Exhibit 10.43
A330-200 FREIGHTER PURCHASE AGREEMENT
Dated as of June 20, 2007
between
Airbus S.A.S.,
Seller
and
AYR FREIGHTER LLC
Buyer
AYR FREIGHTER LLC - A330-200F - June 2007
C O N T E N T S
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0 - DEFINITIONS
1 - SALE AND PURCHASE
2 - SPECIFICATION
2.1 Airframe Specification
2.2 Propulsion Systems
2.3 Milestones
3 - PRICE
3.1 Base Price of the Aircraft
3.2 Final Contract Price
3.3 Taxes, Duties and Imposts
4 - PRICE REVISION
4.1 Seller Price Revision Formula
4.2 Propulsion Systems Price Revision
5 - PAYMENT TERMS
5.1 Seller's Account
5.2 Predelivery Payments
5.3 Commitment Fee
5.4 Payment of Balance of the Final Contract Price
5.5 Application of Payments
5.6 Setoff Payments
5.8 Proprietary Interest
5.9 Payment in Full
6 - MANUFACTURE PROCEDURE - INSPECTION
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6.1 Manufacture Procedures
6.2 Inspection
6.3 Representatives
7 - CERTIFICATION
7.1 Type Certification
7.2 Export Certificate of Airworthiness
8 - TECHNICAL ACCEPTANCE
8.1 Technical Acceptance Process
8.2 Buyer's Attendance
8.3 Certificate of Acceptance
8.4 Finality of Acceptance
8.5 Aircraft Utilization
9 - DELIVERY
9.1 Delivery Schedule
9.2 Delivery
9.3 Flyaway
10 - EXCUSABLE DELAY AND TOTAL LOSS
10.1 Scope of Excusable Delay
10.2 Consequences of Excusable Delay
10.3 Termination on Excusable Delay
10.4 Total Loss, Destruction or Damage
10.5 Remedies
11 - INEXCUSABLE DELAY
11.1 Liquidated Damages
11.2 Renegotiation
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11.3 Termination
11.4 Remedies
12. WARRANTIES AND SERVICE LIFE POLICY
12.1 Warranty
12.2 Seller Service Life Policy
12.3 Supplier Warranties And Service Life Policies
12.4 Interface Commitment
12.5 Exclusivity Of Warranties
12.6 Duplicate Remedies
12.7 Transferability and Disclosure to Third Party Entity
12.8 Negotiated Agreement
13. PATENT AND COPYRIGHT INDEMNITY
13.1 Indemnity
13.2 Administration of Patent and Copyright Indemnity Claims
14 - TECHNICAL DATA AND FLIGHT AND GROUND INFORMATION SERVICES
14A Technical Data
14B Software Services
14C General Provisions
15 - SELLER REPRESENTATIVES
15.1 Customer Support Director
15.2 Customer Support Representatives
15.3 Buyer's Support
15.4 Temporary Assignment and Withdrawal of Resident Customer
Support
Representative
15.5 Indemnities
Appendix A to Clause 15
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16.1 General
16.2 Scope
16.3 Training Organization / Location
16.4 Training Courses
16.5 Prerequisites and Conditions
16.6 Logistics
16.7 Flight Operations Training
16.8 Maintenance Training
16.9 Supplier and Engine Manufacturer Training
16.10 Training Aids for the Buyer's Training Organization
Appendix A to Clause 16
Appendix B to Clause 16
17 - SUPPLIER PRODUCT SUPPORT
17.1 Equipment Supplier Product Support Agreements
17.2 Supplier Compliance
18 - BUYER FURNISHED EQUIPMENT
18.1 Administration
18.2 Requirements
18.3 Buyer's Obligation and Seller's Remedies
18.4 Title and Risk of Loss
18.5 Disposition of BFE Following Termination
19 - INDEMNITIES AND INSURANCE
19.1 Seller's Indemnities
19.2 Buyer's Indemnities
19.3 Notice and Defense of Claims
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19.4 Insurance
20 - ASSIGNMENTS AND TRANSFERS
20.1 Assignments by Buyer
20.2 Assignments for Predelivery Payments and Delivery
Financing
20.3 Assignments on Sale, Merger or Consolidation
20.4 Designations by Seller
20.5 Transfer of Rights and Obligations upon Reorganization
21 - TERMINATION
21.1 Termination Events
21.6 Information Covenants
22 - MISCELLANEOUS PROVISIONS
22.1 Data Retrieval
22.2 Notices
22.3 Waiver
22.4 International Supply Contract
22.5 Certain Representations Of The Parties
22.6 Interpretation And Law
22.7 Waiver of Jury Trial
22.8 No Representations outside of this Agreement.
22.9 Confidentiality
22.10 Severability
22.11 Entire Agreement
22.12 Inconsistencies
22.13 Language
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22.14 Counterparts
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C O N T E N T S
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EXHIBITS
--------
EXHIBIT A A330-200F STANDARD SPECIFICATION
EXHIBIT B-1 FORM OF SPECIFICATION CHANGE NOTICE
EXHIBIT B-2 SPECIFICATION CHANGE NOTICES
EXHIBIT B-3 FORM OF MANUFACTURER SPECIFICATION
CHANGE NOTICE
EXHIBIT C SELLER SERVICE LIFE POLICY - ITEMS
COVERED
EXHIBIT D FORM OF CERTIFICATE OF ACCEPTANCE
EXHIBIT E FORM OF BILL OF SALE
EXHIBIT F TECHNICAL DATA INDEX
EXHIBIT G SELLER PRICE REVISION FORMULA
EXHIBIT H PROPULSION SYSTEMS PRICE REVISION
FORMULA
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P U R C H A S E A G R E E M E N T
This agreement is made this 20th day of June 2007
Between AIRBUS S.A.S. organized and existing under the laws
of the
Republic of France, having its registered office located at
1,
rond-point Maurice Bellonte 31700 BLAGNAC, FRANCE
(hereinafter referred
to as the "Seller")
and AYR FREIGHTER LLC a limited liability company organized
and existing
under the laws of the State of Delaware (hereinafter
referred to as the
"Buyer").
WHEREAS the Buyer wishes to purchase and the Seller is
willing to sell
fifteen (15) Airbus A330-200 Freighter model aircraft, on
the terms and
conditions herein provided,
NOW THEREFORE IT IS AGREED AS FOLLOWS:
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0 - DEFINITIONS
For all purposes of this agreement, except as otherwise
expressly
provided or unless the context otherwise requires, the
following terms
will have the following meanings:
Affiliate - with respect to any person or entity, any other
person or
entity directly or indirectly controlling, controlled by or
under common
control with such person or entity.
Agreement - this A330-200 Freighter Purchase Agreement,
including all
exhibits and appendixes attached hereto, as the same may be
amended or
modified and in effect from time to time.
Aircraft - any or all of the fifteen (15) firm A330-200
Freighter
aircraft for which the delivery schedule is set forth in
Clause 9.1.1 to
be sold by the Seller and purchased by the Buyer pursuant to
this
Agreement, together with all components, equipment, parts
and accessories
installed in or on such aircraft and the Propulsion Systems
installed
thereon upon delivery.
Aircraft Training Services - all aircraft training courses
and training
support provided to the Buyer pursuant to this Agreement,
including
flight training, line training, flight assistance, line
assistance, and
maintenance support.
Airframe - any A330-200 Freighter Aircraft, excluding the
Propulsion
Systems therefore.
ANACS - Airbus North America Customer Services, Inc., a
corporation
organized and existing under the laws of Delaware, having
its registered
office located at 198 Van Buren Street, Suite 300, Herndon,
VA 20170, or
any successor thereto.
ATA Specification - specification issued by the Air
Transport
Association of America relating various aircraft including
manufacturers' technical data, software programs, integrated
data
processing, spare parts shipment, industry-wide
communication system
linking suppliers and users for the purposes of spares
provisioning,
purchasing, order administration, invoicing and information
or data
change.
Aviation Authority - when used with respect to any
jurisdiction, the
government entity that, under the laws of such jurisdiction,
has control
over civil aviation or the registration, airworthiness or
operation of
civil aircraft in such jurisdiction.
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Balance of the Final Contract Price - means the amount
payable by the
Buyer to the Seller on the Delivery Date for an Aircraft
after deducting
from the Final Contract Price for such Aircraft the amount
of all
Predelivery Payments received by the Seller from the Buyer
in respect of
such Aircraft on or before the Delivery Date for such
Aircraft.
Base Price - for any Aircraft, Airframe, SCNs or Propulsion
Systems, as
more completely defined in Clause 3.1.
BFE Definition - as defined in Clause 18.1.1.
Business Day - with respect to any action to be taken
hereunder, a day
other than a Saturday, Sunday or other day designated as a
holiday in the
jurisdiction in which such action is required to be taken.
Buyer Furnished Equipment (BFE) - for any Aircraft, all the
items of
equipment that will be furnished by the Buyer and installed
in the
Aircraft by the Seller, as defined in the Specification.
Commitment Fee - each of the commitment fee amounts
described in Clause
5.3.
Customer Originated Changes (COC) - as defined in Clause
14.A.8.
Delivery - the transfer of title to the Aircraft from the
Seller to the
Buyer, in accordance with Clause 9.
Delivery Date - the date on which Delivery occurs.
Delivery Location - the facilities of the Seller at the
location of
final assembly of the Aircraft.
Development Changes - as defined in Clause 2.1.3.
DGAC - the Direction Generale de l'Aviation Civile of
France, or any
successor thereto.
EASA - European Aviation Safety Agency or any successor
thereto.
Excusable Delay - delay in delivery or failure to deliver an
Aircraft
due to causes as defined in Clause 10.1.
Export Certificate of Airworthiness - an export certificate
of
airworthiness, or, with respect to Aircraft to be registered
in a Member
State of the European Community, the Statement of
Conformity, issued by
the Aviation Authority of the Delivery Location.
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FAA - the U.S. Federal Aviation Administration, or any
successor thereto.
Final Contract Price - as defined in Clause 3.2.
Goods and Services - means any goods, excluding Aircraft,
and services
that may be purchased by the Buyer from the Seller or its
designee.
Inexcusable Delay - as defined in Clause 11.1.
In-house Warranty Repair- as referred to in Clause 12.1.8.
In-house Warranty Labor Rate - as defined in Clause
12.1.8(v)(b).
Initial Operator - the first Operator of an Aircraft in
commercial
revenue service following its Delivery hereunder.
Interface Problem - as defined in Clause 12.4.1.
LIBOR - the London Interbank Offered Rate for each stated
interest
period, determined on the basis of the offered rates for
six-month
deposits in US dollars, appear on the Reuters Screen LIBO
Page as of
11:00 a.m., London time, on the day that is two (2) days
(other than a
Business Day on which banking institutions are authorized to
close in the
London) before the first day of an interest period. If at
least two (2)
such offered rates appear on the Reuters Screen LIBO Page,
the rate for
that interest period will be the arithmetic mean of such
offered rates
rounded to the nearest one-hundred thousandth of a basis
point. If only
one (1) offered rate appears, the rate for that interest
period will be
"LIBOR" as quoted by National Westminster Bank, plc.
"Reuters Screen LIBO
Page" means the display designated as page "LIBO" on the
Reuters Monitor
Money Rates Service (or any successor to such page or
service).
Manufacturer Specification Change Notice (MSCN) -as defined
in Clause
2.1.4.
Operator - Any operator of the Aircraft following Delivery
hereunder.
Predelivery Payment - any of the payments made in accordance
with Clause
5.2.
Predelivery Payment Reference Price - as defined in Clause
5.2.2.
Propulsion Systems - as set forth in Clause 2.2.
Propulsion Systems Price Revision Formula - the Propulsion
Systems price
revision formula set forth in Exhibit H hereto.
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Ready for Delivery - when (i) the Technical Acceptance
Process (as
defined in Clause 8.1.1) has been successfully completed for
an Aircraft
and (ii) the Export Certificate of Airworthiness has been
issued for such
Aircraft.
Reference Price - as set forth in Clause 3.1.3.
Scheduled Delivery Month - as defined in Clause 9.1.1.
Seller Price Revision Formula - the price revision formula
set forth in
Exhibit G.
Seller's Representatives - the representatives of the Seller
referred to
in Clause 15.
Service Life Policy - as set forth to in Clause 12.2.
Specification - the Standard Specification as amended by the
SCNs set
forth in Exhibit B-2 hereto as may be further amended or
modified in
accordance with this Agreement.
Specification Change Notice (SCN) - as described in Clause
2.1.2.
Standard Specification - the A330-200F standard
specification document
with reference G 000 0F000, Issue 1, dated January 31, 2007,
published by
the Seller, a copy of which is annexed as Exhibit A hereto.
Supplier - any supplier of Supplier Parts.
Supplier Part - any component, equipment, accessory or part
installed in
an Aircraft at the time of Delivery thereof, not including
the Propulsion
Systems or Buyer Furnished Equipment, for which there exists
a Supplier
Product Support Agreement.
Supplier Product Support Agreement - an agreement between
the Seller and
a Supplier containing, among other things, enforceable and
transferable
warranties (and in the case of landing gear suppliers,
service life
policies for selected structural landing gear elements).
Technical Data - as set forth in Clause 14.A and Exhibit F.
Termination Event - as defined in Clause 21.1.
Total Loss - as defined in Clause 10.4
Training Conference - as defined in Clause 16.4.1.
Type Certificate - as defined in Clause 7.1
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Warranted Part - as defined in Clause 12.1.1.
Warranty Claim - as defined in Clause 12.1.7(v).
The terms "herein," "hereof" and "hereunder" and other words
of similar
import refer to this Agreement, and not a particular Clause
thereof. The
definition of a singular in this Clause 0 will apply to
plurals of the
same words.
Except as provided in Clause 22.6.4, references in this
Agreement to an
exhibit, schedule, article, section, subsection or clause
refer to the
appropriate exhibit or schedule to, or article, section,
subsection or
clause in this Agreement.
Each agreement defined in this Clause 0 will include all
appendices,
exhibits and schedules thereto. If the prior written consent
of any
person is required hereunder for an amendment, restatement,
supplement or
other modification to any such agreement and the consent of
each such
person is obtained, references in this Agreement to such
agreement shall
be to such agreement as so amended, restated, supplemented
or modified.
References in this Agreement to any statute will be to such
statute as
amended or modified and in effect at the time any such
reference is
operative.
The term "including" when used in this Agreement means
"including without
limitation" except when used in the computation of time
periods.
Technical and trade terms not otherwise defined herein will
have the
meanings assigned to them as generally accepted in the
aircraft
manufacturing industry.
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1 - SALE AND PURCHASE
The Seller will sell and deliver to the Buyer, and the
Buyer will
purchase and take delivery of the Aircraft from the
Seller, subject
to the terms and conditions in this Agreement.
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2 - SPECIFICATION
2.1 Airframe Specification
The Airframe will be manufactured in accordance with
the
Specification.
2.1.1 Specification Amendment
The Seller and Buyer understand and agree that the
Specification
may be amended following signature of this Agreement
in
accordance with the terms of this Clause 2.
2.1.2 Specification Change Notice
The Specification may be amended by written agreement
between the
Seller and Buyer in an SCN. Each SCN will be
substantially in the
form set out in Exhibit B-1 and will set out such
SCN's scope of
implementation and will also set forth, in detail,
the particular
change to be made to the Specification and the
effect, if any, of
such change on design, performance, weight, or
Scheduled Delivery
Month of the Aircraft affected thereby, and on the
text of the
Specification. An SCN may result in an adjustment of
the Base
Price of the Aircraft, which adjustment if any, will
be specified
in the SCN.
2.1.3 Development Changes
The Specification may also be amended to incorporate
changes
deemed necessary by the Seller to improve the
Aircraft, prevent
delay or ensure compliance with this Agreement
("Development
Changes"), as set forth hereunder.
2.1.4 Manufacturer Specification Change Notice
Development Changes will result in amendments to the
Specification by the way of such Manufacturer
Specification
Change Notice ("MSCN") when such development change
has an effect
on design, performance, weight, price or Scheduled
Delivery Month
of an Aircraft. MSCNs will be provided to the Buyer,
will be
substantially in the form set out in Exhibit B-3
hereto and will
set out such MSCN's scope of implementation as well
as, in
detail, the particular change to be made to the
Specification,
and the effect, if any, of such change on design,
performance,
weight, price, Scheduled Delivery Month of the
Aircraft affected
thereby, interchangeability or replaceability
requirements of the
Specification and on the text of the Specification.
The Buyer's
consent to an MSCN is not required if such MSCN (1)
does not
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adversely affect design, performance, weight, price,
Delivery
Date of the Aircraft affected thereby,
interchangeability or
replaceability requirements of the Specification or
(2) is
necessitated by an Aviation Authority directive or by
equipment
obsolescence.
If the MSCN does adversely affect the design,
performance,
weight, price, Delivery Date of the Aircraft affected
thereby or
the interchangeability or replaceability requirements
of the
Specification, and provided that the MSCN is not
necessitated by
an Aviation Authority directive or by equipment
obsolescence, the
Seller will notify the Buyer of a reasonable period
of time
following such notice in which the Buyer must accept
or reject
such MSCN. If the Buyer does not notify the Seller of
an
objection to the MSCN within the time period
specified, the MSCN
will be deemed accepted by the Buyer and the
corresponding
modification will be accomplished.
2.2 Propulsion Systems
2.2.1 Available Propulsion Systems
Each of the Aircraft shall be equipped with any of
the set of
two Rolls Royce Trent 772B engines, or two Pratt
& Whitney
PW4168A engines.
(in each case the "Propulsion Systems"), as shall be
selected by
the Buyer pursuant to sub-Clause 2.2.2 below. Each
Propulsion
Systems shall include nacelles, thrust reversers and
associated
standard equipment, installed on such Aircraft on
Delivery.
2.2.2 Propulsion Systems Selection
The Buyer shall notify the Seller of its choice of
Propulsion
Systems in writing no later than on the first (1st)
day of the
twentieth (20th) month prior to the Scheduled
Delivery Month of
each of the Aircraft.
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2.3 Milestones
2.3.1 Customization Milestones Chart
Within a reasonable period following signature of the
Agreement,
the Seller will provide the Buyer with a
Customization Milestones
Chart setting out how far in advance of the Scheduled
Delivery
Month of the Aircraft an SCN must be executed in
order to
integrate into the Specification any items requested
by the Buyer
from the Specification Changes Catalogues made
available by the
Seller (the "Customization Milestone Chart").
2.3.2 Contractual Definition Freeze
The Customization Milestone Chart shall in particular
define the
Contractual Definition Freeze ("CDF") date,
corresponding to the
latest date prior to an Aircraft Scheduled Delivery
Month by
which all SCNs need to have been executed by the
Buyer to enable
their incorporation into the manufacturing of the
Aircraft.
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3 - PRICE
3.1 As provided in Clause 1 of Schedule 1
3.2 Final Contract Price
The Final Contract Price of an Aircraft will be the
sum of:
(i) the Base Price of the Airframe, as adjusted to
the applicable
Delivery Date of such Aircraft in accordance with the
Seller
Price Revision Formula;
(ii) the price of any SCNs for the Airframe entered
into after
the date of signature of this Agreement, as adjusted
to the
Delivery Date in accordance with the Seller Price
Revision
Formula;
(iii) the Propulsion Systems Reference Price as
revised as of the
Delivery Date in accordance with Clause 4.2;
(iv) the price of any SCNs for the Propulsion Systems
Reference
Price entered into after the date of signature of
this Agreement,
as adjusted to the Delivery Date in accordance with
the
Propulsion Systems Price Revision Formula; and
(v) any other amount resulting from any other
provisions of this
Agreement and/or any other written agreement between
the Buyer
and the Seller relating to the Aircraft.
3.3 Taxes, Duties and Imposts
3.3.1 The Seller will pay any and all taxes, duties,
imposts or similar
charges of any nature whatsoever, except for taxes
based on or
measured by the income of the Buyer or any taxes of a
similar
nature or charges levied against the Buyer or its
Affiliates for
the privilege of doing business in any jurisdiction,
that are (i)
imposed upon the Buyer, (ii) imposed upon the Seller
with an
obligation on the Buyer to withhold or collect the
amount thereof
from the Seller or (iii) imposed upon the Buyer with
an
obligation on the Seller to withhold or collect such
amount from
the Buyer, and that are levied, assessed, charged or
collected
for or in connection with the fabrication,
manufacture,
modification, assembly, sale, delivery, use of or
payment under
this Agreement for any Aircraft, component,
accessory, equipment
or part delivered or furnished hereunder, provided
such taxes,
duties, imposts or similar charges have been
promulgated and are
enforceable under the laws of the country of the
Delivery
Location on or before Delivery of such Aircraft.
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3.3.2 The Buyer will pay any and all taxes, duties, imposts
or similar
charges of any nature whatsoever, except for taxes
based on or
measured by the income of the Seller or any taxes of
a similar
nature or charges levied against the Seller or its
Affiliates for
the privilege of doing business in any jurisdiction,
that are (i)
imposed upon the Seller, (ii) imposed upon the Buyer
with an
obligation on the Seller to collect the amount
thereof for the
Buyer or (iii) imposed upon the Seller with an
obligation for the
Buyer to withhold such amount from the Seller, and
that are
levied, assessed, charged or collected for or in
connection with
the fabrication, manufacture, modification, assembly,
sale,
delivery or use of or payment under this Agreement
for any
Aircraft, component, accessory, equipment or part
delivered or
furnished hereunder, provided such taxes, duties,
imposts or
similar charges have been levied, assessed, charged
or collected
under laws promulgated and enforceable in countries
other than
the country of the Delivery Location.
3.3.3 The Seller will arrange for the export of the
Aircraft from the
country of the Delivery Location and will pay any
customs duties,
taxes and fees required to be paid with respect to
such
exportation of the Aircraft.
3.3.4 The Buyer will arrange for the import of the Aircraft
into any
country or jurisdiction and will pay any customs
duties, taxes
and fees required to be paid with respect to such
importation of
the Aircraft.
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4 - PRICE REVISION
4.1 Seller Price Revision Formula
The Base Prices of the Airframe and of the SCNs are
subject to
revision up to and including the Delivery Date in
accordance with
the Seller Price Revision Formula as set forth in
Exhibit G
hereto.
4.2 Propulsion Systems Price Revision
4.2.1 Each Propulsion Systems Reference Price is subject to
revision in
accordance with the applicable Propulsion Systems
Price Revision
Formula up to and including the Delivery Date as set
forth in
Exhibit H hereto.
4.2.2 Modification of Propulsion Systems Reference Price
and Propulsion
Systems Price Revision Formula
The Reference Price of the Propulsion Systems, the
prices of the
related equipment and the Propulsion Systems Price
Revision
Formula are based on information received from the
respective
Propulsions Systems manufacturers and are subject to
amendment by
the Propulsion Systems manufacturer at any time prior
to
Delivery. If the Propulsion Systems manufacturers
make any such
amendment, the amendment will be deemed to be
incorporated into
this Agreement and the Reference Price of the
applicable
Propulsion Systems, the prices of the related
equipment and the
Propulsion Systems Price Revision Formulae will be
adjusted
accordingly. The Seller agrees to notify the Buyer as
soon as the
Seller receives notice of any such amendment from any
of the
Propulsion Systems manufacturers.
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5 - PAYMENT TERMS
5.1 Seller's Account
The Buyer will pay the Predelivery Payments, the
Balance of the
Final Contract Price and any other amount due
hereunder in
immediately available funds in United States dollars
to: AIRBUS
S.A.S., Acct. No. 0121 635 000 100 CAYLON, Swift
CRLYUS33, ABA
026008073, 1301 Avenue of the Americas, New York, NY
10019, USA,
or to such other account as may be designated by the
Seller.
5.2 Predelivery Payments
5.2.1 Predelivery Payments are non-refundable and will be
paid by the
Buyer to the Seller for Aircraft. The aggregate
Predelivery
Payment amount is thirty percent (30 %) of the
Predelivery
Payment Reference Price defined below in Clause
5.2.2.
5.2.2 The Predelivery Payment Reference Price for an
Aircraft to be
delivered in calendar year T is defined below:
A = Pb (1 + 0.03N)
where
A = the Predelivery Payment Reference Price for an
Aircraft to be
delivered in calendar year T.
Pb = the Base Price of the Aircraft as defined in
Clause 3 above.
N = (T - 2006).
T = the year of delivery of the relevant Aircraft.
In the absence of a Propulsion System selection by
the Buyer for
any Aircraft, the Base Price of the Aircraft to
calculate the
Predelivery Payment Reference Price with above
formula shall be
the sum of:
(i) the Base Price of the Airframe and
(ii) the Rolls Royce Trent 772B Propulsion System
Base Price.
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5.2.3 As provided in Clause 2 of Schedule 1
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5.2.4 The Seller will be entitled to hold and use any
Predelivery
Payment as absolute owner thereof, subject only to
the obligation
to deduct an amount equal to Predelivery Payments
from the Final
Contract Price, when calculating the Balance of the
Final
Contract Price. The Seller will be under no
obligation to
segregate any Predelivery Payment, or any amount
equal thereto,
from the Seller's funds generally.
5.2.5 Specification Change Notice Predelivery Payments
The Seller shall be entitled to request Predelivery
Payments for
each SCN executed after signature of this Agreement:
(i) for each SCN executed prior to the first day of
the fifteenth
(15th) month prior to the Scheduled Delivery Month,
this
Predelivery Payment shall correspond to a percentage
of the SCN
price equal to the aggregate percentage of
Predelivery Payments
as defined in Clause 5.2.1 above and shall be paid on
the first
day of the twelfth (12th) month prior to the
Scheduled Delivery
Month;
(ii) for each SCN executed between fifteen (15) and
twelve (12)
months prior to the Scheduled Delivery Month this
payment shall
amount to fifty percent (50 %) of the SCN price and
shall be paid
on the first day of the sixth (6) month prior to the
Scheduled
Delivery Month ;
(iii) each of the above Predelivery Payments shall be
credited
against the Final Contract Price of the corresponding
Aircraft.
5.3 Commitment Fee
The Seller acknowledges that it has received from the
Buyer the
sum of USD 11,250,000 (U.S. dollars -eleven million
two hundred
fifty thousand), which represents a non-refundable
commitment fee
of USD 750,000 (US dollars - seven hundred fifty
thousand) for
each Aircraft (the "Commitment Fee"). The Commitment
Fee paid
with respect to each particular Aircraft will be
credited without
interest against the first Predelivery Payment for
such Aircraft.
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5.4 Payment of Balance of the Final Contract Price
Concurrent with the Delivery of each Aircraft, the
Buyer will pay
to the Seller the Balance of the Final Contract Price
for the
applicable Aircraft. The Seller's receipt of the full
amount of
all Predelivery Payments and of the Balance of the
Final Contract
Price, including any amounts due under Clause 5.7,
will be a
condition precedent to the Seller's obligation to
deliver such
Aircraft to the Buyer.
5.5 Application of Payments
Notwithstanding any other rights the Seller may have
at contract
or at law, the Buyer and the Seller hereby agree that
should any
amount under this Agreement become due and payable by
the Buyer,
and not be paid in full in immediately available
funds on the
date due, then the Seller will have the right to
debit and apply,
in whole or in part, the Predelivery Payments paid to
the Seller
by the Buyer against such unpaid amount. The Seller
will promptly
notify the Buyer in writing after such debiting and
application,
and the Buyer will immediately pay to the Seller the
amount
required to comply with Clause 5.2.3.
5.6 Setoff Payments
Notwithstanding anything to the contrary contained
herein, before
being required to make any payments, the Seller will
have the
right to apply any and all sums previously paid by
the Buyer to
the Seller with respect to an Aircraft to the payment
of any
other amounts the Buyer owes to the Seller or any
Affiliate
thereof under this Agreement. No other setoff by the
Seller shall
be permitted.
5.7 Overdue Payments
If any payment due to the Seller under this Agreement
including
but not limited to any Predelivery Payment,
commitment fee,
option fees for the Aircraft as well as any payment
due to the
Seller for any spare parts, data, documents, training
and
services, is not received on the due date, without
prejudice to
the Seller's other rights under this Agreement and at
law, the
Seller shall be entitled to interest for late payment
calculated
on the amount due from and including the due date of
payment up
to and including the date when the payment is
received by the
Seller at a rate equal to the LIBOR plus three
percent (3 %) per
year (part year to be prorated).
All interest payable under this Agreement shall be
compounded
monthly and calculated on the basis of the actual
number of days
elapsed in the month and assuming a thirty (30) day
month and a
three hundred and sixty (360) day year.
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5.8 Proprietary Interest
Notwithstanding any provision of law to the contrary,
the Buyer
will not, by virtue of anything contained in this
Agreement
(including, without limitation, any Commitment Fee or
Predelivery
Payments hereunder, or any designation or
identification by the
Seller of a particular Aircraft as an Aircraft to
which any of
the provisions of this Agreement refer) acquire any
proprietary,
insurable or other interest whatsoever in (or, except
as
expressly agreed in writing, including this
Agreement, between
the Seller and Buyer, have any liability with respect
to)any
Aircraft before Delivery of and payment for such
Aircraft, as
provided in this Agreement.
5.9 Payment in Full
The Buyer's obligation to make payments to the Seller
hereunder
will not be affected by and will be determined
without regard to
any setoff, counterclaim, recoupment, defense or
other right that
the Buyer may have against the Seller or any other
person and all
such payments will be made without deduction or
withholding of
any kind other than any U.S., State or local income
withholding
Taxes or income withholding taxes imposed by any
Seller
jurisdiction. The Buyer shall ensure that the sums
received by
the Seller under this Agreement will be equal to the
full amounts
expressed to be due the Seller hereunder, without
deduction or
withholding on account of and free from any and all
taxes,
levies, imposts, duties or charges of whatever
nature, except
that if the Buyer is compelled by law to make any
such deduction
or withholding (other than U.S. federal, state or
local income
withholding taxes or Seller jurisdiction income
withholding
taxes), the Buyer will pay such additional amounts,
to the Seller
as may be necessary so that the net amount received
by the Seller
after such deduction or withholding will equal the
amounts that
would have been received in the absence of such
deduction or
withholding.
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6 - MANUFACTURE PROCEDURE - INSPECTION
6.1 Manufacture Procedures
The Airframe will be manufactured in accordance with
the
requirements of the laws of the jurisdiction of
incorporation of
the Seller or of its relevant Affiliate as enforced
by the
Aviation Authority of such jurisdiction.
6.2 Inspection
6.2.1 All work to be carried out on the Aircraft and all
materials and
parts thereof will be open to inspection during
business hours by
duly authorized representatives of the Buyer or its
designee at
the respective works of the relevant manufacture
facility of the
Seller or the Affiliates and, if possible, at the
works of their
respective subcontractors. These representatives will
have access
to such relevant technical data as are reasonably
necessary for
this purpose (except that, if access to any part of
the
respective works where construction is in progress or
materials
or parts are stored is restricted for security
reasons, the
Seller or the Affiliate or relevant subcontractors
will be
allowed a reasonable time to make the items available
for
inspection elsewhere). The actual detailed inspection
of the
Aircraft, materials and parts thereof will take place
only in the
presence of the respective inspection department
personnel of the
Seller or their subcontractors. The procedures for
such
inspections will be agreed on with the Buyer before
any
inspection.
6.2.2 All inspections, examinations and discussions with
the Seller's,
its Affiliate or relevant subcontractors' or their
respective
subcontractors' engineering or other personnel by the
Buyer and
its representatives will be performed in such a
manner as not to
unreasonably delay or hinder either the work to be
carried out on
the Aircraft or the proper performance of this
Agreement. In no
event will the Buyer or its representatives be
permitted to
inspect any aircraft other than the Aircraft.
6.3 Representatives
For the purposes of Clause 6.2, starting at a
mutually agreed
date until Delivery of the last Aircraft, the Seller
will furnish
suitable space, office equipment and facilities in or
conveniently located with respect to the Delivery
Location for
the use of not more than four (4) representatives of
the Buyer
during the aforementioned period. The Seller will
provide access
to electronic mail, facsimile and a telephone at the
Buyer's cost
to be invoiced on a monthly basis.
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7 - CERTIFICATION
Except as set forth in this Clause 7, the Seller will
not be
required to obtain any certificate or approval with
respect to
the Aircraft.
7.1 Type Certification
The Aircraft shall have been type certificated under
European
Aviation Safety Agency (EASA) procedures in the
transport
category. The Seller shall have obtained the relevant
type
certificate (the "Type Certificate") to allow the
issuance of the
Export Certificate of Airworthiness. The Seller
confirms that it
shall have obtained an FAA Type Certificate
(transport category)
for the Aircraft pursuant to Part 21 and in
compliance with the
applicable provisions of Federal Aviation Regulations
(`FAR")
Part 25.
7.2 Export Certificate of Airworthiness
7.2.1 Each Aircraft shall be delivered to the Buyer with
the Export
Certificate of Airworthiness shall have incorporated
all means of
compliance with all applicable EASA and FAA
Airworthiness
Directives, on a terminating basis if available, and
in a
condition enabling the Buyer (or an eligible person
under then
applicable law) to obtain at time of Delivery a
standard
airworthiness certificate issued pursuant to FAR Part
21.
However, the Seller will have no obligation to make
and will not
be responsible for any costs of alterations or
modifications to
such Aircraft to enable such Aircraft to meet FAA or
U.S.
Department of Transportation requirements for
specific operation
on the Buyer's routes, except as may be provided for
in this
Agreement, whether before, at or after Delivery of
any Aircraft.
7.2.2 If any law or regulation is promulgated or becomes
effective or
an interpretation of any law is issued before an
Aircraft
purchased under this Agreement is Ready for Delivery
to the Buyer
and such law, regulation or interpretation requires
any change to
the Specification as it may be modified pursuant to
Clause 2 in
order to obtain the Type Certificates and Export
Certificate of
Airworthiness as hereinabove provided for such
Aircraft (a
"Change in Law"), the Seller shall make the requisite
variation
or modification.
The cost of implementing the required modifications
referred to
in Clause 7.2.2 shall be:
(i) for the account of the Seller if a Change in Law
became
effective before the date of this Agreement, and
(ii) shared equally by the Seller and the Buyer if
Change in Law
becomes effective after the date of this Agreement
but before the
Aircraft is Ready for Delivery.
(iii) for the Buyer for any operational requirements
to be
complied with by
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any Operator or changes other than those set forth in
sub-paragraph (i) and (ii) above.
If the Seller anticipates that the Scheduled Delivery
Month of
any Aircraft will be postponed by reason of such
change it shall
promptly notify the Buyer and the provisions of
Clause 10
(Excusable Delay) will apply.
In the event of such a variation or modification
being made
pursuant to this sub-Clause, the parties hereto shall
sign a SCN,
in which the effects, if any, upon performances,
weights,
interchangeability and Delivery shall be specified
and agreed
between the Buyer and the Seller.
Nothing in Clause 7.2.2 will require the Seller to
make any
changes or modifications to, or to make any payments
or take any
other action with respect to, any Aircraft that is
Ready for
Delivery before the compliance date of any law or
regulation
referred to in Clause 7.2.2. Any such changes or
modifications
made to an Aircraft after it is Ready for Delivery
will be at the
Buyer's expense.
7.2.3 Notwithstanding the provisions of sub-Clause 7.2.2,
if any such
change is applicable to Propulsion Systems, engine
accessories,
quick engine change units or thrust reversers, or to
Buyer
Furnished Equipment, the costs of such change shall
be borne in
accordance with such arrangements as may be made
separately
between the Buyer and the Propulsion System and/or
Buyer
Furnished Equipment manufacturers.
7.2.4 The Seller shall as far as practicable take into
account the
information available to it concerning any proposed
new
regulations of EASA, the FAA and the relevant
Operator's Aviation
Authorities in order to minimize the costs of changes
which may
appear necessary to obtain the Export Certificate of
Airworthiness after such proposed new regulations
have become
mandatory.
7.2.5 In the event that type certification has not been
previously
undertaken by the Seller in a country where the Buyer
intends to
lease an Aircraft to an Operator, then subject to due
notice from
the Buyer to the Seller at least nine months prior to
the month
of Delivery of the relevant Aircraft (or such lesser
period that
the Seller acting reasonably agrees is practicable),
the Seller
shall use all reasonable efforts to promptly obtain
such type
certification, and shall not charge the Buyer with
its costs for
the necessary documentation and justification work to
demonstrate
the aircraft specification compliance for such type
certification
purposes.
7.2.6 Upon the Buyer's request, to be provided to the
Seller with
adequate notice, the Seller shall identify the
changes that may
be required in order for an Aircraft to be eligible
for a
standard airworthiness certificate to be
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issued by the airworthiness authority designated by
the Buyer for
the registration of such Aircraft (the "Designated
Airworthiness
Authority").
Where the Buyer's Designated Airworthiness Authority
requires a
modification to comply with additional import
aviation
requirements prior to the issuance of the Export
Certificate of
Airworthiness, the Seller shall incorporate such
modification at
reasonable costs to be borne by the Buyer, provided
that the
Buyer's request is made at a time reasonably in
advance of the
Scheduled Delivery Month for such Aircraft.
Such changes shall be made the subject of an SCN to
be agreed
between the parties, which shall specify the
corresponding
effect, if any, on the price and time of Delivery of
the relevant
Aircraft.
If the Seller anticipates that the Scheduled Delivery
Month of
the relevant Aircraft will be postponed by reason of
such change
it shall promptly notify the Buyer and the Scheduled
Delivery
Month of such Aircraft as provided in sub-Clause 9.1
will be
extended to the extent of such postponement as agreed
in such
SCN.
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8 - TECHNICAL ACCEPTANCE
8.1 Technical Acceptance Process
8.1.1 Prior to Delivery, the Aircraft will undergo a
technical
acceptance process developed by the Seller (the
"Technical
Acceptance Process"). Successful completion of the
Technical
Acceptance Process will demonstrate the satisfactory
functioning
of the Aircraft and will be deemed to demonstrate
compliance with
the Specification. Should the Aircraft fail to
complete the
Technical Acceptance Process satisfactorily, the
Seller will
without hindrance from the Buyer be entitled to carry
out any
necessary changes and, as soon as practicable
thereafter,
resubmit the Aircraft to the Technical Acceptance
Process to the
extent necessary to demonstrate full compliance with
the
requirements of the Technical Acceptance Process.
8.1.2 The Technical Acceptance Process will
(i) commence on a date notified by the Seller to the
Buyer as per
Clause 9.1.2,
(ii) take place at the Delivery Location,
(iii) be carried out by the personnel of the Seller,
and
(iv) include a technical acceptance flight (the
"Technical
Acceptance Flight") that will not exceed three (3)
hours.
8.2 Buyer's Attendance
8.2.1 The Buyer is entitled to attend and observe the
Technical
Acceptance Process.
8.2.2 If the Buyer attends the Technical Acceptance
Process, the Buyer
(i) will comply with the reasonable requirements of
the Seller,
with the intention of completing the Technical
Acceptance Process
within five (5) Business Days, and
(ii) may have a maximum of four (4) of its
representatives (no
more than two (2) of whom will have access to the
cockpit at any
one time) accompany the Seller's representatives on
the Technical
Acceptance Flight, during which the Buyer's
representatives will
comply with the instructions of the Seller's
representatives.
8.2.3 If the Buyer does not attend or fails to cooperate in
the
Technical Acceptance Process, the Seller will be
entitled to
complete the Technical
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Acceptance Process in compliance with Clause 8.1
without the
Buyer's attendance, and the Buyer will be deemed to
have accepted
that the Technical Acceptance Process has been
completed, in all
respects.
8.3 Certificate of Acceptance
Upon successful completion of the Technical
Acceptance, the Buyer
will, on or before the Delivery Date, sign and
deliver to the
Seller a certificate of acceptance in respect of the
Aircraft in
the form of Exhibit D (the "Certificate of
Acceptance").
8.4 Finality of Acceptance
The Buyer's signature of the Certificate of
Acceptance for the
Aircraft will constitute waiver by the Buyer of any
right it may
have under the Uniform Commercial Code as adopted by
the State of
New York or otherwise to revoke acceptance of the
Aircraft for
any reason, whether known or unknown to the Buyer at
the time of
acceptance.
8.5 Aircraft Utilization
The Seller will, without payment or other liability,
be entitled
to use the Aircraft before Delivery to obtain the
certificates
required for the Aircraft under Clause 7. Such use in
itself will
not limit the Buyer's obligation to accept Delivery
hereunder.
The Seller will be authorized to use the Aircraft for
up to a
maximum of twenty (20) hours for any other purpose
without
specific agreement of the Buyer.
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9 - DELIVERY
9.1 Delivery Schedule
9.1.1 Subject to the express provisions of Clauses 2, 7, 8,
10 and 18,
the Seller will have the Aircraft Ready for Delivery
at the
Delivery Location within the months listed in Clause
3 of
Schedule 1 (each a "Scheduled Delivery Month"):
9.1.2 The Seller will give the Buyer at least thirty (30)
days' written
notice of the anticipated date on which the Aircraft
will be
Ready for Delivery. Such notice will also include the
starting
date and the planned schedule of the Technical
Acceptance Process
set forth in Clause 8. Thereafter the Seller will
notify the
Buyer of any change to such dates.
9.2 Delivery
9.2.1 The Buyer will send its representatives to the
Delivery Location
to take Delivery within seven (7) days after the date
on which
the Aircraft is Ready for Delivery.
9.2.2 The Seller will transfer title to the Aircraft to the
Buyer free
and clear of all encumbrances, provided that the
Balance of the
Final Contract Price has been paid by the Buyer
pursuant to
Clause 5.4 and that the Certificate of Acceptance has
been signed
and delivered to the Seller pursuant to Clause 8.3.
The Seller
will provide the Buyer with a bill of sale in the
form of Exhibit
E (the "Bill of Sale") and/or such other
documentation confirming
transfer of title and receipt of the Final Contract
Price as may
reasonably be requested by the Buyer. Title to and
risk of loss
of or damage to the Aircraft will pass to the Buyer
contemporaneously with the delivery by the Seller to
the Buyer of
such Bill of Sale.
9.2.3 If the Buyer fails to (i) deliver the signed
Certificate of
Acceptance to the Seller on or before the Delivery
Date, or (ii)
pay the Balance of the Final Contract Price for the
Aircraft to
the Seller on the Delivery Date, then the Buyer will
be deemed to
have rejected Delivery wrongfully when the Aircraft
was duly
tendered to the Buyer hereunder. If such a deemed
rejection
arises, the Seller will retain title to the Aircraft
and the
Buyer will indemnify and hold the Seller harmless
against any and
all costs (including but not limited to any parking,
storage, and
insurance costs) and consequences resulting from the
Buyer's
rejection, it being understood that the Seller will
be under no
duty to the Buyer to store, park, or otherwise
protect the
Aircraft. These rights of the Seller will be in
addition to the
Seller's other rights and remedies in this Agreement.
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9.3 Flyaway
9.3.1 The Buyer and the Seller will cooperate to obtain any
licenses
that may be required by the relevant Aviation
Authority for the
purpose of exporting the Aircraft.
9.3.2 All expenses of, or connected with, flying the
Aircraft from the
Delivery Location after Delivery will be borne by the
Buyer. The
Buyer will make direct arrangements with the
supplying companies
for the fuel and oil required for all post-Delivery
flights.
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10 - EXCUSABLE DELAY AND TOTAL LOSS
10.1 Scope of Excusable Delay
Neither the Seller nor any Affiliate of the Seller,
will be
responsible for or be deemed to be in default on
account of
delays in delivery or failure to deliver or otherwise
in the
performance of this Agreement or any part hereof due
to causes
reasonably beyond the Seller's, or any Affiliate's
control or not
occasioned by the Seller's or any Affiliate's fault
or negligence
("Excusable Delay"), including, but not limited to:
(i) acts of
God or the public enemy, natural disasters, fires,
floods, storms
beyond ordinary strength, explosions or earthquakes;
epidemics or
quarantine restrictions; serious accidents; total or
constructive
total loss; any law, decision, regulation, directive
or other act
(whether or not having the force of law) of any
government or of
the Council of the European Community or the
Commission of the
European Community or of any national, Federal,
State, municipal
or other governmental department, commission, board,
bureau,
agency, court or instrumentality, domestic or
foreign;
governmental priorities, regulations or orders
affecting
allocation of materials, facilities or a completed
Aircraft; war,
civil war or warlike operations, terrorism,
insurrection or
riots; failure of transportation; strikes or labor
troubles
causing cessation, slow down or interruption of work;
delay in
obtaining any airworthiness or type certification;
inability
after due and timely diligence to procure materials,
accessories,
equipment or parts; general hindrance in
transportation; or
failure of a subcontractor or Supplier to furnish
materials,
components, accessories, equipment or parts; (ii) any
delay
caused directly or indirectly by the action or
inaction of the
Buyer ; and (iii) delay in delivery or otherwise in
the
performance of this Agreement by the Seller due in
whole or in
part to any delay in or failure of the delivery of,
or any other
event or circumstance relating to, the Propulsion
Systems or
Buyer Furnished Equipment.
10.2 Consequences of Excusable Delay
10.2.1 If an Excusable Delay occurs the Seller will
(1) notify the Buyer of such Excusable Delay as soon
as
practicable after becoming aware of the same;
(2) not be deemed to be in default in the performance
of its
obligations hereunder as a result of such Excusable
Delay;
(3) not be responsible for any damages arising from
or in
connection with such Excusable Delay suffered or
incurred by the
Buyer;
(4) as soon as practicable after the removal of the
cause of such
Excusable Delay resume performance of its obligations
under this
Agreement and in particular will notify the Buyer of
the revised
Scheduled Delivery Month.
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10.3 Termination on Excusable Delay
10.3.1 If any Delivery is delayed as a result of an
Excusable Delay for
a period of more than twelve (12) months after the
last day of
the Scheduled Delivery Month, then either party may
terminate
this Agreement with respect to the affected Aircraft,
by giving
written notice to the other party within thirty (30)
days after
the expiration of such twelve (12) month period.
However, the
Buyer will not be entitled to terminate this
Agreement pursuant
to this Clause 10.3.1 if the Excusable Delay is
caused directly
or indirectly by the action or inaction of the Buyer.
10.3.2 If the Seller advises the Buyer in its notice of a
revised
Scheduled Delivery Month pursuant to Clause
10.2.1(iv) that there
will be a delay in Delivery of an Aircraft of more
than twelve
(12) months after the last day of the Scheduled
Delivery Month,
then either party may terminate this Agreement with
respect to
the affected Aircraft. Termination will be made by
giving written
notice to the other party within thirty (30) days
after the
Buyer's receipt of the notice of a revised Scheduled
Delivery
Month.
10.3.3 If this Agreement is not terminated under the terms
of Clause
10.3.1 or 10.3.2, then the Seller will be entitled to
re-schedule
Delivery. The Seller will notify the Buyer of the new
Scheduled
Delivery Month after expiration of the thirty (30)
day period
referred to in Clause 10.3.1 or 10.3.2, and this new
Scheduled
Delivery Month will be deemed to be an amendment to
the
applicable Scheduled Delivery Month in Clause 9.1.1.
10.4 Total Loss, Destruction or Damage
If, prior to Delivery, any Aircraft is lost,
destroyed or in the
reasonable opinion of the Seller is damaged beyond
economic
repair ("Total Loss"), the Seller will notify the
Buyer to this
effect within one (1) month of such occurrence. The
Seller will
include in said notification (or as soon after the
issue of the
notice as such information becomes available to the
Seller) the
earliest date consistent with the Seller's other
commitments and
production capabilities that an aircraft to replace
the Aircraft
may be delivered to the Buyer and the Scheduled
Delivery Month
will be extended as specified in the Seller's notice
to
accommodate the delivery of the replacement aircraft;
provided,
however, that if the Scheduled Delivery Month is
extended to a
month that is later than twelve (12) months after the
last day of
the original Scheduled Delivery Month then this
Agreement will
terminate with respect to said Aircraft unless:
(i)the Buyer notifies the Seller within one (1) month
of the date
of receipt of the Seller's notice that it desires the
Seller to
provide a replacement aircraft during the month
quoted in the
Seller's notice; and
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(ii) the parties execute an amendment to this
Agreement recording
the change in the Scheduled Delivery Month.
Nothing herein will require the Seller to manufacture
and deliver
a replacement aircraft if such manufacture would
require the
reactivation of its production line for the model or
series of
aircraft that includes the Aircraft. Any termination
pursuant to
this Clause 10.4 as to a particular Aircraft will
discharge the
obligations and liabilities of the parties hereunder
with respect
to such Aircraft.
10.5 Remedies
THIS CLAUSE 10 SETS FORTH THE SOLE AND EXCLUSIVE
REMEDY OF THE
BUYER FOR DELAYS IN DELIVERY OR FAILURE TO DELIVER,
OTHER THAN
SUCH DELAYS AS ARE COVERED BY CLAUSE 11, AND THE
BUYER HEREBY
WAIVES ALL RIGHTS TO WHICH IT WOULD OTHERWISE BE
ENTITLED IN
RESPECT THEREOF, INCLUDING, WITHOUT LIMITATION, ANY
RIGHTS TO
INCIDENTAL AND CONSEQUENTIAL DAMAGES OR SPECIFIC
PERFORMANCE. THE
BUYER WILL NOT BE ENTITLED TO CLAIM THE REMEDIES AND
RECEIVE THE
BENEFITS PROVIDED IN THIS CLAUSE 10 WHERE THE DELAY
REFERRED TO
IN THIS CLAUSE 10 IS CAUSED BY THE NEGLIGENCE OR
FAULT OF THE
BUYER OR ITS REPRESENTATIVES.
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11 - INEXCUSABLE DELAY
11.1 Liquidated Damages
Should an Aircraft not be Ready for Delivery within
thirty (30)
days after the last day of the Scheduled Delivery
Month (as such
month may be changed pursuant to Clauses 2, 7 or 10)
and such
delay is not as a result of an Excusable Delay or
Total Loss,
then such delay will be termed an "Inexcusable
Delay." In the
event of an Inexcusable Delay, the Buyer will have
the right to
claim, and the Seller will pay the Buyer liquidated
damages of US
$ 15,000 (US dollars- fifteen thousand) for each day
of delay in
the Delivery, starting thirty-one (31) days following
the
scheduled delivery date within the Scheduled Delivery
Month (or,
if no such date has been set, the last day of the
Scheduled
Delivery Month).
In no event will the amount of liquidated damages
exceed the
total of US $ 2,400,000 (US dollars-two million four
hundred
thousand) in respect of any one Aircraft.
The Buyer's right to liquidated damages in respect of
an Aircraft
is conditioned on the Buyer's submitting a written
claim for
liquidated damages to the Seller not later than
thirty (30) days
after the last day of the Scheduled Delivery Month.
11.2 Renegotiation
If, as a result of an Inexcusable Delay, Delivery
does not occur
within six (6) months after the last day of the
Scheduled
Delivery Month the Buyer will have the right,
exercisable by
written notice to the Seller given between fifteen
(15) days and
thirty (30) days after lapse of such six (6) month
period, to
require from the Seller a renegotiation of the
Scheduled Delivery
Month for the affected Aircraft. Unless otherwise
agreed between
the Seller and the Buyer during such renegotiation,
the said
renegotiation will not prejudice Buyer's right to
receive
liquidated damages in accordance with Clause 11.1.
11.3 Termination
If, as a result of an Inexcusable Delay, Delivery
does not occur
within twelve (12) months after the last day of the
Scheduled
Delivery Month and the parties have not renegotiated
the Delivery
Date pursuant to Clause 11.2, then both parties will
have the
right exercisable by written notice to the other
party, given
between one (1) and sixty (60) days after the lapse
of such
twelve (12) month period, to terminate this Agreement
in respect
of the affected Aircraft. In the event of
termination, neither
party will have any claim against the other, except
that the
Seller will pay to the Buyer
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38
any amounts due pursuant to Clause 11.1 and will pay
the Buyer an
amount equal to the Predelivery Payments received
from the Buyer
hereunder in respect of the Aircraft as to which this
Agreement
has been terminated.
11.4 Remedies
THIS CLAUSE 11 SETS FORTH THE SOLE AND EXCLUSIVE
REMEDY OF THE
BUYER FOR DELAYS IN DELIVERY OR FAILURE TO DELIVER,
OTHER THAN
SUCH DELAYS AS ARE COVERED BY CLAUSE 10, AND THE
BUYER HEREBY
WAIVES ALL RIGHTS TO WHICH IT WOULD OTHERWISE BE
ENTITLED IN
RESPECT THEREOF, INCLUDING WITHOUT LIMITATION ANY
RIGHTS TO
INCIDENTAL AND CONSEQUENTIAL DAMAGES OR SPECIFIC
PERFORMANCE. THE
BUYER WILL NOT BE ENTITLED TO CLAIM THE REMEDIES AND
RECEIVE THE
BENEFITS PROVIDED IN THIS CLAUSE 11 WHERE THE DELAY
REFERRED TO
IN THIS CLAUSE 11 IS CAUSED BY THE NEGLIGENCE OR
FAULT OF THE
BUYER OR ITS REPRESENTATIVES.
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12. WARRANTIES AND SERVICE LIFE POLICY
12.1 Warranty
12.1.1 Nature of Warranty
Subject to the limitations and conditions hereinafter
provided,
and except as provided in Clause 12.1.2, the Seller
warrants to
the Buyer that Aircraft and each Warranted Part will
at the time
of Delivery to the Buyer be free from defects:
(i) in material,
(ii) in workmanship, including, without limitation,
processes of
manufacture,
(iii) in design (including, without limitation,
selection of
materials) having regard to the state of the art at
the date of
such design, and
(iv) arising from failure to conform to the
Specification, except
as to those portions of the Specification that are
expressly
stated in the Specification to be estimates or
approximations or
design aims.
For the purposes of this Agreement, the term
"Warranted Part"
will mean any Seller proprietary component,
equipment, software,
or part, that (a) is installed on an Aircraft at
Delivery, (b) is
manufactured to the detail design of the Seller or a
subcontractor of the Seller and (c) bears a
manufacturers part
number at the time of Delivery.
12.1.2 Exclusions
The warranties set forth in Clause 12.1.1 will not
apply to Buyer
Furnished Equipment, Propulsion Systems, or to any
component,
accessory, equipment or part purchased by the Buyer
that is not a
Warranted Part, provided, however, that:
(i) any defect in the Seller's workmanship in respect
of the
installation of such items in the Aircraft, including
any failure
by the Seller to conform to the installation
instructions of the
manufacturers of such items that invalidates any
applicable
warranty from such manufacturers, will constitute a
defect in
workmanship for the purpose of this Clause 12.1 and
be covered by
the warranty set forth in Clause 12.1.1(ii), and
(ii) any defect inherent in the Seller's design of
the
installation, considering the state of the art at the
date of such
design, that impairs the use of such items will
constitute a
defect in design for the purposes of this
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Clause 12.1 and be covered by the warranty set forth
in Clause
12.1.1(iii).
12.1.3 Warranty Periods
The warranties described in Clauses 12.1.1 and 12.1.2
hereinabove
will be limited to those defects that become apparent
within
thirty-six (36) months after Delivery of the affected
Aircraft
(the "Warranty Period").
12.1.4 Limitations of Warranty
12.1.4.1 The Buyer's remedy and the Seller's obligation and
liability
under Clauses 12.1.1 and 12.1.2 are limited to, at
the Seller's
expense and option, the repair, replacement or
correction (to
include, in the case of software, supply of a
comparable product
with equivalent function) of any defective Warranted
Part. The
Seller may elect to effect such repair, replacement
or correction
by supplying modification kits designed to rectify
the defect or
by furnishing a credit to the Buyer for the future
purchase of
goods and services (not including Aircraft) or
redeemable for
cash equal to the price at which the Buyer is then
entitled to
acquire a replacement for the defective Warranted
Part.
12.1.4.2 If the Seller corrects a defect covered by Clause
12.1.1(iii)
that becomes apparent within the Warranty Period, on
the Buyer's
written request the Seller will correct any such
defect of the
same type in any Aircraft that has not already been
delivered to
the Buyer. The Seller will not be responsible for,
nor deemed to
be in default on account of any delay in Delivery of
any Aircraft
or otherwise, in respect of performance of this
Agreement, due to
the Seller's undertaking to make such correction.
Alternatively,
the Buyer and the Seller may agree to deliver such
Aircraft with
subsequent correction of the defect by the Buyer at
the Seller's
expense, or the Buyer may elect to accept Delivery
and thereafter
file a Warranty Claim as though the defect had become
apparent
immediately after Delivery of such Aircraft.
12.1.5 Cost of Inspection
12.1.5.1 In addition to the remedies set forth in Clauses
12.1.4.1 and
12.1.4.2, the Seller will reimburse the direct labor
costs
incurred by the Buyer in performing inspections of
the Aircraft
that are conducted:
(i) to determine whether a defect exists in any
Warranted Part
within the Warranty Period or
(ii) pending the Seller's provision of a corrective
technical
solution.
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12.1.5.2 The Seller's liability under Clause 12.1.5.1 is
subject to the
following conditions:
such inspections are recommended in a Seller Service
Bulletin to
be performed within the Warranty Period;
the labor rate for the reimbursements will be the
In-house
Warranty Labor Rate, and
the hours used to determine such reimbursement will
not exceed
the Seller's reasonable estimate of the hours
required for such
inspections.
12.1.6 Warranty Claim Requirements
The Buyer's remedy and the Seller's obligation and
liability
under this Clause 12.1 with respect to each claimed
defect are
subject to the following conditions:
(j) the defect has become apparent within the
Warranty Period,
(k) the Buyer has filed a Warranty Claim within
ninety (90) days
of a defect becoming apparent;
(l) the Buyer has submitted to the Seller evidence
reasonably
satisfactory to the Seller that (i) the claimed
defect is due to
a matter covered under the provisions of this Clause
12, and (ii)
that such defect did not result from any act or
omission of the
Buyer, including but not limited to, any failure to
operate and
maintain the affected Aircraft or part thereof in
accordance with
the standards set forth in Clause 12.1.11 or from any
act or
omission of any third party;
(m) the Buyer returns the Warranted Part claimed to
be defective
to the repair facilities designated by the Seller as
soon as
practicable, unless the Buyer elects to repair a
defective
Warranted Part in accordance with the provisions of
Clause
12.1.8; and
(n) the Seller's receives a Warranty Claim complying
with the
provisions of Clause 12.1.7(v).
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12.1.7 Warranty Administration
The warranties set forth in this Clause 12.1 will be
administered
as hereinafter provided:
(i) Claim Determination
Determination by the Seller as to whether any claimed
defect in
any Warranted Part is a valid Warranty Claim will be
made by the
Seller and will be based on claim details, reports
from the
Seller's regional representative, historical data
logs,
inspections, tests, findings during repair, defect
analysis and
other relevant documents and information.
(ii) Transportation Costs
The cost of transporting a Warranted Part claimed to
be defective
to the facilities designated by the Seller will be
borne by the
Buyer.
(iii) On-Aircraft Work by the Seller
If either (a) the Seller determines that a defect
subject to this
Clause 12.1 requires the dispatch by the Seller of a
Seller's
working team to the Buyer's facilities, to repair or
correct such
defect through implementation of one or more Seller's
Service
Bulletins, or (b) the Seller accepts the return of an
Aircraft to
perform or have performed a repair or correction,
then, the labor
costs for such on-Aircraft work will be borne by the
Seller at
the In-House Labor Rate.
On-Aircraft work by the Seller will be undertaken
only if, in the
Seller's opinion, the work requires the Seller's
technical
expertise. In such case, the Seller and the Buyer
will agree on a
schedule and place for the work to be performed.
(iv) Return of an Aircraft
If the Buyer and the Seller mutually agree, prior to
such return,
that it is necessary to return an Aircraft to the
Seller for
consideration of a Warranty Claim, the Seller shall
bear the
direct costs of fuel and landing fees to and from the
Seller's
facilities for such return of the Aircraft. The Buyer
shall make
its reasonable efforts to minimize the duration of
the
corresponding flights.
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(v) Warranty Claim Substantiation
For each claim under this Clause 12.1 the Buyer will
give written
notice ("a "Warranty Claim") to the Seller that
contains at least
the data listed below with respect to an Aircraft or
Warranted
Part, as applicable. The Buyer will deliver the
Warranty Claim
within ninety (90) days of discovering each defect
giving rise to
a claim by the Buyer under this Clause 12.
(a) Description of the defect and any action taken,
(b) Date of incident and/or removal,
(c) Description of the Warranted Part claimed to be
defective.
(d) Part number,
(e) Serial number (if applicable),
(f) Position on Aircraft, according to Catalog
Sequence Number
(CSN) of the Illustrated Parts Catalog, Component
Maintenance
Manual or Structural Repair Manual (as such documents
are defined
in Exhibit F) as applicable,
(g) Total flying hours or calendar times, as
applicable, at the
date of appearance of a defect,
(h) Time since last shop visit at the date of
appearance of
defect,
(i) Manufacturer's serial number (MSN) of the
Aircraft and/or its
registration number,
(j) Aircraft total flying hours and/or number of
landings at the
date of appearance of defect,
(k) Claim number,
(l) Date of claim and
(m) Date of Delivery of an Aircraft to the Buyer.
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Warranty Claims are to be addressed as follows:
AIRBUS
CUSTOMER SERVICES DIRECTORATE
WARRANTY ADMINISTRATION
ROND-POINT MAURICE BELLONTE
B.P. 33
F-31707 BLAGNAC CEDEX
FRANCE
(vi) Replacements
Replaced components, equipment, accessories or parts
will become
the Seller's property.
Title to and risk of loss of any Aircraft, component,
accessory,
equipment or part returned by the Buyer to the Seller
will at all
times remain with the Buyer, except that (i) when the
Seller has
possession of a returned Aircraft, component,
accessory,
equipment or part to which the Buyer has title, the
Seller will
have such responsibility therefor as is chargeable by
law to a
bailee for hire, but the Seller will not be liable
for loss of
use, and (ii) title to and risk of loss of a returned
component,
accessory, equipment or part will pass to the Seller
on shipment
by the Seller to the Buyer of any item furnished by
the Seller to
the Buyer as a replacement therefor. Upon the
Seller's shipment
to the Buyer of any replacement component, accessory,
equipment
or part provided by the Seller pursuant to this
Clause 12.1,
title to and risk of loss of such replacement
component,
accessory, equipment or part will pass to the Buyer.
(vii) Rejection
The Seller will provide reasonable written
substantiation in case
of rejection of a Warranty Claim. The Buyer will pay
to the
Seller reasonable inspection and test charges
incurred by the
Seller in connection with the investigation and
processing of a
rejected Warranty Claim.
(viii) Inspection
The Seller will have the right to inspect the
affected Aircraft
and documents and other records relating thereto in
the event of
any claim under this Clause 12.1.
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12.1.8 In-house Warranty
(i) Authorization
The Buyer is hereby authorized to repair Warranted
Parts, subject
to the terms of this Clause 12.1.8 ("In-house
Warranty Repair").
When the estimated cost of an In-house Warranty
repair exceeds
$15,000 (fifteen thousand US dollars), the Buyer will
notify the
Resident Customer Support Representative, of its
decision to
perform any in-house repairs before such repairs are
commenced.
The Buyer's notice will include sufficient detail
regarding the
defect, estimated labor hours and material to allow
the Seller to
ascertain the reasonableness of the estimate. The
Seller will use
reasonable efforts to ensure a prompt response and
will not
unreasonably withhold authorization.
(ii) Conditions of Authorization
The Buyer will be entitled to the benefits under this
Clause
12.1.8 for repair of Warranted Parts:
(a) if the Buyer complies with the terms of
Clause 12.1.8
(i);
(b) if adequate facilities and qualified
personnel are
available to the Buyer.
(c) provided that repairs are to be performed
in accordance
with the Seller's written instructions set
forth in
applicable Technical Data and
(d) only to the extent specified by the Seller,
or, in the
absence of the Seller's specifying, to the
extent
reasonably necessary to correct the defect,
in
accordance with the standards set forth in
Clause
12.1.11.
(iii) Seller's Rights
The Seller will have the right to require the return
to Seller of
any Warranted Part, or any part removed therefrom,
that is
claimed to be defective, if, in the Seller's
judgment, the nature
of the claimed defect requires technical
investigation. Such
delivery will be subject to the provisions of Clause
12.1.7(ii).
The Seller will have the right to have a
representative present
during the disassembly, inspection and testing of any
Warranted
Part claimed to be defective, subject to such
presence being
practical and not unduly delaying the repair.(iv)
In-house
Warranty Claim Substantiation
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Claims for In-house Warranty Repair credit will
comply with the
requirements for Warranty Claims under Clause
12.1.6(v) and in
addition will include:
(a) a report of technical findings with respect
to the
defect,
(b) for parts required to remedy the defect:
part numbers,
serial numbers (if applicable),
description of the parts,
quantity of parts,
unit price of parts,
- copies of related Seller's or third
party's
invoices (if applicable), total
price of parts
(c) detailed number of labor hours,
(d) In-house Warranty Labor Rate, and
(e) total claim value.
(v) Credit
The Buyer's sole remedy, and the Seller's sole
obligation and
liability, in respect of In-house Warranty Repair
claims, will be
a credit to the Buyer's account. Such credit will be
equal to the
sum of the direct labor cost expended in performing
such repair,
plus the direct cost of materials incorporated in the
repair.
Such costs will be determined as set forth below.
To determine direct labor costs, only the manhours
spent on
removal from the Aircraft disassembly, inspection,
repair,
reassembly, and final inspection and test of the
Warranted Part,
and reinstallation thereof on the Aircraft will be
counted. The
hours required for maintenance work concurrently
being carried
out on the Aircraft or Warranted Part will not be
included.
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The manhours permissible above will be multiplied by
a labor rate
("In-house- Warranty Labour Rate") equal to either:
(i) The Inhouse Warranty Labor Rate applicable
pursuant to any
existing agreement between the Seller and the
Operator of
the Aircraft in the event that such Operator
operates Airbus
aircraft, or
(ii) A labor rate to be agreed between the Buyer and
the Seller
and corresponding to the Inhouse Warranty Labor
Rate
generally applicable to Operators of Airbus
aircraft in the
region, in the event that the Operator of the
Buyer's
Aircraft is not an Airbus aircraft operator.
(iii) Direct material costs are determined by the
prices at which
the Buyer acquired such material, excluding any
parts and
materials used for overhaul furnished free of
charge by the
Seller.
(vi) Limitation on Credit
The Buyer will only be credited for repair costs
(labor and
material) for any Warranted Part up to sixty-five
percent (65%)
of the Seller's then-current catalog price for a
replacement of
such defective Warranted Part provided such
replacement part is
available for purchase.
The Seller will substantiate such Seller costs in
writing on
reasonable request by the Buyer.
(vii) Scrapped Material
The Buyer may, with the agreement of the Seller's
Resident
Customer Support Representative, scrap any such
defective
Warranted Parts that are beyond economic repair and
not required
for technical evaluation.
If the Buyer does not obtain the agreement of the
Seller's
Resident Customer Support Representative to scrap a
Warranted
Part immediately, the Buyer will retain such
Warranted Part and
any defective part removed from a Warranted Part
during repair
for a period of either one hundred and twenty (120)
days after
the date of completion of repair or sixty (60) days
after
submission of a claim for In-house Warranty Repair
credit
relating thereto, whichever is longer. Such parts
will be
returned to the Seller within thirty (30) days of
receipt of the
Seller's request therefor, made within such retention
periods.
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A record of scrapped Warranted Parts, certified by an
authorized
representative of the Buyer, will be kept in the
Buyer's file for
at least the duration of the Warranty Period.
(viii) DISCLAIMER OF SELLER LIABILITY FOR BUYER'S
REPAIR
THE SELLER WILL NOT BE LIABLE FOR, AND THE BUYER WILL
INDEMNIFY
THE SELLER AGAINST, THE CLAIMS OF ANY THIRD PARTIES
FOR LOSSES
DUE TO ANY DEFECT, NONCONFORMANCE OR PROBLEM OF ANY
KIND, ARISING
OUT OF OR IN CONNECTION WITH ANY REPAIR OF WARRANTED
PARTS
UNDERTAKEN BY THE BUYER UNDER THIS CLAUSE 12.1.8 OR
ANY OTHER
ACTIONS UNDERTAKEN BY THE BUYER UNDER THIS CLAUSE
12.1.8, WHETHER
SUCH CLAIM IS ASSERTED IN CONTRACT OR IN TORT, OR IS
PREMISED ON
ALLEGED, ACTUAL, IMPUTED, ORDINARY OR INTENTIONAL
ACTS OR
OMISSIONS OF THE BUYER OR THE SELLER .
12.1.9 Warranty Transferability
Notwithstanding the provisions of Clause 20.1, The
warranties
provided for in this Clause 12.1 for any Warranted
Part will
accrue to the benefit of any airline in revenue
service other
than the Buyer, if the Warranted Part enters into the
possession
of any such airline as a result of a pooling
agreement between
such airline and the Buyer, in accordance with the
terms and
subject to the limitations and exclusions of the
foregoing
warranties and to applicable laws or regulations.
12.1.10 Warranty for Corrected, Replacement or Repaired
Warranted Parts
Whenever any Warranted Part that contains a defect
for which the
Seller is liable under this Clause 12.1 has been
corrected,
repaired or replaced pursuant to the terms hereof,
the period of
the Seller's warranty with respect to such corrected,
repaired or
replacement Warranted Part, will be the remaining
portion of the
original warranty in respect of such corrected,
repaired or
replaced Warranted Part or twelve (12) months,
whichever is
longer. If a defect is attributable to a defective
repair or
replacement by the Buyer, a Warranty Claim with
respect to such
defect will be rejected, notwithstanding any
subsequent
correction or repair, and will immediately terminate
the
remaining warranties under this Clause 12.1 in
respect of the
affected Warranted Part.
12.1.11 Good Airline Operation - Normal Wear and Tear
The Buyer's rights under this Clause 12.1 are subject
to the
Aircraft and each component, equipment, accessory and
part
thereof being maintained,
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overhauled, repaired and operated in accordance with
good
commercial airline practice, all technical
documentation and any
other instructions issued by the Seller, the
Suppliers or the
manufacturer of the Propulsion Systems and all
applicable rules,
regulations and directives of the relevant Aviation
Authorities.
The Seller's liability under this Clause 12.1 will
not extend to
normal wear and tear or to
(i) any Aircraft or component, equipment, accessory
or part
thereof that has been repaired, altered or modified
after
Delivery in a manner other than that approved by the
Seller;
(ii) any Aircraft or component, equipment, accessory
or part
thereof that has been knowingly operated in a damaged
state; or
(iii) any component, equipment, accessory or part
from which the
trademark, trade name, part or serial number or other
identification marks have been intentionally removed.
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12.2 Seller Service Life Policy
12.2.1 Scope and Definitions
In addition to the warranties set forth in Clause
12.1, the
Seller agrees that should a Failure occur in any Item
(as these
terms are defined below), then, subject to the
general conditions
and limitations set forth in Clause 12.2.4, the
provisions of
this Clause 12.2 will apply.
For the purposes of this Clause 12.2:
"Item" means any of the Seller components,
equipment,
accessories or parts listed in Exhibit C that are
installed on an
Aircraft at any time during the period of
effectiveness of the
Service Life Policy as defined in Clause 12.2.2.
"Failure" means any breakag
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