STAGE III HUSH KIT SALES AGREEMENT
THIS STAGE III HUSH KIT SALES AGREEMENT ("Agreement") is made this 18th
day of May, 1993, by and between QUIET TECHNOLOGY VENTURE, a Florida General
Partnership at 0000 X.X. 00xx Xxxxxx, Xxxxx, Xxxxxxx 00000 (hereinafter called
"QTV") and FINE AIRLINES, INC., a Florida Corporation at 0000 X.X. 00xx Xxxxxx,
Xxxxx, Xxxxxxx 00000 (hereinafter called the "Purchaser").
WITNESSETH
WHEREAS, QTV is a joint venture formed for the primary purpose of
designing, developing, testing, certifying, manufacturing and otherwise
preparing for market certain turbo jet engine nacelle noise attenuation
modification technology for XxXxxxxxx Xxxxxxx DC-8-50/61 Series Aircraft to
comply with US FAA FAR Part 36 Stage III requirements (the "Hush Kits"); and
WHEREAS, QTV shall provide all technical expertise in designing,
developing, testing, certifying and manufacturing or causing to be manufactured
the Hush Kits; and
WHEREAS, the Purchaser desires to purchase said Hush Kits from QTV for
Purchaser's fleet of ten (10) DC-8-50/61 aircraft as more particularly defined
in Schedule 1 of this Agreement and hereinafter referred to as the "Aircraft".
NOW THEREFORE in consideration of their mutual promises hereinafter set
forth IT IS AGREED AND DECLARED AS FOLLOWS:
CLAUSE 1. SCOPE OF AGREEMENT, PRICE AND PAYMENT TERMS
1.1 Price and terms of payment are as agreed in Schedule 2 of this
Agreement. QTV acknowledges receipt of a total of U.S. $750,000.00 as a non-
refundable deposit subject to Clause 20 for Purchaser's fleet of ten (10)
Aircraft.
1.2 The parties hereto agree that the terms and conditions set forth
herein represent the sole and entire Agreement between the parties relating to
the supply by QTV to the Purchaser of Hush Kits for the Aircraft. The parties
further agree that neither party places any reliance whatsoever on any such
prior representations, agreements, statements and understandings except to the
extent expressly incorporated in this Agreement.
1.3 The parties further agree that the terms and conditions of this
Agreement shall apply to the exclusion of any set standard terms and conditions
or their equivalent on or attached to or otherwise forming part of any order
form issued by the Purchaser or
acknowledgement of QTV or any other administrative document issued by either
party in the course of or in support of their performance of this Agreement.
CLAUSE 2. DELIVERY OF AIRCRAFT
2.1 The Purchaser shall deliver the Aircraft to be modified to the QTV
facility at Opa-locka Airport, Opa-locka, FL at a date to be determined later
related to the production line delivery position.
2.2 The Purchaser warrants that upon such delivery the Aircraft shall be
in a fully airworthy condition and the Purchaser shall exhibit to QTV a current
Certificate of Airworthiness for the Aircraft.
2.3 Prior to the acceptance of the Aircraft for modification, QTV will
determine whether the Aircraft is in satisfactory condition to enable it to
accept installation of the Stage III Hush Kit.
2.4 The Aircraft shall be deemed accepted by QTV at such time as QTV
issues the Aircraft Acceptance Certificate in the form as annexed as Schedule 3
to this Agreement.
CLAUSE 3. MODIFICATION AND DELIVERY
3.1 Purchaser desires and QTV agrees to perform the installation of the
Hush Kits at QTV's facility at Opa-locka, FL. However, Purchaser may elect to
have QTV install the Stage III Hush Kits at the Purchaser's facility at Miami
International Airport, Miami, FL.
3.2 Provided that the Aircraft is delivered to QTV as soon as reasonably
possible after the issuance of the Aircraft Acceptance Certificate, QTV shall
install the Stage III Hush Kit and shall tender the Aircraft as so modified for
redelivery to the Purchaser at Opa-locka, FL no later than a fixed date to be
determined when production line delivery can be established. The Purchaser
and/or its designated agent shall have reasonable access to and the right to
reasonably inspect the Aircraft and the Stage III Hush Kit for the period that
the Aircraft is being modified. QTV shall, on completion of installation of the
Stage III Hush Kit execute and deliver to Purchaser an FAA Form 337 for such
installation and certification that the Aircraft so modified conforms with
Federal Aviation Regulations, 14 C.F.R. Part 36 requirement for Stage III
Aircraft. QTV shall further deliver to Purchaser an Airplane Flight Manual
Supplement for the serial numbered Aircraft with the FAA approved operating
limitations in accordance with QTV Supplemental Type Certificate. The Aircraft
shall be delivered to the Purchaser upon issuance by the Purchaser of the
Aircraft Redelivery Certificate in the form set forth in Schedule 4 to this
Agreement. Should the Purchaser fail within such period to inspect the Aircraft,
then QTV shall be entitled to carry out such inspection on behalf of the
Purchaser and this Agreement shall constitute authority for QTV to execute such
Aircraft Redelivery Certificate as the agent of the Purchaser.
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3.3 It is agreed between the parties that the Purchaser shall receive
production Stage III Hush Kit delivery positions 1, 3, 5, 7, 9, 11, 13, 15, 17
and 19 unless QTV, at its option, chooses to deliver the Stage III Hush Kit
positions on an accelerated basis. The actual dates of this delivery schedule
shall be provided to Purchaser as soon as known by QTV.
CLAUSE 4. INSURANCE
During the time that the Hush Kits are at QTV's installation facility,
QTV shall ensure that a policy of hangarkeeper's insurance is maintained in full
force and effect covering the Hush Kits and naming the Purchaser as additional
insured. Such policy shall be available for inspection by the Purchaser upon
giving of reasonable notice. Purchaser shall insure or cause to be insured the
Aircraft and Hush Kit with ground and flight hull insurance and third party
liability insurance with QTV named as additional insured as its interest may
appear while the Hush Kit is being installed on the Aircraft and during the test
flight. Purchaser will provide QTV with an endorsement, satisfactory to QTV,
from the insurer as evidence of such coverage.
CLAUSE 5. DEFECTIVE WORKMANSHIP
In the event that it should be shown to the reasonable satisfaction of
QTV that a defect has arisen in the Stage III Hush Kit within 2,500 hours or one
year from the date of the Aircraft Redelivery Certificate due to the use by QTV
of defective material or workmanship, then provided that within 30 days of such
defect becoming apparent, the Purchaser, at its own expense, will deliver the
Aircraft to QTV's installation facility or to such other place as QTV may
reasonably designate. QTV shall, without charge to the Purchaser, rectify such
defect by repair or replacement as QTV may, in its sole discretion, decide, and
such repair or replacement shall represent the limit of QTV's liability in
respect of any such defect.
CLAUSE 6. DESIGN WARRANTY
QTV warrants that the application of its Stage III Hush Kit will:
6.1 Bring the Aircraft into compliance with the noise levels prescribed in
Section C Stage III of Appendix C of Part 36 of the Federal Aviation
Regulations, 14 C.F.R. Part 36 as published and promulgated by the Federal
Aviation Administration on the date of execution of this Agreement.
6.2 Not be such as, upon redelivery of the Aircraft, to invalidate the
Certificate of Airworthiness for the Aircraft.
CLAUSE 7. PRICE AND PAYMENT
7.1 Price and payment terms are contained in Schedule 2 of this
Agreement. QTV acknowledges receipt of a total of U.S. $750,000.00 as a
non-refundable deposit for ten (10) Stage III Hush Kits for Purchaser's fleet
of ten (10) Aircraft subject to Clause 20 of this
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Agreement.
7.2 The Purchaser shall ensure that QTV receives the full amount of any
payments due hereunder without any deductions or withholdings whatsoever and the
Purchaser shall be responsible for any and all taxes, duties, imposts, levies,
surcharges and other like charges of the same or any kind which may be levied,
charged or imposed upon any payments by any government agency which fall due
under this Agreement or arise otherwise in connection with the performance of
this Agreement.
CLAUSE 8. EXCLUSIONS OF LIABILITY
The warranties of QTV set forth in Clause 6 above and the express remedies
provided to the Purchaser pursuant to Clauses 5 and 7 above are accepted by the
Purchaser IN LIEU OF AND IN SUBSTITUTION FOR ALL OTHER CONDITIONS AND WARRANTIES
EXPRESSED OR IMPLIED WHETHER STATUTORY OR OTHERWISE INCLUDING, WITHOUT
LIMITATION WARRANTIES OR MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE
AND ALL OTHER OBLIGATIONS AND LIABILITIES WHATSOEVER OF QTV WHETHER IN CONTRACT
OR IN TORT OR OTHERWISE HOWSOEVER. The Purchaser accepts that QTV shall not be
liable for any incidental or consequential damages or expenses howsoever arising
and shall not by reason of any breach or breaches of any of the warranties set
forth in Clause 6 above or otherwise howsoever become liable for any amount or
amounts which in the aggregate exceed the amounts paid by the Purchaser to QTV
under this Agreement.
The foregoing provisions of this Clause have been the subject of full
discussion and are clearly understood by the parties and the total price payable
to QTV hereunder has been established, inter alia, in reliance upon the
Purchaser's acceptance of the scope of the warranties contained in Clause 6, the
remedies provided under Clauses 5 above and the Purchaser's waiver of all the
other remedies and agreement to such total limitation of liability of the
amounts paid by the Purchaser to QTV under this Agreement.
CLAUSE 9. FORCE MAJEURE
QTV shall not be liable for any delay or interruption in performance or
failure to perform hereunder or for any consequences arising out of the delay or
interruption of its performance or failure to perform hereunder by reason of any
strikes, lockout, or other labor disputes which delay the work, or arising out
of fires, floods, or acts of God, nor for any other reason whatsoever that is
reasonably beyond QTV's control, including failure to deliver or delay in
delivery of materials. QTV shall promptly notify Purchaser of delays
attributable to the foregoing causes and shall use its best efforts to minimize
such unavoidable delays.
CLAUSE 10. CONFIDENTIALITY
The parties agree that the purchase price and terms of payment are
confidential.
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Neither party shall reveal such terms to a third party without the written
express consent of the other party. Purchaser recognizes that the Stage III Hush
Kit technology is the sole and exclusive property of QTV, and undertakes to
maintain the confidentiality of the technology now and for the future. Purchaser
represents and warrants that it has entered into this Agreement for the sole
purpose of obtaining Aircraft in compliance with the Federal Aviation
Administration Noise Regulations, that the Aircraft are to be used on its own
account, and that it will not attempt to sell, copy, imitate or in any way deal
in the nacelle quieting technology furnished by QTV.
CLAUSE 11. AMENDMENT
This Agreement may not be amended otherwise than by an instrument in
writing signed by the authorized representatives of the parties made subsequent
to the signature of this Agreement and which is expressly stated to be an
amendment to this Agreement.
CLAUSE 12. NOTICES
Any notices required to be given pursuant to this Agreement shall be
given in writing by certified mail return receipt requested or equivalent
procedure as follows:
If to QTV:
QUIET TECHNOLOGY VENTURE
0000 XX 00xx Xxxxxx
Xxxxx, Xxxxxxx 00000
If to Purchaser:
FINE AIRLINES, INC.
X.X. Xxx 000000
Xxxxx, Xxxxxxx 00000
CLAUSE 13. HEADINGS
Clause headings do not form part of this Agreement nor shall they govern
the interpretation of this Agreement.
CLAUSE 14. SURVIVAL
The provisions of Clause 11 above shall survive and have effect after the
expiration or earlier termination or discharge by performance of this Agreement.
CLAUSE 15. WAIVER
Failure by either party at any time to enforce any of the provisions of the
Agreement shall not be construed as a waiver by such party of such provisions or
in any way
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affect the validity of this Agreement.
CLAUSE 16. ASSIGNABILITY OF RIGHTS
Purchaser may freely assign all its rights under this Agreement,
provided that any Aircraft to be modified under this Agreement shall meet the
technical requirements of the Supplemental Type Certificate. In the event that
the owner of the Aircraft should transfer the Stage III Hush Kit to another
Aircraft, QTV agrees to issue or cause to be issued at a nominal charge a Flight
Manual Supplement for the receiving Aircraft, provided that the receiving
Aircraft complies with the technical requirements of the Supplemental Type
Certificate.
CLAUSE 18. LAW
This Agreement shall be subject to and interpreted in accordance with
the Laws of the State of Florida. Purchaser unconditionally and irrevocably
submits itself to the jurisdiction of the Courts of Dade County in the State of
Florida. Purchaser unconditionally and irrevocably submits itself to the
jurisdiction of the Courts of Dade County in the State of Florida. Should legal
action be required to enforce any provisions of this Agreement, the prevailing
party shall be entitled to recover reasonable attorney's fees and costs.
CLAUSE 19. AMENDMENTS TO SUPPLEMENTAL TYPE CERTIFICATE
In the event that QTV shall obtain an amendment to the Supplemental Type
Certificate from the Federal Aviation Administration which will increase
performance of the DC-8-50/61 series Aircraft, such amendment shall be deemed
subject to this Agreement and QTV agrees to perform such further modification to
the Hush Kit at an additional cost to Purchaser or Purchaser's assignee and
shall furnish Purchaser or assignee the FAA certified Airplane Flight Manual
Supplement for the improved performance.
CLAUSE 20. DEFAULT
In the event that QTV is unable to complete the Stage III Hush Kit and
redelivery of the Aircraft within the schedule set forth in Clause 3.3 for any
reason other than the action of the Purchaser, or force majeure as defined in
Clause 10, QTV shall promptly refund the deposit of U.S. $75,000.00 per Hush
Kit or total of U.S. $750,000.00 to Purchaser.
CLAUSE 21. ASSIGNMENT OF WARRANTIES
QTV hereby assigns to Purchaser and to Purchaser's assigns any
warranties it may have from third parties pertaining to materials or component
parts, to the extent that such warranties exist and are assignable. QTV hereby
consents to the assignment of all warranties and remedies in this Agreement to
any subsequent Purchaser of the Aircraft and Stage III Hush Kit.
CLAUSE 22. ENGINEERING AND SPARES SUPPORT
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22.1 Notwithstanding the expressed warranties of QTV herein, QTV agrees to
provide on-going engineering support for the Stage III Hush Kit and to maintain
a reasonable and adequate stock of spare components available for loan to
Purchaser or assigns in event repairs to any of the modified components on
Purchaser's aircraft shall require return to QTV facilities or to authorized
repair agencies of QTV. Such loans and repairs beyond the scope of QTV's
warranties shall be chargeable at no more than industry standards for similar
loans and repairs. QTV shall furnish a repair manual to Purchaser and make
available parts or kits as necessary for such repairs as may be effected in
customary shop procedures.
22.2 Engineering support by QTV shall include, but not limited to, any
repairs or alterations which may be required by FAA Airworthiness Directives and
QTV shall issue service bulletins as necessary for the maintenance of the Stage
III Hush Kit components.
CLAUSE 23. PRODUCT LIABILITY INSURANCE
QTV warrants that it has and will maintain One Hundred Million Dollars
Product Liability insurance, which shall be in effect for 2,500 hours or one
year from the date of the Aircraft Redelivery Certificate issued for the last
aircraft to be fitted with the QTV Stage III Hush Kit, whichever is the shorter
period.
IN WITNESS WHEREOF, the parties have caused this Stage III Hush Kit Sales
Agreement to be executed on their behalf by the hand of a duly authorized
representative this 18th day of May, 1993, at Miami, Dade County, Florida.
QUIET TECHNOLOGY VENTURE FINE AIRLINES, INC.
BY: /s/ X.X. XXXXXX BY: /s/ XXXXX X. FINE
------------------------- ------------------------
M.C. XXXXXX XXXXX H. FINE
TITLE: General Partner TITLE: General Manager
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SCHEDULE 1
THE AIRCRAFT REG. NO. S.N. DATE OF DELIVERY PLACE OF
(Make & Model) TO QTV DELIVERY
DC-8-55 N55FB 45678 _______________ Xxx-xxxxx, XX
XX-0-00 X00XX 00000 _______________ Opa-locka, FL
DC-8-54 N426FB 45667 _______________ Opa-locka, FL
DC-8-54 N427FB 45684 _______________ Xxx-xxxxx, XX
XX-0-00 X00XX 00000 _______________ Opa-locka, FL
DC-8-54 N44UA 45800 _______________ Opa-locka, FL
DC-8-61 N27UA 45942 _______________ Opa-locka, FL
DC-8-61 N29UA 46159 _______________ Xxx-xxxxx, XX
XX-0-00 X00XX 00000 _______________ Opa-locka, FL
DC-8-51 N507DC 45855 _______________ Opa-locka, FL
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SCHEDULE 2
PRICE AND PAYMENT TERMS
Purchaser shall pay QTV the actual recurring production cost price (less
the non-refundable deposit amount) of each of the ten (10) Stage III Hush Kits
plus U.S. One Hundred Twenty Five Thousand Dollars ($125,000.00) for each Stage
III Hush Kit to Quiet Nacelle Corporation for the use of its technology. Payment
in full at time of installation of each Hush Kit and execution of Aircraft
Redelivery Certificate.
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SCHEDULE 3
AIRCRAFT ACCEPTANCE CERTIFICATE
To the Purchaser:
This is to certify that QTV accepts XxXxxxxxx Xxxxxxx DC-8-____ series Aircraft,
Serial Number _____________ as being in satisfactory condition to accept
installation of the QTV Stage III Hush Kit.
DATE:______________ QUIET TECHNOLOGY VENTURE
BY:______________________
TITLE:___________________
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SCHEDULE 4
AIRCRAFT REDELIVERY CERTIFICATE
Dear QTV:
This is to certify acceptance by FINE AIRLINES, INC. that the QTV Stage III
Hush Kit has been correctly installed in XxXxxxxxx Xxxxxxx DC-8-_______
series Aircraft, Serial Number _________, that title to the said Hush Kit is
hereby accepted by FINE AIRLINES, INC. and that the said Aircraft is in
satisfactory condition and has today been redelivered to FINE AIRLINES, INC.
PURCHASER: FINE AIRLINES, INC.
BY:______________________
TITLE:___________________
DATE:____________________
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ADDENDUM
This Addendum, dated 21st of January, 1995 modifies the Stage III Hush Kit
Sales Agreement, dated 18th day of May, 1993 by and between QUIET TECHNOLOGY
VENTURE, a Florida General Partnership at 0000 X.X. 00xx Xxxxxx, Xxxxx, Xxxxxxx
00000 and FINE AIRLINES, INC., a Florida Corporation at 0000 X.X. 00xx Xxxxxx,
Xxxxx, Xxxxxxx 00000.
Whereas QUIET TECHNOLOGY VENTURE has been converted to QUIET TECHNOLOGY VENTURE,
LIMITED, this Addendum allows, authorizes, and grants QUIET TECHNOLOGY VENTURE,
LIMITED to assume all the rights and responsibilities of QUIET TECHNOLOGY
VENTURE in the Stage III Hush Kit Sales Agreement specified above.
Further, QUIET TECHNOLOGY VENTURE, LIMITED agrees to sell to FINE AIRLINES, INC.
five (5) Stage III Hush Kits in addition to the ten (10) Stage III Hush Kits
already agreed upon in the above specified Stage III Hush Kit Sales Agreement.
FINE AIRLINES, INC. shall pay QUIET TECHNOLOGY VENTURE, LIMITED the actual
recurring production cost price less the non-refundable deposit amount of each
of these additional five (5) Stage III Hush Kits. Payment shall be made in full
at time of installation of each Hush Kit and execution of Aircraft Redelivery
Certificate.
QUIET TECHNOLOGY VENTURE, LTD., FINE AIRLINES, INC.,
a FLorida limited partnership a Florida corporation
By: /s/ XXXXX X. FINE By: /s/ X. XXXXX FINE
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Xxxxx X. Fine, Vice President X. Xxxxx Fine, President
LIMITED PARTNERS CONSENT
QUIET NACELLE CORPORATION as a limited partner of QUIET TECHNOLOGY VENTURE,
LIMITED does hereby consent to the foregoing Agreement.
By: /s/ XXXXXXXX XXXXXXXXXX
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Xxxxxxxx Xxxxxxxxxx, President
