2-23-98
PURCHASE AGREEMENT
BETWEEN
XXXXXXXXX XXXXXXX CORPORATION,
A WHOLLY OWNED SUBSIDIARY OF
THE BOEING COMPANY
AND
TRANS WORLD AIRLINES, INC.
A00480-B
2-23-98 A00480-B
TABLE OF CONTENTS
Date of Contract and Contracting Parties 1-1
Article 1 - DEFINITIONS 1-1
Article 2 - SUBJECT MATTER OF SALE 2-1
Article 3 - PRICE 3-1
Article 4 - PAYMENT 4-1
Article 5 - DETAIL SPECIFICATION CHANGES 5-1
Article 6 - DELIVERY 6-1
Article 7 - EXCUSABLE DELAY 7-1
Article 8 - BUYER FURNISHED OR DESIGNATED EQUIPMENT 8-1
Article 9 - TAXES, CUSTOMS, DUTIES AND LICENSES 9-1
Article 10 - FEDERAL AVIATION ADMINISTRATION APPROVAL 10-1
Article 11 - PATENT, TRADEMARK, TRADE SECRET AND
COPYRIGHT INDEMNITY 11-1
Article 12 - AIRCRAFT SUPPORT SERVICES AND WARRANTY 12-1
Article 13 - ASSIGNMENT AND TRANSFER 13-1
Article 14 - NOTICES AND REQUESTS 14-1
Article 15 - APPLICABLE LAW, VARIANCES AND WAIVER 15-1
Article 16 - NONDISCLOSURE 16-1
Signature Page 17-1
EXHIBIT A - DETAIL SPECIFICATION
EXHIBIT A1 - SPECIFICATION CHANGES NOTICES
EXHIBIT B - CERTIFICATE OF TECHNICAL ACCEPTANCE AND DELIVERY
EXHIBIT C - AIRCRAFT SUPPORT SERVICES
EXHIBIT D - PRICE ADJUSTMENTS FOR FLUCTUATIONS IN THE ECONOMY
EXHIBIT E - NEW ENGINE AND NEW PARTS WARRANTY
INDEX ii
2-23-98 A00480-B
PURCHASE AGREEMENT
THIS AGREEMENT XX. X00000-X, dated __________________, is made by and
between XXXXXXXXX XXXXXXX CORPORATION, a wholly owned subsidiary of THE
BOEING COMPANY (Seller), having an office in the City of Long Beach,
State of California, and TRANS WORLD AIRLINES, INC. (Buyer), having its
principal place of business in the City of St. Louis, State of Missouri.
In consideration of the mutual covenants herein, Buyer and Seller agree
as follows:
ARTICLE 1 - DEFINITIONS
For all purposes of this Agreement the following terms shall have the
following meanings (such definitions to be equally applicable to both
singular and plural forms of the terms defined):
TERM MEANING
---- -------
AGREEMENT This Purchase Agreement including any agreements
made a part of the Purchase Agreement and the
Exhibits (each of which is incorporated in this
Purchase Agreement by this reference) and
amendments hereto.
AIRCRAFT One or more of the aircraft purchased hereunder,
the quantity and description of which are
contained in Article 2.
AOG Aircraft On Ground - The highest priority
- - -
designation to process a requirement for a Spare
Part or maintenance action. Indicates that an
Aircraft is unable to continue or be returned to
revenue service until the appropriate action is
taken.
ATA Air Transport Association of America.
- - -
BFE Buyer Furnished Equipment - Equipment identified
- - -
in the Detail Specification to be furnished by
the Buyer to the Seller.
CAGE The Commercial and Government Entity
- - -
CERTIFICATE OF As to any Aircraft, a certificate substantially
TECHNICAL in the form of Exhibit B.
ACCEPTANCE
AND DELIVERY
COVERED Any airframe component or landing gear component
COMPONENT specified in Exhibit C, Part I, paragraph C.5.
DEFINITIONS 1-1
2-23-98 A00480-B
TERM MEANING
---- -------
DETAIL The document which defines the configuration of
SPECIFICATION the Aircraft, consisting of the Detail
Specification (Exhibit A hereto) identified in
Article 2, as it may be amended from time to
time by SCNs.
DOCUMENTS Manuals, documents, Programs, data or
instructional material provided pursuant to this
Agreement or otherwise, in any form or medium.
ENGINES Two Xxxxx and Xxxxxxx JT8D turbofan engines.
FAA The United States Federal Aviation
- -
Administration. This term includes the Federal
-
Aviation Administrator and any successor U.S.
Federal authority.
FAILURE For purposes of Exhibit C, Part I,
paragraph C.1. any breakage of or defect in a
Covered Component.
FAR The United States Federal Aviation Regulations.
- - -
FLIGHT CREW A Flight Crew will consist of one Captain and
one First Officer.
FSCM The Federal Supplier Code for Manufacturers
- - - -
INITIAL Spare parts ordered for the support of the
PROVISIONING initial twelve months of operation after
ORDERS delivery of first Aircraft as specified in
Part III of Exhibit C.
INTEREST The charge for use, including delay in receipt,
of money computed (on a quarterly basis) at
prime (the per annum rate announced from time to
time by Chase Manhattan Bank at its principal
office in New York, New York as its prime
commercial lending rate) plus one percent, but
in no event greater than the rate permitted
under California law.
INTERFACE Any technical problem in the operation of the
PROBLEM Aircraft or any system or assembly thereof due
to malfunction or failure of any accessory,
equipment, or part, the cause of which after due
and reasonable investigation, is not readily
identifiable as to its source.
POLICY The Service Life Policy set forth in Exhibit C,
Part I, paragraph C.
PRODUCT An Aircraft structure, system, article, product,
accessory, equipment or part whether installed
on the Aircraft or purchased or provided as a
spare or replacement part if made to Seller's
proprietary design.
DEFINITIONS 1-2
2-23-98 A00480-B
TERM MEANING
---- -------
PROGRAM Any computer software or program in any form or
media provided by Seller, including whole or
partial copies of machine-readable instructions,
a collection of machine-readable data, such as a
data base, and documentation, descriptions,
instructions or listings related to such
instructions or data.
SCN A Specification Change Notice is the document
- - -
used to change or modify the Detail
Specification.
SELLER PART An Aircraft article, product, accessory,
equipment or part made to Seller's proprietary
design.
SELLER'S A plant or facility designated by Seller.
FACILITY
SELLER'S Manager, Warranty Administration
WARRANTY XxXxxxxxx Xxxxxxx Corporation
ADMINISTRATOR 0000 Xxxxxxxx Xxxxxxxxx
Xxxx Xxxxx, Xxxxxxxxxx 00000-0000
SERVICE Any service related to the subject matter hereof
whether provided under this Agreement or
otherwise.
SPARE PART Seller Part and Vendor Part.
VENDOR A manufacturer or supplier of a Vendor Part,
service or document.
VENDOR PART An Aircraft article, product, accessory,
equipment or part not made to Seller's
proprietary design. Engines, BFE and BDE are
specifically excluded from this definition of
Vendor Parts.
DEFINITIONS 1-3
2-23-98 A00480-B
ARTICLE 2 - SUBJECT MATTER OF SALE
A. Seller shall manufacture, sell and deliver to Buyer, and Buyer
shall purchase from Seller, under the terms and subject to the
conditions set forth in this Agreement, twenty-four (24) MD-83
aircraft conforming to the Detail Specification which consists of
DSDS 8000G dated March 31, 1992 as amended by the SCNs set forth
in the Exhibit A's hereto and as may be further modified in
accordance with the provisions of Article 5.
B. During the manufacture of the Aircraft by Seller, Buyer shall be
required to provide information concerning the configuration of
the Aircraft, including, but not limited to, interior arrangement,
special features, and the selection of materials and colors.
Seller shall advise Buyer at least 30 days in advance of the dates
when such information is required and Buyer shall provide such
information by the dates (as they may change from time to time due
to production requirements) so specified. In the event Buyer
fails to perform in accordance with the dates provided by Seller,
Seller shall have the right to determine the configuration of the
Aircraft with respect to the information not provided by Buyer.
Prior to determining the configuration, Seller shall act in good
faith with Buyer to develop a course of action which will permit
later designation if practical.
C. In the event of any conflict or inconsistency between any
provisions of this Agreement (excluding Exhibit A and A1 hereto)
and the Detail Specification, the provisions of this Agreement
shall apply.
SUBJECT MATTER OF SALE 2-1
2-23-98 A00480-B
ARTICLE 3 - PRICE
A. The Base Price of each respective Aircraft is composed of the
Airframe Base Price, plus the Exhibit A's Base Price, plus the
Engine Base Price in the amounts set forth below.
Aircraft Airframe Exh. A Engine Base
No. Base Price Base Price Base Price Price
1-24 $ $ $ $
B. The Base Price of the Aircraft shall be increased or decreased by
the amounts specified in any additional SCNs not included in the
Base Price and executed in accordance with Article 5 or as
otherwise provided in this Agreement.
C. If, prior to Aircraft delivery, the Engine manufacturer changes
the Engine Base Price or if the Engine escalation formula is
modified and results in change over the current escalation formula
(as set forth in Exhibit D hereto), the Price shall be adjusted by
the amount of the change.
D. The Price of the Aircraft shall be the Base Price, first modified
or adjusted in accordance with paragraphs B. and C. above, and
then adjusted according to the provisions in Exhibit D.
Confidential Information omitted and filed separately with the
Commission.
PRICE 3-1
2-23-98 A00480-B
ARTICLE 4 - PAYMENT
A. As the basis for determining the amount of progress payments due
each Aircraft shall have an Advance Payment Price as follows:
DELIVERY MONTH/YEAR ADVANCE PAYMENT PRICE
------------------- ---------------------
5/99 $
6/99 $
7/99 $
8/99 $
9/99 $
10/99 $
11/99 $
12/99 $
B. The Advance Payment Price of the Aircraft shall be increased or
decreased by Seller by the amounts specified by SCNs executed in
accordance with Article 5.
C. Buyer shall make progress payments for each Aircraft in the amount
of thirty-five percent of the Advance Payment Price. As an
initial progress payment, Buyer shall pay Seller five percent of
the Advance Payment Price of each Aircraft concurrently with the
execution of this Agreement less any payment(s) previously paid
for the Aircraft. On the first day of each of the following
number of full months prior to the scheduled month of delivery, as
set forth in Article 6, Buyer shall pay Seller additional progress
payments on each Aircraft. These payments shall equal the
following indicated percentage of the Advance Payment Price of
each Aircraft.
Confidential Information omitted and filed separately with the
Commission.
PAYMENT 4-1
2-23-98 A00480-B
MONTHS PRIOR TO PERCENTAGE OF
SCHEDULED MONTH OF DELIVERY ADVANCE PAYMENT PRICE
--------------------------- ---------------------
24 %
21 %
18 %
15 %
12 %
9 %
D. Buyer shall pay Seller the balance of the Price of each Aircraft
at the time of its delivery.
E. Any sums payable under this Agreement which have not been paid as
part of the Price of the Aircraft shall be due and payable within
thirty days after Seller's invoice date.
F. If Buyer fails to make any of the payments at the times and in the
amounts required under this Agreement, Buyer shall pay Seller
Interest on the payment from the due date until the payment is
received by Seller. This shall be in addition to any other rights
or remedies available to Seller.
G. All payments shall be made in United States of America currency,
in immediately available funds, at a depository in the United
States of America to be designated by Seller. Buyer shall comply
with applicable monetary and exchange control regulations in order
to permit Buyer to make all payments in accordance with this
Agreement. Buyer shall provide Seller with a notice of each
payment by facsimile on the day funds are transferred indicating
the amount of funds transferred, the depository from which the
funds are transferred, the depository to which the funds are
deposited, and the means of funds transfer. Such notices of
payment should be addressed to Seller at facsimile number
(000) 000-0000, Attention: Senior Manager - Accounts Receivable
or to such other person or such other address as Seller shall
designate in writing.
H. Buyer shall not by virtue of anything contained in this Agreement
(including, without limitation, any partial payments or progress
payments or any designation or identification by Seller of
particular aircraft as Aircraft) acquire a special property or
insurable interest in any Aircraft prior to delivery of and
payment for such Aircraft by Buyer.
Confidential Information omitted and filed separately with the
Commission.
PAYMENT 4-2
2-23-98 A00480-B
ARTICLE 5 - DETAIL SPECIFICATION CHANGES
A. The Detail Specification may be changed by agreement of the
parties through mutual execution of an SCN.
B. The Detail Specification may be changed by Seller without Buyer's
consent to incorporate development changes. Development changes
shall be provided at no charge and not (i) increase the Price,
(ii) delay delivery, (iii) adversely affect the performance of the
Aircraft as set forth in the Detail Specification,
(iv) significantly affect maintainability of the Aircraft or
(v) change the interchangeability requirements of the Detail
Specification. Development changes shall not be made as to items
of BFE or BDE. Seller shall notify Buyer of all development
changes affecting the Detail Specification by furnishing SCNs.
DETAIL SPECIFICATION CHANGES 5-1
2-23-98 A00480-B
ARTICLE 6 - DELIVERY
A. INSPECTION AND DEMONSTRATION
----------------------------
1. The manufacture of the Aircraft by Seller and all materials
and parts procured by Seller for this purpose may be
inspected by Buyer's representatives during normal business
hours at Seller's Facility. If access to any part of
Seller's Facility where manufacture is in progress or
materials or parts are stored is restricted by governmental
authorities or regulations, Seller shall be allowed a
reasonable time to make the items available for inspection
elsewhere. All inspections by Buyer's representative shall
be made in accordance with Seller's security policies and in
such a way that the manufacturing process is not hindered or
delayed. Seller shall furnish, without charge, office space
at Seller's Facility for a reasonable number of Buyer's
representatives. Buyer shall notify Seller of the number of
representatives requiring office space at least thirty days
prior to date of arrival.
2. Performance data based on ground and flight tests on one or
more of the early aircraft of the type purchased by Buyer
shall be the basis for engineering calculations and
interpretations to show the Aircraft's compliance with the
Detail Specification. The results of such engineering
calculations and interpretations shall be made available to
Buyer upon request.
3. If flight tests are necessary because of Buyer requested
special features incorporated in the Aircraft, Seller may
use one or more of the Aircraft for such flight tests and
Buyer will accept delivery of such Aircraft without any
reduction in the Price on account of resulting wear and
tear. Buyer agrees that any delay resulting from such
testing shall be considered an Excusable Delay.
4. Seller may, in addition, conduct flight tests on Buyer's
Aircraft with Buyer's prior consent, which consent shall not
be unreasonably withheld, and Buyer will accept delivery of
such Aircraft without any reduction in the Price on account
of resulting wear and tear, provided that such flight tests
do not cause such Aircraft to be delivered late to Buyer or
adversely affect Aircraft performance.
5. Seller shall perform its standard production ground
functional and flight test on the Aircraft and the results
of such test shall be provided to Buyer. Buyer's
representatives do not participate in or observe these
flight tests.
6. Buyer's representatives, at any time prior to tender for
technical acceptance of an Aircraft (as described in this
Article 6), may request correction of parts or materials
which (i) are not in accordance with the Detail
Specification or Seller's standard engineering and quality
manuals or (ii) have material or workmanship which, if the
Aircraft were delivered and were within the applicable
warranty period, would entitle Buyer to warranty correction
under paragraph A. of Part I of Exhibit C. Buyer shall
promptly notify Seller after it discovers any such
nonconformance. Seller shall correct or replace (unless
otherwise agreed between Buyer and Seller) all such parts,
materials or workmanship which are promptly brought to its
attention and mutually determined to be nonconforming.
DELIVERY 6-1
2-23-98 A00480-B
B. TECHNICAL ACCEPTANCE
--------------------
1. The Aircraft shall be tendered to Buyer for technical
acceptance after it has been assembled, completed and tested
by Seller, but no earlier than ten days prior to the first
day of the scheduled month of delivery. Seller will use its
best reasonable efforts to give Buyer at least 60 days
notice of the date on which Seller estimates that the
Aircraft will be tendered for technical acceptance and
delivery. Seller will use its best reasonable efforts to
give Buyer at least 45 days notice of the estimated delivery
date of the Aircraft.
2. At Buyer's request, a technical acceptance procedure,
including ground functional and flight test, shall be
performed on the Aircraft jointly by Buyer and Seller as
necessary to show compliance with the Detail Specifications
and shall be conducted in accordance with Seller's standard
procedures. Up to five representatives of Buyer may
participate in this acceptance procedure. Seller shall not
be required to provide special instrumentation for this
acceptance procedure. Seller shall have complete control of
all flights and shall bear all costs and expenses incident
thereto. Buyer agrees to complete all inspections and
testing authorized or permitted under this paragraph before
the end of the fifth business day after Seller has tendered
the Aircraft to Buyer. If during the five business day
technical acceptance period Buyer determines and Seller
agrees that there is noncompliance with the Detail
Specification, the five business day period shall be
suspended until (i) Seller corrects the noncompliance or
(ii) the condition is resolved to the satisfaction of Buyer
and Seller. During the suspension period, Buyer shall
continue its inspection of areas of the Aircraft unaffected
by Seller's efforts to correct the noncompliance. Upon
completion of (i) or (ii) above, Buyer shall have the
remainder of the period to complete its technical
acceptance. Buyer shall technically accept the Aircraft if
it meets the requirements of the Detail Specification.
3. Immediately upon completion of the inspection and testing
noted above, indicating that the Aircraft meets the
requirements of the Detail Specifications, Buyer shall
indicate its technical acceptance of an Aircraft by
execution of Section A of a Certificate of Technical
Acceptance and Delivery for the Aircraft. Technical
acceptance of the Aircraft by Buyer shall not impair the
warranties set forth in Part I of Exhibit C.
4. In the event Buyer fails to complete its technical
acceptance due to the fault of the Buyer within the five
business day period, the Aircraft shall be deemed to have
been technically accepted by Buyer at the end of the five
business day period after tender as if Buyer had expressly
indicated its technical acceptance as noted above.
C. DELIVERY
--------
1. On the first business day after technical acceptance
pursuant to paragraph B.3. or B.4. above, but no earlier
than the date of issuance of an FAA Certificate of
Airworthiness for the Aircraft, Buyer shall accept delivery
of the Aircraft by endorsement of Section B of a Certificate
of Technical Acceptance and Delivery
DELIVERY 6-2
2-23-98 A00480-B
for such Aircraft. Delivery shall be made at an airport in
California or Arizona designated by Seller or at an
alternate location as mutually agreed in writing. If, at
Buyer's request, delivery is made at an alternate location,
Buyer shall reimburse Seller for any increased costs
incurred by Seller as a result thereof. The scheduled
months of delivery of the Aircraft are as follows:
SCHEDULED MONTH OF DELIVERY AIRCRAFT QUANTITY
--------------------------- -----------------
May 1999 3
June 1999 3
July 1999 3
August 1999 3
September 1999 3
October 1999 3
November 1999 3
December 1999 3
2. If Buyer fails to accept delivery of an Aircraft as required
in paragraph C.1. above, Buyer shall reimburse Seller for
all losses, costs and expenses (including, without
limitation, taxes, Interest and reasonable amounts for
transportation, storage, insurance, preservation,
preparation and protection) sustained by Seller after such
date. Seller's acceptance of such payments shall not
constitute a waiver of its rights to pursue its remedies for
default or to pursue any other rights it may have at law or
otherwise.
3. Upon delivery of and payment for an Aircraft, title to the
Aircraft shall pass from Seller to Buyer. Seller shall
furnish to Buyer a full warranty xxxx of sale and other
appropriate documents of title as Buyer may reasonably
request.
D. RISK ALLOCATION
---------------
SELLER HEREBY RELEASES AND AGREES TO DEFEND, INDEMNIFY AND HOLD
HARMLESS BUYER, ITS OFFICERS, DIRECTORS, AGENTS AND EMPLOYEES (i)
FROM AND AGAINST ALL LIABILITIES, DAMAGES, LOSSES, COSTS AND
EXPENSES FOR ALL INJURIES TO AND DEATHS OF PERSONS, EXCEPTING
INJURIES TO AND DEATH OF BUYER'S REPRESENTATIVES PARTICIPATING IN
ANY SUCH INSPECTIONS, TESTS OR FLIGHTS OF ANY AIRCRAFT PRIOR TO
ITS DELIVERY AND (ii) FOR LOSS OF OR DAMAGE TO PROPERTY OF THIRD
PARTIES (EXCLUDING EMPLOYEES OF BUYER OR PARTIES CLAIMING THROUGH
OR BY REASON OF THE DEATH OF ANY SUCH EMPLOYEE), WHETHER OR NOT
CAUSED BY BUYER'S NEGLIGENCE, ARISING OUT OF OR IN CONNECTION WITH
ANY AIRCRAFT DURING ANY INSPECTION, TEST OR FLIGHT THEREOF PRIOR
TO DELIVERY. BUYER HEREBY RELEASES AND AGREES TO
DELIVERY 6-3
2-23-98 A00480-B
DEFEND, INDEMNIFY AND HOLD HARMLESS SELLER, ITS AFFILIATES
(INCLUDING THE BOEING COMPANY) AND THEIR RESPECTIVE OFFICERS,
DIRECTORS, AGENTS, EMPLOYEES AND CONTRACTORS FROM AND AGAINST ALL
LIABILITIES, DAMAGES, LOSSES, COSTS AND EXPENSES RESULTING FROM
INJURIES TO OR DEATHS OF BUYER'S SAID REPRESENTATIVES
PARTICIPATING IN SAID INSPECTIONS, TESTS OR FLIGHTS, WHETHER OR
NOT CAUSED BY SELLER'S OR SUCH INDEMNITEE'S NEGLIGENCE. IN THE
EVENT ANY CLAIM IS MADE OR SUIT IS BROUGHT AGAINST EITHER PARTY,
THE LIABILITY FOR WHICH HAS BEEN ASSUMED HEREIN BY THE OTHER
PARTY, THE PARTY AGAINST WHOM CLAIM IS MADE SHALL PROMPTLY NOTIFY
THE OTHER PARTY AND THE LATTER SHALL HAVE THE RIGHT TO ASSUME AND
CONDUCT THE DEFENSE THEREOF OR TO EFFECT ANY SETTLEMENT WHICH IT,
IN ITS OPINION, DEEMS PROPER.
DELIVERY 6-4
2-23-98 A00480-B
ARTICLE 7 - EXCUSABLE DELAY
A. EXCUSABILITY
------------
1. Seller shall not be held responsible for nor be deemed to be
in default of this Agreement because of delays in delivery
of an Aircraft, Product or Document or delay in the
performance of a Service or any other act to be performed by
Seller under this Agreement (in addition to any such delays
otherwise permitted herein) due to causes such as an act of
God or the public enemy; civil war, insurrection or riot;
war; natural disaster, fire, flood, explosion, earthquake or
serious accident; epidemic or quarantine restriction; any
act of government, government priority, allocation
regulation or an order affecting material, labor, equipment,
facilities or completed aircraft; strike, labor trouble
causing cessation, slowdown or interruption of work;
inability after due and timely diligence to seasonably
procure material, accessories, equipment or parts or to
obtain qualified labor; delay in transportation or, without
limitation by enumeration of the foregoing, any other cause
beyond the reasonable control of or not occasioned by the
fault or negligence of Seller.
2. Seller will use its best reasonable efforts to promptly
notify Buyer of any delay or anticipated delay in delivery
of an Aircraft.
B. LOSS, DESTRUCTION AND DAMAGE
----------------------------
1. If prior to delivery an Aircraft is lost, destroyed or
damaged beyond repair, or damaged to the extent that it can
be repaired by replacement parts to a new condition but
cannot be delivered in accordance with the delivery schedule
set forth in this Agreement, the time reasonably required by
Seller to furnish a replacement for such Aircraft or to
accomplish repairs to such Aircraft, is deemed an Excusable
Delay.
2. If an Aircraft is lost, destroyed or damaged beyond repair,
Seller shall promptly notify Buyer. As soon as possible
Seller shall notify Buyer of the earliest date that a
replacement aircraft can reasonably be delivered, consistent
with Seller's other contractual commitments and production
capabilities. Unless Buyer notifies Seller within one month
after notice of the replacement aircraft delivery date that
Buyer desires a replacement aircraft, this Agreement shall
be terminated as to any such Aircraft and the rights of the
parties shall be determined in accordance with paragraph D.
below. If Buyer timely notifies Seller that it wants a
replacement aircraft, the parties shall amend this Agreement
to establish its scheduled month of delivery.
Notwithstanding the foregoing, nothing herein shall obligate
Seller to deliver a replacement aircraft if manufacture
thereof would require the reactivation of the production
line for the model or series of aircraft purchased
hereunder. The Base Price of the replacement aircraft shall
be the same as that for the lost, destroyed or damaged
beyond repair Aircraft, except such Base Price shall be
adjusted in accordance with Article 3 hereof.
EXCUSABLE DELAY 7-1
2-23-98 A00480-B
C. INDEFINITE EXCUSABLE DELAYS
---------------------------
1. If Seller concludes, based on a continual appraisal of the
available facts, that the extent of any delay in delivery of
any Aircraft by reason of an Excusable Delay will exceed
twelve months beyond the scheduled month of delivery, then
Seller shall promptly notify Buyer concerning such delay and
submit to Buyer a revised scheduled month of delivery.
Either party may, by notice to the other party given within
one month from receipt by Buyer of such notice from Seller,
elect then to terminate this Agreement as to such delayed
Aircraft and the rights of the parties shall be determined
in accordance with paragraph D. below.
2. If this Agreement is not terminated as to an Aircraft
pursuant to paragraph C.1. above, and if during the period
of delay Seller concludes, based on its appraisal of the
available facts, that the extent of delay in delivery of any
Aircraft by reason of an Excusable Delay will exceed six
months beyond the revised scheduled month of delivery
specified in the notice provided pursuant to paragraph C.1.
above, Seller shall promptly notify Buyer concerning such
additional delay and submit to Buyer a revised scheduled
month of delivery. Either party may, by notice to the other
given within one month from receipt by Buyer of such notice
from Seller, elect then to terminate this Agreement as to
such delayed Aircraft and the rights of the parties shall be
determined in accordance with paragraph D. below.
D. In the event of termination under paragraphs B. or C. above,
Seller shall repay to Buyer, without interest, the amount of the
progress payments. Such termination shall discharge all
obligations and liabilities of the parties with respect to such
Aircraft and all undelivered Products, Services, Documents or
other articles or items related to that Aircraft.
EXCUSABLE DELAY 7-2
2-23-98 A00480-B
ARTICLE 8 - BUYER FURNISHED OR DESIGNATED EQUIPMENT
A. BUYER FURNISHED EQUIPMENT
-------------------------
1. Buyer shall furnish the BFE to Seller and Seller shall make
appropriate provisions for the installation of and shall
install such BFE. Seller shall advise Buyer at least 30
days in advance of the dates (as they may change from time
to time due to production requirements) Seller needs BFE and
its respective data. Buyer shall meet Seller's required
schedule for receipt of such BFE and its respective data.
The BFE data shall include a written detailed description of
the dimensions and weight of such BFE and information
necessary for its proper storage, installation, servicing,
maintenance and operation. The BFE data shall not be
subsequently revised unless agreed to by Seller and, if
revised, Buyer shall be subject to adjustments in Price and
delivery.
2. Buyer authorizes Seller to contact and work with Buyer's BFE
suppliers for purposes of general engineering coordination,
expediting shipments, adjusting schedules, performing
quality control and inspection functions, and securing
required BFE data. Such efforts by Seller are for the
purpose of assisting Buyer and its suppliers in meeting BFE
commitments and shall not relieve Buyer from Buyer's
obligations set forth in this Article 8. Buyer shall make
appropriate arrangements with its suppliers for Seller to
contact and work with such suppliers as described above. At
Seller's request, Buyer shall provide technical advisors to
assist Seller in the installation, calibration, repair or
replacement, if defective, of any BFE.
3. Prior to Seller providing any Documents to BFE suppliers, a
proprietary information agreement must be in place between
Seller and the BFE supplier.
B. BUYER DESIGNATED EQUIPMENT
--------------------------
1. Alternatively, upon concurrence by Seller and subject to a
handling charge equal to fifteen percent of the price of the
BFE, Seller shall purchase on behalf of Buyer items of BFE
as BDE. Seller shall, in accordance with its standard
procurement practices, use its diligent efforts to obtain
BDE at the lowest reasonable cost to Buyer.
2. Without waiving Buyer's BFE data obligations defined in
paragraph A. above, Seller shall on behalf of Buyer use its
diligent efforts to obtain from the BDE suppliers, by the
date required, BFE data to support the BDE. At Seller's
request, Buyer shall provide technical advisors to assist
Seller in the installation, calibration, repair or
replacement, if defective, of any BDE.
C. Seller shall have no obligation to include in its provisioning
data for Buyer's Aircraft information covering the repair or
replacement of BFE or BDE items unless Buyer provides such data to
Seller in accordance with Seller's requirements. However, if
Seller has such information in its existing provisioning data
files and Seller has a right to disclose that information to
Buyer, such information will be included in Buyer's Aircraft
provisioning data at no additional cost to Buyer.
BUYER FURNISHED OR DESIGNATED EQUIPMENT 8-1
2-23-98 A00480-B
D. PRICE AND PAYMENT
-----------------
1. Buyer agrees to sell and Seller agrees to purchase each item
of BFE concurrently with its delivery to Seller. A
reasonable shipset price for the BFE shall be established by
Buyer. Buyer and Seller agree that the Price of an Aircraft
will be increased by the amount of said shipset price and
such amount shall be included on Seller's invoice at time of
Aircraft delivery. Seller's payment for the purchase of
each shipset of BFE from Buyer shall be made at the time of
delivery of the Aircraft in which the BFE is installed.
2. Buyer and Seller agree that the Price of each Aircraft will
be increased by the price of the BDE installed thereon plus
the handling charge and such amount shall be included on
Seller's invoice at time of Aircraft delivery. If Seller
purchases any BDE subject to a price escalation or price
adjustment feature, the Price of each Aircraft will be
changed to reflect such price escalation or price
adjustments.
E. Buyer warrants that the BFE or BDE shall comply with all
applicable FARs and U.S. Food and Drug Administration (FDA)
sanitation requirements for installation and use in the Aircraft
at the time of delivery. Buyer shall be responsible for supplying
any data and adjusting, calibrating, retesting or updating such
BFE or BDE and data to the extent necessary to obtain applicable
FAA and FDA approval and shall bear the resulting expenses.
Without waiving Buyer's obligation, Seller shall, as an
accommodation to Buyer, obtain the Certificate of Sanitary
Construction on behalf of Buyer.
F. Any delay in an act to be performed by Seller caused by Buyer's
failure to (i) deliver, or have delivered, BFE, (ii) ensure
satisfactory operation of the BFE or BDE, (iii) furnish or obtain
applicable BFE data, (iv) perform any adjusting, calibrating,
retesting or updating of BFE or BDE or (v) furnish or obtain any
FAA or FDA approvals in compliance with the provisions of this
Article 8, shall be deemed an Excusable Delay. The Price of the
Aircraft shall be increased by the amount of Seller's additional
costs attributable to any such delay or failure by Buyer,
including without limitation, Interest on the unpaid balance of
such Price, storage, taxes, insurance and the costs of out of
sequence installations. In such event, Seller shall act in good
faith with Buyer to develop a course of action which will
facilitate delivery of the affected aircraft at the earliest
possible date. However, if Seller and Buyer are unable to so
develop a mutually satisfactory course of action, in the event of
such a delay and without waiving any other rights and remedies
Seller may have, Seller may (i) elect to deliver the Aircraft
without the installation of the unapproved, delayed or
nonconforming BFE or BDE and Seller shall thereupon be relieved of
all obligations to install such BFE or BDE or (ii) purchase the
same or substantially equivalent equipment from any other source
and install and invoice Buyer for such purchase and equitably
adjust the Price of the Aircraft and any other affected provisions
of the Agreement to reflect such purchase and associated
retesting, adjustment and calibration.
G. SUPPORT
-------
1. To properly maintain Seller's production flow and to
preserve Seller's delivery commitments, Seller reserves the
right, if necessary, due to equipment shortages
BUYER FURNISHED OR DESIGNATED EQUIPMENT 8-2
2-23-98 A00480-B
or failures, to interchange new items of BFE or BDE acquired
from or for Buyer with new items of the same part numbers
acquired from or for other customers of Seller, as long as
such action does not affect the scheduled month of delivery
of Buyer's aircraft. Used BFE acquired from Buyer or from
other customers of Seller will not be interchanged.
2. For specific BFE or BDE which will, in Seller's opinion, be
critical to Aircraft functional tests and or flights, and
whenever other than new equipment is furnished to fulfill
BFE requirements, Buyer shall, upon Seller's request, place
in Seller's possession additional units of spare BFE to
preclude untimely delays which can be caused by the failure
of the BFE or BDE.
3. BFE shall be free and clear of all liens, encumbrances,
pledges, security interests or rights of others and any used
BFE shall be in good operating condition and meet Seller's
requirements for installation on the Aircraft.
4. Upon any spare BFE or interchanged BFE being incorporated or
installed on an Aircraft, without further act, (i) title to
the removed BFE shall vest in Buyer, free and clear of all
rights of Seller (ii) title to the installed BFE shall vest
in Seller and (iii) the installed BFE shall become subject
to the Agreement and be deemed to be part of that Aircraft
for all purposes to the same extent as the BFE originally
supplied for, incorporated or installed in or on the
Aircraft. Prior to incorporation of the spare BFE or
interchanged BFE into an Aircraft, title and risk of loss to
any spare BFE or interchanged BFE shall remain in Buyer.
5. Any BFE or BDE delivered to Seller and not installed in an
Aircraft shall be redelivered to Buyer by Seller at Buyer's
expense and in accordance with Buyer's instructions upon or
after delivery of the last Aircraft in as good a condition
as when delivered to Seller, reasonable wear and tear
excepted.
H. If either party shall terminate this Agreement as to an Aircraft
pursuant to Article 7, Seller shall, within thirty days of the
date of the termination notice, advise Buyer of the items of BFE
delivered to Seller prior to the date of termination notice, that
Seller will continue to purchase and which items of BFE that
Seller will return to Buyer. In the event Seller elects to return
BFE, then Seller shall ship the BFE to Buyer within thirty days of
such election and upon shipment, title to such BFE shall pass to
Buyer. At the same xxxx Xxxxxx makes its election with regard to
BFE delivered to Seller prior to the notice of termination, Seller
shall have the right to purchase other items of BFE that Buyer has
placed on order and which have not been delivered to Seller. The
price paid for BFE by Seller shall be the invoice prices paid by
Buyer.
BUYER FURNISHED OR DESIGNATED EQUIPMENT 8-3
2-23-98 A00480-B
ARTICLE 9 - TAXES, CUSTOMS, AND DUTIES
A. TAXES
-----
In addition to the purchase price of the Aircraft, Buyer shall pay to
Seller (for the purpose of this Article 9, Seller shall also include The
Boeing Company or any wholly-owned subsidiary of either The Boeing
Company or the XxXxxxxxx Xxxxxxx Corporation), upon demand, any sales or
use taxes required to be paid by Seller as a result of any sale, use (by
Buyer after valid tender of delivery), delivery, storage (after valid
tender of delivery), or transfer under this Agreement of the Aircraft,
Product, BFE, Spare Part, Service, or Document; provided, however, that
Buyer shall have no liability for any penalties or interest with respect
to any such taxes, or for any tax which may be levied upon any payment
to Seller by Buyer for the purpose of paying such tax, arising out of
Seller's fault or negligence. If claim is made against Seller for such
taxes, Seller shall promptly notify Buyer. If seasonably requested by
Buyer in writing, Seller shall, at Buyer's expense, take such action as
Buyer may reasonably direct with respect to such asserted liability and
shall not pay such tax except under protest, if protest is necessary.
If payment is made, Seller shall, at Buyer's expense, take such action
as Buyer may reasonably direct to recover such payment and shall, if
requested, permit Buyer in Seller's name to file claim or commence an
action to recover such payment. Provided that delivery is at an airport
in California or Arizona designated by Seller or at an alternate
location as mutually agreed in writing, Buyer shall not be liable for
any sales or use taxes pursuant to the provisions of this Article 9 for
which it has not been invoiced within one (1) year from the date of
delivery, storage or transfer of any Aircraft, Product, BFE, Spare Part,
Service, or Document to which such sales or use taxes apply.
B. CUSTOMS DUTIES
--------------
In addition to the purchase price of the Aircraft, Buyer shall pay to
Seller on demand the amount of any United States custom duties required
to be paid by Seller with respect to the importation of any items of BFE
or any other Product of foreign manufacture installed in the Aircraft at
Buyer's request. Seller shall use its best efforts to assist Buyer in
obtaining a refund of such customs duties upon exportation of the
Aircraft from the United States or in securing temporary free
importation of such items under bond, to the extent permitted by law.
Buyer shall reimburse Seller for any expenses and hold Seller harmless
from any penalties incurred by or imposed upon Seller as a result of any
action taken under this Article 9.2.
C. INDEMNITY
---------
The indemnity provided in this Article 9 shall not extend to any taxes
imposed or assessed on Seller or any other person as a result of any
financing transaction that Seller, or any affiliate of Seller, enters
into with respect to the Aircraft, Product, BFE, Service or Document.
TAXES, CUSTOMS, AND DUTIES 9-1
2-23-98 A00480-B
ARTICLE 10 - FEDERAL AVIATION ADMINISTRATION APPROVAL
A. Each Aircraft shall at the time of delivery meet the FAA
requirements for airworthiness certification and be so certified
under all the conditions set forth in the Detail Specification.
It is further understood and agreed that, except as required by
the Detail Specification, each Aircraft need not meet FAA
requirements for specific operation on Buyer's routes.
B. Subject to the provisions of Article 8 hereof, if any change,
modification or addition to any Aircraft is required prior to
delivery pursuant to any United States law or governmental
regulation or interpretation thereof by a United States
governmental agency in order to continue the effectiveness of the
Type Certificate or meet the FAA requirements for airworthiness
certification of the Aircraft as above provided, such change,
addition or modification shall be made in the undelivered Aircraft
affected. Seller shall bear the cost of complying with FAA
airworthiness certification requirements which are required to be
incorporated in the Aircraft prior to its delivery. Any delay in
delivery of an Aircraft by reason of such change, addition or
modification shall be deemed an Excusable Delay and the scheduled
month of delivery of such Aircraft shall be adjusted to the extent
of such delay. Any such change, addition or modification
effective after Aircraft delivery shall be the sole responsibility
of Buyer.
FEDERAL AVIATION ADMINISTRATION APPROVAL 10-1
2-23-98 A00480-B
ARTICLE 11 - PATENT, TRADEMARK, TRADE SECRET AND COPYRIGHT INDEMNITY
A. DUTY TO DEFEND
--------------
Seller will hold Buyer harmless and indemnify Buyer from any
claim, suit or action which may be made or brought against Buyer,
its directors, officers, agents, successors or assigns for alleged
infringement or misappropriation of any United States patent,
trademark, copyright or trade secret, or any foreign patent,
arising out of the purchase, possession, use or lease, of a
Product (a Claim), provided that:
1. Buyer gives Seller prompt notice (within ten days after
service of any such suit or action or 30 days after receipt
of any such claim) of any Claim and promptly furnishes to
Seller copies of all papers served upon or received by Buyer
relating to such Claim; and,
2. Buyer cooperates fully with Seller in the defense, including
giving to Seller all data, documents and information within
Buyer's possession or knowledge that is material to the
defense; and
3. from the time of design of such Product and until
infringement claims are resolved, the country in which such
Claim is made and the flag country of the applicable
Aircraft are parties to the Chicago Convention on
International Civil Aviation of December 7, 1944 or the
International Convention for the Protection of Industrial
Property.
B. INDEMNIFICATION
---------------
Seller will pay all damages and costs awarded by a court as a
result of a Claim, together with all interest accruing after entry
of judgment or after the making of any settlement. Except for any
damages, costs, expenses and loss of profit resulting from loss of
use, Seller will reimburse Buyer for all reasonable expenses
incurred by Buyer at Seller's written request or with Seller's
written approval as the result of such Claim, provided that Buyer
has complied with the conditions of this Article 11 with respect
to notice and cooperation. Seller shall have the option at any
time to conduct negotiation with the party making the Claim and be
entitled to assume, conduct or control the defense of such suit.
C. LOSS OF USE
-----------
If a Product is found pursuant to paragraph 11.A.1. above, to
infringe any patent, trademark or copyright or to misappropriate
any trade secret and Buyer is enjoined from using it, Seller will,
at its option and at its expense, either:
1. procure for Buyer the right to use it free of any liability
for infringement;
2. replace it with a non-infringing substitute which otherwise
complies with this Agreement and the applicable order; or
PATENT, TRADEMARK, TRADE SECRET AND COPYRIGHT INDEMNITY 11-1
2-23-98 A00480-B
3. alternatively, if C1 and C2 are not feasible, repurchase the
infringing Product from Buyer.
D. The provisions of this Article 11 (i) applies solely to Seller
Parts, (ii) regarding trademarks, copyrights and trade secrets
apply to and are solely for the benefit of the first purchaser of
the Aircraft (and to the first operator in the event the Aircraft
are leased to the first operator) and (iii) are Buyer's sole and
exclusive remedy with respect to a Claim.
PATENT, TRADEMARK, TRADE SECRET AND COPYRIGHT INDEMNITY 11-2
2-23-98 A00480-B
ARTICLE 12 - AIRCRAFT SUPPORT SERVICES AND WARRANTY
A. WARRANTY AND SERVICE LIFE POLICY
--------------------------------
Seller's Warranty and Service Life Policy are set forth in
Exhibit C, Part I.
B. TRAINING AND TECHNICAL SERVICES
-------------------------------
Seller shall provide training and technical services, including
instructional materials, in accordance with Exhibit C, Part II.
C. SPARE PARTS
-----------
Seller agrees to sell and Buyer agrees to purchase Products in
accordance with Exhibit C, Part III.
D. DOCUMENTS
---------
Seller shall provide Buyer with Documents in accordance with
Exhibit C, Part IV.
AIRCRAFT SUPPORT SERVICES AND BUYER'S WARRANTY 12-1
2-23-98 A00480-B
ARTICLE 13 - ASSIGNMENT AND TRANSFER
A. This Agreement shall inure to the benefit of and be binding upon
the successors and assigns of both parties. It shall not be
assigned in whole or in part by either party without the prior
written consent of the other party. It may, however, be assigned
without prejudice to the rights of the other party hereto against
the assignor, insofar as it relates to any undelivered Aircraft,
without such consent, by either party through merger,
consolidation or reorganization; provided, however, that the
assignee shall, at the time of assignment without such consent, be
solvent and have a tangible net worth and a ratio of tangible net
worth to total debt and liabilities which are not less than that
of the assignor after giving effect to such merger, consolidation
or reorganization.
B. Buyer hereby agrees that Seller may at any time assign its right
to receive money and, without Buyer's further consent, assign this
Agreement, in whole or in part, to The Boeing Company or any
affiliate of The Boeing Company. The assignment shall contain
such assignee's commitment to perform and be responsible for any
and all of Seller's obligations under this Agreement.
C. Buyer represents that it is purchasing the Aircraft for use and
not for resale. However, if Buyer resells, leases or otherwise
transfers the Aircraft after delivery, it shall obtain from such
purchaser, lessee or transferee an agreement to be bound by and
comply with all relevant provisions of this Agreement (including,
without limitation, the provisions contained in Exhibit C and this
Article 13) and upon obtaining such agreement, a copy of which
shall promptly be delivered by Buyer to Seller, Buyer shall have
the right to assign to said purchaser, lessee or transferee all
the rights conferred upon Buyer under this Agreement (including
Exhibit C) with respect to the Aircraft resold, leased or
otherwise transferred.
D. At Buyer's request and expense, Seller shall take any action
reasonably required for the purpose of causing any Aircraft to be
subjected, at or after delivery, to an equipment trust, chattel
mortgage, conditional sale, lien, assignment, or other arrangement
for the financing by Buyer of the purchase of such Aircraft. No
such action, however, shall subject Seller to any liability to
which it would not otherwise be subject or modify in any respect
Seller's contract rights or require Seller to divest itself of
title to or possession of such Aircraft until delivery of and
payment for such Aircraft has been made as provided in this
Agreement.
ASSIGNMENT AND TRANSFER 13-1
2-23-98 A00480-B
ARTICLE 14 - NOTICES AND REQUESTS
A. Except as otherwise expressly provided in this Agreement, all
notices and requests required or authorized hereunder shall be
given in writing. Notices and requests shall be submitted to the
addressee noted below by personal delivery, electronic
transmission with confirmation of receipt or any other customary
means of communication. The date upon which any such notice or
request is received by the addressee shall be deemed to be the
effective date of such notice or request. Seller shall be
addressed at 0000 Xxxxxxxx Xxxxxxxxx, Xxxx Xxxxx, Xxxxxxxxxx
00000-0000, Attention: Contracts Department and Buyer shall be
addressed at 000 X. Xxxxx Xxxxxx, Xx. Xxxxx, Xx. 00000, Attention:
Vice President and Deputy General Counsel, or to such other person
or such other address as the party to receive the notice or
request shall designate.
NOTICES AND REQUESTS 14-1
2-23-98 A00480-B
ARTICLE 15 - APPLICABLE LAW, VARIANCES AND WAIVER
A. This Agreement constitutes the final agreement between the parties
and supersedes all previous negotiations, representations and
agreements between the parties with respect to the subject matter
hereof. It is the intent of the parties to establish this
document as the complete and exclusive statement of the terms of
the final agreement between the parties. This Agreement may be
amended only as provided in Article 5 or by an instrument in
writing of even or subsequent date, executed by duly authorized
representatives of the parties. Any other purported amendment or
modification will be null and void.
B. THIS AGREEMENT WILL BE INTERPRETED UNDER AND GOVERNED BY THE LAWS
OF THE STATE OF WASHINGTON, U.S.A, EXCEPT THAT WASHINGTON'S CHOICE
OF LAW RULES SHALL NOT BE INVOKED FOR THE PURPOSE OF APPLYING THE
LAW OF ANOTHER JURISDICTION.
C. The failure of either party to enforce at any time any of the
provisions of this Agreement or to require at any time performance
by the other party of any of the provisions of this Agreement
shall in no way be construed to be a present or future waiver of
such provisions. The express waiver (whether one or more times)
by either party of any provision, condition or requirement of this
Agreement shall not constitute a waiver of any future obligation
to comply with such provision, condition or requirement.
APPLICABLE LAW, VARIANCES AND WAIVER 15-1
2-23-98 A00480-B
ARTICLE 16 - NONDISCLOSURE
A. This Agreement contains information which is confidential and
proprietary to Seller and relates to Seller's research,
development, trade secrets, products, pricing and business affairs
(collectively, Confidential Information). Buyer shall protect the
Confidential Information with the same degree of care it exercises
to protect the confidentiality of its own confidential and
proprietary information and to prevent unauthorized disclosure,
use or publication thereof; provided, however, that Buyer may
disclose Confidential Information to its lenders and where
required by applicable law, the order of any court or governmental
agency, or the rules of any applicable securities exchange. Where
disclosure of Confidential Information is required pursuant to
applicable law and the rules of any applicable securities exchange
or pursuant to the direction of any governmental authority, Buyer
agrees to notify Seller in writing of any such disclosure Buyer
intends to make as far in advance of the date Buyer makes or is
required to make the disclosure as is practicable and Buyer shall
use its reasonable efforts to obtain assurances that confidential
treatment will be accorded to the information required to be
disclosed. Except as permitted herein, Buyer shall not disclose
the terms of this Agreement to any other party. The obligation to
treat information as Confidential Information shall not apply to
any information which is publicly available, independently
developed by Buyer or obtained rightfully from third parties
without a duty to keep confidential.
B. Buyer shall not discuss or reveal this Agreement, any proprietary
or competitively sensitive information provided in connection with
the transactions contemplated by this Agreement, or Confidential
Information, in whole or in part, with anyone other than (i) its
employees who require knowledge of such terms and conditions in
the ordinary course and scope of their employment; and
(ii) agents, consultants and advisors (including legal counsel,
accountants and management consultants) whose assigned duties
reasonably require that such disclosure be made or (iii) as
provided in paragraph A. of this Article 16. In the event any
disclosure is made to the parties identified in the preceding
clause (ii), Buyer further agrees to inform the recipients of the
confidential nature of the information and of their obligation to
treat such information confidentially pursuant to this Agreement
and to attach to the first page of such disclosed materials the
following legend:
THIS DOCUMENT CONTAINS TRADE SECRETS AND COMMERCIAL,
FINANCIAL AND PROPRIETARY INFORMATION WHICH IS PRIVILEGED
AND CONFIDENTIAL TO XXXXXXXXX XXXXXXX CORPORATION AND WHICH
MAY NOT BE DISCLOSED TO ANY PERSON, GOVERNMENTAL AGENCY,
COMPANY, CORPORATION OR OTHER PARTY EXCEPT AS SUCH
DISCLOSURE IS REQUIRED BY LAW.
NONDISCLOSURE 16-1
2-23-98 A00480-B
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written by their officers or agents
thereunto duly authorized.
TRANS WORLD AIRLINES, INC.
Signature_________________________________
Printed Name______________________________
Title_____________________________________
Witness:
Signature_________________________________
Printed Name______________________________
Title_____________________________________
XXXXXXXXX XXXXXXX CORPORATION,
A WHOLLY OWNED SUBSIDIARY OF
THE BOEING COMPANY
Signature_________________________________
Printed Name______________________________
Title_____________________________________
Witness:
Signature_________________________________
Printed Name______________________________
Title_____________________________________
SIGNATURE PAGE 17-1
2-23-98 A00480-B
EXHIBIT A - DETAIL SPECIFICATION
2-23-98 A00480-B
AIRCRAFT CONFIGURATION
relating to
MODEL MD-83 AIRCRAFT
The Detail Specification is DS8000G dated March 31, 1992 as
amended by the SCN's in the Exhibit A's attached hereto, including the
effects on Manufacturer's Empty Weight (MEW) and Operating Empty Weight
(OEW). The Aircraft Base Price reflects and includes all effects of such
SCN's, except such Aircraft Base Price does not include the price
effects of any Buyer Furnished Equipment or Seller Purchased Equipment.
Exhibit A-1
-----------
SCN NUMBER AIRCRAFT
SCN DATE SCN TITLE NUMBER
-------- --------- ------
7815B FINISH PER SPECIFICATION F-109-1.7 1 AND
04/30/92 (MD-80 BASELINE) SUBSEQUENT
7886A INSTALLATION OF A BUYER 1 AND
02/05/91 FURNISHED TRAFFIC ALERT SUBSEQUENT
COLLISION AVOIDANCE SYSTEM
COMPUTER AND ANTENNAS
UTILIZING EXISTING PARTIAL
PROVISIONS
8268B SELECTION OF WINDSHEAR ALERT 1 AND
09/18/96 AND GUIDANCE SYSTEM PROGRAM SUBSEQUENT
OPTION
8282 EDITORIAL CHANGE TO DS 8000G TO 1 AND
08/13/92 RELOCATE THE EVM INDICATOR SUBSEQUENT
SPACE PROVISIONS FROM THE
FIRST OFFICERS INSTRUMENT
PANEL TO THE CAPTAIN'S
INSTRUMENT PANEL
8283 REVISION TO THE FUEL QUANTITY 1 AND
09/21/92 INDICATING SYSTEM SUBSEQUENT
8299 INSTALLATION OF AN ASSIST STRAP 1 AND
11/18/92 ADJACENT TO THE FORWARD SUBSEQUENT
GALLEY SERVICE DOOR
8320 EDITORIAL CHANGES TO DS 8000G 1 AND
09/15/93 SUBSEQUENT
8340 REVISION TO BUYER-FURNISHED 1 AND
06/06/94 ATC TRANSPONDER PART NUMBER SUBSEQUENT
8366 EDITORIAL REVISION TO DS 8000G 1 AND
01/23/95 WEIGHT DATA (CHAPTER 13) SUBSEQUENT
8369 REVISION TO THE DETAIL 1 AND
03/13/95 SPECIFICATION TO PROVIDE SUBSEQUENT
UPDATE TO THE BUYER-FURNISHED
EQUIPMENT LISTING (DS 8000)
8372 DELETION OF THE LIQUID RAIN 1 AND
04/06/95 REPELLANT SYSTEM (MD-80) SUBSEQUENT
8374 REVISION TO BUYER-FURNISHED 1 AND
04/27/95 FLASHLIGHT PART NUMBER SUBSEQUENT
8383 INSTALLATION OF COMPOSITE VORTILLONS 1 AND
06/21/95 IN LIEU OF THOSE SUBSEQUENT
SPECIFIED
8401 INSTALLATION OF AN ADDITIONAL 1 AND
02/19/96 TRUST REVERSER DETENT SUBSEQUENT
8422 INCORPORATION OF FINISH 1 AND
12/12/96 SPECIFICATION F-109-71.2 FOR SUBSEQUENT
TRANS WORLD AIRLINES
8436 ELECTRONIC FLIGHT INSTRUMENT 1 AND
08/27/96 SYSTEM (EFIS) SELECTABLE SUBSEQUENT
PROGRAM OPTION LISTING
EXHIBIT A-2
-----------
SCN NUMBER AIRCRAFT
SCN DATE SCN TITLE NUMBER
-------- --------- ------
609N INSTALLATION OF DRIPLESS DIP 1 AND
04/18/79 STICKS GRADUATED IN POUNDS IN SUBSEQUENT
LIEU OF INCHES (6.7 LB/GAL)
1221F INSTALLATION OF SPARE WIRES 1 AND
12/03/80 (CATEGORY I, II AND IV) SUBSEQUENT
1272E REVISION OF ENGINE START AND 1 AND
01/29/83 IGNITION TO PROVIDE A GROUND SUBSEQUENT
START SAFETY FEATURE (DUAL 20
JOULE IGNITION)
3285H ADDITION OF POLYURETHANE FINISH 1 AND
08/27/79 TO LOWER FUSELAGE (COLOR TO BE SUBSEQUENT
DETERMINED)
4631H REMOVAL OF RADOME EROSION 1 AND
08/13/85 PROTECTION BOOT AND SUBSEQUENT
APPLICATION OF EROSION -
RESISTANT COATING (CHEMGLAZE
M431/M201)
5086A INSTALLATION OF REMOTE ENGINE 1 AND
08/22/79 STARTER CONTROL MECHANISM SUBSEQUENT
5505 INSTALLATION OF A HEATER AT THE 1 AND
02/16/79 POTABLE WATER TANK OVERFLOW SUBSEQUENT
DRAIN PORT
6217 INSTALLATION OF WING TIP 1 AND
09/16/82 MOUNTED LOGO LIGHTS UTILIZING SUBSEQUENT
EXISTING PARTIAL PROVISIONS
6702 COPPER ELECTRICAL GENERATOR 1 AND
07/12/83 FEEDER CABLES AND APU STARTER SUBSEQUENT
CABLE
6742 INSTALLATION OF A FLIGHT 1 AND
09/12/83 COMPARTMENT DOOR KEY SUBSEQUENT
6873E INSTALLATION OF AIR CRUISERS 1 AND
09/14/87 EVACUATION SLIDES QUALIFIED TO SUBSEQUENT
TSO C69A WITH AUTOMATIC
INFLATION IN LIEU OF MANUAL
INFLATION ON CABIN DOORS (MD-80)
6951 INSTALLATION OF SELF- 1 AND
09/20/84 ILLUMINATED TAILCONE SUBSEQUENT
EVACUATION SLIDE IN LIEU OF
EXISTING SLIDE RETAINING
ILLUMINATION EXTERNAL TO SLIDE
7303L INSTALLATION OF A BUYER- 1 AND
11/21/96 FURNISHED XXXXXXX WEATHER SUBSEQUENT
RADAR RECEIVER/TRANSMITTER
AND ANTENNA IN LIEU OF THAT
SPECIFIED
7317 FILLING CAVITIES OF PASSENGER 1 AND
09/30/87 SEAT TRACKS LOCATED UNDER SUBSEQUENT
GALLEYS WITH GREASE FOR
CORROSION PROTECTION
7345B INSTALLATION OF BUYER- 1 AND
10/28/94 FURNISHED SOLID STATE FLIGHT SUBSEQUENT
COMPARTMENT VOICE RECORDER IN
LIEU OF THAT SPECIFIED
8100B APPLICATION OF CROWN METRO 1 AND
02/12/92 EXTERIOR PAINT IN LIEU OF THAT SUBSEQUENT
SPECIFIED
8198 INSTALLATION OF AN APU WHICH 1 AND
10/25/91 INCORPORATES SELECTED XXXXXXX SUBSEQUENT
SERVICE BULLETINS IN LIEU OF
THAT SPECIFIED
8328 APPLICATION OF AEROGLAZE M1433 1 AND
11/18/93 EROSION RESISTANT COATING ON SUBSEQUENT
THE RADOME IN LIEU OF THAT
SPECIFIED
8373 INCREASED COVERAGE FOR 1 AND
04/24/95 EXTERIOR XXXX POLYURETHANE SUBSEQUENT
FINISH ON WINGS AND HORIZONTAL
STABILIZER
8382 INSTALLATION OF BUYER- 1 AND
06/15/95 FURNISHED AMERICAN FLAG DECALS SUBSEQUENT
ON THE VERTICAL STABILIZER (TWA)
8398 INSTALLATION OF PARTIAL 1 AND
01/10/96 PROVISIONS FOR DUAL GLOBAL SUBSEQUENT
NAVIGATION SYSTEM ANTENNAS
8410 CATEGORY CHANGE FROM BUYER- 1 AND
04/15/97 FURNISHED EQUIPMENT (BFE) TO SUBSEQUENT
SELLER-FURNISHED EQUIPMENT
(SFE)
8423 INSTALLATION OF A BUYER- 1 AND
10/24/96 FURNISHED XXXXXXX SERIES 900 SUBSEQUENT
DUAL HF SYSTEM UTILIZING
EXISTING COMPLETE PROVISIONS
8425 INSTALLATION OF BFE XXXXXXX 1 AND
07/10/96 SERIES 900 ATC TRANSPONDERS SUBSEQUENT
IN LIEU OF THAT SPECIFIED
8426 INSTALLATION OF A BFE DIGITAL 1 AND
07/10/96 FLIGHT DATA ACQUISITION UNIT IN SUBSEQUENT
LIEU OF THAT SPECIFIED
8427 INSTALLATION OF BUYER- 1 AND
07/10/96 FURNISHED XXXXXXX SERIES 900 DME SUBSEQUENT
INTERROGATOR UNITS PART
NUMBER 000-0000-000, IN LIEU OF
THOSE SPECIFIED
8428 INSTALLATION OF A BUYER- 1 AND
07/10/96 FURNISHED ALLIEDSIGNAL SOLID SUBSEQUENT
STATE FLIGHT DATA RECORDER,
PART NUMBER 000-0000-000, IN LIEU
OF THAT SPECIFIED
8429 INSTALLATION OF A BFE 1 AND
11/07/96 ALLIEDSIGNAL ACARS SYSTEM WITH SUBSEQUENT
ARINC 740 PRINTER
8430 INSTALLATION OF TWO BFE XXXXXXX 1 AND
01/10/97 SERIES 900 ADF SYSTEMS IN LIEU OF SUBSEQUENT
THAT SPECIFIED
8432 INSTALLATION OF A BFE XXXXXXX 1 AND
12/03/96 TCAS SYSTEM SUBSEQUENT
8435 INSTALLATION OF A -926 FLIGHT 1 AND
08/19/96 MANAGEMENT COMPUTER IN LIEU SUBSEQUENT
OF THAT SPECIFIED
EXHIBIT A-3
-----------
SCN NUMBER AIRCRAFT
SCN DATE SCN TITLE NUMBER
-------- --------- ------
TW-0142A INSTALLATION OF A 142 1 AND
04/25/97 PASSENGER MIXED CLASS SUBSEQUENT
(20 FIRST CLASS AND 122
ECONOMY) INTERIOR
ARRANGEMENT
51H INSTALLATION OF LIQUID 1 AND
10/17/80 SOAP DISPENSERS IN SUBSEQUENT
LAVATORIES IN LIEU OF
BAR SOAP DISPENSERS
5425D INSTALLATION OF A 1 AND
12/04/96 DIAPER CHANGING SHELF SUBSEQUENT
IN THE AFT RIGHT
LAVATORY
5830D REVISION OF DFGC 1 AND
02/15/91 WIRING TO PROVIDE SUBSEQUENT
AUTOLAND WITH ONE
RADIO ALTIMETER
INOPERATIVE
5913 REMOVAL OF 1 AND
03/31/81 XXXXXXXXX XXXXXXX SUBSEQUENT
CORPORATION LEGENDS
AND/OR LOGOS FROM
AIRCRAFT EXTERIOR
5986B REVISION OF ALTITUDE 1 AND
06/06/83 ALERT TO ENABLE AURAL SUBSEQUENT
WARNING AT 750 FOOT
ARMING POINT
6512B ADDITION OF AUTOLAND 1 AND
08/26/80 ROLLOUT GUIDANCE SUBSEQUENT
7301B INSTALLATION OF 1 AND
12/05/96 PARTIAL PROVISIONS FOR SUBSEQUENT
THE INSTALLATION OF A
SECOND ADVANCED
FLIGHT MANAGEMENT
COMPUTER
7771Q SELECTION OF BUYER- 1 AND
02/26/97 FURNISHED EQUIPMENT SUBSEQUENT
8386 INSTALLATION OF 1 AND
08/24/95 NUMBER ONE WINDOW SUBSEQUENT
PLUGS (LH AND RH)
8393 REVISION TO BUYER- 1 AND
06/27/96 FURNISHED FLIGHT DATA SUBSEQUENT
AND VOICE RECORDER
SYSTEMS
8408 INSTALLATION OF A 144- 1 AND
05/09/97 PASSENGER MIXED-CLASS SUBSEQUENT
INTERIOR ARRANGEMENT
8413 REMOVAL OF THE 1 AND
05/24/96 ADDITIONAL THRUST SUBSEQUENT
REVERSER DETENT
(DELETES THE EFFECTS OF
STANDARD SCN 8401)
8417 REVISION TO THE 1 AND
10/16/96 VSI/RA/XX XXXXXXX SUBSEQUENT
INDICATOR BFE
SELECTION
8418 DELETION OF THE RAM 1 AND
06/07/96 AIR INLET ANTI-ICING SUBSEQUENT
SYSTEM
8424 INSTALLATION OF A 1 AND
02/18/97 BUYER-FURNISHED VHF SUBSEQUENT
COMMUNICATION
SYSTEM XXXXXXX SERIES
900 IN LIEU OF THAT
SPECIFIED AND
INSTALLATION OF A
THIRD VHF
8437 INSTALLATION OF 1 AND
09/24/96 XXXXXXXX EVACUATION SUBSEQUENT
SLIDES WITH AUTOMATIC
INFLATION IN LIEU OF AIR
CRUISERS SPECIFIED
8438 REVISION OF ELECTRONIC 1 AND
109/01/96 FLIGHT INSTRUMENT SUBSEQUENT
SYSTEM PROGRAM
WIRING TO PROVIDE AN
ADDITIONAL DISPLAY
8442 INSTALLATION OF THREE 1 AND
12/09/96 XXXXXXX VHF SUBSEQUENT
TRANSCEIVERS PART
NUMBER 000-0000-000
(WITH 8.33 KHZ SPACING
CAPABILITY) IN LIEU OF
THAT SPECIFIED
8444 INSTALLATION OF BUYER- 1 AND
05/09/97 FURNISHED PORTABLE SUBSEQUENT
HALON FIRE
EXTINGUISHERS, FIRST
AID KITS AND
MEGAPHONES IN LIEU OF
THE SELLER-FURNISHED
EQUIPMENT SPECIFIED
8445 INSTALLATION OF BFE 1 AND
05/09/97 MAGAZINE RACK AND BFE SUBSEQUENT
LIFE VEST POUCH
8448 INSTALLATION OF A 1 AND
03/24/97 SELLER-FURNISHED SUBSEQUENT
ALLIEDSIGNAL SOLID
STATE FLIGHT DATA
RECORDER, PART
NUMBER 000-0000-000, IN
LIEU OF THAT SPECIFIED
8449 INSTALLATION OF 1 AND
02/12/97 PARTIAL PROVISIONS FOR SUBSEQUENT
MULTI-MODE RECEIVERS
(MMR) SYSTEM
8454 INSTALLATION OF BUYER- 1 AND
03/13/97 FURNISHED CREW SUBSEQUENT
PORTABLE OXYGEN
CYLINDER AND CREW
OXYGEN MASK IN LIEU OF
THE SELLER-FURNISHED
EQUIPMENT SPECIFIED
8460 INSTALLATION OF A 1 AND
04/17/97 CLASS DIVIDER WITH SUBSEQUENT
OUTBOARD SUPPORT
LEGS MOUNTED AT
X=PLUS OR MINUS 54.50 IN
LIEU OF THAT SPECIFIED
8463 REVISION TO WINDSHEAR 1 AND
05/22/97 ALERT AND GUIDANCE SUBSEQUENT
SYSTEM PROGRAM PIN
WIRING TO PROVIDE
ALTERNATE WINDSHEAR
VOICE WARNING
8465 INSTALLATION OF 1 AND
06/25/97 XXXXXXX DME SUBSEQUENT
INTERROGATOR
000-0000-000 IN LIEU OF
000-0000-000
2-23-98 Exhibit B
A00480-B
EXHIBIT B - CERTIFICATE OF
TECHNICAL ACCEPTANCE AND DELIVERY
CERTIFICATE OF TECHNICAL ACCEPTANCE AND DELIVERY B-1
2-23-98 Exhibit B
A00480-B
CERTIFICATE OF TECHNICAL ACCEPTANCE AND DELIVERY
Buyer: TRANS WORLD AIRLINES, INC.
Seller: XXXXXXXXX XXXXXXX CORPORATION
Purchase Agreement Number: A00480-B, dated
-----------------
AIRCRAFT IDENTIFICATION
-----------------------
Model:
Buyer's Aircraft Number:
Nationality and Registration Number:
Factory Serial Number:
Fuselage Number:
SECTION A - TECHNICAL ACCEPTANCE
--------------------------------
Trans World Airlines, Inc. hereby technically accepts the Aircraft and
agrees that the Aircraft has been manufactured in accordance with and
conforms to the requirements of Purchase Agreement Xx. X00000-X, as
amended.
TRANS WORLD AIRLINES, INC.
Signature
--------------------------------
Printed Name
-----------------------------
Title
------------------------------------
Date
-------------------------------------
CERTIFICATE OF TECHNICAL ACCEPTANCE AND DELIVERY B-2
2-23-98 Exhibit B
A00480-B
CERTIFICATE OF TECHNICAL ACCEPTANCE AND DELIVERY
Buyer: TRANS WORLD AIRLINES, INC.
Seller: XXXXXXXXX XXXXXXX CORPORATION
Purchase Agreement Number: A00480-B, dated
-----------------
AIRCRAFT IDENTIFICATION
-----------------------
Model: MD-83
Buyer's Aircraft Number:
Nationality and Registration Number:
Factory Serial Number:
Fuselage Number:
SECTION B - DELIVERY
--------------------
Trans World Airlines, Inc. hereby accepts delivery of the Aircraft at
the time and place noted below and hereby waives all remedies as to the
condition of the Aircraft, including the remedy of revocation of
acceptance, which might otherwise arise by operation of law, excepting
only those remedies provided for in Exhibit C, Part I of Purchase
Agreement No. A00480-B. Trans World Airlines, Inc. certifies the
Aircraft will be used by Trans World Airlines, Inc. as a certified or
licensed carrier of persons or property in interstate or foreign
commerce.
TRANS WORLD AIRLINES, INC.
Signature
--------------------------------
Printed Name
-----------------------------
Title
------------------------------------
Date
-------------------------------------
CERTIFICATE OF TECHNICAL ACCEPTANCE AND DELIVERY B-3
2-23-98 A00480-B
EXHIBIT C - AIRCRAFT SUPPORT SERVICES
2-23-98 Exhibit C
A00480-B
TABLE OF CONTENTS
PART I - WARRANTY AND SERVICE LIFE POLICY I-1
A. Seller's Warranty I-1
B. Warranties From Other Manufacturers I-4
C. Service Life Policy I-6
D. Normal Usage I-11
E. Duplicate Protection Plan Remedies I-11
F. General I-11
PART II - TRAINING AND SERVICES II-1
A. Flight Training Program II-1
B. Maintenance and Technical Training Program II-3
C. Field Service II-8
D. Factory Service II-8
E. Maintenance Planning Assistance II-9
F. Additional Services II-10
G. Transportation and Per Diem Reimbursement II-10
H. General II-10
PART III - SPARE PARTS III-1
A. Applicability III-1
B. Term III-1
C. Buyer's Orders III-1
D. Communications III-1
E. Status Information III-1
F. Prices III-1
G. Shipment III-2
H. Payment III-2
I. Purchase of Seller's Parts III-3
J. Vendor Parts III-4
K. Provisioning III-4
L. General III-5
PART IV - AIRCRAFT MANUALS AND DOCUMENTS IV-1
A. Documents Provided IV-1
B. ATA Specifications IV-1
C. Shipment IV-1
D. Revision Service IV-1
E. List of Documents IV-2
F. Additional Copies IV-19
G. Limitation On Use of Documents IV-19
H. Warranty IV-19
AIRCRAFT SUPPORT SERVICES INDEX ii
2-23-98 Exhibit C
A00480-B
PART I - WARRANTY AND SERVICE LIFE POLICY
This Part I contains the terms and conditions applicable to the warranty
and service life policy.
A. SELLER'S WARRANTY
-----------------
1. Coverage. Seller warrants that Products, at the time of
--------
delivery by Seller, shall be free from:
a. defects in material and workmanship;
b. defects caused by Seller's installation of any article
not manufactured by Seller in a manner not in
accordance with the reasonable instructions of the
manufacturer;
c. defects arising from failure to conform to the Detail
Specification, except as to portions thereof stated to
be estimates or approximations or stated to be design
objectives; and
d. defects inherent in the design, in view of the state
of the art as of the date of such design, including
defects arising from Seller's selection of materials
or process of manufacture.
2. Term. This warranty applies only to defects described in
----
paragraph 1. above which become apparent to Buyer within
thirty-six months after delivery of each Product.
3. Repair or Replacement. Seller's liability under this
---------------------
warranty for defects described in paragraphs 1.a.,
1.b. and 1.c. above is limited, at Seller's election, to the
repair or replacement at Seller's expense (with a similar
item free from the defect in question) of any defective
Product.
4. Correction of Design Defects. Seller's liability under this
----------------------------
warranty for defects described in paragraph 1.d. above is
limited to correction at Seller's expense of all such
defects. If such design defects become apparent and Buyer
gives Seller due and timely notice within the applicable
period set forth in paragraphs 11.f. and 11.g. of this
Part I A. and Seller is obligated to correct such defect,
Seller shall also make such correction in any Product which
has not been delivered to Buyer. Seller, however, shall not
be responsible nor deemed to be in default on account of any
delays in performance caused by any such corrections. Also,
rather than accept a delay in delivery, Buyer may elect to
accept delivery and subsequently file a claim for a warranty
correction as though the defect had become apparent
immediately after delivery.
5. Timely Corrections. Seller, or Buyer with the approval of
------------------
Seller, shall make the repairs, replacements or corrections
with reasonable care and dispatch in order that the Product
involved is not out of service longer than necessary.
WARRANTY AND SERVICE LIFE POLICY I-1
2-23-98 Exhibit C
A00480-B
6. Seller's Approval. Within two weeks following receipt of
-----------------
Buyer's notice of a defect accompanied by Buyer's request
for permission to make a repair or correction, Seller shall
notify Buyer of its approval or disapproval of the request.
If Seller fails to give timely notice, the request shall be
deemed approved. Approval under this paragraph shall not
constitute a determination as to the existence of a defect,
as described in paragraph 1. above.
7. Coverage. For defects described in paragraph 1. above,
--------
removal and repair of the defective Product and its
reinstallation shall be at Seller's expense. When temporary
or interim repairs, replacements and corrections are
accomplished by Buyer and not proposed or requested by
Seller, Seller's liability to Buyer for removal and repair
shall not exceed the cost of furnishing a permanent repair,
replacement or correction.
8. Reimbursement.
-------------
a. Labor. For defects described in paragraph 1. above,
-----
Seller shall establish a reasonable estimate for the
labor hours required for removal and reinstallation
and, if performed by Buyer, repair or correction of
the defective Product and will reimburse Buyer for the
estimated hours or for Buyer's actual labor hours,
whichever is less. Buyer's warranty labor rate shall
be based upon Buyer's direct labor rate per man-hour
plus a burden rate of fifty percent, subject to annual
review and adjustment as mutually agreed. The amount
of Buyer's warranty labor rate shall not exceed the
Xxxxxxx Products Division's manufacturing direct labor
rate plus a burden rate of one-hundred percent.
b. Material. Seller shall reimburse Buyer for parts
--------
required to effect the repair. The price paid for
parts by Seller shall be the invoice prices paid by
Buyer.
9. Claims Information. All warranty claims must be submitted
------------------
in writing to Seller's Warranty Administrator at Long Beach,
California and shall include the following:
a. the identity of the Product involved, including
Seller's part number, serial number, CAGE Code,
nomenclature and the quantity claimed to be defective;
b. the identity of the Aircraft and ATA location from
which each Product was removed;
c. the date the claimed defect became apparent to Buyer;
d. the total flight hours or cycles accrued on each
Product at the time the claimed defect became apparent
to Buyer;
e. description of the claimed defect and circumstances;
f. the date any repair or modification was completed;
WARRANTY AND SERVICE LIFE POLICY I-2
2-23-98 Exhibit C
A00480-B
g. an itemized account of any direct labor hours expended
in performing the repair or modification;
h. an itemized account of any direct materials
incorporated in any repair or modification; and
i. with respect to any spare parts purchased from Seller,
identification by Buyer's purchase order number and
date.
10. Audit, Notification and Transportation. All warranty claims
--------------------------------------
shall be subject to audit by Seller. Seller shall notify
Buyer of Seller's disposition of each claim. If a warranty
claim is rejected, Seller will provide an explanation for
the rejection including any supporting data/documentation
reasonably requested by Buyer. For defects described in
paragraph 1. above, Seller shall pay all costs of
transportation of the defective Product returned to and from
the point on Buyer's airline route closest to Seller's
Facility in Long Beach, California.
11. Limitations. Seller shall have no obligation or liability
-----------
under this warranty if:
a. the Aircraft was not operated or maintained in
accordance with the AIRCRAFT MANUALS AND DOCUMENTS
furnished Buyer pursuant to Part IV hereof unless
Buyer furnishes reasonable evidence that such
operation or maintenance was not a cause of the
defect;
b. the Aircraft was not operated under normal airline use
unless Buyer furnishes reasonable evidence that such
operation was not a cause of the defect;
c. Buyer does not submit reasonable proof to Seller
within 2 months after the defect becomes apparent that
the defect is due to a matter covered within this
warranty. Seller shall use reasonable efforts to
approve or disapprove in writing Buyer's warranty
claim within 2 months of receipt.
d. Buyer does not return the defective Product to
Seller's Facility, unless otherwise approved by
Seller, within two months following such defect
becoming apparent;
e. Buyer does not report the defect in writing to
Seller's Warranty Administrator and submit reasonable
proof to Seller that the defect is due to a matter
covered within this warranty within two months after
the defect becomes apparent; or
f. Buyer does not submit its claim for reimbursement
within one year of the defect becoming apparent to
Buyer or within a reasonable time period as mutually
agreed between Buyer and Seller's Warranty
Administrator.
12. Document Warranty. Seller warrants that at the time of
-----------------
delivery by Seller all Documents shall be free from errors.
Seller's liability under this warranty is limited to
replacement of the Document with a similar Document or page
thereof free from
WARRANTY AND SERVICE LIFE POLICY I-3
2-23-98 Exhibit C
A00480-B
the error in question at no charge for up to Twenty-Four
months after delivery of the Document.
B. WARRANTIES FROM OTHER MANUFACTURERS
-----------------------------------
1. Warranties From Other Manufacturers. Seller has made or
-----------------------------------
shall make reasonable efforts to obtain favorable warranties
enforceable by Buyer from Vendors, with respect to Vendor
Parts purchased by Seller and installed in the Aircraft at
the time of delivery. Seller shall furnish copies of Vendor
commitments to Buyer (see Product Support Supplier
Agreements Manual, Exhibit C, Part IV - AIRCRAFT MANUALS AND
DOCUMENTS).
2. Vendor Backstop. For those Vendor Parts installed on the
---------------
Aircraft or purchased through Seller, in the event of a
default by a Vendor in the performance of any material
obligation under any applicable warranty obtained by Seller
from such Vendor pursuant to paragraph 1. above, or in the
event of a disclaimer of responsibility by such Vendor for
any defect constituting a breach of such warranty and upon
seasonable notice thereof to Seller, Seller will furnish the
equivalent warranty terms as those provided by the
defaulting Vendor.
3. Seller's Interface Commitment. At Buyer's request to
-----------------------------
Seller's Warranty Administrator, Seller shall, without
charge, conduct an investigation and analysis of any
Interface Problem to determine, if possible, the cause of
the Interface Problem and to recommend feasible corrective
action. Buyer shall furnish to Seller all data and
information in Buyer's possession relevant to the Interface
Problem and shall cooperate with Seller in the conduct of
its investigation and such tests as may be required.
Seller, at the conclusion of its investigation, shall advise
Buyer in writing of Seller's opinion as to the cause of the
Interface Problem and Seller's recommended corrective
action.
If Seller determines that the interface problem stems from a
Seller part, the cause of the Interface Problem shall be
treated as a defect in the design of such part pursuant to
Exhibit C, Part I, Paragraph A of the Agreement. Warranty
claims submitted by Buyer pursuant to Exhibit C, Part I,
Paragraph A of the Agreement shall be processed in
accordance with and subject to all of the terms and
conditions thereof.
If Seller concludes that the cause of the Interface Problem
is attributable to a Vendor Part, Seller shall assist Buyer
in delineating claims which Buyer may assert against the
Vendor, Seller will also take reasonable actions permitted
by its contacts with such Vendor, in an effort to obtain a
correction of the Interface Problem which is satisfactory to
Buyer.
If Seller determines that the Interface Problem is in part
due to a Seller Part and a Vendor Part, Seller shall at the
request of Buyer, attempt to correct the Interface Problem
through the cooperative efforts of both Seller and the
Vendor.
WARRANTY AND SERVICE LIFE POLICY I-4
2-23-98 Exhibit C
A00480-B
4. Engine Warranty. Seller has obtained from United
---------------
Technologies Corporation, Xxxxx & Whitney Group, Large
Commercial Engines (United) the right to extend to Buyer the
provisions of United's sales warranty, attached hereto as
Exhibit E. Buyer agrees that the warranty applicable to
Engines installed at the time of delivery in the aircraft to
be furnished under this Agreement shall be the United sales
warranty; provided that Buyer may, by notice given to United
prior to delivery of the Aircraft under this Agreement,
elect to substitute for such sales warranty any
corresponding warranty included either in a General Terms
Agreement currently effective between the Buyer and United
or in a contract for the sale by United to the Buyer of
Engines intended for use in direct support of the Aircraft
to be furnished under this Agreement. Buyer agrees that any
such warranty shall be deemed to have been provided directly
by United to Buyer. Buyer shall look to United and not
Seller with respect to any such warranty and Seller has no
obligation under such warranty and does not act as guarantor
of United's warranty. In consideration of such extension,
Buyer hereby releases and discharges United from any and all
liabilities and obligations whatsoever arising out of the
purchase or use of said installed Engines, except as
expressly assumed by United in such warranty.
C. SERVICE LIFE POLICY
-------------------
The Policy shall apply if fleetwide or repetitive Failures occur
in any Covered Component.
1. Term. Should a Failure occur in any Covered Component
----
within one-hundred forty-four months after delivery, Seller
shall, at the price provided below and as promptly as
practicable, either (i) design and furnish a correction for
such failed Covered Component and provide any parts required
for such correction (exclusive of standard parts) or (ii)
furnish a replacement Covered Component.
2. Price. Any part or Covered Component which Seller is
-----
required to furnish under this Policy shall be priced in
accordance with the following formula:
P = CT
--
N
where:
P = Price to Buyer;
C = Seller's then current Seller Part sales price;
T = the total time to the nearest month during which the
Covered Component has been used; and
N = 144 months.
WARRANTY AND SERVICE LIFE POLICY I-5
2-23-98 Exhibit C
A00480-B
3. Conditions and Limitations. The following general
--------------------------
conditions and limitations shall apply to the Policy:
a. The transportation cost for the return, if practicable
and requested by Seller, of any failed Covered
Component necessary for redesigning studies shall be
borne by Seller to and from the point on Buyer's
airline route closest to Seller's Facility in Long
Beach, California.
b. Any required disassembly and reassembly of the
Aircraft or landing gear, removal of the failed
Covered Component and reassembly and installation of
the corrected or replacement Covered Component, shall
be at Buyer's expense.
c. Seller's obligations under the Policy are conditioned
upon the submission of reasonable proof to Seller that
the Failure is covered by the Policy.
d. Buyer must report a Failure in writing to Seller's
Warranty Administrator within two months after any
Failure becomes evident, whether or not said Failure
can reasonably be expected to occur in any other
aircraft. Omission to give this required notice shall
excuse Seller from all obligations with respect to
such Failure.
e. The provisions of paragraph 11.a., 11.b. and, 11.c. of
paragraph A. of Part I entitled Seller's Warranty, are
incorporated by this reference and shall condition
Seller's obligations under the Policy with respect to
any Covered Component.
f. Seller's obligations under the Policy shall not apply
to any Aircraft or Covered Component which has not
been correctly modified in accordance with Seller's
service bulletin specifications or instructions
furnished by Seller to Buyer prior to receipt by
Seller from Buyer of any notice of an occurrence which
constitutes, or which at a later date is shown to
constitute, a Failure in a Covered Component unless
Buyer furnishes reasonable evidence that such Failure
was not caused by Buyer's failure to so modify the
Aircraft or Covered Component.
g. The Policy shall not apply for a Failure if Seller
determines that the Failure may not reasonably be
expected to occur on a fleetwide or repetitive basis.
4. Coverage. This Policy is neither a warranty, performance
--------
guarantee nor an agreement to modify the Aircraft or Covered
Component to conform to new developments in airframe and
landing gear design and manufacturing art. Seller's
obligation is to make only those corrections to the Covered
Components or furnish replacements as provided in the
Policy.
5. Covered Components. The following specific airframe
------------------
components and landing gear components are subject to the
provisions of the Policy:
WARRANTY AND SERVICE LIFE POLICY I-6
2-23-98 Exhibit C
A00480-B
a. Airframe Components
(1) Pylons
(a) Front engine mount yoke
(b) Spars (including spar caps, webs and
stiffeners)
(c) Front engine mount to pylon attach fitting
(d) Aft engine mount to pylon attach fitting
(e) Upper and lower skin and stiffeners
between spars
(f) Pylon to fuselage attach angles and
fittings
(2) Wings
(a) Front and rear spars (including spar caps,
webs and stiffeners)
(b) Upper and lower stringers and skin between
spars
(c) Landing gear bulkhead and landing gear
attach fitting
(d) Bulkhead at side of fuselage, including
trapezoidal panel
(e) Flap ribs in the wing
(f) Wing to fuselage attach tee
(g) Wing flap attach fittings
(3) Fuselage
Frames, plating, longerons and pressure
bulkheads, but excluding all non-load carrying
access doors.
(4) Empennage
(a) Vertical stabilizer spars and skin between
spars
(b) Aft fuselage vertical stabilizer
carry-through structure
(c) Horizontal stabilizer spars, integral skin
and stringers between spars, and pivot
fittings
b. Landing Gear Components
(1) Main Gear
(a) Cylinder
(b) Piston/axle
(c) Side brace (upper and lower)
(d) Fixed side brace
(e) Orifice support tube
(f) Torque links
WARRANTY AND SERVICE LIFE POLICY I-7
2-23-98 Exhibit C
A00480-B
(2) Nose Gear
(a) Housing
(b) Piston
(c) Axle
(d) Orifice support tube
(e) Cylinder
(f) Torque links
(g) Cross tube
(h) Drag links (upper and lower)
NOTE: The Policy does not cover any bearings, bushings, attaching
hardware such as bolts, washers, clamps, brackets, or
actuating or latching mechanisms, or gaskets, O-rings, or
seals used in or on the Covered Components.
D. NORMAL USAGE
------------
Normal wear and tear and the need for regular maintenance shall
not constitute a defect or failure pursuant to Part I hereof.
E. DUPLICATE PROTECTION PLAN REMEDIES
----------------------------------
It is agreed that Seller shall not be obligated to provide to
Buyer any remedy which is a duplicate of any other remedy which
has been provided to Buyer under Part I hereof.
F. DISCLAIMER AND RELEASE, EXCLUSION OF LIABILITIES
------------------------------------------------
1. THE WARRANTY AND SERVICE LIFE POLICY PROVIDED IN THIS
EXHIBIT C, PART I AND THE OBLIGATIONS AND LIABILITIES OF
SELLER UNDER SAID WARRANTY AND SERVICE LIFE POLICY ARE
EXCLUSIVE AND IN LIEU OF, AND BUYER HEREBY WAIVES ALL OTHER
REMEDIES, WARRANTIES, GUARANTEES OR LIABILITIES, EXPRESS OR
IMPLIED, WITH RESPECT TO EACH AIRCRAFT, ARTICLE, PRODUCT,
ACCESSORY, EQUIPMENT, SPARE PART, SERVICE, MANUAL, DOCUMENT,
DATA,OR OTHER THING DELIVERED UNDER THIS AGREEMENT AND
RELATED DOCUMENTS, ARISING BY LAW OR OTHERWISE (INCLUDING,
WITHOUT LIMITATION, ANY OBLIGATION OR LIABILITY ARISING FROM
NEGLIGENCE OR TORT OR WITH RESPECT TO FITNESS,
MERCHANTABILITY, LOSS OF OR DAMAGE TO THE AIRCRAFT.
2. SELLER WILL HAVE NO OBLIGATION OR LIABILITY, WHETHER ARISING
IN CONTRACT (INCLUDING WARRANTY), TORT, WHETHER OR NOT
ARISING FROM THE NEGLIGENCE OF SELLER, OR OTHERWISE , FOR
THE LOSS OF USE, REVENUE OR PROFIT, OR FOR ANY OTHER
INCIDENTAL OR CONSEQUENTIAL DAMAGES WITH RESPECT TO EACH
AIRCRAFT, ARTICLE, PRODUCT, ACCESSORY, EQUIPMENT, SPARE
PART, SERVICE, MANUAL, DOCUMENT, DATA OR OTHER THING
DELIVERED UNDER THIS AGREEMENT AND RELATED DOCUMENTS.
WARRANTY AND SERVICE LIFE POLICY I-8
2-23-98 Exhibit C
A00480-B
3. BUYER AND SELLER STATE AND AGREE THAT THIS PART I OF
EXHIBIT C, INCLUDING BUT NOT LIMITED TO PARAGRAPH 1. ABOVE,
HAS BEEN THE SUBJECT OF DISCUSSION AND NEGOTIATION AND IS
FULLY UNDERSTOOD BY THE PARTIES AND THAT THE PRICE OF THE
AIRCRAFT AND THE OTHER MUTUAL AGREEMENTS OF THE PARTIES SET
FORTH IN THIS AGREEMENT WERE ARRIVED AT IN CONSIDERATION OF
THE PROVISIONS CONTAINED IN THIS PARAGRAPH, PARAGRAPH 1.
ABOVE AND THE OTHER PROVISIONS OF THIS PART I OF EXHIBIT C.
4. For the purpose of this paragraph F, "Seller" is defined as
the Boeing Company, its divisions, subsidiaries, affiliates,
the assigns of each, and their respective directors,
officers, employees and agents.
WARRANTY AND SERVICE LIFE POLICY I-9
2-23-98 Exhibit C
A00480-B
PART II - TRAINING AND SERVICES
This Part II contains the terms and conditions applicable to the
training of Buyer's flight and maintenance personnel. The training
program shall consist of services and support, presented in the American
English language, designed to familiarize, train and assist Buyer's
personnel with the introduction of the Aircraft. Unless otherwise
stated, the program shall be conducted at Seller's Facility. Any other
location or additional training based on Buyer's special requirements
will be subject to mutually agreeable terms and conditions including
price, schedule, location and scope of training required.
A. FLIGHT TRAINING PROGRAM
-----------------------
1. General. Seller reserves the right to rotate instructors
-------
every four weeks when training is conducted away from
Seller's Facility. Instructor services, when utilized away
from Seller's Facility, are counted in full days (eight
hours equals one full day) on a portal to portal basis.
Buyer's personnel shall be qualified and have experience in
Commercial Transport Class (Group II) Turbo Jet Aircraft as
defined in FAR Part 121.400.
2. Training Conference. Buyer and Seller shall schedule a
-------------------
flight training conference at Seller's Facility no less than
twelve months prior to delivery of the first Aircraft. This
conference will establish a training plan and schedule
including the elements in this paragraph A. and will
establish any additional training or special requirements
beyond the scope of this paragraph A. The terms and
conditions applicable to such additional training or special
requirements will be the subject of a separate agreement.
3. Classroom Training. Seller shall conduct the following
------------------
classroom instruction:
a. Flight Crew Ground Training Course - Provide
customized FAA approved operational courses, up to
fifteen days in duration, for six of Buyer's Flight
Crews. This course shall consist of classroom
instruction supplemented by the use of ground training
devices. The course objective is to train Buyer's
personnel to be proficient to operate the Aircraft
systems and to advance to the flight training phase of
paragraph A.4. This course will normally be conducted
during the four month period prior to delivery of the
first Aircraft. Seller shall furnish to each of
Buyer's personnel participating in this course one
copy of the Flight Crew Operating Manual (without
revision service).
b. Flight Crew Ground Training Instructor Course - This
course of up to nineteen business days duration, for
up to four of Buyer's ground training personnel,
consists of the Flight Crew Ground Training Course
plus additional in-depth Aircraft Systems information.
c. Flight Attendant Course - A familiarization course of
up to three days duration shall be conducted for up to
twenty of Buyer's flight attendant personnel. This
course shall present general information on the
Aircraft and detailed information on the operation of
the cabin equipment and emergency
TRAINING AND SERVICES II-1
2-23-98 Exhibit C
A00480-B
equipment. Seller shall furnish for each participant
in this course one copy of the Flight Attendant Manual
(without revision service). Five instructor days plus
travel time shall be available to assist Buyer's
personnel at Buyer's facility to conduct hands-on
training on the first delivered Aircraft.
d. Flight Dispatcher Course - A course of up to five days
duration shall be conducted for up to ten of Buyer's
flight dispatcher personnel. The course consists of
classroom instruction covering general aircraft
familiarization plus detailed coverage of aircraft
performance, flight planning, weight and balance
calculation and the Master Minimum Equipment List.
Seller shall furnish for each participant in this
course one copy of the Flight Crew Operating Manual
(without revision service).
e. Course Material - If utilized in the course, Seller
shall furnish one set of the following materials
(without revision service) used to conduct the Flight
Crew Ground Training Course, Flight Attendant Course
and Flight Dispatcher Course as applicable:
(1) 35mm slides
(2) Instructional narrative or instruction guides
(3) Overhead projection transparencies
(4) Video tapes
(5) Audio cassette tapes
(6) Computer based courseware in the Seller's format
(7) Cockpit panel prints (two sets unmounted)
f. Customization of Courses - The Flight Crew Ground
Training Course, Flight Crew Ground Training
Instructor Course, Flight Attendant Course and the
Flight Dispatcher Course will be designed to
reasonably reflect the configuration of the Aircraft
and Seller's standard operating procedures.
4. Flight Crew Flight Training. Seller will train Buyer's
---------------------------
Flight Crews with a flight training syllabus which meets the
performance standards of the FAA pilot type rating. Any
additional training beyond the level established by the
syllabus to achieve the desired proficiency will be subject
to mutually agreeable terms and conditions. Seller shall
provide qualified instructors to conduct the flight training
program for a total of one-hundred-thirty calendar days.
These days may be utilized in a combination of the following
types of flight training support:
a. Flight Crew Simulator Training - Seller shall use
reasonable efforts to schedule time in a FAA approved
flight simulator for the training outlined in Seller's
flight training syllabus. Costs of simulator rental
shall be borne by Buyer.
b. Aircraft Ferry - Upon request, Seller shall provide
qualified flight personnel to assist Buyer in ferrying
Aircraft to Buyer's main base.
TRAINING AND SERVICES II-2
2-23-98 Exhibit C
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c. Flight Crew Aircraft Training - If required, Seller
shall conduct a program of aircraft flight training
utilizing Buyer's Aircraft at a mutually agreed
location commencing with the delivery of the first
Aircraft. Seller's responsibility is limited to
instructor service only.
d. Line Training - Upon request, Seller shall provide
flight personnel to assist the Buyer in achieving
initial operating experience. Processing of any
special licenses permits or other documentation
required for the Seller's flight personnel to provide
this service shall be the responsibility of the Buyer.
5. Time Limit. Seller's obligation to provide flight training
----------
shall cease twelve months following delivery of the first
Aircraft.
6. Revisits. Subject to separate contractual negotiation,
--------
operational assistance will be provided on a periodic basis
in the form of revisits by Seller's flight operations
personnel.
7. Recurrent Flight Crew Training. Subject to separate
------------------------------
contractual negotiation, Seller will provide a FAA approved
program of flight crew recurrent training customized in
content and frequency to meet the recurrent training
requirements of Buyer's flight crews.
B. MAINTENANCE AND TECHNICAL TRAINING PROGRAM
1. General. The maintenance training program shall consist of
-------
factory and field training, including training aids and
materials.
2. Training Conference. Buyer and Seller shall schedule a
-------------------
maintenance training conference at Seller's Facility, on a
mutually agreed to date, approximately twelve months prior
to first Aircraft delivery. This conference will establish
a maintenance training plan including the scheduling and
content of all elements in this paragraph B. The scope and
depth of the individual courses defined in the plan will be
based on Seller's standard course syllabi.
3. Seller's Instructor Time. Seller shall provide instructor
------------------------
time, for a combination of factory and field training up to
thirty-four man-weeks.
4. Factory Training. The following factory training will be
----------------
furnished at Seller's Facility:
a. Executive General Familiarization Course - This course
is in general accordance with ATA Xxxxxxxxxxxxx 000,
Xxxxx X and is designed for Buyer's management, or
other support personnel, who are generally familiar
with modern jet aircraft. A brief overview of the
airframe, powerplant, electrical and avionic related
systems shall be presented.
b. General Familiarization Course - This course is in
general accordance with ATA Xxxxxxxxxxxxx 000, Xxxxx X
and is designed for Buyer's management, or
TRAINING AND SERVICES II-3
2-23-98 Exhibit C
A00480-B
other support personnel, familiar with modern jet
aircraft. It includes a brief overview of the
airframe, powerplant, electrical and avionic related
systems. Additionally, it may provide limited
information of technical data, specifications, special
tools, test equipment, maintenance practices, safety
precautions and procedures peculiar or unique to the
Aircraft.
c. Ramp and Transit Maintenance Course - This course is
in general accordance with ATA Specification 104,
Level II and is designed as basic systems training for
Buyer's management, planning, technical publications
and maintenance personnel who are licensed, certified
or otherwise approved, with experience in
through-flight activities and servicing practices. In
addition to the information contained in the General
Familiarization Course, task oriented information will
be provided concerning identification and location of
systems and components, system operation, control and
indication, minor troubleshooting, normal ground
handling and systems servicing.
d. Airframe and Powerplant Line and Base Maintenance
Course - This course is in general accordance with ATA
Specification 104, Level III and is designed as
advanced systems training for Buyer's line and hangar
maintenance personnel, instructors, technical
specialists, quality assurance inspectors and
engineers. The course material is principally
mechanical, with electrical information presented for
overall system comprehension. Personnel attending
this course must have the knowledge and experience
required to hold current licenses under International
Civil Aviation Organization (ICAO) standards.
Additional task oriented emphasis is placed on
detailed system description and operation, in-depth
troubleshooting, component identification and
location, removal and installation techniques, limited
adjustment and rigging and test procedures.
e. Electrical and Avionics Line and Base Maintenance
Course - This course is designed as advanced systems
training for line and hangar maintenance personnel,
instructors, technical specialists, quality assurance
inspectors and engineers. The course material is
principally electrical and avionics, with mechanical
information presented for overall system
comprehension, and is in general accordance with ATA
Specification 104, Level III. Personnel attending
this course must have the knowledge and experience
required to hold current licenses under International
Civil Aviation Organization (ICAO) standards.
Additional task oriented emphasis is placed on
detailed system description and operation, in-depth
troubleshooting, component identification and
location, removal and installation techniques, limited
adjustment and rigging and test procedures.
f. Specialized Courses - Specialized courses are designed
as task oriented specialized training for Buyer's base
and heavy maintenance personnel, instructors,
technical specialists, quality assurance inspectors
and engineers, and is in general accordance with ATA
Xxxxxxxxxxxxx 000, Xxxxx XX. Buyer's personnel
attending these courses, as defined by subject matter,
must have considerable field experience. Courses will
review pertinent material and
TRAINING AND SERVICES II-4
2-23-98 Exhibit C
A00480-B
present detailed specific instruction on
troubleshooting, repair, adjustment, rigging and test
procedures. Emphasis is placed on use of maintenance
and repair manuals, wiring diagrams, schematics,
engineering data and process and material standards,
where applicable. Prerequisites for students
attending specialized course will be coordinated by
the Buyer and Seller's maintenance training personnel.
5. Field Training. Seller shall provide the services of a
--------------
field instructor team, consisting of no more than four
instructors, at Buyer's designated base(s) of operation.
The field instructors will provide assistance as mutually
agreed upon to Buyer's maintenance and training personnel,
including classroom and on-the-job training, consultation
and monitoring assistance, and engine shop Quick Engine
Change (QEC) build-up assistance for one engine change.
Seller reserves the right to rotate instructors as required.
The field training shall not exceed a total of nineteen
instructor weeks. The field training weeks available to
Buyer shall be a portion of, and not in addition to,
Seller's instructor time set forth above. Field training is
in general accordance with ATA Specification 104, Levels I
through IV.
6. Vendor Training. Seller will use reasonable efforts, if
---------------
requested by Buyer, to obtain an agreement with its Vendors
to make maintenance training available as required, in
general accordance with ATA Specification 104, Level V.
7. Training Aids and Materials. If utilized in the course,
---------------------------
Seller shall furnish copies of the following training aids
and materials used to conduct Seller's standard training
courses which are in general accordance with ATA
Specification 104, Levels I through III, to assist Buyer in
establishing a maintenance training program at Buyer's
training facility. Revision service shall be provided for
only those materials described in paragraphs 7.a.(1),
7.a.(2) and 7.b. below. Revision service shall be provided
for one year after delivery of the first Aircraft.
a. Audio Visual Aids
(1) Overhead Projection Transparencies - One each of
all appropriate 81/2" x 11" transparencies (in
teaching sequence) used in Seller's baseline
training courses will be provided.
(2) 35mm Slides - One each of the appropriate slides
(in teaching sequence) and a reproducible half
tone master as used in Seller's baseline
training program shall be furnished.
(3) Video Tapes - One copy each of all applicable
color sound video tapes specially designed,
developed and utilized in support of the
baseline training courses will be provided.
(4) Wall Charts (black line) - One set of all wall
charts used in the factory training program will
be provided. These charts will depict cockpit
and instrument panel configuration and
arrangement.
TRAINING AND SERVICES II-5
2-23-98 Exhibit C
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b. Student Manuals - Buyer's personnel attending factory
training courses shall receive corresponding paper
copies of appropriate media with respective narrative.
c. Component and Equipment Location List - Buyer's
personnel attending Seller's standard courses shall
receive one copy of the Component and Equipment
Location List.
d. Study Guides - up to twenty five copies of the system
description and operation section of the Maintenance
Manual, or equivalent information, for Buyer's
Aircraft will be provided.
e. Course Completion Records - Each student attending a
Level II or higher course shall be measured to
demonstrate competence and if qualified shall be
provided a course completion certificate. Seller
shall furnish Buyer with appropriate student records.
8. Time Limit. Seller shall not be obligated to provide
----------
maintenance training after twelve months following delivery
of the first Aircraft.
C. FIELD SERVICE
-------------
1. Seller shall assign one service representative to Buyer's
main base of operation or other location as mutually agreed.
Such assignment shall commence approximately one month prior
to the scheduled delivery of the first Aircraft and shall
continue for one year after delivery of the last Aircraft.
2. Buyer shall furnish, at no charge to Seller, suitable office
facilities and furnishings, secretarial services, and
equipment and conveniently located to Buyer's maintenance
facilities for accommodation of such field service
representative.
D. FACTORY SERVICE
---------------
Seller agrees to maintain the capability to respond to Buyer's
technical inquiries, to conduct investigations concerning
repetitive maintenance problems and the issuance of findings and
recommended action. This service shall be provided for as long as
ten of the aircraft of the type purchased hereunder remain in
regularly scheduled commercial air transport service. Any
investigations which Seller deems to be extensive and requires
more than routine effort by Seller's personnel shall be the
subject of separate contractual negotiations.
E. MAINTENANCE PLANNING ASSISTANCE
-------------------------------
1. Maintenance Requirements. Seller shall provide technical
------------------------
assistance for Buyer's use in planning Aircraft maintenance
requirements.
2. Maintenance Engineering Data. Seller shall provide
----------------------------
maintenance engineering data as set forth in Part IV of this
Exhibit C.
TRAINING AND SERVICES II-6
2-23-98 Exhibit C
A00480-B
3. Ground Support Equipment Planning. Seller shall recommend
---------------------------------
ground support equipment necessary for operation of the
Aircraft and shall provide a summary of ground support
equipment suitable for use in maintenance and servicing.
4. Maintenance Engineering Operations Review. Seller shall, at
-----------------------------------------
Buyer's request, conduct a maintenance engineering
operations review at Buyer's facility which consists of
assistance to analyze Buyer's then current maintenance and
engineering operational requirements, reliability and
maintenance specifications, maintenance cost and reliability
accounting practices. The object of such review is to
improve the interactions of operations, engineering,
maintenance and logistics for improved operational
effectiveness. Seller will provide the findings and
recommendations in a report to Buyer. This service will be
available until three years after delivery of the last
Aircraft.
5. Maintenance Reliability Program Progression. Buyer agrees
-------------------------------------------
to provide Seller in-service maintenance data for the
Aircraft. Seller shall analyze the data together with
airline industry experience in order to provide updates to
Seller's Recommended On-Aircraft Maintenance Planning (OAMP)
Report. Buyer and Seller shall agree on standards and
frequency for communication of such data.
F. ADDITIONAL SERVICES
-------------------
Seller shall provide additional services which may include
training, special investigations and maintenance and repair of the
Aircraft, subject to mutually agreeable terms and conditions.
G. TRANSPORTATION AND PER DIEM REIMBURSEMENT
-----------------------------------------
1. With respect to all services and support provided by Seller
away from Seller's Facility specified in this Part II, Buyer
shall reimburse Seller for confirmed round trip air
transportation (Business or First Class, as available, on
international flights) for Seller's personnel.
2. Buyer shall reimburse Seller, at Seller's then current rate
of per diem, for each day Seller's personnel are away from
Seller's Facility for all services and support provided in
this Part II. Per diem is not applicable to Seller's field
service representatives at Buyer's main base of operation or
other location assigned and mutually agreed to pursuant to
paragraph C. of this Part II.
H. RISK ALLOCATION AND INSURANCE
-----------------------------
1. Buyer agrees the quality and reliability of Seller's
services provided under this Part II will be based upon the
quality and reliability of the relevant data and information
received from Buyer.
2. BUYER HEREBY RELEASES AND AGREES TO DEFEND, INDEMNIFY AND
HOLD HARMLESS SELLER, ITS AFFILIATES (INCLUDING THE BOEING
COMPANY AND AFFILIATES OF THE BOEING COMPANY), THEIR
TRAINING AND SERVICES II-7
2-23-98 Exhibit C
A00480-B
SUBSIDIARIES AND VENDORS, AND THE EMPLOYEES, DIRECTORS,
OFFICERS, AGENTS AND SUBCONTRACTORS OF EACH OF THEM, FROM
AND AGAINST ALL LIABILITIES, CLAIMS, DAMAGES, LOSSES, COSTS
AND EXPENSES FOR ALL INJURIES TO OR DEATH OF ANY AND ALL
PERSONS (INCLUDING BUYER'S OFFICERS, AGENTS AND EMPLOYEES
UTILIZING SUCH SERVICES AND SUPPORT BUT EXCLUDING EMPLOYEES
OF SELLER) AND FOR LOSS OF OR DAMAGE TO PROPERTY, INCLUDING
THE AIRCRAFT AND LOSS OF USE THEREOF, ARISING DIRECTLY OR
INDIRECTLY OUT OF OR IN CONNECTION WITH ALL TRAINING,
SERVICES AND SUPPORT PROVIDED UNDER OR IN CONNECTION WITH
THIS AGREEMENT, WHETHER OR NOT CAUSED BY THE NEGLIGENCE OF
SELLER, ITS SUBSIDIARIES OR VENDORS, OR THE EMPLOYEES,
DIRECTORS, OFFICERS, AGENTS OR SUBCONTRACTORS OF ANY OF
THEM. IN PROVIDING SUCH SERVICES AND SUPPORT, SELLER, ITS
AFFILIATES (INCLUDING THE BOEING COMPANY AND AFFILIATES OF
THE BOEING COMPANY), THEIR SUBSIDIARIES AND VENDORS AND
THEIR REPRESENTATIVES ARE DEEMED TO BE ACTING IN AN ADVISORY
CAPACITY ONLY AND AT NO TIME SHALL THEY BE DEEMED TO ACT AS
EMPLOYEES OR AGENTS OF BUYER EITHER DIRECTLY OR INDIRECTLY.
3. Buyer agrees to name Seller, its employees, subsidiaries and
affiliates (including The Boeing Company and affiliates of
The Boeing Company) and their assigns as an additional
insured under Buyer's aviation liability insurance policies
with respect to Buyer's obligations set forth in
paragraph 2. above. In addition, Buyer shall cause the
insurance carriers under Buyer's hull insurance policies to
waive all rights of subrogation against Seller to the extent
of Buyer's obligations set forth in paragraph 2. above.
4. One hundred twenty days prior to the scheduled month of
delivery of Buyer's Aircraft, Buyer shall provide Seller
certificates of insurance evidencing (i) Seller being named
as an additional insured, (ii) limits of liability coverage
of $ ; (iii) subrogation has been waived and
(iv) the term of the insurance. Buyer's insurance shall be
primary and not contributory with any insurance maintained
by Seller. The certificates of insurance shall be kept
current.
[FN]
Confidential Information omitted and filed separately with the
Commission.
TRAINING AND SERVICES II-8
2-23-98 Exhibit C
A00480-B
PART III - SPARE PARTS
This Part III contains the terms and conditions applicable to the sale
of Spare Parts.
A. APPLICABILITY
-------------
The terms and conditions of this Part III apply to all orders for
Spare Parts placed by Buyer with Seller by any method of order
placement (including but not limited to SITA, ARINC, Seller's
Customer On-Line Order Processing (CO-OP) System, Internet,
commercial telex, telephone or other telecommunication system or
hard copy purchase order). Any terms or conditions in Buyer's
purchase orders shall not apply.
B. TERM
----
As long as at least ten aircraft of the type purchased hereunder
are operated in scheduled commercial air transport service, Seller
shall maintain, or have maintained, a reasonable stock of Seller
Parts.
C. BUYER'S ORDERS
--------------
Buyer agrees that orders for Spare Parts placed with Seller shall
conform to the requirements and procedures contained in ATA
Specification 200 and Specification 2000.
D. COMMUNICATIONS
--------------
Seller shall make available its on-line order processing system
through SITA, ARINC or direct communication lines which provide
immediate response to inquiries for stock availability, pricing
information and purchase order status. The cost for direct
communication lines shall be borne by Buyer. For AOG and critical
orders automatic messages will be transmitted giving shipping data
such as xxxx of lading, flight, routing, size and weight of
shipments.
E. STATUS INFORMATION
------------------
Seller agrees that information about purchase order status and
actions related to the shipment of Spare Parts shall be generally
consistent with the provisions of the World Airline and Suppliers
Guide and the applicable portions of ATA Specification 200 and
Specification 2000.
F. PRICES
------
Prices shall be published in the procurement data defined in ATA
Specification 200, Chapter 3 or Specification 2000, Chapter 2.
Seller shall also issue a price catalog for certain Seller Parts
which shall be extracted from this procurement data. Seller shall
hold published prices firm for twelve month intervals and shall
provide at least ninety days notice prior to increasing a
published price. Seller reserves the right to correct errors in
said catalog. Also, Seller shall use reasonable efforts to
require its
SPARE PARTS III-1
2-23-98 Exhibit C
A00480-B
major Vendors to maintain any published price for their Vendor
Parts for at least twelve month intervals with at least
ninety days notice prior to changing a published price. If Buyer
orders Vendor Parts from Seller, Seller's Vendor Parts prices for
Initial Provisioning Orders shall be the airline acquisition price
plus fifteen percent. Seller's Vendor Parts prices for
replenishment orders shall be the airline acquisition price plus
twenty percent.
G. SHIPMENT
--------
Delivery of Spare Parts ordered from Seller will be F.O.B. point
of shipment. Seller assumes no liability for loss of or damage to
any Spare Part during shipment. Seller agrees that shipment of
Spare Parts to Buyer shall be made as follows:
1. Packaging. Seller shall generally comply with ATA
---------
Specification 300, Revision 17.
2. AOG Orders. Seller shall use reasonable efforts to ship AOG
----------
orders within four hours of receipt of order. If a Spare
Part must be removed from a production aircraft or procured
from another source by Seller, a firm shipping schedule or
status will be transmitted within four hours after receipt
of Buyer's order. Buyer's affected aircraft factory serial
number is required on AOG orders.
3. Critical Orders. Seller shall use reasonable efforts to
---------------
ship critical orders within twenty-four hours of order
receipt.
4. Expedite Orders. Seller shall use reasonable efforts to
---------------
ship expedite orders within seven days of order receipt.
5. Initial Provisioning Orders. Seller shall use reasonable
---------------------------
efforts to ship initial provisioning orders placed with
Seller prior to delivery of the first Aircraft or as
mutually agreed.
6. Other Orders. Seller Parts normally carried in Seller's
------------
inventory shall be shipped approximately ten days after
Seller's receipt of Buyer's order. Shipment of non-stock
Seller Parts shall be in accordance with quoted lead-times
or lead-times published in the current price catalog,
procurement data, or provisioning data. Spare Vendor parts
shall be delivered per the Vendor's quoted lead-time plus
Seller's internal processing time.
H. PAYMENT
-------
Payment terms shall be net thirty days of invoice date. In the
absence of an established open account or an order exceeding the
credit limit established by Seller, Seller may require full or
partial payment prior to shipment of Spare Parts. If Buyer fails
to make any of the payments within the stipulated time period,
Buyer shall pay Interest on the payment from the date due until
payment is received. The payment of Interest shall be in addition
to any other rights or remedies available to Seller.
SPARE PARTS III-2
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A00480-B
I. PURCHASE OF SELLER'S PARTS
--------------------------
1. In consideration of Seller's obligations to provide Seller
Parts for as long as at least ten aircraft of the type
purchased hereunder are operated in scheduled commercial air
transport service, Buyer agrees to purchase Seller Parts
only from (i) Seller, (ii) Seller's authorized licensees,
(iii) designated sources identified in Seller's spare parts
catalog or (iv) from airline operators of the same type
aircraft purchased herein which parts were originally
purchased from Seller. Buyer may purchase Seller Parts from
other sources, redesign Seller Parts or have them
redesigned, manufacture Seller Parts or have Seller Parts
manufactured only under the following conditions:
a. when less than ten aircraft of the type purchased
hereunder are operated in scheduled commercial air
transport service;
b. any xxxx Xxxxxx fails to fulfill its obligations under
paragraph B.;
c. any xxxx Xxxxxx Parts are needed to effect emergency
repairs on the Aircraft, provided that Buyer, after
consulting with Seller, in good faith determines that
Seller is unable to comply within a reasonable time to
resolve the emergency;
d. if Buyer has notified Seller in writing that any
Seller Part is defective or unsatisfactory in use and
if within a reasonable period Seller has not provided
a satisfactory resolution or made a redesigned Seller
Part available;
2. Any parts redesigned or manufactured by or for Buyer under
paragraph I. of this Part III shall be identified and
distinguished from Sellers Parts by distinctive and
permanent markings on all said parts, in conformance with
FAA regulations, to confirm that said parts are the product
of Buyer and not Seller. Buyer shall at all times comply
with the FAA regulations, or the foreign equivalent thereof
in each country in which the Buyer operates its Aircraft, as
the said regulations apply to the purchase, manufacture,
redesign, and use of such parts.
3. Buyer's right to purchase, redesign or manufacture Seller
Parts under the preceding conditions shall not be construed
as a granting of a license by Seller, shall not obligate
Seller to the payment of any license, royalty or obligation
and shall not be construed to affect the rights of third
parties.
4. If Buyer redesigns or has redesigned any Seller Parts
pursuant to the foregoing conditions, Buyer, if Buyer has
the right, shall make available to Seller any such
redesigned Seller Parts or drawings. Also, if Seller
requests, Buyer shall negotiate with Seller, within
sixty days after such redesigned Seller Parts or drawings
are available to Seller, for the exclusive manufacturing
rights of the redesigned Seller Parts. If no agreement is
made for such rights within the sixty days, Buyer or its
licensees may manufacture, use and sell (provided it is in
compliance with all regulatory requirements) such redesigned
Seller Parts and Seller shall have the nonexclusive right of
manufacture, use and sale of the redesigned Seller Parts,
except as may be covered by patents or by the laws of the
country where the
SPARE PARTS III-3
2-23-98 Exhibit C
A00480-B
redesigned Seller Parts have been manufactured. Seller
shall have the nonexclusive right of manufacture, use and
sale of the redesigned Seller Parts if Buyer can grant such
rights. Seller shall not be obligated to pay any royalty or
license fee to Buyer for the nonexclusive right.
J. VENDOR PARTS
------------
Buyer is responsible for complying with the requirements of
Buyer's regulatory authority. Seller, as holder of the type
certificate and production certificate for the Aircraft, has
regulatory approval to sell aircraft replacement parts for the
Aircraft directly to Buyer; however, Seller's Vendors may not have
such approval. While Seller is not obligated to maintain a stock
of Vendor parts, Seller may have certain Vendor Parts in stock for
Buyer's purchase.If a Vendor has not obtained regulatory approval
for a Vendor Part, then Buyer should purchase such part from
Seller.
K. PROVISIONING
------------
1. If requested by Buyer, preprovisioning and provisioning
conferences shall be convened at Seller's Facility on dates
mutually agreed to by Buyer's and Seller's provisioning
personnel in order to:
a. acquaint Buyer with Seller's provisioning system and
available data;
b. plan the provisioning program;
c. establish Buyer's data familiarization and training
requirements; and
d. assist Buyer in the Spare Parts selection process.
2. Initial provisioning spares support shall be provided by
Seller as follows:
a. Seller shall provide the initial issue of provisioning
files required by ATA Specification 200, Revision 24,
Chapters 1 and 2 or Specification 2000, Chapter 1,
Revision 1, (as amended by MDC Document K0064) no
later than nine months prior to the scheduled delivery
of the first Aircraft. Revisions to these
provisioning data shall be issued by Seller every
forty-five days until ninety days after delivery of
the last Aircraft.
b. For provisioning under Specification 2000, Chapter 1,
Revision 1, Seller shall provide all S, T, or V and
ancillary or supplementary files U, W, X, Y and Z.
For provisioning under Chapters 1 and 2 of ATA
Specification 200, Seller shall provide only K, F, B
and D files.
c. The Illustrated Parts Catalog (IPC) designed to
support provisioning shall be issued with provisioning
data files and revised at forty-five day intervals up
to ninety days after delivery of the last Aircraft.
SPARE PARTS III-4
2-23-98 Exhibit C
A00480-B
d. The Illustrated Parts List designed to support
provisioning shall be issued concurrently with Buyer's
submittal of the T file defined in Chapter 1,
Revision 1 of Specification 2000.
L. GENERAL
1. Quotations. Price and delivery quotations for Seller's
----------
noncatalog listed Seller Parts shall be held firm for
ninety days, except where otherwise noted on the quote
provided for such items as surplus material.
2. Lease of Seller Parts. Seller agrees to lease on an interim
---------------------
basis certain insurance type Seller Parts under Seller's
then current standard terms and conditions.
3. Warranty. Seller Parts purchased or furnished under this
--------
Agreement shall be covered by the warranty provisions and
the terms and conditions set forth in Part I of this
Exhibit C.
4. Seller Services. Buyer agrees that the quality and
---------------
reliability of Seller Services provided under this Part III
shall be based upon the quality and reliability of the data
and information received from Buyer.
5. Additional Terms and Conditions. Buyer agrees that those
-------------------------------
terms and conditions of this Agreement applicable to the
sale of Spare Parts shall be effective during the term of
this Part III.
SPARE PARTS III-5
2-23-98 Exhibit C
A00480-B
PART IV - AIRCRAFT MANUALS AND DOCUMENTS
This Part IV contains the terms and conditions applicable to furnishing
the Documents.
DOCUMENTS PROVIDED
------------------
Seller (hereinafter in this Part IV to Exhibit C "MDC") shall
furnish the Documents described in Part IV, paragraph E. Unless
otherwise specified herein, such Documents shall be furnished in
the quantities specified by MDC at no additional cost to Buyer.
Additional copies of the Documents shall be made available at
MDC's then current published prices. Such Documents are intended
to provide pertinent information only on items manufactured
according to MDC's proprietary design. Such Documents shall be
prepared in the American English language and in those units of
measure specified in the Detail Specification and as may otherwise
be required to reflect the Aircraft instrumentation.
ATA SPECIFICATIONS
------------------
Unless otherwise noted, all Documents specified in this Part IV
are prepared in general accordance with ATA Specification 100,
Revision 18, or later as MDC may adopt. All other Documents shall
be provided to MDC's existing commercial practices.
SHIPMENT
--------
All Documents provided under this Part IV shall be shipped surface
F.O.B. shipping point to Buyer's designated point in the
continental United States of America.
REVISION SERVICE
----------------
Where revision service has been identified as applicable to a
Document in paragraph E. of this Part IV, such revision service
shall be provided for six months following delivery of the last
Aircraft, unless otherwise indicated in paragraph E. Subsequent
revision service may be purchased at the then current prices
specified in the Services and Support Catalog.
LIST OF DOCUMENTS
-----------------
The following identifies Documents to be provided in support of
the Aircraft. The explanation of the table is as follows:
Aircraft Manuals and Documents IV-1
2-23-98 Exhibit C
A00480-B
COLUMN HEADING EXPLANATION OF CODE
-------------- -------------------
1 DOCUMENT Title of Document provided.
2 CONFIG Configuration:
A = Contains data common to all DC-9 and MD-80
aircraft.
B = Contains data tailored to specific MD-80 aircraft
model, series or engine type.
C = Contains data configured to Buyer's Aircraft.
D = Contains data common to MD-80 aircraft.
E = Contains data common to all DC-9, MD-80, MD-90,
and MD-95 aircraft.
3 MEDIUM Buyer has selected one of the following optional media
specified in the table.
1 = Paper
2 = Microfilm Diazo
3 = Microfilm Silver Negative
4 = Aperture Cards
5 = Magnetic Media
6 = EDP Printout
[FN]
= See REMARKS Column
4 REV Revision:
Y = Scheduled Revision Service Applies
N = Revision Service Not Applicable
S = Revised as Required by MDC
[FN]
= See REMARKS Column
5 QTY Quantity:
(Number) = Quantity per this Agreement
(Number) PER = Quantity per Aircraft
[FN]
= See REMARKS Column
6 DEL Delivery:
ASAP = As Soon As Possible following the Agreement
- - -
execution but not later than first Aircraft
delivery.
ATD = At Time of Delivery of first Aircraft.
- - -
ASAV = As Soon As Available
- - -
PTD = Prior To Delivery
- - -
[FN]
= See REMARKS Column
Aircraft Manuals and Documents IV-2
2-23-98 Exhibit C
A00480-B
COLUMN HEADING EXPLANATION OF CODE
-------------- -------------------
7 ATA ATA Specification:
Y = Document is per ATA Specification as described in
paragraph B. of this Part IV.
N = Document is not to ATA Specification.
Aircraft Manuals and Documents IV-3
2-23-98 Exhibit C
A00480-B
---------------------------------------------------------------------------------------------------------------------
1 2 3 4 5 6 7 8
DOCUMENT CONFIG MEDIUM REV QTY DEL ATA REMARKS
---------------------------------------------------------------------------------------------------------------------
A. MAINTENANCE ENGINEERING DATA
---------------------------------------------------------------------------------------------------------------------
1. Access Door Diagrams & D 1 S 3 PTD N
Data Sheets
---------------------------------------------------------------------------------------------------------------------
2. Aircraft Recovery Manual D 1 S 3 PTD N
---------------------------------------------------------------------------------------------------------------------
3. Component Description D 1 S 3 PTD N
& Location List
---------------------------------------------------------------------------------------------------------------------
4. FAA Maintenance D 1 S 3 PTD N
Review Board Report
---------------------------------------------------------------------------------------------------------------------
5. Maintenance Check D 1 S 1 PTD N
Manual (Work Cards)
---------------------------------------------------------------------------------------------------------------------
6. Maintenance Facility D 1 S 3 PTD N
And Equipment Planning
Manual
---------------------------------------------------------------------------------------------------------------------
7. On-Aircraft Maintenance D 1 S 3 PTD N
Planning Report (OAMP)
---------------------------------------------------------------------------------------------------------------------
8. Special Tool & D 4 S 1 ASAV N
Equipment Drawings
(MDC)
---------------------------------------------------------------------------------------------------------------------
9. Support Equipment Summary E 1 S 3 PTD N
---------------------------------------------------------------------------------------------------------------------
B. TECHNICAL PUBLICATIONS DATA
---------------------------------------------------------------------------------------------------------------------
1. Flight Crew Operating C 1 Y 3 N See Notes
Manual (FCOM) 1 & 2
---------------------------------------------------------------------------------------------------------------------
Aircraft Manuals and Documents IV-4
2-23-98 Exhibit C
A00480-B
----------------------------------------------------------------------------------------------------------------------------------
1 2 3 4 5 6 7 8
DOCUMENT CONFIG MEDIUM REV QTY DEL ATA REMARKS
----------------------------------------------------------------------------------------------------------------------------------
2. Maintenance Manual C 1, 3 Y 1 PTD Y Medium 1 shall be
provided on one-sided
paper without holes.
See Notes 2 & 3.
----------------------------------------------------------------------------------------------------------------------------------
3. Product Support Supplier --- 1 S 3 PTD N
Directory
----------------------------------------------------------------------------------------------------------------------------------
4. Product Support Supplier A 1 S 3 PTD N Summarizes MDC's
Agreements Manual Agreements with
Suppliers
----------------------------------------------------------------------------------------------------------------------------------
5. Schematic Manual C 1 Y 30 ASAV N See Note 2
----------------------------------------------------------------------------------------------------------------------------------
6. MDC C 1 Y 1 PTD Y See Notes 2 & 7
Overhaul/Component
Maintenance Manuals
----------------------------------------------------------------------------------------------------------------------------------
7. Vendor C 1 1 PTD Y See Note 4
Overhaul/Component
Maintenance Manuals
----------------------------------------------------------------------------------------------------------------------------------
Aircraft Manuals and Documents IV-5
2-23-98 Exhibit C
A00480-B
-----------------------------------------------------------------------------------------------------------------------------------
1 2 3 4 5 6 7 8
DOCUMENT CONFIG MEDIUM REV QTY DEL ATA REMARKS
-----------------------------------------------------------------------------------------------------------------------------------
8. Wiring Diagram Manual C 1 Y 18 ASA Y Quantity of 1 shall be
provided on one-sided
V paper (11 x 16) without
holes. See Notes 2 &
5.
-----------------------------------------------------------------------------------------------------------------------------------
9. Tool & Equipment (T&E) A 2 Y 3 PTD Y See Note 2
Lists
-----------------------------------------------------------------------------------------------------------------------------------
10. Nondestructive Testing --- --- Included in Structural
Manual Repair Manual
-----------------------------------------------------------------------------------------------------------------------------------
11. Nondestructive Testing A 1,3 S PTD N Quantity of 4 in Medium
Standard Practice Manual 1. Quantify of 1 in
Medium 3.
-----------------------------------------------------------------------------------------------------------------------------------
12. Power Plant Buildup C 1 Y 9 PTD Y See Note 2
Manual
-----------------------------------------------------------------------------------------------------------------------------------
13. Structural Repair Manual A 1 Y 2 PTD Y Quantity of 1 shall be
provided on one-sided
paper without holes.
See Note 2.
-----------------------------------------------------------------------------------------------------------------------------------
Aircraft Manuals and Documents IV-6
2-23-98 Exhibit C
A00480-B
-----------------------------------------------------------------------------------------------------------------------------------
1 2 3 4 5 6 7 8
DOCUMENT CONFIG MEDIUM REV QTY DEL ATA REMARKS
-----------------------------------------------------------------------------------------------------------------------------------
14. Service Bulletins (SB) A 1 Y 2 PTD Y See Notes 2 & 12
-----------------------------------------------------------------------------------------------------------------------------------
15. Service Bulletin Record A 1 S 2 ATD Y
Book
-----------------------------------------------------------------------------------------------------------------------------------
16. Illustrated Parts Catalog C 3 Y 1 PTD Y See Notes 2 & 8
(IPC)
-----------------------------------------------------------------------------------------------------------------------------------
17. Airline Data Report A 1 S 3 PTD N See Note 9
-----------------------------------------------------------------------------------------------------------------------------------
C. ENGINEERING DATA
-----------------------------------------------------------------------------------------------------------------------------------
1. Aircraft Characteristics D 1 S 1 ATD N
For Airport Planning
-----------------------------------------------------------------------------------------------------------------------------------
2. Design Handbook A 2 S 1 ATD N
-----------------------------------------------------------------------------------------------------------------------------------
3. Xxxxxxx Material A 2 S ATD N MDC shall continue to
Specifications (DMS) provide revision
Manual service, as noted in
column 4, until
delivery of the last
Aircraft. No
additional manuals
will be provided.
-----------------------------------------------------------------------------------------------------------------------------------
Aircraft Manuals and Documents IV-7
2-23-98 Exhibit C
A00480-B
-----------------------------------------------------------------------------------------------------------------------------------
1 2 3 4 5 6 7 8
DOCUMENT CONFIG MEDIUM REV QTY DEL ATA REMARKS
-----------------------------------------------------------------------------------------------------------------------------------
4. Xxxxxxx Process A 1 S ATD N MDC shall continue to
Material (DPM) Index provide revision
service, as noted in
column 4, until
delivery of the last
Aircraft. No
additional manuals
will be provided.
-----------------------------------------------------------------------------------------------------------------------------------
5. Xxxxxxx Process A 2 S ATD N MDC shall continue to
Standards (DPS) Manual provide revision
service, as noted in
column 4, until
delivery of the last
Aircraft. No
additional manuals
will be provided.
-----------------------------------------------------------------------------------------------------------------------------------
6. Drafting Manual A 2 S 1 ATD N
-----------------------------------------------------------------------------------------------------------------------------------
7. Drawing Section List C 1 S 3 ATD N
-----------------------------------------------------------------------------------------------------------------------------------
Aircraft Manuals and Documents IV-8
2-23-98 Exhibit C
A00480-B
-----------------------------------------------------------------------------------------------------------------------------------
1 2 3 4 5 6 7 8
DOCUMENT CONFIG MEDIUM REV QTY DEL ATA REMARKS
-----------------------------------------------------------------------------------------------------------------------------------
8. Engineering Drawings C 4 S 1 ATD N
(To Section List Level
Only)
-----------------------------------------------------------------------------------------------------------------------------------
9. FAA Approved Airplane C 1 S 1 + 1 PER ATD N See Note 10
Flight Manual (AFM)
-----------------------------------------------------------------------------------------------------------------------------------
10. Flying Qualities Report D 1 S 1 ASAV N
-----------------------------------------------------------------------------------------------------------------------------------
11. Xxxx Schematics C 1 N 10 PER ASAV N
-----------------------------------------------------------------------------------------------------------------------------------
12. Minimum Equipment List A 1 Y 5 PTD N
(XXX) Procedures
Manual
-----------------------------------------------------------------------------------------------------------------------------------
13. On-Board Wiring C 1 N 1 PER ATD N See Note 11
Diagram Book
-----------------------------------------------------------------------------------------------------------------------------------
14. Approved Equivalent A 2 S 1 PTD N MDC shall continue to
Parts List (AEPL) provide revision
service, as noted in
column 4, until
delivery of the last
Aircraft. No
additional manuals
will be provided.
-----------------------------------------------------------------------------------------------------------------------------------
Aircraft Manuals and Documents IV-9
2-23-98 Exhibit C
A00480-B
-----------------------------------------------------------------------------------------------------------------------------------
1 2 3 4 5 6 7 8
DOCUMENT CONFIG MEDIUM REV QTY DEL ATA REMARKS
-----------------------------------------------------------------------------------------------------------------------------------
15. Master Minimum A 1 Y 5 ASAV N MDC shall continue to
Equipment List (MMEL) provide revision
service, as noted in
column 4, until
delivery of the last
Aircraft. No
additional manuals
will be provided.
-----------------------------------------------------------------------------------------------------------------------------------
16. Wire Lists & Hookup C 1 S 1 PTD Y Quantity of 1 to be
Charts provided for Buyer's
Aircraft No. 1. An
additional quantity of
1 shall be provided for
Buyer's Aircraft No. 2.
Both copies shall be
provided on paper
without holes.
-----------------------------------------------------------------------------------------------------------------------------------
Aircraft Manuals and Documents IV-10
2-23-98 Exhibit C
A00480-B
-----------------------------------------------------------------------------------------------------------------------------------
1 2 3 4 5 6 7 8
DOCUMENT CONFIG MEDIUM REV QTY DEL ATA REMARKS
-----------------------------------------------------------------------------------------------------------------------------------
17. Xxxxxxx Standards A 2 S 1 ATD N
Manual (DSM)
-----------------------------------------------------------------------------------------------------------------------------------
18. Master Component List D 1 S 1 ASAV N See Note 13
(MCL)
-----------------------------------------------------------------------------------------------------------------------------------
19. Flight Planning & Cruise B 1 S 1 ASAV N See Note 14
Control Manual (FPCCM)
-----------------------------------------------------------------------------------------------------------------------------------
20. Weight & Balance C 1 S 2 ATD N See Note 15
Manual, Chapter 1
-----------------------------------------------------------------------------------------------------------------------------------
21. Weight & Balance C 1 N 1 PER N See Note 15
Manual, Chapter 2
-----------------------------------------------------------------------------------------------------------------------------------
22. Weight & Balance C 1 N 1 PER N See Note 15
Manual, Chapters 1 & 2,
On-Board Copy
-----------------------------------------------------------------------------------------------------------------------------------
23. Weight Compliance C 1 N 3 PER N See Note 15
Report
-----------------------------------------------------------------------------------------------------------------------------------
24. Performance Handbook B 1 S 1 ATD N See Note 6
(PH)
-----------------------------------------------------------------------------------------------------------------------------------
D. OTHER DATA
-----------------------------------------------------------------------------------------------------------------------------------
1. Flight Training Data --- --- See Part II A.
-----------------------------------------------------------------------------------------------------------------------------------
2. Maintenance Training --- --- See Part II B.
Data
-----------------------------------------------------------------------------------------------------------------------------------
3. Provisioning Data --- --- See Part III
-----------------------------------------------------------------------------------------------------------------------------------
Aircraft Manuals and Documents IV-11
2-23-98 Exhibit C
A00480-B
NOTES:
1. Flight Crew Operating Manual (FCOM)
-----------------------------------
a. Initial issue of the FCOM will be six months prior to the
scheduled month of delivery of the first Aircraft.
b. Provided revision service is being supplied under the terms
of this Agreement, or by subsequent purchase order, MDC will
incorporate in its FCOM all applicable MDC originated
Service Bulletins in a regular revision following formal
notification by Buyer that such bulletins will be
accomplished on Buyer's Aircraft. The manuals will then
contain both original and revised configurations until Buyer
advises MDC in writing within two years of Service Bulletin
issue date that one configuration should be completely
removed.
c. Upon receipt of typed draft text in the style of the manual,
MDC will incorporate Buyer originated changes into the FCOM
at a reasonable charge. Illustrations should be of
sufficiently high quality to be electronically scanned. Any
page that is incorporated into MDC's FCOM as a result of a
Buyer-originated change will bear the name of Buyer or
current Aircraft operator. This will indicate that certain
data contained on such pages originated with the Buyer and
that MDC is not responsible for the technical accuracy of
such data. Buyer originated changes incorporated by MDC
shall be considered in all future revisions affecting the
FCOM.
d. Data contained within the FCOM will be tailored to reflect
Buyer's Aircraft configuration, and will be prepared in
accordance with MDC's FCOM concept.
2. Revision Service
----------------
a. Provided revision service is being supplied under the terms
of this Agreement, or by subsequent Purchase Order, MDC will
incorporate in its Illustrated Parts Catalog (IPC),
Maintenance Manual, Overhaul/Component Maintenance Manual,
Structural Repair Manual and Wiring Diagram Manuals all
applicable MDC originated Service Bulletins in a regular
revision following formal notification by Buyer that such
bulletins will be accomplished on Buyer's Aircraft. The
manuals will then contain both original and revised
configurations until Buyer advises MDC in writing within two
years of Service Bulletin issue date that one configuration
should be completely removed.
b. Upon receipt of typed draft text in the style of the
existing manual, MDC will incorporate Buyer originated
modifications in all manuals, except the IPC, at a
reasonable charge. Requests for Buyer originated
modification to the IPC should be addressed to the data
subcontractor. Illustrations should be of sufficiently high
quality to be electronically scanned. MDC cannot take raw
data and write
Aircraft Manuals and Documents IV-12
2-23-98 Exhibit C
A00480-B
maintenance practices, overhaul information or structural
repair information, or develop illustrations, including
wiring diagrams. Any page that is incorporated into MDC's
manuals as a result of a Buyer-originated change will bear
the name of the originating airline. This will indicate
that certain data contained on such pages originated with
the Buyer and that MDC is not responsible for the technical
accuracy of such data. Buyer originated changes
incorporated by MDC shall be considered in all future
revisions affecting the applicable publications.
3. Maintenance Manual. Includes engine manufacturer's
------------------
information. Chapters 22, 34 and 70 through 80 will be
prepared in general accordance with ATA Specification 100,
Revision 18. The remaining Chapters, although written in
general accordance with Revision 8, will be formatted in
general accordance with Revision 18.
4. Vendor Overhaul/Component Maintenance Manuals. MDC shall
---------------------------------------------
use reasonable efforts to assure that initial copies and
subsequent revision service of Vendor's Overhaul/Component
Maintenance Manuals and parts lists pertaining to repairable
or recoverable components and equipment are supplied to the
Buyer by such Vendors at no cost. Manuals will be in
general accordance with ATA Specification 100, Revision 14,
only if peculiar to the aircraft of the type leased
hereunder. Existing manuals shall be provided wherever
possible and will be in general accordance with ATA
Specification 100, Revision 8, or later as MDC may adopt.
Initial manuals and subsequent revisions and any Service
Bulletins will be distributed by the Vendor directly to the
Buyer.
5. Wiring Diagram Manual. Shall be customized to the Aircraft
---------------------
and will be in general accordance with ATA
Specification 100, Revision 14.
6. Performance Handbook (PH). Additional performance
-------------------------
information for airline performance Engineers; provides
thrust curves, aerodynamic performance curves, etc. This
handbook shall be made available one year after
certification on first aircraft series or engine type.
7. MDC Overhaul/Component Maintenance Manuals. Shall consist
------------------------------------------
of (i) existing copies of DC-9 Overhaul Manual produced to
ATA Specification 100, Revision 8, to the extent applicable
to the Aircraft and (ii) Component Maintenance Manuals
peculiar to the type of aircraft leased hereunder produced
in general accordance with ATA Specification 100,
Revision 14 or later as MDC may adopt.
8. Illustrated Parts Catalog (IPC). The IPC is a customized
-------------------------------
Document intended for use in the identification and
requisition of replaceable aircraft parts and units. The
IPC is a companion Document to the Maintenance Manual and
contains all parts information for which maintenance
practices coverage has been provided. The IPC shall be
prepared in general accordance with ATA Specification 100,
Revision 8, or later as MDC may adopt.
Aircraft Manuals and Documents IV-13
2-23-98 Exhibit C
A00480-B
9. Airline Data Report. This report shall include a listing of
-------------------
all repairable or recoverable manufactured items grouped by
part number and grouped alphabetically by Vendor name.
10. FAA Approved Airplane Flight Manual. Revisions applicable
-----------------------------------
to the Aircraft shall be provided as soon as practicable
after FAA approval for as long as Lessor owns or operates
the Aircraft.
11. On-Board Wiring Diagram Book. Contains radio and electrical
----------------------------
wiring diagrams only. This book is to be used for interim
reference only until the Wiring Diagram Manual reflects the
delivery configuration of the Aircraft.
12. Service Bulletins (SB). One Aperture Card of the Service
----------------------
Drawing will be provided in lieu of printed illustrations at
MDC's option.
13. Master Component List (MCL). This Document is an automated
---------------------------
list of line replaceable units (LRU) that have reliability,
maintenance, or cost significance.
14. Flight Planning & Cruise Control Manual (FPCCM). Tables on
-----------------------------------------------
magnetic media are available upon request.
15. Weight & Balance Manuals
------------------------
a. Weight & Balance Manual, Chapter 1, is provided at the
time of the first Aircraft delivery only.
b. Weight & Balance Manual, Chapter 2, is provided for
each Aircraft at time of delivery.
c. Weight & Balance Manual, Chapters 1 & 2, On-Board
copy, is provided for each Aircraft at time of
delivery.
d. Weight Compliance Report is provided for each Aircraft
at time of delivery and compares the actual weight to
the weight developed from the Detail Specification.
ADDITIONAL COPIES
-----------------
Additional replacement copies of the Documents shall be made
available at MDC's then current published prices.
LIMITATION ON USE OF DOCUMENTS
------------------------------
1. Buyer agrees that, except with MDC's prior written consent
or except as required by law or as otherwise permitted
herein, none of the Documents provided or copies or
duplicates thereof or the Detail Specification or copies
thereof, shall be transferred or permitted out of Buyer's
possession or the contents thereof divulged to any other
person, firm or corporation by Buyer or used by Buyer or
furnished by
Aircraft Manuals and Documents IV-14
2-23-98 Exhibit C
A00480-B
Buyer for the design or manufacture of any aircraft or spare
parts or training aids, except when manufacture or redesign
is permitted under the provisions of Part III of this
Exhibit C and then only to the extent and for the purposes
expressly permitted therein.
2. Buyer agrees that any Documents provided by MDC in the form
of Programs shall be subject to the following additional
restrictions on use:
a. Buyer shall have a non-exclusive, non-transferable
license to use a single copy of any Program provided
by MDC.
b. Buyer agrees that it will not without the express
written consent of MDC:
(1) sub-license, assign or attempt to transfer its
license for any Program,
(2) copy any Program other than to create a single
copy of the Program for archival or backup
purposes,
(3) distribute or permit access to any Program to
any third party, or
(4) reverse assemble, reverse compile, or otherwise
translate any Program for any purpose.
WARRANTY
--------
The warranty for Documents provided hereunder is set forth in
Part I of this Exhibit C.
Aircraft Manuals and Documents IV-15
2-23-98 A00480-B
EXHIBIT D - PRICE ADJUSTMENTS
FOR FLUCTUATIONS IN THE ECONOMY
2-23-98 Exhibit D
A00480-B
PRICE ADJUSTMENTS FOR FLUCTUATIONS IN THE ECONOMY
The Base Price of each Aircraft, after any price adjustments made in
accordance with paragraphs B. and C. of Article 3, shall be subject to
the following escalation provisions in order to determine the Price:
A. PRICE
-----
The Price shall be determined according to the following formula:
P = AFn + En + SCNn
where:
P = Price
AFn = Final Adjusted Airframe Price
En = Final Adjusted Engine Price
SCNn = Final Adjusted Exhibit A's Price
B. FINAL ADJUSTED AIRFRAME PRICE
-----------------------------
1. The Airframe Base Price included in the Base Price contains
no allowance for inflation subsequent to the period of
November 1993 through March 1994. Accordingly, the Airframe
Base Price shall be adjusted to determine the Final Adjusted
Airframe Price, which in no event shall be less than the
Airframe Base Price set forth in paragraph A. of Article 3,
by use of the formula in paragraph 2. below which is based
on fluctuations in the following labor and material price
indexes which are published by the United States of America
- Department of Labor, Bureau of Labor Statistics:
a. Labor or ECI Index - "Employment Cost Index
(compensation) workers in aerospace manufacturing by
occupation and industry group" - Aircraft
manufacturing, SIC Code 3721 (June 1989 = 100), as
released by the Bureau of Labor Statistics, U.S.
Department of Labor on a quarterly basis for the
months of March, June, September and December. The
released Employment Cost Index value for the month of
March will also be used for the months of January and
February; the value for June will also be used for
April and May; the value for September will also be
used for July and August; and the value for December
will also be used for October and November.
b. Material or IC Index - Producer price indexes and
percent changes for commodity groupings and individual
items - Industrial commodities (1982 = 100).
PRICE ADJUSTMENTS FOR FLUCTUATIONS IN THE ECONOMY D-1
2-23-98 Exhibit D
A00480-B
2. The formula for the airframe is as follows:
ECIn ICn
AFn = AFb [ .75 (-----) + .25 (-----) ]
125.8 118.7
where:
AFn = The Final Adjusted Airframe Price.
AFb = The Airframe Base Price.
ECIn = The average of the ECI Index values for the
fourth through the eighth month (as described
in 1.a. above) prior to the scheduled month of
delivery computed to one decimal place
(Note: 1.05 rounds to 1.1).
125.8 = The average of the ECI Index values for
November 1993 though March 1994 (as described
in 1.a. above).
ICn = The average of the IC Index values for the
fourth through the eighth month prior to the
scheduled month of delivery computed to one
decimal place (Note: 1.05 rounds to 1.1).
118.7 = The average of the IC Index values for
November 1993 through March 1994
3. Airframe Rounding Rules are as follows:
Unless otherwise specified, computations shall be made to
four decimal places (Note: 1.00005 rounds to 1.0001). After
final computation, AFn shall be rounded to the nearest whole
number (Note: 0.5 rounds to 1).
4. The most recent ECI and IC Index values released by the
Bureau of Labor Statistics and made available to Seller for
the applicable months shall be used to determine the ECIn
and ICn values used in the calculation of the Final Adjusted
Airframe Price. However, the index denominators of 125.8
and 118.7 shall not be revised. The Price of the Aircraft
shall not be adjusted after delivery except as defined in
paragraph B.5. below.
5. In the event any of the index values required to calculate
ECIn and ICn have not been released by the Bureau of Labor
Statistics and made available to Seller, Seller shall use
the published value for the nearest preceding quarter for
the ECIn or the nearest preceding month for the ICn for the
purposes of calculating the Final Adjusted Airframe Price
until such values are subsequently published or made
available to Seller. Seller shall submit either a
supplemental invoice or refund the amounts due Buyer as
appropriate to reflect any increase or decrease in the Final
Adjusted Airframe Price for the Aircraft from that
determined at the time of delivery of such Aircraft.
PRICE ADJUSTMENTS FOR FLUCTUATIONS IN THE ECONOMY D-2
2-23-98 Exhibit D
A00480-B
6. If the Department of Labor revises the methodology (in
contrast to benchmark adjustments and any other corrections
of previously released values) or discontinues any of the
indexes referred to in this Exhibit, the parties shall
select a substitute for the revised or discontinued index.
The substitute index shall lead in application to the same
adjustment result, insofar as possible, as would have been
achieved by continuing to use the original index as it may
have fluctuated had it not been revised or discontinued.
Appropriate revision of the formula shall be made to
accomplish this result.
7. To implement paragraph B.6. above, either party may notify
the other that a change in the indexes within the meaning of
this Exhibit is anticipated or has taken place. Seller
shall then propose substitute indexes and formula revision.
Within ninety days from such notification or from receipt of
data covering the last month of publication of the unchanged
index series, whichever is later, the parties shall agree on
substitute indexes and formula revision. If the parties
cannot so agree, they shall select an arbitrator to decide
the substitute index required to carry out the intent of
paragraph B.6. above, and the decision of the arbitrator
shall be binding. If, however, the parties cannot agree on
an arbitrator, an arbitrator shall be selected in accordance
with the Commercial Arbitration Rules of the American
Arbitration Association. Adjustment of the Price under this
Exhibit and payment of invoices computed from the adjusted
Price, shall continue following any change in the indexes
throughout any period of negotiation or arbitration. The
indexes and formula used when the unchanged indexes are not
available shall be those proposed by Seller, but said
payments shall be on a temporary basis and shall be
corrected. Any required refunds or additional payments
shall be made within thirty days following agreement between
the parties or an arbitration decision.
C. FINAL ADJUSTED ENGINE PRICE (En)
--------------------------------
1. The Engine Base Price contained in the Base Price of the
Aircraft after any adjustment made in accordance with
paragraphs B. and C. of Article 3, shall be adjusted in
accordance with the escalation formula contained in
paragraph 2. below to obtain the Final Adjusted Engine
Price. The Final Adjusted Engine Price, which in no event
shall be less than the Engine Base Price (Eb) set forth in
paragraph A. of Article 3, is derived in accordance with the
formula set forth below which is based on fluctuations in
the following labor, material and energy price indexes which
are published by the United States of America Department of
Labor, Bureau of Labor Statistics:
a. Labor or HE Index - Average hours and earnings of
production or nonsupervisory workers on private
nonfarm payrolls by detailed industry, Industry:
Durable goods, Transportation equipment, Aircraft and
parts - Aircraft engines and engine parts, SIC
Code 3724 - Average hourly earnings.
b. Material or M&MP Index - Producer price indexes and
percent changes for commodity groupings and individual
items - Metals and metal products, Code 10
(1982 = 100).
PRICE ADJUSTMENTS FOR FLUCTUATIONS IN THE ECONOMY D-3
2-23-98 Exhibit D
A00480-B
c. Energy or ER Index - Producer price indexes and
percent changes for commodity groupings and individual
items - Fuels and related products and power, Code 5
(1982 = 100).
2. The formula for the Engines is as follows:
En = (Eb + F) (.60 HE + .30 M&MP + .10 ER)
where:
En = Final Adjusted Engine Price included in the
Price.
Eb = Engine Base Price set forth in paragraph A. of
Article 3.
F = 0.005 (N) (Eb).
N = The calendar year of scheduled Engine delivery
minus 1994. The calendar year of scheduled
Engine delivery shall be deemed to be the second
month prior to the scheduled month of Aircraft
delivery.
HE = The HE Index (SIC Code 3724) value for the
sixth month prior to the scheduled month of
Aircraft delivery divided by $17.13 (which
represents the base month of December 1993),
rounded to the nearest ten thousandth
(Note: 1.00005 rounds to 1.0001).
M&MP = The M&MP Index value for the sixth month prior
to the scheduled month of Aircraft delivery
divided by 120.2 (which represents the base
month of December 1993 as stated in terms of
1982 = 100), and rounded to the nearest ten
thousandth (Note: 1.00005 rounds to 1.0001).
ER = The ER Index value for the sixth month prior to
the scheduled month of Aircraft delivery divided
by 74.7 (which represents the base month of
December 1993 as stated in terms of 1982 = 100)
and rounded to the nearest ten thousandth
(Note: 1.00005 rounds to 1.0001).
3. Engine Rounding Rules are as follows:
a. The sum of the values of HE and M&MP and ER multiplied
by .60, .30 and .10 respectively shall be rounded to
the nearest ten thousandth (Note: 1.00005 rounds
to 1.0001).
b. The escalation factor shall be rounded to the nearest
ten thousandth (Note: 1.00005 rounds to 1.0001).
PRICE ADJUSTMENTS FOR FLUCTUATIONS IN THE ECONOMY D-4
2-23-98 Exhibit D
A00480-B
c. After final computation En shall be rounded to the
nearest whole number (Note: 1.5 rounds to 2).
4. If the Department of Labor, by footnote, appendix or by any
other method, discontinues or revises any of the data
referred to above (not benchmark adjustments) or revises the
methodology for obtaining them, the Engine manufacturer
shall select a substitute for the revised or discontinued
data, such substitute to lead in application to the same
adjustment result, insofar as possible, as would have been
achieved by continuing the use of the original data had it
not been revised or discontinued.
5. In the event escalation provisions are made nonenforceable
or otherwise rendered null and void by any agency of the
Government of the United States of America, the parties
agree, to the extent that they may lawfully do so, to adjust
equitably the Engine Base Price of the Engine to reflect an
allowance for increases in labor, material and energy costs
occurring since January 1, 1994 to the sixth month preceding
the scheduled month of Aircraft delivery.
6. Seller reserves the right to make appropriate changes to
this paragraph C., if prior to Aircraft delivery the Engine
manufacturer changes its escalation provisions applicable to
the Engine Base Price of any Aircraft.
D. FINAL ADJUSTED EXHIBIT A'S PRICE
--------------------------------
The Exhibit A's Base Price included in the Base Price contains no
allowance for inflation subsequent to the period of November 1993
through March 1994. Accordingly, the Exhibit A's Base Price shall
be adjusted to determine the Final Adjusted Exhibit A's Price,
which in no event shall be less than the Exhibit A's Base Price
set forth in paragraph A. of Article 3, by use of the same formula
used to escalate the Airframe Base Price in paragraph 2 of Part B.
E. If the scheduled delivery of one or more of the Aircraft is
delayed by an Excusable Delay, the adjustments in this Exhibit
shall be based on the actual delivery month for any delayed
Aircraft.
PRICE ADJUSTMENTS FOR FLUCTUATIONS IN THE ECONOMY D-5
2-23-98 A00480-B
EXHIBIT E - NEW ENGINE AND NEW PARTS WARRANTY
2-23-98 Exhibit E
A00480-B
NEW ENGINE AND NEW PARTS WARRANTY
A. DEFECTIVE GOODS
---------------
United Technologies Corporation, Xxxxx & Xxxxxxx Group Large,
Commercial Engines (United) warrants to Buyer that at the time of
delivery the goods sold by United hereunder (Engines and Engine
Parts therefor) will be free from defects in material and
manufacture and will conform substantially to United's applicable
specification. United's liability and Buyer's remedy under this
warranty are limited to the repair or replacement, at United's
election, of goods or parts thereof returned to United which are
shown to United's reasonable satisfaction to have been defective;
provided that written notice of the defect shall have been given
by Buyer to United within ninety days after the first operation or
use of the goods (or if the goods are installed in new aircraft,
within ninety days after acceptance of such aircraft by its first
operator) but in no event later than one year after the date of
delivery of such goods by United. Transportation charges for the
return of defective goods to United and their reshipment to Buyer
and the risk of loss thereof will be borne by United only if
returned in accordance with written shipping instructions from
United.
B. TITLE
-----
United warrants to Buyer that it will convey good title to the
goods sold hereunder. United's liability and Buyer's remedy under
this warranty are limited to the removal of any title defect or,
at the election of United, to the replacement of the goods or
parts thereof which are defective in title; provided, however,
that the rights and remedies of the parties with respect to patent
infringement shall be limited to the provisions of paragraph C.
below.
C. PATENT INFRINGEMENT
-------------------
1. United shall conduct, at its own expense, the entire defense
of any claim, suit or action alleging that, without further
combination, the use or resale by Buyer or any subsequent
purchaser or user of the goods delivered hereunder directly
infringes any United States patent, but only on the
conditions that:
a. United receives prompt written notice of such claim,
suit or action and full opportunity and authority to
assume the sole defense thereof, including settlement
and appeals, and all information available to Buyer
and defendant for such defense;
b. said goods are made according to a specification or
design furnished by United or, if a process patent is
involved, the process performed by the goods is
recommended in writing by United; and
c. the claim, suit or action is brought against Buyer or
one expressly indemnified by Buyer.
NEW ENGINE AND NEW PARTS WARRANTY E-1
2-23-98 Exhibit E
A00480-B
2. Provided all of the foregoing conditions have been met,
United shall, at its own expense, either settle said claim,
suit or action or shall pay all damages and costs awarded by
the court therein and, if the use or resale of such goods is
finally enjoined, United shall, at United's option:
a. procure for defendant the right to use or resell the
goods;
b. replace them with equivalent noninfringing goods;
c. modify them so that they become noninfringing but
equivalent; or
d. remove them and refund the purchase price (less a
reasonable allowance for use, damage and
obsolescence).
3. If a claim, suit or action is based on a design or
specification furnished by Buyer or on the performance of a
process not recommended in writing by United, or on the use
or sale of the goods delivered hereunder in combination with
other goods not delivered to Buyer by United, Buyer shall
indemnify and save United harmless therefrom.
D. ENGINE AND PARTS SERVICE POLICY
-------------------------------
United warrants to Buyer that it will extend to Buyer, with
respect to aircraft engines sold to Buyer whether installed as new
equipment in Aircraft by Seller and delivered to Buyer or
delivered directly by United to Buyer, allowances and adjustments
in accordance with the applicable Engine and Parts Service Policy
offered by United on the date of United's receipt of the order
therefor. United's liability and Buyer's remedy under this
warranty are limited to the allowances and adjustments and are
subject to the general conditions stipulated in the applicable
Engine and Parts Service Policy; provided, however, that no change
in or retraction of such Policy shall apply to Engines delivered
or to be delivered by United under orders received by United prior
to United's announcement of any such change or retraction.
E. EXCLUSIVE WARRANTIES AND REMEDIES
---------------------------------
THE FOREGOING WARRANTIES ARE EXCLUSIVE AND ARE GIVEN AND ACCEPTED
IN LIEU OF: (i) ANY AND ALL OTHER WARRANTIES, EXPRESS OR IMPLIED,
INCLUDING WITHOUT LIMITATION THE IMPLIED WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE; AND (ii) ANY
OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY IN CONTRACT OR TORT,
WHETHER OR NOT ARISING FROM UNITED'S NEGLIGENCE, ACTUAL OR
IMPUTED. THE REMEDIES OF BUYER SHALL BE LIMITED TO THOSE PROVIDED
HEREIN TO THE EXCLUSION OF ANY AND ALL OTHER REMEDIES INCLUDING,
WITHOUT LIMITATION, INCIDENTAL OR CONSEQUENTIAL DAMAGES. NO
AGREEMENT VARYING OR EXTENDING THE FOREGOING WARRANTIES, REMEDIES
OR THIS LIMITATION WILL BE BINDING UPON UNITED UNLESS IN WRITING,
SIGNED BY A DULY AUTHORIZED OFFICER OF UNITED.
NEW ENGINE AND NEW PARTS WARRANTY E-2
2-23-98 Exhibit E
A00480-B
F. WARRANTY PASS ON
----------------
United shall, upon the written request of the Buyer, consider an
extension of Warranty coverage to Engines, Modules and Parts sold
by Buyer to another operator to the extent only, however, that
such coverage exists at the time of such sale and subject to the
provisions of the Warranty.
NEW ENGINE AND NEW PARTS WARRANTY E-3
6-1162-RCN-1262
Trans World Airlines, Inc.
One City Centre
000 Xxxxx Xxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Subject: Business Considerations
Reference: Agreement No. A00480-B (The Purchase Agreement) between
XXXXXXXXX XXXXXXX CORPORATION a wholly owned subsidiary of
THE BOEING COMPANY (Seller) and TRANS WORLD AIRLINES,
INC.(Buyer) relating to Model MD-83 aircraft (the
Aircraft)
This letter amends the Purchase Agreement. All terms used but not
defined in this Letter Agreement shall have the same meaning as in the
Purchase Agreement.
1.
2.
3.
4.
5.
6.
7.
8.
[FN]
Confidential Information omitted and filed separately with the
Commission.
6-1162-RCN-1262
Page 2
9.
10.
11. Setoff Rights Against Amounts Paid Under Other Buyer Agreements.
---------------------------------------------------------------
Buyer agrees that in the event that Buyer defaults in any of its
obligations hereunder, Seller may apply all or any of the advance
payments paid by Buyer to Seller's affiliate under the 757 purchase
agreement no. 1910 to cure any such default hereunder. Additionally, to
the extent that Buyer and Seller or any of Seller's affiliates enter
into any future purchase agreement for Boeing or MDC aircraft, advance
payments made thereunder shall be available and may be applied by Seller
or Seller's affiliate to cure any Buyer default hereunder.
12. Previously Provided Training.
----------------------------
Buyer acknowledges that the training discussed in Part II of
Exhibit C has been previously provided to Buyer.
13. Previously Provided Documents.
-----------------------------
Buyer acknowledges that the documents designated in Part IV of
Exhibit C as "at time of delivery of the first aircraft" have been
previously provided to Buyer.
[FN]
Confidential Information omitted and filed separately with the
Commission.
6-1162-RCN-1262
Page 3
14. Confidentiality.
---------------
Buyer and Seller agree that the terms of Article 16 of the
Purchase Agreement shall apply to this Letter Agreement.
Sincerely,
XXXXXXXXX XXXXXXX CORPORATION,
a wholly owned subsidiary of
THE BOEING COMPANY
BY _____________________________
ITS ____________________________
ACCEPTED AND AGREED TO THIS
DATE: _____________, 1998
TRANS WORLD AIRLINES, INC.
BY _____________________________
ITS ____________________________
6-1162-RCN-1263
Trans World Airlines, Inc.
One City Centre
000 Xxxxx Xxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Subject: Application of Progress Payments
Reference: Agreement No. A00480-B (The Purchase Agreement) between
XXXXXXXXX XXXXXXX CORPORATION a wholly owned subsidiary
of THE BOEING COMPANY (Seller) and TRANS WORLD
AIRLINES, INC.(Buyer) relating to Model MD-83 aircraft
(the Aircraft)
[Applies to entire body of letter].
Sincerely,
XXXXXXXXX XXXXXXX CORPORATION,
a wholly owned subsidiary of
THE BOEING COMPANY
BY _______________________________
ITS ______________________________
ACCEPTED AND AGREED TO THIS
DATE: _____________, 1998
TRANS WORLD AIRLINES, INC.
BY ________________________________
ITS _______________________________
[FN]
Confidential Information omitted and filed separately with the
Commission.
6-1162-RCN-1266
Trans World Airlines, Inc.
One City Centre
000 Xxxxx Xxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Subject:
Reference: Agreement No. A00480-B (The Purchase Agreement) between
XXXXXXXXX XXXXXXX CORPORATION a wholly owned subsidiary
of THE BOEING COMPANY (Seller) and TRANS WORLD
AIRLINES, INC.(Buyer) relating to Model MD-83 aircraft
(the Aircraft)
[Applies to entire body of letter].
Sincerely,
XXXXXXXXX XXXXXXX CORPORATION,
a wholly owned subsidiary of
THE BOEING COMPANY
BY ________________________
ITS _______________________
ACCEPTED AND AGREED TO THIS
DATE: _____________, 1998
TRANS WORLD AIRLINES, INC.
BY ________________________
ITS _______________________
[FN]
Confidential Information omitted and filed separately with the
Commission.
