EXHIBIT 10.22
Confidential treatment has been granted with respect to certain provisions
of this Exhibit, which provisions have been omitted from this Exhibit 10.22,
marked by asterisks (***) and filed separately with the Commission.
----------------------------------------
PURCHASE AGREEMENT
BETWEEN
XXXXXXXXX XXXXXXX CORPORATION
AND
VALUJET AIRLINES, INC.
DAC 95-40-D
----------------------------------------
THIS DOCUMENT CONTAINS TRADE SECRETS AND COMMERCIAL, FINANCIAL AND
PROPRIETARY INFORMATION WHICH IS PRIVILEGED AND CONFIDENTIAL TO THE
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.
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 BUYER'S 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 AND ADJUSTMENTS FOR FLUCTUATIONS IN THE ECONOMY
PURCHASE AGREEMENT
THIS AGREEMENT, dated December 6, 1995 is made by and between XXXXXXXXX XXXXXXX
----------------
CORPORATION (Seller), having an office in the City of Long Beach, State of
California, and VALUJET AIRLINES, INC. (Buyer), having its principal place of
business in the City of Atlanta, State of Georgia.
In consideration of the mutual covenants herein, Buyer and Seller agree as
follows:
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
---- -------
ADVANCE An amount used solely for the calculation of progress payments and
PAYMENT which is specified in paragraph A. of the article entitled
PRICE PAYMENT.
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 the article entitled SUBJECT
MATTER OF SALE.
AIRFRAME The price for the airframe set forth in paragraph A. of the
BASE article entitled
PRICE PRICE.
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.
BASE PRICE The sum of the Airframe Base Price and the Engine Base Price.
BDE Buyer Designated Equipment - Equipment identified in the Detail
- - -
Specification as BFE designated for purchase by Seller.
BFE Buyer Furnished Equipment - Equipment identified in the Detail
- - -
Specification to be furnished by the Buyer to the Seller.
TERM MEANING
---- -------
CERTIFICATE As to any Aircraft, a certificate substantially in the form of
TECHNICAL Exhibit B.
ACCEPTANCE
AND DELIVERY
COVERED Any airframe component or landing gear component specified in
Exhibit C,
COMPONENT Part I, paragraph C.5.
DETAIL The document which defines the configuration of the Aircraft,
SPECIFICATION consisting of the Detail Specification (Exhibit A hereto)
identified in the article entitled SUBJECT MATTER OF SALE, 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 The propulsion system which is comprised of engines, nacelles,
including thrust reversers and engine build-up.
ENGINE BASE The price for the Engines as set forth in paragraph A. of the
PRICE article entitled PRICE.
EXCUSABLE Any delay in delivery of Aircraft or of any Product or Document
or delay
DELAY in performance of a Service or any other act by Seller under this
Agreement by reason of any one or more of the causes set forth in
paragraph A. of the article entitled EXCUSABLE DELAY.
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.
INITIAL Spare parts ordered for the support of the initial twelve months
PROVISIONING of operation after delivery of first Aircraft as specified in
ORDERS Part III of Exhibit C.
TERM MEANING
---- -------
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 problem in the operation of the Aircraft or any system or
PROBLEM 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.
PRICE The Base Price adjusted by the provisions contained in paragraphs
B., C. and D. of the article entitled PRICE.
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.
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.
TERM MEANING
---- -------
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.
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, fifty MD-95-30 aircraft conforming to the Detail Specification
which consists of DS9530A dated 05 January 1995 as amended by the SCN's set
forth in Exhibit A1 hereto and as may be further modified in accordance with
the provisions of the article entitled DETAIL SPECIFICATION CHANGES.
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 provide Buyer reasonable notice
relative to the dates when such information is required and Buyer shall
provide such information by the dates so specified. In the event Buyer fails
to perform in accordance with the dates provided by Seller, Seller shall have
the same rights as those specified in paragraph F. of the article entitled
BUYER FURNISHED OR DESIGNATED EQUIPMENT.
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.
D. Seller shall make all reasonable efforts towards obtaining the same type
rating with respect to flight crew training between the MD-95-30 aircraft and
DC-9 aircraft.
E. Seller shall make all reasonable efforts towards providing the primary flight
display, navigation display, engine and alert displays in a Liquid Crystal
Display (LCD) format in lieu of those specified in Detail Specification
DS9530A dated 05 January 1995 at no additional charge to Buyer.
ARTICLE 3 - PRICE
A. The Base Price of the Aircraft is, * * * which is composed of the Airframe
Base Price of * * * , plus the Engine Base Price of * * * .
B. Except for SCNs defined in Article 5, Paragraph B., the Base Price of the
Aircraft shall be increased or decreased by the amounts specified in SCNs
executed in accordance with the article entitled DETAIL SPECIFICATION CHANGES
or as otherwise provided in this Agreement.
C. The Price of the Aircraft shall be the Base Price, first modified or adjusted
in accordance with paragraph B. above, and then adjusted according to the
provisions in Exhibit D.
D. Equipment designated in the Detail Specification as Buyer Furnished Equipment
is hereby designated by Seller as Seller Furnished Equipment (SFE) and is
included in the above Base Price.
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:
YEAR OF ORIGINAL
SCHEDULED DELIVERY ADVANCE PAYMENT PRICE
------------------ -----------------------
1999
2000
2001 * * *
2002
2003
B. As an initial progress payment, Buyer shall pay Seller one 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 business day of each of the following number of full months prior to
the scheduled month of delivery as adjusted from time to time, as set forth
in the article entitled DELIVERY, 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.
MONTHS PRIOR TO
SCHEDULED MONTH OF DELIVERY PERCENTAGE OF
AS ADJUSTED FROM TIME TO TIME ADVANCE PAYMENT PRICE
------------------------------- ---------------------
* * * * * *
C. Buyer shall pay Seller the balance of the Price of each Aircraft at the time
of its delivery.
* * *
* * *
D. Seller will advise Buyer at the time each progress payment is due as to
whether it anticipates that the Aircraft for which the payment is due will
deliver in accordance with the contractual delivery month. In the event
Seller determines that the delivery will be delayed beyond the contractual
delivery month, the progress payments shall be rescheduled in accordance with
Paragraph B. above to correspond with the anticipated month of delivery.
* * *
F. Any sums payable under this Agreement other than the Price of the Aircraft
shall be due and payable within thirty days after receipt of invoice by
Buyer.
G. Seller shall provide Buyer notice in the event 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 such payment beginning one business day
after the date notice is provided by Seller until the payment is received by
Seller. This shall be in addition to any other rights or remedies available
to Seller.
H. All Aircraft 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. If so requested by Seller, Buyer shall provide Seller
information relative to the day funds are transferred, 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.
I. 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.
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 not (i) increase
the Price, (ii) delay delivery, (iii) adversely affect the performance of the
Aircraft as set forth in the Detail Specification, (iv) materially adversely
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.
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 (including desks, telephones, and facsimile equipment) 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 and functional 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
compliance with the Detail Specification excepting the Performance
Guarantee set forth in Letter Agreement No. 7 which shall be determined
in accordance with the terms thereof.
3. If flight tests are necessary on Aircraft delivered subsequent to
Buyer's Aircraft No. 1 because of Buyer unique SCNs 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. In no event shall Seller accrue more than ten hours or
five cycles in performing such flight tests.
4. 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 prior to delivery of such Aircraft. Buyer's
representatives do not participate in or observe these flight tests.
5. Buyer's representatives, at any time prior to technical acceptance of an
Aircraft (as described in this article), 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 at no-charge to Buyer (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.
B. TECHNICAL ACCEPTANCE
--------------------
1. The Aircraft shall be tendered to Buyer for technical acceptance after
it has been assembled, completed and tested, but no earlier than seven
business days prior to the first day of the scheduled month of delivery.
Seller shall give Buyer ninety days notice of the date on which Seller
proposes to tender the Aircraft for technical acceptance and delivery.
2. At Buyer's request, an acceptance procedure, including ground functional
and flight test, shall be performed on the Aircraft jointly by Buyer and
Seller and shall be conducted in accordance with Seller's standard
procedures. Up to five representatives of Buyer may participate in this
acceptance procedure and Buyer shall be permitted to flight test the
Aircraft. 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
seventh business day after Seller has tendered the Aircraft to Buyer. If
during the five business day technical acceptance period Buyer
determines and Seller agrees, which agreement shall not be unreasonably
withheld, that there is noncompliance with the Detail Specification, the
seven 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 acceptance
(subject to further suspensions as a result of non-compliance with the
Detail Specification). 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,
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 shall not impair the
warranties set forth in Part I of Exhibit C.
4. In the event Buyer fails to complete its technical acceptance within the
seven business day period, the Aircraft shall be deemed to have been
technically accepted by Buyer at the end of the seven business day
period after tender as if Buyer had expressly indicated its technical
acceptance as noted above.
5. Buyer shall have the right to technically accept an Aircraft not in
compliance with the Detail Specification subject to mutual agreement as
to the resolution of the non-compliance.
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 later of the
issuance of an FAA Certificate of Airworthiness for the Aircraft or
the first business day of the scheduled month of delivery, Buyer shall
accept delivery of the Aircraft by endorsement of Section B of a
Certificate of Technical Acceptance and Delivery for such Aircraft.
Delivery shall be made at Long Beach, California, or any other
location mutually agreed by Buyer and Seller. The scheduled months of
delivery of the Aircraft are as follows:
BUYER'S AIRCRAFT SCHEDULED MONTH OF DELIVERY
---------------- ---------------------------
NUMBER
------
1
2
3
4
5
6
7
8
9
10 * * *
11
12
13
14
15
16
17
18
19
20
21
22
BUYER'S AIRCRAFT SCHEDULED MONTH OF DELIVERY
---------------- ---------------------------
NUMBER
------
23
24
25
26
27
28
29
30
31
32
33 * * *
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
2. If Buyer fails to accept delivery of an Aircraft as required in paragraph
C.1. above, Buyer shall reimburse Seller for all reasonable 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 xxxx of sale and
other appropriate documents of title as Buyer may reasonably request.
4. Notwithstanding anything herein to the contrary, in no event shall Buyer be
required to take delivery of more than two Aircraft per month except for
Aircraft delayed by Buyer's failure to perform in accordance with the
Agreement.
* * *
D. GENERAL
-------
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 EMPLOYEES
PARTICIPATING IN ANY SUCH INSPECTIONS, TESTS OR FLIGHTS OF ANY AIRCRAFT PRIOR
TO ITS DELIVERY, AND (ii) FOR LOSS OF OR DAMAGE TO TANGIBLE PROPERTY OF THIRD
PARTIES NOT EMPLOYED BY BUYER OR 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
DEFEND, INDEMNIFY AND HOLD HARMLESS SELLER, ITS 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
EMPLOYEES PARTICIPATING IN SAID INSPECTIONS, TESTS OR FLIGHTS, WHETHER OR NOT
CAUSED BY SELLER'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.
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 control of or not occasioned by the fault or negligence of
Seller.
2. Seller shall promptly notify Buyer of any delay or anticipated delay and
anticipated duration of any such 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 and shall appropriately
reschedule progress payments. 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 the article hereof entitled
PRICE.
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. Buyer may, by notice to Seller 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.
Buyer may, by notice to Seller 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.
3. Notwithstanding the foregoing, nothing herein shall obligate Seller
to deliver an aircraft subject to an indefinite excusable delay if
manufacture thereof would require the reactivation of the production
line for the model or series of aircraft purchased hereunder.
D. In the event of termination under paragraphs B. or C. above, Seller
* * * * * * repay to Buyer, without interest,
the amount of the progress payments which are related to the purchase of
such terminated Aircraft. 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. Any Product, Document or other article or item
related to that Aircraft which has been delivered shall be returned to
Seller.
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 BFE. Seller shall
provide reasonable notice as to 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, shall
be subject to reasonable adjustments in Price and delivery as mutually
agreed.
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. 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 ten 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.
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, without escalation, 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, without escalation, 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 FAR's 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, shall be deemed an Excusable Delay. Seller shall provide Buyer with
not less than three days written notice of its intention to treat any such
delay as an Excusable Delay. The Price of the Aircraft shall be increased by
the amount of Seller's additional costs attributable to any such Excusable
Delay by Buyer, including without limitation, Interest on the unpaid balance
of such Price, storage, taxes, insurance and the costs of out of sequence
installations. However, in the event of such Excusable 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
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 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. Such interchange,
however, shall not result in a delay in delivery of Buyer's Aircraft.
Used BFE acquired from Buyer or from other customers of Seller will not
be interchanged.
2. For specific BFE 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 a reasonable number of
additional units to preclude untimely delays which can be caused by the
failure of the BFE.
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 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 or interchanged BFE into an Aircraft, title
and risk of loss to any Spare 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.
H. If either party shall terminate this Agreement as to an Aircraft pursuant to
the article entitled EXCUSABLE DELAY, 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 at
Seller's cost, within thirty days of such election and upon shipment Buyer
shall concurrently repurchase such BFE from Seller. 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 shall be the invoice prices paid by Buyer.
I. Buyer and Seller agree that at the time of Agreement execution, all BFE set
forth in the Detail Specification and Exhibit A-1 has been designated as
Seller-Furnished Equipment (SFE). In the event that Buyer purchases
additional SCNs that include BFE, such BFE may be provided to Seller under
the terms of this article.
ARTICLE 9 - TAXES, CUSTOMS, DUTIES AND LICENSES
A. In addition to all other amounts payable under this Agreement, Buyer shall
promptly pay to Seller (for purposes of this Article 9, Seller shall include
any wholly-owned subsidiary of Seller) upon demand any and all taxes,
including but not limited to sales, use, value added, or other similar taxes
or fees imposed upon transfers (currently imposed or subsequently enacted)
and related interest and penalties (collectively referred to in this Article
9 as "Taxes"), that are imposed by any taxing jurisdiction in connection with
this Agreement, including but not limited to Taxes occasioned by:
1. the sale, lease, delivery, transfer, storage, use, consumption or
support of any Aircraft, Product, Spare Part, Service or Document;
2. the purchase or retention of BFE or BDE;
3. any act that is expressly requested by Buyer; or
4. any act or failure to act by Buyer or other party acting on behalf of
Buyer in connection with any Aircraft, Product, Spare Part, Service or
Document.
B. Notwithstanding anything herein to the contrary, Buyer shall not be required
to pay to Seller:
1. Any United States (federal, state or local):
a. Taxes measured by Seller's net income, capital or both;
b. payroll or employment Taxes imposed on Seller;
c. Taxes imposed on Seller prior to delivery to Buyer (except to the
extent that the imposition of such Taxes results from Buyer's
failure to take in a timely manner any action required of Buyer
under the provisions of this Agreement, and except Taxes imposed on
BFE or BDE); or
d. any interest or penalties relating to Taxes attributable to (i) any
delay by Seller in performing any act or (ii) any failure by Seller
to act, provided that such failure or delay by Seller is not caused
by Seller's reliance on information provided by Buyer.
2. Any Taxes imposed by a jurisdiction outside the United States in
connection with this Agreement.
C. Seller shall promptly notify Buyer if a claim is made by any jurisdiction
against Seller for any Taxes described in Paragraph A. of this Article. If
reasonably requested by Buyer in writing, Seller, at Buyer's expense, shall
contest the validity, applicability or amount of such Taxes by actions to
which Seller and Buyer jointly agree. If Buyer fails to make such written
request to Seller, Seller shall promptly pay all Taxes then due and owing and
Buyer shall promptly reimburse Seller for such Taxes. Notwithstanding the
foregoing, Buyer may contest the validity, applicability or amount of such
Taxes without Seller's participation provided that Buyer delivers to Seller a
tax indemnification agreement reasonably acceptable to Seller.
D. In addition to all other amounts payable under this Agreement, Buyer shall
pay Seller upon demand any customs, duties and related brokerage, freight and
other charges (including related interest and penalties) which are imposed
upon Seller in connection with the importation to the United States of:
1. any BFE or BDE, and
2. any item of foreign manufacture to be installed in or applicable to an
Aircraft, Product, Spare Part, Service or Document as a result of a
change installed on or incorporated at the request of the Buyer.
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 the article hereof entitled BUYER FURNISHED OR
DESIGNATED EQUIPMENT 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. Seller shall
provide Buyer with not less than three days written notice of its intention
to treat any such delay as an Excusable Delay. Any such change, addition or
modification effective after Aircraft delivery shall be the sole
responsibility of Buyer.
ARTICLE 11 - PATENT, TRADEMARK, TRADE SECRET AND COPYRIGHT INDEMNITY
A. DUTY TO DEFEND
--------------
1. 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 or Vendor Part (a Claim),
provided that:
a. 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,
b. 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
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 with respect to a Claim provided
that Buyer has complied with the conditions of this Article with respect to
notice and cooperation, or, if Buyer has failed to comply with such
provisions, if such failure to comply has not materially and adversely
affected Seller's ability to defend against such Claim. Seller or Vendor
shall have the obligation to assume, conduct and control the defense of such
suit.
C. LOSS OF USE
-----------
If a Product or Vendor Part 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; or
2. replace it with a non-infringing substitute which otherwise complies
with this Agreement and the applicable order.
D. The provisions of this Article (i) applies solely to Seller Parts and
Vendor 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 or the Aircraft are sold and leased back to Buyer as
the first operator), and (iii) are Buyer's sole and exclusive remedy with
respect to a Claim.
ARTICLE 12 - AIRCRAFT SUPPORT SERVICES AND BUYER'S 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.
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.
Subject to the provisions of Letter Agreement No. 14, this Agreement may 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 net worth and a ratio of net worth to
total debt and liabilities which are not less than that of the assignor.
B. The parties agree that either party may at any time assign its right to
receive money and, without the other parties' further consent, assign this
Agreement, (i) in connection with a reorganization, merger or consolidation
effected to implement a recapitalization or reorganization (or a similar
transaction) that does not result in a material change to the beneficial
ownership of such party's voting securities; or (ii) to such party's parent
or a wholly-owned subsidiary of such party or such party's parent. Such
assignment, however, will be without release or impairment of either parties'
rights. The assignment shall contain the assignor's commitment to perform
and be responsible for any and all of its obligations under this Agreement as
if the assignment had not been made.
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) 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, lease, 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.
ARTICLE 14 - NOTICES AND REQUESTS
A. Except as otherwise expressly provided in this Agreement, all notices and
requests required or authorized 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 0000 Xxxxxxx Xxxxxxxxx, Xxxxx 000,
Xxxxxxx, Xxxxxxx 00000, Attention: Senior Vice President and Chief Financial
Officer, or to such other person or such other address as the party to
receive the notice or request shall designate.
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 agreement. This Agreement may be amended only
as provided in the article entitled DETAIL SPECIFICATION CHANGES 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 shall be construed and performance thereof shall be determined
according to the laws of the State of California, United States of America,
excluding its laws regarding conflict or choice of law. The applicable
California statute of limitation shall govern this Agreement regardless of
the forum. The parties agree to exclude the application of the United
Nations Convention on Contracts for the International Sale of Goods (1980).
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.
ARTICLE 16 - NONDISCLOSURE
A. This Agreement contains, and other information provided in connection with
the transactions contemplated hereby may contain, 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 (i) 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 and (ii) Buyer's
obligation to protect such information shall be conditioned on Seller clearly
and conspicuously marking such information as confidential or proprietary.
Where disclosure of Confidential Information is required pursuant to 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 Confidential Information with, or reveal Confidential
Information to, 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. 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. If disclosure is made to parties identified in the preceding
clause (ii) in the form of copies of all or part of this Agreement, Buyer
agrees 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 THE
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.
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.
VALUJET AIRLINES, INC.
Signature /s/ Xxxxxxx X. Xxxxx
-----------------------------------
Printed Name Xxxxxxx X. Xxxxx
-------------------------------
Title SVP Financial & CFO
--------------------------------------
Witness:
Signature /s/ Xxxxx X. Xxxxxxxx
-----------------------------------
Printed Name Xxxxx X. Xxxxxxxx
-------------------------------
Title Director - Corporate Finance
---------------------------------------
XXXXXXXXX XXXXXXX CORPORATION
Signature /s/ X. X. Xxxxx
------------------------------------
Printed Name X. X. Xxxxx
--------------------------------
Title V.P. Contracts
---------------------------------------
Witness:
Signature /s/ Xxxxxx X. Xxxxxx
------------------------------------
Printed Name Xxxxxx X. Xxxxxx
--------------------------------
Title Area Director, Commercial Marketing
---------------------------------------
EXHIBIT A - DETAIL SPECIFICATION
(Note: The Detail Specification has been provided separately.)
EXHIBIT A1 - SPECIFICATION CHANGE NOTICES
SCNS OVER AND ABOVE DS9530A
SCN NO.
DATE SUBJECT
-------- -------
G0100C007 SELECTABLE PROGRAM OPTIONS (MD-95-30)
05/16/95
X0000X000 INCORPORATION OF FINISH SPECIFICATION F-109-211 FOR VALUJET
10/25/95
G0214S001 REVISION TO THE TAKEOFF AND LANDING ALTITUDE LIMITS
04/06/95
G0320C003 INCREASED MAXIMUM TAKEOFF GROSS WEIGHT FROM 114,000 TO
08/18/94 121,000 LB AND THE MAXIMUM TAXI WEIGHT FROM 115,000 TO 122,000 LB
G0320C005 INCREASED MAXIMUM LANDING WEIGHT FROM 102,000 LBS TO 104,000
04/26/95 LBS AND MAXIMUM ZERO FUEL WEIGHT FROM 96,000 LBS TO 98,000 LBS
G2500E010A INSTALLATION OF A 129 PASSENGER SINGLE CLASS INTERIOR
10/20/95 ARRANGEMENT
G2541C001 INSTALLATION OF LIQUID SOAP DISPENSERS IN LAVATORIES IN LIEU OF
04/26/95 BAR SOAP DISPENSERS
X0000X000 INSTALLATION OF EMERGENCY EQUIPMENT
10/24/95
G2751S001 REVISION TO THE WING FLAP CONTROL SYSTEM TO PROVIDE DIAL-A-FLAP
06/08/95 POSITION SELECTION
G2842S003 INSTALLATION OF DRIPLESS DIP STICKS GRADUATED IN POUNDS IN LIEU
04/24/95 OF INCHES (6.7 Lb/Gal)
G3446C001B INSTALLATION OF TRAFFIC ALERT AND COLLISION AVOIDANCE SYSTEM
05/02/95 COMPUTER AND ANTENNAS UTILIZING EXISTING PARTIAL PROVISIONS
G5115E002A ADDITION OF POLYURETHANE FINISH TO LOWER FUSELAGE (COLOR TO BE
07/11/95 DETERMINED)
G5212S001A INSTALLATION OF A FULL SIZE AFT PRESSURE BULKHEAD EXIT DOOR
11/08/95
G5261E001 DELETION OF FORWARD ENTRANCE STAIRWAY WITH RETENTION OF
09/08/95 COMPLETE PROVISIONS
G5300S001 REVISION TO THE AIRCRAFT STRUCTURE TO LENGTHEN THE FUSELAGE 38
05/31/95 INCHES
G5300S002 REVISION TO THE AIRCRAFT STRUCTURE TO LENGTHEN THE FUSELAGE 19
10/09/95 INCHES
G7200S006A BR715 REVISION TO ENGINE DESIGNATION AND ASSUMED WEIGHT
10/16/95
G7200E009 INSTALLATION OF BR715 ENGINES IN LIEU OF THOSE SPECIFIED (PROVIDES
09/05/95 INCREASED THRUST TO 21,000 LBF)
X0000X000 EQUIPMENT CATEGORY CHANGE FROM BUYER FURNISHED TO SELLER
10/24/95 FURNISHED
EXHIBIT B - CERTIFICATE OF
TECHNICAL ACCEPTANCE AND DELIVERY
CERTIFICATE OF TECHNICAL ACCEPTANCE AND DELIVERY
Buyer: VALUJET AIRLINES, INC.
Seller: XXXXXXXXX XXXXXXX CORPORATION
Purchase Agreement Number: DAC 95-40-D dated _______
AIRCRAFT IDENTIFICATION
-----------------------
Model
-----------------------------------
Buyer's Aircraft Number
-----------------------------------
Nationality and Registration
-----------------------------------
Factory Serial Number
-----------------------------------
Fuselage Number
SECTION A - TECHNICAL ACCEPTANCE
--------------------------------
ValuJet 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 DAC 95-40-D, as amended.
VALUJET AIRLINES, INC.
Signature
----------------------
Printed Name
----------------------
Title
----------------------
Date
----------------------
CERTIFICATE OF TECHNICAL ACCEPTANCE AND DELIVERY
Buyer: VALUJET AIRLINES, INC.
Seller: XXXXXXXXX XXXXXXX CORPORATION
Purchase Agreement Number: DAC 95-40-D dated ____________
AIRCRAFT IDENTIFICATION
-----------------------
Model
-----------------------------------
Buyer's Aircraft Number
-----------------------------------
Nationality and Registration
-----------------------------------
Number
-----------------------------------
Factory Serial Number
-----------------------------------
Fuselage Number
-----------------------------------
SECTION B - DELIVERY
--------------------
ValuJet Airlines, Inc. hereby accepts delivery of the Aircraft at the time and
place noted below and hereby waives all remedies, excepting those remedies
provided for in * * * Exhibit C, Part I to Purchase Agreement DAC 95-40-D, as to
the condition of the Aircraft, including the remedy of revocation of acceptance,
which might otherwise arise by operation of law. ValuJet Airlines, Inc.
certifies the Aircraft will be used by ValuJet Airlines, Inc. as a certified or
licensed carrier of persons or property in interstate or foreign commerce.
VALUJET AIRLINES, INC.
Signature
----------------------
Printed Name
----------------------
Title
----------------------
Date
----------------------
Time
----------------------
Place
----------------------
EXHIBIT C - AIRCRAFT SUPPORT SERVICES
TABLE OF CONTENTS
PART I - WARRANTY AND SERVICE LIFE POLICY ............................................. I-1
A. Seller's Warranty.................................................................. I-1
B. Warranties From Other Manufacturers................................................ I-3
C. Service Life Policy................................................................ I-4
D. Normal Usage....................................................................... I-7
E. Duplicate Protection Plan Remedies................................................. I-7
F. General............................................................................ I-8
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-7
D. Factory Service.................................................................... II-7
E. Maintenance Planning Assistance.................................................... II-7
F. Additional Services................................................................ II-8
G. Transportation and Per Diem Reimbursemen........................................... II-8
H. General............................................................................ II-8
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-1
F. Additional Copies.................................................................. IV-11
G. Limitation On Use of Documents..................................................... IV-11
H. Warranty........................................................................... IV-12
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 * * * after installation or
use 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 (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.
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.
6. Seller's Approval. Within two weeks following receipt of Buyer's notice
-----------------
of a defect accompanied by Buyer's request to Seller's Field Service
Representative at Buyer's main base 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. Labor 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, requested, or
approved 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. Labor Reimbursement. 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 Aircraft Company's
manufacturing direct labor rate plus a burden rate of one hundred
percent.
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, nomenclature and the quantity claimed to be defective;
b. the identity of the Aircraft from which each Product was removed;
c. the date the claimed defect became apparent to Buyer;
d. the total flight hours 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;
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. For defects described in paragraph 1. above,
Seller shall pay all costs of transportation of the defective Product
returned, to and from Atlanta, Georgia.
11. Limitations. Seller shall have no obligation or liability under this
-----------
warranty if:
a. the Aircraft was operated with any product not specifically
approved by Seller unless such product was not a cause of the
defect;
b. the Aircraft was not operated or maintained in accordance with the
AIRCRAFT MANUALS AND DOCUMENTS furnished Buyer pursuant to Part IV
hereof unless such operation or maintenance was not a cause of the
defect;
c. the Aircraft was not operated under normal airline use unless such
operation was not a cause of the defect;
d. Buyer does not (i) report the defect in writing to Seller's
Warranty Administrator within one year following such defect
becoming apparent and (ii) 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 submit reasonable proof to Seller within one year
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 two months of receipt; 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 during the first twenty-
four months after delivery of the Document or first use if not used in
the first twenty-four months with a similar Document or page thereof
free from the error in question.
B. Warranties From Other Manufacturers
-----------------------------------
1. Warranties From Other Manufacturers. Seller has made or shall make
-----------------------------------
reasonable efforts to obtain favorable warranties from vendors, with
respect to Vendor Parts. In
addition, Seller shall make reasonable efforts to extend vendor
warranties to sixty months. Seller has made or shall make reasonable
efforts to obtain for Buyer the same warranties or more favorable
warranties to encompass Buyer's direct purchase of spare parts.
2. Vendor Backstop. For those Vendor Parts installed on the Aircraft or
---------------
purchased through Seller, excluding the Engine or the Engine
manufacturer's parts, in the event of a default by a Vendor in the
performance of any 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, the warranties and all other terms and conditions of
paragraph A. of Part I shall become applicable as if the Vendor Parts
had been manufactured by Seller except that the warranty period shall
be the warranty period as set forth herein or the Vendor's warranty,
whichever is shorter and all transportation costs associated with the
Vendor Parts shall be borne by Seller. In the event a Vendor does not
provide a warranty, Seller's Warranty shall apply to such parts.
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. Buyer shall have the right to file a warranty claim upon
determination of the cause of the Interface Problem to the extent that
warranty coverage is applicable hereunder.
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 * * *
----
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 = * * * months.
In the event that C is * * * or less, Seller shall provide
the part or Covered Component to Buyer at no-charge.
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 Atlanta,
Georgia.
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 the Failure
which was not reported in accordance with the two month period.
e. The provisions of paragraph 11. (except for paragraphs 11.d., 11.e.
and 11.f. thereof) 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 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 such Failure was not caused by Buyer's
failure to so modify the Aircraft. This provision does not apply
(i) in cases where Buyer has demonstrated that such service
bulletins are not cost effective to Buyer and (ii) where a
reasonable period of time is not given Buyer to incorporate the
service bulletin.
g. The Policy shall not apply for a Failure that 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:
a. Airframe Components
(1) Pylons
(a) Front engine mount yoke
(b) Spars and spar caps
(c) Front engine mount yoke to pylon attach fitting
(d) Aft engine mount to pylon attach fitting
(e) Upper and lower plating and stiffeners between spars
(f) Pylon to fuselage attach angles and fittings
(2) Wings
(a) Front and rear spars
(b) Upper and lower stringers and plating between spars
(c) Landing gear bulkhead and forging
(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, stringers and pressure bulkheads, but
excluding all non-load carrying access doors.
(4) Empennage
(a) Vertical spars and plating between spars
(b) Aft fuselage vertical stabilizer carry-through structure
(c) Horizontal stabilizer spars, integral plating between
spars, and pivot fittings
b. Landing Gear Components
(1) Main Gear
(a) Outer cylinder
(b) Piston/axle
(c) Side brace
(d) Fixed side brace
(e) Orifice support tube
(2) Nose Gear
(a) Housing
(b) Piston
(c) Axle
(d) Orifice support tube
(e) Cylinder
NOTE: The Policy does not cover any bearings, bolts, bushings, gaskets,
O-rings, or seals used in the Covered Components.
D. Normal Usage
------------
Normal wear and tear and the need for regular overhaul shall not constitute
a defect or failure pursuant to Part I hereof.
E. Duplicate Protection Plan Remedies
----------------------------------
Buyer shall have the right to submit warranty claims under Seller's Warranty
or Service Life Policy at Buyer's discretion as applicable. 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. General
-------
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 AND DATA
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 USE, REVENUE
OR PROFIT OR CONSEQUENTIAL DAMAGES).
2. 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.
3. NOTWITHSTANDING THE PROVISIONS OF PARAGRAPH 1. ABOVE, SELLER
HAS PROVIDED GUARANTEES IN LETTER AGREEMENT NUMBERS 7, 9 AND
10. WITH RESPECT TO THE GUARANTEES OR AGREEMENTS BY SELLER
SET FORTH IN LETTER AGREEMENT NUMBERS 7, 9 AND 10, BUYER'S SOLE
AND EXCLUSIVE REMEDY FOR BREACH OF SAID GUARANTEES OR
AGREEMENTS SHALL BE AS SET FORTH IN SAID LETTER AGREEMENTS.
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 English language, designed to
familiarize, train and assist Buyer's personnel with the introduction of the
Aircraft. Unless otherwise stated, the program shall be provided at no charge to
Buyer and 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.
At Buyer's request, Seller shall provide the training set forth in this Exhibit
C, Part II to a third party in lieu of providing such training to Buyer. Prior
to commencement of such training, an agreement must be in place between Seller
and such third parties covering proprietary information, liability and access to
Seller's training facility.
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 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 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.
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 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
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. 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, 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 - Four each of all
appropriate 8" x 11" transparencies (in teaching sequence)
used in Seller's baseline training courses will be provided.
(2) 35mm Slides - Four each of the appropriate slides (in teaching
sequence) as used in Seller's baseline training program shall
be furnished.
(3) Video Tapes - Four copies 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 - Twenty-four sets of color flight deck wall
charts used in the factory training program will be provided.
These charts will depict cockpit and instrument panel
configuration and arrangement.
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.
f. Computer Based Training - Seller will provide, as available,
baseline Computer Based Maintenance Training (CBMT) courseware for
the Aircraft. In no case will the CBMT be more than fifty percent
of the total Maintenance Training Program.
8. Time Limit. Seller shall not be obligated to provide maintenance
----------
training after fifteen 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, office facilities, and
office equipment conveniently located to Buyer's maintenance facilities
for accommodation of such field service representative.
3. The Field Service Representative shall provide Buyer access to MD-95-30
engineering drawings as required.
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. Seller shall also provide any necessary FAA
Designated Engineering Representative (DER) approval of repairs necessary to
continue MD-95-30 in service under normal operational conditions.
E. Maintenance Planning Assistance
-------------------------------
The following support shall be provided for as long as Buyer maintains ten
Aircraft in regularly scheduled service.
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.
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 Report. Buyer and Seller shall agree on standards and
frequency for communication of such data.
6. Aircraft Maintenance Task Oriented Support System. Seller shall provide
-------------------------------------------------
an Aircraft Maintenance Task Oriented Support System (AMTOSS) which
provides a numerical identity for those maintenance procedures normally
conducted in an airline maintenance program. In addition, Seller shall
provide a Production Management Data Base (PMDB) in general accordance
with ATA Specification 100.
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
--------------
With respect to all services and support provided by Seller away from
Seller's Facility specified in this Part II., Seller shall provide only that
portion of transportation for its personnel from and to its main facility
which occurs within the continental United States.
H. General
-------
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.
2A. BUYER HEREBY RELEASES AND AGREES TO DEFEND, INDEMNIFY
AND HOLD HARMLESS SELLER, ITS 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, AND LOSS OF USE THEREOF, ARISING DIRECTLY OR
INDIRECTLY OUT OF OR IN CONNECTION WITH ALL TRAINING,
SERVICES AND SUPPORT (EXCLUDING TRAINING SERVICES)
PROVIDED UNDER OR IN CONNECTION WITH THIS PART II AND
LETTER AGREEMENT NO. 6 TO THE 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 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 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) the
limits of liability coverage, (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.
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, 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 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 twelve
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.
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 (with the exception of freestock and non-flight
essential 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 has notified Seller in writing of the
requirement for the Seller Parts at the time the requirement
becomes known to Buyer, and Seller is unable to comply within a
mutually agreed upon 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 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
------------
While Seller is not obligated to maintain a stock of Vendor Parts, Seller
may have certain Vendor Parts in stock for Buyer's purchase. In order for a
Vendor to deliver Vendor parts directly to Buyer, Vendor may be required to
obtain Parts Manufacturing Approval (PMA) for such parts. If a Vendor has
not obtained PMA for a Vendor Part, then Buyer should purchase such part
from Seller less the twelve percent handling charge set forth in paragraph
F. above.
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.
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.
6. Certification. Spare Parts provided by Seller to Buyer pursuant to this
-------------
Agreement shall comply with all FAA certification requirements.
7. Spares Consignment. In the event of any conflict between the provisions
------------------
of this Part III and Letter Agreement No. 5, the provisions of Letter
Agreement No. 5 shall prevail.
PART IV - AIRCRAFT MANUALS AND DOCUMENTS
This Part IV contains the terms and conditions applicable to furnishing the
Documents.
A. Documents Provided
------------------
Seller shall furnish the Documents described in Part IV, paragraph E. Unless
otherwise specified herein, such Documents shall be furnished in the
quantities specified by Seller at no additional cost to Buyer. Additional
copies of the Documents shall be made available at Seller's then current
published prices. Such Documents are intended to provide pertinent
information only on items manufactured according to Seller'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.
B. 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
Seller may adopt. All other Documents shall be provided to Seller's existing
commercial practices.
C. Shipment
--------
All Documents provided under this Part IV shall be shipped free of charge
for initial shipment and surface F.O.B. shipping point to Buyer's designated
point for all subsequent shipments in the continental United States of
America.
D. 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 in
accordance with the terms set forth in paragraph 3. to Letter Agreement
No. 6.
E. List of Documents
-----------------
The following identifies Documents to be provided in support of the
Aircraft. The explanation of the table is as follows:
COLUMN HEADING EXPLANATION OF CODE
-------------- -------------------
1 DOCUMENT Title of Document provided.
2 CONFIG Configuration:
A = Contains data common to all DC-9, MD-80,
MD-90, and MD-95 aircraft.
B = Contains data tailored to specific MD-95
aircraft model, series or engine type.
C = Contains data configured to Buyer's
Aircraft.
D = Contains data common to MD-95 aircraft.
3 MEDIUM
One year prior to scheduled delivery of Buyer's
Aircraft No. 1, Buyer shall select one of the
optional media specified in the table.
1 = Paper
2 = Microfilm Diazo
3 = Microfilm Silver Negative
4 = Aperture Cards
5 = Magnetic Media
* = See REMARKS Column
4 REV Revision:
Y = Scheduled Revision Service Applies
N = Revision Service Not Applicable
S = Revised as Required by Seller
* = See REMARKS Column
5 QTY Quantity:
(Number) = Quantity per this Agreement
(Number)PER = Quantity per Aircraft
* = 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
- - -
* = See REMARKS Column
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.
---------------------------------------------------------------------------------------------------------
1 2 3 4 5 6 7 8
DOCUMENT CONFIG MEDIUM RE QTY DEL AT REMARKS
V
----------------------------------------------------------------------------------------------------------
A. MAINTENANCE ENGINEERING DATA
1. Access Door Diagrams &
Data Sheets D 1 S 3 PTD N
2. Aircraft Recovery Manual D 1 S 3 PTD N
3. Component Description &
Location List D 1 S 3 PTD N
4. FAA Maintenance Review
Board Report D 1 S 3 4
MOS
PTD N
5. Maintenance Check Manual
(Work Cards) D 1 S 2 4
MOS
PTD N
6. Maintenance Facility And
Equipment Planning Manual D 1 S 3 PTD N
7. On-Aircraft Maintenance
Planning Report (OAMP) D 1 S 3 4
MOS
PTD N
8. Special Tool & Equipment
Drawings (Seller) D 1, 4 S 1 ASAV N
9. Support Equipment Summary A 1 S 3 PTD N
10. Aircraft Zoning Report D 1 S 3 PTD N
11. Production Management Data
Base (PMDB) B 5 Y 1 PTD Y See Note 16
12. Structural Diagrams
Reference Manual D 1 S 3 PTD N
B. TECHNICAL PUBLICATIONS DATA
1. Flight Crew Operating
Manual (FCOM) C 1 Y 4 + 1
PER * N See Notes 1
& 2,
Performance
Data ASAV
--------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------
2. Aircraft Maintenance Manual C 1, 2, 3, 5 Y 4 + 1
PER PTD Y See Notes 2
& 3
3. Product Support Supplier
Directory --- 1 S 3 PTD N
4. Product Support Supplier
Agreements Manual A 1 S 3 PTD N Summarizes
Seller's
Agreements
with
Suppliers
5. Schematic Manual C 1, 2, 3, 5 Y 4 + 1
PER PTD N See Note 2
6. Seller Overhaul/Component
Maintenance Manuals C 1, 2, 3 Y 1 PTD Y See Notes 2
& 7
7. Vendor Overhaul/Component
Maintenance Manuals C 1 * 1 PTD Y See Note 4
8. Wiring Diagram Manual C 1, 2, 3, 5 Y 4 + 1
PER PTD Y See Notes 2
& 5
9. Tool & Equipment (T&E)
Lists X 0, 0, 0 X 0 XXX Y See Note 2
10. Nondestructive Testing
Manual X 0, 0, 0 X 0 XXX Y See Note 2
11. Nondestructive Testing
Standard Practice Manual A 1 S 3 PTD N
12. Power Plant Buildup Manual --- * * * * --- Provided by
Engine
Manufacturer
13. Structural Repair Manual X 0, 0, 0 X 00 XXX Y See Note 2
14. Service Bulletins (SB) A 1 Y 5 PTD Y See Notes 2
& 12
15. Service Bulletin Record Book A 1 S 5 ATD Y
16. Illustrated Parts Catalog
(IPC) C 1, 2, 3, 5 Y 4 + 1
PER PTD Y See Notes 2
& 8
----------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
17. Airline Data Report A 1 S 3 PTD N See Note 9
C. ENGINEERING DATA
1. Aircraft Characteristics For
Airport Planning D 1 S 4 ATD N
2. Design Handbook A 1, 2 S 1 ATD N
3. Xxxxxxx Material
Specifications (DMS) Manual A 1, 2 S 1 ATD N
4. Xxxxxxx Process Material
(DPM) Index A 1, 2 S 1 ATD N
5. Xxxxxxx Process Standards
(DPS) Manual A 1, 2 S 1 ATD N
6. Drafting Manual A 1, 2 S 1 ATD N
7. Drawing Section List C 1 S 3 ATD N
8. Engineering Drawings (To
Section List Level Only) C 4 S 1 ATD N
9. FAA Approved Airplane
Flight Manual (AFM) C 1 S 1 + 1
PER ATD N See Note 10
10. Flying Qualities Report D 1 S 1 ASAV N
11. Xxxx Schematics C 1 N 10
PER ASAV N
12. Minimum Equipment List
(XXX) Procedures Manual D 1 Y 5 PTD N See note 17
13. On-Board Wiring Diagram
Book C 1 N 1 PER ATD N See Note 11
14. Approved Equivalent Parts
List (AEPL) X 0, 0, 0 X 0 XXX N
15. Master Minimum Equipment
List (MMEL) D 1, 5 Y 5 ASAV N See Note 17
--------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------
16. Wire Lists & Hookup Charts C 1, 2, 5 S 2 PTD Y
17. Xxxxxxx Standards Manual
(DSM) A 1, 2 S 1 ATD N
18. Master Component List
(MCL) D 1 S 1 ASAV N See Notes 13
& 17
19. Flight Planning & Cruise
Control Manual (FPCCM) B * S 1 ASAV N See Note 14
20. Weight & Balance Manual,
Chapter 1 C 1 S 2 ATD N See Note 15
21. Weight & Balance Manual,
Chapter 2 C 1 N 1 PER * N See Note 15
22. Weight & Balance Manual,
Chapters 1 & 2, On-Board
Copy C 1 N 1 PER * N See Note 15
23. Weight Compliance Report C 1 N 3 PER * N See Note 15
24. Performance Handbook (PH) B 1 S 1 ATD N See Note 6
25. Airworthiness Limitation
Instructions (ALI) A 1 S 1 ATD N
D. OTHER DATA
1. Flight Training Data --- * * * * --- See Part II
A.
2. Maintenance Training Data --- * * * * --- See Part II
B.
3. Provisioning Data --- * * * * --- See Part III
----------------------------------------------------------------------------------------------------------------
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, Seller will incorporate in
its FCOM all applicable Seller 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 Seller 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, Seller
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 Seller'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 Seller
is not responsible for the technical accuracy of such data. Buyer
originated changes incorporated by Seller 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
Seller's FCOM concept.
2. Revision Service
----------------
a. Provided revision service is being supplied under the terms of this
Agreement, or by subsequent Purchase Order, Seller will incorporate in
its Illustrated Parts Catalog (IPC), Maintenance Manual,
Overhaul/Component Maintenance Manual, Structural Repair Manual and
Wiring Diagram Manuals all applicable Seller originated Service
Bulletins in a regular revision following issue. The manuals will then
contain both original and revised configurations until Buyer advises
Seller 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,
Seller 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. Seller cannot take raw data and write
maintenance practices, overhaul information or structural repair
information, or develop illustrations, including wiring diagrams. Any
page that is incorporated into Seller'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 Seller is not responsible for the technical accuracy
of such data. Buyer originated changes incorporated by Seller shall be
considered in all future revisions affecting the applicable
publications.
3. Aircraft Maintenance Manual. Includes engine manufacturer's information.
---------------------------
Prepared in general accordance with ATA Specification 100, Revision 32
AMTOSS format. Consumable material information will be included in Chapters
20 and 70 instead of a separate manual. Troubleshooting information is
included in this manual. Schematics are provided in separate manual. PMDB is
provided as a separate magnetic tape.
4. Vendor Overhaul/Component Maintenance Manuals. Seller 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 28, only if peculiar to the aircraft of the
type purchased hereunder. Existing manuals shall be provided wherever
possible. 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. Seller Overhaul/Component Maintenance Manuals. Shall consist of (i) existing
---------------------------------------------
copies of DC-9 Overhaul Manuals produced to ATA Specification 100, Revision
8, to the extent applicable to the Aircraft, (ii) existing copies of MD-80
Component Maintenance Manuals produced to ATA 100, Revision 14, or later as
Seller may adopt, to the extent applicable to the Aircraft, (iii) existing
copies of MD-90 Component Maintenance Manuals produced to ATA 100, Revision
28 to the extent applicable to the Aircraft, and (iv) Component Maintenance
Manuals peculiar to the type of aircraft purchased hereunder produced in
general accordance with ATA Specification 100, Revision 28 or later as
Seller 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 Aircraft 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 32, and ATA Specification 2100,
Revision 0, or later as Seller may adopt.
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
Buyer owns or operates the Aircraft. The Airplane Flight Manual will be
provided in a paper medium with the exception of the performance section
which will be provided in a magnetic medium.
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 Seller'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). Data consists of a hard
-----------------------------------------------
copy report with graphical information covering enroute performance, and a
magnetic media covering all enroute performance, including variations in the
cost-index-cruise-speed schedules contained in hard copy report.
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.
16. Production Management Data Base (PMDB). The PMDB is an electronic data base
--------------------------------------
of maintenance program requirements with associated data, as similarly
presented in the OAMP, with some additional data elements. This electronic
delivery of data requires application software not provided by Seller in
order for the Buyer to manage fleet maintenance production, logistics and
reliability functions. The PMDB is prepared in general accordance with ATA
Specification 100, Revision 32.
17. Seller to provide two preliminary copies no later than six months prior to
first delivery.
F. ADDITIONAL COPIES
-----------------
Additional replacement copies of the Documents shall be made available at
Seller's then current published prices.
G. LIMITATION ON USE OF DOCUMENTS
------------------------------
1. Buyer agrees that, except with Seller'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
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 Seller in the form of
Programs shall be subject to the following additional restrictions on
use:
a. Buyer shall have a non-exclusive, non-transferrable license to use
a single copy of any Program provided by Seller.
b. Buyer agrees that it will not without the express written consent
of the Seller:
(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.
H. Warranty
--------
The warranty for Documents provided hereunder is set forth in Part I of this
Exhibit C.
EXHIBIT D - PRICE ADJUSTMENTS
FOR FLUCTUATIONS IN THE ECONOMY
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 the article entitled PRICE, 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 = AF\\n\\ + E\\n\\
where:
P = Price
AF\\n\\ = Final Adjusted Airframe Price
E\\n\\ = Final Adjusted Engine Price
X.Xxxxx Adjusted Airframe Price
1. The Airframe Base Price included in the Base Price contains no
allowance for inflation subsequent to the period of November 1994
through March 1995. Accordingly, the Airframe Base Price shall be
adjusted to determine the Final Adjusted Airframe Price, 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).
2. The formula for the airframe is as follows:
AF\\n\\ =
Fb [.75 (ECIn) +.25 (ICn}
---- ---
130.0 123.6
where:
AF\\n\\ = The Final Adjusted Airframe Price.
AF\\b\\ = The Airframe Base Price.
ECI\\n\\ = The average of the ECI Index values for the fourth through
the eighth month (as described in 1.a. above) prior to the
original scheduled month of delivery computed to one
decimal place (Note: 1.05 rounds to 1.1).
130.0 = The average of the ECI Index values for November 1994
through March 1995 (as described in 1.a. above).
IC\\n\\ = The average of the IC Index values for the fourth through
the eighth month prior to the original scheduled month of
delivery computed to one decimal place (Note: 1.05 rounds
to 1.1).
123.6 = The average of the IC Index values for November 1994
through March 1995.
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 l).
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 ECI\\n\\ and IC\\n\\ values used in the
calculation of the Final Adjusted Airframe Price. However, the index
denominators of 130.0 and 123.6 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 ECI\\n\\ and
IC\\n\\ 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 ECI\\n\\ or the
nearest preceding month for the IC\\n\\ 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.
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 (E\\n\\)
-----------------------------------
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 the
article entitled PRICE, 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, 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 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).
2. The formula for the Engines is as follows:
E\\n\\ = ,[.75 (ECIn) + .25 (ICn
---- ---
130.0 123.6
where:
E\\n\\ = The Final Adjusted Engine Price.
E\\b\\ = The Engine Base Price.
ECI\\n\\ = The average of the ECI Index values for the fourth through
the eighth month (as described in 1.a. above) prior to the
original scheduled month of delivery computed to one
decimal place (Note: 1.05 rounds to 1.1).
130.0 = The average of the ECI Index values for November 1994
through March 1995 (as described in 1.a. above).
IC\\n\\ = The average of the IC Index values for the fourth through
the eighth month prior to the original scheduled month of
delivery computed to one decimal place (Note: 1.05 rounds
to 1.1).
123.6 = The average of the IC Index values for November 1994
through March 1995.
3. Engine 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 l).
4. 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
Paragraph C., 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.
* * *
* * *
11-20-95
Letter Agreement No. 1
DAC 95-40-D
ValuJet Airlines, Inc.
0000 Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Simultaneously herewith ValuJet Airlines, Inc. (Buyer) and XxXxxxxxx Xxxxxxx
Corporation (Seller) have entered into Purchase Agreement No. DAC 95-40-D (the
Agreement) which Agreement covers the manufacture and sale by Seller and the
purchase by Buyer of MD-95-30 aircraft (the Aircraft). It is agreed that upon
execution by both parties hereto, this Letter Agreement shall constitute a part
of said Agreement.
OPTION AIRCRAFT
---------------
Buyer shall have the option to purchase fifty additional MD-95-30 aircraft (the
Option Aircraft) under the same terms and conditions as set forth in the
Agreement except as modified by the following:
1. Delivery
--------
The Option Aircraft shall be scheduled for delivery to Buyer as follows:
Option Aircraft Scheduled Month
Number of Delivery
--------------- ---------------
1
2
3
4
5
6
7 * * *
8
9
10
11
12
13
14
15
Option Aircraft Scheduled Month
Number of Delivery
--------------- ---------------
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30 * * *
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
2. Option Deposit
--------------
In consideration for the option to purchase the Option Aircraft, Buyer shall
pay a refundable deposit of * * * per Option Aircraft concurrent
with the execution of the
Agreement. Upon the exercise of an option, Seller shall apply the respective
deposit to the progress payment due at option exercise for such Option
Aircraft and such deposit shall be deemed nonrefundable. * * *
3. Payment
-------
Buyer shall make an initial progress payment (less any deposit referred to
above or any other advance payment) in the amount of * * * of
the Advance Payment Price upon each option exercise. Additional progress
payments shall be made in * * * increments at * * *
prior to each Option Aircraft delivery.
* * *
4. Option Exercise
---------------
Buyer's option to purchase the Option Aircraft may be exercised only by
notice in writing to Seller received on or before the first business day of
the applicable month as set forth below:
Option Aircraft Scheduled Month Option Exercise
Number of Delivery Month
--------------- --------------- ---------------
1
2
3
4 * * *
5
6
7
Option Aircraft Scheduled Month Option Exercise
Number of Delivery Month
--------------- --------------- ---------------
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25 * * *
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
Option Aircraft Scheduled Month Option Exercise
Number of Delivery Month
--------------- --------------- ---------------
48
49 * * *
50
Any such Option Aircraft exercised by Buyer shall be redefined as Aircraft at
time of option exercise and shall be thereafter governed by the terms of the
Agreement.
5. Option Aircraft Flexibility
---------------------------
* * *
In the event Buyer exercises an option prior to twenty-four months from the
scheduled month of delivery, Buyer shall make a progress payments in the
amount of * * * of the Advance Payment Price less any refundable
deposit or any advance payment at option exercise, a progress payment of
* * * at * * * months and progress payments of * * * at
* * * prior to delivery.
6. Option Aircraft Assignment
--------------------------
The Option Aircraft terms as set forth above shall not be assignable by
Buyer. Upon option exercise, Option Aircraft shall be subject to the
assignment provisions set forth in the Agreement.
If the foregoing correctly sets forth our understanding, please execute this
Letter Agreement in the space provided below.
VALUJET AIRLINES, INC.
Signature /s/ Xxxxxxx X. Xxxxx
------------------------------
Printed Name Xxxxxxx X. Xxxxx
----------------------------
Title SVP Financial & CFO
-----------------------------------
XXXXXXXXX XXXXXXX CORPORATION
Signature /s/ X. X. Xxxxx
-------------------------------
Printed Name X. X. Xxxxx
----------------------------
Title V.P. Contracts
-----------------------------------
Date 12/6/95
------------------------------------
11-20-95 Attachment A to
Letter Agreement No. 1
DAC 95-40-D
Page 1
* * *
11-20-95
Attachment A to
Letter Agreement No. 1
DAC 95-40-D
Page 2
* * *
11-20-95 Letter Agreement No. 2
DAC 95-40-D
ValuJet Airlines, Inc.
0000 Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Simultaneously herewith ValuJet Airlines, Inc. (Buyer) and XxXxxxxxx Xxxxxxx
Corporation (Seller) have entered into Purchase Agreement No. DAC 95-40-D (the
Agreement) which Agreement covers the manufacture and sale by Seller and the
purchase by Buyer of MD-95-30 aircraft (the Aircraft). It is agreed that upon
execution by both parties hereto, this Letter Agreement shall constitute a part
of said Agreement.
* * *
If the foregoing correctly sets forth our understanding, please execute this
Letter Agreement in the space provided below.
VALUJET AIRLINES, INC.
Signature /s/ Xxxxxxx X. Xxxxx
-----------------------------
Printed Name Xxxxxxx X. Xxxxx
--------------------------
Title SVP Finance & CFO
--------------------------------
XXXXXXXXX XXXXXXX CORPORATION
Signature /s/ X. X. Xxxxx
-----------------------------
Printed Name X. X. Xxxxx
-------------------------
Title V.P. Contracts
--------------------------------
Date 12/6/95
---------------------------------
Letter Agreement No. 3
DAC 95-40-D
ValuJet Airlines, Inc.
0000 Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Simultaneously herewith ValuJet Airlines, Inc. (Buyer) and XxXxxxxxx Xxxxxxx
Corporation (Seller) have entered into Purchase Agreement No. DAC 95-40-D (the
Agreement) which Agreement covers the manufacture and sale by Seller and the
purchase by Buyer of MD-95-30 aircraft (the Aircraft). It is agreed that upon
execution by both parties hereto, this Letter Agreement shall constitute a part
of said Agreement.
1. Interim Lift
------------
For Buyer's requirement for interim lift between January 1, 1997 and the
delivery of the first MD-95-30, Seller shall provide interim lift support
with DC-9 Series 20, 30, 40, or 50 or MD-80 Series 81, 82, 83, 87 or 88
aircraft, all of which shall be Stage 3, on the following terms and
conditions:
A. Buyer and Seller agree that Buyer's requirement for interim lift
aircraft from Seller is 15 aircraft per year in each of 1997 and 1998,
and for 1999 the net difference between 15 and the number of MD-95-30s
delivered in 1999. Seller shall supply interim lift aircraft at no
more than two per month. Except as otherwise mutually agreed, no more
than 4 of the interim lift aircraft supplied by Seller in 1997, 5 in
1998 and 5 in 1999 shall be MD-80s. Prior to committing to an interim
lift MD-80 for Buyer, Seller shall advise Buyer of its intent and
Buyer shall have the option to advise Seller that it does not want
such MD-80, in which event Seller's obligation to provide interim lift
aircraft shall be reduced by one (up to a maximum reduction in any
year of the number of MD-80s Seller is permitted to supply in such
year). Buyer shall have two business days from receipt of notice from
Seller in which to exercise its option to reject an MD-80.
B. Seller commits to provide the interim lift aircraft to Buyer under
lease as follows:
1) For hushkitted DC-9s, the aircraft shall be delivered to Buyer
* * * shall be leased to Buyer for * * * per month,
paid monthly in advance. * * *
2) For used MD-80s, the aircraft shall be delivered to Buyer * * *
and shall be leased to Buyer for a monthly in advance
rental factor equal to
* * * per month. Seller's Total Capitalized Cost shall mean
its total purchase price paid for the aircraft plus all out of
pocket costs and expenses incurred by Seller to purchase the
aircraft and lease it to Buyer, including without limitation
brokers' fees, costs to reconfigure the aircraft and interest
capitalized at 30-day Libor plus * * * (but not including any
interest accrued in any month as a result of Seller not being
able to deliver the aircraft to Buyer because Seller has already
delivered two aircraft to Buyer in such month and not including
any interest accrued during any period that the aircraft is
leased by Seller to an operator other than Buyer).
C. Seller shall have the option to purchase or arrange a lease in to
Seller on the interim aircraft, subject to coordination with Buyer.
D. The minimum lease term of any interim lift aircraft shall be * * *
years or to delivery of a corresponding MD-95-30, at Seller's option,
determined at time of lease inception. The corresponding MD-95-30
shall be determined on a one-for-one basis on a first in, first out
basis (e.g., the first MD-95-30 delivered will cause the first interim
lift aircraft lease which Seller has elected to terminate prior to * *
* years to terminate or the first aircraft sold and financed under G.
below, whichever was closed first, to be repaid or resold, and upon
delivery of the second MD-95-30 the next interim lift aircraft under
lease which Seller has elected to terminate prior to * * * years or
aircraft financed under G. below, whichever occurred first, shall
terminate or be repaid or resold, as the case may be). The lease shall
be a net lease with all insurance, taxes, and other expenses
associated with the use, possession and return of the aircraft to be
paid by Buyer. Leased aircraft must be operated at all times by Buyer
and shall be operated so as to permit MACRS depreciation. Seller shall
have section 1110 protection. Seller shall have the right to assign
any lease and Buyer will cooperate with Seller on any Seller arranged
* * * judgment. Subject to the terms specifically
described herein, the lease shall be documented in a form reasonably
satisfactory to both parties.
E. The aircraft shall be returned at the end of the lease term in the
same condition as delivered (normal wear and tear excepted) * * * and
with a fresh "C" check, registered with the FAA, and capable of
immediate service in the U.S. under Buyer's maintenance program (it
being understood that the detailed return conditions will be
negotiated in the lease documentation).
* * *
H. In the case where Seller has purchased DC-9 and MD-80 aircraft and leased
the aircraft to Buyer, Buyer shall have a one-time purchase option at the
end of the lease term equal to the greater of fair market value or the
stipulated loss value (as set forth by Seller in the lease). * * *
I. In the event Buyer is able to obtain more than * * * aircraft from other
sources in 1997, 1998, or 1999, then Seller's obligation to provide and
Buyer's obligation to take interim lift aircraft in that year shall be
reduced one-for-one for the amount in excess of * * * aircraft unless
Seller has already arranged for interim lift aircraft in which event Buyer
shall remain obligated to purchase or lease, as the case may be, the
interim lift. In the event Seller provides interim lift earlier to Buyer,
or in amounts greater than set forth in paragraph A of this Letter
Agreement, and Buyer agrees to take the earlier aircraft, Seller's future
commitment will be reduced by such earlier-provided lift. If Buyer obtains
less than * * * aircraft from other sources in 1997, 1998 or 1999 because
Buyer determines that its need for aircraft is less than * * * in any of
such years * * * Seller's obligation to provide
15 interim lift aircraft will be reduced by one for each aircraft less
than * * * obtained by Buyer from other sources.
J. Seller will provide technical assistance to Buyer at rates to be
negotiated with respect to inspection and ferrying of Buyer interim lift
aircraft.
K. Buyer agrees its targeted fleet growth is * * * aircraft per year at a
rate of * * * aircraft per month. Buyer and Seller agree to fill this
demand on a first come, first served basis, whichever party shall first
obtain the interim lift, i.e., if Seller commits to interim lift aircraft
for Buyer prior to Buyer notifying Seller that it has already secured or
does not require such interim lift, Buyer shall be required to purchase or
lease such interim lift aircraft under the terms described above. Buyer
shall not be required to take more than two aircraft per month from
Seller.
L. Seller's obligation to provide any interim lift shall be contingent upon:
1) Buyer not being in material default under any of the following
agreements:
a) The Agreement;
b) any other agreement between MDC or MDFC or their affiliates and
Buyer; and
c) any Buyer financing * * *
2. Bridge Financing
----------------
Seller will offer Buyer bridge financing (the "Bridge Financing") between
December 1, 1995 and the first scheduled (as such schedule may be revised)
MD-95-30 delivery under the Agreement on the following terms and conditions:
A. Bridge Financing will be available for Buyer's purchase of used DC-9s and
MD-80s.
B. The Bridge Financing shall be a revolving line of credit limited to a
maximum outstanding at any one time of * * *
C. Seller will agree to purchase each aircraft on behalf of Buyer at a price
not to exceed fair market value.
D. Buyer will pay a fee to Seller equal to * * * of any amount drawn down
under the Bridge Financing, payable at the time of each drawdown.
E. Buyer will pay a downpayment to Seller on each aircraft in an amount equal
to * * * of the purchase price paid by Seller for the aircraft.
F. Simultaneous with Seller's entry into an agreement to purchase any
aircraft, Buyer will enter into a purchase agreement with Seller to
purchase such aircraft from Seller no later than * * * after Seller's
purchase of the aircraft for an amount equal to Seller's purchase price
net of the downpayment, plus escalation thereon at the rate of * * * over
30-day Libor (per annum calculated monthly). * * *
G. The aircraft will be registered in the U.S. with the FAA in the name of
Seller until they are purchased by Buyer.
H. Buyer will maintain on any aircraft subject to the Bridge Financing, at
its expense and for the benefit of Seller, all risk and liability
insurance in amounts and coverage reasonably acceptable to Seller.
I. Buyer will be responsible for all fees and taxes, including without
limitation any and all sales or property taxes incurred by Seller in
connection with its purchase, ownership or sale of the aircraft.
* * *
K. Any Bridge Financing will be assignable by Seller to another lender, but
any assignment shall not increase the financing available under paragraph
X.
X. Seller's obligation to provide any Bridge Financing shall be contingent
upon the following additional terms and conditions:
1) Buyer not being in material default under any of the following
agreements.
a) The Agreement;
b) any other agreement between MDC or MDFC or their affiliates and
Buyer; and
c) any Buyer financing for which Seller has provided a guarantee.
2) Bridge Financing documentation reasonably satisfactory to Seller.
* * *
* * *
If the foregoing correctly sets forth our understanding, please execute this
Letter Agreement in the space provided below.
VALUJET AIRLINES, INC.
Signature /s/ Xxxxxxx X. Xxxxx
-----------------------------------
Printed Name Xxxxxxx X. Xxxxx
--------------------------------
Title SVP Financial & CFO
---------------------------------------
XXXXXXXXX XXXXXXX CORPORATION
Signature /s/ X. X. Xxxxx
-----------------------------------
Printed Name X. X. Xxxxx
--------------------------------
Title V.P. Contracts
---------------------------------------
Date 12/6/95
----------------------------------------
12-06-95 Letter Agreement No. 4
DAC 95-40-D
ValuJet Airlines, Inc.
0000 Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Simultaneously herewith ValuJet Airlines, Inc. (Buyer) and XxXxxxxxx Xxxxxxx
Corporation (Seller) have entered into Purchase Agreement No. DAC 95-40-D (the
Agreement) which Agreement covers the manufacture and sale by Seller and the
purchase by Buyer of MD-95-30 aircraft. It is agreed that upon execution by
both parties hereto, this Letter Agreement shall constitute a part of said
Agreement.
AIRCRAFT FINANCING
------------------
Seller shall provide support for Buyer's MD-95-30 aircraft financing as set
forth below:
* * *
* * *
* * *
* * *
* * *
* * *
* * *
* * *
If the foregoing correctly sets forth our understanding, please execute this
Letter Agreement in the space provided below.
VALUJET AIRLINES, INC.
Signature /s/ Xxxxxxx X. Xxxxx
-------------------------------
Printed Name Xxxxxxx X. Xxxxx
----------------------
Title SVP Financial & CFO
------------------------------------
XXXXXXXXX XXXXXXX CORPORATION
Signature /s/ X. X. Xxxxx
-------------------------------
Printed Name X. X. Xxxxx
----------------------------
Title V.P. Contracts
-----------------------------------
Date 12/6/95
------------------------------------
12-01-95
Letter Agreement No. 5
DAC 95-40-D
ValuJet Airlines, Inc.
0000 Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Simultaneously herewith ValuJet Airlines, Inc. (Buyer) and XxXxxxxxx Xxxxxxx
Corporation (Seller) have entered into Purchase Agreement No. DAC 95-40-D (the
Agreement), which Agreement covers the manufacture and sale by Seller and the
purchase by Buyer of MD-95-30 aircraft (the Aircraft). It is agreed that upon
execution by both parties hereto, this Letter Agreement shall constitute a part
of said Agreement.
* * *
Letter Agreement No. 5
DAC 95-40-D
Page 2
* * *
Letter Agreement No. 5
DAC 95-40-D
Page 3
* * *
If the foregoing correctly sets forth our understanding, please execute this
Letter Agreement in the space provided below.
VALUJET AIRLINES, INC.
Signature /s/ Xxxxxxx X. Xxxxx
-------------------------------
Printed Name Xxxxxxx X. Xxxxx
-----------------------------
Title SVP Financial & CFO
------------------------------------
XXXXXXXXX XXXXXXX CORPORATION
Signature /s/ X. X. Xxxxx
-------------------------------
Printed Name X. X. Xxxxx
-----------------------------
Title V.P. Contracts
------------------------------------
Date 12/6/95
-------------------------------------
Attachment A to
Letter Agreement No. 5
DAC 95-40-D
Page 1
* * *
Attachment A to
Letter Agreement No. 5
DAC 95-40-D
Page 2
* * *
11-13-95 Letter Agreement No. 6
DAC 95-40-D
ValuJet Airlines, Inc.
0000 Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Simultaneously herewith ValuJet Airlines, Inc. (Buyer) and XxXxxxxxx Xxxxxxx
Corporation (Seller) have entered into Purchase Agreement No. DAC 95-40-D (the
Agreement) which Agreement covers the manufacture and sale by Seller and the
purchase by Buyer of MD-95-30 aircraft (the Aircraft). It is agreed that upon
execution by both parties hereto, this Letter Agreement shall constitute a part
of said Agreement.
ADDITIONAL SUPPORT SERVICES
---------------------------
Seller shall provide the following additional support services at no-charge to
Buyer.
1. Launch Team Support
-------------------
A Launch Team of a total of * * * technical experts will be assigned to the
most advantageous locations within Buyer's MD-95-30 system as mutually
agreed by Buyer and Seller. These experts shall be available as mutually
agreed between Buyer and Seller prior to the delivery of Buyer's Aircraft
No. 1 and shall remain assigned to the Buyer's entry into service team
* * *
During the MD-95-30's entry into service phase with Buyer, each Aircraft
will be met by a launch team member in each Buyer "Focus" city.
2. Spare Parts and Material Expert
-------------------------------
Seller shall assign a Spare Parts and Material expert to Buyer's main
material supply location * * *
3. Technical Manual Revision Service
---------------------------------
All necessary technical manuals in sufficient quantities to provide for
efficient and regulatory compliant operation will be provided to Buyer.
Manuals will have revision service for as long as Buyer operates at least
ten Aircraft in regularly scheduled service. The Aircraft Maintenance Manual
and other manuals as
appropriate will be customized to Buyer's configuration. The Aircraft
Maintenance Manual will be updated to reflect Seller issued Service
Bulletins when Seller is notified by Buyer of incorporation. In addition,
Seller shall incorporate Buyer Engineering Orders when provided to Seller in
an agreed to format and media. The technical manuals will be provided to
Buyer electronically wherever available upon Buyer's request.
4. Flight Crew Training
--------------------
Contingent upon FAA approval of a Buyer Training Program allowing
differences training of DC-9 and MD-80 Pilots for MD-95-30 qualification,
Seller shall make available in Atlanta, Georgia, not later than 60 days
prior to delivery of the Buyer's Aircraft No. 1, the training device(s)
required by the FAA approved Buyer MD-95-30 differences program.
Additionally, Seller shall train
* * *
In the event the FAA requires other than differences training for MD-95-30
qualification, Seller will train * * * Buyer crews at the Training
Center at Seller's facility. The * * * crews will include an advance
cadre of up to * * * Buyer shall provide transportation for crews to
Seller's facility. As an * * *
In any event, Buyer shall provide general living expenses.
Buyer's training program and curriculum will incorporate Buyer's standard
operating procedures. Buyer shall be provided and may reproduce flight and
training material for Buyer specific training needs contingent upon
execution of a no-charge licensing agreement.
5. Performance Data Software
-------------------------
Takeoff Performance for Airlines (TOPAZ) and Operational Performance for
Airlines (OPAL) software to enable Buyer to accomplish detailed performance
analysis will be provided at delivery of Buyer's Aircraft No. 1 at no charge
with revision service for as long as Buyer operates at least ten Aircraft in
regularly scheduled service.
6. Customized Maintenance Program
------------------------------
A fully customized maintenance program will be provided at or before
delivery of the Buyer's Aircraft No. 1 to meet the requirements of Buyer's
MD-95-30 configuration and operational requirements. Seller shall provide
updates and revision service on this customized maintenance program for as
long as Buyer operates at least ten Aircraft in regularly scheduled service.
If the foregoing correctly sets forth our understanding, please execute this
Letter Agreement in the space provided below.
VALUJET AIRLINES, INC.
Signature /s/ Xxxxxxx X. Xxxxx
-----------------------------
Printed Name Xxxxxxx X. Xxxxx
--------------------------
Title SVP Financial & CFO
--------------------------------
XXXXXXXXX XXXXXXX CORPORATION
Signature /s/ X. X. Xxxxx
-----------------------------
Printed Name X. X. Xxxxx
-------------------------
Title V.P. Contracts
--------------------------------
Date 12/6/95
--------------------------------
11-20-95
Letter Agreement No. 7
DAC 95-40-D
ValuJet Airlines, Inc.
0000 Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Simultaneously herewith ValuJet Airlines, Inc. (Buyer) and XxXxxxxxx Xxxxxxx
Corporation (Seller) have entered into Purchase Agreement No. DAC 95-40-D (the
Agreement) which Agreement covers the manufacture and sale by Seller and the
purchase by Buyer of MD-95-30 aircraft (the Aircraft). It is agreed that upon
execution by both parties hereto, this Letter Agreement shall constitute a part
of said Agreement.
The following guarantees are applicable to a passenger configured Aircraft
equipped with BMW Rolls Royce BR715 at 21,000 lb rating and with a delivery date
starting in the 2nd quarter of 1999.
1.0 GUARANTEED PERFORMANCE
----------------------
1.1 TAKEOFF
-------
1.1.1 FAR Allowable Takeoff Weight
Paragraph 4.1.2 provides FAR allowable takeoff weights for seven
runways at the conditions specified. These conditions include
temperature, runway elevation, runway slope, and runway length. The
allowable takeoff weights are guaranteed to be no less than those
provided in Paragraph 4.1.2.
1.1.2 FAR Second Segment Climb Gradient
The Aircraft shall comply with the FAR minimum second segment climb
gradient (2.4%), with one engine inoperative, and the other engine
operating at takeoff thrust. The conditions shall be consistent with
paragraph 1.1.1.
1.1.3 FAR Final Segment Climb Gradient
The Aircraft shall comply with the FAR minimum final segment climb
gradient (1.2%), with one engine inoperative, and the other engine
operating at maximum continuous thrust. The conditions shall be
consistent with Paragraph 1.1.1.
1.2 CLIMB/CRUISE
------------
1.2.1 Maximum Speed
The maximum level flight airspeed of the Aircraft at a gross weight
of 110,000 pounds, at a pressure altitude of 31,000 feet, with a
maneuver margin to FAA-approved buffet boundary of not less than
1.3g, with thrust not in excess of maximum cruise thrust, is
guaranteed to be no less the following:
Temperature
Deviation True Air Speed Mach
------------- --------------- -----
(Celsius) (knots)
0 458 0.781
+15 462 0.763
1.2.2 Initial Cruise Altitude
The initial cruise altitude of the Aircraft with a gross takeoff
weight of 121,000 lb from a sea level airport and using standard
climb procedures, with a maneuver margin to FAA-approved buffet
boundary of not less than 1.3g, with thrust not in excess of maximum
cruise thrust, at a Mach of 0.76, on a standard day and on an ISA+15
(degrees) Celsius day, are guaranteed to be no less than 31,300 ft.
1.2.3 Specific Range
At the three conditions presented below, the specific range of the
Aircraft with a maneuver margin to FAA-approved buffet boundary of
not less than 1.3g, with thrust not in excess of maximum cruise
thrust is guaranteed to be no less than the values presented below:
Specific Range (NM/lb)
-------------------------------
Weight (lb.) Altitude Mach @ ISA @
------------ -------- ---- ----- -
ft. ISA+15 Celsius
--- --------------
110,000 31,000 0.76 0.0809 0.0801
100,000 33,000 0.76 0.0887 0.0879
95,000 35,000 0.76 0.0952 0.0944
1.3 APPROACH
--------
1.3.1 FAR Approach Climb Gradient
The Aircraft shall comply with the FAR minimum approach climb
gradient (2.1%), with one engine inoperative, and the other engine
operating at takeoff thrust, for a gross weight of 104,000 pounds, at
the primary approach flap setting, on a standard day, at a pressure
altitude guaranteed to be no less than 7,300 feet.
1.3.2 Approach Speed
The approach speed of the Aircraft (1.3 V\S\) at a gross weight of
104,000 pounds at the primary landing flap setting, at sea level, on
a standard day, is an equivalent airspeed guaranteed to be no greater
than 139 knots.
1.4 LANDING
-------
1.4.1 FAR Landing Field Length
The FAR landing field length, at a landing weight of 104,000 pounds,
at sea level, on a standard day, at the primary landing flap setting,
is guaranteed to be no greater than 5,300 feet.
1.5 FUEL BURNED
-----------
1.5.1 The mission fuel burn of the Aircraft is guaranteed not to exceed
that which is computed using the nominal taxi fuel flow, specific
range and time, distance and fuel to climb and descent charts
provided in the MDC report number MDC 95K9146, dated November 1995,
original issue, such report being reasonably satisfactory to Buyer,
plus a tolerance of +3%. The cruise data provided in the above noted
charts shall be valid for the following conditions:
Temperatures = ISA and ISA+15 (degrees) Celsius
Gross Weights = 80,000 lb to 121,000 xx
Xxxxxx:
Speed* = 0.74 M to 0.78 M
Altitudes = 25,000 ft to 35,000 ft
* Except where limited by maximum cruise thrust, 1.3g buffet
boundary or placard speeds.
1.6 MISSIONS
--------
1.6.1 Paragraph 1.6.2 summarizes the mission assumptions and Paragraph
1.6.3 summarizes the mission performance data for six city pair
combinations. Route distance, allowable takeoff weights, flight
level, winds, alternate airport and alternate airport distance
definitions for each mission are provided. All other mission
conditions are defined in Paragraph 4.0.
1.6.2 Guarantee Mission Assumptions
Route Route Cruise Enroute Quarter for winds
Distance Flight Level Wind
(NM) (kts)
---------------------------------------------------------------
SLC-ATL 1,425 290/330 6/7 3
ATL-SLC 1,425 310/350 -83/-87 1
ATL-SLC 1,425 310/350 -37/-42 3
DEN-MIA 1,540 290/330 -2/-2 3
MIA-DEN 1,540 310/350 -76/-82 1
MIA-DEN 1,540 310/350 -24/-28 3
IAD-DEN 1,314 310 -47 3
DEN-IAD 1,314 290/330 12/14 3
DEN-LGA 1,461 290/330 14/16 3
LGA-DEN 1,461 310/350 -50/-55 3
MDW-SLC 1,132 310 -51 3
SLC-MDW 1,132 290/330 14/17 3
MDW-MIA 1,069 290/330 -6/-7 3
MIA-MDW 1,069 310 -53 1
MIA-MDW 1,069 310 -29 3
---------------------------------------------------------------
1.6.3 Guarantee Mission Performance Data
Route Thrust Takeoff Guaranteed Assumed Guaranteed Guaranteed Guaranteed No. of Aux. Tanks**
Rating Temp Takeoff Reserve Block Block Payload
(lbf) (/o/F) Weight (lb) Fuel (lb) Time (hr) Fuel (lb) (lb)
------------------------------------------------------------------------------------------------------------------------------------
SLC-ATL 21,000 95 112,900 5,750 3.6 18,050 20,300 0
SLC-ATL 21,000 84* 121,000 6,170 3.6 19,150 26,200 1
ATL-SLC# 20,000 95 121,000 6,040 3.9 21,100 24,400 1
ATL-SLC 20,000 55 121,000 5,920 4.3 23,100 21,850 2
DEN-MIA 21,000 100 105,700 5,350 3.9 18,850 12,700 0
DEN-MIA 21,000 81* 118,000 5,910 3.9 20,200 22,450 1
MIA-DEN# 20,000 95 121,000 5,980 4.0 22,000 23,550 1
MIA-DEN 20,000 75 121,000 5,850 4.5 24,350 20,650 2
IAD-DEN 20,000 100 121,000 6,100 3.7 20,150 25,300 1
DEN-IAD 21,000 100 105,700 5,470 3.3 16,000 15,450 0
DEN-IAD 21,000 81* 118,000 6,100 3.3 17,100 26,000 0
DEN-LGA 21,000 100 105,700 5,410 3.6 17,450 14,050 0
DEN-LGA 21,000 81* 118,000 6,010 3.6 18,700 24,500 0
LGA-DEN 21,000 98 121,000 5,980 4.1 22,150 23,400 1
MDW-SLC 21,000 95 114,000 5,850 3.3 17,250 22,100 0
MDW-SLC 21,000 84* 118,300 6,090 3.3 17,600 25,850 0
SLC-MDW 21,000 95 112,900 5,940 2.9 14,600 23,550 0
SLC-MDW 21,000 84* 121,000 6,270 2.9 15,150 28,400 0
MDW-MIA 21,000 95 114,000 6,000 2.9 14,700 24,500 0
MDW-MIA 21,000 84* 118,300 6,250 2.9 15,150 28,100 0
MIA-MDW# 20,000 95 121,000 6,270 3.0 16,100 28,400 0
MIA-MDW 20,000 75 121,000 6,270 3.1 16,950 28,400 0
------------------------------------------------------------------------------------------------------------------------------------
* Airport temperature reduced to 85% quarterly temperature
** Optional
# Third quarter 85% probability winds
2.0 GUARANTEED WEIGHTS
------------------
2.1 The Manufacturer's Empty Weight (MEW) of the Aircraft is guaranteed
to be no greater than those shown below. This weight is based on the
MEW of 63,598 pounds as shown in Paragraph 13-20.04.00 of Detail
Specification DS 9530A, dated January 5, 1995, plus the SCNs listed
in Attachment A to this Letter Agreement, plus the MEW tolerance as
shown below:
No. of Optional Total SCN weight MEW Tolerance MEW
Auxiliary Tanks (lbs) (lbs) (lbs)
------------------------------------------------------------------
0 1,706 980 66,284
1 2,392 990 66,980
2 3,075 1,000 67,673
------------------------------------------------------------------
2.2 The guaranteed MEW of Paragraph 2.1 shall be adjusted for (1) any
changes to Attachment A, (2) any variation in actual weights of
weight adjustable items as specified in Paragraph 13-11 of the Detail
Specification, and (3) any rule change as defined in Paragraph 4.2.8.
3.0 OPERATOR'S EMPTY WEIGHT
-----------------------
Mission payload, block fuel and block time guarantees in Paragraph
1.6 are based upon the assumed Operator's Empty Weight (OEW) as shown
below. This weight is the sum of the guaranteed Manufacturer's Empty
Weight (MEW), as provided in Paragraph 2.1, plus assumed operator's
items as shown below:
No. of Optional MEW Operator's Items OEW
Auxiliary Tanks (lbs) (lbs) (lbs)
-----------------------------------------------------
0 66,284 3,045 69,329
1 67,980 3,103 70,083
2 67,673 3,161 70,834
-----------------------------------------------------
Should the MEW be adjusted in accordance with the provisions
contained in Paragraph 2.2, the guaranteed payloads, block fuels and
block times shall be appropriately adjusted.
4.0 GUARANTEE CONDITIONS
--------------------
4.1 MISSION CONDITIONS AND OPERATING RULES
--------------------------------------
4.1.1 The following allowances are assumed:
Time (minutes) Fuel (lb)
-------------- ---------
Engine start and taxi-out 11 350
Takeoff and climb to 1,500 feet 2 380
Approach and land (destination & alternate) 4 240
Taxi-in (fuel taken from reserves) 6 190
Missed approach 200
4.1.2 Guaranteed Takeoff Weights
Airport Runway Thrust Rating Temp Elevation Field Length Slope Takeoff Weight
No. (lb) (/o/F) (ft) (ft) (%) (lb)
-----------------------------------------------------------------------------------------------------------
ATL 09L 20,000 95 1,020 11,899 -0.35 121,000
ATL 09L 20,000 55** 1,020 11,899 -0.35 121,000
DEN 08 21,000 100 5,431 12,000 -0.50 105,700
DEN 08 21,000 81 5,431 12,000 -0.50 118,000
IAD 01L 20,000 100 287 11,501 -0.15 121,000
LGA 31 21,000 98 22 7,000 0.07 121,000
MDW* 31C 21,000 95 611 6,521 -0.07 114,000
MDW* 31C 21,000 84 611 6,521 -0.07 118,300
MIA 09R 20,000 95 11 13,000 0.00 121,000
MIA 09R 20,000 75** 11 13,000 0.00 121,000
SLC 16 21,000 95 4,227 12,003 -0.44 112,900
SLC 16 21,000 84 4,227 12,003 -0.44 121,000
-----------------------------------------------------------------------------------------------------------
* Obstacles were considered for Midway Airport (MDW) and were not
limiting for all other airports.
** First quarter 85% probability temperature.
4.1.3 Climb is conducted with maximum climb thrust at a speed of 250 knots
CAS from an altitude of 1,500 feet above the departure airport
elevation to 10,000 feet, then climb at 290 knots CAS until 0.72 M is
achieved, and then proceed until the initial cruise altitude is
reached. Climb is conducted in ISA and ISA+15 (degrees) Celsius
temperatures for 1st quarter and 3rd quarter conditions respectively.
4.1.4 Cruise is conducted at Long Range Cruise (LRC) speeds at optimal
altitudes consistent with the FAR hemispheric flight rules (91.179).
Cruise is conducted in ISA and ISA+15 (degrees) Celsius temperatures
for 1st quarter and 3rd quarter conditions respectively.
4.1.5 Descent is made at a speed of 250 knots CAS until reaching an
altitude of 1,500 feet above the destination airport. The cabin
pressure altitude during descent is controlled to a rate of no more
than a rate equivalent to 300 feet per minute at sea level. Descent
is conducted in ISA and ISA+15(degrees) Celsius temperatures for 1st
quarter and 3rd quarter conditions respectively.
4.1.6 The reserve fuel is calculated as the sum of the following:
- Fuel for missed approach at the destination airport.
- Fuel to climb, cruise, and descend to the alternate airport 125 nmi
from the destination using LRC at ISA temperature and no wind.
- Fuel for 45 minutes continued cruise at 25,000 ft and at ISA
temperature.
- Fuel for approach at the alternate airport.
4.1.7 A fuel capacity, as shown below, is assumed based on a fuel density
of 6.7 pounds per U.S. gallon. The fuel capacity consists of 24,589
lbs of standard fuel plus additional fuel for optional auxiliary fuel
tanks as shown below:
No. of Optional Auxiliary Fuel Fuel Capacity
Auxiliary Tanks (gal/lb) (lb)
-----------------------------------------------------------------
0 0 / 0 24,589
1 565 / 3,785 28,374
2 1,130 / 7,571 32,160
-----------------------------------------------------------------
4.2 OTHER GUARANTEE CONDITIONS
--------------------------
4.2.1 All takeoff and landing performance shall be based on operation from
hard-surface, level, dry runways with no wind and without the use of
thrust reversers, and the Aircraft's CG location not more forward
than 5.9% MAC. The engine will not be supplying bleed air for cabin
air conditioning or anti-ice during takeoff, second segment climb,
final segment climb, approach climb, and landing climb unless
otherwise noted. Bleed air shall be limited to one (1) air
conditioning pack per operating engine when it is supplied for final
segment climb, enroute climb, approach climb, and landing climb.
4.2.2 The Aircraft shall not be restricted by loading considerations on the
runway, taxiway, or pier at La Guardia airport.
4.2.3 All performance data are based upon ICAO International Standard
Atmosphere 1964. All altitudes are pressure altitudes.
4.2.4 The performance guarantees are conditioned upon a fuel heating value
of 18,550 BTU/pound.
4.2.5 The performance guarantees of Paragraphs 1.2 , 1.5, and 1.6 are
conditioned upon a center of gravity of 20%.
4.2.6 The performance guarantees are based upon the BMW Rolls Royce (BRR)
BR715 Propulsion System performance. Elements of performance that are
subject to FAA approval are based on engine thrust ratings for
minimum performance engines as defined by BRR Deck CDD.BW01.02.1900
dated September 28, 1995, (D1-04) (Seller Deck RRC00106,BR71506$
dated October 11, 1995). Other elements of performance are based on
engine performance for average new engines as defined by said engine
deck. New engines are those with up to 50 hours total operating time.
The installed engine thrust and fuel flow data include allowances for
normal aircraft bleed air and horsepower extraction. Normal bleed air
is defined as that required to operate the airplane environmental
control system when the actuation switches on the air conditioning
panel in the flight deck are in the "normal" position. Normal
horsepower extraction is defined as the engine shaft horsepower
extraction required to operate the aircraft accessory systems during
each phase of flight, i.e. takeoff, climb, cruise, descent, and
landing.
4.2.7 No allowances are made for warm-up, taxi, takeoff, maneuver, climb,
wind, ice protection or descent unless otherwise specified.
4.2.8 In the event of any change to any law, governmental regulation or
requirement, or interpretation thereof ("rule change") by any
governmental agency made subsequent to the date of execution of this
Agreement, and such rule change affects the Aircraft configuration
and/or performance in order to permit Seller to obtain certification,
the guarantees contained herein shall be appropriately modified to
reflect the effect of the rule change. Notwithstanding the above,
Seller shall use reasonable efforts to maintain the performance
values guaranteed herein in the event of such rule change.
4.2.9 The Federal Aviation Regulations (FAR) referred to in Paragraph 1.0
hereof are defined in the MD-95-30 certification basis as given in
Paragraph 02-11 of the Detail Specification DS 9530A, dated January
5, 1995.
4.2.10 The Aircraft configuration for these guarantees is based upon Detail
Specification DS 9530A, dated January 5, 1995, plus the SCNs listed
in Attachment A. Should Buyer and Seller mutually agree to
configuration changes, compliance to the guarantee shall take into
consideration any adjustments associated with such changes.
5.0 GUARANTEE NOISE
---------------
5.1 CERTIFICATION NOISE LEVELS
--------------------------
5.1.1 The MD-95-30 Aircraft with the BMW Rolls Royce BR715 gross weight of
121,000 pounds and a landing weight of 104,000 pounds shall be
quieter than the Stage 3 limits of FAR Part 36 and the Chapter 3
limits of ICAO Annex 16, with certification noise levels not to
exceed the following noise limits.
Sideline Stage 3/Chapter 3 Minus 4 EPNdB
Takeoff w/Cutback Stage 3/Chapter 3 Minus 4 EPNdB
Approach (40 (degree)Flap) Stage 3/Chapter 3 Minus 4 EPNdB
5.1.2 The tradeoff provisions of FAR Part 36 Paragraph C36.5(b) shall not
be used.
5.1.3 The applicable noise standards are FAR Part 36, effective 01 December
1969, including Amendments 36-1 through 36-20, and ICAO Annex 16
Third Edition-1993, as applicable at the time of airplane type and
airworthiness certification.
5.2 INTERIOR SOUND LEVELS
---------------------
5.2.1 For the Aircraft interior configuration as defined in Detail
Specification DS 9530A adjusted for 129 seats per Attachment A, the
Overall Sound Pressure Level (OASPL) at the Aircraft centerline, 40
Inches above the floor when measured per the conditions of paragraph
6.2, at the cabin station locations listed below shall not be greater
than the following:
LOCATION STATION OASPL
----------------------------------- ------------ -----
Forward Cabin Station 400 82 dB
Mid-Cabin, Station 600 82 dB
Aft Cabin, Station 819 87 dB
Aft Cabin, Last Seat Row Station 1004 92 dB
5.2.2 The OASPL in the cockpit, at the positions of the captain's right ear
and the first officer's left ear, when measured per the conditions of
paragraph 6.2, is guaranteed to be no greater than 78 dB.
6.0 GUARANTEE CONDITIONS
--------------------
6.1 The certification noise levels of Paragraph 5.1 shall be determined
in accordance with the conditions set forth in FAR Part 36. The
Aircraft shall also comply with Chapter 3 of ICAO Annex 16 on the
basis of equivalency with FAR Part 36, Stage 3 Requirements.
6.2 The interior sound level requirements of Paragraph 5.2 shall be
-------------------------------------
determined in level flight at a pressure altitude of 33,000 feet,
with normal cabin differential pressure, at a speed of Mach 0.76.
Measurements shall be made at the aircraft centerline, 40 inches
above the floor for the cabin station locations noted in paragraph
5.2.1. Measurements at the Captain and First Officer's seat positions
shall be made at head level, at the Captain's right ear and at the
First Officer's left ear. The sound pressure levels shall be an
average of noise levels measured on up to 5 aircraft with an interior
representative of the Buyer's configuration having a full set of
upholstered seats with cabin sidewalls and floor coverings installed,
air-conditioning "on" and with passenger service unit air closed. The
OASPL shall be calculated over the frequency range from 45 to 11,200
Hz. The sound pressure levels shall be referenced to the standard 20
microPascal.
7.0 OTHER GUARANTEES
----------------
---------
7.1 TIME TO FUEL
------------
7.1.1 The time to fuel the Aircraft from empty to full, filling all three
(3) tanks simultaneously with a nozzle pressure under flow of 50 psi,
is guaranteed to be no greater than 12 minutes.
7.1.2 The time to fuel the Aircraft with an optional single 565-gallon
forward auxiliary fuel tank from empty to full, filling all four (4)
tanks simultaneously with a nozzle pressure under flow of 50 psi, is
guaranteed to be no greater than 18 minutes.
7.1.3 The time to fuel the Aircraft with an optional 565-gallon forward and
an optional 565-gallon aft auxiliary fuel tanks from empty to full,
filling all five (5) tanks simultaneously with a nozzle pressure
under flow of 50 psi, is guaranteed to be no greater than 20 minutes.
7.2 CABIN COOL DOWN TIME
--------------------
The Aircraft , with the air conditioning operated under APU power,
will cool down the passenger compartment on a 103 (degrees)
Fahrenheit, 130 gr/lb Hot day, to 80 (degrees) Fahrenheit with no
passengers aboard and all exterior doors closed, is guaranteed to be
no greater than 30 minutes.
8.0 GUARANTEE COMPLIANCE
--------------------
8.1 The FAA Approved Airplane Flight Manual and the Flight Planning and
Cruise Control Manual (FPCCM) or equivalent shall provide the bases
for determination of compliance with the Guaranteed Performance of
Paragraph 1.0.
8.2 Buyer has the right to verify the mission fuel consumption of the
delivered Aircraft versus the guaranteed performance defined in
Paragraph 1.5 by conducting a mission fuel consumption fleet audit
that will sample the mission fuel consumption of at least 12 aircraft
during the delivery flight of each Aircraft.
8.3 Compliance with the fuel burned guarantee in Paragraph 1.5 shall be
based on a fleet-wide basis.
8.4 Compliance with the MEW guarantee, Paragraph 2.0, shall be determined
for each Aircraft in the form of an "Actual versus Guarantee" weight
compliance report.
8.5 The Operator's Empty Weight (OEW) to be used in showing compliance
with mission guarantees in Paragraph 1.3 is 69,329 lb for a
configuration with no auxiliary fuel tank. The OEW with optional 1 or
2 auxiliary fuel tanks configurations are 70,083 lb and 70,834 lb
respectively.
8.6 The FAA Approved Airplane Flight Manual shall provide the basis for
determining compliance with the Certification Noise Levels guarantee
of Paragraph 5.1.
8.7 A compliance report provided by the Seller, based on the results of
measurements made under the conditions of Paragraph 6.2, shall be the
basis for determining compliance with the Interior Sound Levels
guarantee of Paragraph 5.2.
8.8 Compliance to the time to fuel the aircraft guarantee shall be
demonstrated on an aircraft before delivery.
8.9 Compliance to the cabin cool down guarantee will be validated by test
and corrected by analysis.
9.0 REMEDIES
--------
9.1 * * *
Buyer agrees to accept Aircraft not complying with the guarantees set forth
herein provided that such non-compliance does not substantially impair the
profit-making potential, operation or performance of the Aircraft. In the
event it is demonstrated that the Aircraft do not comply with the above
guarantees, Buyer agrees to allow Seller a reasonable period of time, but not to
exceed twenty-four months after delivery of the first Aircraft, to take the
action necessary to enable compliance with the guarantee. * * *
actions to comply with the guarantees herein may include, but shall not be
limited to, the development of hardware, systems and procedural changes to or
for the Aircraft. Seller shall offer these to Buyer at no cost and may do so
before or after delivery of the Aircraft. If such recommended action will not
have a material adverse cost impact on Buyer and Buyer nonetheless declines to
accept such recommended reasonable changes to ensure compliance with a
guarantee, such guarantee level shall be adjusted to reflect the loss of the
performance benefits Seller estimates such actions would have produced. In
those instances where a non-compliance to a guarantee does not, due to other
compensating capabilities of the Aircraft, adversely affect the overall
operational suitability of the Aircraft in Buyer's operation, Buyer and Seller
shall mutually agree on a resolution to such non-compliance.
The guarantees herein are by this reference made a part of the Detail
Specification.
If the foregoing correctly sets forth our understanding, please execute this
Letter Agreement in the space provided below.
VALUJET AIRLINES, INC.
Signature /s/ Xxxxxxx X. Xxxxx
---------------------------------
Printed Name Xxxxxxx X. Xxxxx
-------------------------------
Title SVP Financial & CFO
--------------------------------------
XXXXXXXXX XXXXXXX CORPORATION
Signature /s/ X. X. Xxxxx
--------------------------------------
Printed Name X. X. Xxxxx
-----------------------------------
Title V.P. Contracts
------------------------------------------
Date 12/6/95
-------------------------------------------
10-24-95 Attachment A to
Letter Agreement No. 7
DAC 95-40-D
Page 1 of 3
SCNS OVER AND ABOVE DS 9530A
FOR VALUJET
SCN
NUMBER SCN TITLE WEIGHT WEIGHT WEIGHT
/DATE (LBS) (LBS) (LBS)
------------------------------------------------------------------------
G0100C007 SELECTABLE PROGRAM OPTIONS 0 0 0
05/16/95 (MD-95)
G0200ETBD INCORPORATION OF TBD FINISH 239 239 239
TBD SPECIFICATION
G0214S001 REVISION TO THE TAKEOFF AND 0 0 0
04/06/95 LANDING ALTITUDE LIMITS
G0320C003 INCREASED MAXIMUM TAKEOFF 0 0 0
08/18/94 GROSS WEIGHT FROM 114,000 TO
121,000 LB AND THE MAXIMUM
TAXI WEIGHT FROM 115,000
TO 122,000 LB
G0320C005 INCREASED MAXIMUM LANDING 0 0 0
04/26/95 WEIGHT FROM 102,000 LBS TO
104,000 LBS AND MAXIMUM ZERO
FUEL WEIGHT FORM 96,000 LBS TO
98,000 LBS
G2500ETBD INSTALLATION OF A 129 PASSENGER 656 656 656
TBD SINGLE-CLASS ARRANGEMENT
G2541C001 INSTALLATION OF LIQUID SOAP 1 1 1
04/26/95 DISPENSERS IN LAVATORIES IN
XXXX XX XXX XXXX XXXXXXXXXX
X0000XXXX INSTALLATION OF FAR 121 50 50 50
TBD REQUIRED EMERGENCY EQUIPMENT
G2751S001 REVISION TO THE WING FLAP 0 0 0
06/08/95 CONTROL SYSTEM TO PROVIDE
DIAL-A-FLAP POSITION SELECTION
10-24-95 Attachment A to
Letter Agreement No.7
DAC 95-40-D
Page 2 of 3
SCN
NUMBER SCN TITLE WEIGHT WEIGHT WEIGHT
/DATE (LBS) (LBS) (LBS)
--------------------------------------------------------------------------
G3446C001B INSTALLATION OF TRAFFIC ALERT 33 33 33
05/02/95 AND COLLISION AVOIDANCE
SYSTEM COMPUTER AND
ANTENNAS UTILIZING EXISTING
PARTIAL PROVISIONS
G5115E002A ADDITION OF POLYURETHANE 42 42 42
07/11/9 FINISH TO LOWER FUSELAGE
(COLOR TO BE DETERMINED)
G5200STBD INSTALLATION OF LARGE DOOR IN 214 214 214
TBD AFT PRESSURE BULKHEAD IN LIEU
OF HATCH DOOR SPECIFIED
X0000XXXX XXXXXXXX XX XXXXXXX XXXXXXXX -254 -254 -254
TBD STAIRWAY WITH RETENTION OF
COMPLETE PROVISIONS
G5300S001 REVISION TO THE AIRCRAFT 184 184 184
05/31/95 STRUCTURE TO LENGTHEN THE
FUSELAGE 38 INCHES
G5300STBD REVISION TO THE AIRCRAFT 346 346 346
TBD STRUCTURE TO LENGTHEN THE
FUSELAGE 19 INCHES
G7200S006A BR715 REVISION TO ENGINE 195 195 195
10/16/95 DESIGNATION AND ASSUMED
WEIGHT
G7200E009 INSTALLATION OF BR715 IN LIEU OF 0 0 0
09/05/95 THOSE SPECIFIED (PROVIDES
INCREASED THRUST TO 21,000 LBS)
G9900ETBD EQUIPMENT CATEGORY CHANGE 0 0 0
TBD FROM BUYER FURNISHED TO
SELLER FURNISHED
10-24-95 Attachment A to
Letter Agreement No.7
DAC 95-40-D
Page 3 of 3
FOR PURPOSES OF PERFORMANCE GUARANTEES, THE ABOVE
MENTIONED SCNS REPRESENT THE OFFERED CONFIGURATION.
THE OPTIONAL SCNS LISTED BELOW SHOULD BE ADDED AS
REQUIRED BY THE MISSION PERFORMANCE.
SCN
NUMBER SCN TITLE WEIGHT WEIGHT WEIGHT
/DATE (LBS) (LBS) (LBS)
-------------------------------------------------------------------------
G2811C001 INSTALLATION OF A 565 GALLON 686
08/19/94 AUXILIARY FUEL SYSTEM IN THE
FORWARD CARGO COMPARTMENT
X0000X000 INSTALLATION OF 1,130 GALLON 1369
08/19/94 AUXILIARY FUEL SYSTEM (565
GALLONS IN FORWARD AND AFT
CARGO COMPARTMENTS
TOTAL 2,392 3,075
1 TANK 2 TANKS
11-13-95
Letter Agreement No. 8
DAC 95-40-D
ValuJet Airlines, Inc.
0000 Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Simultaneously herewith ValuJet Airlines, Inc. (Buyer) and XxXxxxxxx Xxxxxxx
Corporation (Seller) have entered into Purchase Agreement No. DAC 95-40-D (the
Agreement) which Agreement covers the manufacture and sale by Seller and the
purchase by Buyer of MD-95-30 aircraft (the Aircraft). It is agreed that upon
execution by both parties hereto, this Letter Agreement shall constitute a part
of said Agreement.
SPARE PARTS
-----------
Notwithstanding the terms set forth in Exhibit C, Part III, paragraph G., Seller
shall commit to the following spare parts delivery performance standards for
spare parts ordered under * * *
-----------------------------------------------------
PARTS DESCRIPTION CATEGORY * * * * * *
---------------------------- --------- ------------
-----------------------------------------------------
Provision Parts * * * * * *
-----------------------------------------------------
Stock Class Parts* * * * * * *
-----------------------------------------------------
Non-Stock Parts * * * * * *
-----------------------------------------------------
*Note: Condition is that Seller agrees to stock all parts in accordance with
World Airlines Suppliers Guide specification of 2 demands/12 months.
The above values shall be measured from receipt of order by Seller from Buyer
until arrival of spare parts on dock at location in Atlanta.
* * *
11-13-95
Letter Agreement No. 8
DAC 95-40-D
Page 2
If the foregoing correctly sets forth our understanding, please execute this
Letter Agreement in the space provided below.
VALUJET AIRLINES, INC.
Signature /s/ Xxxxxxx X. Xxxxx
-------------------------------
Printed Name Xxxxxxx X. Xxxxx
-----------------------------
Title SVP Financial & CFO
------------------------------------
XXXXXXXXX XXXXXXX CORPORATION
Signature /s/ X. X. Xxxxx
-------------------------------
Printed Name X. X. Xxxxx
-----------------
Title V.P. Contracts
----------------------------------
Date 12/6/95
--------------------------
11-20-95
Letter Agreement No. 9
DAC 95-40-D
ValuJet Airlines, Inc.
0000 Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Simultaneously herewith ValuJet Airlines, Inc. (Buyer) and XxXxxxxxx Xxxxxxx
Corporation (Seller) have entered into Purchase Agreement No. DAC 95-40-D (the
Agreement) which Agreement covers the manufacture and sale by Seller and the
purchase by Buyer of MD-95-30 aircraft (the Aircraft). It is agreed that upon
execution by both parties hereto, this Letter Agreement shall constitute a part
of said Agreement.
* * *
Letter Agreement No. 9
DAC 95-40-D
Page 2
* * *
Letter Agreement No. 9
DAC 95-40-D
Page 3
* * *
Letter Agreement No. 9
DAC 95-40-D
Page 4
* * *
Letter Agreement No. 9
DAC 95-40-D
Page 5
* * *
If the foregoing correctly sets forth our understanding, please execute in the
space provided below and return to MDC.
VALUJET AIRLINES, INC.
Signature /s/ Xxxxxxx X. Xxxxx
-------------------------------
Printed Name Xxxxxxx X. Xxxxx
-----------------------------
Title SVP Financial & CFO
------------------------------------
XXXXXXXXX XXXXXXX CORPORATION
Signature /s/ X. X. Xxxxx
-------------------------------
Printed Name X. X. Xxxxx
-----------------------------
Title V.P. Contracts
------------------------------------
Date 12/6/95
-------------------------------------
11-20-95 Attachment A to
Letter Agreement No. 9
DAC 95-40-D
* * *
Letter Agreement No. 10
DAC 95-40-D
ValuJet Airlines, Inc.
0000 Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Simultaneously herewith ValuJet Airlines, Inc. (Buyer) and XxXxxxxxx Xxxxxxx
Corporation (Seller) have entered into Purchase Agreement No. DAC 95-40-D (the
Agreement) which Agreement covers the manufacture and sale by Seller and the
purchase by Buyer of MD-95-30 aircraft (the Aircraft). It is agreed that upon
execution by both parties hereto, this Letter Agreement shall constitute a part
of said Agreement.
MECHANICAL DISPATCH RELIABILITY AND COMPLETION GUARANTEE
--------------------------------------------------------
The highest rates of Mechanical Dispatch Reliability and Completion can only be
attained when both Seller and Buyer work as partners to have a high quality
designed and manufactured aircraft, significant factory support, appropriate
spare parts stock, fully trained maintenance and operations crews and other
appropriate resources. Based on this concept and subject to the conditions set
forth below, the following guarantees are made with respect to the Aircraft:
Dispatch Reliability - Percentage of revenue flights with less than 15 minute
mechanical delays:
------------------------------------------------------------------------------
First 3 Months* Next 9 Months* Years 2 and 3* Years 4 - 10*
------------------------------------------------------------------------------
* * * * * * * * * * * *
------------------------------------------------------------------------------
Completion Factor - Percentage of flights completed within 24 hours of scheduled
arrival:
------------------------------------------------------------------------------
First 3 Months* Next 9 Months* Years 2 and 3* Years 4 - 10*
------------------------------------------------------------------------------
* * * * * * * * * * * *
------------------------------------------------------------------------------
* Calculated from the first day of the month immediately following the month
of delivery by Seller to Buyer of the first Aircraft (the "Commencement
Date").
Buyer and Seller agree that because Seller is not making any guarantee
commitment for the first three months following delivery to Buyer of the
first Aircraft, the first "annual" calculation with respect to dispatch
reliability and mission completion shall be based on the nine-month period
commencing on the three-month anniversary of the Commencement Date.
Calculations shall be made on a fleet basis, not on an individual Aircraft
basis.
A. Dispatch Reliability is defined as an average (expressed as a percentage),
which shall be calculated by application of the following formula:.
Dispatch Reliability = 100 x | 1 - (Total Chargeable Mechanical Delays)
| (----------------------------------)
| (Total Scheduled Departures)
A Chargeable Mechanical Delay is defined as a delay in excess of 15 minutes
beyond the scheduled revenue departure time, or a cancellation, caused by
mechanical malfunction of the Aircraft.
Mission Completion is defined as an annual average (expressed as a
percentage), which shall be calculated by application of the following
formula:
Mission Completion = 100 x | (Total Revenue Flights Completed)
| (-------------------------------)
| (Total Revenue Flights Scheduled)
A flight will not be included in Total Revenue Flights Completed in the
event of a failure to complete a scheduled Buyer revenue flight within a 24-
hour time period commencing from the scheduled revenue flight arrival time
caused by mechanical malfunction of the Aircraft.
Buyer shall report to Seller on a monthly interval, such information and
data as Seller would reasonably need to maintain a reliability data base to
track compliance to the Dispatch Reliability and Mission Completion
guarantees. Seller will provide a program status report to the Buyer every
six months or as mutually agreed.
X. Xxxxx and cancellation mechanical classification will be determined pursuant
to Buyer ground rules with the concurrence of Seller's Field Service
Representative on chargeable delays and cancellations. Delays and
cancellations not jointly concurred on will be reviewed and dispositioned by
mutual agreement on a quarterly basis by Seller's Vice-President and General
Manager of Product Support, Seller's MD-95 Chief Engineer and Buyer's Vice
President of Engineering and Maintenance.
C. Reasonable spare Aircraft as mutually agreed by Seller and Buyer will be
incorporated into Buyer's scheduling plan.
D. An appropriate stock of spare parts will be maintained by Buyer to meet
Dispatch Reliability and Mission Completion guarantees. If delays are caused
by Seller's inability to deliver spare parts pursuant to the shipment
provisions of Part III to Exhibit C to the Agreement, then this stocking
requirement will be waived in the determination of cause.
E. If the calculated Dispatch Reliability or Mission Completion guarantee has
not been achieved for three consecutive months, Seller and Buyer will
jointly agree to review the joint reliability data base to identify areas
needing improvement and to determine a course of action. Seller and Buyer
will identify and assign full-time MD-95 reliability focus points and
provide the necessary personnel until the guarantees are being met. In
addition, Seller will work with Buyer to provide the following support in
the event either the Dispatch Reliability or Mission Completion guarantees
are not met, in addition to the remedies offered under paragraph F. of this
Agreement.
a. Review of data provided by Buyer related to parts, material,
components, accessories and equipment incorporated within and on, and
used in conjunction with, the Aircraft, and furnish technical
assistance, advice and information to Buyer for the purpose of
developing improvement in the Dispatch Reliability of the Aircraft.
b. Technical service support to analyze Buyer's operating procedures,
maintenance practices, training programs, manuals and publications and
related procedures, practices, policies and programs that can have an
adverse effect on dispatch reliability and recommend any changes in
such procedures, practices, policies and programs reasonably indicated
to improve the dispatch reliability.
c. Seller shall use its reasonable efforts to require its Vendors to take
corrective action when the equipment designated by such Vendors is
impacting the goal of achieving the target value.
d. Review the potential for engineering design changes and modification
kits of Seller Parts which shall be designed, in the joint opinion of
Buyer and Seller, to cause an improvement in the Dispatch Reliability
of the Aircraft.
* * *
* * *
H. The Aircraft Guarantees provided herein will be applied as described above,
will commence at delivery of Buyer's Aircraft No. 1, and are based on and
contingent upon Buyer's purchasing and operating a fleet of fifty Aircraft.
In the event that Buyer fails to purchase fifty Aircraft and:
1. Such failure is the result of a default under the Agreement by Seller,
the Aircraft Guarantees shall be unaffected;
2. Such failure is the result of a default under the Agreement by Buyer,
the Aircraft Guarantees shall terminate; and
3. Such failure is the result of an Excusable Delay or is otherwise not
the fault of either party, Buyer and Seller shall negotiate in good
faith to adjust the Aircraft Guarantees.
If the foregoing correctly sets forth our understanding, please execute this
Letter Agreement in the space provided below.
VALUJET AIRLINES, INC.
Signature /s/ Xxxxxxx X. Xxxxx
-------------------------------------
Printed Name Xxxxxxx X. Xxxxx
----------------------------------
Title SVP Finance & CFO
-----------------------------------------
XXXXXXXXX XXXXXXX CORPORATION
Signature /s/ X. X. Xxxxx
-------------------------------------
Printed Name X. X. Xxxxx
----------------------------------
Title V.P. Contracts
-----------------------------------------
Date 12/6/95
------------------------------------------
10-24-95 Letter Agreement No. 11
DAC 95-40-D
ValuJet Airlines, Inc.
0000 Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Simultaneously herewith ValuJet Airlines, Inc. (Buyer) and XxXxxxxxx Xxxxxxx
Corporation (Seller) have entered into Purchase Agreement No. DAC 95-40-D (the
Agreement) which Agreement covers the manufacture and sale by Seller and the
purchase by Buyer of MD-95-30 aircraft (the Aircraft). It is agreed that upon
execution by both parties hereto, this Letter Agreement shall constitute a part
of said Agreement.
REMEDIES
--------
* * *
If the foregoing correctly sets forth our understanding, please execute this
Letter Agreement in the space provided below.
VALUJET AIRLINES, INC.
Signature
-----------------------------------
Printed Name Xxxxxxx X. Xxxxx
---------------------------------
Title SVP Finance & CFO
----------------------------------------
XXXXXXXXX XXXXXXX CORPORATION
Signature
-----------------------------------
Printed Name X. X. Xxxxx
--------------------------------
Title V.P. Contracts
---------------------------------------
Date 12/6/95
----------------------------------------
Letter Agreement No. 12
DAC 95-40-D
ValuJet Airlines, Inc.
0000 Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Simultaneously herewith ValuJet Airlines, Inc. (Buyer) and XxXxxxxxx Xxxxxxx
Corporation (Seller) have entered into Purchase Agreement No. DAC 95-40-D (the
Agreement) which Agreement covers the manufacture and sale by Seller and the
purchase by Buyer of MD-95-30 aircraft (the Aircraft). It is agreed that upon
execution by both parties hereto, this Letter Agreement shall constitute a part
of said Agreement.
* * *
* * *
2. DELIVERY DELAYS (AIRCRAFT)
--------------------------
A. In the event that one or more Aircraft is delayed (beyond its scheduled
month of delivery as defined in Article 6, Paragraph C.) and the
delivery delay is not an Excusable Delay (an "Unexcused Delay"), Seller
shall notify Buyer of such Unexcused Delay at the time the delay becomes
apparent. For the purposes of this Section 2, an "Unexcused Delay" shall
not include * * * Excusable Delays and the term
"scheduled month of delivery" shall mean the scheduled month of delivery
as adjusted for * * * Excusable Delays.
B. Seller shall advise Buyer eight months prior to the first day of the
scheduled month of delivery of each Aircraft as to the delivery status
of the Aircraft. At this xxxx Xxxxxx shall use its reasonable efforts to
advise Buyer of any delivery delay. If at this xxxx Xxxxxx believes
there would be an Unexcused Delay, Seller shall provide Buyer a revised
scheduled month of delivery. Subject to the limitations set forth in
Section 3 below, any delivery in or prior to the revised scheduled month
of delivery shall not be deemed an Unexcused Delay and no damages shall
be paid to Buyer for such delay.
C. In the event that Seller notifies Buyer between the first day of the
eighth month and the last day of the sixth month prior to the scheduled
month of delivery or the revised scheduled month of delivery (as
described in paragraph B above) that Seller reasonably believes that
there will be an Unexcused Delay in delivery of an Aircraft, Seller
shall pay Buyer liquidated damages in the amount of $1,000 per day.
D. In the event that Seller notifies Buyer between the first day of the
fifth month and the last day of the fourth month prior to the scheduled
month of delivery or the revised scheduled month of delivery (as defined
in paragraph B above or as revised in C. above) that Seller reasonably
believes that there will be an Unexcused Delay in delivery of an
Aircraft, Seller shall pay Buyer liquidated damages in the amount of
$2,500 per day.
E. In the event that Seller notifies Buyer less than three months prior to
the scheduled month of delivery or the revised scheduled month of
delivery (as defined in paragraph B above or as revised in C or D above)
that Seller reasonably believes that there will be an Unexcused Delay in
delivery of an Aircraft, Seller shall pay Buyer liquidated damages in
the amount of $5,000 per day.
F. Payment of liquidated damages as set forth above shall begin thirty days
after the last day of the scheduled month of delivery or revised
scheduled month of delivery (as defined in paragraph B above) and end on
the day that the Certificate of Airworthiness is issued for the delayed
Aircraft up to a maximum of $5,000 per day and a total amount of
$100,000 per Aircraft. Liquidated damages shall be paid in the form of a
credit memorandum available at delivery of the delayed Aircraft to be
used for the purchase of Seller proprietary goods and services or to
reduce the final invoice price of the delayed Aircraft as determined by
Buyer.
G. In the event of any delay in delivery of an Aircraft (except (i) a
replacement aircraft purchased by Buyer in accordance with Article 7,
Paragraph B.2., (ii) a delay caused by Buyer's default or (iii) a delay
requested by Buyer) beyond the original scheduled month of delivery as
defined in Article 6, Paragraph C, Seller shall use such original
scheduled month of delivery for the purpose of computing the escalation
to be included in the final Aircraft invoice price.
* * *
4. LIQUIDATED DAMAGES
------------------
The parties have agreed upon the amount to be paid hereunder, as an endeavor
to make a reasonable estimate of probable actual loss, because it would be
impracticable or extremely difficult to determine with exactness the actual
loss resulting from an inexcusable delay in delivery of an Aircraft as
scheduled. Therefore, Buyer and Seller hereby fix said sum as liquidated
damages and not as a penalty. Except as to Unexcused Delays exceeding one
year, for which damages and claims have not been liquidated hereunder, this
amount shall be in complete and total satisfaction for any and all claims
Buyer may have against Seller as a result of such delay, whether such claims
are for direct, indirect, incidental or consequential damages.
If the foregoing correctly sets forth our understanding, please execute this
Letter Agreement in the space provided below.
VALUJET AIRLINES, INC.
Signature /s/ Xxxxxxx X. Xxxxx
-----------------------------------
Printed Name Xxxxxxx X. Xxxxx
--------------------------------
Title SVP Finance & CFO
---------------------------------------
XXXXXXXXX XXXXXXX CORPORATION
Signature /s/ X. X. Xxxxx
-----------------------------------
Printed Name X. X. Xxxxx
--------------------------------
Title V.P. Contracts
---------------------------------------
Date 12/6/95
----------------------------------------
10-24-95 Letter Agreement No. 13
DAC 95-40-D
ValuJet Airlines, Inc.
0000 Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Simultaneously herewith ValuJet Airlines, Inc. (Buyer) and XxXxxxxxx Xxxxxxx
Corporation (Seller) have entered into Purchase Agreement No. DAC 95-40-D (the
Agreement) which Agreement covers the manufacture and sale by Seller and the
purchase by Buyer of MD-95-30 aircraft (the Aircraft). It is agreed that upon
execution by both parties hereto, this Letter Agreement shall constitute a part
of said Agreement.
AIRCRAFT AND ENGINE CONDITION MONITORING
----------------------------------------
Seller will work with Buyer to facilitate the selection of one of the following
options in order to satisfy Buyer's engine condition monitoring system
requirements:
1. Installation of a Quick Access Recorder (SCN G3131C002A)
--------------------------------------------------------
The base price of this installation without the optical digital access
recorder (DAR) shall be * * * per Aircraft. The optical digital access
recorder (Allied Signal P/N 1374-200-000) shall be provided at a base price
of * * * per Aircraft. Buyer shall advise the number of Aircraft to be
equipped with this feature and if a number of actual DARs may be shared by
the fleet.
2. Third VHF Plus ACARS (SCNs G2321C002B and G2324C002A)
-----------------------------------------------------
The third VHF system shall be installed by SCN G2321C002B and the ACARS
system will be installed by SCN G2324C002A. The base price per Aircraft for
these two SCNs is as follows:
----------------------------------------------------------------------------
SCN BASE NOTES
PRICE
----------------------------------------------------------------------------
G2321C002B * * * (REQUIRES CONTROL PANELS)
----------------------------------------------------------------------------
CONTROL PANELS * * *
----------------------------------------------------------------------------
G2324C002A * * * (REQUIRES ACARS MGMT UNIT)
----------------------------------------------------------------------------
ACARS MGMT UNIT * * * SUBJECT TO BUYER'S CONFIGURATION
REQUIREMENTS
----------------------------------------------------------------------------
TOTAL BASE PRICE PER A/C * * *
----------------------------------------------------------------------------
3. Aircraft Integrated Data Systems or Revision to the Flight Data Recording
-------------------------------------------------------------------------
System
------
If Buyer desires to have a broader aircraft data recording and analysis
capability, Seller shall work with Buyer to identify the most cost effective
solution and reasonable pricing to provide the desired aircraft Integrated
Data System that will also have engine conditioning monitoring capability.
The selection of option 1., 2., or 3. will result in a subsequent increase to
the Aircraft Base Price by the amounts specified above and will be subject to
the escalation provisions set forth in Exhibit D to the Agreement.
If the foregoing correctly sets forth our understanding, please execute this
Letter Agreement in the space provided below.
VALUJET AIRLINES, INC.
Signature /s/ Xxxxxxx X. Xxxxx
----------------------------
Printed Name Xxxxxxx X. Xxxxx
--------------------------
Title SVP Finance & CFO
---------------------------------
XXXXXXXXX XXXXXXX CORPORATION
Signature /s/ X. X. Xxxxx
---------------------------
Printed Name X. X. Xxxxx
------------------------
Title V.P. Contracts
-------------------------------
Date 12/6/95
-------------------------------
Letter Agreement No. 14
DAC 95-40-D
ValuJet Airlines, Inc.
0000 Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Simultaneously herewith ValuJet Airlines, Inc. (Buyer) and XxXxxxxxx Xxxxxxx
Corporation (Seller) have entered into Purchase Agreement No. DAC 95-40-D (the
Agreement) which Agreement covers the manufacture and sale by Seller and the
purchase by Buyer of MD-95-30 aircraft (the Aircraft). It is agreed that upon
execution by both parties hereto, this Letter Agreement shall constitute a part
of said Agreement.
CHANGE OF CONTROL AND FINAL ASSEMBLY
------------------------------------
1. In the event of a Change in Control of Buyer (as defined below), Seller shall
have the right to terminate the Agreement.
For the purposes of this Letter Agreement, "Change in Control" shall mean the
first to occur of the following events:
A. The date of the first public announcement that any person or entity,
together with all Affiliates and Associates (as such capitalized terms are
defined in Rule 12B-2 promulgated under the Securities Exchange Act of
1934, as amended [the "Exchange Act"]) of such person or entity, shall have
become the Beneficial Owner (as defined in Rule 13d-3 promulgated under the
Exchange Act) of voting securities of the Buyer representing 50% or more
of the voting power of the Buyer (a "50% Stockholder"); provided, however
--------
that the terms "person" and "entity" as used in this clause (A.) shall not
include (1) the Buyer or any of its subsidiaries, (2) any employee benefit
plan of the Buyer or any of its subsidiaries including the Buyer's Employee
Stock Ownership Plan, (3) any entity holding voting securities of the Buyer
for or pursuant to the terms of any such plan, or (4) Messrs. Priddy,
Jordan, Xxxxxxxxx and Xxxxx, individually or as a group; or
B. A reorganization, merger or consolidation of the Buyer (other than a
reorganization, merger or consolidation the sole purpose of which is to
change the Buyer's domicile solely within the United States or a
reorganization, merger or consolidation effected to implement a
recapitalization or reincorporation of the Buyer (or a similar transaction)
that does not result in a material change in beneficial ownership of the
Buyer's voting securities) the consummation of which results in the
outstanding securities of any class of the Company's securities being
exchanged for or converted into cash, property and/or a different kind of
securities.
C. Approval by the Buyer's stockholders of a plan of complete liquidation of
the Buyer or an agreement for the sale or other disposition by the Buyer of
all or substantially all of the Buyer's assets.
Notwithstanding the foregoing provisions, a Change in Control shall not be
deemed to have occurred if the "person" described in the preceding portion of
this Letter Agreement is an underwriter or underwriting syndicate that has
acquired the ownership of 50% or more of the combined voting power of the
Buyer's then outstanding voting securities solely in connection with a public
offering of the Buyer's securities.
2. Seller shall final assemble all Aircraft in the United States of America.
If the foregoing correctly sets forth our understanding, please execute this
Letter Agreement in the space provided below.
VALUJET AIRLINES, INC.
Signature /s/ Xxxxxxx X. Xxxxx
----------------------------
Printed Name Xxxxxxx X. Xxxxx
----------------------------
Title SVP Finance & CFO
------------------------------------
XXXXXXXXX XXXXXXX CORPORATION
Signature /s/ X. X. Xxxxx
----------------------------
Printed Name X. X. Xxxxx
----------------------------
Title V.P. Contracts
-----------------------------------
Date 12/6/95
------------------------------------
11-20-95 Letter Agreement No. 15
DAC 95-40-D
ValuJet Airlines, Inc.
0000 Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Simultaneously herewith ValuJet Airlines, Inc. (Buyer) and XxXxxxxxx Xxxxxxx
Corporation (Seller) have entered into Purchase Agreement No. DAC 95-40-D (the
Agreement) which Agreement covers the manufacture and sale by Seller and the
purchase by Buyer of MD-95-30 aircraft (the Aircraft). It is agreed that upon
execution by both parties hereto, this Letter Agreement shall constitute a part
of said Agreement.
AIRCRAFT WEIGHTS
----------------
Exhibit A1 includes Specification Change Notices (SCNs) G0320C003 and G0320C005
which revise the Maximum Takeoff Gross Weight, Maximum Taxi Weight, Maximum
Landing Weight, and Maximum Zero Fuel Weight from those specified in Detail
Specification DS9530A dated 05 January 1995. Upon request, and from time to
time, Seller shall provide Buyer with KCNs for an Aircraft for either the
weights contained in the Detail Specification or those contained in SCNs
G0320C002 and G0320C005 * * *.
If the foregoing correctly sets forth our understanding, please execute this
Letter Agreement in the space provided below.
VALUJET AIRLINES, INC.
Signature /s/ Xxxxxxx X. Xxxxx
---------------------------------
Printed Name Xxxxxxx X. Xxxxx
-----------------------------
Title SVP Finance & CFO
------------------------------------
XXXXXXXXX XXXXXXX CORPORATION
Signature /s/ X. X. Xxxxx
---------------------------------
Printed Name X. X. Xxxxx
-----------------------------
Title V.P. Contracts
------------------------------------
Date 12/6/95
-------------------------------------
12-06-95 Letter Agreement No. 16
DAC 95-40-D
ValuJet Airlines, Inc.
0000 Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Simultaneously herewith ValuJet Airlines, Inc. (Buyer) and XxXxxxxxx Xxxxxxx
Corporation (Seller) have entered into Purchase Agreement No. DAC 95-40-D (the
Agreement) which Agreement covers the manufacture and sale by Seller and the
purchase by Buyer of MD-95-30 aircraft (the Aircraft). It is agreed that upon
execution by both parties hereto, this Letter Agreement shall constitute a part
of said Agreement.
ENGINE SELECTION
----------------
Buyer and Seller shall have the option upon written notice to the other to
change the Engine manufacturer. This option is available through January 31,
1996 and terminates if not exercised on or before that date.
Upon exercise, Seller shall have a reasonable period of time within which to
offer Buyer a substitute engine. The offer shall contain the terms and
conditions (including support services offered) and shall identify any delays in
delivery required by the engine change. Buyer shall have a reasonable amount of
time to accept Seller's offer of a substitute engine. In the event of a change,
Buyer and Seller shall negotiate in good faith to amend the contract to reflect
the new engine. Buyer shall be obligated to accept such offer provided that
such new engine manufacturer is willing to provide a propulsion system to Buyer
on terms and conditions not materially less favorable to Buyer than those
offered by BRR. Any delay resulting from the engine change shall be deemed an
Excusable Delay.
Prior to exercising the option, each party agrees to use good faith efforts to
negotiate an acceptable agreement with BRR in accordance with terms previously
negotiated between such party and BRR.
12-06-95
Letter Agreement No. 16
DAC 95-40-D
Page 2
If the foregoing correctly sets forth our understanding, please execute this
Letter Agreement in the space provided below.
VALUJET AIRLINES, INC.
Signature /s/ Xxxxxxx X. Xxxxx
----------------------------------
Printed Name Xxxxxxx X. Xxxxx
-------------------------------
Title SVP Finance & CFO
--------------------------------------
XXXXXXXXX XXXXXXX CORPORATION
Signature /s/ X. X. Xxxxx
----------------------------------
Printed Name X. X. Xxxxx
-------------------------------
Title V.P. Contracts
--------------------------------------
Date 12/6/95
---------------------------------------
12-01-95 Letter Agreement No. 17
DAC 95-40-D
ValuJet Airlines, Inc.
0000 Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Simultaneously herewith ValuJet Airlines, Inc. (Buyer) and XxXxxxxxx Xxxxxxx
Corporation (Seller) have entered into Purchase Agreement No. DAC 95-40-D (the
Agreement) which Agreement covers the manufacture and sale by Seller and the
purchase by Buyer of MD-95-30 aircraft (the Aircraft). It is agreed that upon
execution by both parties hereto, this Letter Agreement shall constitute a part
of said Agreement.
FAR PART 121 CERTIFICATION
--------------------------
Based on information provided to Seller by Buyer concerning Buyer's specific
operations and routes, Seller confirms that the Aircraft configuration, as
defined by the Detail Specification and those SCNs as listed in Exhibit A1 of
this Purchase Agreement, meets the Buyer's requirements for FAR Part 121
certification as of the date of execution of this Agreement.
ASSIGNMENT
----------
Notwithstanding anything contained in the Agreement, Buyer may not assign its
rights under Letter Agreement Numbers 1, 2, 3, 4, 6, 7, 8, 9, 10 and 12 unless
(i) such assignment constitutes an assignment not requiring Seller's consent
pursuant to Article 13(A) or (B) of the Agreement, and (ii) such assignment is
not made in contemplation of the transfer of an Aircraft to an unrelated third
party.
If the foregoing correctly sets forth our understanding, please execute this
Letter Agreement in the space provided below.
VALUJET AIRLINES, INC.
Signature /s/ Xxxxxxx X. Xxxxx
-------------------------------------
Printed Name Xxxxxxx X. Xxxxx
---------------------------------
Title SVP Finance & CFO
----------------------------------------
XXXXXXXXX XXXXXXX CORPORATION
Signature /s/ X. X. Xxxxx
------------------------------------
Printed Name X. X. Xxxxx
--------------------------------
Title V.P. Contracts
---------------------------------------
Date 12/6/95
----------------------------------------
11-20-95 Letter Agreement No. 18
DAC 95-40-D
ValuJet Airlines, Inc.
0000 Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Simultaneously herewith ValuJet Airlines, Inc. (Buyer) and XxXxxxxxx Xxxxxxx
Corporation (Seller) have entered into Purchase Agreement No. DAC 95-40-D (the
Agreement) which Agreement covers the manufacture and sale by Seller and the
purchase by Buyer of MD-95-30 aircraft (the Aircraft). It is agreed that upon
execution by both parties hereto, this Letter Agreement shall constitute a part
of said Agreement.
FLIGHT TEST AIRCRAFT
--------------------
Buyer hereby consents to the use of one of its early Aircraft (the "Flight Test
Aircraft") in Seller's type certification test program under the following terms
and conditions:
1. Flight Test Aircraft
--------------------
Seller shall not use the Flight Test Aircraft for more than * * * hours
without renegotiation of this Letter Agreement.
2. Aircraft Refurbishment
----------------------
Seller shall refurbish the Flight Test Aircraft prior to delivery thereof to
Buyer to ensure that the Flight Test Aircraft is in compliance with the
Detail Specification. Reasonable wear and tear shall be permissible in all
areas of the Flight Test Aircraft except interior areas exposed to passenger
view. Such interior areas shall be in a condition, at time of delivery to
Buyer, comparable to the same areas of other Aircraft delivered to Buyer in
the same time period as the Flight Test Aircraft.
3. Warranty
--------
Seller's warranty for airframe and components of the Flight Test Aircraft
shall run for the full term from delivery of the Flight Test Aircraft to the
Buyer. In the event a Vendor refuses to honor any valid warranty claim by
Buyer solely on the basis of use or time expiration relating to flight test
or refurbishment, Seller shall assume responsibility for such claim using
the Vendor warranty period as if it began at Aircraft delivery and the terms
and conditions of Seller's warranty provided pursuant to Part I.A. of
Exhibit C to the Agreement.
4. Wheels, Tire and Brakes
-----------------------
Seller shall install new tires, wheels, and brakes on the Flight Test
Aircraft after such flight tests and prior to delivery thereof.
5. Payment for Use
---------------
Seller shall pay Buyer, at time of delivery of the Flight Test Aircraft,
* * * per hour for each flight test hour accumulated on the Flight Test
Aircraft in excess of * * * flight hours.
If the foregoing correctly sets forth our understanding, please execute this
Letter Agreement in the space provided below.
VALUJET AIRLINES, INC.
Signature /s/ Xxxxxxx X. Xxxxx
--------------------------------
Printed Name Xxxxxxx X. Xxxxx
-----------------------------
Title SVP Finance & CFO
------------------------------------
XXXXXXXXX XXXXXXX CORPORATION
Signature /s/ X. X. Xxxxx
---------------------------------
Printed Name X. X. Xxxxx
-----------------------------
Title V.P. Contracts
------------------------------------
Date 12/6/95
-------------------------------------
12-06-95 Letter Agreement No. 19
DAC 95-40-D
ValuJet Airlines, Inc.
0000 Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Simultaneously herewith ValuJet Airlines, Inc. (Buyer) and XxXxxxxxx Xxxxxxx
Corporation (Seller) have entered into Purchase Agreement No. DAC 95-40-D (the
Agreement) which Agreement covers the manufacture and sale by Seller and the
purchase by Buyer of MD-95-30 aircraft (the Aircraft). It is agreed that upon
execution by both parties hereto, this Letter Agreement shall constitute a part
of said Agreement.
MD-82 TO MD-83 CONVERSION KIT CHANGE NOTICES (KCNs)
---------------------------------------------------
Seller agrees to provide * * * to Buyer the data elements for KCN
740A and KCN 815, as applicable, for up to six MD-80 aircraft to be acquired by
Buyer. The data KCNs shall be provided upon written notice from Buyer and in
accordance with leadtimes to be established by Seller. Buyer shall provide
Seller specific aircraft identification as required to prepare specific
customized documentation which shall be included in KCNs 740A and 815. Buyer
will be responsible for all labor and parts related to the conversion of MD-82
aircraft into a MD-83 configuration, including procurement of all hardware and
parts necessary for the installation of auxiliary fuel tanks in the event
Buyer's aircraft lacks such partial installation provisions.
Buyer shall have the right to sublease such converted aircraft to a third party.
In the event that such converted aircraft is operated less than two years by
Buyer or third party, Buyer agrees to reimburse Seller for such KCN data in the
amount of * * * for KCN 740A and * * * for
KCN 815 for each such aircraft.
If the foregoing correctly sets forth our understanding, please execute this
Letter Agreement in the space provided below.
VALUJET AIRLINES, INC.
Signature /s/ Xxxxxxx X. Xxxxx
-----------------------------------
Printed Name Xxxxxxx X. Xxxxx
---------------------------------
Title SVP Finance & CFO
----------------------------------------
XXXXXXXXX XXXXXXX CORPORATION
Signature /s/ X. X. Xxxxx
------------------------------------
Printed Name X. X. Xxxxx
--------------------------------
Title V.P. Contracts
----------------------------------------
Date 12/6/95
----------------------------------------
Letter Agreement No. 20
DAC 95-40-D
ValuJet Airlines, Inc.
0000 Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Simultaneously herewith ValuJet Airlines, Inc. (Buyer) and XxXxxxxxx Xxxxxxx
Corporation (Seller) have entered into Purchase Agreement No. DAC 95-40-D (the
Agreement) which Agreement covers the manufacture and sale by Seller and the
purchase by Buyer of MD-95-30 aircraft (the Aircraft). It is agreed that upon
execution by both parties hereto, this Letter Agreement shall constitute a part
of said Agreement.
DEFAULT
-------
A. A party shall be deemed to be in default hereunder if:
(i) such party fails to make any payment required from it hereunder and
fails to cure such payment default within ten (10) days after receipt of
notice of default from the other party; or
(ii) such party fails to perform any other material act required hereunder
and fails to cure such nonpayment default within thirty (30) days after
receipt of notice of default from the other party (or, if such default is
not capable of cure within thirty days, such party has not commenced
reasonable actions to cure the default within such thirty day period or
does not thereafter diligently pursue the cure). Any notice of default
shall specifically state that it is a notice of default and shall describe
the default asserted.
B. Notwithstanding the foregoing, no default shall be deemed to have occurred
under Paragraph A above if the party from which payment or performance is
required: (i) reasonably disputes that a payment or performance is required
or the amount of the payment required, (ii) pays or performs that portion
not in dispute, (iii) within the cure period provided, responds to the
other party in writing, detailing the reasons for the its position, and
(iv) diligently pursues a resolution of the dispute thereafter.
C. If a party is in default hereunder, then the non-defaulting party shall be
entitled to seek any remedy available to it at law or in equity; provided,
however, that in the event a party is in default hereunder as a result of
failure to provide notice, failure to comply with the confidentiality
provisions of the Agreement or failure to perform any other ministerial
requirement, then the non-defaulting party's remedies shall be limited to
actual damages attributable to that specific default and the non-defaulting
party shall not be entitled to suspend any other performance hereunder
(except to the extent made necessary by the default) or to terminate this
Agreement.
In the event that a party is in payment default with respect to an amount of
$250,000 or less, then the non-defaulting party's remedies shall be limited to
actual damages attributable to that specific default and the non-defaulting
party shall not be entitled to suspend any other performance hereunder (except
to the extent made necessary by the default) or to terminate this Agreement.
D. The terminating party shall be entitled to set off any claim it may have
against the other party as a result of such default by retaining the
appropriate portion of any amounts paid to it under this Agreement.
E. The foregoing default provisions shall be applicable only in those
instances in which other time periods or remedies are not provided
hereunder for default or non-compliance. The parties acknowledge and agree
that the foregoing default provisions are not intended to alter, amend or
supplement any indemnity obligations hereunder.
If the foregoing correctly sets forth our understanding, please execute this
Letter Agreement in the space provided below.
VALUJET AIRLINES, INC.
Signature /s/ Xxxxxxx X. Xxxxx
--------------------------------
Printed Name Xxxxxxx X. Xxxxx
-----------------------------
Title SVP Finance & CFO
------------------------------------
XXXXXXXXX XXXXXXX CORPORATION
Signature /s/ X. X. Xxxxx
---------------------------------
Printed Name X. X. Xxxxx
-----------------------------
Title V.P. Contracts
------------------------------------
Date 12/6/95
-------------------------------------
12-05-95 Letter Agreement
C1-220-95-4007
* * *
12-05-95 Letter Agreement
C1-220-95-4007
If the foregoing correctly sets forth our understanding, please execute this
Letter Agreement in the space provided below.
VALUJET AIRLINES, INC.
Signature /s/ Xxxxxxx X. Xxxxx
-------------------------------
Printed Name Xxxxxxx X. Xxxxx
-----------------------------
Title SVP Financial & CFO
------------------------------------
XXXXXXXXX XXXXXXX CORPORATION
Signature /s/ X. X. Xxxxx
-------------------------------
Printed Name X. X. Xxxxx
-----------------------------
Title V.P. Contracts
------------------------------------
Date 12/6/95
-------------------------------------
