EX 10.21
CONFIDENTIAL TREATMENT HAS BEEN SOUGHT FOR PORTIONS OF THIS DOCUMENT MARKED
WITH " * " AND SUCH PORTIONS HAVE BEEN FILED SEPARATELY WITH THE SEC
[LOGO OF GREENWICH AIR SERVICES, INC. APPEARS HERE]
_______________________________________________________________________________
Miami, Florida
Dallas, Texas
East Granby, Connecticut
Prestwick, Scotland
_______________________________________________________________________________
SERVICE AGREEMENT
BETWEEN
FRONTIER AIRLINES, INC.
AND
GREENWICH AIR SERVICES, INC.
FOR
CFM 56 AND JT8D ENGINES
MAY 19, 1997
_______________________________________________________________________________
CONFIDENTIAL INFORMATION NOTICE
THE INFORMATION CONTAINED IN THIS DOCUMENT IS THE PROPRIETARY PROPERTY OF
GREENWICH AIR SERVICES, INC. AND SHALL NOT BE USED, DISCLOSED TO OTHERS, OR
REPRODUCED WITHOUT THE PRIOR WRITTEN CONSENT OF GREENWICH AIR SERVICES, INC.
TABLE OF CONTENTS
ARTICLE SUBJECT PAGE
------- ------- ----
1 Definitions.......................................... 1
2 Term................................................. 3
3 Procedures........................................... 3
4 Delivery - Repair Time............................... 4
5 Pricing/Payment...................................... 5
6 Exchange Parts....................................... 6
7 Missing or Damaged Parts............................. 7
8 Miscellaneous........................................ 7
9 Warranty............................................. 8
10 Indemnity............................................ 8
11 Insurance............................................ 9
12 Limitation of Liability.............................. 9
13 Force Majeure........................................ 10
14 Notices.............................................. 10
15 Renegotiation and Escalation......................... 10
16 Termination.......................................... 11
17 Taxes and Other Charges.............................. 12
18 Governing Law and Severability....................... 12
19 Entire Agreement..................................... 12
Signatures........................................... 13
EXHIBITS
--------
Exhibit A Schedule 1 - CFM56 & JT8D Time and Material Pricing.. A-1
Schedule 2 - Field Service Pricing................... A-4
Schedule 3 - CFM56 & JT8D Accessory Pricing.......... A-5
Exhibit B Aircraft Engine Service Warranty..................... B-1
Exhibit C Accessory Shops Standard Overhaul Warranty........... C-1
i
SERVICE AGREEMENT
THIS AGREEMENT, is made as of this 19th day of May, 1997, by and between
FRONTIER AIRLINES, INC., a Delaware corporation, of 00000 X. 00xx Xxxxxx,
Xxxxxx, Xxxxxxxx 00000 ("Customer") and GREENWICH AIR SERVICES, INC., a Delaware
corporation, having its principal place of business at Miami, Florida 33122 and
a mailing address of P.O. Box 522187, Miami, Florida 33152, for itself and on
behalf of its affiliated companies ("Greenwich") .
WITNESSETH:
WHEREAS, Greenwich is a Federal Aviation Administration ("FAA") approved
overhaul, service, and repair facility and operates facilities for the servicing
of aircraft engines, components, Q.E.C. components, and parts thereof at Miami,
Florida; East Granby, Connecticut; Dallas, Texas; and Prestwick, Scotland;
WHEREAS, Customer requires overhaul, check, inspection, modification, repair,
and/or service on its CFM56 and JT8D Engines, assemblies, subassemblies,
components, Q.E.C. components, and parts thereof (collectively, the
"Equipment"); and
WHEREAS, Xxxxxxxxx agrees to overhaul, check, inspect, modify, repair, and/or
service such CFM56 and JT8D series Engines, modules, related accessories, and
other Equipment as Customer shall furnish to Greenwich for such service during
the period of this agreement;
NOW THEREFORE, and in consideration of the mutual promises and covenants herein
contained, the parties agree as follows.
ARTICLE 1
DEFINITIONS
1.1 Definitions. In addition to terms elsewhere defined in this Agreement, the
terms used in this Agreement shall have the following meanings unless some
other meaning is apparent from the context in which these terms are used.
(A) "Accessories" or "Components" shall mean those items (excluding
Engines) which are renewable and inventory controlled on a unit basis,
usually by serial number, with a potential for reuse through
inspection, overhaul, repair or calibration, as judged by Greenwich
and approved by Customer.
(B) "Basic Workscope" shall mean the document executed by Customer listing
the Services (as hereinafter defined) to be performed by Greenwich
hereunder, including a repair/purchase order covering the cost of
repair.
(C) "Business Day" shall mean any day on which banks are open for business
in Dallas, Texas, U.S.A.
1
(D) "CLP" shall mean the current manufacturer's list price.
(E) "Condemned", as applied to any part, shall mean a part that is beyond
repair limits or that has repair costs in excess of economical limits
as determined by Greenwich. Greenwich shall take title to and dispose
of all Condemned parts at its own expense, after obtaining Customer's
concurrence on the Condemned classification.
(F) "Customer Engineering Order" or "Modification" shall mean an order,
direction or request from Customer to use parts, procedures, or
modifications not approved by the manufacturer or not contained in the
manuals supplied by the manufacturer.
(G) "Engine" shall mean the CFM56 or JT8D Engine series assembly plus its
essential accessories as described in the CFM56 and JT8D
manufacturer's specification manuals.
(H) "Exchange Part(s)" shall mean those part(s) utilized from Greenwich's
inventory to replace Customer's repairable parts.
(I) "Field Service Support" shall mean any Services provided by Greenwich
at a site other than at the Service Center (as hereinafter defined).
(J) "Overhaul" shall mean to perform such work services as are required to
return the Equipment to "as new" condition or limits as established by
the manufacturer's specifications, or to the condition contemplated by
the parties in any Customer engineering order.
(K) "Refurbish", "Repair" and "Restore" shall mean to perform such work
services as required and authorized to the Equipment to permit the
item to continue its service life.
(L) "Repairable" shall mean the condition of an item which is capable of
being made "serviceable" by subjecting it to certain processes and
procedures as indicated in the appropriate original manufacturer's
overhaul or specification manuals, Customer's engineering order or
Greenwich's engineering order approved by Customer.
(M) "Replacement" shall mean any part or unit which is physically replaced
by a different part or unit from that installed on the Engine at the
time of receipt by Greenwich (not necessarily a part number change).
(N) "Rework" or "Update" shall mean to perform such work services as are
required by service bulletin, technical order, Customer engineering
order, or other document that will alter or modify the item from its
original condition or configuration.
(O) "Service" shall mean those services requested by Customer which
Xxxxxxxxx agrees
2
to perform.
(P) "Serviceable Condition" shall mean the condition of a Repaired item
which can be used for the same purpose as a newly manufactured item.
(Q) "Service Center" shall mean any one or all of Greenwich's FAA approved
Repair Stations.
ARTICLE 2
TERM
2.1 Term. This Agreement shall be exclusive for CFM56 Engines and non-
exclusive for JT8D Engines, shall commence upon the date first written
above and, unless sooner terminated pursuant to Section 16 herein, is to
continue through April 30, 2002, and shall continue in effect from year to
year thereafter as long as Customer continues to operate CFM56 or JT8D
series Engines (the "Term") or, unless and until either party shall
terminate the same, by sixty (60) days advance written notice.
ARTICLE 3
PROCEDURES
3.1 Engine Procedures. Greenwich shall furnish all labor, facilities,
equipment, parts, materials, supplies, painting and plating, and testing
devices required to perform the Services required by Customer pursuant
hereto and shall accomplish such Service in a good and workmanlike manner
in accordance with the requirements of the Engine manufacturer, the Federal
Aviation Administration (FAA), the Joint Airworthiness Authority of Europe
(JAA), or Customer; as applicable. The following procedures shall govern
the processing of work by Greenwich on Engines, subject to the terms and
conditions contained herein:
(A) Basic Workscope. With respect to any Engine, Customer shall provide
Greenwich with a Basic Workscope outlining the (a) removal cause; (b)
life limited parts ("LLP") Replacement requirements; (c) extent of
disassembly; and (d) Customer's work specifications, if applicable,
together with a repair/purchase order for the cost of Repairs. The
Basic Workscope may be amended by Customer as agreed with Greenwich.
(B) Receiving Inspection. Upon delivery to Greenwich of any Engine to be
Repaired, Greenwich shall accomplish a standard receiving inspection
to include, as applicable: (a) borescope inspection; (b) Component
inventory; (c) filter contamination check; and (d) external
inspection. Greenwich shall provide copies of the results of this
inspection to Customer.
(C) Disassembly. Greenwich shall disassemble each Engine as requested by
Customer in Article 3.1(A) above.
(D) Inspection. Greenwich shall clean and inspect the disassembled
Engine and promptly thereafter provide Customer with a cost estimate
for the Services required.
3
Greenwich, upon Customer's request, shall provide a list of known
rotable parts to be scrapped or replaced.
(E) Cost Estimate. Any quotation related to the cost of Services ("Cost of
Services") is provided to and accepted by the Customer only as an
estimate ("Cost Estimate"), is given solely for the purpose of
guidance and not for reliance, and is entirely without prejudice to
the calculation of the Cost of Services in accordance with the
provisions of this Agreement. The Cost of Services performed shall be
based on the actual condition of the Equipment and the actual cost of
the Repair. The Cost of Services shall be as stated in the invoice(s)
and Customer shall be responsible for all invoiced amounts regardless
of the Cost Estimate. Any trailing invoice(s) shall reflect actual
charges which were not available at the time of the earlier invoice(s)
and which have been reconciled with any estimated amounts previously
invoiced to Customer. Upon receipt of Customer's approval of the Cost
Estimate, Greenwich shall Repair the Engine in accordance with the
manufacturer's or Customer's specifications.
(F) Test Procedures. Greenwich shall test the Engine in accordance with
the manufacturer's or Customer's specifications, as designated by
Customer. Following this acceptance test, Greenwich shall preserve
the Engine's fuel and oil systems.
(G) Post Test Procedures. Greenwich shall accomplish a post test
borescope inspection and prepare the Engine for shipment.
(H) Certification Procedures. Greenwich shall accomplish an Engine
records review. If Serviceable, the Engine shall be tagged with an
FAA Serviceable Tag. Greenwich shall compile an Engine records
package and forward such package to Customer.
(I) Redelivery. The Engine shall be made available for redelivery to
Customer as described in Article 4.
(J) Final Invoice. Greenwich shall prepare a final invoice and present
such invoice to Customer for payment as described in Article 5 herein.
3.2 Parts Procedure. Parts not received as part of an Engine will be subject
to a separate procedure as agreed by the parties.
ARTICLE 4
DELIVERY - REPAIR TIME
4.1 Delivery. Customer shall deliver all Engines to Greenwich's designated
freight agent F.O.B. Customer's facility, as designated by Customer.
Greenwich shall redeliver the same items to Customer F.O.B. Greenwich's
designated freight agent at Customer's facility, as designated by Customer.
Customer shall deliver all Parts, Accessories, Components, and other items
shipped separate from an Engine to Greenwich, F.O.B. Greenwich's Texas
facility. Greenwich shall redeliver the same items to Customer or its
designated agent, F.O.B. Greenwich's Texas facility.
4
4.2 Repair Time.
(A) Engine repairs shall be accomplished by Greenwich in sixty (60)
calendar days (the "Turn Time") from approval of the Cost Estimate to
the date of test acceptance. Such time may be extended under the
Force Majeure provisions of Article 13 herein and/or any delays caused
by Customer in providing required documentation, approvals, or timely
delivery of Customer Furnished Material.
(B) Greenwich shall provide Customer an estimate of the redelivery date
following disassembly, cleaning, and inspection.
(C) If the Turn Time, for any engine, exceeds sixty (60) days, and the
reason for such delay is not a cause set forth in either Section 4.2
(A) or Section 13 herein, and for JT8D engines eighty percent (80%) of
Customer's removals for the previous twelve (12) months have gone to
Greenwich, and Customer is in an AOG condition, Greenwich shall, as
liquidated damages and not as a penalty:
(i) Lease to Customer, under a separate engine lease agreement, a
spare Engine, if available, for Customer's use until redelivery
of the repaired engine. Customer agrees to pay Greenwich hourly
charges for the hours of operation of the Engine, which charges
shall be determined at a rate which is standard in the industry
at the time of such lease. Customer shall make available the
leased spare Engine for shipment to Greenwich within five (5)
days of redelivery of its repaired Engine to Customer's facility,
or the Customer shall pay, in addition to the hourly charges for
Engine operation, the daily lease rate, which is standard in the
industry at the time of lease, from such time until the leased
spare Engine is made available for shipment to Greenwich. Such
spare engine will not be delivered to Customer until the Lease
Agreement is fully executed; or
(ii) in the event that Greenwich is unable to provide a lease Engine
to Customer under this provision and Customer is in an AOG
situation due to circumstances entirely outside Customers
control, Greenwich shall reimburse Customer its daily charge
only, up to a maximum daily charge of two thousand U S Dollars
($2000.00) per day for CFM56 Engine requirement and/or a maximum
daily charge of three hundred twenty-five U S Dollars ($325.00)
per day for JT8D Engine requirement, until redelivery of the
repaired Engine, or upon delivery at Customer's facility of a
lease Engine from Greenwich, or when Customer is no longer in an
AOG situation, whichever occurs first.
ARTICLE 5
PRICING/PAYMENT
5.1 Pricing. Charges for labor, material, outside services, testing and Field
Service Support shall be in accordance with the prices listed on Exhibit A.
5
5.2 Payment. All payments under this Agreement shall be made via wire
transfer by Customer to Greenwich in United States dollars, immediately
available for use, without any right of set-off or deduction. All sums
past due shall bear interest at the rate of one and one-half percentage
(1.5%) points per month, or at the highest legal interest rate permitted by
law, whichever is lower.
5.3 Payment Terms.
(A) In accordance with Exhibit A hereof, Customer shall pay one hundred
percent (100%) of the Cost Estimate after test acceptance and prior to
redelivery of the Engine.
(B) As set forth in Section 3.1(E) above, Customer agrees that any Cost
Estimate and Initial Invoice is preliminary and may include estimated
charges for rework, subcontractor work, and other related services
when the actual charges for those activities are not available, and is
subject to revision based on the condition of the Equipment and the
actual cost of the repair. Subsequent "trailing" invoices reflecting
the actual charges will be submitted to Customer as soon as
practicable and will be reconciled with the estimated amounts
previously invoiced to Customer. Customer shall pay the "trailing"
invoice within thirty (30) calendar days of receipt.
5.4 Mechanic's Lien/Security Interest. Customer hereby grants to Greenwich a
security interest in all property of Customer in the possession of
Greenwich at any time to secure all amounts owed by Customer to Greenwich
now or in the future, and Greenwich shall have all rights of a secured
party under the Uniform Commercial Code with respect to such property.
ARTICLE 6
EXCHANGE PARTS
6.1 Procedure. Greenwich shall determine which Exchange Parts are required to
Repair the Equipment, and will issue these parts from rotable stock.
Greenwich shall transfer ownership to Customer (without representation of
warranty except as expressly provided herein) of these Exchange parts in
exchange for ownership of the respective parts removed, and provided that
such removed parts are Repairable. During the production process, Customer
may, with reasonable advance notification, review Greenwich's Exchange
Parts documentation and actions. Repairable parts received by Greenwich in
exchange for parts in Serviceable Condition will be Repaired by Greenwich
or an outside source, at Greenwich's sole option. Greenwich shall invoice
Customer for such Repairs and exchange fees as per Exhibit A.
6.2 Condemned Parts. If the part that is removed from Customer's Equipment in
an Exchange Part transaction is subsequently Condemned, then such
transaction shall be void, and the Exchange part provided by Greenwich will
be deemed to have been purchased by Customer at the price provided in the
Price List at Exhibit A, less any exchange fee.
6
6.3 Scrapped Parts. All scrapped parts determined to be unserviceable and/or
not economically repairable shall become Greenwich's vested property
fifteen (15) days after completion of engine services. During this fifteen
(15) day period, Customer may take possession of such parts and immediately
ship or dispose of said parts at its sole cost and expense. Parts which
become Greenwich's vested property hereunder shall be Greenwich's
responsibility at its sole expense and without any further adjustment to
Customer, to mutilate and dispose of such parts as to preclude any further
use as an Engine part.
6.4 Customer parts provisioning. Customer may, at its discretion, review
Greenwich's list of rotable parts required to repair its Engine. After
this review, Customer may elect to provide certain rotable parts. If
Customer so elects to provide certain rotable parts, it must inform
Greenwich of such election within five calendar days of receipt of the
Greenwich provided rotable parts list as to which parts it intends to
provide. All parts provided by Customer must be serviceable, tagged in
accordance with FAA requirements, and in a condition to be installed on the
Engine. All such parts must be delivered to Greenwich in a timely manner
which does not affect Greenwich's production schedule. If any part is not
received by Greenwich prior to the scheduled installation date of such
part, in an immediately usable condition, Greenwich may, at its sole
option, either delay the turn time day for day until such part is received
and reinduction of the engine into the production schedule can be
accomplished, or provide a Greenwich owned rotable part under the terms of
this Agreement. Charges for Customer supplied parts shall be in accordance
with Exhibit I.
ARTICLE 7
MISSING OR DAMAGED PARTS
7.1 Missing or Damaged Parts. Greenwich shall advise Customer of (i) parts
missing from any Equipment when received at Greenwich's facility; and (ii)
parts found to have been damaged in transit. Should (i) or (ii) occur,
resulting in the excusable delay of redelivery, Greenwich shall provide
notice to Customer. Greenwich may replace such parts with the express
consent of Customer. If neither party can provide Replacements
immediately, then the redelivery date shall be extended by the length of
the delay in receiving the Replacement parts.
ARTICLE 8
MISCELLANEOUS
8.1 Subcontracted Work. Greenwich shall have the right to subcontract any work
it deems necessary to an authorized repair facility; provided, that
Greenwich shall provide Customer with any warranties received from such
subcontractors which are assignable. Greenwich will make its best efforts
to minimize work subcontracted to outside vendors. Upon request, Greenwich
shall provide Customer a list of its subcontractors.
8.2 Work in Process. Upon the expiration or termination of this Agreement,
Greenwich shall complete all work in process in a diligent manner;
provided, that Customer has deposited sufficient monies with Greenwich to
pay the estimated charges for all such work, in
7
accordance with the price list at Exhibit A.
8.3 Field Service Support. Greenwich shall provide Field Service Support at
the daily rates provided in the price list at Exhibit A.
8.4 Service Center Representatives. Customer may appoint an employee or
representative as Service Center Representative to act as liaison with
Greenwich. The Service Center Representative is authorized to review work,
request additional work, revise the original workscope, and approve (i) the
labor performed, (ii) any parts, materials, or supplies furnished by
Greenwich, and (iii) receive notices for Customer. The Customer
Representative has the authority to request a stoppage of the work being
performed on Customer's Engines; however, any such stoppage and subsequent
restart will result in an adjusted turn time and a minimum additional
charge of twenty five (25) manhours per occurrence to Customer. Greenwich
shall provide the Service Center Representative with a suitable work area
at its Service Center while this Agreement is in force. Customer shall
provide all xxxxxxx'x compensation and other insurance required for such
representatives. Customer agrees to defend, indemnify, save, and hold
harmless Greenwich, its affiliates, directors, officers, agents, and
employees, from and against any and all responsibilities, liabilities,
claims, demands, suits, judgements, damages, losses, costs, and expenses of
any nature or description whatsoever for any injury to or death of any
person associated with or employed by Customer, at Greenwich's facility for
the purposes stated herein.
8.5 Spare Component Support. Greenwich will maintain one each of the following
spare components, available for shipment within forty eight (48) hours to a
location designated by Customer. These components will be provided to
Customer in accordance with the terms of the exchange parts program found
in Article 6 of this Agreement
A. JT8D Gearbox
B. JT8D C1 Fan Assembly
C. JT8D C2 Fan Assembly
8.6 Spare Engine Support. At the end of each calendar year, for the term of
this contract, Greenwich shall credit Customer * for each of the first two
(2) "full restoration" CFM56-3 engines input during the preceding year.
This * maximum credit is specifically for the purpose of offsetting a
portion of the expense associated with Customer's guaranteed spare engine
program.
ARTICLE 9
WARRANTY
9.1 Workmanship. Greenwich warrants its work to be free from defects in
workmanship in the Services it performs hereunder, as set forth in its
Engine Service Warranty contained in Exhibit B and its Accessory Shops
Standard Overhaul Warranty contained in Exhibit C hereto.
9.2 EGT Margin Guaranty. Full performance restoration, including or excluding
LPT repair, provides for EGT margin guaranty of 30 degrees C for B1 powered
CFM56 Engines and 25
8
degrees C for B2 powered CFM56 Engines.
ARTICLE 10
INDEMNITY
10.1 Indemnity. From and after delivery hereunder, Customer agrees to defend,
indemnify, save, and hold harmless Greenwich, its affiliates, directors,
officers, agents and employees, from and against any and all
responsibilities, liabilities, claims, demands, suits, judgments, damages,
losses, costs, and expenses of any nature or description whatsoever
(including, without limitation, investigation costs and expenses and
attorneys' fees and expenses in connection therewith) for any loss of,
damage to, or destruction of any property (including the Equipment ) or for
any injury to or death of any person, arising from and after the delivery
of the Equipment to Greenwich and arising out of or connected with (i) the
maintenance, operation, Repair, or condition of the Equipment before
delivery hereunder or (ii) the ownership, use, operation, Repair,
maintenance, or disposition by Customer, its successors, assigns, or agents
of the Equipment, regardless of the negligence of Greenwich, its directors,
officers, employees, or agents; provided, however, that Customer shall
9
not be required to indemnify Greenwich for any claims or liabilities arising
directly from Greenwich's gross negligence or willful misconduct.
ARTICLE 11
INSURANCE
11.1 The following insurance shall be provided:
A. Hangar (or Shop) Keeper's Insurance. Xxxxxxxxx agrees to maintain
Hangarkeeper's liability insurance protecting Customer from loss,
damage, or destruction of Customer's property in the care, custody, or
control of Greenwich, from which loss, damage, or destruction
Greenwich, subject to Article 10.1, agrees to defend, indemnify, save,
and hold harmless customer.
B. Products Liability Insurance. Greenwich agrees to maintain products
liability insurance in an amount not less than One Hundred Million
U.S. Dollars ($100,000,000.00) for personal injury and property damage
to third parties, from which personal injury or property damage
Greenwich, subject to Article 10.1, agrees to defend, indemnify, save,
and hold harmless customer.
C. Public Liability Insurance. Customer agrees to maintain public
liability insurance in an amount not less than Five Hundred Million
U.S. Dollars ($500,000,000.00). Customer shall cause its insurer to
name Greenwich, its affiliates, directors, officers, employees,
agents, and representatives as additional insureds, and to
specifically state that the indemnification requirements in Article 7
are insured as a contractual obligation.
11.2 Certificates of Insurance. Each party hereto agrees to furnish the other
party, appropriate Certificates of Insurance evidencing its maintenance of
the above insurance, applicable to it, at the commencement of this
Agreement and each renewal thereof. Each party shall maintain the
applicable insurance until two (2) years after the expiration of this
Agreement. In addition, each party hereto agrees to provide the other
party written notice not less than thirty (30) calendar days prior to any
cancellation or adverse material change in the maintenance of the above
Insurance.
ARTICLE 12
LIMITATION OF LIABILITY
12.1 TOTAL LIABILITY. THE TOTAL LIABILITY OF GREENWICH, INCLUDING ITS
SUBCONTRACTORS AND SUPPLIERS, FOR ANY AND ALL CLAIMS, WHETHER IN CONTRACT,
WARRANTY, TORT (INCLUDING NEGLIGENCE OF ANY DEGREE), OR OTHERWISE, ARISING
OUT OF, CONNECTED WITH, OR RESULTING FROM THE PERFORMANCE OR NON-
PERFORMANCE OF THE ACCEPTED WORKSCOPE, SHALL NOT EXCEED GREENWICH'S INVOICE
FOR THE REPAIRED OR OVERHAULED ITEM WHICH GIVES RISE TO THE CLAIM HEREIN,
PROVIDED THAT GREENWICH'S LIABILITY WILL BE LIMITED TO THE LESSER OF THE
COST TO PERFORM SAID REPAIRS OR THE COST TO REPLACE THE ENGINE WITH A
SUBSTITUTE ENGINE OF EQUAL VALUE AND UTILITY.
12.2 DAMAGES. IN NO EVENT, WHETHER AS A RESULT OF BREACH OF CONTRACT, WARRANTY,
TORT, (INCLUDING NEGLIGENCE OF ANY DEGREE), OR OTHERWISE, SHALL GREENWICH,
ITS SUBCONTRACTORS, AND/OR SUPPLIERS, BE LIABLE FOR ANY SPECIAL,
CONSEQUENTIAL, RESULTANT, INCIDENTAL, INDIRECT, OR
10
EXEMPLARY DAMAGES.
ARTICLE 13
FORCE MAJEURE
13.1 Inability, Delays, and Force Majeure. Greenwich shall not be liable for
any failure to perform or any delays in performance due to acts of God; the
public enemy, war; declared or undeclared, or warlike conditions; inability
to secure parts or material (provided such inability stems from scarcity or
difficulty and not from delays by Greenwich in placing orders);
insurrection or riots; floods; explosions; fires; earthquakes; hurricanes;
any governmental act; failure of transportation; strikes or other labor
disputes; or any other cause beyond its control.
13.2 Customer's Obligation to Pay. Section 13.1 above shall not relieve
Customer of its obligations to pay for Services actually performed.
ARTICLE 14
NOTICES
14.1 Acknowledgment. All notices required or permitted under this Agreement
shall be in writing and shall be delivered personally, facsimiled, sent by
courier service, or express mail, addressed as follows:
If to Greenwich: If to Customer:
---------------------------- -----------------------
Greenwich Air Services, Inc. Frontier Airlines, Inc.
0000 X.X. 00xx Xxxxxx 00000 X. 00xx Xxxxxx
Xxxx. 00 XXXX Xxxxx 000
Xxxxx, Xxxxxxx 00000 Xxxxxx, XX 00000
Attn: Director of Contracts Attn: Xxx Xxxxxxx
Phone: 000 000-0000 V.P. of Maintenance
Fax: 000 000-0000 Phone: 000-000-0000
Fax: 000-000-0000
or such other address as either party may designate in writing to the other
party from time to time.
14.2 Effect of Notices. Notices shall be effective and shall be deemed to have
been given when received.
ARTICLE 15
RENEGOTIATION AND ESCALATION
15.1 Renegotiation and Escalation. Pricing and rates shown herein shall be
adjusted in accordance with the following:
(A) Labor. Labor rates, vendor pricing, and test cell fees shown herein
are valid through December 31, 1997. At that time, and each January 1st
thereafter, Greenwich
11
reserves the right to increase the hourly labor charges and fixed labor
charges by an amount which is proportionate to any increase in the
National Labor Index of the "Hourly Earnings of Aircraft Engine and
Engine Parts Production Workers" SIC 3724, as prepared by the U.S.
Department of Labor, Bureau of Labor Statistics for the previous twelve
(12) month period. Each such increase shall be effective as to units
completed on or after the relevant change date.
(B) Material. Charges for material caps shown herein are valid through
December 31, 1997. At that time, and each January 1st thereafter,
Greenwich reserves the right to increase the such charges by an amount
which is proportionate to any increase to the manufacturer's parts
price book increase. Such increase shall be effective as to units
completed on or after the relevant change date.
15.2 At any time and from time to time after execution of this agreement,
Greenwich may, with Customer=s concurrence, establish new fixed rates for
labor to service Engines, modules, and accessories and new fixed job rates
for special processes, plasmas, platings, coatings, standards, and
exchanges. The new rates shall be effective as to units completed on or
after the date on which Customer is notified of the new rates.
15.3 If, at any time during the term of this Agreement, the Engine related
Services required by Customer decline to a level not supportive of rates
and fees herein offered, then Greenwich may, by written notice to Customer,
request that this Agreement be opened for renegotiation of prices, term of
agreement, and performance times. Within thirty (30) days after receipt of
said notice from Greenwich, the parties hereto will meet to discuss
proposals and counter proposals. Any revision agreed to by the parties
shall be made retroactive to the date that the parties met to commence
renegotiations.
ARTICLE 16
TERMINATION
16.1 Material Provisions. This Agreement may be terminated by either party upon
sixty (60) calendar days advance written notice to the other party for any
failure to comply with any material provision, and shall expire without
further act or deed on the date indicated in such written notice, unless
the failure shall have been completely cured or the party in breach has
substantially performed all acts required to cure the failure prior to the
expiration date, except for reason of termination pursuant to Section 16.2
below.
16.2 Required Payments/Insurance. Greenwich or Customer may terminate this
Agreement on ten (10) calendar days notice if either party fails to make
any of the required payments or to provide the required insurance, unless
such party cures such nonpayment or provides the required insurance within
such time period.
16.3 Effect of Agreement. In the event that either party terminates this
Agreement, any liabilities, obligations, expenses, or charges having
accrued to the parties under this Agreement shall remain in full force and
effect.
16.4 Redelivery of Customer Furnished Material. Upon termination of this
Agreement, Customer furnished material in Greenwich's possession shall be
redelivered to Customer at the Service Center on the date of termination or
the date of completion of work performed, after the payment of all charges
by Customer to Greenwich.
12
ARTICLE 17
TAXES AND OTHER CHARGES
17.1 Taxes, Duties, or Charges. Any and all taxes, custom duties, brokerage
fees, or other charges, excluding any income taxes payable by Greenwich,
resulting from performance under this Agreement, ("Charges") shall be borne
by Customer.
17.2 Exemption. If Customer is claiming exempt status from the State Sales Tax,
Customer shall, prior to the effective date of this Agreement, provide
Greenwich with a copy of its state sales tax exemption certificate or
affidavit in the form required by the State Department of Revenue.
ARTICLE 18
GOVERNING LAW AND SEVERABILITY
18.1 Governing Law. This Agreement shall be deemed to have been made in Dallas,
Dallas County, Texas, and shall be interpreted, and the rights and
liabilities of the parties hereto determined in accordance with the law of
the State of Texas, U.S.A. without regard to conflicts of law principles.
The parties consent and hereby submit to the exclusive jurisdiction of the
state and federal courts located in Dallas County, Texas, U.S.A. for the
determination of any and all issues between the parties relating to this
Agreement. Nothing in this clause limits the right of Greenwich to bring
proceedings in any other court of competent jurisdiction; nor shall the
bringing or continuing of proceedings in one or more jurisdictions preclude
the bringing or continuing of proceedings in any other jurisdiction,
whether concurrently or otherwise. Customer irrevocably waives any
objection which it may have at any time to the laying of the venue of any
proceedings in any court referred to in this section, to any claim that any
such proceedings have been brought in any inconvenient forum, to any right
to trial by jury in any proceedings, and to any objection to service of
process if such service is by certified mail, return receipt requested, at
the address provided, or updated as provided, herein. Customer agrees to
be subject to the Texas Long Arm Statute for service of process.
18.2 Severability. If any portion of this Agreement shall be determined to be
in violation of or contrary to any law, rule or regulation by a court of
competent jurisdiction, then that portion shall be unenforceable and
deleted from the Agreement. However, the balance of this Agreement shall
remain in full force and effect notwithstanding the unenforceability of
said portion.
ARTICLE 19
ENTIRE AGREEMENT
19.1 Contents. This Agreement contains the entire agreement between the parties
and supersedes all prior and contemporaneous understandings,
representations, warranties, and agreements.
19.2 Non-Waiver of Rights and Remedies. Any failure or delay in the exercise of
any rights or remedies hereunder shall not operate to waive or impair such
rights or remedies. Any waiver
13
given shall not be construed to require said party to make any future or
further waivers.
19.3 Additional Documentation. The parties agree to cooperate with each other
and to execute any additional documentation as may reasonably be necessary
to give effect to this Agreement.
19.4 Titles/Subtitles. The titles and subtitles given to the sections of this
Agreement are for convenience only and shall not in any manner be deemed to
limit or restrict the context of the article or section to which they
relate. The words "hereof", "hereunder", "herein", "herewith", and similar
terms are not to be deemed restrictive and refer to the entire Agreement
including all Exhibits.
19.5 Modification. This Agreement may only be modified, supplemented, or
amended by a writing duly signed by authorized representatives of both
parties hereto.
19.6 Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed to be an original, but both of which together
shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
as of the day and year written below.
GREENWICH AIR SERVICES, INC. FRONTIER AIRLINES, INC.
By:_______________________________ By:_____________________________
Name: ____________________________ Name: __________________________
Title: ___________________________ Title:__________________________
Date: _____________________________ Date: __________________________
14
SCHEDULE 1
EXHIBIT A
FRONTIER AIRLINES - CFM56 & JT8D PRICING
I. JT8D T&M PRICING
1. Labor (Basic & Rework) *
2. Special Processes *
3. Material
A. New *
B. Serviceable *
C. Serviceable LLP *
D. Rotable Scrap *
E. Customer Supplied Material
(a) New Parts: *
(b) Serviceable Parts: *
*
(c) LLP (used
serviceable) *
4. Subcontract Services *
5. Rotable Fee *
6. Test Cell Fee *
7. Fuel & Oil *
8. Transportation *
9. Engine Condition Monitoring *
A-1
(Waive 12 months following shop visit)
SCHEDULE 1
(cont'd)
II. CFM56 PRICING
1. Time & Material Pricing
A. Labor *
B. Special Processes *
C. Material
a. New *
b. Serviceable *
c. Serviceable LLP *
D. Subcontract *
E. Rotable Fee *
F. Test Cell Fee *
G. Fuel & Oil *
H. Transportation *
I. ECM *
A-2
SCHEDULE 1
(cont'd)
2. Engine Flat Rates (specific work scopes to be provided)
A. Full Performance Restoration including LPT Repair $ *
through 12/31/97
B. Full Performance Restoration excluding LPT Repair $ *
through 12/31/97
The above flat rates include all basic and rework labor, subcontract
charges, special processes, test cell fee, fuel & oil and rotable
fees. The above flat rates exclude bench check, repair, or overhaul
of accessories, and all material.
3. Material issued Flat Rated engines
A. New Current Manufacturer's Catalog
Price
B. Serviceable Current Manufacturer's Catalog
Price
C. Serviceable LLP Fair Market Value
4. Accessories for Flat Rated engines See Exhibit A-3.B.
Work that is over and above the defined workscope for the Performance
Restoration Flat Rate Repair (with or without penetration of the LLP)
shall be invoiced at the T&M pricing below:
A-3
EXHIBIT A
SCHEDULE 2
FRONTIER AIRLINES - FIELD SERVICE PRICING
CFM56 & JT8D
A. For each Technical Service Representative charged with providing technical
assistance or support to Operator. Charges applicable from time of
dispatch to return less periods of rest.
1) Monday through Friday Rates (minimum 8 hour daily charge):
0800 to 1700 Hours $ *
1700 to 0800 Hours $ *
2) Saturday Rates (minimum 8 hour daily charge):
0001 to 2400 Hours $ *
3) Sunday and Holiday Rates (minimum 8 hour daily charge):
0001 to 2400 Hours $ *
B. For Contractor-supplied tooling (i.e., borescopes, etc.):
Regular Borescope $ *
Video Borescope $ *
Vibration Survey Equipment $ *
Tooling $ *
C. Operator to be invoiced all reasonable costs to Contractor associated with
travel, baggage and tooling, freight, lodging, meals, rental cars, local
taxes and licenses, etc.
A-4
EXHIBIT A
SCHEDULE 3
FRONTIER AIRLINES - ACCESSORY PRICING
A. JT8D ACCESSORY PRICING
Basic Labor only to service accessories as applicable to JT8D engines (all
material and rework of parts is additional, if required):
Overhaul Bench Check Exchange
--------- ----------- ---------
Cable Assy-Thermocouple........ $ * $ * *
Cable - Exciter (Bendix)....... $ * $ * *
(Xxxxxxxx)......... $ * $ * *
Control Assy-PRBC.............. $ * $ * $ *
Control-Fuel (JFC-1, -2)....... $ * $ * $ *
(JFC-3).................. $ * $ * $ *
(JFC-6 w/o SB 73-24)........ $ * $ * *
(JFC-6 w/SB 73-24).......... $ * $ * *
Cooler Assy - Oil, Fuel........ $ * $ * *
Exciter (Bendix)............... $ * $ * $ *
(Xxxxxxxx)............. $ * $ * $ *
Flyweight Set-Fuel Control
(min. qty. of 10 set/input)
(grind only).................. $ * * *
Heater - Fuel De-icing......... $ * $ * $ *
Lead Assy - Thermocouple....... $ * $ * *
Manifold Assy, Fuel (each)..... $ * * *
Nozzle & Support Assy, Fuel
(JT8D-small)................... $ * * *
(JT8D-200 w/o SB 6169)......... $ * * *
(JT8D-200 w/SB 6169)........... $ * * *
Nozzle, Fuel (only)............ $ * * $ *
Pump Assy, Oil, Main........... $ * * *
Pump, Fuel, Main............... $ * $ * $ *
(TRW, i.e., 243601, 358201
371901 379201, 384301)
(Convert to 378201)........... $ * * $ *
Switch, Differential Fluid
Pressure (Custom)............. $ * $ * *
(P&W)........................ $ * $ * $ *
Valve & Actuator-Air Shutoff... $ * $ * $ *
Valve Assy - Compressor Bleed.. $ * $ * *
Valve Assy-
Fuel Pressurizing & Dump....... $ * $ *
Valve - Oil Drain.............. $ * $ * *
Valve - Start Bleed Control.... $ * $ * *
Other at Direct Hourly Rate JT8D T&M pricing
A-5
SCHEDULE 3
(cont'd)
B. CFM56 ACCESSORY PRICING
Overhaul Bench Check Exchange
--------- ----------- ---------
Main Engine Control........................................ $ * $ * *
Fuel Pump.................................................. $ * $ * *
Fuel Pump with SB 073-085.................................. * $ * *
Sensor, CIT................................................ * $ * *
Heater, Fuel Servo......................................... * $ * $ *
Valve, Turbine Clearance................................... $ * $ * *
Valve, Turbine Clearance
(9th Stage Hsg)........................................... * $ * *
Cable, VBV................................................ * $ * *
Cable, VSV................................................ * $ * *
Motor, Hydraulic Gear...................................... * $ * *
VSV Actuator.............................................. * $ * $ *
VSV Piston................................................ $ * * *
Lube Unit (including service bulletins).................... * $ * $ *
Oil, Heater Exchanger (Secan or Serik)..................... * $ * $ *
Oil Tank................................................... * $ * *
Sensor, Fan Inlet Temperature............................. * $ * *
Sensor, T12............................................... * $ * *
Valve, Start Bleed....................................... * $ * $ *
Ignitor Plug............................................... * $ * *
Exciter.................................................... * $ * *
N1 Speed Sensor (with SB 77-022)........................... * $ * *
Oil Screen (lots of 5 minimum)(each)....................... * $ * *
Oil Screen (less than 5)(each)............................. * * *
Alternator Stator.......................................... * $ * $ *
(*price is to bench check and modify)
Other at Direct Hourly Labor Rate.......................... CFM56 T&M
Pricing
The above flat rates for both CFM56 and JT8D accessories are for basic labor
only. All material is invoiced separately, as is repair of individual parts or
components.
A-6
EXHIBIT B
AIRCRAFT ENGINE SERVICE WARRANTY
--------------------------------
Greenwich warrants its serviced Engines against defective workmanship relating
to the work that Greenwich performs. Greenwich will repair any such Engine that
has failed for this reason. Greenwich's obligations are expressly limited to
correction of such defects by Greenwich at its expense and to specific periods
after redelivery of the Engine to Customer, as follows:
If, within one (1) year after redelivery, or within the first one
thousand (1,000) hours or cycles (whichever is greater) of operation,
whichever occurs first, the Engine fails due to a defect warrantable
hereunder, Greenwich shall correct such defect at no cost to Customer.
This warranty covers all defects which Customer can establish after Customer's
notice to Greenwich of the defect as having occurred, provided:
(1) Customer submits written notice of the defect within thirty (30) calendar
days of discovery; and
(2) the Engine is returned to Greenwich's facility, freight prepaid, within
sixty (60) calendar days after discovery, accompanied by a written
description of the nature of the defect; and
(3) after redelivery to Customer, the Engine has not been improperly installed
by Customer or by a subcontractor utilized by Customer; and
(4) subsequent to redelivery, the Engine was operated and maintained in
accordance with FAA and other applicable standards; was used under normal
operating conditions; was not subjected to misuse, abuse, neglect, accident
or incident; was properly stored and was not repaired or altered by anyone
other than Greenwich; and
(5) the Engine is returned with all proper records and necessary documents, all
of which shall be in English; and
(6) the Engine has not been sold to another; and
(7) Customer has met all of its financial obligations under the contract; and
(8) the Engine has not incurred Foreign Object Damage or has not failed as a
result of the failure of Customer supplied material.
Greenwich reserves the right to disclaim liability for costs which are incurred
in correcting any defect but which reasonably would not have occurred had the
workscope not excluded, at Customer's direction, work which otherwise would have
been performed, or which would have included inspection and repairs, that would
have revealed or anticipated the defect. Further, Greenwich shall not warrant
work excluded from Customer's workscope, when such work had been recommended by
Greenwich in writing.
B-1
This warranty expressly excludes correction of any defect in the Engine if it
must, following redelivery, be removed from operation due to performance or
material defects attributable to inadequacies or deficiencies in design,
materials or tooling as identified in applicable manufacturers' reports and
documents or due to problems generally recognized to be industry-wide.
Greenwich's total liability in connection with the service of Engines is
expressly limited to workmanship and any warranty for material will be the
warranty of the manufacturer of the material and Greenwich shall use its best
efforts to assist in obtaining that warranty for its Customer.
Greenwich reserves the right to determine whether the failure of the Engine
falls under the terms of this warranty and will have the option of repairing,
reworking, restoring or replacing the Engine and returning it to service or
crediting Customer on a prorata basis. If it is determined that the subsequent
repair is covered by this warranty, all freight charges will be reimbursed to
Customer. After repair or rework, to correct any such defect, the Engine will
be returned to Customer at Greenwich's expense.
The warranties provided for herein shall be for the benefit of Customer, and no
other party.
THIS WARRANTY IS IN LIEU OF ALL OTHER WARRANTIES, GUARANTEES, OR REPRESENTATIONS
OF ANY KIND, EITHER EXPRESS OR IMPLIED, STATUTORY OR OTHERWISE, INCLUDING,
WITHOUT LIMITATION, IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE, AND ANY OTHER LIABILITY OF ANY NATURE WHATSOEVER WITH
RESPECT TO WORK DONE, SERVICES PERFORMED OR PARTS OR MATERIALS PROVIDED BY
GREENWICH. WITHOUT LIMITATION OF THE FOREGOING, GREENWICH SHALL HAVE NO
LIABILITY FOR INDIRECT OR CONSEQUENTIAL DAMAGES OF ANY KIND DUE TO ANY DEFECT IN
WORKMANSHIP, AND CUSTOMER HEREBY WAIVES ANY RIGHTS IT MAY HAVE TO SUCH DAMAGES.
THIS WARRANTY SHALL NOT BE ALTERED EXCEPT BY WRITTEN AMENDMENT TO THIS AGREEMENT
BY AN AUTHORIZED OFFICER OF GREENWICH.
B-2
EXHIBIT C
ACCESSORY SHOPS
STANDARD OVERHAUL WARRANTY
--------------------------
Greenwich warrants its Accessory Shop's services to be free from defects in
workmanship at the time of delivery. Greenwich's liability is expressly limited
to replacing or repairing, at its option, any part which may be damaged as a
result of such defect, within one (1) year after redelivery of the part, subject
to the following conditions:
(1) Greenwich is notified in writing of the defect within ten (10) calendar
days of discovery.
(2) The assembly is returned to Greenwich freight prepaid, within thirty (30)
calendar days after discovery of the defect.
(3) Customer shall be responsible for costs of removal, reinstallation or
other associated expenditures.
(4) The assembly or part has been operated and maintained in accordance with
current manufacturer's manuals, operator handbooks, written
recommendations, service bulletins and procedures.
(5) Proper records have been kept on the part or assembly, especially
installation dates, where time in service is the only criterion.
(6) The assembly has not experienced any foreign object or external
(casualty) damage.
(7) If warranty request is approved by Greenwich, repairs shall be completed
with continued time applicable to the original overhaul transaction
(8) Warranty claims are subject to proration for time or use.
(9) Upon completion of the warranty work, Customer shall sign a release
indicating that all warranty work has been satisfactorily completed and
that all potential or actual claims related to the warranty work have
been satisfied.
Greenwich will, at its discretion, determine whether or not the failure or
defect is covered under the terms of the warranty. If it is determined that the
subsequent repair is covered by this warranty, this freight charge will be
reimbursed to Customer. The warranties provided for herein shall be for the
benefit of Customer, and no other party.
THIS WARRANTY IS IN LIEU OF ALL OTHER WARRANTIES, GUARANTEES, OR REPRESENTATIONS
OF ANY KIND, EITHER EXPRESS OR IMPLIED, STATUTORY OR OTHERWISE, INCLUDING,
WITHOUT LIMITATION, IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE, AND ANY OTHER LIABILITY OF ANY NATURE WHATSOEVER WITH
RESPECT TO WORK DONE, SERVICES PERFORMED OR PARTS OR MATERIALS PROVIDED BY
GREENWICH. WITHOUT LIMITATION OF THE FOREGOING, GREENWICH SHALL HAVE NO
LIABILITY FOR INDIRECT OR CONSEQUENTIAL DAMAGES OF ANY KIND DUE TO ANY DEFECT IN
WORKMANSHIP, AND CUSTOMER HEREBY WAIVES ANY RIGHTS IT MAY HAVE TO SUCH DAMAGES.
THIS WARRANTY SHALL NOT BE
C-1
ALTERED EXCEPT BY WRITTEN AMENDMENT TO THIS AGREEMENT BY AN AUTHORIZED OFFICER
OF GREENWICH.
C-2
