AIRCRAFT MAINTENANCE SERVICES AGREEMENT
dated as of October 26, 1999
by and between
HAWAIIAN AIRLINES, INC.,
as Customer
and
CONTINENTAL AIRLINES, INC.,
as Maintenance Provider
INDEX
ARTICLE HEADING
Page
ARTICLE 1 -- DEFINITIONS 1
ARTICLE 2 -- TERM OF AGREEMENT 6
ARTICLE 4 -- CERTAIN REGULATORY REQUIREMENTS 14
ARTICLE 5 -- DELIVERY AND REDELIVERY OF AIRCRAFT; INVENTORY 15
ARTICLE 6 -- DESIGNATED CUSTOMER REPRESENTATIVE 16
ARTICLE 7 -- MATERIAL SUPPLY 18
ARTICLE 8 -- OFFICE SPACE, MONITORING, AUDITS AND INSPECTION 18
ARTICLE 9 -- CHARGES 19
ARTICLE 10 -- PAYMENTS 21
ARTICLE 11 -- COST RECOVERY 25
ARTICLE 12 -- EXCUSABLE DELAY 26
ARTICLE 13 -- ASSURANCE OF SUPPLY 27
ARTICLE 15 -- WARRANTIES 27
ARTICLE 16 -- PATENT PROTECTION 29
ARTICLE 17 -- COMPLIANCE WITH LEGAL REQUIREMENTS 30
ARTICLE 18 -- MAINTENANCE PROVIDER'S INSURANCE 30
ARTICLE 19 -- INDEMNIFICATION 31
ARTICLE 20 -- CANCELLATION, DEFAULT, AND TERMINATION 32
ARTICLE 21 -- NOTICES AND REQUESTS 33
ARTICLE 22 -- CONFIDENTIALITY 35
ARTICLE 23 -- MAINTENANCE PROVIDER AS INDEPENDENT CONTRACTOR 35
ARTICLE 24 -- ASSIGNMENT 35
ARTICLE 25 -- SUBCONTRACTING 35
ARTICLE 26 -- SAVINGS CLAUSE 36
ARTICLE 27 -- WAIVER CLAUSE 36
ARTICLE 28 -- GOVERNING LAW 36
ARTICLE 29 -- COSTS OF ENFORCEMENT 36
ARTICLE 30 -- INTEGRATION CLAUSE 37
ARTICLE 31 -- HEADINGS 37
ARTICLE 32 -- COUNTERPARTS 37
ARTICLE 33 -- NON-LIABILITY OF CERTAIN PERSONS 37
ARTICLE 34 -- CONSEQUENTIAL, INCIDENTAL AND EXEMPLARY DAMAGES. 37
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INDEX TO EXHIBITS
Exhibit Exhibit Heading Page
------- --------------- ----
A Schedule of Charges for Initial Conversion Services
and Line Maintenance Services..................................A-1
B Schedule of Time and Material Charges For Additional Services..B-1
C Statement of Work..............................................C-1
D Delivery/Redelivery Receipt....................................D-1
E Loose Equipment Inventory List.................................E-1
F Daily Aircraft Status Summary .................................F-1
G Customer Work Change Authorization ............................G-1
H Invoicing Cost Categories .....................................H-1
I Monthly Aircraft Usage Report..................................I-1
ii
AIRCRAFT MAINTENANCE SERVICES AGREEMENT
THIS AIRCRAFT MAINTENANCE SERVICES AGREEMENT is made and entered into to
have effect as of this 26th day of October, 1999 (the "Effective Date"), by and
between HAWAIIAN AIRLINES, INC., a Hawaii corporation ("Customer") and
CONTINENTAL AIRLINES, INC., a Delaware corporation ("Continental" or
"Maintenance Provider").
RECITALS:
1. On the date hereof, Customer is entering into aircraft sublease agreements
for two DC-10-30 aircraft with Continental Micronesia, Inc., an indirect,
wholly-owned subsidiary of Continental.
2. Customer desires that Maintenance Provider perform certain Services (as
hereinafter defined) on the Aircraft (as hereinafter defined).
3. Maintenance Provider is willing and able to perform the Services pursuant
to the terms and subject to the conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth, the parties agree as follows:
ARTICLE 1 -- DEFINITIONS
Unless the context otherwise requires, the following terms shall have the
following meanings for all purposes of this Agreement and shall be equally
applicable to both the singular and the plural forms of the terms herein
defined. Any agreement referred to below shall mean such agreement as amended,
supplemented and modified from time to time. The word "including" means
"including without limitation".
"Additional Services" shall have the meaning ascribed to such term in Article
3.A.4.
"Agreement", "herein", "hereof", "hereunder", and like terms shall refer to this
Aircraft Maintenance Services Agreement, as the same may be amended or
supplemented from time to time.
"Aircraft" shall mean the two XxXxxxxxx Xxxxxxx XX00-00 aircraft bearing U.S.
Registration Nos. N12061 and N68060, respectively, and manufacturer's serial
numbers 47851 and 47850, respectively, in each case including the airframe, all
attached engines and instruments, and all other equipment, apparatus,
assemblies, Parts, and accessories attached thereto, incorporated therein, or
installed thereon from time to time.
1
"Current Heavy Maintenance Facilities" shall mean FLS Aerospace Limited,
Mobile Aerospace Engineering, Inc., Israeli Aircraft Industries and Alitalia.
"Customer" shall mean the legal entity identified as "Customer" in the
introductory paragraph of this Agreement.
"Customer-Furnished Material" shall mean all Parts and Materials provided by
Customer as required for the provision of any Services.
"Customer-Requested Services" shall have the meaning ascribed to such term in
Article 3.A.4.C.
"Customer Parties" shall mean and include Customer and its successors and
assigns and their respective affiliates, officers, directors, agents and
employees.
"Customer Work Change Authorization" shall mean a document, in substantially the
form of Exhibit G and executed on behalf of both Maintenance Provider and
Customer, used to document any changes in respect of a Statement of Work,
including, without limitation, any addition to or deletion permitted under this
Agreement from the scope of Services initially described on such Statement of
Work and any change to the Scheduled Redelivery Date specified therein.
"Cycle" shall mean, with respect to any Aircraft, one (1) take-off of such
Aircraft and the next subsequent landing of such Aircraft.
"Default" shall have the meaning set forth in Article 20, Paragraph B of this
Agreement.
"Delivery" shall mean the act by which Customer delivers or causes to be
delivered an Aircraft to Maintenance Provider for the provision of Services.
"Delivery/Redelivery Receipt" shall have the meaning ascribed to such term in
Article 5.A.
"Designated Customer Representative" shall mean, with respect to any Aircraft,
(1) the on-site representative of Customer, designated in writing by Customer to
Maintenance Provider, pursuant to paragraph (B) of Article 6, designated as such
or (2) in the absence of any such designation by Customer, Customer's
Vice-President or Assistant Vice President of Technical Services.
"Discrepancy" shall mean any condition of any Aircraft, Engine, Part, or other
component or system of any of the foregoing, that is outside of permissible
limits under the applicable Maintenance Manual whether or not this condition
could eventually result in failure, confirmed as such by Maintenance Provider.
"Effective Date" shall have the meaning specified in the first paragraph of this
Agreement.
2
"Engine" shall mean (1) any aircraft engine installed on or attached to any
Aircraft at the time of Delivery to the Maintenance Provider for the performance
of Services under this Agreement, and (2) any replacement or spare General
Electric model CF6-50C2 engine owned or otherwise operated by Customer from time
to time in conjunction with the Aircraft, whether or not such engine is
installed on an Aircraft at the time Services are requested in respect of such
engine under this Agreement.
"Environmental Laws" shall mean any and all applicable federal, state, or local
laws, statutes, ordinances, codes, rules, decrees, regulations, guides, or
orders relating to health, safety, or the environment as now or at any time
hereafter in effect during the Term.
"Expendable Part" means any Part that, in the ordinary course of correcting a
Discrepancy, is replaced rather than Overhauled, Repaired, or calibrated.
"Expiration Date" shall mean January 2, 2002.
"FAA" shall mean the Federal Aviation Administration of the United States
Department of Transportation, or any agency succeeding to the power and
authority thereof.
"FARs" shall mean any and all regulations promulgated by the FAA or any
predecessor agency, as well as those promulgated by any other Federal agency
that are applicable to the provision of the Services, including, without
limitation, those set out in Title 14 of the Code of Federal Regulations, as
from time to time in effect.
"Flight Hour" shall mean, with respect to any Aircraft, the amount of time
(expressed in hours and rounded to the nearest one-hundredth (1/100th of an
hour) between the time the wheels of the Aircraft leave the ground on take-off
to the time the wheels touch down on the ground at landing.
"Hazardous Materials" shall mean and include any petroleum, including crude oil
or any fraction thereof, natural gas, natural gas liquids, liquified natural
gas, synthetic gas usable for fuel, or any mixture thereof, flammable
explosives, asbestos, polychlorinated biphenyls, radioactive materials, or other
substance now or in the future defined or listed in, or otherwise classified
pursuant to, or regulated by, any Environmental Law as a hazardous substance,
hazardous material, hazardous waste, infectious waste, toxic substance,
pollutant, or contaminant, or any other term used to define, list, classify, or
regulate substances by reason of properties such as their threshold limit
concentrations, ignitability, corrosivity, reactivity, carcinogenicity,
toxicity, reproductive toxicity, or "EP toxicity."
"Heavy Maintenance Checks" shall have the meaning ascribed to such term in
Article 3.A.3.
"Heavy Maintenance Check Location" shall mean the heavy maintenance base from
time to time selected in accordance with this Agreement for the performance of
Heavy Maintenance Checks.
"Initial Conversion Services" shall have the meaning ascribed to such term in
Article 3.A.1.
3
"Inventory" shall mean all loose equipment, manuals, certificates, and other
items on board an Aircraft at the time of Delivery, as evidenced by their
inclusion on the relevant Loose Equipment Inventory List.
"Line Maintenance" shall have the meaning ascribed to such term in Article
3.A.2.
"Line Maintenance Location" shall mean (1) Los Angeles International Airport
and (2) Honolulu International Airport in Honolulu, Hawaii.
"Loose Equipment Inventory List" shall mean each completed form, in
substantially the form of Exhibit E, required to be delivered pursuant to
Article 5.
"Maintenance" shall mean that work required to maintain an Aircraft in, or
return it to, serviceable and airworthy condition, whether through inspection,
Overhaul, Repair, calibration, or replacement.
"Maintenance Provider" shall mean Continental Airlines, Inc.
"Maintenance Manual" shall mean any maintenance manual or portion of a
maintenance manual prepared, distributed or approved by Continental in respect
of any Aircraft, Engine or Part.
"Maintenance Program" shall mean Maintenance Provider's FAA-approved Continuous
Airworthiness Maintenance Program for aircraft operated by the Maintenance
Provider that are of the same manufacturer, make and model as the Aircraft,
including Maintenance Provider's FAA-approved Reliability Program (per
Continental Continuous Maintenance Performance Audit Report #020R001, Revision
No. 58), Maintenance Provider's procedures for the reliability program (per
Continental General Maintenance Manual), and Maintenance Provider's Operations
Specifications (per Continental Operations Specifications Part D, including DC10
Task Oriented Maintenance Specification Engineering Report No. 0520R00134, and
CF6-50 Engine Repair Specification Report No. ER7200R00033).
"Manufacturer" shall mean (1) The Boeing Company, as successor in interest to
XxXxxxxxx Xxxxxxx Aircraft Corporation, with respect to each Aircraft, (2) GE
Aircraft Engines with respect to the Engines, and (3) with respect to any Part,
the original equipment manufacturer of such Part.
"Materials" shall mean raw stock (as opposed to pre-manufactured Parts) and
other supplies used or consumed in the performance of Services.
"Modification" shall mean the work required to modify the Aircraft in a
specified manner.
4
"Monthly Aircraft Usage Report" shall mean a Monthly Aircraft Usage Report
substantially in the form of Exhibit I attached hereto, duly completed and
submitted by Customer to Maintenance Provider pursuant to Article 10(A).
"Monthly Credit" shall mean the sum of Thirty Five Thousand U.S. Dollars
($________) per month during the Term, which shall be deducted from Customer's
obligation to pay the Monthly Payment on each Monthly Payment Date in accordance
with Article 10(A) below.
"Monthly Payment" shall have the meaning specified in Article 9(B) of this
Agreement.
"Monthly Payment Date" shall mean the fifth (5th) calendar day of each calendar
month, commencing with the calendar month immediately following the month in
which the Effective Date occurs, and ending with the calendar month immediately
following the month in which the Expiration Date occurs or in which the Term of
this Agreement otherwise terminates in accordance with the provisions hereof,
except that if such fifth (5th) calendar day in any month is not a day on which
banks are open in New York City, New York and Honolulu, Hawaii, then the Monthly
Payment Date for such month shall be on the next calendar day when such banks
are open.
"Non-Routine Items" shall mean all Discrepancies detected through or in the
course of performance of routine items that, in accordance with the Maintenance
Program require inspection, Repair or Overhaul before the affected Aircraft or
Part can be returned to service.
"Off-line Maintenance" shall have the meaning ascribed to such term in Article
3.A.4.a.
"Overhaul" shall mean to disassemble, clean, inspect, repair and re-assemble, in
each case as required, any Rotable Part to return such Rotable Part to a
condition of compliance with such limits of tolerance as are established by the
Maintenance Program.
"Parts" shall mean any one or more Rotable Parts or Expendable Parts that is
used or installed on any Aircraft or Engine.
"Redelivery" shall mean the act by which Maintenance Provider returns, or causes
to be returned, the Aircraft to Customer after completion (or cancellation) of
the Services requested to be performed thereon pursuant to the applicable
Statement of Work and any applicable Customer Work Change Authorizations.
"Repair" shall mean the work required to return a Rotable Part to a serviceable
(and, where applicable, airworthy) condition in accordance with the Maintenance
Program.
"Rotable Parts" shall mean Parts that are renewable and inventory- or
time-controlled on a unit basis, usually (but not necessarily) by serial number,
and have a definite potential for reuse through inspection, Overhaul, Repair, or
calibration in connection with the Maintenance Program.
5
"Schedule of Charges" shall mean Exhibit B, as the same may be amended or
supplemented from time to time.
"Scheduled Redelivery Date" shall have the meaning ascribed to such term in
Article 5.A.
"Services" shall mean all services (including Off-Line Maintenance) to be
provided by Maintenance Provider for Customer pursuant to this Agreement, as
described on any Statement of Work or Customer Work Change Authorization,
whether consisting of the performance of Initial Conversion Services, Line
Maintenance Services, Heavy Maintenance Checks, Additional Services or AOG
Services, and whether such services constitute routine items or Non-Routine
Items.
"Statement of Work" shall have the meaning ascribed to such term in Article 3.B.
"Sublease" shall mean each Aircraft Sublease Agreement dated the date hereof in
respect of an Aircraft between Continental Micronesia, Inc., as sublessor and
Customer as sublessee.
"Sublease Delivery" with respect to each Aircraft shall mean the delivery of
such Aircraft to Customer under the applicable Sublease.
"Term" shall have the meaning specified in Article 2.
"U.S. Dollars" and "U.S. $" shall mean legal currency of the United States of
America.
"Weekly Aircraft Status Summary" shall mean a weekly report with respect to the
status of Heavy Maintenance Checks requested to be performed on a particular
Aircraft, in substantially the form of Exhibit F or of such replacement form as
Customer and Maintenance Provider may agree from time to time for the purpose of
monitoring the status of Heavy Maintenance Checks being performed.
"Work Cards" shall mean the work cards submitted by Customer to Maintenance
Provider in connection with any Statement of Work or Customer Work Change
Authorization to assist in describing the nature of the Services to be performed
pursuant thereto.
ARTICLE 2 -- TERM OF AGREEMENT
Except as may be otherwise provided herein, the term of this Agreement
shall commence as of the Effective Date and shall continue in full force and
effect until the Expiration Date, subject to earlier termination pursuant to the
terms hereof (the "Term").
ARTICLE 3 - SERVICES COVERED
6
A. General. On the terms and subject to the conditions set forth in this
Agreement, Maintenance Provider shall provide to Customer, and Customer shall
purchase from Maintenance Provider, the following services during the Term of
this Agreement:
1. Initial Conversion Services. Maintenance Provider agrees to provide
the following initial services ("Initial Conversion Services") to
Customer:
a. install five (5) Sceptre computer terminals (four on premises
used by the Customer at Honolulu airport and the fifth terminal
on premises used by the Customer at Los Angeles International
Airport) and provide access to Continental's Sceptre computer
terminals until such five (5) terminals are installed,
b. provide training at a mutually acceptable location to a
reasonable number of employees of the Customer designated by the
Customer with respect to the Maintenance Program and operation of
the Sceptre computer system,
c. prepare, with the assistance of Customer, a standard practice
manual, which shall be subject to Customer's approval (not to be
unreasonably withheld, conditioned or delayed) for reference in
the performance of the Services hereunder and which shall include
definitions of organizational responsibilities and interfaces,
together with any amendments made thereto from time to time
agreed upon by the parties hereto,
d. reconfigure each of the Aircraft to a Continental standard 28
first class and 254 coach interior seating configuration, and
e. install the Customer's logo to the exterior of each Aircraft
(either by painting or by installation of decals provided by the
Customer to Maintenance Provider, as the Customer may elect so
long as such decals or stencils are provided by October 25, 1999
for Aircraft N68060 and March 1, 2000 for Aircraft N12061), with
the specifications to be provided by Customer to Maintenance
Provider.
Maintenance Provider shall complete the Initial Conversion
Services (1) described in clause "b" above not later than the date
on which the first Aircraft is delivered to Customer under the
applicable Sublease, (2) described in clauses "a" and "c" above as
soon as reasonably practicable after the delivery of the first
Aircraft to Customer under the relevant Sublease and (3) described
in clauses "d" and "e" above with respect to each Aircraft not later
than the date on which such Aircraft is delivered to Customer under
the applicable Sublease.
The Maintenance Provider may commence the provision of Initial
Conversion Services at any time after the execution and delivery of
this Agreement.
7
Maintenance Provider also agrees to provide as Additional
Services (as defined in Article 3.A.4 below) such other Services
prior to the Sublease Delivery of an Aircraft as the Customer may
reasonably request hereunder, subject to the conditions applicable
to the provision of Customer-Requested Services hereunder, and such
Services provided prior to the Sublease Delivery of an Aircraft
shall be treated as Customer-Requested Services.
2. Line Maintenance. Maintenance Provider will provide the following line
maintenance services to Customer with respect to each Aircraft and
each Engine ("Line Maintenance"):
a. line maintenance work required to maintain an Aircraft in, or
return it to, serviceable and airworthy condition, whether
through inspection, Overhaul, Repair, calibration or replacement
of Parts and Modification -- all in accordance with the
Maintenance Program,
b. spares provisioning as and when required under the Maintenance
Program, including the provision of spare engines and auxiliary
power units ("APUs"), at an inventory level no less than that
maintained by Maintenance Provider in respect of like model and
vintage aircraft in its fleet as reasonably adjusted to account
for such factors as the total number of aircraft being supported
by such spares inventory, the location of such spares inventory
and the utilization and stage lengths of the aircraft being
supported by such spares inventory,
c. Phase "A" checks,
d. other customary line maintenance services,
e. all engineering, maintenance, inspection and testing work
required in connection with the completion of "service checks",
"Phase `A' checks", "transit checks", "time control inspection"
and "XXX recovery" (as such terms are used in the Maintenance
Program), and
f. washing services at Honolulu or Los Angeles through a third party
vendor mutually agreed upon by Maintenance Provider and Customer.
but excluding the following: (u) cleaning the interior of the
Aircraft, (v) ground handling of the Aircraft, including fueling the
Aircraft, pushing the Aircraft back from the gate, moving the Aircraft
from gate to gate and similar tasks customarily performed as part of
ground handling, (w) "meet and greet" maintenance performed on an
Aircraft upon arrival and departure at Honolulu, Kailua-Kona and Maui
and, if Customer elects, Los Angeles International Airport, (x)
providing any passenger convenience and safety items, including
pillows, blankets, magazines, soap, paper towels, audio headphones,
galley equipment, video cassettes, emergency briefing cards, life
vests, cockpit and cabin logbooks, galley equipment, etc., (y) Heavy
Maintenance Checks (as defined in Article 3.A.3), and (z) all
Additional Services (as defined in Article 3.A.4).
8
The Maintenance Provider shall commence the provision of Line
Maintenance with respect to each Aircraft at the time of the
Sublease Delivery of such Aircraft.
3. Heavy Maintenance Checks. Maintenance Provider agrees to perform or
cause to be performed on the Aircraft the "C" check, the mid-"D"
check, the "D" check (including all phases and multiples thereof) as
defined in the Maintenance Program, including all work required to
correct all Discrepancies identified in the course of such check,
whether such work consists of routine items or Non-Routine Items
(collectively, "Heavy Maintenance Checks"). Each Heavy Maintenance
Check will be performed on each Aircraft at or prior to the intervals
prescribed for such Heavy Maintenance Check under the Maintenance
Program. Maintenance Provider shall use reasonable efforts to schedule
the next Heavy Maintenance Check for Aircraft N68060 to coincide with
the delivery of Aircraft N12061 to Customer under the relevant
Sublease and sufficiently in advance of June 1, 2000 so as to result
in Aircraft N68060 being returned from such Heavy Maintenance Check
and available to Customer for service not later than June 1, 2000,
provided that such date is subject to adjustment pursuant to Article
5.D. In any case, Maintenance Provider shall ensure that the next
Heavy Maintenance Check for Aircraft N68060 does not occur until the
delivery of Aircraft N12061 under the applicable Sublease. Maintenance
Provider will develop the work scope for each Heavy Maintenance Check,
including estimates of man-hours required for such Heavy Maintenance
Check, approximately 30 to 45 days prior to induction of the Aircraft
into the applicable Heavy Maintenance Check Location and shall present
such work scope to Customer for review. Maintenance Provider shall
give due consideration to any request by Customer to exclude any task
proposed to be included in a workscope (a) if such task is not
normally performed under the Maintenance Program during the scheduled
Heavy Maintenance Check or (b) if such task is one that would not
otherwise be due until the next Heavy Maintenance Check or within
thirty (30) days after the end of the term of the relevant Sublease,
if earlier.
4. Additional Services. Maintenance Provider agrees to provide the
following additional services to Customer ("Additional Services"),
subject to the limitations and conditions set forth in this Agreement:
a. all inspection, work, maintenance, Repair or Overhaul of any
Aircraft, Engine or Part required to maintain the airworthiness
or serviceability of an Aircraft as determined by the Maintenance
Program and required in a circumstance that makes it impractical
(due to scheduling, routing, unplanned failure or other reasons)
for the Services to be performed at a Heavy Maintenance Check
Location or a Line Maintenance Location, including maintenance
services for charter flights to locations other than a Line
Maintenance Location ("Off-Line Maintenance"). Customer shall use
reasonable efforts to fly a mechanic on board the Aircraft during
operations to locations other than Line Maintenance Locations,
9
b. all inspection, work, maintenance, Repair or Overhaul of any
Aircraft, Engine or Part required under the Maintenance Program
as a result of ground damage, foreign object damage (whether to
the airframe of such Aircraft, any Engine or both), installation
of Customer-Furnished Material that is a damaged Part or the
wrong Part, misuse or abuse of such equipment or operation of
such equipment in violation or outside the parameters of the
Maintenance Manual, the flight manual for such Aircraft (or its
equivalent), applicable FARs or the applicable manufacturer's
guidelines or negligent performance of line maintenance by a
maintenance provider other than Continental, its employees,
agents or subcontractors and replacement of any Part lost or
stolen while the Aircraft or such Part is in Customer's custody
("Extraordinary Maintenance"), and
c. all other maintenance services not included in the definitions of
Extraordinary Maintenance, Off-Line Maintenance, Heavy
Maintenance Checks, Line Maintenance or Initial Conversion
Services that Customer desires to have performed with respect to
any Aircraft, Engine or Part and that are accepted by the
Maintenance Provider ("Customer-Requested Services"). Maintenance
Provider shall provide Customer-Requested Services so long as (1)
Maintenance Provider receives notice of such Customer-Requested
Service reasonably in advance of when such Services are to be
performed, (2) the labor or materials required to perform such
Services are available (either from Maintenance Provider's own
staff and inventory or from third party vendors) without imposing
an unreasonable burden on Maintenance Provider, (3) the
Customer-Requested Service would not violate the applicable
Sublease or (4) would not unreasonably delay Redelivery of the
Aircraft.
5. AOG Services. Maintenance Provider agrees to provide all support
reasonably required and available to return to service as
promptly as practicable an Aircraft that is grounded at any
location where repair or recovery is feasible (an "AOG
Aircraft"). If a parts shortage at a Line Maintenance Location
results in an AOG Aircraft, Maintenance Provider agrees to exert
all commercially reasonable efforts to obtain, through whatever
means available, the parts required to return the Aircraft to
service. If Off-Line Maintenance Services would be required with
respect to an AOG Aircraft, Maintenance Provider agrees to
dispatch (or cause to be dispatched) a field service team to the
relevant location as promptly as feasible. If under the
circumstances Customer and Maintenance Provider jointly conclude
that an AOG Aircraft could be rectified more promptly and/or
efficiently through the retention of a third party vendor,
Maintenance Provider shall use the services of the appropriate
third party vendor to perform the relevant Off-Line Maintenance
Services.
10
B. Statements of Work. In each instance, any Extraordinary Maintenance or
Customer-Requested Services shall be initiated by Customer and Maintenance
Provider entering into a document in substantially the form of Exhibit C
delivered to Maintenance Provider by or on behalf of Customer defining and
describing the Services to be performed on one or more Aircraft or Engines and
which has been accepted by Maintenance Provider (a "Statement of Work") covering
such Services. Each Statement of Work shall specify, with respect to each item
or type of Service described therein, within which type of Additional Service
such Service falls (i.e., Extraordinary Maintenance or Customer-Requested
Services).
No Statement of Work shall be required for the provision of Initial
Conversion Services, Line Maintenance, Heavy Maintenance Checks or Off-Line
Maintenance, but Customer may provide, at its election, a Statement of Work for
Initial Conversion Services.
Any Statement of Work required hereunder shall be issued in a timely manner
to enable the relevant Services to be performed when required.
C. Aircraft Routing Information; Scheduling and Coordination. Customer
agrees to provide Continental employees with:
o the anticipated routing and flight schedules for each of the Aircraft
on a regular basis, not less frequently than once per week, provided
two weeks in advance;
o any changes to such routing and flight schedules promptly after they
become available to Customer and
o notice of any proposed ad hoc charter flights (i.e., non-recurring
charter flights) of the Aircraft promptly after Customer knows of such
charters.
Customer and Continental will use the routing and flight schedules to coordinate
the provision of Services under this Agreement and the locations at which
Services will be provided with the routing and scheduling of each Aircraft.
Customer acknowledges that each Aircraft will need to be scheduled for a
maintenance "hold" for certain Line Maintenance at Honolulu once per week on
Monday through Thursday for a minimum of 12 hours and approximately once per
month for 24 hours (in addition to longer removals of the Aircraft from
passenger service for more extensive periodic checks). Furthermore, each
Aircraft shall overnight in Los Angeles or Honolulu for a minimum of five (5)
nights per week for 12 hours per night. In addition, Customer agrees to provide
additional scheduled maintenance holds, subject to the fourth sentence of
Article 3.E, when reasonably requested by Maintenance Provider.
D. Location of Services.
1. Initial Conversion Services. The Initial Conversion Services
shall be performed at a location selected by Continental.
11
2. Line Maintenance Services. All Line Maintenance shall be performed at
a Line Maintenance Location; provided, however, that Maintenance
Provider agrees that it shall provide transit checks to Customer at
its facilities in San Francisco, and, if Maintenance Provider has
available sufficient manpower and materials to provide other Line
Maintenance Services at such location at the relevant time without
disrupting its normal operations, shall also provide such additional
Line Maintenance Services and that such checks shall occur no more
than once per week on an unscheduled basis and as a result of an
irregular operation. Any costs due to the shipment of any Parts or
materials required to support any such transit check or other Line
Maintenance in San Francisco shall be at the expense of the Customer
and shall be in addition to the Monthly Payment.
3. Heavy Maintenance Check. Maintenance Provider anticipates contracting
with one of its four Current Heavy Maintenance Facilities to provide
the Heavy Maintenance Checks for the Aircraft. Maintenance Provider
agrees that it shall ensure that all of the pricing, warranty and
other material terms and conditions applicable to Services performed
at one of the Current Heavy Maintenance Facilities on the Aircraft are
at least as favorable to Customer as the terms and conditions
applicable to similar services performed at such facilities on
Continental's aircraft. Customer acknowledges that three of the four
Current Heavy Maintenance Facilities are located outside the
continental United States. In the event that Maintenance Provider
determines that Heavy Maintenance Check should be performed by a third
party vendor other than one of the Current Heavy Maintenance
Facilities, reasonably in advance of the relevant Heavy Maintenance
Check, Maintenance Provider shall advise Customer of the decision to
use a different vendor and Maintenance Provider and Customer shall
mutually agree upon the vendor to be used. Customer shall be entitled
to receive reasonable assurances from Maintenance Provider that the
third party vendor so selected to perform the Heavy Maintenance Check
shall perform the relevant Services on terms and conditions that are
fair and reasonable and no less favorable to Customer than the terms
and conditions generally applicable to similar services performed for
Continental on like model and vintage aircraft by the selected vendor,
if Continental regularly uses such vendor for such services, or at the
other vendors from whom Continental regularly obtains such services.
4. Off-Line Maintenance Services. Upon reasonable notice, Off-Line
Maintenance Services shall be performed at such location as Customer
may reasonably request subject to Continental's approval (not to be
unreasonably withheld, conditioned or delayed), provided that the
location proposed by Customer is capable of supporting DC-10-30
operations. If Customer makes such a request, Maintenance Provider and
Customer shall cooperate with one another to establish an appropriate
plan for providing the Services at the requested location. Customer
acknowledges that Maintenance Provider will be entitled to
compensation on a time and material basis for establishing Services at
any such location.
12
5. Extraordinary Maintenance. Extraordinary Maintenance shall be
performed at a Line Maintenance Location, a Heavy Maintenance Check
Location, at any other location as the parties may agree, and, in the
case of an AOG Aircraft, at such location as may be required in
accordance with Article 3.A.5 hereof.
6. Customer Requested Services. Customer Requested Services shall be
performed at either a Heavy Maintenance Check Location (if the
Aircraft at such Heavy Maintenance Check Location) or a Line
Maintenance Location as specified in the applicable Statement of Work.
E. Performance Standards. Maintenance Provider agrees that in providing
Services hereunder (including without limitation arranging, monitoring, and
auditing Services provided through third party vendors hereunder), Maintenance
Provider shall use at least the same degree of care and consideration as it
applies to performing similar services for similar aircraft in its fleet.
Maintenance Provider agrees that it shall not discriminate, and shall use its
reasonable best efforts not to permit any of its subcontractors to discriminate
against the Aircraft in favor of similar aircraft in Maintenance Provider's
fleet. Upon reasonable request by Customer in relation to any particular
circumstances, Continental shall provide Customer with reasonably satisfactory
assurances or, to the extent possible, substantiation that it has not
discriminated against the Aircraft (as compared to other equipment of the same
type owned or operated by Continental) with respect to the Services provided
under the Agreement; provided, however, that the foregoing agreement shall not
be construed as obligating Maintenance Provider (or its subcontractors) to give
Customer's Aircraft priority over Continental's servicing of its own aircraft,
it being the intention of the parties that Maintenance Provider afford to
Customer's Aircraft the same priority in the performance of Services as
Maintenance Provider affords to Continental's own operations. In this regard,
Maintenance Provider agrees to use its commercially reasonable efforts to
perform all Line Maintenance Services on a schedule that will coincide with the
flight scheduling information furnished by Customer pursuant Article 3.C, and
shall minimize, to the extent feasible, the risk of disruption to Customer's
scheduled service. Without limiting the generality of the foregoing, Maintenance
Provider agrees to include the Aircraft in Continental's reliability program as
if such Aircraft were operated in Continental's fleet. Maintenance Provider
shall endeavor to attain a dispatch reliability for the Aircraft from the line
stations it manages measured for each calendar quarter that equals or exceeds
the average dispatch reliability for the other DC-10-30 aircraft included in
Continental's reliability program, after adjusting the applicable statistics to
account for differences in flight operations. At the end of each calendar
quarter, beginning with the quarter ending in March 2000, Maintenance Provider
shall issue a reliability report comparing the performance of the Aircraft to
the other DC-10-30 aircraft included in Continental's reliability program.
Promptly following the issuance of such report, Maintenance Provider and
Customer shall meet to assess performance and identify any actions required of
Customer and/or Maintenance Provider to improve reliability. If the reliability
performance of the Aircraft during any such quarterly period falls in the lowest
(i.e., the fourth) quartile for Continental's DC-10-30 fleet, Maintenance
Provider agrees to promptly devote the resources appropriate to increasing such
reliability to at least equal the dispatch reliability for the third quartile of
Continental's DC-10-30 fleet in the following quarter.
13
F. Reports. Maintenance Provider shall deliver to the Designated Customer
Representative and to Customer each week, for monitoring and verification
purposes, a Weekly Aircraft Status Summary relating to each Aircraft in a Heavy
Maintenance Check, setting forth with respect to the Services requested to be
performed on such Aircraft such information as may be called for by such form as
then may be in effect.
G. Adoption of Maintenance Program. During the Term of this Agreement,
each of the Aircraft shall be on the Customer's operations specifications except
for when an Aircraft is in a Heavy Maintenance Check, at which time if required,
the Aircraft shall be placed on Continental's operations specifications during
such Heavy Maintenance Check. Not later than the date on which the first
Aircraft is delivered to Customer under a Sublease, Customer shall adopt
Continental's Maintenance Program for the Aircraft. If Continental makes any
change to the Maintenance Program, Continental shall communicate the change to
Customer, which shall accept such change. Following the adoption of the
Maintenance Program, such program as adopted by Customer with respect to the
Aircraft shall at all times remain under the exclusive control of Customer, and
the provision by Continental of the Services to be provided under this Agreement
shall not be interpreted to remove exclusive control of the Maintenance Program
as adopted by Customer with respect to the Aircraft from Customer. Customer
shall ensure that all maintenance and repair that it performs on the Aircraft
shall be accomplished in accordance with the Maintenance Program. Customer
agrees that the Services requested in any Statement of Work shall not be in
violation of any FAR or in violation of any applicable provision of the relevant
Sublease.
ARTICLE 4 -- CERTAIN REGULATORY REQUIREMENTS
In performing the Services, Maintenance Provider shall comply in all
material respects with the Maintenance Program relating to the Aircraft. Without
limiting in any manner the generality of the foregoing (and without limiting in
any manner the obligations of Maintenance Provider under Article 17),
Maintenance Provider shall:
A. provide maintenance for the Aircraft in accordance with the
provisions of FAR 121.379 by providing trained and qualified
maintenance personnel authorized to execute an Airworthiness Release
(returned to service) as outlined in FAR 121.709;
B. promptly report to the Designated Customer Representative any
discrepancies between FAA requirements and Maintenance Provider's
operations that are reported to Maintenance Provider by the FAA and
that affect the Aircraft or the provision of Services hereunder;
C. provide the Designated Customer Representative with access to
records of all Services performed that are required to be
maintained in accordance with the FARs;
14
D. prepare and execute such forms and other releases, make such log
entries, and obtain such other FAA approvals, as may be required
for the return of an Aircraft to service following the provision
of Services requested pursuant to a particular Statement of Work
and any related Customer Work Change Authorizations, in any such
case, covering all major Repairs, Modifications and other
alterations to such Aircraft accomplished during the performance
of such Services;
E. Provide Customer and Engineering Documentation that provide repairs,
alterations, and modifications to the Aircraft with the supporting
justification including FAA approval, when required;
F. maintain such data and records as may be necessary to assist
Customer and the Designated Customer Representative in the
preparation of alteration and repair reports required by FAR
121.707, and make such data and records available to Customer and
the Designated Customer Representative for inspection and copying
at all times during normal business hours. All such data and
records shall contain such information, as may be reasonably
requested and required by Customer upon reasonable notice.
ARTICLE 5 -- DELIVERY AND REDELIVERY OF AIRCRAFT; INVENTORY
A. Delivery of Aircraft for Services; Scheduled Redelivery Date. Prior to
the time when a particular Service is to be provided under this Agreement (other
than Initial Conversion Services), Customer shall deliver the Aircraft to the
applicable location at its sole risk and expense (including fuel, navigation
charges, landing fees and similar charges). Upon delivery of an Aircraft by
Customer to the Heavy Check Location, the parties shall execute an appropriately
completed receipt substantially in the form of Exhibit D (the
"Delivery/Redelivery Receipt") to evidence the delivery of such Aircraft. No
Delivery/Redelivery Receipt shall be required for delivery of an Aircraft to
Maintenance Provider for Line Maintenance, Off-Line Maintenance, Additional
Services or AOG Services.
At the time an Aircraft is delivered for a Heavy Maintenance Check, the
parties shall agree upon a date (the "Scheduled Redelivery Date") on which such
Aircraft is expected to be redelivered to Customer upon completion of the
relevant Services, which date is subject to subsequent adjustment as provided in
Article 5.D below.
B. De-Catering the Aircraft; Loose Equipment Inventory. Prior to delivery
of an Aircraft for a Heavy Maintenance Check, phase "A" checks and such other
times as Maintenance Provider may reasonably request, Customer shall xx-xxxxx
the Aircraft by removing all pillows, blankets, headsets, galley carts, trays,
beverages and food and empty the lavatories and the potable water on the
Aircraft. At delivery of the Aircraft for a Heavy Maintenance Check, Maintenance
Provider and the Designated Customer Representative shall conduct an inventory
of all Inventory on board the Aircraft and prepare and sign a Loose Equipment
Inventory List listing all such Inventory on board the Aircraft at delivery.
Upon completion of the Services and at the time Maintenance Provider redelivers
the Aircraft to Customer, Maintenance Provider and the Designated Customer
Representative shall inspect the Aircraft to determine whether all such
Inventory is on board the Aircraft at redelivery. Maintenance Provider shall be
responsible to Customer for replacing any missing items of such Inventory at the
time the Aircraft is redelivered to Customer.
15
C. Redelivery of Aircraft. Upon (1) completion of the Services to be
performed on an Aircraft or (2) if earlier, cancellation of the relevant
Services pursuant to Article 20, Maintenance Facility shall (subject to Article
10) redeliver the Aircraft to Customer, and (subject to its rights of inspection
and testing) Customer shall accept redelivery of the Aircraft at the location
where such Services were performed, at such other location as the parties may
mutually agree, or as specified in the applicable Statement of Work or any
related Customer Work Change Authorization, in each case at Customer's expense.
Upon redelivery of the Aircraft to Customer following completion of a Heavy
Maintenance Check, the parties shall sign an appropriately completed
Delivery/Redelivery Receipt. No Delivery/Redelivery Receipt shall be required
for redelivery of an Aircraft to Customer following the performance of Services
other than a Heavy Maintenance Check.
D. Adjustments to Scheduled Redelivery Date. The Scheduled Redelivery Date
shall be adjusted in the following circumstances: (1) if there is any delay in
the delivery of any Aircraft to Maintenance Provider or in the issuance of any
Statement of Work required hereunder, (2) in the case of Heavy Maintenance
Checks, if the outside vendor performing such Heavy Maintenance Check acting in
accordance with procedures contained in the underlying agreement between
Continental and such vendor, at the conclusion of the condition determination
phase, an estimated date on which such Heavy Maintenance Check shall be
completed that differs from the originally Scheduled Redelivery Date, (3) if
there is any revision of the originally Scheduled Redelivery Date in or as a
result of a Customer Work Change Authorization or Customer Requested Services
and (4) if there is an excusable delay covered by Article 12. In such case, the
Scheduled Redelivery Date shall be adjusted to take into account such delayed
delivery, revision of the originally Scheduled Redelivery Date, revised
estimated redelivery date or excusable delay, as the case may be. Maintenance
Provider agrees to inform Customer of the procedures referred to in item (2) of
the preceding sentence at or prior to the time when an Aircraft is delivered to
the applicable vendor for a Heavy Maintenance Check. The Designated Customer
Representative shall be permitted to participate with Maintenance Provider in
the condition assessment phase of a Heavy Maintenance Check referred to in such
item (2).
ARTICLE 6 - DESIGNATED CUSTOMER REPRESENTATIVE
Customer may designate a representative to Maintenance Provider to act on
behalf of the Customer with respect to the performance of the Services requested
with respect to any Aircraft (the "Designated Customer Representative" for
purposes of the Services to be provided to such Aircraft), and such Designated
Customer Representative shall be empowered by Customer to make in Customer's
name all required decisions with respect to such Aircraft , including the
following:
16
A. to observe the performance of all Services hereunder (including,
without limitation, Heavy Maintenance Checks),
B. to monitor the progress of the performance of Services hereunder
by Sceptre or other means,
C. to authorize changes in the scope or terms of the Heavy
Maintenance Checks and Additional Services to be provided
pursuant to a Statement of Work with respect to an Aircraft,
D. to sign on Customer's behalf any relevant Delivery/Redelivery
Receipt, Statement of Work or Customer Work Change Authorization,
E. to carry out on Customer's behalf any other function described
herein with respect to an Aircraft,
F. generally to liaise with Continental personnel performing
Services hereunder in coordinating flight routing/scheduling and
the timing and location of the Services performed hereunder and
G. to participate on a sampling basis in Continental's process of
review and approval of invoices received from outside vendors for
Heavy Maintenance Checks prior to the due date for such invoices.
In observing and monitoring the performance of Services, the Designated
Customer Representative shall not unreasonably interfere with the Maintenance
Provider's performing the Services or Continental's operations unrelated to this
Agreement.
The Designated Customer Representative may enhance or increase the scope
of work to be performed in a Heavy Maintenance Check, but he or she shall have
no authority to reduce or defer the scope of work to be performed during a Heavy
Maintenance Check other than in respect of tasks excluded in accordance with the
last sentence of Article 3.A.3. Continental will obtain Customer approval (which
shall not be unreasonably withheld, conditioned or delayed) for any Non-Routine
Item if the estimated amount of man-hours required to correct exceeds _____ man
hours of labor (or such higher limit as may be applicable in the underlying
agreement with the supplier performing such Heavy Maintenance Check, but not to
exceed _____ man hours of labor). Changes in or additions to Additional Services
requested by Customer to be provided to such Aircraft shall be authorized and
approved in writing by the Designated Customer Representative on a Customer Work
Change Authorization prior to the performance of such changed or additional
Services.
17
ARTICLE 7 -- MATERIAL SUPPLY
A. General. Maintenance Provider shall provide all Parts (whether
Expendable Parts or Rotable Parts) and Materials required to accomplish the
Services, as well as all inventory support activities relating to those Parts
and Materials. Charges for Maintenance Provider's supply of such Parts and
Materials for Services other than Line Maintenance Services and Initial
Conversion Services specified in item A.1. of Exhibit A shall be as specified in
the Schedule of Charges (Exhibit B), and shall be inclusive of any and all
handling charges imposed by Maintenance Provider with respect to such Parts or
Materials. For the avoidance of doubt, there is no additional charge beyond the
Monthly Payment specified in Article 9.B. for the provisions of Parts and
Materials by Maintenance Provider in performing Line Maintenance.
B. Inventory; Customer-Furnished Material. All Inventory listed on the
Loose Equipment Inventory List completed in connection with Delivery of an
Aircraft, and all Customer-Furnished Material, regardless of the source, shall
be handled by Maintenance Provider through its normal FAA-approved incoming
material receiving inspection procedures (i.e., FARs 145.2, 145.45(c), and
145.45(d)). All Customer Furnished Material will be delivered to Maintenance
Provider free from defects and in serviceable condition in conformity with
applicable FAR and manufacturers specifications.
C. Waiver of Liens. MAINTENANCE PROVIDER EXPRESSLY WAIVES ANY RIGHT TO A
LIEN IN ANY CUSTOMER-FURNISHED MATERIAL PRIOR TO ITS INSTALLATION ON AN
AIRCRAFT, WHETHER ARISING UNDER CALIFORNIA BUSINESS AND PROFESSIONS CODE CHAPTER
19.5, CALIFORNIA CODE OF CIVIL PROCEDURE SECTIONS 1208.61 ET SEQ., CALIFORNIA
CIVIL CODE SECTIONS 3051 ET SEQ., SECTION 184 OF THE NEW YORK LIEN LAW, THE LAWS
OF THE STATE OF HAWAII, OR OTHERWISE; AND UNDER NO CIRCUMSTANCES SHALL
MAINTENANCE PROVIDER WITHHOLD REDELIVERY OF SUCH UNINSTALLED CUSTOMER-FURNISHED
MATERIAL BECAUSE OF ANY BREACH OR ALLEGED BREACH BY CUSTOMER OF ANY PAYMENT OR
OTHER OBLIGATION OF CUSTOMER UNDER THIS AGREEMENT.
ARTICLE 8 -- OFFICE SPACE, MONITORING, AUDITS AND INSPECTION
A. Office Space and Facilities. Maintenance Provider agrees to arrange for
the third party performing any Heavy Maintenance Check to provide suitable
office space to Customer at the Heavy Check Maintenance Location as Customer may
reasonably request. Such office space may be shared with Continental and, if
applicable, will be at Customer's expense.
B. Monitoring of Services. Upon reasonable notice to Continental, Customer
shall have the right to observe all work in progress at Line Maintenance
Locations and Heavy Maintenance Check Locations and all AOG Services and to
monitor on a sampling basis the inspection of Parts and Materials being
Repaired, Modified, Overhauled, or calibrated. For that purpose Maintenance
Provider shall permit the Designated Customer Representative, and other
representatives of Customer, to enter the relevant location at all reasonable
times during Maintenance Provider's business hours; provided that no such
inspection shall unreasonably interfere with the progress of the work.
18
C. Auditing of Services. Maintenance Provider shall keep complete records
and accounts from which may be determined the actual cost any Heavy Maintenance
Check provided under this Agreement. Continental shall use commercially
reasonable efforts to ensure that, provided Customer agrees to be subject to the
same confidentiality provisions restrictions as are applicable to Continental
under the agreements between Continental and the provider of Heavy Maintenance
Checks, such records and accounts shall be open for inspection, examination,
audit, and copying by the Designated Customer Representative, and other
representatives of Customer, at all reasonable times and with reasonable notice
for a period 180 days after invoice. If such records and accounts are not open
to Customer for such inspection, examination, audit, and copying, upon
reasonable request by Customer, Maintenance Provider agrees to exercise such
rights as it may have under such agreements to provide Customer with reasonable
assurances that any items as to which Customer has expressed a reasonable
concern have been substantiated to the extent that Maintenance Provider is
entitled to receive substantiation.
D. Inspection of Services. All Services with respect to any Aircraft are
subject to Customer's final inspection and acceptance (not to be unreasonably
delayed, conditioned or withheld) at the location at which Redelivery of such
Aircraft is effected, notwithstanding any prior payment(s) made in respect
thereof. Such inspection shall be made at the time of Redelivery and shall be
for the purposes of determining whether the Services provided comply with the
Maintenance Program and represent satisfactory completion of all tasks included
in the workscope. Acceptance of any Service, however, shall not be deemed to
alter or affect the obligations of Maintenance Provider, or the rights of
Customer, under Article 15, relating to Maintenance Provider's warranties.
E. Flight Tests. Maintenance Provider shall conduct, with its own pilots
and covered by its own policies of insurance, any required flight test of the
Aircraft following the provision of Services hereunder. Customer shall be
responsible for all other costs associated with any such flight. Customer shall
be entitled to have an observer on board the Aircraft during any such test
flight. Any Discrepancies discovered during such flight testing and relating to
Services performed by Maintenance Provider shall be corrected at a location
determined by Maintenance Provider. Any warranty claims for reimbursement of the
costs of correcting such Discrepancies shall be settled in accordance with
Article 15.
ARTICLE 9 -- CHARGES
A. Initial Conversion Services. Maintenance Provider's charges to Customer
in respect of the Initial Conversion Services shall be as set forth on Exhibit
A. Maintenance Provider shall invoice Customer for all charges in respect of
Initial Conversion Services in accordance with Article 10 below.
19
B. Line Maintenance. As payment in full for all Line Maintenance required
in respect of the Aircraft during the Term of this Agreement (other than washing
services at Honolulu or Los Angeles), Customer shall pay to Maintenance Provider
for each Aircraft on each Monthly Payment Date the sum of the following amounts
(1) and (2) (such sum being referred to herein as the Monthly Payment): (1) the
product of (i) the number of Flight Hours flown by such Aircraft during the
immediately preceding calendar month, or portion thereof occurring during the
Term of this Agreement, and (ii) the amount set forth under "Total Cost Per
Flight Hour" under Part B of Exhibit A hereto, and (2) the product of (i) the
number of Cycles flown by such Aircraft during the immediately preceding
calendar month, or portion thereof occurring during the Term of this Agreement,
and (ii) the amount set forth under "Total Cost Per Cycle" under Part B of
Exhibit A hereto; provided, however, that (x) if the number of Flight Hours
flown by an Aircraft during any month is less than 50, the actual number of
Flight Hours for such month for such Aircraft shall be deemed to be 50 for
purposes of calculating the portion of the amount of the Monthly Payment
represented by clause (1) above unless such Aircraft is either in a Heavy
Maintenance Check for such month or out of service during such month as a result
of Maintenance Provider's negligence or improper provision of Services, in
either such case, the actual number of Flight Hours for such Aircraft shall be
used for such calculation, and (y) the portion of the Total Cost Per Cycle
consisting of charges in respect of a transit check shall be reduced to delete
each flight segment (other than a flight segment to either Los Angeles or
Honolulu) for which a transit check is not performed. Customer agrees to provide
Maintenance Provider with a report each week identifying the flight segments as
to which clause (y) of the preceding sentence is applicable. The amount invoiced
to Customer for washing services in Honolulu or Los Angeles (or both) shall be
equal to the amount invoiced to Continental by the third party vendor.
C. Heavy Maintenance Checks.
1. Time. The amount invoiced to Customer for Heavy Maintenance
Checks will be the sum of (A) the amount invoiced to Continental
by the outside vender (which Customer acknowledges may include
taxes), and (B) (1) labor charges for Continental employees in
charge of supervising or monitoring such Heavy Maintenance Check
and expenses as provided in the Schedule of Time and Material
Charges for Additional Services and Heavy Maintenance Checks
attached hereto as Exhibit B multiplied by (2) the actual number
of labor hours or labor days (or fractions of such days), as
applicable, performed, and (C) per diem and accommodation
allowances and car rental expenses identified on Exhibit B.
2. Materials. Customer shall pay the cost of all Parts and Materials
(whether supplied by Continental or an outside vendor) and other
direct charges incurred in connection with the performance of
Heavy Maintenance Checks by Maintenance Provider or the
applicable outside vendor in accordance with the Schedule of Time
and Material Charges for Additional Services and Heavy
Maintenance Checks attached hereto as Exhibit B.
20
D. Additional Services and AOG Services.
1. Time. The amount invoiced to Customer for labor charges for
Additional Services and AOG Services will be computed by
multiplying the hourly rate for the appropriate labor category
specified on the Schedule of Time and Material Charges for
Additional Services, AOG Services and Heavy Maintenance Checks
attached hereto as Exhibit B by the actual number of labor hours
performed under a particular Statement of Work or Customer Work
Change Authorization.
2. Materials. Customer shall pay the cost of all Parts and Materials
(whether supplied by Continental or an outside vendor), and other
direct charges (such as travel expenses, if required to perform
Services) incurred in connection with the performance of
Additional Services or AOG Services by Maintenance Provider in
accordance with the Schedule of Time and Material Charges for
Additional Services, AOG Services and Heavy Maintenance Checks
attached hereto as Exhibit B.
3. Engine FOD. Notwithstanding any other provision in this Agreement
to the contrary, Maintenance Provider agrees to perform, at no
cost to Customer, any Services (including Extraordinary Services)
occasioned by the discovery of foreign object damage ("FOD") in
any Engine during the first five hundred flight hours of
operation after Sublease Delivery of such Engine, other than FOD
that results from the operation of the Aircraft during such
period (as reasonably demonstrated by Continental) and FOD that
is related to a confirmed FOD incident occurring during such
period.
4. Off-Line Transit Checks. Customer shall be entitled to a credit
in the amount of $_____ against the time and material charges
assessed in accordance with this Article 9.D in respect of each
transit check of an Aircraft at an Off-Line Maintenance Location.
If Maintenance Provider retains Customer, rather than a third
party vendor, to perform a transit check of an Aircraft at an
Off-Line Maintenance Location, the charges by Customer for such
check shall be deemed to exactly offset the associated charges
under Article 9.D hereof in respect of such transit check.
Customer agrees to provide Maintenance Provider with a report
each week identifying the transit checks as to which this
paragraph is applicable.
ARTICLE 10 -- PAYMENTS
21
A. Payment for Line Maintenance. On each Monthly Payment Date, Customer
shall pay the Monthly Payment, less the amount of the Monthly Credit, to
Maintenance Provider in the manner specified in paragraph G of this Article 10.
If the Monthly Credit exceeds the amount of the Monthly Payment due from
Customer on any Monthly Payment Date and if no other amounts are due and payable
hereunder, Maintenance Provider shall promptly remit such excess to Customer in
immediately available funds at such account as Customer may designate in
writing. On each Monthly Payment Date, Customer shall submit to Maintenance
Provider a Monthly Aircraft Usage Report specifying the number of Flight Hours
and Cycles operated by each Aircraft during the immediately preceding calendar
month, which report shall also set forth Customer's calculation as to (i) the
gross amount of the Monthly Payment due in respect of the operations of the
Aircraft shown on such report, and (ii) the net amount of the Monthly Payment to
be remitted by Customer to Maintenance Provider after application of the Monthly
Credit, or the excess amount of the Monthly Credit to be remitted by Maintenance
Provider to Customer under the terms of this Article 10(A), as the case may be.
Maintenance Provider shall not be required to issue any invoices to Customer
under this Article 10 in respect of any Line Maintenance.
B. Payment for Additional Services, Heavy Maintenance Checks and AOG
Services. In consideration of Additional Services and AOG Services rendered
under this Agreement, Customer agrees, subject to paragraphs D and E of this
Article 10, to pay Maintenance Provider all amounts due and payable for
Additional Services and AOG Services within 25 days following receipt of
Maintenance Provider's final invoice therefor. For the Heavy Maintenance Checks,
Customer shall pay Continental's invoice to Customer at the later of (i) the
date when such payment is due from Continental to the outside vendor performing
such Heavy Maintenance Check under Continental's agreement with such vendor, or
(ii) the twenty-fifth day following receipt of such invoice. The parties
acknowledge that the "fixed price" portion of invoices for Heavy Maintenance
Checks is sometimes due upon completion of such check and the remaining balance
within 30 days thereafter. At least five days prior to the date that an Aircraft
is scheduled for Redelivery, Continental shall give Customer written notice
setting forth the "fixed price" portion of the invoices for any Heavy
Maintenance Check.
C. Changes in Charges Due by Reason of Customer Work Change
Authorizations. If a Customer Work Change Authorization causes an increase in
the estimated total labor charges of Additional Services to be performed on a
time-and-materials basis, all amounts payable by Customer and attributable to
such Customer Work Change Authorization shall be paid thirty days after receipt
of Maintenance Facility's invoice of all Additional Services requested with
respect to such Aircraft. If a Customer Work Change Authorization results in a
credit to Customer, such credit shall be issued by Maintenance Provider and
applied in reduction of the next scheduled payment due under paragraph (B) of
this Article 10 above.
D. Invoices and Approvals.
1. Invoices for Additional Services, AOG Services and Heavy Maintenance
Checks Generally. All invoices for Additional Services, AOG Services
and Heavy Maintenance Checks submitted to Customer hereunder shall
include the following information:
22
a. invoice number
b. invoice date
c. Statement of Work number
d. Aircraft registration number
e. Engine serial number (if relevant)
f. dates of work accomplished
g. all time-and-material charges
2. Back-Up and Level of Itemization for Invoices for Additional Services and
AOG Services. Detailed labor-and material back-up attached to or included
with any invoice for Additional Services will include the following:
a. costs classified and identified by cost category
b. a report of all labor, divided into routine
items and Non-Routine Items, identified by task
description and total man-hours
c. an itemized report of Parts and Materials
d. an itemized report of all other applicable charges
e. number of approved hours worked for time-and-material work
f. part number or serial number
g. part manufacturer
h. quantity of part purchased
i. part cost
j. sub-contracted services cost, etc.
Maintenance Provider shall not be required to itemize separately on
invoices common commercial low value hardware and other items purchased in
bulk, which may be carried as floor stock by Maintenance Provider, where
individual item control is not considered practical or economical.
3. Back-Up and Level of Itemization for Invoices for Heavy Maintenance Checks.
Detailed labor-and material back-up attached to or included with any
invoice for Heavy Maintenance Checks other than with respect to the "fixed
price" portion of such invoice will include the following:
a. costs classified and identified by cost category
b. a report of all labor, divided into total approved man-hours for
routine items and for Non-Routine Items
c. an itemized report of for man-hours for Non-Routine Items if the
number of approved man-hours for any one Non-Routine Item exceeds 125
(or such higher limit as may be applicable in the underlying agreement
with the supplier performing such Heavy Maintenance Check, but not to
exceed 150 man hours of labor)
23
d. an itemized report of Parts and Materials
e. an itemized report of all other applicable charges
f. part number or serial number
g. part manufacturer
h. quantity of part purchased
i. part cost
j. sub-contracted services cost, etc.
For the portion of invoices for Heavy Maintenance Checks attributable to
charges of the outside vendor performing such work, Continental shall
provide to Customer a copy of such vendor's invoice to Continental
(provided that Customer agrees to be bound by any restrictions imposed by
confidentiality provisions in agreements between such vendor and
Continental). Customer acknowledges that no itemized detail is normally
provided with respect to the "fixed price" portion of such outside vendor
invoice.
4. Time Period Within Which Work Must Be Invoiced. Customer will not pay any
invoice received beyond ____ days after Redelivery of the Aircraft to which
such invoice relates (other than past-due invoices for previously invoiced
and overdue amounts, which shall continue to be due and payable); provided
however, if, prior to the expiration of such ____ day period, Maintenance
Provider advises Customer in writing of any outstanding items to be
invoiced, Customer shall pay the invoices for such items upon receipt as
long as such invoices are received by Customer within ____ days after
Redelivery of the Aircraft to which such invoice relates. In no event shall
Customer be obligated to pay any invoice that is received by Customer more
than ____ days after Redelivery of the Aircraft to which invoice relates.
Notwithstanding the time limits expressed in the preceding two sentences,
if the Services that give rise to the relevant invoice are performed by a
third party vendor with whom Continental has an existing general terms
agreement and under the terms applicable to such Services (and to other
services performed for Continental at such facility) a later time limit for
rendering invoices has been expressly agreed upon, then such later time
limits shall be applicable to the affected invoice in lieu of the time
limits set forth herein.
5. Approval of Invoices. All invoices for Parts, Materials, and Services
performed by subcontractors (i.e., all invoices except the final invoice
for Maintenance Provider's labor charges) shall be submitted promptly to
the Customer for payment. Customer may, but shall not be required to, pay
any invoice before it becomes due, and in so doing may take advantage of
any cash discounts made available to Maintenance Provider from time to
time; no such payment, however, shall constitute a waiver of, or shall
otherwise impair, Customer's right to reject the Services and to have a
valid claim against Maintenance Provider for any loss, shortage, defect,
delay, or other default in the Services reflected on the relevant
invoice(s). Any adjustment in an invoice deemed appropriate by the parties
shall be made by means of a subsequent invoice or by refund to Customer.
24
E. Submittal of Invoices. Maintenance Provider shall send all invoices
to Customer at the address for notices set forth in Article 21.
F. Disputes. The parties will negotiate in good faith to promptly resolve
any dispute as to an invoice. If a bona fide dispute occurs regarding the amount
of any payment due hereunder except for the "fixed price" portion of an invoice
for a Heavy Maintenance Check, Customer may withhold payment of the amount in
dispute, but shall pay the balance. Customer agrees to pay the agreed upon
"fixed price" portion of the cost of any completed Heavy Maintenance Check on or
prior to the due date, regardless of any dispute with respect to the balance of
the invoice for such Services or any other dispute hereunder in relation to
other Services. Customer agrees that it shall provide Maintenance Provider with
written notice of any dispute and the reasons for such dispute and supporting
detail not less than five (5) days prior to the date by which payment on the
invoice to which such dispute relates is due under this Agreement. No action
taken pursuant to this Article 10, however, shall be deemed to constitute a
waiver of either party's rights or obligations under this Agreement.
G. Method of Payment. All payments due to Maintenance Provider
hereunder shall be made by wire transfer to Maintenance Provider's account as
follows:
The Chase Manhattan Bank
ABA No. 000-000-00
Account No.: _______________
Account Name: Continental Airlines, Inc.
Reference: Hawaiian DC10-30 Maintenance Agreement
ARTICLE 11 -- COST RECOVERY
A. Damage, Loss, and Other Occurrences Requiring Replacement of Customer's
Property. If any Aircraft, Engine, Inventory, Part, Customer-Furnished Material,
or other item delivered by Customer to Maintenance Provider hereunder is damaged
or lost or otherwise requires replacement while in the care, custody or control
of Maintenance Provider or any of its employees, agents, or subcontractors
(other than any Aircraft, Engine, Inventory, Part, Customer-Furnished Material
or other item that is damaged or lost or otherwise requires replacement because
it is damaged or lost by representatives of the Customer or, in the case of
Customer-Furnished Material, was delivered to Maintenance Facility damaged or is
the incorrect Part), Maintenance Provider shall pay the cost of replacing the
item damaged or lost or otherwise requiring replacement or provide a replacement
part. In addition, Maintenance Provider shall promptly notify the Designated
Customer Representative if the replacement cost of such items exceeds $________.
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B. Late Delivery Charge. If Redelivery of an Aircraft is delayed in a
Heavy Maintenance Check beyond the Scheduled Redelivery Date (as adjusted
pursuant to Article 5.D) for reasons other than those set forth in Article 12
hereof, Maintenance Provider agrees to review and evaluate the causes of such
delay and its rights in respect thereof under the agreement between Maintenance
Provider and the outside vendor contracted to perform such Services. If, under
the circumstances, Maintenance Provider concludes reasonably that it may be
entitled to a late delivery payment or similar compensation in respect of such
delay in completion of the subject Services, Maintenance Provider agrees that it
shall pursue such contractual rights that it may have under its agreement with
such outside vendor and pass the full amount of any payment or other
compensation (which may take the form of a credit) received from such vendor in
respect of the claim to Customer.
C. AOG Charge. If an Aircraft incurs ground damage as a result of
Maintenance Provider's own negligence and such ground damage results in such
Aircraft becoming an AOG Aircraft for a period in excess of 24 hours,
Maintenance Provider agrees to pay Customer in respect of each additional period
of 24 hours that such Aircraft remains an AOG Aircraft, the sum of $--------.
D. Rights Cumulative. Customer's rights under this Article 11 shall not be
exclusive, but shall be in addition to any and all other remedies available to
Customer upon the occurrence of an event referred to in this Article.
ARTICLE 12 -- EXCUSABLE DELAY
Maintenance Provider shall not be liable for any delay in the Redelivery
of any Aircraft if the delay is due to causes beyond the reasonable control of
Maintenance Provider or the applicable subcontractor, including, but not limited
to acts or omissions of Customer, fire, explosion, flood or other natural
catastrophe, governmental act, order or regulation, acts of God or the public
enemy, war or warlike operations, inability or failure of suppliers to deliver
parts or materials in a timely manner, insurrection or riots, failure of public
transportation or common carrier, strikes or other labor disputes; provided,
that where reasonable efforts could have been taken by Maintenance Provider
under all the attendant circumstances to avert the results of such occurrences,
that such reasonable efforts were in fact taken by Maintenance Provider;
provided further, however, that delay due to any such cause shall be excused
only for so long as resumption of performance remains beyond the reasonable
control of Maintenance Provider due to any such cause. Maintenance Provider
shall use every reasonable effort to minimize the effects of any such cause of
delay. Maintenance Provider shall notify Customer promptly after a responsible
officer or employee of Maintenance Provider with management responsibilities
becomes aware of the occurrence of any such event claimed to be a cause of
excusable delay, and, in the absence of such notice, delayed performance by
Maintenance Provider shall not be considered excused pursuant to this Article
12.
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ARTICLE 13 -- ASSURANCE OF SUPPLY
Continental represents and warrants to Customer that Continental's
mechanics are covered by a collective bargaining agreement that becomes
amendable January 8, 2002. If Maintenance Provider's ability to continue to
render Services is adversely affected due to labor unrest, Maintenance Provider
shall use reasonable and diligent efforts to either redirect, reassign, or
transfer Service requirements to an unaffected facility operated by Maintenance
Provider or to procure Services from other sources, and in the case of
redirected Line Maintenance, such Line Maintenance shall be at no additional
cost to Customer.
ARTICLE 14 - TAXES
Any bank fees, taxes, duties and other charges imposed or levied against
any payment for the Services performed pursuant to this Agreement shall be borne
by the Customer, unless such fees, taxes, duties or other charges are levied on
the income or profits of Continental, in which case they will be borne by
Continental.
ARTICLE 15 -- WARRANTIES
A. Warranties. Maintenance Provider expressly warrants that all of the
Services (other than Services performed by third party vendors in relation to
Heavy Maintenance Checks) shall be performed in a workmanlike manner and that
all Parts manufactured by Continental and furnished under this Agreement will
conform to applicable specifications, drawings, parts numbers, samples, or other
descriptions given and with all applicable FARs, and that such Parts and such
Services will be free from defects, whether patent or latent, in materials and
workmanship, for a period of _______________ or _______ flight hours, whichever
expires earlier, after Redelivery of the Aircraft upon completion of such
Services. In the event of a defect covered by this warranty, Maintenance
Provider agrees to rectify such warranty failure and, if necessary, at no
additional charge to Customer, upon Customer's request, to dispatch to the
Aircraft location field service personnel, and subject to Maintenance Provider's
prior written consent (not to be unreasonably conditioned, withheld or delayed),
Customer may perform any repairs in accordance with the Maintenance Program
covered by this warranty and Maintenance Provider will reimburse Customer for
the actual reasonable costs incurred by Customer in the performance of such
repairs. For avoidance of doubt, Maintenance Provider confirms that any
component failure caused by negligent or improper performance of Line
Maintenance shall be rectified by Maintenance Provider without charge to
Customer even if the failure occurs while an Aircraft is away from a Line
Maintenance Location and the Services required to so rectify the failure must be
performed away from a Line Maintenance Location.
Maintenance Provider warrants that all Parts and Materials (other than
Customer-Furnished Materials, as to which Continental disclaims any warranty
other than that they shall be free and clear of liens, charges and encumbrances
created by or arising through Continental) are, and will be, free and clear from
all liens, charges, and encumbrances of any nature whatsoever, except for liens,
charges and encumbrances created by or arising through Customer; the lien of the
applicable Sublease and liens permitted thereunder. All warranties, whether
express or implied, with respect to such Services and Parts manufactured by
Continental shall extend to the benefit of Customer, its successors and assigns.
The foregoing representations, warranties and conditions and the conditions set
forth in Paragraph E of this Article 15 shall survive Redelivery of the Aircraft
to which they relate, acceptance of the relevant Services and (unless they
expire earlier, as provided in the first sentence of this Article 15.A)
termination of this Agreement. THE CUSTOMER EXPRESSLY AGREES AND ACKNOWLEDGES
THAT SAVE AS PREVIOUSLY EXPRESSED IN THIS ARTICLE 15.A, MAINTENANCE PROVIDER
GIVES NO WARRANTIES, GUARANTEES OR REPRESENTATIONS, EXPRESS OR IMPLIED WITH
RESPECT TO THE AIRCRAFT OR WORK PERFORMED HEREUNDER BY MAINTENANCE PROVIDER OR
PERFORMED BY ANY SUBCONTRACTOR, AND ALL SUCH WARRANTIES, GUARANTEES OR
REPRESENTATIONS, EXPRESS OR IMPLIED, STATUTORY OR ARISING BY LAW OR OTHERWISE,
(INCLUDING WITHOUT LIMITATION ANY WARRANTIES AS TO MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE) ARE EXPRESSLY EXCLUDED.
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B. Limitation. Maintenance Provider does not warrant the quality or
fitness of Parts or Materials furnished to Maintenance Provider by Customer. In
no event shall Maintenance Provider have any liability in performing Services
under this Agreement for any lost profits or revenues of Customer or for
incidental or consequential damages.
C. Manufacturers' Warranties. With regard to any Part or Material now or
at any time hereafter supplied by Maintenance Provider to Customer hereunder
having a warranty from the manufacturer of such Part or Material that is
assignable, but without limiting in any manner Maintenance Provider's warranty
set forth above in paragraph (A), Maintenance Provider hereby assigns to
Customer, to the extent possible, each such warranty and shall provide all
reasonable assistance to Customer in pursuing warranty claims (including without
limitation procuring any manufacturer consent as may be required or advisable
for such assignment).
D. Third Party Vendor Warranties. Maintenance Provider shall ensure that
all Services performed by a third party vendor, including without limitation,
Heavy Maintenance Checks, are covered by a warranty (a "Vendor Warranty") that
is at least as protective of the interests of Customer in relation to such
Services as the warranty applicable to the services regularly performed by such
vendor on aircraft operated by Continental. So long as this Agreement remains in
effect, Maintenance Provider agrees to pursue any applicable Vendor Warranty in
its name but for Customer's account. If this Agreement terminates prior to its
scheduled expiration date, upon the Customer's request, Maintenance Provider
shall assign to Customer all Vendor Warranties that are assignable, and
Maintenance Provider shall seek such consents to and acknowledgments of
assignment from the relevant third party vendor as are appropriate to confirm to
Customer that Customer is entitled to enforce such Vendor Warranty. If a Vendor
Warranty is not assignable or the relevant third party vendor refuses for any
reason to permit the relevant warranty rights to be enforced by Customer,
Maintenance Provider agrees to pursue such warranty rights in its own name, but
for Customer's account.
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E. Maintenance Provider's warranty obligations for Services performed
hereunder are subject to the following conditions:
1. The warranted Aircraft has been used under normal operating
conditions as established by the original equipment manufacturer and
in compliance with airworthiness directives and has not been subject
to misuse, neglect, accident or ingestion of foreign material or
modifications of the Aircraft not authorized or consented to by
Continental; and
2. Within the warranty period or within 30 days following discovery by
Customer of malfunction, whichever is earlier, Customer notifies
Maintenance Provider in writing of any claim and the basis for such
claim. Customer shall reasonably endeavor to provide Maintenance
Facility with notice of any malfunction or defect promptly following
discovery.
ARTICLE 16 -- PATENT PROTECTION
Maintenance Provider will indemnify and hold harmless Customer, its
affiliates and each of their employees, officers, and directors (each such
person or entity, a "User") from any loss, damage, or liability which may be
incurred on account of actual or alleged infringement of any patent, copyright,
trademark, trade name, or trade secret with respect to the Services or any Part
manufactured by Maintenance Provider or furnished by third party vendors or
manufacturers to the extent manufactured or designed by Maintenance Provider
(such Parts "Vendor Materials"), and will, at its own expense, defend each User
in any action, suit, or claim in which such infringement is alleged. Without
limiting in any manner the rights of any User under the foregoing sentence, if
any Part manufactured by Continental or the Services infringes a patent, etc.
and the affected user is deprived of the use of such Services or such Vendor
Material, Maintenance Provider shall also, at its expense and at the option of
any affected User, either (A) procure for each affected User the right to
continued use of Services or Vendor Materials, (B) replace same with
non-infringing Services or Vendor Materials satisfactory to such User, (C)
modify such Services or Vendor Materials to non-infringing status (but without
impairing their utility), or (D) remove the Services or Vendor Materials and
refund a portion of the purchase price and other costs incurred by such User for
the installation and removal thereof equal to the product of (A) such purchase
price and costs of such infringing Service or Vendor Material and (B) a
fraction, the numerator of which is the number of months of useful life of such
Service or Vendor Material remaining as of the date on which the Customer was
deprived of the use of such Service or Vendor Material and the denumerator of
which is the number of months of useful life of such Service or Vendor Material
at the time such Service or Vendor Material was originally performed or
installed. Any original design of Customer, and any design, literary property,
work of authorship, trade secret, invention, or other intellectual property
developed during the rendering of Services or in the custom manufacture of Parts
or Materials for Customer or for which Customer has paid the design or
development costs, either separately or as part of the purchase price, shall
become the property of Customer, and no patent or copyright application or other
use of such design, literary property, work of authorship, trade secret,
invention, or other intellectual property shall be made by Maintenance Provider
without Customer's prior written approval. This Article 16 shall survive the
termination of this Agreement.
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ARTICLE 17 -- COMPLIANCE WITH LEGAL REQUIREMENTS
Maintenance Provider shall be approved by the FAA and shall comply with
all applicable FARs and other federal, state and local laws and executive orders
and regulations issued pursuant thereto, except for immaterial, non-recurring
violations of such FARs, laws, orders and regulations either unrelated to any
Services performed hereunder or that would not result in a violation of any
provision of the applicable Sublease and except for FARs, laws, orders and
regulations the validity or application of which Continental is contesting in
good faith. Maintenance Provider shall (1) obtain and pay for any required
permits and licenses, applicable laws, zoning or other ordinances, fire
underwriting requirements, and (2) upon completion of the Services to be
performed hereunder with respect to an Aircraft prior to Redelivery, furnish
written evidence to Customer that the Services have been inspected and approved
by the FAA and/or other appropriate authorities if but only if required by law
or regulation.
ARTICLE 18 -- MAINTENANCE PROVIDER'S INSURANCE
A. Throughout the course of this Agreement, Maintenance Provider shall
maintain in force (and, if applicable, cause each subcontractor that provides
services in fulfillment of Continental's obligations hereunder to maintain in
force) insurance as required in this Article 18, with insurers of recognized
responsibility. Maintenance Provider shall cause its independent insurance
broker, or the relevant insurer(s), to furnish to Customer, upon execution and
delivery of this Agreement and thereafter no later than thirty (30) days prior
to the expiration of any policy required to be maintained hereunder showing
renewal or replacement thereof for an additional term of at least twelve (12)
months, a Certificate of Insurance detailing all of such insurance required
hereunder, including, without limitation, expiration dates and limits of
coverage of such insurance and each insurer's acceptance of the applicable
provisions of this Agreement. All such policies of insurance shall be endorsed
to provide that (1) coverage thereunder may not be canceled or materially
altered without at least thirty (30) days' prior written notice to Customer, (2)
the insurer thereunder has waived the right of subrogation with respect to the
indemnification obligations hereunder, and (3) the coverage provided to
Customer, or with respect to its interests, will not be invalidated by any
breach of the insuring conditions by Maintenance Provider.
B. Maintenance Provider agrees to maintain in force the following
insurance, in the following amounts and with the following endorsements.:
1. Comprehensive general liability insurance (including, among other
things, premises, completed operations and products) with a combined
single limit for bodily injury and property damage of Seven Hundred
Fifty Million U.S. Dollars (U.S. $_________) in respect of any one
Accident/Occurrence/Aircraft (which, with respect to product
liability, shall be an annual aggregate limit). Customer shall be
named as an additional insured on all polices maintained pursuant to
this subparagraph (1);
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2. Worker's compensation insurance as required by law, together with
employer's liability insurance with limits of not less than One
Million U.S. Dollars (U.S. $_________) per occurrence or such
greater amount as may be required by law; and
3. Hangarkeepers legal liability insurance with a limit of not less
than Twenty Million U.S. Dollars (U.S. $_________) each aircraft,
and One Hundred Million U.S. Dollars (U.S. $_________) each
occurrence.
Maintenance Provider shall bear all costs of the insurance policies
maintained by Maintenance Provider as required hereunder. The insurance provided
pursuant to this Article 18 shall be primary and without right of contribution
from any other insurance carried by Customer. The Maintenance Provider shall
agree to waive any right of subrogation, set off, recoupment, counterclaim, or
any other deduction by attachment or otherwise, with respect to Maintenance
Provider's indemnification obligations hereunder. The policies shall provide in
respect of the interests of Customer as an additional insured in such policies,
the insurance shall not be invalidated by any action or inaction of Continental
and shall insure Customer regardless of any breach or violation of any warranty,
declaration or condition contained in such policy. With respect to the liability
coverage, all of the provisions thereof, except limits of liability, shall
operate in the same manner as if there were a separate policy covering Customer.
ARTICLE 19 -- INDEMNIFICATION
A. Indemnity by Maintenance Provider. Maintenance Provider agrees to
indemnify, reimburse and hold harmless each of the Customer Parties (as herein
defined) from and against any and all damages, losses, liabilities, third party
or other claims, demands, suits, judgments, causes of action, legal proceedings,
whether civil or criminal, penalties, fines and sanctions, including any of the
same relating to an accident or incident involving an Aircraft, injury or death
to persons or damage to property, and any attorney's fees and other reasonable
costs and expenses in connection with any of the foregoing (any and all of which
are hereafter referred to as "Claims"), which in any way may result from or
arise in any manner out of (a) any gross negligence (whether active or passive)
or willful misconduct of Maintenance Provider, its subcontractors, agents or
employees and/or (b) any violation of applicable laws or regulations by
Maintenance Provider, its subcontractors, agents or employees.
B. Apportionment. If an event or occurrence gives rise to rights of
indemnity under Article 19.A. in favor of any of the Customer Parties and also
gives rise to rights of indemnity under a Sublease in favor of Maintenance
Provider, the right of recovery of the claiming Customer Party shall be reduced
in the same proportion that the fault of the claiming Customer Party bears to
the combined fault of the claiming Customer Party and Maintenance Provider. If
an event or occurrence gives rise to rights of indemnity under a Sublease in
favor of any Maintenance Provider and also gives rise to rights of indemnity
under Article 19.A. in favor of any of the Customer Parties, the right of
recovery of Maintenance Provider shall be reduced in the same proportion that
the fault of Maintenance Provider bears to the combined fault of Maintenance
Provider and the claiming Customer Party.
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C. Survival of Indemnities; Interpretation. The indemnities, duties to
hold harmless and rights of contribution contained in this Article 19 shall
continue in full force and effect notwithstanding the expiration or other
termination of this Agreement. Maintenance Provider and Customer intend that the
provisions of this Article 19 apply to any and all Claims covered by Article 19
whether or not such Claims arise in a forum that recognizes the doctrine of
comparative negligence.
ARTICLE 20 -- CANCELLATION, DEFAULT, AND TERMINATION
A. Cancellation of Services on Particular Aircraft. Without limiting in
any manner any other remedies of Customer in respect thereof, Customer reserves
the right to cancel a particular provision of Customer-Requested Services in a
particular instance, without penalty to Customer and without terminating this
Agreement upon fifteen days advance written notice to Maintenance Provider, if
the quality of the Customer-Requested Services being performed by or at the
direction of Maintenance Provider with respect to such Aircraft is, in
Customer's reasonable judgment, unsatisfactory. If Customer cancels all or part
of the Customer-Requested Services requested with respect to a particular
Aircraft as provided in the preceding sentence and there is no default on the
part of Maintenance Provider, Maintenance Provider shall be entitled to
compensation in accordance with Article 9 hereof for charges up to and including
the effective date of the cancellation. Upon any such cancellation, Customer
shall have the right, in addition to all other remedies it may have in respect
of the circumstances giving rise to its right of cancellation, to remove (if
such removal is practicable) from the relevant location the Aircraft and all
Inventory and Customer-Furnished Material, if any, delivered to Maintenance
Provider in connection with the canceled Customer-Requested Services, and obtain
replacement services for such Aircraft from any other source without liability
to Maintenance Provider except as provided in this paragraph A. In the event
that the Redelivery of an Aircraft undergoing Services at a third party vendor
is substantially delayed from the Schedule Redelivery Date (as adjusted pursuant
to Article 5.D), Maintenance Provider agrees to assess the circumstances causing
the delay and its rights under the contract with the relevant vendor.
Maintenance Provider and Customer shall consult with one another and attempt in
good faith to reach agreement as to the best course of action available to
return the affected Aircraft to service as promptly as possible.
B. Default. Except as may be otherwise provided in this Agreement, if
either party shall refuse, neglect, or fail to substantially perform, observe,
and keep any of the material terms or conditions contained herein to be
performed, observed, and kept by such party and such refusal, neglect, or
failure shall continue for a period of thirty (30) days after written notice
thereof, such refusal, neglect, or failure shall constitute a "default" under
this Agreement in respect of which the other party shall have the right to
terminate this Agreement upon written notice, effective immediately. In addition
to and notwithstanding the foregoing, a party shall be deemed in "Default"
hereunder and this Agreement shall terminate automatically effective immediately
if an order for relief is entered with respect to such party, or any proceeding
shall be initiated, consented to or acquiesced in by such party, or shall be
filed against such party and not dismissed within 30 days thereafter, under any
bankruptcy, insolvency, reorganization or similar laws or seeking with respect
to such party liquidation, winding up, arrangement, adjustment, protection,
relief or composition of such party or its debts or the appointment of any
liquidator, receiver, sequestrator, trustee, custodian or similar official for
such party or a substantial part of its assets.
32
C. Sublease. Maintenance Provider and Customer acknowledge and agree that
this Agreement and each Sublease have entered into as part of a single
transaction, and that this Agreement and each Sublease should be regarded as a
single agreement for purposes of assumption or rejection under Section 365 of
the U.S. Bankruptcy Code. If this Agreement terminates for any reason
(including, without limitation, due to Default by either party or rejection in a
bankruptcy proceeding) while such Sublease remains in effect, Maintenance
Provider agrees that it shall nevertheless pay Customer the Monthly Credit in
the amount of $________ per month for each month that such Sublease remains in
effect.
D. Rights and Remedies Cumulative. In addition to any right or remedy
specifically provided to any party to this Agreement, in this Article 20 or
elsewhere in this Agreement, upon the happening of a given occurrence, such
party shall be entitled to all other rights or remedies to which it may be
entitled under this Agreement or under applicable law. All of such rights and
remedies shall be cumulative and not exclusive. Without limiting in any manner
the generality of the foregoing, upon any termination of this Agreement,
Customer shall have the right to Redelivery of all Aircraft and return of all
Inventory and Customer-Furnished Material described in paragraph (A) of this
Article 20 with respect to cancellation. All indemnities and warranties provided
for hereunder shall survive termination of this Agreement.
ARTICLE 21 -- NOTICES AND REQUESTS
Except as otherwise expressly provided in this Agreement, any notice,
request, or other communication required or authorized hereunder shall be
sufficiently given if it is in writing and sent by (A) Registered Mail or
Certified Mail, with postage prepaid, (B) courier or other messenger, or (C)
fax, in any case, addressed as follows:
If to Customer:
Hawaiian Airlines, Inc.
Honolulu International Airport
X.X. Xxx 00000
Xxxxxxxx, XX 00000-0000
Attn: VP - Maintenance & Engineering
Telecopy: ______________
Telephone: ______________
33
With a copy to:
Hawaiian Airlines, Inc.
Honolulu International Airport
X.X. Xxx 00000
Xxxxxxxx, XX 00000-0000
Attn: VP - General Counsel
Telecopy: ______________
Telephone: ______________
If to Maintenance Provider:
Continental Airlines, Inc.
0000 Xxxxx Xxxxxx
00xx Xxxxx - XXXXX
Xxxxxxx, XX 00000
Attn: Vice President - Fleet Management
Telecopy: ______________
Telephone: ______________
With a copy to:
Continental Airlines, Inc.
000 Xxxxxxxxx Xxxxxx
11th Floor - HQT
Xxxxxxx, XX 00000
Attention: Vice President - Maintenance and Engineering
Telecopy: ______________
Telephone: ______________
Any such notice, request, or other communication shall be deemed received
(X) if mailed, five (5) days after it is mailed, (Y) if sent by courier or
messenger, when it is delivered, and (Z) if faxed, when the fax is received.
Either party may change its address for purposes of this Article 21 by notice to
the other party given in accordance with the provisions of this Article.
Any notice, request, or other communication required or authorized to be
delivered to the Designated Customer Representative shall be delivered to him by
hand at the Location or in such other manner as he may request in writing from
time to time. Notices, requests, and other communications required to be
delivered to both the Designated Customer Representative and Customer shall be
delivered to each of them.
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ARTICLE 22 -- CONFIDENTIALITY
Except as required by law or to enforce the terms hereof, neither party
(nor their respective advisors) shall disclose any details connected with this
Agreement to any third party other than Continental Micronesia, Inc. without
first obtaining the written consent of the other party. Advertising and
promotional material that mentions either party must be approved in writing by
such party prior to release.
ARTICLE 23 -- MAINTENANCE PROVIDER AS INDEPENDENT CONTRACTOR
Maintenance Provider agrees that it is an independent contractor, and
under no circumstance an agent of Customer. Except as provided in Article 25.A,
all persons performing Services hereunder, and the manner and details of
performance thereof, shall be under the exclusive control of Maintenance
Provider, and Maintenance Provider shall have the sole right to direct such
persons.
ARTICLE 24 -- ASSIGNMENT
Neither party may assign this Agreement, in whole or in part, without the
prior written consent of the other party, and any such transfer without the
other party's prior written consent shall be void and of no effect; provided,
however, either party may assign this Agreement to an affiliate of such party or
to a successor entity resulting from a merger or consolidation with such
successor or purchaser of all or substantially all of the assets of such party.
ARTICLE 25 -- SUBCONTRACTING
A. Maintenance Provider will be permitted to subcontract Services to any
entity on its approved vendor list; provided, however, if requested by Customer,
Maintenance Provider shall identify each subcontractor that will provide
Additional Services hereunder. Maintenance Provider shall not subcontract a
material portion of the Line Maintenance Services with respect to any given
Aircraft without the prior written consent of Customer. Customer may reasonably
object to particular entities from Maintenance Provider's approved vendor list
in which case such entities shall not be used to provide Services hereunder if
it is practicable to use a different vendor.
B. The engagement of a subcontractor by Maintenance Provider shall not
create any contractual relationship or agency between Customer and such
subcontractor. Maintenance Provider's obligation to pay its subcontractors shall
be an obligation independent from Customer's obligation to pay Maintenance
Provider, and Customer shall have no obligation to pay or to see to the payment
of any monies directly to any subcontractor except as otherwise expressly
provided in this Agreement.
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ARTICLE 26 -- SAVINGS CLAUSE
If any provision of this Agreement is declared unlawful or unenforceable
as a result of final administrative, legislative, or judicial action, the
parties agree that this Agreement shall be deemed to be amended to conform with
the requirements of such action, but in such a manner as to achieve the intent
of the parties to the fullest extent possible, and that all other provisions of
this Agreement shall remain in full force and effect.
ARTICLE 27 -- WAIVER CLAUSE
Neither party's failure to require strict performance of, or to enforce,
any provision of this Agreement, nor any delay in doing so, nor any previous
waiver or forbearance by such party with respect to the same or any other
provision of this Agreement, shall in any way be construed as a waiver or
continuing waiver of that provision or of any other provision of this Agreement.
ARTICLE 28 -- GOVERNING LAW
THIS AGREEMENT SHALL BE CONSTRUED AND GOVERNED ACCORDING TO THE LAWS OF THE
STATE OF NEW YORK APPLICABLE TO CONTRACTS ENTERED INTO BY RESIDENTS OF NEW YORK
AND TO BE PERFORMED WHOLLY WITHIN THAT STATE, EACH PARTY HERETO HEREBY SUBMITS
TO THE NONEXCLUSIVE JURISDICTION AND VENUE OF THE COURTS OF THE STATE OF NEW
YORK (AND OF THE COURTS OF THE UNITED STATES OF THE SOUTHERN DISTRICT OF NEW
YORK) WITH RESPECT TO ALL DISPUTES ARISING HEREUNDER, WAIVES ANY CLAIM OF
INCONVENIENT FORUM IN ANY PROCEEDING IN ANY SUCH COURT AND AGREES THAT LEGAL
PROCESS MAY BE SERVED ON IT AT ITS ADDRESS FOR NOTICES SET FORTH IN ARTICLE 21
HEREOF. WITHOUT LIMITING ANY OTHER PROVISION HEREOF, EACH PARTY REPRESENTS TO
AND AGREES WITH THE OTHER THAT THE CHOICE OF NEW YORK LAW AND FORUM IS A
MATERIAL INDUCEMENT TO IT TO ENTER INTO THIS AGREEMENT, THAT IT HAS CONSULTED
WITH LEGAL COUNSEL AND THAT THE FOREGOING AS TO SUCH PARTY IS A VALID AND
BINDING CHOICE OF LAW AND FORUM PURSUANT TO SECTIONS 5-1401 AND 5-1402 OF THE
NEW YORK GENERAL OBLIGATIONS LAW (WHICH THE PARTIES HERETO AGREE APPLY TO THIS
AGREEMENT).
ARTICLE 29 -- COSTS OF ENFORCEMENT
If any party seeks to enforce its rights under this Agreement, by legal
proceedings or otherwise, or seeks a declaration of any rights or obligations
under this Agreement, the non-prevailing party shall pay all costs and expenses
incurred by the prevailing party, including, without limitation, all reasonable
attorneys' fees and expert witnesses' and other consultants' fees.
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ARTICLE 30 -- INTEGRATION CLAUSE
This Agreement is the entire agreement of the parties and shall supersede
any previously executed agreements, and any prior or contemporaneous oral
understandings, between the parties which relate to the subject matter of this
Agreement.
ARTICLE 31 -- HEADINGS
The headings to this Agreement are for convenience only and shall not
affect the meaning or construction of any paragraph.
ARTICLE 32 -- COUNTERPARTS
This Agreement may be executed in one or more counterparts, all of which
counterparts shall be treated as the same binding agreement, which shall be
effective, as of the date set forth on the first page hereof, upon execution and
delivery by each party hereto to each other party of one or more such
counterparts.
ARTICLE 33 -- NON-LIABILITY OF CERTAIN PERSONS
No director, officer, agent or employee of either party shall be charged
personally or held contractually liable by or to the other party under any term
or provision of this Agreement or any supplement, modification, or amendment to
this Agreement, because of any breach thereof, or because of its execution or
attempted execution.
ARTICLE 34 -- CONSEQUENTIAL, INCIDENTAL AND EXEMPLARY DAMAGES.
Neither party hereto shall be liable to the other for any consequential,
incidental or exemplary damages arising out of or relating to this Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date and year set forth in the first paragraph above by their
duly authorized representatives.
"CUSTOMER" HAWAIIAN AIRLINES, INC.
By: /S/______________________
Name: ______________________
Title: _______________________
By: /S/______________________
Name: ______________________
Title: _______________________
"MAINTENANCE PROVIDER" CONTINENTAL AIRLINES, INC.
By: /S/______________________
Name: ______________________
Title: _______________________
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EXHIBIT A
SCHEDULE OF CHARGES FOR
INITIAL CONVERSION SERVICES AND LINE MAINTENANCE SERVICES
A. INITIAL CONVERSION SERVICES
1. Fixed Charges Covering both Aircraft
Interior reconfiguration of both Aircraft to 28/254 seating $_______
Sceptre Computer Installation (5 terminals) $_______
Technical Training/Maintenance Program Set-Up _______
Total Fixed Costs: $_______
2. Additional Charge for Painting of Aircraft
Maintenance Provider's actual out-of-pocket expenses paid to any
third party in respect of the exterior painting of both Aircraft,
together with labor charges and per diem for Continental employees
in charge of supervising or monitoring such painting.
B. LINE MAINTENANCE SERVICES
1. Charges Per Flight Hour
a. Service Check: $________
b. Phase A Check: $________
c. Time Control Insp. and XXX Recovery $________
d. Engine(s): $________*
e. APU: $________**
f. Components: $________
Total Per Flight Hour Charge: $__________
2. Charges Per Cycle
a. Transit Check: $________
b. Engine LLP: $________
c. Wheels Tires and Brakes: $________
Total Per Cycle Charge: $________
A-1
* 3. Adjustments to Per Flight Hour Charge
The rate set forth in Section B.1.d with respect to the charge per
Flight Hour for Line Maintenance Services in respect of the Engines
is based on the assumption that each Aircraft will be operated on
4.5/1 Flight Hours to Cycles ratio calculated for the period
coinciding with the Term of this Agreement. If actual usage of any
Aircraft results in a different Flight Hours to Cycles operational
ratio in any calendar month, then the rate set forth in Section
B.1.d for such month shall be determined as follows:
--------------------------------------------------------------------------------
Hour/Cycle Ratio Hourly Rate
--------------------------------------------------------------------------------
4.0/1 $________
--------------------------------------------------------------------------------
4.5/1 $________
--------------------------------------------------------------------------------
5.0/1 $________
--------------------------------------------------------------------------------
5.5/1 $________
--------------------------------------------------------------------------------
6.0/1 $________
--------------------------------------------------------------------------------
6.5/1 $________
--------------------------------------------------------------------------------
7.0/1 $________
--------------------------------------------------------------------------------
7.5/1 $________
--------------------------------------------------------------------------------
If the actual Hour-to-Cycle ratio falls between any two ratios shown
in the foregoing table, the applicable Hourly Rate shall be
determined by linear interpolation between the two values. If the
actual Hour-to-Cycle ratio is less than 4.0 to 1.0 or greater than
8.0 to 1, then this table will be expanded to cover the actual
range. Upon any adjustment pursuant to the foregoing provision, the
"Total Per Flight Hour Charge" as set forth in Section B.1 shall
also be adjusted to reflect the difference in the Engine component
thereof.
The rate set forth in Section B.1.d with respect to the charge per
Flight Hour for Line Maintenance Services in respect to the Engines
is also based on the assumption that the corresponding rate in the
Engine Maintenance Agreement ESI-98-2098 between GE Engine Services,
Inc. and Continental covering General Electric CF6-50C2 Engines
remains at the rate in effect on the date hereof. In the event that
such rate is adjusted upward or downward, Maintenance Provider shall
promptly notify Customer of the change and the per Flight Hour
charge for Line Maintenance Services in respect of the Engines shall
be adjusted by a like amount.
** 4. Adjustments to APU per Flight Hour Charge
The actual hours used by APUs shall be determined each month. If the
APU hours multiplied by $____ is greater or less than the number of
flight hours flown by the Aircraft multiplied by $_____, then
Continental shall remit credit or debit to the Customer for such
excess or credit.
A-2
EXHIBIT B SCHEDULE OF TIME AND MATERIAL CHARGES FOR ADDITIONAL
SERVICES, AOG SERVICES AND
HEAVY MAINTENANCE CHECKS
A. LABOR RATES FOR CONTINENTAL EMPLOYEES*
The current labor rates applicable to Additional Services performed and Heavy
Maintenance Checks overseen and prepared by Continental employees are as
follows:
1. Standard Basic Hourly Labor Rate
Straight Time $_____
Time and a Half $_____
Double Time $_____
Double Time and a Half $_____
2. Field Team Basic Hourly Labor Rate
Straight Time $_____ plus travel and lodging at cost
and per diem
Time and a Half $_____
Double Time $_____
Double Time and a Half $_____
3. Field Team -- Management Personnel
Straight Time $_____
Time and a Half $_____
Double Time $_____
Double Time and a Half $_____
4. Engineering Hourly Labor Rate
Straight Time $_____
B-1
5. Heavy Maintenance Representative
Straight Time $_____ per day
Per Diem $_____
Lodging $_____ per day
6. Heavy Maintenance Quality Assurance Representative
Straight Time $_____ per day
Per Diem $_____
Lodging $_____ per day
The labor rates above may be adjusted for inflation (indexed to the Consumer
Price Index published by the U.S. Department of Labor) not more than once in any
calendar year. For items 1, 2 and 3 above, the basic hourly rate for personnel
based in Hawaii or dispatched from Hawaii shall be increased by ___%. For items
5 and 6 above, Continental shall allocate such charges on a reasonable basis if
the personnel assigned to the Aircraft are concurrently assigned to monitor
other aircraft in the facility.
The engineering labor rate may be charged, if and to the extent authorized by
Customer in writing, for the development of non-standard Repairs and to satisfy
other extraordinary engineering requirements.
B. NONDESTRUCTIVE TESTING (NDT) FOR CONTINENTAL EMPLOYEES
1. Maintenance Provider will charge $_____ per man-hour for ultrasonic,
eddy-current, dye penetrant, and magnetic particle testing, plus
$_____ for tooling per event.
2. Maintenance Provider will charge $_____ per man-hour for X-ray
inspections, plus film, plus $_____ for tooling per event.
C. LABOR RATES FOR NON-CONTINENTAL EMPLOYEES
Engineering services and labor for Additional Services and Nondestructive
Testing obtained from outside vendors to perform Services required beyond the
capacity or capability of Maintenance Provider, if and to the extent authorized
by Customer in writing, will be charged at invoice. Charges related to
engineering services performed by such outside vendors shall include travel,
lodging, and per diem, and other directly related expenses when applicable.
B-2
D. CONTRACTOR-FURNISHED SUPPLIES, MATERIALS, AND COMPONENTS.
1. Purchased Parts and Materials
Maintenance Provider will charge vendor invoice without additional
xxxx-ups by Maintenance Provider.
2. Maintenance Provider-Stocked Parts and Materials
For all Parts and Materials, Maintenance Provider will charge
replacement cost plus a _____% xxxx-up.
E. OUTSIDE VENDOR SERVICES
Services provided by outside vendors will be charged at invoice
without additional xxxx-ups by Maintenance Provider.
F. FREIGHT
Invoiced at actual cost, without xxxx-up from Continental and shall
include any freight charges incurred in shipping any Parts or Engines
which result from an AOG Aircraft (unless under the terms of the
applicable warranty charges associated with such AOG Aircraft are for the
account of Maintenance Provider or the relevant third party vendor) or
which are incurred in shipping an Engine to or from Hawaii, if required to
support an unscheduled Engine change in Hawaii. If it is impracticable to
schedule an Engine change in Los Angeles, Customer shall reimburse
Maintenance Provider for one-half of the freight charges incurred in
shipping any parts or Engines to or from Hawaii required to support a
scheduled Engine change in Honolulu.
F. STORAGE OF CUSTOMER-FURNISHED MATERIAL
No charge for storage will be imposed when the quantity of
Customer-Furnished Material is reasonable, taking into consideration the
Services that Maintenance Provider has been requested to perform and
availability of storage space. Taxes, insurance, and other direct costs
relating to such storage will be passed through to Customer at actual
cost, without xxxx-up.
B-3
G. TRANSPORTATION -- FLIGHT CREW
Flight crew transportation will be Customer's responsibility, but
Maintenance Provider will provide flight crew transportation between the
nearest commercial airport and the location where Services are performed,
if requested, at no charge, if available, at no cost to Continental from
the outside vendor performing the Heavy Maintenance Check.
H. TRAVEL EXPENSES
Reasonable travel and per diem expenses will be charged at actual cost,
without xxxx-up.
* The specified labor rates apply to all direct personnel, such as
working leads, inspectors, mechanics, parts coordinators, and
painters.
B-4
EXHIBIT CSTATEMENT OF WORKNo._______
CHECK ONE OF THE FOLLOWING AND COMPLETE AS APPROPRIATE:
______ Aircraft Registration Number __________ and Serial Number__________
(which shall include the engines installed thereon)
______ Model GE CF6-50C2 Engine Serial Number _______ (not installed on
Aircraft)
COMPLETE FOLLOWING DATA:
Delivery Date __________________
Scheduled Redelivery Date ___________________
Location of Work: _____________________
A. Services requested in respect of the above-referenced Aircraft are set
forth on Exhibit A attached hereto and incorporated herein.
B. Designated Customer Representative (if separately identified as of
Delivery
Date):__________________________________________________________________
Customer: Maintenance Provider:
HAWAIIAN AIRLINES, INC. CONTINENTAL AIRLINES, INC.
By: ________________________ By: _________________________
Name: ______________________ Name: _______________________
Title:_______________________ Title:________________________
By: ________________________
Name: ______________________
Title: _______________________
C-1
EXHIBIT A TO STATEMENT OF WORK
Pricing of Work
(Initial Conversion Services,
or
Description of Work Additional Services)
------------------- --------------------
C-2
EXHIBIT D
DELIVERY/REDELIVERY RECEIPT
Date: ________________________
Time: ________________________
Location: _____________________
Received from Customer/Maintenance Provider, pursuant to the Aircraft
Maintenance and Modification Services Agreement dated as of the ___________ day
of ________________, ______, between Maintenance Provider and Customer, the
following items:
______ Aircraft Reg. No: ______________ Mftrs. Serial No. ___________
______ Engine Model: General Electric Mftrs. Serial No. ___________
CF6-50C2
Total Fuel on Aircraft: _______________Lbs.
Delivered by: _____________________
Title: ______________________
Received by: ______________________
Title: ______________________
D-1
EXHIBIT E
LOOSE EQUIPMENT INVENTORY LIST
Customer/Maintenance Provider acknowledges receipt of the following manuals,
certificates, and items of loose equipment on board the Aircraft bearing
Manufacturer's Serial No. __________ and FAA Registration No. _____________, and
delivered to Maintenance Provider by Customer on the __________day of
________________, 19____, at _________(AM/PM).
ITEM QUANTITY INITIALS
(Maint.Fac./Customer)
A. MANUALS
1. ___________________________________ ________ ______/_________
2. ___________________________________ ________ ______/_________
3. ___________________________________ ________ ______/_________
4. ___________________________________ ________ ______/_________
5. ___________________________________ ________ ______/_________
6. ___________________________________ ________ ______/_________
7. ___________________________________ ________ ______/_________
8. ___________________________________ ________ ______/_________
B. CERTIFICATES
1. ___________________________________ ________ ______/_________
2. ___________________________________ ________ ______/_________
3. ___________________________________ ________ ______/_________
4. ___________________________________ ________ ______/_________
5. ___________________________________ ________ ______/_________
6. ___________________________________ ________ ______/_________
7. ___________________________________ ________ ______/_________
8. ___________________________________ ________ ______/_________
E-1
ITEM QUANTITY INITIALS(Maint.
Fac./Customer)
C. LOOSE EQUIPMENT
1. ___________________________________ ________ ______/_________
2. ___________________________________ ________ ______/_________
3. ___________________________________ ________ ______/_________
4. ___________________________________ ________ ______/_________
5. ___________________________________ ________ ______/_________
6. ___________________________________ ________ ______/_________
7. ___________________________________ ________ ______/_________
8. ___________________________________ ________ ______/_________
D. SPARE PARTS
PART NO. DESCRIPTION MFR. QUANTITY INITIALS
(MAINT. FAC./
Customer)
1. ___________ ______________ __________ ________ ______/________
2. ___________ ______________ __________ ________ ______/________
3. ___________ ______________ __________ ________ ______/________
4. ___________ ______________ __________ ________ ______/________
5. ___________ ______________ __________ ________ ______/________
6. ___________ ______________ __________ ________ ______/________
7. ___________ ______________ __________ ________ ______/________
8. ___________ ______________ __________ ________ ______/________
E-2
CUSTOMER'S DESIGNATED MAINTENANCE PROVIDER'S AUTHORIZED
CUSTOMER REPRESENTATIVE REPRESENTATIVE
BY: ___________________________ BY: ___________________________
NAME: ___________________________ NAME: ___________________________
TITLE: ___________________________ TITLE: ___________________________
E-3
EXHIBIT F
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WEEKLY AIRCRAFT STATUS SUMMARY
FOR HEAVY MAINTENANCE CHECKS
----------------------------------- -------------------------------
AIRCRAFT REG. NO.: On Schedule? Y N
---------------------------------- -------------------------------
Date: Time: Maintenance Function:
--------- -------- -------------------------------
("C" Check, "D" Check, Corrosion Prevention &
Control Program, etc.)
-------------------------------------------------------------------------------
Induction date:
--Via Fax--
----------------- -----------------------
Sched. Departure Date:
-------------
Sched. Ground Time: Days To:
------------- -----------------------
Elapsed Time: Days
-------------
Time Remaining: Days From:
------------- -----------------------
Routine Cards: # Non-Routine #
Cards--Total:
----------------- -------------
Routine Cards # Non-Routine Cards #
(Open): (Open):
----------------- -------------
Routine Cards # Non-Routine Cards #
(Closed): (Closed):
----------------- -------------
Routine Cards-- Non-Routine Cards--
% Complete: % %Complete: %
----------------- -------------
Non-Routine Cards
Written
in past 24 hours: #
-------------
Routine Man-hrs Estimate: Non-Routine Man-hrs
Estimate:
----------------------------------- -------------
Routine Man-hrs Expended: Non-Routine Man-hrs
Expended:
----------------------------------- -------------
TOTAL NON-ROUTINE TASKS
OVER 125 MAN-HOURS: Man-hours Material $
Used: Cost:
-------- ---------- ---------
F-1
Non-Routine Tasks That Exceed 125
Man-hours:
1. M-hrs Mat. Cost: $
Exp'd.:
-------------------------- ---------- --------------
2. M-hrs Mat. Cost: $
Exp'd.:
-------------------------- ---------- --------------
3. M-hrs Mat. Cost: $
Exp'd.:
-------------------------- ---------- --------------
Material Cost To Actual: $
date
(if and to the
extent available
from outside
vendors):
----------------------
Estimate: $
----------------------
Total: $
----------------------
Man-hour Scheduling by Skill, By
Shift:
A & P: man-hrs. Paint: man-hrs. Misc.:
--------- ------------ ---------
S/M: man-hrs. C & I: man-hrs.
--------- ------------ ------------------
R & E: man-hrs. Eng. : man-hrs.
--------- ------------ ------------------
------------------
Project Status:
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F-2
EXHIBIT G
========================================
CUSTOMER WORK CHANGE
AUTHORIZATION
========================================
Aircraft Reg. No. Date:
Aircraft Serial No. o Add: ______
o Delete: ______
o Change: ______
In accordance with the terms and conditions of Aircraft Maintenance Services
Agreement between Hawaiian Airlines and Continental Airlines and Statement of
Work No. _______, the following change is hereby authorized:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
NEW SCHEDULED REDELIVERY DATE (if changed): ______________________________
Approved and Authorized by: ____________________________________________________
[Customer's Designated Customer Representative]
Approved and Accepted by: ____________________________________________________
[Maintenance Provider's Authorized
I-1
