EXHIBIT 10.16
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF
THIS EXHIBIT. THE CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND
ARE DENOTED BY [***]. THE CONFIDENTIAL PORTIONS HAVE BEEN
SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.
AIRBUS X000-000 XXXXXXXX AGREEMENT
Dated as of March 17, 1995
between
AVSA, S.A.R.L.,
Seller
and
MIDWAY AIRLINES CORPORATION,
Buyer
March 17, 1995
CONTENTS
CLAUSES TITLE
0 PURCHASE AGREEMENT
1 DEFINITIONS
2 SALE AND PURCHASE
3 CHANGES
4 PRICE
5 PRICE REVISION
6 PAYMENT TERMS
7 PLANT REPRESENTATIVES - INSPECTION
8 BUYER'S ACCEPTANCE
9 DELIVERY
10 EXCUSABLE DELAY
11 INEXCUSABLE DELAY
12 WARRANTIES AND SERVICE LIFE POLICY
13 PATENT INDEMNITY
14 TECHNICAL PUBLICATIONS
15 FIELD ASSISTANCE
16 TRAINING AND TRAINING AIDS
17 VENDORS' PRODUCT SUPPORT
18 BUYER FURNISHED EQUIPMENT AND DATA
19 ASSIGNMENT
20 DATA RETRIEVAL
21 TERMINATION FOR CERTAIN EVENTS; INSECURITY EVENTS;
FURTHER ASSURANCES
22 MISCELLANEOUS PROVISIONS
0-1
CONTENTS
EXHIBITS
EXHIBIT "A-1" A320 STANDARD SPECIFICATION
EXHIBIT "A-2" A319 STANDARD SPECIFICATION
EXHIBIT "B" CHANGE ORDERS TO STANDARD SPECIFICATION (SCNs)
EXHIBIT "C" SCN FORM
EXHIBIT "D" SELLER SERVICE LIFE POLICY AND VENDOR SERVICE LIFE
POLICY
EXHIBIT "E" CERTIFICATE OF ACCEPTANCE
EXHIBIT "F" TECHNICAL PUBLICATIONS
EXHIBIT "G" AIRFRAME REVISION FORMULA
EXHIBIT "H-1" CFM PROPULSION SYSTEM REVISION FORMULA (A320
AIRCRAFT)
EXHIBIT "H-2" CFM PROPULSION SYSTEM REVISION FORMULA (A319
AIRCRAFT)
EXHIBIT "I-1" IAE PROPULSION SYSTEM REVISION FORMULA (A320
AIRCRAFT)
EXHIBIT "1-2" IAE PROPULSION SYSTEM REVISION FORMULA (A319
AIRCRAFT)
0-2
CONTENTS
LETTER AGREEMENTS
LETTER AGREEMENT NO. 1 SPARE PARTS PROCUREMENT
LETTER AGREEMENT NO. 2 PURCHASE INCENTIVES AND
MISCELLANEOUS MATTERS
LETTER AGREEMENT NO. 3 OPTION AIRCRAFT
LETTER AGREEMENT NO. 4 PREDELIVERY PAYMENT FLEXIBILITY
0-3
PURCHASE AGREEMENT
This Agreement is made this 17th day of March, 1995,
between
AVSA, a societe a responsibilite limitee organized and existing
under the laws of the Republic of France, having its registered
office located at
0, xxxx-xxxxx Xxxxxxx Xxxxxxxx
00000 XXXXXXX
XXXXXX
(hereinafter referred to as the "Seller")
and
Midway Airlines Corporation, a corporation organized and existing
under the laws of the State of Delaware, United States of America,
having its principal corporate offices located at
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000
(hereinafter referred to as the "Buyer")
WHEREAS,
a) the Buyer wishes to purchase and the Seller is willing to sell four (4)
new firm Airbus Industrie A320-200 model aircraft and the Buyer wishes to
obtain and the Seller is willing to grant the Buyer an option to purchase
up to four (4) new option Airbus Industrie A320-200 model aircraft, upon
the terms and conditions herein provided; and
b) the Seller is a sales subsidiary of Airbus Industrie and will purchase
the Aircraft from Airbus Industrie for resale to the Buyer.
NOW THEREFORE IT IS AGREED AS FOLLOWS:
0-4
1 - DEFINITIONS
For all purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires, the following
terms shall have the following meanings:
Affiliate - with respect to any person or entity, any other person
or entity directly or indirectly controlling, controlled by or
under common control with such person or entity, not including any
of the Associated Contractors.
Agreement - this Airbus A320-200 Purchase Agreement, including all
Exhibits, Appendixes and numbered Letter Agreements attached
hereto, as the same may be amended or modified and in effect from
time to time.
Aircraft - any or all of the Firm Aircraft or Option Aircraft that
have been converted to a firm order to be purchased by the Seller
and sold to the Buyer pursuant to this Agreement, together with all
components, equipment, parts and accessories installed in or on
such aircraft and the Propulsion Systems installed thereon upon
delivery.
Airframe - any Aircraft, excluding the Propulsion Systems therefor.
Alternate Closing Site - as defined in Paragraph 3 of Letter
Agreement No. 2 to the Agreement.
ASC - Airbus Service Company, Inc., a corporation organized and
existing under the laws of Delaware, having its registered office
located at 000 Xxxxxxx Xxxxxxx, Xxxxx 000, Xxxxxxx, XX 00000, or
any successor thereto.
Associated Contractors - collectively, the members and, for certain
purposes, subcontractors of the Manufacturer from time to time,
which members presently are:
(1) AEROSPATIALE, SOCIETE NATIONALE INDUSTRIELLE ("Aerospatiale"),
whose principal office is at
00, Xxxxxxxxx xx Xxxxxxxxxxx
00000 Xxxxx
Xxxxxx
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(2) BRITISH AEROSPACE (OPERATIONS) LTD, whose principal office is
at
Warwick House
P0 Box 87
Farnborough Aerospace Centre
Xxxxxxxxxxx
Xxxxx XX00 0XX
Xxxxxxx
(3) CONSTRUCCIONES AERONAUTICAS, S.A., whose principal office is
at
404 Xxxxxxx xx Xxxxxx
00000 Xxxxxx
Xxxxx
(4) DAIMLER-BENZ AEROSPACE AIRBUS, GmbH ("Daimler-Benz"), whose
principal office is at
Kreetslag 10
Postfach 95 0l 09
00000 Xxxxxxx
Xxxxxxx
ATA Specification 100 - the specification issued by the Air
Transport Association of America relating to manufacturers'
technical data.
ATA Specification 101 - the specification issued by the Air
Transport Association of America relating to ground equipment
technical data.
ATA Specification 102 - the specification issued by the Air
Transport Association of America relating to software programs.
ATA Specification 200 - the specification issued by the Air
Transport Association of America relating to integrated data
processing.
ATA Specification 300 - the specification issued by the Air
Transport Association of America relating to the packaging of spare
parts shipments.
ATA Specification 2000 - the specification issued by the Air
Transport Association of America relating to an industry-wide
communication system linking suppliers and users for the purposes
of spares provisioning, purchasing, order administration, invoicing
and information or data exchange.
Base Price - for any Aircraft, Airframe or Propulsion Systems, as
defined in Subclause 4.1 of this Agreement.
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Buyer Furnished Equipment - for any Aircraft, all the items of
equipment that shall be furnished by the Buyer and installed in the
Aircraft by the Seller, as defined in the Specification.
Collateral - as referred to in Subclause 21.3(c) of this Agreement.
Comfort - as defined in Subclause 21.2(k) of this Agreement.
Customer Originated Changes - as defined in Subclause 14.4.3 of
this Agreement.
DGAC - the Direction Generale de l'Aviation Civile of France, or
any successor agency thereto.
FAA - the U.S. Federal Aviation Administration, or any successor
agency thereto.
Failure - as defined in Subclause 12.2 of this Agreement.
Final Contract Price - as defined in Subclause 4.2 of this
Agreement.
Firm Aircraft - any or all of the four (4) firm originally ordered
Airbus Industrie A320-200 model aircraft to be purchased by the
Seller and sold to the Buyer pursuant to this Agreement, together
with all components, equipment, parts and accessories installed in
or on such aircraft and the Propulsion Systems installed thereon
upon delivery, for which the delivery schedule is set forth in
Subclause 9.1 of this Agreement.
Inhouse Warranty - as referred to in Subclause 12.1.7 of this
Agreement.
Inhouse Warranty Labor Rate - as defined in Subclause 12.1.7(v) of
this Agreement.
Insecurity Event - as defined in Clause 21 of this Agreement.
Interface Problem - as defined in Subclause 12.4.1 of this
Agreement.
Item - as defined in Subclause 12.2 of this Agreement.
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Letter of Agreement No. 1 - the letter agreement regarding
"Spare Parts Procurement," dated the date hereof between the
Buyer and the Seller, and incorporated by reference in this
Agreement.
Letter of Agreement No. 2 - the letter agreement regarding
"Purchase Incentives and Miscellaneous Matters," dated the date
hereof between the Buyer and the Seller, and incorporated by
reference in this Agreement.
Letter of Agreement No. 3 - the letter agreement regarding
"Option Aircraft," dated the date hereof between the Buyer and
the Seller, and incorporated by reference in this Agreement.
Letter of Agreement No. 4 - the letter agreement regarding
"Predelivery Payment Flexibility," dated the date hereof between
the Buyer and the Seller, and incorporated by reference in this
Agreement.
Letter of Intent (LOI) - the Letter of Intent dated February 17,
1995, reference number 5128.9/95, executed by the Buyer and the
Seller regarding matters addressed in this Agreement.
LIBOR - for each stated interest period, the rate determined on the
basis of the offered rates for deposits in US dollars, which appear
on the Reuters Screen LIBO Page as of 11:00 a.m., London time, on
the day that is two (2) days (other than a Saturday, Sunday or a
day that is a legal holiday or a day on which banking institutions
are authorized to close in the City of New York, New York, London,
England, or Paris, France) before the first day of an interest
period. If at least two (2) such offered rates appear on the
Reuters Screen LIBO Page, the rate for that interest period will be
the arithmetic mean of such offered rates rounded to the nearest
basis point (0.5 rounds to 1). If only one (1) offered rate
appears, the rate for that interest period will be "LIBOR" as
quoted by National Westminster Bank, plc. "Reuters Screen LIBO
Page" means the display designated as page "LIBO" on the Reuters
Monitor Money Rates Service (or any successor to such page or
service).
Manufacturer - Airbus Industrie, a "Groupement
d'Interet Economique" established under "Ordonnance"
No. 67-821 dated September 23, 1967, of the Republic of
France.
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Material - as defined in Subclause 1.1 of Letter Agreement No. 1
to the Agreement.
Option Aircraft - any or all of the Airbus Industrie A320-200 or
A319-l00 (when applicable) model aircraft on option order by the
Buyer pursuant to the terms and conditions contained in Letter
Agreement No. 3 hereto, together with all components, equipment,
parts and accessories installed in or on such aircraft and the
Propulsion Systems installed thereon upon delivery.
ORIX - ORIX Aviation Systems Limited, whose address is Block 0
Xxxxxxxx Xxxxxx, Xxxxxxxx Xxxx, Xxxxxx 0, Xxxxxxx.
Predelivery Payment - any payment made against the Final Contract
Price of an Aircraft according to the schedule set forth in
Subclause 6.2 of this Agreement.
Predelivery Payment Reference Price - as defined in Subclause 6.2.4
of this Agreement.
Product Support Agreements - as referred to in Subclause 17.1.1 of
this Agreement.
Propulsion Systems - a set of either (1) CFM 56-5A-3 engines, (2)
IAE V2527-A5 engines, (3) CFM 56-5A-5 engines or (4) IAE V2524-A5
engines, to be installed on an Aircraft or installed on an Aircraft
at delivery, each composed of the powerplant (as such term is
defined in Chapters 70-80 of ATA Specification 100 (Revision 21),
but limited to the equipment, components, parts and accessories
included in the powerplant, as so defined), that have been sold to
the Manufacturer by International Aero Engines or CFM International
(as applicable), and a nacelle and thrust reverser for each such
powerplant, as applicable.
Replacement BFE - as defined in Subclause 18.3.3 of this Agreement.
SCN - as defined in Subclause 3.1 of this Agreement.
Service Life Policy - as referred to in Subclause 12.2 of this
Agreement.
Specification - as defined in Subclause 2.2 of this Agreement.
Supplemental Credit - as defined in Subparagraph 7.7.2 of
Letter Agreement No. 2 to the Agreement.
1-5
Technical Publications - as defined in Subclause 14.1 of this
Agreement.
Termination Event - as defined in Clause 21 of this Agreement.
Third Party - as defined in Paragraph 10 of Letter Agreement No.
3 to this Agreement.
Tooling Credit - as defined in Subparagraph 7.7.1 of Letter
Agreement No. 2 to the Agreement.
Tooling Equipment - as defined in Subparagraph 7.7.1 of Letter
Agreement No. 2 to the Agreement.
Transaction Security Agreements - as defined in Clause 21.3(b) of
this Agreement.
Upfront Support Package - as defined in Subparagraph 7.2.1 of
Letter Agreement No. 2 to the Agreement.
Upfront Technical Publications - as defined in Subparagraph 7.3 of
Letter Agreement No. 2 to the Agreement.
Upfront Training - as defined in Subparagraph 7.5 of Letter
Agreement No. 2 to the Agreement.
Vendor - each manufacturer (other than the manufacturer of the
Propulsion Systems) of a component, equipment, accessory or part
installed in an Aircraft at its delivery to the Buyer under this
Agreement, or any replacement therefor, other than a Warranted
Part, and listed in the Vendor Product Support Agreements manual
referred to in Subclause 12.3.1 of this Agreement.
Vendor Component - as defined in Subclause 12.4.3 of this
Agreement.
Vendor Parts - as defined in Subclause 12.3.1 of this Agreement.
Warranted Part - as defined in Subclause 12.1.1 of this Agreement.
Warranty Claim - as defined in Subclause 12.1.6(v) of this
Agreement.
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Working Day - with respect to any action to be taken hereunder, a
day other than a Saturday, Sunday or other day designated as a
holiday in the jurisdiction in which such action is required to be
taken.
The terms "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement, and not a particular Clause
thereof.
Technical and trade items not otherwise defined herein will have
the meanings assigned to them as generally accepted in the aircraft
manufacturing industry.
1-7
2 - SALE AND PURCHASE
2.1 General
The Seller shall cause to be manufactured and shall sell and
deliver, and the Buyer shall buy and take delivery of, the Aircraft
subject to the terms and conditions contained in this Agreement.
2.2 Specification
The Aircraft shall be manufactured in accordance with the A320-200
Standard Specification, Document No. D.000.02000, Issue 3, dated
May 4, 1992, including Revision No. 1 dated January 27, 1994, with
the maximum take-off weight increased to 75.5 metric tons (the
"Standard Specification"). Such Standard Specification, a copy of
which is annexed hereto as Exhibit "A-l" to this Agreement, as
amended by the estimated change orders set forth in Exhibit "B"
hereto is hereinafter referred to as the "Specification." The
Specification may be further modified from time to time pursuant to
the provisions of Clause 3 below.
2.3 Certification
Prior to the delivery of the first Aircraft, the Seller shall
obtain or cause to be obtained a US FAA Type Certificate (transport
category) for the Aircraft pursuant to Part 21 and in compliance
with the applicable provisions of Part 25 of the US Federal
Aviation Regulations.
Each Aircraft shall be delivered to the Buyer with the Certificate
of Airworthiness for Export issued by the DGAC and in a condition
enabling the Buyer (or a person eligible to obtain such certificate
under then applicable law) to obtain at the time of delivery a
Standard Airworthiness Certificate issued pursuant to Part 21 of
the US Federal Aviation Regulations. Subject to the other terms of
this Agreement, the Seller shall have no obligation, whether
before, at or after delivery of any Aircraft, to make any
alterations to such Aircraft to enable such Aircraft to meet FAA
requirements for specific operation on routes unique to the Buyer,
except to the extent the specific operational requirements were
mutually agreed as part of the Specification.
Except as set forth in this Subclause 2.3, the Seller shall not be
required to obtain any other certificate or approval with respect
to the Aircraft.
2-1
3 - CHANGES
3.1 Specification Change Notices
The Specification may be amended from time to time by a
Specification Change Notice, a written agreement between the
parties (each such Specification Change Notice being herein called
an "SCN" and being in the form of Exhibit "C" hereto). Each SCN
shall set forth in detail the particular changes to be made in the
Specification, and the effect, if any, of such changes on design,
performance, weight, balance, time of delivery, Buyer Furnished
Equipment and price of each Aircraft affected thereby and
interchangeability or replaceability of parts. SCN's shall not be
binding on either party until signed by persons duly authorized in
writing by the Buyer and the Seller, but upon being so signed shall
constitute amendments to this Agreement.
3.2 Development Changes
The Specification shall also be revised by the Seller without an
SCN or the Buyer's consent to incorporate Manufacturer-decided
changes that are deemed necessary or useful to correct defects,
improve the Aircraft or its process of manufacture, prevent delay,
to ensure compliance with this Agreement, or to comply with any
applicable statutory or regulatory requirement and that do not
either increase the price, adversely affect the delivery, overall
dimensions, guaranteed weight, maintenance requirements or
performance of the Aircraft or adversely change the
interchangeability or replaceability requirements of the
Specification with respect to parts (hereinafter called
"Development Changes").
3.3 Requests and Approvals
In the event that the Buyer files a Request for Change ("RFC") with
the Seller and the RFC does not subsequently become an SCN for any
reason, such RFC will be cancelled without charge to the Buyer. In
the event that the Buyer requests the Seller in writing to
incorporate a proposed change (excluding Development Changes) in an
Aircraft and the Seller agrees to such request and properly
initiates or performs work related to such change, but the change
is not subsequently made the subject of an SCN for any reason
(other than (i) the Seller's unreasonable refusal to sign the SCN
or otherwise acting in bad faith or (ii) the Buyer's good faith
refusal to sign the SCN due to the cost or lead time thereof,
provided such refusal is due to the
3-1
actual or estimated cost or lead time not having been provided to
the Buyer at an earlier date and not having been accepted in
writing by the Buyer), the Buyer will pay to the Seller the full
cost of design and other work resulting from such request and
incurred by the Seller, at the Seller's then existing labor and
materials cost. In the event that the Buyer requests the Seller in
writing to proceed with a proposed change and such change has been
initiated before any requisite approval of such change of the DGAC
and FAA has been obtained and subsequently such DGAC or FAA
approval is not obtained, any SCN which will have been executed in
connection with such proposed change will be deemed cancelled at
the Buyer's cost.
3.4 Specification Changes Before Delivery
If, pursuant to the promulgation of any applicable law or
regulation, any change in the Specification has to be made before
delivery of any Aircraft to enable the Buyer to obtain a Standard
Airworthiness Certificate for such Aircraft referred to in
Subclause 2.3, the Seller shall make the required change or
modification to the Aircraft. For each such change, the parties
shall sign an SCN specifying the effect, if any, of such change on
design, performance, weight, balance, time of delivery, Buyer
Furnished Equipment and price of each Aircraft affected thereby and
interchangeability or replaceability of parts. If the Seller
anticipates that the scheduled delivery of any Aircraft will be
postponed by reason of such change, the delivery date of such
Aircraft as provided in Subclause 9.1 shall be extended to the
extent of such postponement, as set forth in the SCN covering such
change.
The effect on price of such a change shall be borne by the Seller,
when such law or regulation is to be complied with before delivery
of each relevant Aircraft; except for changes applicable to
Propulsion Systems, which will be borne by the party responsible
therefor (excluding in all events the Seller) in accordance with
such arrangements as may be made separately between the Buyer and
the manufacturer of the Propulsion Systems.
3-2
3.5 Specification Changes After Delivery
Subclause 3.4 shall not require the Seller to make any changes or
modifications to or to make any payments or take any other action
with respect to any Aircraft delivered to the Buyer before any law
or regulation referred to in Subclause 3.4 is to be complied with.
Any such changes or modifications made to an Aircraft after its
delivery to the Buyer shall be at the Buyer's expense.
3-3
4 - PRICE
4.1 Base Price of the Aircraft
The "Base Price" of each Aircraft is the sum of:
(i) the Base Price of the Airframe, and
(ii) the Base Price of the Propulsion Systems.
4.1.1 Base Price of the Airframe
4.1.1.1 The Base Price of the Airframe shall be the sum of the Base Prices
set forth below in (i) and (ii):
(i) The Base Price of the Standard Airframe, as defined in the
Standard Specification set forth in Exhibit "A-l" hereto
(excluding Buyer Furnished Equipment, Propulsion Systems and
SCNs), at delivery conditions prevailing in January 1995,
which is:
[***]
(ii) The Base Price of the estimated change orders to the Standard
Specification (SCN estimate) referred to in Exhibit "B"
hereto, at delivery conditions prevailing in January 1995,
which is estimated at:
[***]
4.1.1.2 The Base Price of the Airframe of each Aircraft shall be revised to
the actual delivery date of such Aircraft in accordance with
Subclause 5.1 hereto.
4.1.2 Base Price of the Propulsion Systems
4.1.2.1 The Base Price of the CFM 56-5A-3 Propulsion Systems is the sum of
(i), (ii) and (iii) below:
(i) Base Price of the CFM 56-5A-3 Engines
The Base Price of a set of two (2) CFM International CFM
56-5A-3 engines and additional standard equipment at delivery
conditions prevailing in January 1995, which is:
4-1
[***]
Said Base Price has been calculated with reference to the
Reference Price indicated by CFM International of [***]
in accordance with economic conditions prevailing in
October 1985.
Said Reference Price is subject to adjustment to the date of
delivery of the Aircraft in accordance with the CFM
International Price Revision Formula set forth in Exhibit
"H-1" of this Agreement.
(ii) Base Price of Nacelles and Thrust Reversers
The Base Price of a set of two (2) nacelles and two (2) thrust
reversers for the CFM 56-5A-3 Propulsion Systems at delivery
conditions prevailing in January 1995, which is:
[***]
Said Base Price is subject to adjustment to the date of
delivery of the Aircraft in accordance with the Airframe Price
Revision Formula set forth in Exhibit "G" of this Agreement.
(iii) Base Price of the Engine Configuration Option
The Base Price of the configuration option for the CFM 56-5A-3
Propulsion Systems at delivery conditions prevailing in
January 1995, which is:
[***]
4-2
Said Base Price is subject to adjustment to the date of
delivery of the Aircraft in accordance with the Airframe Price
Revision Formula set forth in Exhibit "G" of this Agreement.
4.1.2.2 The Base Price of the IAE V2527-A5 Propulsion Systems is the sum of
(i) and (ii) below:
(i) Base Price of the IAE Propulsion Systems
The Base Price of a set of two (2) IAE V2527-A5 Propulsion
Systems, including related equipment, nacelles and thrust
reversers, at delivery conditions prevailing in January 1995
is:
[***]
Said Base Price has been calculated with reference to the
Reference Price indicated by International Aero Engines of
[***] in accordance with theoretical economic conditions
prevailing in March 1988.
Said Reference Price is subject to adjustment to the date of
delivery of the Aircraft in accordance with the IAE Price
Revision Formula set forth in Exhibit "I-1" of this Agreement.
(ii) Base Price of the Engine Configuration Option
The Base Price of the configuration option for the IAE
V2527-A5 Propulsion Systems at delivery conditions prevailing
in January 1995 is:
[***]
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Said Base Price is subject to adjustment to the date of
delivery of the Aircraft in accordance with the Airframe Price
Revision Formula set forth in Exhibit "G" of this Agreement.
4.2 Final Contract Price
The Final Contract Price of an Aircraft shall be the sum of:
(i) the Base Price of the Airframe constituting a part of such
Aircraft, together with the Base Price of the engine
configuration option and the Base Price of nacelles and thrust
reversers (when applicable), as adjusted to the date of
delivery of such Aircraft in accordance with Subclause 5.1 of
this Agreement;
(ii) the price (as of delivery conditions prevailing in January
1995) of any SCNs constituting a part of such Aircraft that
are entered into pursuant to Clause 3 after the date of
execution of this Agreement, as adjusted to the date of
delivery of such Aircraft in accordance with Subclause 5.1 of
this Agreement;
(iii) the Reference Price of the installed Propulsion Systems
(excluding the engine configuration option and the nacelles
and thrust reversers, when applicable), constituting a part of
such Aircraft, as adjusted to the date of delivery of such
Aircraft in accordance with Subclause 5.2 of this Agreement;
and
(iv) any other amount resulting from any other provisions of this
Agreement and/or any other written agreement between the Buyer
and the Seller relating to the Aircraft and specifically
making reference to the Final Contract Price of an Aircraft.
4.3 Validity of Propulsion Systems Prices
It is understood that the prices cited above and the price revision
formulas referred to in Clause 5 concerning the Propulsion Systems
and related equipment are based on information received from the
Propulsion Systems manufacturers and remain subject to any
modifications that might be communicated by said Propulsion Systems
manufacturers to the Seller, the Manufacturer and the Buyer.
4-4
4.4 Taxes, Duties and Imposts
4.4.1 The Seller shall bear and pay the amount of any and all taxes,
duties, imposts or similar charges of any nature whatsoever that are
(i) imposed upon the Buyer, (ii) imposed upon the Seller with an
obligation on the Buyer to withhold or collect the amount thereof
from the Seller or (iii) imposed upon the Buyer with an obligation
on the Seller to withhold or collect such amount from the Buyer, and
that are levied, assessed, charged or collected for or in connection
with the fabrication, manufacture, modification, assembly, sale,
delivery, use of or payment under this Agreement for any Aircraft,
component, accessory, equipment or part delivered or furnished
hereunder, provided such taxes, duties, imposts or similar charges
have been levied, assessed, charged or collected by the Republic of
France under laws promulgated and enforceable in the Republic of
France.
4.4.2 The Buyer shall bear and pay the amount of any and all taxes,
duties, imposts or similar charges of any nature whatsoever that are
(i) imposed upon the Seller, (ii) imposed upon the Buyer with an
obligation on the Seller to collect the amount thereof for the Buyer
or (iii) imposed upon the Seller with an obligation for the Buyer to
withhold such amount from the Seller, and that are levied, assessed,
charged or collected for or in connection with the fabrication,
manufacture, modification, assembly, sale, delivery or use of or
payment under this Agreement for any Aircraft, component, accessory,
equipment or part delivered or furnished hereunder, provided such
taxes, duties, imposts or similar charges have been levied,
assessed, charged or collected under laws promulgated and
enforceable in countries other than the Republic of France under
laws promulgated and enforceable in the Republic of France.
4.4.3 The Seller shall in its own name do all things necessary with
respect to the exportation of the Aircraft from France and shall pay
any customs duties, taxes and fees required to be paid with respect
to such exportation of the Aircraft.
4.4.4 The Buyer shall in its own name do all things necessary with respect
to the importation of the Aircraft into any country or jurisdiction
and shall pay any customs duties, taxes and fees required to be paid
with respect to such importation of the Aircraft.
4-5
5 - PRICE REVISION
5.1 Airframe Price Revision Formula
The Base Price of the Airframe of each Aircraft, together with the
Base Price of the engine configuration option and the Base Price of
nacelles and thrust reversers (when applicable), shall be revised in
accordance with the revision formula set forth in Exhibit "G" hereto
to the month of delivery of such Aircraft.
5.2 Propulsion Systems Price Revision Formula
The Base Price of the Propulsion Systems (excluding the engine
configuration option and the nacelles and thrust reversers, when
applicable) shall be revised to the month of delivery of the
Aircraft on which the Propulsion Systems are installed in accordance
with the revision formula set forth in Exhibit "H" or Exhibit "I"
(as applicable) hereto.
5-1
6 - PAYMENT TERMS
6.1 Unless set forth to the contrary in Letter Agreement No. 4 to the
Agreement, the Buyer shall pay all sums due hereunder in immediately
available funds in United States dollars by credit to Credit
Lyonnais, New York Branch, for transfer by the Seller to Credit
Lyonnais to the Seller's account with Credit Lyonnais at 0,
Xxxxxxxxx Xxxxxxx Xxxxxxxxxx, 00000 Xxxxxxxx, Xxxxxx, or to such
other account as the Seller shall designate by notice to the Buyer.
6.2 Predelivery Payments
6.2.1 Predelivery Payments shall be paid by the Buyer to the Seller for
each Aircraft and will, in the aggregate, amount to (i) [***] of the
Predelivery Payment Reference Price defined in Subclause 6.2.4 below
for each of the Firm Aircraft and (ii) [***] of the Predelivery
Payment Reference Price defined in Subclause 6.2.4 below for each of
the Option Aircraft.
6.2.2 Predelivery Payments for each of the Firm Aircraft shall be paid
according to the following schedule:
Percentage of
Predelivery
Payment
Reference Price
---------------
- first payment, received
on signature of the LOI [***]
- second payment, no later than
[***] [***]
- third payment, no later than
[***] [***]
- fourth payment, no later than
[***] [***]
- fifth payment, 18 months
prior to delivery [***]
- sixth payment, 15 months
prior to delivery [***]
- seventh payment, 12 months
prior to delivery [***]
6-1
- eighth payment, 6 months
prior to delivery [***]
- ninth payment, 3 months
prior to delivery [***]
TOTAL PAYMENT PRIOR TO DELIVERY [***]
The balance of the Final Contract Price shall be paid to the Seller
at delivery of each of the Firm Aircraft.
6.2.3 Predelivery Payments for each of the Option Aircraft shall be paid
according to the following schedule:
Percentage of
Predelivery Payment
Reference Price (or
USD)
- first payment, received
on signature of the LOI [***]
- second payment, no later than
[***] [***]
- third payment, no later than
[***] [***]
- fourth payment, upon Option
Aircraft exercise but not later
than 24 months prior to delivery [***]
- fifth payment, 18 months prior
to delivery [***]
- sixth payment, 15 months prior
to delivery [***]
- seventh payment, 12 months prior
to delivery [***]
- eighth payment, 6 months prior
to delivery [***]
- ninth payment, 3 months prior
to delivery [***]
TOTAL PAYMENT PRIOR TO DELIVERY [***]
6-2
The balance of the Final Contract Price shall be paid to the Seller
at delivery of each of the Option Aircraft.
6.2.4 The Predelivery Payment Reference Price is defined as:
A = Pb (1 + 0.05 N)
where
A = the Predelivery Payment Reference Price for Aircraft
scheduled to be delivered in calendar year T pursuant to
this Agreement.
Pb = the Base Price of the Aircraft as defined in Clause 4
above.
N = (T - 1995).
T = the scheduled year of delivery of the relevant Aircraft
pursuant to this Agreement.
6.3 Payment of Final Contract Price
Concurrently with the delivery of each Aircraft, the Buyer shall pay
to the Seller the Final Contract Price thereof, less the total
amount of the Predelivery Payments theretofore received by the
Seller in cash for such Aircraft under Subclause 6.2 above. The
Seller's receipt of the full amount of all Predelivery Payments and
of the Final Contract Price, less all applicable credits, shall be a
condition precedent to the Seller's obligation to deliver such
Aircraft.
6.4 Payment of Other Amounts
6.4.1 Unless otherwise expressly provided for herein, any payments due
hereunder or in respect of an Aircraft in addition to those referred
to in Subclauses 6.2 and 6.3 above shall be paid by the Buyer
concurrently with the delivery of the corresponding Aircraft or, if
invoiced after delivery of such Aircraft, within one (1) month after
the invoice date.
6.4.2 Notwithstanding any other rights the Seller may have at contract or
at law, the Buyer and the Seller hereby agree that should any amount
(whether under the Agreement or under any other agreement and
whether at the stated maturity of such amount, by acceleration or
otherwise) become due and payable by the Buyer or its Affiliates,
and not be paid in full in immediately
6-3
available funds on the date due, then the Seller shall have the
right to debit and apply, in whole or in part, the unused amount of
any credit made available by the Seller to the Buyer against such
unpaid amount. The Seller shall promptly notify the Buyer in writing
before such debiting and application.
6.5 Overdue Payments
If any payment due the Seller is not received by the Seller on the
date or dates as agreed upon between the Buyer and the Seller, the
Seller shall have the right to claim from the Buyer and the Buyer
shall promptly pay to the Seller upon receipt of such claim interest
at the rate of LIBOR for six-month deposits of US dollars plus three
hundred (300) basis points on the amount of such overdue payment, to
be calculated from and including the due date of such payment to
(but excluding) the date such payment is received by the Seller. The
Seller's right to receive such interest shall be in addition to any
other rights of the Seller hereunder or at law.
6.6 Refund of Predelivery Payments
The Buyer shall have no right to any refund of any deposit or
Predelivery Payment received by the Seller, except as provided under
Clauses 10 and 11 of this Agreement.
6.7 Proprietary Interest
The Buyer shall not, by virtue of anything contained in this
Agreement (including, without limitation, any Predelivery Payments
hereunder, or any designation or identification by the Seller of a
particular Aircraft as an Aircraft to which any of the provisions of
this Agreement refers), and notwithstanding any provision of law to
the contrary, acquire any proprietary, insurable or other interest
whatsoever in any Aircraft prior to delivery of and payment for such
Aircraft as provided in this Agreement.
6.8 Tender of Delivery
In addition to any other rights and remedies available to the
Seller, the Seller shall not be obligated to tender delivery of any
Aircraft for which the Buyer has not paid all Predelivery Payments
to the Buyer and shall have no further liability to the Buyer with
respect thereto, if the Buyer fails to make any Predelivery Payment
due pursuant to or generally is in default under this Agreement.
6-4
6.9 Payment in Full
The Buyer's obligation to make payments to the Seller hereunder
shall not be affected by and shall be determined without regard to
any setoff, counterclaim, recoupment, defense or other right that
the Buyer may have against the Seller or any other person and all
such payments shall be made without deduction of any kind. The Buyer
shall ensure that the sums received by the Seller under this
Agreement shall be equal to the full amounts expressed to be due the
Seller hereunder, without deduction on account of and free from any
and all taxes, levies, imposts, duties or charges of whatever nature
imposed on the Buyer, except that if the Buyer is compelled by law
to make any such deduction the Buyer shall pay such additional
amounts as may be necessary so that the net amount received by the
Seller after such deduction shall equal the amounts that would have
been received in the absence of such deduction.
6-5
7 - PLANT REPRESENTATIVES - INSPECTION
7.1 Inspection Procedures
7.1.1 All work to be carried out on the Aircraft and all materials and
parts thereof shall at all reasonable times during business hours be
open to inspection by duly authorized representatives of the Buyer
or its designee at the respective works of the Associated
Contractors and, if possible, at the works of their respective
subcontractors, and such representatives shall, to carry out the
aforesaid inspection, have access to such relevant technical data as
is reasonably necessary for this purpose (except that, if access to
any part of the respective works where construction is in progress
or materials or parts are stored is restricted for security reasons,
the Associated Contractors shall be allowed a reasonable time to
make the items available for inspection elsewhere). The actual
detailed inspection of the Aircraft, materials and parts thereof
shall take place only in the presence of the respective inspection
department personnel of the Associated Contractors or their
subcontractors. The procedures for such inspections shall be agreed
upon with the Buyer prior to any inspection.
7.1.2 For the purposes of Subclause 7.1.1 above and commencing with the
date of this Agreement until the delivery of the last Aircraft, the
Seller shall furnish free-of-charge adequate secretarial assistance
and suitable space, office equipment and facilities in or
conveniently located with respect to Aerospatiale's works in
Toulouse, France, for the use of not more than four (4)
representatives of the Buyer during the aforementioned period. The
Seller shall provide telecommunications facilities at the Buyer's
cost to be invoiced on a monthly basis.
7.1.3 All inspections, examinations and discussions with the Seller's, the
Associated Contractors' or their respective subcontractors'
engineering or other personnel by the Buyer and its said
representatives shall be performed in such manner as not to delay or
hinder the work to be carried out on the Aircraft or the proper
performance of this Agreement. In no event shall the Buyer or its
representatives be permitted to inspect any aircraft other than the
Aircraft.
7-1
7.2 INDEMNITY
THE SELLER SHALL INDEMNIFY AND HOLD HARMLESS THE BUYER, ITS
DIRECTORS, OFFICERS, AGENTS AND EMPLOYEES FROM AND AGAINST ALL
LIABILITIES, DAMAGES, LOSSES, COSTS AND EXPENSES (I) FOR ALL
INJURIES TO AND DEATHS OF PERSONS (EXCEPTING INJURIES TO OR DEATH OF
THE BUYER'S REPRESENTATIVES PARTICIPATING IN ANY TESTS, CHECKOUTS OR
INSPECTIONS OR CONTROLS UNDER THIS CLAUSE 7) CAUSED BY THE BUYER OR
ITS REPRESENTATIVES AND (II) FOR ANY LOSS OF OR DAMAGE TO PROPERTY
(EXCEPTING LOSS OF OR DAMAGE TO PROPERTY OF THE BUYER'S SAID
REPRESENTATIVES) CAUSED BY THE BUYER OR ITS REPRESENTATIVES, IN
EITHER CASE WHEN ARISING OUT OF OR IN CONNECTION WITH ANY SUCH
TESTS, CHECKOUTS, INSPECTIONS OR CONTROLS UNDER THIS CLAUSE 7. THIS
INDEMNITY OF THE SELLER SHALL NOT APPLY FOR ANY SUCH LIABILITIES,
DAMAGES, LOSSES, COSTS OR EXPENSES ARISING OUT OF OR CAUSED BY THE
NEGLIGENCE OR WILLFUL MISCONDUCT OF THE BUYER'S SAID
REPRESENTATIVES.
THE BUYER SHALL INDEMNIFY AND HOLD HARMLESS THE SELLER, THE
MANUFACTURER, EACH OF THE ASSOCIATED CONTRACTORS AND THEIR
RESPECTIVE SUBCONTRACTORS AND THEIR RESPECTIVE OFFICERS, AGENTS AND
EMPLOYEES FROM AND AGAINST ALL LIABILITIES, DAMAGES, LOSSES, COSTS
AND EXPENSES (I) FOR INJURIES TO OR DEATHS OF THE BUYER'S SAID
REPRESENTATIVES PARTICIPATING IN ANY TESTS, CHECKOUTS, INSPECTIONS
OR CONTROLS UNDER THIS CLAUSE 7, (II) FOR LOSS OF OR DAMAGE TO
PROPERTY OF THE BUYER'S SAID REPRESENTATIVES OR (III) ARISING OUT OF
OR CAUSED BY THE WILLFUL MISCONDUCT OR NEGLIGENCE OF THE BUYER'S
SAID REPRESENTATIVES. WITH RESPECT TO SUBCLAUSES (I) AND (II) OF THE
PRECEDING SENTENCE, THE BUYER SHALL NOT BE OBLIGATED TO INDEMNIFY OR
HOLD HARMLESS THE SELLER WHERE THE LIABILITIES, DAMAGES, LOSSES,
COSTS OR EXPENSES ARISE FROM THE SELLER'S NEGLIGENCE OR WILLFUL
MISCONDUCT.
IN THE EVENT ANY CLAIM IS MADE OR LAWSUIT IS BROUGHT AGAINST EITHER
PARTY (OR ITS RESPECTIVE INDEMNITEES) FOR DAMAGES FOR DEATH OR
INJURY, OR FOR PROPERTY DAMAGE, THE LIABILITY FOR WHICH HAS BEEN
ASSUMED BY THE OTHER PARTY PURSUANT TO THIS SUBCLAUSE 7.2, THE
FORMER (INDEMNITEE) SHALL PROMPTLY GIVE NOTICE TO THE OTHER PARTY
(INDEMNITOR), AND THE INDEMNITOR SHALL ASSUME AND CONDUCT THE
DEFENSE THEREOF, AND SHALL HAVE THE RIGHT TO EFFECT ANY SETTLEMENT
WHICH FINALLY EXTINGUISHES SUCH CLAIM AS AGAINST THE INDEMNITEE, AND
THE INDEMNITOR AGREES TO INDEMNIFY AND HOLD THE INDEMNITEE HARMLESS
FROM ANY LOSSES, LIABILITIES, OR EXPENSES BY REASON OF SUCH
SETTLEMENT. IN THE EVENT THAT THE INDEMNITOR FAILS TO ASSUME AND
CONDUCT THE DEFENSE OF
7-2
THE CLAIM OR LAWSUIT WHEN IT WAS OBLIGATED TO DO SO, THEN THE
INDEMNITEE SHALL HAVE THE RIGHT TO PROCEED WITH DEFENSE OF THE CLAIM
OR LAWSUIT AS IT DEEMS APPROPRIATE AND SHALL HAVE AN ACTION AGAINST
THE INDEMNITOR FOR ANY JUDGMENTS, SETTLEMENTS, COSTS OR EXPENSES
INCURRED IN CONDUCTING SAID DEFENSE. IF THE INDEMNITEE BELIEVES IT
HAS A DEFENSE TO THE CLAIM OR LAWSUIT AND THE INDEMNITOR HAS NOT
RAISED SUCH DEFENSE, THE INDEMNITEE MAY SUGGEST SUCH DEFENSE TO THE
INDEMNITOR AND THE INDEMNITOR SHALL THEN CONSIDER SUCH DEFENSE IN
GOOD FAITH. FOR THE PURPOSE OF THIS SUBCLAUSE 7.2, A CLAIM OR
LAWSUIT AGAINST THE MANUFACTURER OR ANY OF THE ASSOCIATED
CONTRACTORS OR ANY OF THEIR RESPECTIVE SUBCONTRACTORS OR ANY OF
THEIR RESPECTIVE DIRECTORS, OFFICERS, AGENTS OR EMPLOYEES SHALL BE
DEEMED TO BE A LAWSUIT AGAINST THE SELLER.
7-3
8 - BUYER'S ACCEPTANCE
8.1 Acceptance Procedures
8.1.1 The Seller or any Affiliate thereof acting as the Seller's designee
shall give to the Buyer not less than thirty (30) days' notice of
the proposed time when the Buyer's acceptance tests will be
conducted, and, in the event that the Buyer elects to attend the
said tests, the Buyer will cooperate in complying with the
reasonable requirements of the Seller with the intention of
completing all tests within five (5) Working Days after
commencement. The tests shall take place at Aerospatiale's works
near Toulouse, France (or at such other facilities of the Associated
Contractors or any affiliates thereof as the Seller may specify) and
shall be carried out by the personnel of the Manufacturer
(accompanied, if the Buyer so wishes, by representatives of the
Buyer up to a total of four (4) acting as observers, of whom not
more than two (2) shall have access to the cockpit at any one time).
During flight tests, these representatives shall comply with the
instructions of the Manufacturer's representatives. The Manufacturer
will not normally be required in the course of such acceptance tests
to fly any of the Aircraft for more than an aggregate of three (3)
hours.
8.1.2 The Seller will cause ASC, at no cost to the Buyer, to brief two (2)
pilots and provide one (1) free-of-charge four-hour (4-hour)
simulator session for each such two (2) pilots prior to acceptance
of the first Aircraft. This briefing shall provide specific
information related to acceptance flights.
8.1.3 The acceptance tests shall demonstrate the satisfactory functioning
of the Aircraft. The successful completion of such acceptance tests
in accordance with the Manufacturer's aircraft acceptance procedure
shall also be deemed to demonstrate compliance with the
Specification. In the event that the Buyer does not attend the tests
or fails to so cooperate, the Seller may complete them in the
absence of the Buyer, whereupon the Buyer shall be deemed to have
accepted the tests, if such tests are reasonably deemed satisfactory
by the Seller, and the Seller shall furnish such data with respect
to such tests as the Buyer may reasonably request.
8-1
8.1.4 If the acceptance tests for an Aircraft are not successfully
completed or there is a defect, the Buyer, within three (3) days
after such tests, shall give notice to the Seller specifying such
unsuccessful completion or defect. Thereafter the Seller shall, at
its cost, without hindrance from the Buyer, carry out any necessary
changes and, as soon as practicable thereafter, to resubmit the
Aircraft for new acceptance tests to demonstrate the elimination of
the defect, such tests to be held and carried out in accordance with
this Subclause 8.1.
8.2 Seller's Use of Aircraft
The Seller shall be entitled to use, without compensation to the
Buyer or other liability, each Aircraft prior to its delivery as may
be necessary to obtain the certificates required under Clause 2
hereof, and such use shall not affect the Buyer's obligation to
accept delivery of any Aircraft hereunder.
8.3 Certificate of Acceptance
When the Aircraft is "ready for delivery" as defined below in
Subclause 9.2, the Buyer will forthwith give to the Seller a signed
Certificate of Acceptance in the form attached as Exhibit "E" in
respect of the relevant Aircraft. Should the Buyer fail to so
deliver the said Certificate when conditions relating thereto have
been satisfied, then the Buyer shall be deemed to be in default as
though it had without warrant rejected delivery of such Aircraft
when duly tendered to it hereunder and shall thereafter bear all
costs and expenses resulting from such delay in delivery.
8.4 Finality of Acceptance
The Buyer's acceptance of delivery of each Aircraft shall be
evidenced by the Buyer's execution and delivery to the Seller of the
Certificate of Acceptance in the form attached to this Agreement as
Exhibit "E" and shall occur when the Aircraft is "ready for
delivery" as required by Subclauses 8.3 and 9.2 hereof. The Buyer's
execution of the Certificate of Acceptance and the Buyer's
acceptance of the Aircraft shall constitute a waiver of the Buyer's
right to revoke such acceptance of the Aircraft for any reason,
whether known or unknown at the time of acceptance, provided,
however, that the Buyer's execution of the Certificate of Acceptance
shall not constitute a waiver of any of the Buyer's rights or
remedies in the enforcement of any and all of the Seller's
obligations under this Agreement.
8-2
8.5 INDEMNITY
THE SELLER SHALL INDEMNIFY AND HOLD HARMLESS THE BUYER, ITS
DIRECTORS, OFFICERS, AGENTS AND EMPLOYEES FROM AND AGAINST ALL
LIABILITIES, DAMAGES, LOSSES, COSTS AND EXPENSES (I) FOR ALL
INJURIES TO AND DEATHS OF PERSONS (EXCEPTING INJURIES TO AND DEATHS
OF THE BUYER'S REPRESENTATIVES PARTICIPATING IN ANY GROUND OR FLIGHT
TESTS UNDER THIS CLAUSE 8) CAUSED BY THE BUYER OR ITS
REPRESENTATIVES AND (II) FOR ANY LOSS OF OR DAMAGE TO PROPERTY
(EXCEPTING LOSS OF OR DAMAGE TO PROPERTY OF THE BUYER'S SAID
REPRESENTATIVES) CAUSED BY THE BUYER OR ITS REPRESENTATIVES, IN
EITHER CASE WHEN ARISING OUT OF OR IN CONNECTION WITH THE OPERATION
OF THE AIRCRAFT DURING ANY GROUND OR FLIGHT TESTS UNDER THIS CLAUSE
8. THIS INDEMNITY OF THE SELLER SHALL NOT APPLY FOR ANY SUCH
LIABILITIES, DAMAGES, LOSSES, COSTS OR EXPENSES ARISING OUT OF OR
CAUSED BY THE NEGLIGENCE OR WILLFUL MISCONDUCT OF THE BUYER'S SAID
REPRESENTATIVES.
THE BUYER SHALL INDEMNIFY AND HOLD HARMLESS THE SELLER, THE
MANUFACTURER, EACH OF THE ASSOCIATED CONTRACTORS AND THEIR
RESPECTIVE SUBCONTRACTORS AND EACH OF THEIR RESPECTIVE DIRECTORS,
OFFICERS, AGENTS AND EMPLOYEES FROM AND AGAINST ALL LIABILITIES,
DAMAGES, LOSSES, COSTS AND EXPENSES (I) FOR INJURIES TO OR DEATHS OF
THE BUYER'S SAID REPRESENTATIVES PARTICIPATING IN ANY GROUND OR
FLIGHT TESTS UNDER THIS CLAUSE 8, (II) FOR LOSS OF OR DAMAGE TO
PROPERTY OF THE BUYER'S SAID REPRESENTATIVES OR (III) ARISING OUT OF
OR CAUSED BY THE WILLFUL MISCONDUCT OR NEGLIGENCE OF THE BUYER'S
SAID REPRESENTATIVES. WITH RESPECT TO SUBCLAUSES (I) AND (II) OF THE
PRECEDING SENTENCE, THE BUYER SHALL NOT BE OBLIGATED TO INDEMNIFY OR
HOLD HARMLESS THE SELLER WHERE THE LIABILITIES, DAMAGES, LOSSES,
COSTS OR EXPENSES ARISE FROM THE SELLER'S NEGLIGENCE OR WILLFUL
MISCONDUCT.
IN THE EVENT ANY CLAIM IS MADE OR LAWSUIT IS BROUGHT AGAINST EITHER
PARTY (OR ITS RESPECTIVE INDEMNITEES) FOR DAMAGES FOR DEATH OR
INJURY OR FOR PROPERTY DAMAGE, THE LIABILITY FOR WHICH HAS BEEN
ASSUMED BY THE OTHER PARTY PURSUANT TO THIS SUBCLAUSE 8.5, THE
FORMER (INDEMNITEE) SHALL PROMPTLY GIVE NOTICE TO THE OTHER PARTY
(INDEMNITOR), AND THE INDEMNITOR SHALL ASSUME AND CONDUCT THE
DEFENSE THEREOF, AND SHALL EFFECT ANY SETTLEMENT WHICH FINALLY
EXTINGUISHES SUCH CLAIM AS AGAINST THE INDEMNITEE, AND THE
INDEMNITOR AGREES TO INDEMNIFY AND HOLD THE INDEMNITEE HARMLESS FROM
ANY LOSSES, LIABILITIES, OR EXPENSES BY REASON OF SUCH SETTLEMENT.
IN THE EVENT THAT THE INDEMNITOR FAILS TO ASSUME AND CONDUCT THE
DEFENSE OF THE CLAIM OR LAWSUIT
8-3
WHEN IT WAS OBLIGATED TO DO SO, THEN THE INDEMNITEE SHALL HAVE THE
RIGHT TO PROCEED WITH DEFENSE OF THE CLAIM OR LAWSUIT AS IT DEEMS
APPROPRIATE AND SHALL HAVE AN ACTION AGAINST THE INDEMNITOR FOR ANY
JUDGMENTS, SETTLEMENTS, COSTS OR EXPENSES INCURRED IN CONDUCTING
SAID DEFENSE. IF THE INDEMNITEE BELIEVES IT HAS A DEFENSE TO THE
CLAIM OR LAWSUIT AND THE INDEMNITOR HAS NOT RAISED SUCH DEFENSE, THE
INDEMNITEE MAY SUGGEST SUCH DEFENSE TO THE INDEMNITOR AND THE
INDEMNITOR SHALL THEN CONSIDER SUCH DEFENSE IN GOOD FAITH. FOR THE
PURPOSE OF THIS SUBCLAUSE 8.5, A CLAIM OR LAWSUIT AGAINST THE
MANUFACTURER OR ANY OF THE ASSOCIATED CONTRACTORS OR ANY OF THEIR
RESPECTIVE SUBCONTRACTORS OR ANY OF THEIR RESPECTIVE DIRECTORS,
OFFICERS, AGENTS OR EMPLOYEES SHALL BE DEEMED TO BE A LAWSUIT
AGAINST THE SELLER.
8-4
9 - DELIVERY
9.1 Delivery Schedule
Subject to the provisions of this Agreement, the Seller shall have
the Aircraft ready for delivery at Aerospatiale's works near
Toulouse, France, and the Buyer shall accept the same, during the
months set forth below:
Firm Aircraft Delivery Date
No. 1: December 1998
No. 2: January 1999
No. 3: February 1999
No. 4: December 1999
Not later than thirty (30) days prior to the date scheduled for
acceptance tests for a particular Aircraft, the Seller shall give
the Buyer notice of the anticipated date on which such Aircraft will
be ready for delivery. Not later than fifteen (15) days prior to
such date notified to the Buyer, the Seller shall (i) confirm to the
Buyer that such anticipated delivery date is firm or (ii) in the
event the Seller cannot confirm such date as being firm, confirm a
new date, which shall be no more than two (2) Working Days in France
before or after the originally scheduled date.
9.2 Certificate of Airworthiness
Each Aircraft shall for the purpose of this Agreement be deemed to
be "ready for delivery" upon the satisfactory completion of its
acceptance tests and the issuance of a DGAC Certificate of
Airworthiness for Export in the "Transport Category" with respect
thereto and the compliance by the Seller with the other obligations
to be performed by it under Subclause 2.3 hereof.
9.3 Title
Title to and risk of loss of and damage to the Aircraft shall pass
to the Buyer upon delivery following execution of the Certificate of
Acceptance and upon payment of the Final Contract Price for such
Aircraft. The Seller will provide the Buyer with such appropriate
documents of title or other documents as the Buyer may reasonably
request.
9-1
9.4 Overdue Payment or Flyaway
In the event that:
(i) the delivery of the Aircraft and payment of the Final Contract
Price for the Aircraft is delayed more than five (5) days
after the firm delivery date established pursuant to Subclause
9.1 due to any act or omission by the Buyer, or
(ii) within two (2) days after delivery of the Aircraft, in
accordance with this Agreement, the Buyer has failed to remove
such Aircraft for whatever reason (except for reasons directly
attributable to the Seller),
then the Buyer shall on demand reimburse the Seller for all
reasonable costs and expenses (including, without limitation, costs
and expenses attributable to storage, preservation and protection,
insurance and taxes) sustained by the Seller and resulting from any
such delay or failure. Such reimbursement will be in addition to any
other rights that the Seller may have under this Agreement as a
result of any such delay or failure.
9.5 Flyaway Expenses
Except for expenses to be borne by the Seller as provided in
Subclause 4.4 of or elsewhere in this Agreement, all expenses of and
in connection with flyaway from Aerospatiale's works shall be borne
by the Buyer.
9-2
10 - EXCUSABLE DELAY
10.1 Scope
Neither the Seller nor the Manufacturer shall be responsible for or
be deemed to be in default on account of delays in delivery or
failure to deliver the Aircraft or otherwise in the performance of
this Agreement or any part hereof due to causes reasonably beyond
the Seller's, the Manufacturer's or any Associated Contractor's
control or not occasioned primarily by the Seller's, the
Manufacturer's or any Associated Contractor's fault or negligence
("Excusable Delay"), including, but not limited to: acts of God or
the public enemy, natural disasters, fires, floods, storms beyond
ordinary strength, explosions or earthquakes; epidemics or
quarantine restrictions; serious accidents; total or constructive
total loss; any law, decision, regulation, directive or other act
impacting directly or indirectly the performance of the Seller's
obligations under this Agreement (whether or not having the force of
law) of any government or of the Council of the European Community
or the Commission of the European Community or of any national,
Federal, State, municipal or other governmental department,
commission, board, bureau, agency, court or instrumentality,
domestic or foreign; governmental priorities, regulations or orders
affecting allocation of materials, facilities or a completed
Aircraft; war, civil war or warlike operations, terrorism,
insurrection or riots; failure of transportation; strikes or labor
troubles causing cessation, slow down or interruption of work,
provided such strikes or labor troubles are beyond the Seller's and
the Manufacturer's reasonable control or not occasioned by the
Seller's or the Manufacturer's fault or negligence; delay in
obtaining any airworthiness or type certification; inability after
due and timely diligence to procure materials, accessories,
equipment or parts; general hindrance in transportation; or failure
of a subcontractor or Vendor (except where such a failure is caused
by the fault or negligence of the Seller or the Manufacturer) to
furnish materials, components, accessories, equipment or parts.
It is expressly understood and agreed that each of (i) any delay
caused directly or indirectly by the action or inaction of the
Buyer, and (ii) delay in delivery or otherwise in the performance of
this Agreement by the Seller due in whole or in part to any delay in
or failure of the delivery of, or any other event or circumstance
relating to, the Propulsion Systems or Buyer Furnished Equipment,
shall constitute Excusable Delay for the Seller. The Seller shall as
soon as practicable after becoming aware of any delay falling
10-1
within the provisions of this Subclause 10.1 (i) notify the Buyer of
such delay, of the probable extent thereof, and that such delay is
an anticipated delay such notification by the Seller to be a
condition precedent to the applicability of the provisions of this
Clause 10 and (ii) subject to the following provisions, as soon as
practicable after the removal of the cause or causes for delay,
resume the performance of those obligations affected under this
Agreement.
10.2 Unanticipated Delay
In the event that the delivery of any Aircraft shall be delayed by
reason of an Excusable Delay for a period of more than six (6)
months after the end of the calendar month in which delivery is
otherwise required hereunder, the Buyer shall be entitled to
terminate this Agreement with respect only to the Aircraft so
affected upon notice given to the Seller within thirty (30) days
after the expiration of such six (6) month period. In the event such
delay shall continue for an additional six (6) month period after
the expiration of such six (6) month period, either party shall have
the option to terminate this Agreement with respect to the Aircraft
so affected upon notice given to the other within thirty (30) days
after the end of such additional six (6) month period. Such
termination shall discharge all obligations and liabilities of the
parties hereunder with respect to such affected Aircraft, except
that the Seller shall repay to the Buyer an amount equal to the
entire amount of any Predelivery Payments received from the Buyer in
cash hereunder with respect to such affected Aircraft, with interest
at LIBOR for six-month deposits of US dollars plus fifty (50) basis
points to be calculated from (and including) the due date of such
Predelivery Payment to (but excluding) the date payment is received
by the Buyer.
10.3 Anticipated Delay
In respect of any Aircraft, the Seller may conclude that Excusable
Delays will (i) cause delay in delivery of such Aircraft for a
period of more than six (6) months after the end of the calendar
month in which delivery is otherwise required or (ii) prevent
delivery of such Aircraft. In such event, in good faith and in
accordance with its normal scheduling procedures, the Seller will
give notice to the Buyer of either (i) such delay and its related
rescheduling reflecting such delay(s) or (ii) such nondelivery.
Within thirty (30) days after the Buyer's receipt of such notice,
either party may terminate this Agreement as to such rescheduled or
nondeliverable Aircraft by giving notice to the other party. Such
termination shall discharge
10-2
all obligations and liabilities of the parties hereunder with
respect to such affected Aircraft, except that the Seller shall
repay to the Buyer an amount equal to the entire amount of any
Predelivery Payment received from the Buyer in cash hereunder with
respect to such affected Aircraft, with interest at LIBOR for
six-month deposits of US dollars plus fifty (50) basis points to be
calculated from (and including) the due date of such Predelivery
Payment to (but excluding) the date payment is received by the
Buyer.
10.4 Delivery Date
If, following notice of an anticipated delay under Subclause 10.3,
this Agreement is not terminated in accordance with the provisions
of such Subclause (with respect to the affected Aircraft), then the
date of delivery otherwise required hereunder shall be extended by a
period equal to the delay specified in such notice.
10.5 Lost Destroyed or Damaged Aircraft
If, any Aircraft is lost, destroyed or damaged beyond economic
repair prior to delivery thereof, then this Agreement shall be
terminated with respect to such Aircraft and the obligations and
liabilities of the parties hereunder with respect to such Aircraft
shall be discharged. The Seller shall repay to the Buyer an amount
equal to the entire amount of any Predelivery Payments (without
interest) received from the Buyer in cash hereunder with respect to
any such Aircraft that is lost, destroyed or damaged beyond economic
repair.
10.6 REMEDIES
OTHER THAN AS EXPRESSLY PROVIDED FOR ELSEWHERE IN THIS AGREEMENT,
THIS CLAUSE 10 SETS FORTH THE SOLE AND EXCLUSIVE REMEDY OF THE BUYER
FOR EXCUSABLE DELAYS, AND THE BUYER HEREBY WAIVES ALL RIGHTS,
INCLUDING WITHOUT LIMITATION ANY RIGHTS TO INCIDENTAL AND
CONSEQUENTIAL DAMAGES OR SPECIFIC PERFORMANCE, TO WHICH IT WOULD
OTHERWISE BE ENTITLED IN RESPECT OF SUCH EXCUSABLE DELAY. THE BUYER
SHALL NOT BE ENTITLED TO CLAIM THE REMEDIES AND RECEIVE THE BENEFITS
PROVIDED IN THIS CLAUSE 10 TO THE EXTENT THE EXCUSABLE DELAY
REFERRED TO IN THIS CLAUSE 10 IS CAUSED BY THE NEGLIGENCE OR WILLFUL
MISCONDUCT OF THE BUYER OR ITS REPRESENTATIVES.
10-3
11 - INEXCUSABLE DELAY
11.1 Liquidated Damages
Should an Aircraft not be ready for delivery to the Buyer within
thirty (30) days after the month of delivery specified in this
Agreement (as such month may otherwise be changed pursuant to this
Agreement) for reasons other than an Excusable Delay, the Buyer
shall, in respect of any subsequent delay in delivery of such
Aircraft, have the right to claim and the Seller shall in respect of
any subsequent delay, pay or credit to the Buyer, at the Buyer's
option, as liquidated damages for the delay in delivery of such
Aircraft [***] for each day of subsequent delay in the delivery
until the effective date of the written notice of termination
referred to in Subclause 11.4 or 11.5 plus any amount referred to
in Subclause 11.4 or 11.5.
11.2 Total Liability
Notwithstanding Subclause 11.1, the total liability of the Seller
under this Clause 11 and this Agreement with respect to each
Aircraft shall in no event exceed the total sum of US $1,350,000 (US
dollars--one million three hundred fifty thousand) plus any amount
referred to in Subclause 11.4 or 11.5.
11.3 Written Claim
The Buyer's right to recover such damages in respect of an Aircraft
is conditional upon the Buyer's written notice to the Seller that it
intends to enforce the terms of this Clause 11. Such notice shall be
due no later than sixty (60) days after the date when such Aircraft
was scheduled to have been ready for delivery.
11.4 Six-Month Delay
In the event that such subsequent delay in delivery exceeds six (6)
months, the Buyer shall have the further right (in addition to the
damages and rights set forth above in Subclause 11.1 of this
Agreement), exercisable by written notice to the Seller given no
less than one (1) month and no more than two (2) months after such
six (6) month period, to terminate this Agreement in respect only of
the Aircraft that is the subject of such delay, whereupon the Seller
shall pay the Buyer, within one (1) month after receipt of such
notice, an amount equal to all Predelivery Payments made by the
Buyer to the Seller in cash in relation to
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such Aircraft, with interest at LIBOR for six-month deposits of US
dollars plus three hundred (300) basis points to be calculated from
(and including) the due date of such Predelivery Payment to (but
excluding) the date payment is received by the Buyer. Such payment
shall be in addition to any amount due pursuant to Subclause 11.1
above.
11.5 Twelve-Month Delay
In the event that such subsequent delay in delivery exceeds twelve
(12) months, the Seller shall have the right, exercisable by written
notice to the Buyer given no less than one (1) month and no more
than two (2) months after such twelve (12) month period, to
terminate this Agreement in respect only of the Aircraft that is
subject to such delay, whereupon the Seller shall pay the Buyer,
within one (1) month after such notice, an amount equal to all
Predelivery Payments made by the Buyer to the Seller in cash in
relation to such Aircraft, with interest at LIBOR for six-month
deposits of US dollars plus three hundred (300) basis points to be
calculated from (and including) the due date of such Predelivery
Payment to (but excluding) the date payment is received by the
Buyer. Such payment shall be in addition to any amount due pursuant
to Subclause 11.1 above.
11.6 Setoff Payments
If the Buyer terminates the Agreement pursuant to this Clause 11,
and is entitled to the return of Predelivery Payments as set forth
in Subclause 11.4 or 11.5, and notwithstanding anything to the
contrary contained herein, the Seller shall have the right to apply
any and all Predelivery Payments previously paid by the Buyer to the
Seller with respect to an Aircraft first to the payment of any other
amounts owing from the Buyer to the Seller or any affiliate thereof
under any agreement between them, including any amount the Buyer
owes the Seller under the Financial Matters Agreement dated the date
hereof between the Buyer and the Seller.
11.7 REMEDIES
OTHER THAN AS EXPRESSLY PROVIDED FOR ELSEWHERE IN THIS AGREEMENT,
THIS CLAUSE 11 SETS FORTH THE SOLE AND EXCLUSIVE REMEDY OF THE BUYER
FOR INEXCUSABLE DELAYS, AND THE BUYER HEREBY WAIVES ALL RIGHTS,
INCLUDING WITHOUT LIMITATION ANY RIGHTS TO INCIDENTAL AND
CONSEQUENTIAL DAMAGES OR SPECIFIC PERFORMANCE, TO WHICH IT WOULD
OTHERWISE BE ENTITLED IN RESPECT OF SUCH
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INEXCUSABLE DELAY. THE BUYER SHALL NOT BE ENTITLED TO CLAIM THE
REMEDIES AND RECEIVE THE BENEFITS PROVIDED IN THIS CLAUSE 11 WHERE
THE INEXCUSABLE DELAY REFERRED TO IN THIS CLAUSE 11 IS CAUSED BY THE
NEGLIGENCE OR WILLFUL MISCONDUCT OF THE BUYER OR ITS
REPRESENTATIVES.
11-3
12 - WARRANTIES AND SERVICE LIFE POLICY
12.1 STANDARD WARRANTY
12.1.1 Nature of warranty
12.1.2 Exceptions
12.1.3 Warranty Periods
12.1.4 Buyer's Remedy and Seller's Obligation
12.1.5 Warranty Claim Requirements
12.1.6 Warranty Administration
12.1.7 Inhouse Warranty
12.1.8 Standard Warranty Transferability
12.1.9 Warranty for Corrected, Replacement or Repaired Warranted Parts
12.1.10 Good Airline Operation - Normal Wear and Tear
12.2 SELLER SERVICE LIFE POLICY
12.2.1 Definitions
12.2.2 Periods and Seller's Undertakings
12.2.3 Seller's Participation in the Cost
12.2.4 General Conditions and Limitations
12.2.5 Transferability
12.3 VENDOR WARRANTIES
12.3.1 Seller's Support
12.3.2 Vendor's Default
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12.4 INTERFACE COMMITMENT
12.4.1 Interface Problem
12.4.2 Seller's Responsibility
12.4.3 Vendor's Responsibility
12.4.4 Joint Responsibility
12.4.5 General
12.5 EXCLUSIVITY OF WARRANTIES AND GENERAL LIMITATIONS OF LIABILITY
12.6 DUPLICATE REMEDIES
12.7 NEGOTIATED AGREEMENT
12-2
12 - WARRANTIES AND SERVICE LIFE POLICY
The Seller, in its capacity as "Buyer" under its arrangements with
the Manufacturer, has negotiated and obtained the following Standard
Warranty, Service Life Policy, Vendor Warranties and Interface
Commitment from the Manufacturer with respect to the Aircraft,
subject to the terms, conditions, limitations and restrictions
(including, but not limited to, the Exclusivity of Warranties and
General Limitations of Liability and Duplicate Remedies provisions)
all as hereinafter set out. The Seller hereby assigns to the Buyer,
and the Buyer hereby accepts, all of the rights and obligations of
the Seller in its capacity as "Buyer" as aforesaid under the said
Standard Warranty, Service Life Policy, Vendor Warranties and
Interface Commitment and the Seller subrogates the Buyer into all
such rights and obligations in respect of the Aircraft. The Seller
hereby warrants to the Buyer that it has all requisite authority to
make the foregoing assignment and effect the foregoing subrogation
to and in favor of the Buyer and that it will not enter into any
amendment of the provisions so assigned without the prior written
consent of the Buyer. Capitalized terms utilized in the following
provisions have the meanings assigned thereto in this Agreement,
except that the term "Seller" refers to the Manufacturer and the
term "Buyer" refers to the Seller.
QUOTE
12.1 STANDARD WARRANTY
12.1.1 Nature of Warranty
Subject to the limitations and conditions as hereinafter provided,
and except as provided in Subclause 12.1.2, the Seller warrants to
the Buyer that each Aircraft and each Warranted Part (as defined
hereinafter) shall at the time of delivery to the Buyer:
(i) be free from defects in material,
(ii) be free from defects in workmanship, including, without
limitation, processes of manufacture,
(iii) be free from defects in design (including, without limitation,
selection of materials) having regard to the state of the art
at the date of such design, and
12-3
(iv) be free from defects arising from failure to conform to the
Specification, except as to those portions of the
Specification that are expressly stated in the Specification
to be estimates or approximations or design aims (unless there
is material failure to conform to such estimates or
approximations or design aims).
For the purposes of this Agreement, the term "Warranted Part" shall
mean any Seller proprietary component, equipment, accessory or part
that is part of an Aircraft at the time of delivery of such Aircraft
and that (a) is manufactured to the detail design of the Seller or a
subcontractor of it and (b) bears a part number of the Seller at the
time of such delivery.
12.1.2 Exceptions
The warranties set forth in Subclause 12.1.1 shall not apply to
Buyer Furnished Equipment, nor to the engine and its associated
parts, nor to any component, accessory, equipment or part purchased
by the Buyer that is not a Warranted Part, provided, however, that:
(i) any defect in the Seller's workmanship in respect of the
installation of such items in the Aircraft, including any
failure by the Seller to conform to the installation
instructions of the manufacturers of such items that
invalidates any applicable warranty from such manufacturers,
shall constitute a defect in workmanship for the purpose of
this Subclause 12.1 and be covered by the warranty set forth
in Subclause 12.1.1(ii)
(ii) any defect inherent in the Seller's design of the
installation, in view of the state of the art at the date of
such design, that impairs the use of such items shall
constitute a defect in design for the purposes of this
Subclause 12.1 and be covered by the warranty set forth in
Subclause 12.1.1(iii).
For the purposes of Subclauses 12.1.2(i) and (ii) only, a Buyer
Furnished Equipment item that is the subject of a defect, as
described in such Subclauses, shall be deemed a Warranted Part and
be covered by the warranty set forth in either Subclause 12.1.1(ii)
or 12.1.1(iii), as applicable.
12-4
12.1.3 Warranty Periods
The warranties contained in Subclauses 12.1.1 and 12.1.2 hereinabove
shall be limited as follows:
(i) with respect to defects covered by Subclauses 12.1.1(i) and
(ii) and 12.1.2(i), to those defects that become apparent
within [***] (whichever shall first occur) after delivery of
the affected Aircraft, provided, however, that for any
Warranted Part that has not been scheduled for inspection by
the Buyer under its maintenance program approved by its
airworthiness authority prior to the expiration of such
[***], such warranties shall be extended to cover those
defects that become apparent before completion of the first
applicable inspection thereafter or within [***] after
delivery of the affected Aircraft (whichever shall first
occur); and
(ii) with respect to defects covered by Subclauses 12.1(iii) and
(iv) and 12.1.2(ii), to those defects that become apparent
within eighteen (18) months after delivery of the affected
Aircraft or, in the case of a Warranted Part, the Aircraft in
which the defective item was initially installed.
12.1.4 Buyer's Remedy and Seller's Obligation
12.1.4.1 The Buyer's remedy and the Seller's obligation and liability under
Subclauses 12.1.1 and 12.1.2 hereinabove are limited to the repair,
replacement or correction, at the Seller's sole expense and option,
of any defective Warranted Part, and, if necessary, to bear the cost
of any temporary replacement while any such Warranted Part is not
useable by the Buyer. Alternatively, the Seller may at its option
furnish a credit to the Buyer for the future purchase of Material
equal to the price at which the Buyer is then entitled to acquire a
replacement for the defective Warranted Part. Should the Buyer have
an outstanding credit in its favor at such time as the Buyer no
longer needs to purchase goods and services from the Seller or its
Affiliates, then, upon the Buyer's written request, the Seller will
pay the Buyer in cash an amount equal to
12-5
the amount of the then outstanding credit. Nothing herein contained
shall obligate the Seller to correct any failure to conform to the
Specification with respect to components, equipment, accessories or
parts that the parties agree in writing at the time of delivery of
the affected Aircraft are acceptable deviations or have no adverse
effect on the use, operation or performance of an Aircraft.
12.1.4.2 In the event a defect covered by Subclause 12.1.1(iii) becomes
apparent within the applicable period set forth in Subclause
12.1.3(ii) and the Seller is obligated to correct such defect, the
Seller shall also, if so requested by the Buyer in writing, make
such correction in any Aircraft that has not already been delivered
to the Buyer; provided, however, that the Seller shall not be
responsible nor deemed to be in default on account of any delay in
delivery of any Aircraft or otherwise, in respect of performance of
this Agreement, due to the Seller's undertaking to make such
correction where the Seller has given the Buyer notice of the
anticipated delay. Further, rather than accept a delay in delivery
of any such Aircraft, the Buyer may elect to accept delivery of such
Aircraft with subsequent correction of the defect by the Buyer at
the Seller's expense, or the Buyer may elect to accept delivery and
thereafter file a Warranty Claim as though the defect had become
apparent immediately after delivery of such Aircraft. It is
understood that nothing in this Subclause 12.1.4.2 will be deemed to
contravene the obligations of the Seller under the provisions of
Subclause 2.3 of this Agreement.
12.1.5 Warranty Claim Requirements
The Buyer's remedy and the Seller's obligation and liability under
this Subclause 12.1, with respect to each claimed defect, are
subject to the following conditions precedent:
(i) the existence of a defect covered by the provisions of this
Subclause 12.1,
(ii) the defect's having become apparent within the applicable
warranty period, as set forth in Subclause 12.1.3,
(iii) the Buyer's having submitted to the Seller proof reasonably
satisfactory to the Seller that the claimed defect is due to a
matter embraced within this Subclause 12.1, and that such
defect did not result from any
12-6
failure of the Buyer to operate the Aircraft in accordance
with the applicable approved data, including, but not limited
to, any failure to operate and maintain the affected Aircraft
or part thereof in accordance with the standards or any matter
set forth or covered in Subclause 12.1.10,
(iv) the Buyer's having returned as soon as reasonably practicable
the Warranted Part claimed to be defective to such repair
facilities in the United States as may be designated by the
Seller, except where the Buyer elects to repair a defective
Warranted Part in accordance with the provisions of Subclause
12.1.7, and
(v) the Seller's having received a Warranty Claim fulfilling the
conditions of and in accordance with the provisions of
Subclause 12.1.6 below.
12.1.6 Warranty Administration
The warranties set forth in Subclause 12.1 shall be administered as
hereinafter provided:
(i) Claim Determination
Warranty Claim determination by the Seller will be reasonably
based upon the claim details, reports from the Seller's
regional representative, historical data logs, inspections,
tests, findings during repair, defect analysis and other
suitable documents and information.
(ii) Transportation Costs
Transportation costs associated with the sending of a
defective Warranted Part to the facilities designated by the
Seller shall be borne by the Buyer and for the return
therefrom of a repaired or replacement Warranted Part shall be
borne by the Seller.
(iii) Return of an Aircraft
In the event that the Buyer desires to return an Aircraft to
the Seller for consideration of a Warranty Claim, the Buyer
shall notify the Seller of its intention to do so and the
Seller shall, prior to such return, have the
12-7
right to inspect such Aircraft and thereafter, without
prejudice to its rights hereunder, to repair such Aircraft, at
its sole option, either at the Buyer's facilities or at
another place acceptable to the Seller. Return of any Aircraft
by the Buyer to the Seller and return of such Aircraft to the
Buyer's facilities shall be at the Seller's expense.
(iv) On-Aircraft Work by the Seller
In the event that a defect necessitates the dispatch by the
Seller of a working team to repair or correct such defect at
the Buyer's facilities, or in the event that the Seller
accepts the return of an Aircraft to perform or have performed
such repair or correction, then all related expenses other
than direct costs incurred in performing such repair or
correction shall be borne by the Seller.
Any work performed by the Seller to rectify defects, which if
performed by the Buyer would not be eligible for a warranty
credit under the terms of Subclause 12.1.7(v), shall be at the
Buyer's expense. The rate charged by the Seller for any such
services shall not exceed the rate charged by the Seller to
other commercial airline customers of the Seller during
substantially the same time period.
(v) Warranty Claim Substantiation
For each claim under this Subclause 12.1, within ninety (90)
days after a defect becomes apparent, the Buyer will give
written notice to the Seller that contains at least the
following data with respect to a part or Aircraft, as
applicable ("Warranty Claim"):
(a) description of defect and action taken, if any,
(b) date of incident and/or of removal,
(c) description of the defective part,
(d) part number,
(e) serial number (if applicable),
(f) position on Aircraft, according to Catalog Sequence
Number (CSN) of the
12-8
Illustrated Parts Catalog, Component Maintenance Manual
or Structural Repair Manual (as such documents are
defined in Clause 14 and Exhibit "F" thereto) as
applicable,
(g) total flying hours or calendar times, as applicable, at
the date of appearance of a defect,
(h) time since last shop visit at the date of defect
appearance,
(i) Manufacturer's serial number of the Aircraft and/or its
registration number,
(j) Aircraft total flying hours and/or number of landings at
the date of defect appearance,
(k) claim number,
(l) date of claim, and
(m) date of delivery of an Aircraft or part to the Buyer.
Claims are to be addressed as follows:
Airbus Industrie
Support Division
Warranty Administration
Rond-Point Xxxxxxx Xxxxxxxx
F-31707 Blagnac
FRANCE
(vi) Replacements
Replacements made pursuant to this Subclause 12.1 will be made
within the lead time defined in the Seller's Spare Parts Price
List. Replaced components, equipment, accessories or parts
shall become the Seller's property.
Title to and risk of loss of any Aircraft, component,
accessory, equipment or part returned by the Buyer to the
Seller shall at all times remain with the Buyer, except that
(i) when the Seller has possession of a returned Aircraft,
component, accessory, equipment or part to which the Buyer has
12-9
title, the Seller shall have such responsibility therefor as
is chargeable by law to a bailee for hire, and, in addition,
the responsibility to insure the Buyer against direct damages
for loss of such returned Aircraft, component, accessory,
equipment or part to which the Buyer has title, but the Seller
shall not be liable for loss of use, and (ii) title to and
risk of loss of a returned component, accessory, equipment or
part shall pass to the Seller upon shipment by the Seller to
the Buyer of any item furnished by the Seller to the Buyer as
a replacement therefor. Upon the Seller's shipment to the
Buyer of any replacement component, accessory, equipment or
part provided by the Seller pursuant to this Subclause 12.1,
title to and risk of loss of such component, accessory,
equipment or part shall pass to the Buyer.
(vii) Rejection
The Seller shall provide reasonable written substantiation in
case of rejection of a claim. In such event the Buyer shall
pay to the Seller reasonable inspection and test charges
incurred by the Seller in connection with the investigation
and processing of such claim, provided, however, that the
Seller shall not invoice the Buyer for such charges for
amounts less than $500 (US dollars--five hundred) per Warranty
Claim. Such charges will be based on the Seller's then current
labor and materials cost. Transportation, insurance, and any
other costs associated with the sending of any Warranted Part
or any other item, equipment, component or part for which the
Buyer's warranty claim is properly rejected by the Seller
shall be borne by the Buyer.
(viii) Inspection
The Seller shall have the right to inspect the affected
Aircraft and documents and other records relating thereto in
the event of any claim under this Subclause 12.1.
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12.1.7 Inhouse Warranty
(i) Authorization
The Buyer is hereby authorized to perform the repair of
Warranted Parts, subject to the terms of this Subclause 12.1.7
("Inhouse Warranty"). The Buyer shall notify the Seller's
representative of its decision to perform any inhouse repairs
before such repairs are commenced, unless it is not practical
to do so, in which case the Buyer shall notify the Seller of
the inhouse repair as soon as reasonably practicable.
(ii) Conditions of Authorization
The Buyer shall be entitled to repair such Warranted Parts:
(a) only if adequate facilities and qualified personnel, as
approved by the FAA, are available to the Buyer,
(b) in accordance with the Seller's written instructions set
forth in documents such as the Aircraft Maintenance
Manual, Component Maintenance Manual (Manufacturer),
Component Maintenance Manual (Vendor) and Structural
Repair Manual, and
(c) only to the extent specified by the Seller, or, in the
absence of such specification, to the extent reasonably
necessary to correct the defect, in accordance with the
standards set forth in Subclause 12.1.10.
(iii) Seller's Rights
The Seller shall have the right to have any Warranted Part, or
any part removed therefrom, which is claimed to be defective,
returned to the Seller, as set forth in Subclause 12.1.6(ii),
if, in the judgment of the Seller, the nature of the defect
requires technical investigation.
The Seller shall further have the right to have a
representative present during the disassembly, inspection and
testing of any Warranted Part claimed to be defective, at the
Seller's cost.
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(iv) Inhouse Warranty Claim Substantiation
Claims for Inhouse Warranty credit shall be filed within the
time period set forth in and shall contain the same
information required in Warranty Claims under Subclause
12.1.6(v) and in addition shall include:
(a) a report of technical findings with respect to the
defect,
(b) for parts required to remedy the defect:
- part numbers,
- serial numbers (if applicable),
- description of the parts,
- quantity of parts,
- unit price of parts,
- total price of parts,
- related Seller's or third party's invoices (if
applicable),
(c) detailed number of labor hours,
(d) agreed Inhouse Warranty Labor Rate (defined below in
Subclause 12.1.7(v)(a)), and
(e) total claim value.
(v) Credit
The Buyer's sole remedy, and the Seller's sole obligation and
liability, in respect of Inhouse Warranty claims, shall be a
credit to the Buyer's account. Should the Buyer have an
outstanding credit in its favor at such time as the Buyer no
longer needs to purchase goods and services from the Seller or
its Affiliates, then, upon the Buyer's written request, the
Seller will pay the Buyer in cash an amount equal to the
amount of the then outstanding credit. The credit to the
Buyer's account shall be equal to the direct labor cost
expended in performing a repair and to the direct cost of
materials incorporated in the repair. Such costs shall be
determined as set forth below.
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(a) To determine direct labor costs, only man-hours spent on
disassembly, inspection, repair, reassembly, and final
inspection and test (including flight tests if flight
tests prove necessary to complete a repair under the
Inhouse Warranty) of the Warranted Part alone will be
counted. Man-hours required for maintenance work
concurrently being carried out on the Aircraft or
Warranted Part will not be included.
The man-hours counted as set forth above shall be
multiplied by an agreed labor rate representing the
Buyer's composite average hourly labor rate (excluding
all fringe benefits, premium time allowances, social
security charges, business taxes and similar items) paid
to the Buyer's employees whose jobs are directly related
to the performance of the repair (the "Inhouse Warranty
Labor Rate").
(b) Direct material costs are determined by the prices at
which the Buyer acquired such material, excluding any
parts and materials used for overhaul furnished free of
charge by the Seller.
(vi) Limitation on Credit
The Buyer will in no event be credited for repair costs
(including labor and material) for any Warranted Part
exceeding sixty-five percent (65%) of the Seller's current
catalog price for a replacement of such defective Warranted
Part or exceeding those costs which would have resulted if
repairs had been carried out at the Seller's facilities.
Such cost shall be substantiated in writing by the Seller upon
reasonable request by the Buyer.
(vii) Scrapped Material
The Buyer shall retain any Warranted Part defective beyond
economic repair and any defective part removed from a
Warranted Part during repair for a period of either one
hundred and twenty (120) days after the date of completion of
repair or ninety (90) days after submission of a claim for
Inhouse
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Warranty credit relating thereto, whichever is longer. Such
parts shall be returned to the Seller at the Seller's cost
within thirty (30) days of receipt of the Seller's request to
that effect.
Notwithstanding the foregoing, the Buyer may, with the
agreement of the Seller's Field Representative, scrap any such
defective parts that are beyond economic repair and not
required for technical evaluation.
Scrapped Warranted Parts shall be evidenced by a record of
scrapped material certified by an authorized representative of
the Buyer, which shall be kept in the Buyer's file for at
least the duration of the warranty periods set forth in this
Subclause 12.1.
(viii) LIMITATIONS ON LIABILITY OF SELLER
THE SELLER SHALL NOT BE LIABLE FOR ANY RIGHT, CLAIM OR REMEDY,
AND THE BUYER SHALL INDEMNIFY THE SELLER AGAINST THE CLAIMS OF
ANY THIRD PARTIES FOR ANY DEFECT, NONCONFORMANCE OR PROBLEM OF
ANY KIND, ARISING OUT OF OR IN CONNECTION WITH ANY REPAIR OF
WARRANTED PARTS OR ANY OTHER ACTIONS UNDERTAKEN BY THE BUYER
UNDER THIS SUBCLAUSE 12.1.7, INCLUDING BUT NOT LIMITED TO: (I)
LIABILITY IN CONTRACT OR TORT, (II) LIABILITY ARISING FROM THE
BUYER'S ACTUAL OR IMPUTED NEGLIGENCE, INTENTIONAL TORTS AND/OR
STRICT LIABILITY, AND/OR (III) LIABILITY TO ANY THIRD PARTIES.
THIS LIMITATION OF LIABILITY SHALL NOT APPLY IN THOSE
CIRCUMSTANCES WHERE THE BUYER FOLLOWED, WITHOUT ANY DEVIATION
WHATSOEVER, INSTRUCTIONS ISSUED BY THE SELLER WITH RESPECT TO
THOSE ACTIONS UNDERTAKEN BY THE BUYER UNDER THIS SUBCLAUSE
12.1.7.
12.1.8 Standard Warranty Transferability
The warranties provided for in this Subclause 12.1 for any Warranted
Part shall accrue to the benefit of any airline in revenue service
other than the Buyer, if the Warranted Part enters into the
possession of any such airline as a result of a pooling, sale or
leasing agreement between such airline and the Buyer, in accordance
with the terms and subject to the limitations and exclusions of the
foregoing warranties.
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12.1.9 Warranty for Corrected, Replacement or Repaired Warranted Parts
Whenever any Warranted Part that contains a defect for which the
Seller is liable under Subclause 12.1 has been corrected, repaired
or replaced pursuant to the terms of this Clause 12, the period of
the Seller's warranty with respect to such corrected, repaired or
replacement Warranted Part, whichever may be the case, shall be the
longer of six (6) months and the remaining portion of the original
warranty in respect of such corrected, repaired or replacement
Warranted Part. In the event that a defect is attributable to a
repair or replacement by the Buyer that was not completed in
accordance with this Agreement, a Warranty Claim with respect to
such defect shall not be allowable, notwithstanding any subsequent
correction or repairs, and shall immediately terminate the remaining
warranties under this Subclause 12.1 in respect of the affected
Warranted Part.
12.1.10 Good Airline Operation - Normal Wear and Tear
The Buyer's rights under this Subclause 12.1 are subject to the
Aircraft and each component, equipment, accessory and part thereof
being maintained, overhauled, repaired and operated in accordance
with good commercial airline practice, all technical documentation
and any other instructions issued by the Seller to the Buyer, the
Vendors or the manufacturer of the Propulsion Systems and all
applicable rules, regulations and directives of the FAA.
The Seller's liability under this Subclause 12.1 shall not extend to
normal wear and tear nor to:
(i) any Aircraft or component, equipment, accessory or part
thereof that has been repaired, altered or modified after
delivery by a party other than the Seller or in a manner other
than that allowed pursuant to this Agreement or otherwise
approved by the Seller;
(ii) any Aircraft or component, equipment, accessory or part
thereof that has been knowingly operated in a damaged state,
but only to the extent of any extra damage caused by such
operation; or
(iii) any component, equipment, accessory or part from which the
trademark, trade name,
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part or serial number or other identification marks have been
knowingly removed by the Buyer.
This waiver of the Seller's liability by the Buyer will not apply in
the cases of Subclause 12.1.10(i) and Subclause 12.1.10(ii) above if
the Buyer submits evidence satisfactory to the Seller that the
defect did not arise from nor was contributed to by either of said
cases.
12.2 SELLER SERVICE LIFE POLICY
In addition to the warranties set forth in Subclause 12.1 above, the
Seller further agrees that should a Failure (as defined in Subclause
12.2.1.2) occur in any Item (as defined in Subclause 12.2.1.1),
then, subject to the general conditions and limitations set forth in
Subclause 12.2.4 below, the provisions of this Subclause 12.2 shall
apply. The following provisions shall constitute the full extent of
coverage of the Service Life Policy.
12.2.1 Definitions
For the purposes of this Subclause 12.2, the following definitions
shall apply:
12.2.1.1 "Item" means any of the Seller components, equipment, accessories or
parts listed in Exhibit "D" hereto which are installed on an
Aircraft at any time during the period of effectiveness of the
Service Life Policy as defined below in Subclause 12.2.
12.2.1.2 "Failure" means any breakage of, or defect in, an Item that has
occurred, that can reasonably be expected to occur on a repetitive
or fleetwide basis, and that materially impairs the utility or
safety of the Item, provided that any such breakage of, or defect
in, any Item did not result from any breakage or defect in any other
Aircraft part or component or from any other extrinsic force.
12.2.2 Periods and Seller's Undertaking
Subject to the general conditions and limitations set forth in
Subclause 12.2.4 below, the Seller agrees that if a Failure occurs
in an Item before the Aircraft in which such Item is installed has
completed forty-three thousand two hundred (43,200) flying hours or
twentyeight thousand eight hundred (28,800) landings or within
twelve (12) years after the delivery of said Aircraft to the Buyer,
whichever shall first occur, the Seller shall, at its own
discretion, as promptly as practicable and for a price that reflects
the Seller's
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financial participation as hereinafter provided, either:
12.2.2.1 design and furnish to the Buyer a correction for such Item subject
to a Failure and provide any parts required for such correction
(including Seller designed standard parts but excluding industry
standard parts), or,
12.2.2.2 replace such Item.
12.2.3 Seller's Participation in the Cost
Any part or Item that the Seller is required to furnish to the Buyer
under this Service Life Policy in connection with the correction or
replacement of an Item shall be furnished to the Buyer at the
Seller's current sales price therefor, less the Seller's financial
participation, which will be determined in accordance with the
following formula:
P = C (N - T)/N
where
P: financial participation of the Seller,
C: the Seller's then current sales price for the required
Item or required Seller designed parts,
and,
(i) T: total flying time in hours since
delivery of the particular Aircraft in
which the Item subject to a Failure was
originally installed,
and,
N: forty-three thousand two hundred (43,200)
hours,
or,
(ii) T: total number of landings since delivery
that have been accumulated by the
particular Aircraft in which the Item
subject to a Failure was originally
installed,
and,
N: twenty-eight thousand eight hundred
(28,800) landings,
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or,
(iii) T: total time in months since delivery of
the particular Aircraft in which the
Item subject to a Failure was originally
installed,
and,
N: one hundred and forty-four (144) months,
whichever of the foregoing clauses (i), (ii) and (iii) yields
the lowest ratio of:
N-T/N
12.2.4 General Conditions and Limitations
12.2.4.1 Notwithstanding Subclause 12.2.3, the undertakings given in this
Subclause 12.2 shall not be valid during the period applicable to an
Item under Subclause 12.1.
12.2.4.2 The Buyer's remedy and the Seller's obligation and liability under
this Service Life Policy are subject to compliance by the Buyer with
the following conditions precedent:
(i) The Buyer shall maintain log books and other historical
records with respect to each Item adequate to enable
determination as to whether the alleged Failure is covered by
this Service Life Policy and, if so, to define the portion of
the cost to be borne by the Seller in accordance with
Subclause 12.2.3 above.
(ii) The Buyer shall keep the Seller informed of any significant
incidents relating to an Aircraft, howsoever occurring or
recorded.
(iii) The conditions of Subclause 12.1.10 shall have been complied
with.
(iv) The Buyer shall carry out specific structural inspection
programs for monitoring purposes as may be reasonably
established from time to time by the Seller. Such programs
shall be, to the extent possible, compatible with the Buyer's
operational requirements and shall be carried out at the
Buyer's expense. Reports relating thereto shall be regularly
furnished to the Seller.
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(v) In the case of any breakage or defect, the Buyer will report
the same in writing to the Seller within ninety (90) days
after any breakage or defect in an Item becomes apparent,
whether or not said breakage or defect can reasonably be
expected to occur in any other Aircraft, and the Buyer shall
inform the Seller in sufficient detail about the breakage or
defect to enable the Seller to determine whether said breakage
or defect is subject to this Service Life Policy.
In addition, in the event of a material change in the operational
parameters on which the figures set forth in Subclauses 12.2.3(i)
and 12.2.3(ii) are based, then the Buyer and the Seller will adjust
such figures.
12.2.4.3 Except as otherwise provided in this Subclause 12.2, any claim under
this Service Life Policy shall be administered as provided in, and
shall be subject to the terms and conditions of, Subclause 12.1.6.
12.2.4.4 In the event that the Seller shall have issued a modification
applicable to an Aircraft, the purpose of which is to avoid a
Failure, the Seller may elect to supply the necessary modification
kit free of charge or under a pro rata formula established by the
Seller. If such a kit is so offered to the Buyer, then, in respect
of such Failure and any Failures that could ensue therefrom, the
validity of the Seller's commitment under this Subclause 12.2 shall
be subject to the Buyer's incorporating such modification in the
relevant Aircraft, within a reasonable time, as promulgated by the
Seller and in accordance with the Seller's instructions.
12.2.4.5 THIS SERVICE LIFE POLICY IS NEITHER A WARRANTY, PERFORMANCE
GUARANTEE, NOR AN AGREEMENT TO MODIFY ANY AIRCRAFT OR AIRFRAME
COMPONENTS TO CONFORM TO NEW DEVELOPMENTS OCCURRING IN THE STATE OF
AIRFRAME DESIGN AND MANUFACTURING ART. THE SELLER'S OBLIGATION UNDER
THIS SUBCLAUSE 12.2 IS TO MAKE ONLY THOSE CORRECTIONS TO THE ITEMS
OR FURNISH REPLACEMENTS THEREFOR AS PROVIDED IN THIS SUBCLAUSE 12.2.
THE BUYER'S SOLE REMEDY AND RELIEF FOR THE NONPERFORMANCE OF ANY
OBLIGATION OR LIABILITY OF THE SELLER ARISING UNDER OR BY VIRTUE OF
THIS SERVICE LIFE POLICY SHALL BE IN MONETARY DAMAGES, LIMITED TO
THE AMOUNT THE BUYER REASONABLY EXPENDS IN PROCURING A CORRECTION OR
REPLACEMENT FOR ANY ITEM THAT IS THE SUBJECT OF A FAILURE COVERED BY
THIS SERVICE LIFE POLICY AND TO WHICH SUCH NONPERFORMANCE IS
RELATED, LESS THE AMOUNT THAT THE BUYER OTHERWISE WOULD HAVE BEEN
REQUIRED TO PAY UNDER THIS SUBCLAUSE 12.2 IN RESPECT OF SUCH
CORRECTED OR REPLACEMENT ITEM. WITHOUT LIMITING THE
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EXCLUSIVITY OF WARRANTIES AND GENERAL LIMITATIONS OF LIABILITY
PROVISIONS SET FORTH IN SUBCLAUSE 12.5, THE BUYER HEREBY WAIVES,
RELEASES AND RENOUNCES ALL CLAIMS TO ANY FURTHER DIRECT, INCIDENTAL
OR CONSEQUENTIAL DAMAGES, INCLUDING LOSS OF PROFITS AND ALL OTHER
RIGHTS, CLAIMS AND REMEDIES, ARISING UNDER OR BY VIRTUE OF THIS
SERVICE LIFE POLICY, EXCEPT AS PROVIDED FOR ELSEWHERE IN THIS
AGREEMENT.
12.2.5 Transferability
The Buyer's rights under this Subclause 12.2 shall not be assigned,
sold, leased, transferred or otherwise alienated by operation of law
or otherwise, without the Seller's prior written consent.
Any unauthorized assignment, sale, lease, transfer or other
alienation of the Buyer's rights under this Service Life Policy
shall, as to the particular Aircraft involved, immediately void this
Service Life Policy in its entirety.
12.3 VENDOR WARRANTIES
12.3.1 Seller's Support
Prior to delivery of the first Aircraft, the Seller shall obtain
from all Vendors listed in the Supplier Product Support Agreements
manual enforceable and transferable warranties and indemnities
against patent infringements for components, equipment, accessories
and parts of the Vendors that are installed in an Aircraft at the
time of delivery thereof ("Vendor Parts," it being understood that
such term shall not include the Propulsion Systems, Buyer Furnished
Equipment or other equipment selected by the Buyer to be supplied by
Vendors with whom the Seller has no existing enforceable warranty
agreements). The Seller shall also obtain enforceable and
transferable Vendor service life policies from landing gear Vendors
for selected structural landing gear elements. The Seller undertakes
to supply to the Buyer such Vendor warranties, Vendor service life
policies and indemnities against patent infringements substantially
in the form summarized in the Supplier Product Support Agreements
manual.
12.3.2 Vendor's Default
12.3.2.1 In the event that any Vendor under any standard warranty or
indemnity against patent infringements obtained by the Seller
pursuant to Subclause 12.3.1 or
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Clause 13 hereof defaults in the performance of any material
obligation under such warranty or indemnity against patent
infringements with respect to a Vendor Part, and the Buyer submits
within a reasonable time to the Seller reasonable proof that such
default has occurred, then Subclause 12.1 or Clause 13 of this
Agreement shall apply to the extent the same would have been
applicable had such Vendor Part been a Warranted Part except that,
for obligations covered under Subclause 12.1, the longer of (i) the
Vendor's warranty period as indicated in the Supplier Product
Support Agreements manual and (ii) the Seller's warranty period as
indicated in Subclause 12.1.3 of this Agreement shall apply.
12.3.2.2 In the event that any Vendor under any Vendor service life policy
obtained by the Seller pursuant to Subclause 12.3.1 hereof defaults
in the performance of any material obligation with respect thereto,
and the Buyer submits within reasonable time to the Seller
reasonable proof that such default has occurred, then Subclause 12.2
of this Agreement shall apply to the extent the same would have been
applicable had such component, equipment, accessory or part been
listed in Exhibit "D" hereto.
12.3.2.3 At the Seller's request, the Buyer shall assign to the Seller, and
the Seller shall be subrogated to, all of the Buyer's rights against
the relevant Vendor, with respect to and arising by reason of such
default and the Buyer shall provide reasonable assistance to enable
the Seller to enforce the rights so assigned.
12.4 INTERFACE COMMITMENT
12.4.1 Interface Problem
If the Buyer experiences any technical problem in the operation of
an Aircraft or its systems due to a malfunction, the cause of which,
after due and reasonable investigation, is not readily identifiable
by the Buyer, but which the Buyer reasonably believes to be
attributable to the design characteristics of one or more components
of the Aircraft (an "Interface Problem"), the Seller shall, if
requested by the Buyer, and without additional charge to the Buyer,
promptly conduct or have conducted an investigation and analysis of
such problem to determine, if possible, the cause or causes of the
problem and to recommend such corrective action as may be feasible,
provided, however, that if the Seller determines, after such due and
reasonable investigation, that the Interface Problem was due to or
caused by any failure of the Buyer to operate the Aircraft in
accordance with the applicable approved data, the Buyer shall pay to
the Seller all reasonable
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costs and expenses incurred by the Seller during such investigation.
The Buyer shall furnish to the Seller all data and information in
the Buyer's possession relevant to the Interface Problem and shall
cooperate with the Seller in the conduct of the Seller's
investigations and such tests as may be required.
At the conclusion of such investigation the Seller shall promptly
advise the Buyer in writing of the Seller's opinion as to the cause
or causes of the Interface Problem and the Seller's recommendations
as to corrective action.
12.4.2 Seller's Responsibility
If the Seller reasonably determines that the Interface Problem is
primarily attributable to the design of a Warranted Part, the Seller
shall, if requested by the Buyer, correct the design of such
Warranted Part, pursuant to the terms and conditions of Subclause
12.1.
12.4.3 Vendor's Responsibility
If the Seller reasonably determines that the Interface Problem is
primarily attributable to the design of a component, equipment,
accessory or part other than a Warranted Part ("Vendor Component"),
the Seller shall, if requested by the Buyer, reasonably assist the
Buyer in processing any warranty claim the Buyer may have against
the manufacturer of such Vendor Component.
12.4.4 Joint Responsibility
If the Seller reasonably determines that the Interface Problem is
attributable partially to the design of a Warranted Part and
partially to the design of any Vendor Component, the Seller shall,
if requested by the Buyer, seek a solution to the Interface Problem
through cooperative efforts of the Seller and any Vendor involved.
The Seller shall promptly advise the Buyer of such corrective action
as may be proposed by the Seller and any such Vendor. Such proposal
will be consistent with any then existing obligations of the Seller
hereunder and of any such Vendor to the Buyer. Such corrective
action, unless reasonably rejected by the Buyer, shall constitute
full satisfaction of any claim the Buyer may have against either the
Seller or any such Vendor with respect to such Interface Problem.
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12.4.5 General
12.4.5.1 All requests under this Subclause 12.4 shall be directed both to the
Seller and the affected Vendors.
12.4.5.2 Except as specifically set forth in this Subclause 12.4, this
Subclause 12.4 shall not be deemed to impose on the Seller any
obligations not expressly set forth elsewhere in this Agreement.
12.4.5.3 All reports, recommendations, data and other documents furnished by
the Seller to the Buyer pursuant to this Subclause 12.4 shall be
deemed to be delivered under this Agreement and shall be subject to
the terms, covenants and conditions set forth in this Clause 12 and
in Subclause 22.4.
12.5 EXCLUSIVITY OF WARRANTIES AND GENERAL LIMITATIONS OF LIABILITY
THIS CLAUSE 12 (INCLUDING ITS SUBPROVISIONS) SETS FORTH THE
EXCLUSIVE WARRANTIES, EXCLUSIVE LIABILITIES AND EXCLUSIVE
OBLIGATIONS OF THE SELLER, AND THE EXCLUSIVE REMEDIES AVAILABLE TO
THE BUYER, WHETHER UNDER THIS AGREEMENT OR OTHERWISE, ARISING FROM
ANY DEFECT OR NONCONFORMITY OR PROBLEM OF ANY KIND IN ANY AIRCRAFT,
COMPONENT, EQUIPMENT, ACCESSORY, PART OR SERVICE DELIVERED UNDER
THIS AGREEMENT.
THE BUYER RECOGNIZES THAT THE RIGHTS, WARRANTIES AND REMEDIES IN
THIS CLAUSE 12 ARE ADEQUATE AND SUFFICIENT TO PROTECT THE BUYER FROM
ANY DEFECT OR NONCONFORMITY OR PROBLEM OF ANY KIND IN THE GOODS AND
SERVICES SUPPLIED UNDER THIS AGREEMENT. THE BUYER HEREBY WAIVES,
RELEASES AND RENOUNCES ALL OTHER WARRANTIES, OBLIGATIONS, GUARANTEES
AND LIABILITIES OF THE SELLER AND ALL OTHER RIGHTS, CLAIMS AND
REMEDIES OF THE BUYER AGAINST THE SELLER, WHETHER EXPRESS OR IMPLIED
BY CONTRACT, TORT, OR STATUTORY LAW OR OTHERWISE, WITH RESPECT TO
ANY NONCONFORMITY OR DEFECT OR PROBLEM OF ANY KIND IN ANY AIRCRAFT,
COMPONENT, EQUIPMENT, ACCESSORY, PART OR SERVICE DELIVERED UNDER
THIS AGREEMENT, INCLUDING BUT NOT LIMITED TO:
(1) ANY IMPLIED WARRANTY OF MERCHANTABILITY AND/OR FITNESS FOR ANY
GENERAL OR PARTICULAR PURPOSE;
(2) ANY IMPLIED OR EXPRESS WARRANTY ARISING FROM COURSE OF
PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE;
(3) ANY RIGHT, CLAIM OR REMEDY FOR BREACH OF CONTRACT;
12-23
(4) ANY RIGHT, CLAIM OR REMEDY FOR TORT, UNDER ANY THEORY OF
LIABILITY, HOWEVER ALLEGED, INCLUDING, BUT NOT LIMITED TO,
ACTIONS AND/OR CLAIMS FOR NEGLIGENCE, GROSS NEGLIGENCE,
INTENTIONAL ACTS, WILLFUL DISREGARD, IMPLIED WARRANTY, PRODUCT
LIABILITY, STRICT LIABILITY OR FAILURE TO WARN;
(5) ANY RIGHT, CLAIM OR REMEDY ARISING UNDER THE UNIFORM
COMMERCIAL CODE OR ANY OTHER STATE OR FEDERAL STATUTE;
(6) ANY RIGHT, CLAIM OR REMEDY ARISING UNDER ANY REGULATIONS OR
STANDARDS IMPOSED BY ANY INTERNATIONAL, NATIONAL, STATE OR
LOCAL STATUTE OR AGENCY;
(7) ANY RIGHT, CLAIM OR REMEDY TO RECOVER OR BE COMPENSATED FOR:
(a) LOSS OF USE OR REPLACEMENT OF ANY AIRCRAFT, COMPONENT,
EQUIPMENT, ACCESSORY OR PART PROVIDED UNDER THIS
AGREEMENT;
(b) LOSS OF, OR DAMAGE OF ANY KIND TO, ANY AIRCRAFT,
COMPONENT, EQUIPMENT, ACCESSORY OR PART PROVIDED UNDER
THIS AGREEMENT;
(c) LOSS OF PROFITS AND/OR REVENUES;
(d) ANY OTHER INCIDENTAL OR CONSEQUENTIAL DAMAGE.
THE WARRANTIES AND SERVICE LIFE POLICY PROVIDED BY THIS AGREEMENT
SHALL NOT BE EXTENDED, ALTERED OR VARIED EXCEPT BY A WRITTEN
INSTRUMENT SIGNED BY THE SELLER AND THE BUYER. IN THE EVENT THAT ANY
PROVISION OF THIS CLAUSE 12 SHOULD FOR ANY REASON BE HELD UNLAWFUL,
OR OTHERWISE UNENFORCEABLE, THE REMAINDER OF THIS CLAUSE 12 SHALL
REMAIN IN FULL FORCE AND EFFECT.
12.6 DUPLICATE REMEDIES
The remedies provided to the Buyer under this Clause 12 as to any
defect in respect of the Aircraft or any part thereof are mutually
exclusive and not cumulative. The Buyer shall be entitled to the
remedy that provides the maximum benefit to it, as the Buyer may
elect, pursuant to the terms and conditions of this Clause 12 for
any such particular defect for which remedies are provided
12-24
under this Clause 12; provided, however, that the Buyer shall not be
entitled to elect a remedy under one part of this Clause 12 that
constitutes a duplication of any remedy elected by it under any
other part hereof for the same defect. The Buyer's rights and
remedies herein for the nonperformance of any obligations or
liabilities of the Seller arising under these warranties shall be in
monetary damages limited to the amount the Buyer expends in
procuring a correction or replacement for any covered part subject
to a defect or nonperformance covered by this Clause 12, and the
Buyer shall not have any right to require specific performance by
the Seller.
UNQUOTE
In consideration of the assignment and subrogation by the Seller
under this Clause 12 in favor of the Buyer in respect of the
Seller's rights against and obligations to the Manufacturer under
the provisions quoted above, the Buyer hereby accepts such
assignment and subrogation and agrees to be bound by all of the
terms, conditions and limitations therein contained, specifically
including, without limitation, the Exclusivity of Warranties and
General Limitations of Liability provisions and Duplicate Remedies
provisions.
THIS CLAUSE 12 (INCLUDING ITS SUBPROVISIONS) SETS FORTH THE
EXCLUSIVE WARRANTIES, EXCLUSIVE LIABILITIES AND EXCLUSIVE
OBLIGATIONS OF THE SELLER, AND THE EXCLUSIVE REMEDIES AVAILABLE TO
THE BUYER, WHETHER UNDER THIS AGREEMENT OR OTHERWISE, ARISING FROM
ANY DEFECT OR NONCONFORMITY OR PROBLEM OF ANY KIND IN ANY AIRCRAFT,
COMPONENT, EQUIPMENT, ACCESSORY, PART OR SERVICE DELIVERED UNDER
THIS AGREEMENT.
THE BUYER RECOGNIZES THAT THE RIGHTS, WARRANTIES AND REMEDIES IN
THIS CLAUSE 12 ARE ADEQUATE AND SUFFICIENT TO PROTECT THE BUYER FROM
ANY DEFECT OR NONCONFORMITY OR PROBLEM OF ANY KIND IN THE GOODS AND
SERVICES SUPPLIED UNDER THIS AGREEMENT. THE BUYER HEREBY WAIVES,
RELEASES AND RENOUNCES ALL OTHER WARRANTIES, OBLIGATIONS, GUARANTEES
AND LIABILITIES OF THE SELLER AND ALL OTHER RIGHTS, CLAIMS AND
REMEDIES OF THE BUYER AGAINST THE SELLER, WHETHER EXPRESS OR IMPLIED
BY CONTRACT, TORT, OR STATUTORY LAW OR OTHERWISE, WITH RESPECT TO
ANY NONCONFORMITY OR DEFECT OR PROBLEM OF ANY KIND IN ANY AIRCRAFT,
COMPONENT, EQUIPMENT, ACCESSORY, PART OR SERVICE DELIVERED UNDER
THIS AGREEMENT, INCLUDING BUT NOT LIMITED TO:
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(1) ANY IMPLIED WARRANTY OF MERCHANTABILITY AND/OR FITNESS FOR ANY
GENERAL OR PARTICULAR PURPOSE;
(2) ANY IMPLIED OR EXPRESS WARRANTY ARISING FROM COURSE OF
PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE;
(3) ANY RIGHT, CLAIM OR REMEDY FOR BREACH OF CONTRACT;
(4) ANY RIGHT, CLAIM OR REMEDY FOR TORT, UNDER ANY THEORY OF
LIABILITY, HOWEVER ALLEGED, INCLUDING, BUT NOT LIMITED TO,
ACTIONS AND/OR CLAIMS FOR NEGLIGENCE, GROSS NEGLIGENCE,
INTENTIONAL ACTS, WILLFUL DISREGARD, IMPLIED WARRANTY, PRODUCT
LIABILITY, STRICT LIABILITY OR FAILURE TO WARN;
(5) ANY RIGHT, CLAIM OR REMEDY ARISING UNDER THE UNIFORM
COMMERCIAL CODE OR ANY OTHER STATE OR FEDERAL STATUTE;
(6) ANY RIGHT, CLAIM OR REMEDY ARISING UNDER ANY REGULATIONS OR
STANDARDS IMPOSED BY ANY INTERNATIONAL, NATIONAL, STATE OR
LOCAL STATUTE OR AGENCY;
(7) ANY RIGHT, CLAIM OR REMEDY TO RECOVER OR BE COMPENSATED FOR:
(a) LOSS OF USE OR REPLACEMENT OF ANY AIRCRAFT, COMPONENT,
EQUIPMENT, ACCESSORY OR PART PROVIDED UNDER THIS
AGREEMENT;
(b) LOSS OF, OR DAMAGE OF ANY KIND TO, ANY AIRCRAFT,
COMPONENT, EQUIPMENT, ACCESSORY OR PART PROVIDED UNDER
THIS AGREEMENT;
(c) LOSS OF PROFITS AND/OR REVENUES;
(d) ANY OTHER INCIDENTAL OR CONSEQUENTIAL DAMAGE.
THE WARRANTIES AND SERVICE LIFE POLICY PROVIDED BY THIS AGREEMENT
SHALL NOT BE EXTENDED, ALTERED OR VARIED EXCEPT BY A WRITTEN
INSTRUMENT SIGNED BY THE SELLER AND THE BUYER. IN THE EVENT THAT ANY
PROVISION OF THIS CLAUSE 12 SHOULD FOR ANY REASON BE HELD UNLAWFUL,
OR OTHERWISE UNENFORCEABLE, THE REMAINDER OF THIS CLAUSE 12 SHALL
REMAIN IN FULL FORCE AND EFFECT.
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The remedies provided to the Buyer under this Clause 12 as to any
defect in respect of the Aircraft or any part thereof are mutually
exclusive and not cumulative. The Buyer shall be entitled to the
remedy that provides the maximum benefit to it, as the Buyer may
elect, pursuant to the terms and conditions of this Clause 12 for
any such particular defect for which remedies are provided under
this Clause 12; provided, however, that the Buyer shall not be
entitled to elect a remedy under one part of this Clause 12 that
constitutes a duplication of any remedy elected by it under any
other part hereof for the same defect. The Buyer's rights and
remedies herein for the nonperformance of any obligations or
liabilities of the Seller arising under these warranties shall be in
monetary damages limited to the amount the Buyer expends in
procuring a correction or replacement for any covered part subject
to a defect or nonperformance covered by this Clause 12, and the
Buyer shall not have any right to require specific performance by
the Seller.
12.7 NEGOTIATED AGREEMENT
The Buyer and the Seller agree that this Clause 12 has been the
subject of discussion and negotiation and is fully understood by the
parties and that the price of the Aircraft and the other mutual
agreements of the parties set forth in this Agreement were arrived
at in consideration of, inter alia, the provisions of this Clause
12, specifically including the Exclusivity of Warranties and General
Limitations of Liability provisions and the Duplicate Remedies
provisions set forth following Subclause 12.6.
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3 - PATENT INDEMNITY
The Seller, in its capacity as "Buyer" under its arrangements with
the Manufacturer, has negotiated and obtained the following Patent
Indemnity from the Manufacturer with respect to the Aircraft,
subject to the terms, conditions, limitations and restrictions
(including, but not limited to, the waiver, release and renunciation
provision) all as hereinafter set out. The Seller hereby assigns to
the Buyer, and the Buyer hereby accepts, all of the rights and
obligations of the Seller in its capacity as "Buyer" as aforesaid
under the said Patent Indemnity and the Seller subrogates the Buyer
into all such rights and obligations in respect of the Aircraft. The
Seller hereby warrants to the Buyer that it has all requisite
authority to make the foregoing assignment and effect the foregoing
subrogation to and in favor of the Buyer and that it will not enter
into any amendment of the provisions so assigned without the prior
written consent of the Buyer. Capitalized terms utilized in the
following provisions have the meanings assigned thereto in this
Agreement, except that the term "Seller" refers to the Manufacturer
and the term "Buyer" refers to the Seller.
QUOTE
13.1 Scope
The Seller shall indemnify the Buyer from and against any damages,
costs and expenses including reasonable legal costs (excluding
damages, costs, expenses, loss of profits and other liabilities in
respect of or resulting from loss of use of any Aircraft):
(1) to the extent of one hundred percent (100%) thereof in case of
any actual or alleged infringement by any Aircraft or any
Warranted Part or the use thereof of (a) any British, French,
German, Spanish or US patent, or (b) any patent issued under
the laws of any other country that (i) is bound by and
entitled to all benefits of Article 27 of the Chicago
Convention on International Civil Aviation of December 7,
1944, or (ii) is a party to the International Convention for
the Protection of Industrial Property or (iii) has in full
force and effect patent laws that recognize and give adequate
protection to patents issued under the laws of other
countries, and
13-1
(2) to the extent of fifty percent (50%) thereof in case of any
actual or alleged infringement by any Aircraft or any
Warranted Part or the use thereof of any patent issued under
the laws of any country not covered by (1) above in which the
Buyer is from time to time lawfully operating the Aircraft.
The Seller's undertaking under this Clause 13 shall not apply to
components, accessories, equipment or parts which are not Warranted
Parts.
13.2 Seller's Action
Should the Buyer be enjoined from using any part of an Aircraft by
reason of infringement of a patent covered by Subclause 13.1, the
Seller will, at its option and expense, either (i) procure for the
Buyer the right to use such part free of any liability for patent
infringement or (ii) as soon as possible replace such part with a
noninfringing substitute otherwise complying with the requirements
of this Agreement.
13.3 Seller's Obligation
The Seller's obligation hereunder with respect to any actual or
alleged infringement is conditioned upon commencement of suit
against the Buyer for infringement or the Buyer's receipt of a
written claim alleging infringement, and upon written notice by the
Buyer to the Seller within ten (10) days after receipt by the Buyer
of notice of the institution of such suit or claim, giving
particulars thereof. The Seller shall have the option but not the
obligation at any time to conduct negotiations with the party or
parties charging infringement and may intervene in any suit
commenced. Whether or not the Seller intervenes in any such suit, it
shall be entitled at any stage of the proceedings to assume, conduct
or control the defense thereof, if it assumes the costs associated
therewith.
The Seller's obligation hereunder with respect to any actual or
alleged infringement is also conditioned upon (i) the Buyer's
promptly furnishing to the Seller all the data, papers, records and
other assistance within the control of the Buyer material to the
resistance of or defense against any such charge or suits for
infringement, (ii) the Buyer's use of reasonable efforts to
cooperate with the Seller to reduce royalties, damages, costs and
expenses involved, (iii) the Seller's prior approval of the Buyer's
payment, assumption or admission of any liabilities, expenses,
13-2
costs or royalties for which the Seller is asked to respond and (iv)
the Buyer's not otherwise reasonably acting in a manner prejudicial
to its or the Seller's defense of the action.
13.4 WAIVER
THE INDEMNITY PROVIDED IN THIS CLAUSE 13 AND THE OBLIGATIONS AND
LIABILITIES OF THE SELLER UNDER THIS CLAUSE 13 ARE EXCLUSIVE AND IN
SUBSTITUTION FOR, AND SOLELY IN CONNECTION WITH ITS RIGHTS UNDER
THIS CLAUSE 13, THE BUYER HEREBY WAIVES, RELEASES AND RENOUNCES ALL
OTHER INDEMNITIES, WARRANTIES, OBLIGATIONS, GUARANTEES AND
LIABILITIES ON THE PART OF THE SELLER AND RIGHTS, CLAIMS AND
REMEDIES OF THE BUYER AGAINST THE SELLER, EXPRESS OR IMPLIED,
ARISING BY LAW OR OTHERWISE (INCLUDING WITHOUT LIMITATION ANY
OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY ARISING FROM OR WITH
RESPECT TO LOSS OF USE OR REVENUE OR CONSEQUENTIAL DAMAGES), WITH
RESPECT TO ANY ACTUAL OR ALLEGED PATENT INFRINGEMENT OR THE LIKE BY
ANY AIRCRAFT, ACCESSORY, EQUIPMENT OR PART, OR THE USE OR SALE
THEREOF, PROVIDED THAT, IN THE EVENT THAT ANY OF THE AFORESAID
PROVISIONS SHOULD FOR ANY REASON BE HELD UNLAWFUL OR OTHERWISE
INEFFECTIVE, THE REMAINDER OF THIS SUBCLAUSE 13.4 SHALL REMAIN IN
FULL FORCE AND EFFECT. THIS PATENT INDEMNITY SHALL NOT BE EXTENDED,
ALTERED OR VARIED EXCEPT BY A WRITTEN INSTRUMENT SIGNED BY THE
SELLER AND THE BUYER.
UNQUOTE
In consideration of the assignment and subrogation by the Seller
under this Clause 13 in favor of the Buyer in respect of the
Seller's rights against and obligations to the Manufacturer under
the provisions quoted above, the Buyer hereby accepts such
assignment and subrogation and agrees to be bound by all of the
terms, conditions and limitations therein contained (specifically
including, without limitation, the waiver, release and renunciation
provision).
THE INDEMNITY PROVIDED IN THIS CLAUSE 13 AND THE OBLIGATIONS AND
LIABILITIES OF THE SELLER UNDER THIS CLAUSE 13 ARE EXCLUSIVE AND IN
SUBSTITUTION FOR, AND THE BUYER HEREBY WAIVES, RELEASES AND
RENOUNCES ALL OTHER INDEMNITIES, WARRANTIES, OBLIGATIONS, GUARANTEES
AND LIABILITIES ON THE PART OF THE SELLER AND RIGHTS, CLAIMS AND
REMEDIES OF THE BUYER AGAINST THE SELLER, EXPRESS OR IMPLIED,
ARISING BY LAW OR OTHERWISE (INCLUDING WITHOUT LIMITATION ANY
OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY ARISING FROM OR WITH
RESPECT TO LOSS OF USE OR REVENUE OR CONSEQUENTIAL
13-3
DAMAGES), WITH RESPECT TO ANY ACTUAL OR ALLEGED PATENT INFRINGEMENT
OR THE LIKE BY ANY AIRCRAFT, ACCESSORY, EQUIPMENT OR PART, OR THE
USE OR SALE THEREOF, PROVIDED THAT, IN THE EVENT THAT ANY OF THE
AFORESAID PROVISIONS SHOULD FOR ANY REASON BE HELD UNLAWFUL OR
OTHERWISE INEFFECTIVE, THE REMAINDER OF THIS CLAUSE SHALL REMAIN IN
FULL FORCE AND EFFECT. THIS PATENT INDEMNITY SHALL NOT BE EXTENDED,
ALTERED OR VARIED EXCEPT BY A WRITTEN INSTRUMENT SIGNED BY THE
SELLER AND THE BUYER.
13-4
14 - TECHNICAL PUBLICATIONS
14.1 Scope
Unless set forth to the contrary in Letter Agreement No. 2 to the
Agreement or in any other agreement between the Buyer and the Seller
dated the date hereof, the Seller will provide the Buyer or cause
the Buyer to be provided with a set of technical publications to
support the operation of each of the Aircraft in accordance with the
terms set forth in this Clause 14 (the "Technical Publications").
Such Technical Publications are listed in Exhibit "F" of this
Agreement together with the form, type, format and quantity of each
such Technical Publication.
14.2 Specification
14.2.1 The Technical Publications are prepared according to applicable ATA
specifications. Exhibit "F" references the relevant ATA
specification for each affected Technical Publication.
14.2.2 Technical Publications will be customized as indicated in Exhibit
"F."
14.2.3 Technical Publications at delivery of the Aircraft shall correspond
to the Specification of the Aircraft as defined at least six (6)
months before such delivery.
14.3 Delivery
The Technical Publications and corresponding revisions that the
Seller will supply or cause to be supplied in accordance with the
terms of this Clause 14 will be sent to one address only, as defined
by the Buyer.
The quantities of the Technical Publications to be delivered on or
before the delivery of the Buyer's first Aircraft shall be mutually
agreed. The Seller shall send or cause to be sent additional
quantities of Technical Publications as required by the Buyer upon
thirty (30) days' prior notice. If the Buyer elects to cancel the
order for or return a certain number of Technical Publications in
hard copy that are already in production and scheduled for delivery
or have already been supplied, then the next quantity of
free-of-charge Technical Publications to be delivered by the Seller
shall not be due until one year after such cancellation or return of
Technical Publications.
14-1
Technical Publications and their revisions will be shipped by the
quickest transportation methods. The shipments will be Free Carrier
(FCA) Toulouse, France, and/or Hamburg, Germany.
14.4 Language
The Technical Publications will be supplied in the English language
using aeronautical terminology in common use.
14.4 Revision Service
14.4.1 General
Unless otherwise specifically stated, revision service shall be
offered free of charge for [***] years after delivery of the last
Aircraft. Mandatory changes shall be incorporated into the Technical
Publications at no charge for as long as one (1) Aircraf is in
service with the Buyer.
14.4.2 Service Bulletins
Service Bulletin (SB) information will be incorporated into the
Technical Publications after notice from the Buyer of embodiment of
a Service Bulletin, provided that such notice is given to the Seller
within three (3) years after issue of such Service Bulletin. The
split effectivity for the corresponding Service Bulletin will remain
in the Technical Publications until notification from the Buyer that
embodiment of such Service Bulletin has been completed for all the
Aircraft.
14.4.3 Customer Originated Changes
14.4.3.1 Buyer-originated data documented in the Buyer's own Airline
Engineering Bulletin (AEB) ("Customer Originated Changes" or "COC")
may be introduced into the following customized Technical
Publications:
(i) Aircraft Maintenance Manual
(ii) Illustrated Parts Catalog
(iii) Trouble Shooting Manual
(iv) Wiring Manual (Schematics, Wirings, Lists)
14.4.3.2 The Buyer shall issue COC in accordance with the provisions of the
"Guidelines for Customer Originated Changes" issued by the Seller
and shall label such data "COC."
14-2
14.4.3.3 The Seller shall use all reasonable efforts to introduce the COC
into the relevant Technical Publications within two (2) revisions
following the receipt of complete and accurate data for processing.
14.4.3.4 COC data will be incorporated by the Seller in all affected
customized Technical Publications, unless the Buyer specifies in
writing to the Seller into which Technical Publications the COC data
will be incorporated. The customized Technical Publications into
which the COC data are incorporated will only show the Aircraft
configuration that reflects the COC data and not the configuration
before incorporation of such COC data.
14.4.3.5 The Buyer hereby acknowledges and accepts that the incorporation of
any COC into the Technical Publication issued by or caused to be
issued by the Seller shall be entirely at the Buyer's risk.
Accordingly, the Seller shall be under no liability whatsoever in
respect of either the engineering contents of any COC, including any
omissions or inaccuracies therein, or the effect that incorporation
of such COC may have on the Technical Publications.
14.4.3.6 The Seller shall not be required to check any COC data submitted for
incorporation as aforementioned, and the Buyer shall ensure that all
COC data submitted for incorporation into a Technical Publication
have received prior agreement from its local airworthiness
authority.
14.4.3.7 IN THE EVENT THAT THE SELLER AND/OR THE MANUFACTURER IS REQUIRED
UNDER ANY COURT ORDER OR SETTLEMENT TO INDEMNIFY IN WHOLE OR IN PART
ANY THIRD PARTY FOR INJURY, LOSS OR DAMAGE INCURRED DIRECTLY OR
INDIRECTLY AS A RESULT OF INCORPORATION OF ANY COC INTO THE
TECHNICAL PUBLICATIONS ISSUED OR CAUSED TO BE ISSUED BY THE SELLER,
THE BUYER AGREES TO DEFEND, INDEMNIFY OR HOLD HARMLESS THE SELLER
AND/OR THE MANUFACTURER FOR ALL PAYMENTS OR SETTLEMENTS MADE IN
RESPECT OF SUCH INJURY, LOSS OR DAMAGE INCLUDING ANY EXPENSES
INCURRED BY THE SELLER AND/OR THE MANUFACTURER IN DEFENDING SUCH
CLAIMS. THIS INDEMNIFICATION BY THE BUYER SHALL IN NO EVENT BE
AFFECTED BY ANY WRITTEN OR ORAL COMMUNICATION THAT THE SELLER OR THE
MANUFACTURER MAY MAKE TO THE BUYER IN RESPECT OF SUCH DOCUMENTATION.
14.4.3.8 The price for the incorporation of any COC as aforesaid shall be
invoiced to the Buyer under conditions specified in the Seller's
then current Support Services Price Catalog.
14-3
14.5 Vendor Equipment
14.5.1 Information relating to Vendor equipment that is installed on the
Aircraft by the Seller will be included free of charge in the basic
issue of the Technical Publications, to the extent necessary for the
understanding of the systems concerned.
14.5.2 The Buyer shall supply or cause to be supplied to the Seller the
data related to Buyer Furnished Equipment and Seller Furnished
Equipment not covered in the Seller's standard Seller Furnished
Equipment definition at least six (6) months before the scheduled
delivery of the customized Technical Publications.
14.5.3 The Seller shall introduce into the basic issue of the Technical
Publications the data related to Buyer Furnished Equipment and
Seller Furnished Equipment, at no charge.
14.6 Aircraft Identification for Technical Publications
For the customized Technical Publications the Buyer agrees to the
allocation of Fleet Serial Numbers (FSNS) from 001 up to 999. The
sequence shall be interrupted only if two (2) different Propulsion
Systems manufacturers are selected and/or different aircraft models
are chosen.
The Buyer will indicate to the Seller the Fleet Serial Number
allocated to the Aircraft Manufacturer's Serial Number (MSN) two (2)
years prior to delivery of the first Aircraft. The allocation of
Fleet Serial Numbers to Manufacturer's Serial Numbers shall not
constitute any proprietary, insurable or other interest whatsoever
of the Buyer in any Aircraft prior to delivery of and payment for
such Aircraft as provided in this Agreement.
The relevant customized Technical Publications are:
(i) Aircraft Maintenance Manual
(ii) Illustrated Parts Catalog
(iii) Trouble Shooting Manual
(iv) Wiring Manuals (Schematics, Wirings, Lists)
14.7 Airworthiness Authority
It will be the responsibility of the Buyer to provide its local
airworthiness authority with such Technical Publications as it may
require, using the Technical Publications delivered by the Seller to
the Buyer in accordance with the terms hereof.
14-4
14.8 Additional Requirements
If feasible the Seller will comply with the Buyer's request to
change the form, quantity, type and/or revisions of any of the data
specified in Exhibit "F, upon receipt of the Buyer's purchase order.
The charges for such changes shall be invoiced to the Buyer under
conditions specified in the Seller's then current Support Services
Price Catalog.
14.9 Future Developments
The Seller shall continuously monitor technological developments and
apply them to document production and method of transmission where
beneficial and economical.
14.10 Proprietary Rights
14.10.1 All proprietary rights, including but not limited to patent, design
and copyrights, relating to Technical Publications and data supplied
under this Agreement, shall remain with the Seller. All such
Technical Publications and data are supplied to the Buyer for the
sole use of the Buyer, who undertakes not to divulge the contents
thereof to any third party save as permitted therein or otherwise
pursuant to any governmental or legal requirement imposed upon the
Buyer. These proprietary rights shall also apply to any translation
into a language or languages or media that may have been performed
or caused to be performed by the Buyer.
14.10.2 The supply of Technical Publications and data by the Seller shall
not give the Buyer any right to design or manufacture any Aircraft
or spare parts except as expressly provided in this Agreement.
Further, any right of manufacture granted to the Buyer by the Seller
under this Agreement shall in no way be construed as, express or
implied approval of any such manufactured products.
14.10.3 Drawings of the Manufacturer are provided to the Buyer under the
express condition that the Manufacturer shall have no liability,
whether in contract or tort, arising from or in connection with the
use of a drawing of the Manufacturer by the Buyer.
14.10.4 In the event that the Seller has authorized the disclosure to third
parties, either under this Agreement or by express written
authorization, the Buyer will undertake to bind such third party to
the same conditions and restrictions as the Buyer with respect to
such disclosure, as set forth in this Subclause 14.10.
14-5
15 - FIELD ASSISTANCE
15.1 Seller's Service
Unless set forth to the contrary in Letter Agreement No. 2 to the
Agreement or in any other agreement between the Buyer and the Seller
dated the date hereof, the Seller shall provide or cause to be
provided at no charge to the Buyer the following services at the
Buyer's main base or at other locations to be mutually agreed.
15.1.1 The Seller shall provide Customer Support Representatives acting in
an advisory capacity at the Buyer's main base for the period to be
agreed commencing at or about delivery of the first Aircraft up to a
total of [***]. The actual number of Customer Support
Representatives allocated to the Buyer shall be mutually agreed. At
no time, however, will that number exceed three (3) persons.
15.1.2 If requested by the Buyer, the Seller shall use reasonable efforts
to arrange for similar services to be procured by competent
representatives of the Propulsion Systems manufacturer(s) and, when
necessary and applicable, by representatives of Vendors (other than
Vendors of Buyer Furnished Equipment).
15.1.3 The Seller shall provide one (1) Customer Support Director based in
Herndon, VA, to liaise between the Manufacturer and the Buyer on
product support matters after execution of this Agreement for as
long as any of the Aircraft is operated by the Buyer.
15.2 Buyer's Service
15.2.1 For as long as the Customer Support Representative(s), specified in
Subclause 15.1.1 above remain(s) with the Buyer, the Buyer shall
furnish without charge secretarial assistance, suitable space,
office equipment and facilities in or conveniently near the Buyer's
maintenance facilities. The Buyer shall provide telecommunications
facilities at the Seller's cost to be invoiced on a monthly basis.
15.2.2 In accordance with the Buyer's regulations, the Buyer shall provide
at no charge to the Seller:
(i) for the Customer Support Representatives mentioned in
Subclause 15.1.1, confirmed and guaranteed airline tickets
between the locations
15-1
mentioned above in Subclause 15.1 and the international
airport nearest Toulouse, France, in business class on
international routes and in coach class on domestic routes;
and
(ii) when said Customer Support Representatives are assigned away
from the locations mentioned above in Subclause 15.1 at the
Buyer's request, transportation between the said locations and
the place of assignment.
15.2.3 The Buyer shall give the Seller all necessary reasonable assistance
with general administrative functions specific to the Buyer's
country and procurement of the documents necessary to live and work
there. Failure of the Seller to obtain the necessary documents,
after using its best efforts to do so, will relieve the Seller of
any obligation to the Buyer under this Clause 15.
15.3 Representatives' Status
In providing the above technical service, the Seller's employees,
including Customer Support Representatives and the Customer Support
Director, are deemed to be acting in an advisory capacity only and
at no time shall they be deemed to be acting, either directly or
indirectly, as the Buyer's employees or agents.
15.4 Temporary Assignment of Customer Support Representative
The Buyer agrees that the Seller shall have the right to transfer or
recall any Customer Support Representative on a temporary or
permanent basis. The Buyer shall receive credit for the man-days
during which any Customer Support Representative is absent from the
Buyer's facility pursuant to this Subclause 15.4.
15.5 INDEMNITY AND INSURANCE
THE BUYER WILL INDEMNIFY AND HOLD HARMLESS THE SELLER, THE
MANUFACTURER, ASC AND EACH OF THE ASSOCIATED CONTRACTORS AND THEIR
RESPECTIVE SUBCONTRACTORS AND THEIR RESPECTIVE AFFILIATES,
DIRECTORS, OFFICERS, AGENTS AND EMPLOYEES FROM AND AGAINST ALL
LIABILITIES, DAMAGES, LOSSES, LOSS OF USE, COSTS AND EXPENSES (I)
FOR ALL INJURIES TO AND DEATHS OF PERSONS (EXCEPTING INJURIES TO AND
DEATHS OF THE SELLER'S REPRESENTATIVES PROVIDING THE SERVICES UNDER
THIS CLAUSE) CAUSED BY THE SELLER OR ITS REPRESENTATIVES AND (II)
FOR LOSS OF OR DAMAGE TO PROPERTY (EXCEPTING LOSS OF OR DAMAGE TO
15-2
PROPERTY OF THE SELLER'S SAID REPRESENTATIVES) CAUSED BY THE SELLER
OR ITS REPRESENTATIVES, IN EITHER CASE WHEN ARISING OUT OF OR IN
CONNECTION WITH THE PROVISION OF SERVICES UNDER THIS CLAUSE 15. THIS
INDEMNITY OF THE BUYER WILL NOT APPLY FOR ANY SUCH LIABILITIES,
DAMAGES, LOSSES, COSTS OR EXPENSES ARISING OUT OF OR CAUSED BY THE
NEGLIGENCE OR WILLFUL MISCONDUCT OF THE SELLER'S SAID
REPRESENTATIVES.
THE SELLER WILL INDEMNIFY AND HOLD HARMLESS THE BUYER, ITS
DIRECTORS, OFFICERS, AGENTS AND EMPLOYEES FROM AND AGAINST ALL
LIABILITIES, DAMAGES, LOSSES, COSTS AND EXPENSES (I) FOR INJURIES TO
OR DEATHS OF THE SELLER'S SAID REPRESENTATIVES PROVIDING THE
SERVICES UNDER THIS CLAUSE, (II) FOR LOSS OF OR DAMAGE TO PROPERTY
OF THE SELLER'S SAID REPRESENTATIVES OR (III) ARISING OUT OF OR
CAUSED BY THE WILLFUL MISCONDUCT OR NEGLIGENCE OF THE SELLER'S SAID
REPRESENTATIVES. WITH RESPECT TO SUBCLAUSES (I) AND (II) OF THE
PRECEDING SENTENCE, THE SELLER SHALL NOT BE OBLIGATED TO INDEMNIFY
OR HOLD HARMLESS THE BUYER WHERE THE SELLER'S LIABILITIES, DAMAGES,
LOSSES, COSTS OR EXPENSES ARISE FROM THE BUYER'S NEGLIGENCE OR
WILLFUL MISCONDUCT.
IN THE EVENT ANY CLAIM IS MADE OR LAWSUIT IS BROUGHT AGAINST EITHER
PARTY (OR ITS RESPECTIVE INDEMNITEES) FOR DAMAGES FOR DEATH OR
INJURY OR FOR PROPERTY DAMAGE, THE LIABILITY FOR WHICH HAS BEEN
ASSUMED BY THE OTHER PARTY PURSUANT TO THIS SUBCLAUSE 15.5, THE
FORMER (INDEMNITEE) WILL PROMPTLY GIVE NOTICE TO THE OTHER PARTY
(INDEMNITOR), AND THE INDEMNITOR WILL ASSUME AND CONDUCT THE DEFENSE
THEREOF, AND WILL HAVE THE RIGHT TO EFFECT ANY SETTLEMENT THAT
FINALLY EXTINGUISHES SUCH CLAIM AS AGAINST THE INDEMNITEE, AND THE
INDEMNITOR AGREES TO INDEMNIFY AND HOLD THE INDEMNITEE HARMLESS FROM
ANY LOSSES, LIABILITIES, OR EXPENSES BY REASON OF SUCH SETTLEMENT.
IN THE EVENT THAT THE INDEMNITOR FAILS TO ASSUME AND CONDUCT THE
DEFENSE OF THE CLAIM OR LAWSUIT WHEN IT WAS OBLIGATED TO DO SO, THEN
THE INDEMNITEE WILL HAVE THE RIGHT TO PROCEED WITH THE DEFENSE OF
THE CLAIM OR LAWSUIT AS IT DEEMS APPROPRIATE AND WILL HAVE AN ACTION
AGAINST THE INDEMNITOR FOR ANY JUDGMENTS, SETTLEMENTS, COSTS OR
EXPENSES INCURRED IN CONDUCTING SAID DEFENSE. IF THE INDEMNITEE
BELIEVES IT HAS A DEFENSE TO THE CLAIM OR LAWSUIT AND THE INDEMNITOR
HAS NOT RAISED SUCH DEFENSE, THE INDEMNITEE MAY SUGGEST SUCH DEFENSE
TO THE INDEMNITOR AND THE INDEMNITOR SHALL THEN CONSIDER SUCH
DEFENSE IN GOOD FAITH. FOR THE PURPOSE OF THIS SUBCLAUSE 15.5, A
CLAIM OR LAWSUIT AGAINST THE MANUFACTURER OR ANY OF THE ASSOCIATED
CONTRACTORS OR ANY OF THEIR RESPECTIVE SUBCONTRACTORS OR ANY OF
THEIR RESPECTIVE DIRECTORS, OFFICERS, AGENTS OR EMPLOYEES WILL BE
DEEMED TO BE A CLAIM OR LAWSUIT AGAINST THE SELLER.
15-3
FOR THE PERIOD OF PERFORMANCE DESCRIBED IN THIS CLAUSE, THE BUYER
WILL (I) INDEMNIFY AND WAIVE ANY RIGHTS OF RECOURSE OR SUBROGATION
AGAINST THE SELLER, THE MANUFACTURER AND ASC, AND EACH OF THE
ASSOCIATED CONTRACTORS AND THEIR RESPECTIVE SUBCONTRACTORS AND THEIR
RESPECTIVE DIRECTORS, OFFICERS, AGENTS, EMPLOYEES AND SUBCONTRACTORS
IN RESPECT OF ALL RISKS HULL INSURANCE POLICY; AND (II) EFFECT
INSURANCE TO COVER THIRD-PARTY LIABILITY RISKS ARISING DURING SAID
PERFORMANCE IN AN AMOUNT REASONABLY SATISFACTORY TO THE SELLER,
NAMING THE SELLER AND ITS DIRECTORS, OFFICERS, AGENTS AND EMPLOYEES
AS ADDITIONAL INSUREDS. SUCH INSURANCE WILL CONTAIN A
CROSS-LIABILITY CLAUSE AND WILL ALSO CONTAIN A THIRTY (30)-DAY
NOTICE-OF-CANCELLATION PROVISION. UPON REQUEST, THE BUYER WILL
DELIVER TO THE SELLER A CERTIFICATE OF INSURANCE EVIDENCING THE
COVERAGE REQUIRED BY THIS CLAUSE.
15-4
16 - TRAINING AND TRAINING AIDS
16.1 General
Unless set forth to the contrary in Letter Agreement No. 2 to the
Agreement or in any other agreement between the Buyer and the Seller
dated the date hereof, training services will be provided as follows
in this Clause 16.
16.1.1 Training Sites
The Seller shall provide training services, or cause training
services to be provided, for the Buyer's personnel. Such training
services shall be provided at the Seller's training center in
Toulouse, France, or Miami, Florida, as more fully described in this
Clause 16.
Certain training may also be provided by the Seller at the Buyer's
base or other location, if and when practicable for the Seller,
under terms and conditions to be mutually agreed.
The location at which training services shall be provided will be
mutually agreed at the Training Conference referenced below in
Subclause 16.1.3.
16.1.2 Training Conference
Subject to the terms of Letter Agreement No. 2 to the Agreement or
to any other agreement dated the date hereof between the Buyer and
the Seller, training courses provided for the Buyer's personnel
shall be scheduled at dates mutually agreed during a training
conference to be held about twelve (12) months before delivery of
the first Aircraft (the "Training Conference") or at an earlier
date, if mutually desirable. The courses shall be scheduled for a
minimum number of participants, to be agreed upon at the Training
Conference.
16.1.3 Course Level
Training courses provided for the Buyer's personnel shall be the
Seller's standard courses.
The training equipment used for flight and maintenance crew training
shall reflect the Specification as closely as possible but will not
necessarily be fully customized.
16-1
The Seller will be responsible for all training course syllabi,
training aids, and training equipment necessary for the organization
of the training courses.
16.1.4 Course Prerequisites
The Buyer warrants that trainees are able to fully understand, write
and speak English.
They shall have the prerequisite jet transport category experience,
as defined in Appendix "A" to this Clause 16, in order to attend the
Seller's courses, and the Seller reserves the right to check the
trainees' previous professional experience in accordance with
applicable law. The Seller reserves the right to check the trainees'
previous professional experience. Avionics specialists must have
knowledge of digital techniques including ARINC 429 liaisons.
It is clearly understood that said training courses will be FAA
approved transition courses.
The Buyer shall be responsible for the selection of training and for
any liability with respect to entry knowledge level of the trainees.
In the event the Seller should determine that a trainee lacks such
entry-level preparation, the trainee shall, after consultation with
the Buyer, either be cycled through an entry-level training program
or be withdrawn from the program. All costs associated with such
entry-level program and with the cancellation of the scheduled
transition training shall be charged to the Buyer's account.
16.1.5 Attendance and Performance
In fulfillment of its obligation to provide training courses, the
Seller shall deliver to the trainees a certificate of completion at
the end of such training courses. This certificate does not
represent authority or qualification by any official civil aviation
authority, but may be presented to such authority as an attestation
of completion of the Seller's training courses.
The Buyer shall provide the Seller with an attendance list of the
trainees for each course and with the validated performance of each
trainee.
The Seller warrants to the Buyer that the Seller's standard courses
are designed to and have been approved
16-2
by all applicable authorities to bring jet transport specialists to
a professional knowledge of the Aircraft. However, the Seller shall
not be held liable for the unsatisfactory performance of any
individual trainee for whatever reason originating from the Buyer,
including, but not limited to, entry level or learning capacity.
16.1.6 Additional Training
Performance of an additional number of courses for the Buyer's
personnel, over and above those provided free of charge pursuant to
this Clause 16, and the supply of other additional training services
can be provided at the Buyer's expense, subject to availability.
On the Buyer's request and/or on the Seller's advice and subject to
mutual agreement, an extension in duration, a repetition or a
deviation from the standard of any course to be given or in progress
(for reasons due to the Buyer, including, but not limited to
unsatisfactory performance of the trainees) may be provided.
Extensions exceeding the Buyer's trainee-day allowance or any
extension in the duration of the Seller's flight crew training
course set forth hereunder shall be at the Buyer's expense.
16.1.7 Training at the Buyer's Base
In the event that, at the Buyer's request, training is provided by
the Seller's instructors at any location other than the Seller's
training center in Toulouse, France, or Miami, Florida, the Buyer
shall provide lodging and local transportation and shall reimburse
the Seller for other expenses on the basis of a per diem rate of $75
(US dollars--seventy-five) (subject to escalation from January 1995
economic conditions) per Seller's instructor.
In addition, the Buyer shall ensure that airline reservations shall
be confirmed and guaranteed in business class on the Buyer's route
network. When the use of the Buyer's route network is not feasible
or practical, the Buyer shall reimburse the Seller for business
class accommodations on international routes and coach class on
domestic routes.
It is understood that transportation of the Seller's instructors
includes travel to and from the Seller's training center and the
place of assignment.
The training equipment necessary for course performance on the
Buyer's request at any base other than the Seller's shall be
provided by the Buyer in accordance with the Seller's
specifications.
16-3
In the event the relevant equipment cannot be made available by the
Buyer, when performance is made at a base other than the Seller's
base pursuant to the Buyer's request, this equipment shall, when
practicable, be provided by the Seller and sent by air from
Toulouse, France, or Miami to the course location and back to
Toulouse, France, or Miami at the Buyer's expense.
The Buyer shall be solely liable for and hereby indemnifies and
holds harmless the Seller, for any and all delay in the performance
of training outside the Seller's training centers associated with
transportation services described above and/or consequences of such
delays.
16.1.8 Practical Flight Crew Training on Aircraft
(i) Any training involving the use of an aircraft shall be
performed on the Buyer's delivered Aircraft or on the Buyer's
leased A320 aircraft. Should no delivered Aircraft or leased
A320 aircraft be available for whatever reason, the Seller
will assist the Buyer in finding a substitute aircraft.
Related costs and expenses shall be charged to the Buyer's
account.
(ii) When such training on Aircraft is performed in Toulouse,
France, the Seller shall provide free-of-charge line
maintenance, including servicing, preflight checks and
changing of minor components for the contractual training
sessions. The Buyer shall provide, in whatever training
location, a mutually agreed batch of spare parts as required
to support said training and shall bear all other expenses
such as fuel, oil and landing fees.
(iii) The Buyer shall provide the Seller with a certificate of
insurance evidencing coverage required under the provisions of
Subclause 16.5 hereunder.
16.1.9 Buyer's Personnel Transportation
(i) When training is performed in Toulouse, France, the Seller
shall provide free of charge local transportation by bus for
the Buyer's trainees to and from designated pick up points and
the training center. The Seller shall also provide each flight
crew with a rented car or taxi transportation as from the
beginning of the
16-4
Fixed Base Simulator (FBS) phase of the course to enable the
crew to attend either simulator or flight sessions at any
time.
(ii) When training is performed in Miami, Florida, the Seller shall
provide free-of-charge for the Buyer's trainees one rented car
per group of four (4) trainees or per flight crew as from the
beginning of the course.
(iii) For each rented car, twenty (20) miles per working day shall
be free of charge. Any additional mileage shall be charged to
the crew at the end of the training period. The Buyer's
trainees will be responsible for fuel charges and fines, if
any. The Seller reserves the right to ask the Buyer to pay for
car damages that are not declared in due time by the
responsible trainee.
16.1.10 Duration
The training provided herein can be taken until one (1) year after
delivery of the last Firm Aircraft scheduled to be delivered under
this Agreement.
16.1.11 Unused Training
In the event that all or part of the training or training aids as
defined in this Clause 16 is not used by the Buyer, then, upon
delivery of the first Aircraft, the Seller will make available to
the Buyer a credit memorandum for the purchase of goods and services
from the Seller or any of its Affiliates for such unused portion.
16.2 Training Courses
16.2.1 Flight Courses
16.2.1.1 Flight Crew Transition Course
The Seller shall provide transition training free of charge for up
to forty-four (44) flight crews (each of which consists of a captain
and a first officer). Among these forty-four (44) flight crews,
eight (8) captains shall also receive flight-crew instructor
familiarization training. The training manual shall be the AIRBUS
INDUSTRIE FLIGHT CREW OPERATING MANUAL (FCOM).
16-5
16.2.1.2 Flight Crew Initial Operating Experience
As part of the flight crew transition course allowance set forth in
Subclause 16.2.1.1 above, and in order to assist the Buyer with
initial operating experience, after the delivery of the first
Aircraft, the Seller shall provide free of charge to the Buyer one
(1) instructor pilot for an aggregate period of up to two (2) months
after delivery of the first Aircraft.
The Buyer shall reimburse the expenses for said instructors as set
forth above in Subclause 16.1.7. Additional pilot instructors can be
provided at the Buyer's expense upon conditions to be mutually
agreed.
16.2.1.3 Cabin Attendants' Familiarization Course
The Seller shall offer the cabin attendants course to up to fifteen
(15) cabin attendants.
16.2.2 Maintenance Courses
The maintenance courses are listed in Appendix "B" to this Clause
16.
16.2.2.1 Trainee Days
The Seller shall train ground personnel free of charge for a
training period equivalent to one thousand nine hundred thirty-five
(1,935) trainee days of instruction for the whole range of courses
listed in Appendix "B" to this Clause 16. The number of EM-07
(Engine Run-up) courses shall be limited to six (6) courses with
three (3) trainees each.
The trainee days will be debited as follows:
(i) For instruction at the Seller's training centers, one (1) day
of instruction for one (1) trainee equals one (1) trainee day.
The number of trainees at the beginning of the course shall be
counted as the number of trainees considered to have taken the
entire course.
(ii) For instruction at locations other than the Seller's Training
Centers, the total number of trainee days shall be the number
of trainees at the beginning of the course, with a minimum of
twelve (12), multiplied by the number of days of detachment of
the Seller's instructor(s).
16.2.2.2 Maintenance Line Training
As part of the maintenance trainee-day allowance set forth in
Subclause 16.2.2.1 above, and in order to
16-6
assist the Buyer with practical line training, such as Aircraft
handling and servicing, flight crew/maintenance coordination, use of
manuals and any other activities that the instructor might deem
necessary after delivery of the first Aircraft, the Seller shall
provide the Buyer one (1) free-of-charge maintenance instructor at
the Buyer's base for a period of four (4) weeks.
The Buyer shall reimburse the expenses for said instructor as set
forth above in Subclause 16.1.7. Additional maintenance instructors
can be provided at the Buyer's expense.
16.2.3 Operations/Performance Courses
The Seller shall provide free of charge sixty-five (65) trainee days
to be used for the training courses listed in Appendix "C" to this
Clause 16.
16.2.4 Vendors and Engine Manufacturer Training
The Seller shall ensure that the major Vendors and the Propulsion
Systems manufacturer shall provide maintenance and overhaul training
on their products at appropriate times.
A list of the Vendors concerned will be supplied to the Buyer upon
request.
16.3 Training Aids and Materials
16.3.1 Training Aids for Trainees at the Seller's Training Centers
For the purposes of this Subclause 16.3.1, training aids shall be
understood to include (a) all printed course materials, including
manuals and supporting documents, such materials to be for trainees
receiving the training referred to in Subclause 16.2 and to be free
of charge, and (b) all computer hardware, software and courseware
(including simulators and simulator data packages) and all other
equipment, such material in (b) to remain the property of the Seller
or to be sold to the Buyer pursuant to the Seller's price catalog.
Training aids shall be "FOR TRAINING ONLY," and as such are supplied
for the sole and express purpose of training.
All training aids and materials supplied to the Buyer are for the
training of the Buyer's personnel only. The Buyer undertakes not to
divulge the contents thereof to any third party without the prior
agreement of the Seller, save as required pursuant to any
16-7
governmental, contractual or legal requirement imposed upon the
Buyer.
16.3.2 Training Aids for the Buyer's Training Organization
The Seller will provide Video and Computer Based Instruction (VACBI)
courseware related to the Aircraft and similar to that used by the
Seller for the Buyer's training organization, upon commercial
conditions to be mutually agreed.
Such courseware will be for the training of the Buyer's personnel
only and can include a revision service upon terms and conditions to
be agreed.
16.4 Seller's Support
If requested by the Buyer and on terms to be agreed upon, the Seller
may assist the Buyer with the development and introduction of
Aircraft training programs at the Buyer's training center.
16.5 INDEMNITY AND INSURANCE
THE BUYER WILL INDEMNIFY AND HOLD HARMLESS THE SELLER, THE
MANUFACTURER, AND EACH OF THE ASSOCIATED CONTRACTORS AND THEIR
RESPECTIVE SUBCONTRACTORS AND THEIR RESPECTIVE AFFILIATES,
DIRECTORS, OFFICERS, AGENTS AND EMPLOYEES FROM AND AGAINST ALL
LIABILITIES, DAMAGES, LOSSES, LOSS OF USE, COSTS AND EXPENSES (I)
FOR ALL INJURIES TO AND DEATHS OF PERSONS (EXCEPTING INJURIES TO AND
DEATHS OF THE SELLER'S REPRESENTATIVES PROVIDING THE SERVICES UNDER
THIS CLAUSE) CAUSED BY THE SELLER OR ITS REPRESENTATIVES AND (II)
FOR LOSS OF OR DAMAGE TO PROPERTY (EXCEPTING LOSS OF OR DAMAGE TO
PROPERTY OF THE SELLER'S SAID REPRESENTATIVES) CAUSED BY THE SELLER
OR ITS REPRESENTATIVES, IN EITHER CASE WHEN ARISING OUT OF OR IN
CONNECTION WITH THE PROVISION OF SERVICES UNDER THIS CLAUSE 16. THIS
INDEMNITY OF THE BUYER SHALL NOT APPLY FOR ANY SUCH LIABILITIES,
DAMAGES, LOSSES, COSTS OR EXPENSES ARISING OUT OF OR CAUSED BY THE
WILLFUL MISCONDUCT OR NEGLIGENCE OF THE SELLER'S SAID
REPRESENTATIVES.
THE SELLER WILL INDEMNIFY AND HOLD HARMLESS THE BUYER, ITS
DIRECTORS, OFFICERS, AGENTS AND EMPLOYEES FROM AND AGAINST ALL
LIABILITIES, DAMAGES, LOSSES, COSTS AND EXPENSES (I) FOR INJURIES TO
OR DEATHS OF THE SELLER'S SAID REPRESENTATIVES PROVIDING THE
SERVICES UNDER THIS CLAUSE, (II) FOR LOSS OF OR DAMAGE TO PROPERTY
OF THE SELLER'S SAID REPRESENTATIVES OR (III) ARISING OUT OF OR
CAUSED BY THE WILLFUL MISCONDUCT OR NEGLIGENCE OF THE SELLER'S SAID
REPRESENTATIVES. WITH RESPECT TO SUBCLAUSES (I) AND (II) OF THE
PRECEDING SENTENCE, THE SELLER SHALL NOT BE OBLIGATED TO INDEMNIFY
OR HOLD
16-8
HARMLESS THE BUYER WHERE THE SELLER'S LIABILITIES, DAMAGES, LOSSES,
COSTS OR EXPENSES ARISE FROM THE BUYER'S GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT.
IN THE EVENT ANY CLAIM IS MADE OR LAWSUIT IS BROUGHT AGAINST EITHER
PARTY (OR ITS RESPECTIVE INDEMNITEES) FOR DAMAGES FOR DEATH OR
INJURY OR FOR PROPERTY DAMAGE, THE LIABILITY FOR WHICH HAS BEEN
ASSUMED BY THE OTHER PARTY PURSUANT TO THIS SUBCLAUSE 16.5, THE
FORMER (INDEMNITEE) WILL PROMPTLY GIVE NOTICE TO THE OTHER PARTY
(INDEMNITOR), AND THE INDEMNITOR WILL ASSUME AND CONDUCT THE DEFENSE
THEREOF, AND WILL HAVE THE RIGHT TO EFFECT ANY SETTLEMENT THAT
FINALLY EXTINGUISHES SUCH CLAIM AS AGAINST THE INDEMNITEE, AND THE
INDEMNITOR AGREES TO INDEMNIFY AND HOLD THE INDEMNITEE HARMLESS FROM
ANY LOSSES, LIABILITIES, OR EXPENSES BY REASON OF SUCH SETTLEMENT.
IN THE EVENT THAT THE INDEMNITOR FAILS TO ASSUME AND CONDUCT THE
DEFENSE OF THE CLAIM OR LAWSUIT WHEN IT WAS OBLIGATED TO DO SO, THEN
THE INDEMNITEE WILL HAVE THE RIGHT TO PROCEED WITH THE DEFENSE OF
THE CLAIM OR LAWSUIT AS IT DEEMS APPROPRIATE AND WILL HAVE AN ACTION
AGAINST THE INDEMNITOR FOR ANY JUDGMENTS, SETTLEMENTS, COSTS OR
EXPENSES INCURRED IN CONDUCTING SAID DEFENSE. IF THE INDEMNITEE
BELIEVES IT HAS A DEFENSE TO THE CLAIM OR LAWSUIT AND THE INDEMNITOR
HAS NOT RAISED SUCH DEFENSE, THE INDEMNITEE MAY SUGGEST SUCH DEFENSE
TO THE INDEMNITOR AND THE INDEMNITOR SHALL THEN CONSIDER SUCH
DEFENSE IN GOOD FAITH. FOR THE PURPOSE OF THIS SUBCLAUSE 16.5, A
CLAIM OR LAWSUIT AGAINST THE MANUFACTURER OR ANY OF THE ASSOCIATED
CONTRACTORS OR ANY OF THEIR RESPECTIVE SUBCONTRACTORS OR ANY OF
THEIR RESPECTIVE DIRECTORS, OFFICERS, AGENTS OR EMPLOYEES WILL BE
DEEMED TO BE A CLAIM OR LAWSUIT AGAINST THE SELLER.
FOR THE PERIOD OF PERFORMANCE DESCRIBED IN THIS CLAUSE, THE BUYER
WILL (I) INDEMNIFY AND WAIVE ANY RIGHTS OF RECOURSE OR SUBROGATION
AGAINST THE SELLER, THE MANUFACTURER, AND EACH OF THE ASSOCIATED
CONTRACTORS AND THEIR RESPECTIVE SUBCONTRACTORS AND THEIR RESPECTIVE
DIRECTORS, OFFICERS, AGENTS, EMPLOYEES AND SUBCONTRACTORS IN RESPECT
OF ALL RISKS HULL INSURANCE POLICY; AND (II) EFFECT INSURANCE TO
COVER THIRD-PARTY LIABILITY RISKS ARISING DURING SAID PERFORMANCE IN
AN AMOUNT REASONABLY SATISFACTORY TO THE SELLER, NAMING THE SELLER
AND ITS DIRECTORS, OFFICERS, AGENTS AND EMPLOYEES AS ADDITIONAL
INSUREDS. SUCH INSURANCE WILL CONTAIN A CROSS-LIABILITY CLAUSE AND
WILL ALSO CONTAIN A THIRTY (30)-DAY NOTICE-OF-CANCELLATION
PROVISION. UPON REQUEST, THE BUYER WILL DELIVER TO THE SELLER A
CERTIFICATE OF INSURANCE EVIDENCING THE COVERAGE REQUIRED BY THIS
CLAUSE.
16-9
CLAUSE 16 - APPENDIX "A"
RECOMMENDED PILOT QUALIFICATION
IN RELATION TO TRAINING REQUIREMENTS
(transition courses)
1. Captains' minimum experience: 1,000 hours in command of jet transport
category aircraft.
- cases of senior co-pilots upgrading to captain position (therefore
not meeting this minimum requirement) may be considered on an ad-hoc
basis.
2. Copilots' minimum experience: 300 hours total experience operating jet
transport aircraft with a total experience of not less than 500 hours.
This assumes formal basic training.
NOTE:
1. For pilots not meeting these above requirements, a jet familiarization
course will be required.
2. For pilots who come from early generation jet transport aircraft, and, in
particular, with no previous experience of FMS, AFCS, glass cockpits or
two crew member operations, an introductory course would be highly
desirable in order to obtain full benefits from the transition course.
00-00
XXXXXX 00 - XXXXXXXX "X"
LIST OF STANDARD A320-200 MAINTENANCE COURSES
EMOl GENERAL FAMILIARIZATION COURSE
EMO2 RAMP AND TRANSIT COURSE
EM3l LINE MECHANICS/AVIONICS COURSE, LEVEL II
EM4l BASE MECHANICS COURSE, LEVEL III
EM42 BASE MECHANICS, ELECTRICS AND AVIONICS LEVEL III COURSE
EM45 BASE MECHANICS AND ELECTRICS COURSE, LEVEL III
EM5l BASE ELECTRICS XXXXX XXX/XXXXXXXX XXXXX XX XXXXXX
XX00 XXXX ELECTRICS AND AVIONICS LEVEL III COURSE
EM62 BASE AVIONICS LEVEL III COURSE
EMO7 ENGINE RUN-UP COURSE
EMO9 MECHANIC CONTROL RIGGING COURSE
EMlO CABIN INTERIOR AND EMERGENCY EQUIPMENT COURSE
EMl1 STRUCTURE MAINTENANCE COURSE
EMl2 ON THE JOB PRACTICAL TRAINING
EMl6 STRUCTURE N.D.T. INSPECTION COURSE
EMl7 COMPOSITE STRUCTURE REPAIR COURSE
XM15 BASIC DIGITAL AND MICROPROCESSOR COURSE
16-11
CLAUSE 16 - APPENDIX "C"
LIST OF A320 OPERATIONS/PERFORMANCE COURSES
EG0l MANAGEMENT SURVEY COURSE
EG02 PERFORMANCE ENGINEER'S COURSE
EG03 DISPATCHER'S COURSE
EFC5 FLIGHT CREW GROUND INSTRUCTOR'S COURSE
EG06 WEIGHT AND BALANCE COURSE
EG07 LOAD MASTER TRANSITION COURSE
16-12
17 - VENDORS' PRODUCT SUPPORT
17.1 Vendor Product Support Agreements
17.1.1 The Seller has obtained product support agreements transferable to
the Buyer from Vendors of Seller Furnished Equipment listed in the
Specification ("Product Support Agreements").
17.1.2 These Product Support Agreements are based on the "World Airlines
and Suppliers Guide" and include Vendor commitments as contained in
the Supplier Product Support Agreements, which include the following
provisions:
17.1.2.1 Technical data and manuals required to operate, maintain, service
and overhaul the Vendor items. Such technical data and manuals shall
be prepared in accordance with the applicable provisions of ATA
Specification 100 and 101 in accordance with Clause 14 of this
Agreement, shall include revision service and shall be published in
the English language. The Seller recommends that software data,
supplied in the form of an appendix to the Component Maintenance
Manual, be provided in compliance with ATA Specification 102 up to
level 3 to protect Vendors' proprietary interests.
17.1.2.2 Warranties and guarantees including Vendors' standard warranties. In
addition, Vendors of landing gear will provide service life policies
for landing gear structures.
17.1.2.3 Training to ensure efficient operation, maintenance and overhaul of
the Vendors' items for the Buyer's instructors, shop and line
service personnel.
17.1.2.4 Spares data in compliance with ATA Specification 200 or 2000,
initial provisioning recommendations, spares and logistics service,
including routine and emergency deliveries.
17.1.2.5 Technical service to assist the Buyer with maintenance, overhaul,
repair, operation and inspection of Vendor items as well as required
tooling and spares provisioning.
17.2 Vendor Compliance
The Seller will monitor Vendor compliance with support commitments
defined in the Product Support Agreements and will take remedial
action together with the Buyer if requested by the Buyer.
17-1
17.3 Vendor Part Repair Stations
17.3.1 The Manufacturer has developed with the Vendors a program aimed at
building a comprehensive network of repair stations in North America
for those Vendor Parts originating from outside this territory.
17.3.2 As a result of the above, most Vendor Parts are now repairable in
North America, and corresponding repair stations are listed in a
document, the AOG and Repair Guide, which is issued and regularly
updated by the Manufacturer.
The Seller undertakes that the Vendor Parts that have to be
forwarded for repair outside North America will be sent back to the
Buyer with proper tagging as required by the FAA.
17.3.3 The Seller will support the Buyer in cases where the agreed repair
turn time of an approved repair station is not met by causing
free-of-charge loans or exchanges (as specified in the relevant
Supplier Product Support Agreements manual) to be offered to the
Buyer.
17-2
18 - BUYER FURNISHED EQUIPMENT AND DATA
18.1 Installation and Delivery
18.1.1 Without additional charge, and in accordance with the Specification,
the Seller shall cause the Manufacturer to provide for the
installation of the Buyer Furnished Equipment.
18.1.2 The Seller shall cause the Manufacturer to advise the Buyer of the
dates by which, in the planned release of engineering for an
Aircraft, the Manufacturer requires a written detailed description
of the dimensions and weight of Buyer Furnished Equipment for such
Aircraft and information necessary for the installation and
operation thereof, and the Buyer shall furnish such detailed
description and information by the dates so specified. Such
dimensions and weights shall not thereafter be revised unless
mutually agreed and set forth in an SCN.
18.1.3 The Seller shall also cause the Manufacturer to furnish in due time
to the Buyer a schedule of dates by and locations to which Buyer
Furnished Equipment for such Aircraft must be delivered to the
Manufacturer to permit installation in and delivery of such Aircraft
in accordance with the delivery schedule referred to in Clause 9.
The Buyer shall furnish such equipment to the Manufacturer at such
locations by such dates. The Buyer, at its own expense, shall also
furnish or cause to be present at the works where such Buyer
Furnished Equipment is to be installed, when requested by the
Manufacturer, field service representatives to provide the
Manufacturer technical advice regarding the installation and
calibration of Buyer Furnished Equipment.
18.2 Specification and Airworthiness Approvals
The Buyer warrants that all Buyer Furnished Equipment shall, to its
knowledge, meet the requirements of the Specification, shall comply
with applicable DGAC and FAA regulations and shall be approved by
the DGAC and the FAA for installation and use on an Aircraft at the
time of delivery of such Aircraft. The Seller shall bear no expense
in connection with adjusting and calibrating Buyer Furnished
Equipment to the extent necessary to obtain DGAC and FAA approval.
18-1
18.3 Delay and Nonperformance
Any delay or failure in complying with the warranty in the foregoing
Subclause 18.2, in providing the descriptive information and
services mentioned in Subclause 18.1 hereof, in furnishing the Buyer
Furnished Equipment or in obtaining any required approval of such
equipment under the DGAC or FAA regulations shall be the
responsibility of the Buyer, to the extent that such delay or
failure shall in turn,
(i) delay the performance of any act to be performed by or on
behalf of the Seller or the Manufacturer, or
(ii) cause the Final Contract Price of the Aircraft to be increased
by the amount of the Seller's additional costs, if any,
attributable to such delay or failure by the Buyer, including,
without limitation, storage, taxes, insurance and costs of
out-of-sequence installation,
and any resulting cost shall be borne by the Buyer.
Further, in any such event, the Seller may elect to take any of the
actions set forth below in Subclauses 18.3.2, 18.3.3 or 18.3.4:
18.3.2 The Seller shall be entitled to cause the Manufacturer to select,
purchase and install the Buyer Furnished Equipment involved, in
which event the Final Contract Price of the affected Aircraft shall
be increased by the purchase price of such Buyer Furnished Equipment
plus reasonable costs and expenses incurred by the Manufacturer for
handling charges, transportation, insurance, packaging and, if so
required and not already provided for in the Final Contract Price of
such Aircraft, for adjustment and calibration.
18.3.3 If (i) delivery of the Buyer Furnished Equipment is delayed by more
than thirty (30) days after the date specified by the Manufacturer
for the delivery of such Buyer Furnished Equipment or (ii) the Buyer
Furnished Equipment required to obtain certification of the Aircraft
in accordance with Subclause 2.3 hereof is not approved by the DGAC
or the FAA within thirty (30) days after the date specified by the
Manufacturer for the delivery of such Buyer Furnished Equipment,
then, subject to reasonable industrial and commercial constraints,
the Seller shall use its reasonable efforts to identify a
replacement Buyer Furnished Equipment of its choice (the
"Replacement BFE") for the
18-2
Aircraft, in which case the provisions of Subclause 18.3.2 above
applicable to the Replacement BFE shall apply. Should the Seller be
unable after diligent efforts to identify a Replacement BFE, then,
notwithstanding the terms of Subclause 2.3, the Seller shall be
entitled to deliver the affected Aircraft where it is then located
with no obligation to install such Buyer Furnished Equipment. Upon
such delivery the Seller shall be relieved of all obligations to
install such Buyer Furnished Equipment.
18.3.4 If (i) the Buyer Furnished Equipment is delayed by more than thirty
(30) days after the date specified by the Manufacturer for the
delivery of such Buyer Furnished Equipment or (ii) the Buyer
Furnished Equipment is not required for certification of the
Aircraft and is not approved by the DGAC or the FAA within thirty
(30) days after the date specified by the Manufacturer for the
delivery of such Buyer Furnished Equipment, then the Seller shall be
entitled to deliver the Aircraft with no obligation to install such
Buyer Furnished Equipment. The Buyer may also elect to have the
Aircraft so delivered, whereupon the Seller will be relieved of all
obligations to install such Buyer Furnished Equipment.
18.3.5 Any Buyer Furnished Equipment installed on an Aircraft and
subsequently removed, as a result of action or inaction by the
Buyer, shall be removed at the Buyer's expense.
18.4 Tax-Free Zones
The Buyer will cause all Buyer Furnished Equipment to be delivered
at its own expense to tax-free zones at the following addresses:
(i) For all Buyer Furnished Equipment other than cabin furnishing
equipment:
Aerospatiale, Societe Nationale Industrielle 000,
Xxxxx xx Xxxxxxx
00000 Xxxxxxxx
XXXXXX
(ii) For cabin furnishing equipment:
Daimler-Benz Aerospace Airbus GmbH
Division Hamburger Flugzeugbau
Xxxxxxxxx 00
00000 Xxxxxxx
XXXXXXX
18-3
or to such other addresses as the Seller may notify in writing to
the Buyer.
18.5 Risk of Loss
Title to and risk of loss of Buyer Furnished Equipment shall at all
times remain with the Buyer. When Buyer Furnished Equipment is in
the possession of the Seller, the Seller shall have only such
responsibility therefor as is chargeable by law to a bailee for
hire, but shall not be liable for loss of use. In addition, the
Seller shall insure the Buyer against direct damages for loss of
Buyer Furnished Equipment in the possession of the Seller.
18.6 Seller-Supplied Buyer Furnished Equipment
If the Buyer requests the Seller to cause the Manufacturer to supply
directly certain items that are Buyer Furnished Equipment pursuant
to the Specification, and if compliance with such request by the
Seller and the Manufacturer in their judgment shall not affect the
delivery date of an Aircraft referred to in Clause 9, then the
Seller shall order such items subject to the execution of an SCN
reflecting the effect on price and any other items and conditions of
this Agreement. In such a case, the Seller shall be entitled to the
payment of a reasonable handling charge and shall bear no liability
in respect of any delay caused and product support commitments
assumed by the Vendor of such Buyer Furnished Equipment. The
provisions of Subclauses 18.2 and 18.3 shall apply to Buyer
Furnished Equipment covered under this Subclause 18.6 in the event
of any delay in approval or delivery of such Buyer Furnished
Equipment.
18-4
19 - ASSIGNMENT
19.1 Successors and Assigns
Subject to the provisions of this Subclause 19.1, this Agreement
shall inure to the benefit of and be binding upon the successors and
assigns of the parties hereto. This Agreement shall not be assigned
in whole or in part by either party without the prior written
consent of the other party. Notwithstanding anything herein to the
contrary, so long as the same does not affect any of the Seller's
obligations under Subclause 2.3 of the Agreement, the Seller may at
any time, without the Buyer's consent, assign any of its rights to
receive money, and any of its duties to effect sale and delivery of
any Aircraft, or any of its responsibilities, duties or obligations
to perform any other obligations hereunder to the Manufacturer, any
of the Associated Contractors, ASC or any affiliate of the Seller,
the Manufacturer or of any Associated Contractor.
19.2 Seller's Designations
The Seller may at any time by notice to the Buyer designate
particular facilities or particular personnel of the Manufacturer,
ASC, any of the Associated Contractors or any affiliate of the
Manufacturer or any Associated Contractor at which or by whom the
services to be performed under this Agreement shall be performed.
The Seller may also designate the Manufacturer, any Associated
Contractor or any affiliate of the Manufacturer or any Associated
Contractor as the party responsible on behalf of the Seller for
providing to the Buyer all or any of the services described in this
Agreement.
19.3 Assignment in Case of Resale or Lease
In the event of the resale or lease of any Aircraft, pursuant to a
financing arrangement, by the Buyer immediately before, upon, or
immediately after delivery thereof to the Buyer, the Buyer's rights
with respect to such Aircraft under this Agreement, other than the
Buyer's rights under Clauses 3, 14, 15, 16 and 17 hereof and the
Letter Agreements hereto, may be assigned to the extent necessary
with the Seller's prior written consent to the terms and conditions
of such assignment, such consent not to be unreasonably withheld.
The Buyer shall furnish to the Seller a true copy of such agreement
with such purchaser or lessor, clearly stating that such purchaser
or lessor acknowledges that it is bound by and will comply with all
applicable terms, conditions and limitations of this Agreement.
19-1
20 - DATA RETRIEVAL
On the Seller's reasonable request, the Buyer shall provide the
Seller with all the necessary data, as customarily compiled by the
Buyer and pertaining to the operation of the Aircraft, to assist the
Seller in making an efficient and coordinated survey of all
reliability, maintenance, operational and cost data with a view to
improving the safety, availability and operational costs of the
Aircraft.
20-1
21 - TERMINATION FOR CERTAIN EVENTS; INSECURITY EVENTS; FURTHER
ASSURANCES
21.1 Termination Events
21.1.1 Each of the following shall constitute a "Termination Event" under
this Agreement:
(1) The Buyer or any other party shall commence any case,
proceeding or other action with respect to the Buyer in any
jurisdiction relating to bankruptcy, insolvency,
reorganization, relief from debtors, an arrangement,
winding-up, liquidation, dissolution or other relief with
respect to its debts and such case, proceeding or other action
remains unstayed, undismissed or undischarged for sixty (60)
days.
(2) An action is commenced seeking the appointment of a receiver,
trustee, custodian or other similar official for the Buyer for
all or substantially all of its assets, and such action
remains unstayed, undismissed or undischarged for sixty (60)
days, or the Buyer makes a general assignment for the benefit
of its creditors.
(3) An action is commenced against the Buyer seeking issuance of a
warrant of attachment, execution, distraint or similar process
against all or any substantial part of its assets, and such
action remains unstayed, undismissed or undischarged for sixty
(60) days.
(4) The Buyer becomes insolvent or fails generally to pay its
debts as they become due.
(5) There is a liquidation, winding up or analogous event with
respect to the Buyer.
(6) The Buyer fails to make (i) any payment required to be made
pursuant to this Agreement or any other agreement between the
Buyer and the Seller dated the date hereof when such payment
comes due, (ii) any Predelivery Payment required to be made
pursuant to Subclause 6.2 of this Agreement, (iii) payment of
all or part of the Final Contract Price required to be made
pursuant to Subclause 6.3 of this Agreement, or (iv) any
payments as they become due the Propulsion Systems
manufacturer or an A320 operating lessor, under their
respective agreements with the Buyer.
21-1
(7) The Buyer shall default on any payment of principal or
interest on any indebtedness or in the payment of any
guarantee obligation to the Seller or any of its Affiliates.
(8) The Buyer shall default on any payment of any lease obligation
relating to any Aircraft.
(9) The Buyer shall default in its obligation to take delivery of
an Aircraft as provided in Subclause 9.3 of this Agreement.
(10) The Buyer shall default in the observance or performance of
any other covenant or undertaking contained in this Agreement
or any other agreement between the Buyer and the Seller dated
as of the date hereof, beyond a five day cure period.
(11) The Buyer shall fail to provide Comfort (as defined in
Subclause 21.2 hereof) to the Seller within forty-five (45)
days of the occurrence of an Insecurity Event (as defined in
Subclause 21.2 hereof).
Immediately upon the occurrence of a Termination Event, the Buyer
shall notify the Seller of such occurrence in writing and by courier
or telecopier, provided, however, that any failure by the Buyer to
notify the Seller shall not prejudice the Seller's rights hereunder.
21.1.2 In the event of any Termination Event, the Seller shall at its
option have the right to resort to any remedy under applicable law
(provided that the Seller shall mitigate its damages), including,
without limitation, the right by written notice, effective
immediately, to (i) suspend its performance under the Agreement and
under the agreements between the Buyer and the Seller dated the date
hereof, (ii) terminate this Agreement or any agreement between the
Buyer and the Seller dated the date hereof with respect to any or
all Aircraft, services, data and other items undelivered or
unfurnished on the effective date of such termination and (iii)
retain, as part of the damages for breach and not as a penalty, an
amount equal to (a) all Predelivery Payments and (b) all other
payments to the Seller made theretofore under this Agreement and
(iv) receive payment for the Utilized Amount of the Upfront Support
Credit pursuant to the Financial Matters Agreement dated the date
hereof between the Buyer and the Seller.
21-2
21.2 Insecurity Events
Any of the following shall constitute an "Insecurity Event" and any
remedies therefor provided in this Agreement shall be in addition to
and not in substitution for any rights the Seller may have at law to
terminate this Agreement as set forth in Subclause 21.1.2:
(a) At the end of each of the following months, the Buyer shall
fail to have unencumbered cash balances of not less than the
product of (i) $225,000 (US dollars--two hundred twenty-five
thousand) at the end of April 1995; $150,000 (US dollars--one
hundred fifty thousand) at the end of May 1995; $150,000 (US
dollars--one hundred fifty thousand) at the end of June 1995;
$250,000 (US dollars--two hundred fifty thousand) at the end
of July 1995; $300,000 (US dollars--three hundred thousand) at
the end of August 1995; $325,000 (US dollars--three hundred
twenty-five thousand) at the end of September 1995; and
$350,000 (US dollars--three hundred fifty thousand) at the end
of each month thereafter until the termination of this
Agreement; (in each case as adjusted to any month of
determination from March 1995 by multiplying the relevant
requisite unencumbered cash balance by the ratio of (A) to
(B), where (A) is equal to the Consumer Price Index ("CPI")
reported for the third month prior to such month of
determination and (B) is equal to the CPI reported for March
1995) (provided, however, that in no event shall the number
computed thereby be less than one (1)) multiplied by (ii) the
number of jet-powered aircraft then owned, acquired pursuant
to a conditional sale agreement or leased by the Buyer (in
each case whether or not then operated by the Buyer);
(b) The ratio of current assets to current liabilities, as those
amounts would be determined through the application of
Generally Accepted Accounting Principles, is 0.80 to 1 or
less; or
(c) If at any time the Buyer shall enter into a revolving credit
agreement, line of credit or similar extension of credit and
such agreement is terminated (other than by its own terms or
by the Buyer) or a covenant is breached and such breach is not
waived or ceases to exist within thirty (30) days after the
occurrence thereof; or
21-3
(d) With respect to the Agreement of Sublease dated January 18,
1995, between the Buyer and American Airlines, Inc.
("American"), relating to property which American has leased
or will lease to the Buyer (as such agreement may be amended
from time to time); if such agreement is terminated prior to
March 31, 1997, and at any subsequent date if such termination
results in an unfavorable change in the Buyer's financial
condition or if such agreement becomes subject to revision in
a manner that is materially unfavorable to the Buyer; or
(e) With respect to the current holders of the Buyer's outstanding
shares, the current majority shareholder ceases to control
eighty percent (80%) of the outstanding voting shares of the
Buyer or its successor, provided that this shall not apply in
the event of a public offering of the Buyer, as long as such
public offering provides the Buyer (or its successor) with a
total debt-to-net worth ratio, as those amounts would be
determined through the application of Generally Accepted
Accounting Principles, of at least three to one; or
(f) With respect to any or all of the seven operating leases or
any other leases in replacement thereof for the Buyer's use of
the Fokker F-l00 aircraft ("Fokker F-l00 Aircraft Leases"),
the Buyer fails to make a payment when due or a financial
covenant thereunder is breached; provided, however, that such
provision shall not apply for as long as the earlier of the
following events has occurred and/or is continuing: (i) the
Buyer fails to make a payment under the Fokker F-l00 Aircraft
Leases and such nonpayment is not cured to the satisfaction of
the lessor under the Fokker F-l00 Aircraft Leases and the
Buyer within thirty (30), days and (ii) the Lessor under the
Fokker F-l00 Aircraft Leases delivers to the Buyer a notice of
termination or seeks to repossess the aircraft; or
(g) With respect to any or all of the four aircraft leases for the
Buyer's use of A320 aircraft, between the Buyer and ORIX, or
any of its Affiliates, or any successor or assignee, the Buyer
fails to make a payment when due or a financial covenant
thereunder is breached; or
(h) With respect to the Term Loan Agreement, dated as of April 14,
1994, between the Buyer and American National Bank and Trust
Company of Chicago or any successor thereto, the Buyer fails
to make a payment when due or a financial covenant thereunder
is breached; or
21-4
(i) With respect to any other significant credit or lease
financing facility or similar agreement, including but not
limited to any agreement signed subsequent to this date for
the lease of aircraft, either (i) the commitment to lend,
finance or lease, as the case may be, thereunder is terminated
(other than by the Buyer) or (ii) a financial covenant
thereunder is breached and such breach is not waived or ceases
to exist within forty-five (45) days after the occurrence
thereof; or
(j) The Buyer is involuntarily removed from active membership and
participation in the airline clearinghouse (or any substitute
or replacement arrangement) among domestic airlines or the
Buyer is placed on a cash basis by such clearinghouse (or any
such substitute or replacement arrangement).
Within five (5) days of the occurrence of an Insecurity Event, the
Buyer shall notify the Seller of such occurrence in writing and by
courier or telecopier, provided, however, that any failure by the
Buyer to notify the Seller shall not prejudice the Seller's rights
hereunder.
If Comfort is not received by the Seller within forty-five (45) days
after the date of the Insecurity Event, the Seller may treat this
Agreement as terminated by giving written notice of such termination
to the Buyer. Such termination shall constitute a Termination Event
and Subclause 21.1.2 above shall apply.
The term "Comfort," is defined as follows:
Comfort - at the time of determination, assurance from the Buyer to
the Seller of the Buyer's ability to duly perform each of the
Buyer's obligations under this Agreement and any agreement between
the Buyer and the Seller dated the date hereof (including with
respect to all Option Aircraft, assuming such options have been
exercised at the time) at the time and in the manner that each such
obligation is required to be performed, provided that such assurance
shall:
(a) consist of assurance substantially identical to that
constituting "adequate assurance of due performance" within
the meaning of Article 2-609 of the Uniform Commercial Code as
in effect on the date hereof in the State of New York, and
21-5
(b) be in writing or evidenced by a writing.
In addition, Comfort shall be deemed to have been received hereunder
if the event or circumstance which caused the Insecurity Event to
occur hereunder has been cured satisfactorily as set forth above and
the same has been evidenced in writing to the Seller.
21.3 The Seller's obligations pursuant to this Agreement are subject to
the following conditions:
(a) No Termination Event shall have occurred and be continuing;
(b) The Buyer shall have entered into the Security Agreement,
dated the dated hereof and such supplemental security
agreements (if applicable) as are contemplated by such
Security Agreement;
(c) Uniform Commercial Code financing statements covering the
"Collateral," the subject of the defined Transaction Security
Agreements, duly completed and executed by the Buyer and the
Seller, and showing the Buyer as debtor and the Seller as
secured party. Each such financing statement shall have been
properly filed in each of the appropriate jurisdictions and
the Seller shall have received evidence satisfactory to it of
each such filing; and
(d) Such other filings, instruments and documents with respect to
the Buyer as the Seller may reasonably request in order to
establish the taking by the Buyer of all necessary corporate
action in connection herewith.
21-6
22 - MISCELLANEOUS PROVISIONS
22.1 Notices
All notices and requests required or authorized hereunder shall be
given in writing either by personal delivery to a responsible
officer of the party to whom the same is given or by commercial
courier, certified air mail (return receipt requested), facsimile or
other electronic transmission at the addresses and numbers set forth
below. The date upon which any such notice or request is so
personally delivered, or if such notice or request is given by
commercial courier, certified air mail, facsimile or other
electronic transmission, the date upon which sent; shall be deemed
to be the effective date of such notice or request.
The Seller shall be addressed at:
0, xxxx-xxxxx Xxxxxxx Xxxxxxxx
00000 Xxxxxxx
XXXXXX
Attention: Director - Contracts
Telephone: 00 00 00 00 00
Telex: AVSA 521155F
The Buyer shall be addressed at:
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: President
Telephone: 000-000-0000
Telecopier: 000-000-0000
Copy: General Counsel
Telephone: 000-000-0000
Telecopier: 000-000-0000
From time to time, the party receiving the notice or request may
designate another address or another person.
22.2 Waiver
The failure of either party to enforce at any time any of the
provisions of this Agreement, to exercise any right herein provided
or to require at any time performance by the other party of any of
the provisions hereof shall in no way be construed to be a present
or future waiver of such provisions nor in any way to
22-1
affect the validity of this Agreement or any part hereof or the
right of the other party thereafter to enforce each and every such
provision. The express waiver by either party of any provision,
condition or requirement of this Agreement shall not constitute a
waiver of any future obligation to comply with such provision,
condition or requirement.
22.3 INTERPRETATION AND LAW
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND THE
PERFORMANCE THEREOF SHALL BE DETERMINED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK.
THE PARTIES HEREBY ALSO AGREE THAT THE UNITED NATIONS CONVENTION ON
THE INTERNATIONAL SALE OF GOODS SHALL NOT APPLY TO THIS TRANSACTION.
22.4 Confidentiality
Subject to any legal or governmental requirements of disclosure, the
parties (which for this purpose shall include their employees,
agents and advisors) shall maintain the terms and conditions of this
Agreement and any reports or other data furnished hereunder strictly
confidential. Without limiting the generality of the foregoing, the
Buyer shall use its best efforts to limit the disclosure of the
contents of this Agreement to the extent legally permissible in any
filing required to be made by the Buyer with any governmental agency
and shall make such applications as shall be necessary to implement
the foregoing. With respect to any public disclosure or filing, the
Buyer agrees to submit to the Seller a copy of the proposed document
to be filed or disclosed and will give the Seller a reasonable
period of time in which to review the said document. The Buyer and
Seller shall consult with each other prior to the making of any
public disclosure or filing, permitted hereunder, of this Agreement
or the terms and conditions thereof. The provisions of this
Subclause 22.4 shall survive any termination of this Agreement.
22.5 Severability
In the event that any provision of this Agreement should for any
reason be held to be without effect, the remainder of this Agreement
shall remain in full force and effect. To the extent permitted by
applicable law, each party hereto hereby waives any provision of law
which renders any provision of this Agreement prohibited or
unenforceable in any respect.
22-2
22.6 Alterations to Contract
This Agreement, including its Exhibits, Appendixes and Letter
Agreements, contains the entire agreement between the parties with
respect to the subject matter hereof and thereof and supersedes any
previous understanding, commitments or representations whatsoever,
whether oral or written (including, without limitation, the Letter
of Intent). This Agreement shall not be varied except by an
instrument in writing of even date herewith or subsequent hereto
executed by both parties or by their fully authorized
representatives.
22.7 Inconsistencies
In the event of any inconsistency between the terms of this
Agreement and the terms contained in either (i) the Specification,
or (ii) any other Exhibit or Letter Agreement attached to this
Agreement, in each such case the terms of such Specification,
Exhibit or Letter Agreement shall prevail over the terms of this
Agreement. For the purpose of this Subclause 22.7, the term
Agreement shall not include the Specification or any other Exhibit
or Letter Agreement hereto.
22.8 Language
All correspondence, documents and any other written matters in
connection with this Agreement shall be in English.
22.9 Headings
All headings in this Agreement are for convenience of reference only
and do not constitute a part of this Agreement.
22.10 Counterparts
This Agreement may be executed by the parties hereto in separate
counterparts, each of which when so executed and delivered shall be
an original, but all such counterparts shall together constitute but
one and the same instrument.
22.11 Opinion of Counsel
The Buyer shall, concurrently with the execution of this Agreement,
deliver to the Seller an opinion of counsel for the Buyer reasonably
satisfactory to the Seller and dated as of such date to the effect
that (i)
22-3
the execution, delivery and performance of this Agreement are within
the corporate power of the Buyer, (ii) the execution, delivery and
performance of this Agreement, in accordance with the respective
terms by the Buyer, do not, to such counsel's knowledge, constitute
a breach of any agreement to which the Buyer is a party, and (iii)
this Agreement has been duly executed and delivered by and
constitutes legal, valid and binding obligations of the Buyer
enforceable in accordance with its terms, and such opinion shall
also address such other matters as the Seller may reasonably
request.
22.12 Conditions Precedent
This Agreement shall be subject to:
(a) the Propulsion System manufacturer's financial participation in
the transactions that are the subject matter of the Agreement as
outlined in Subparagraph (c) of the third paragraph of Paragraph 11
of the LOI, no later than Xxxxx 00, 0000, (x) the execution by March
31, 1995, of an A320 operating lease agreement between the Buyer and
ORIX, and (c) any other condition precedent to be fulfilled by
either party before March 31, 1995, in any agreement between the
Buyer and the Seller dated the date hereof.
It is hereby agreed and understood that in the event that for any
reason any of the above listed conditions is not met, the Buyer and
the Seller may each unilaterally terminate this Agreement by written
notice to the other without any further obligations to each other,
provided, however, that the Seller shall refund to the Buyer (if
applicable) the portion of the first Predelivery Payment received
from the Buyer upon execution of the LOI and that has not been spent
by the Seller (if applicable) to support the introduction of the
A320 aircraft into the Buyer's fleet.
22-4
IN WITNESS WHEREOF, these presents were entered into as of the day and year
first above written.
AVSA, S.A.R.L.
By: /s/ Xxxxxxxxxx Xxxxxx
-------------------------------
Title Xxxxxxxxxx Xxxxxx
AVSA Chief Executive Officer
Midway Airlines Corporation
By: /s/ Xxxxx X. Xxxx
-------------------------------
Title
Xxxxx X. Xxxx
Executive Vice president
Chief Operating Officer
EXHIBIT "A-1"
The A320 Standard Specification is contained in a separate folder.
Exh. A-1 1
EXHIBIT "A-2"
The A319 Standard Specification is contained in a separate folder.
Xxx. X-0 0
XXXXXXX "X"
Change orders will be mutually agreed between the Buyer and the Seller
after execution of the Agreement. For practical purposes, the dollar amount of
these change orders has been estimated (i) as set forth in Subclause 4.1.1.1
(ii) of the Agreement for the Aircraft and (ii) as set forth in Subparagraph
9.4.1.1.1 (ii) of Letter Agreement No. 3 to the Agreement for the Converted A319
Aircraft.
Exh. B-1
EXHIBIT "C"
SCN FORM
Exh. C-1
--------------------------------------------------------------------------------
A V S A SCN No
[LOGO]
Issue
SPECIFICATION CHANGE NOTICE Dated
(SCN) Page No
--------------------------------------------------------------------------------
TITLE
DESCRIPTION
EFFECT ON WEIGHT Manufacturer's Weight Empty Change:
Operational Weight Empty Change ..:
Allowable Payload Change .........:
REMARKS/REFERENCES
Responds to RFC
SPECIFICATION CHANGED BY THIS SCN
THIS SCN REQUIRES PRIOR OR CONCURRENT ACCEPTANCE OF THE FOLLOWING SCN(s):
--------------------------------------------------------------------------------
PRICE PER AIRCRAFT
US DOLLARS:
AT DELIVERY CONDITIONS:
This change will be effective on Aircraft No and subsequent.
Provided approval is received by
BUYER APPROVAL SELLER APPROVAL
By ...: By ...:
Date .: Date .:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
A V S A SCN No
[LOGO]
Issue
SPECIFICATION CHANGE NOTICE Dated
(SCN) Page No
--------------------------------------------------------------------------------
After contractual agreement with respect to weight, performance, delivery,
etc., the indicated part of the specification wording will read as follows:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
A V S A SCN No
[LOGO]
Issue
SPECIFICATION CHANGE NOTICE Dated
(SCN) Page No
--------------------------------------------------------------------------------
SCOPE OF CHANGE (FOR INFORMATION ONLY)
--------------------------------------------------------------------------------
EXHIBIT "D"
SELLER SERVICE LIFE POLICY
1. The Items covered by the Service Life Policy pursuant to Subclause
12.2 are those Seller Items of primary and auxiliary structure
described hereunder.
2. WINGS - CENTER AND OUTER WING BOX
2.1 Spars
2.2 Ribs Inside the Wing Box
2.3 Upper and Lower Panels of the Wing Box
2.4 Fittings
2.4.1 Attachment fittings for the flap structure
2.4.2 Attachment fittings for the engine pylons
2.4.3 Attachment fittings for the main landing gear
2.4.4 Attachment fittings for the center wing box
2.5 Auxiliary Support Structure
2.5.1 For the slats:
2.5.1.1 Ribs supporting the track rollers on wing box structure
2.5.1.2 Ribs supporting the actuators on wing box structure
2.5.2 For the ailerons:
2.5.2.1 Hinge brackets and ribs on wing box rear spar or shroud box
2.5.2.2 Actuator fittings on wing box rear spar or shroud box
2.5.3 For airbrakes, spoilers, lift dumpers:
2.5.3.1 Hinge brackets and ribs on wing box rear spar or shroud box
2.5.3.2 Actuator fittings on wing box rear spar or shroud box
Exh. D-l
EXHIBIT "D"
3. FUSELAGE
3.1 Fuselage Structure
3.1.1 Fore and aft bulkheads
3.1.2 Pressurized floors and bulkheads surrounding the main and nose gear
wheel well and centre wing box
3.1.3 Skins with doublers, stringers and frames from the forward pressure
bulkheads to the frame supporting the rear attachment of horizontal
stabilizer
3.1.4 Window and windscreen attachment structure but excluding
transparencies
3.1.5 Passenger and cargo doors internal structure
3.1.6 Xxxxx excluding scuff plates and upper beams surrounding passenger
and cargo door apertures
3.1.7 Cockpit floor structure and passenger cabin floor beams excluding
floor panels and seat rails
3.1.8 Keel beam structure
3.2 Fittings
3.2.1 Landing gear attachment fittings
3.2.2 Support structure and attachment fittings for the vertical and
horizontal stabilizers
4. STABILIZERS
4.1 Horizontal Stabilizer Main Structural Box
4.1.1 Spars
4.1.2 Ribs
4.1.3 Upper and lower skins and stringers
4.1.4 Attachment fittings to fuselage and trim screw actuator
4.1.5 Elevator support structure
4.1.5.1 Hinge bracket
4.1.5.2 Servocontrol attachment brackets
Exh. D-2
EXHIBIT "D"
4.2 Vertical Stabilizer Main Structural Box
4.2.1 Spars
4.2.2 Ribs
4.2.3 Skins and stringers
4.2.4 Attachment fittings to fuselage
4.2.5 Rudder support structure
4.2.5.1 Hinge brackets
4.2.5.2 Servocontrol attachment brackets
5. Bearing and roller assemblies, bearing surfaces, bushings, bolts,
rivets, access and inspection doors, including manhole doors,
latching mechanisms, all system components, commercial interior
parts, insulation and related installation and connecting devices
are excluded from this Seller Service Life Policy.
Exh. D-3
EXHIBIT "E"
CERTIFICATE OF ACCEPTANCE
In accordance with the terms of that certain Airbus A320 Purchase Agreement (the
"Purchase Agreement") dated as of March ___ , 1995, between AVSA, S.A.R.L.
("AVSA") and Midway Airlines Corporation ("Midway"), the acceptance inspection
relating to the Airbus A320-200 aircraft (the "Aircraft"), manufacturer's serial
no. _____ FAA Registration No.: ___________, with two (2) series propulsion
systems installed thereon, serial nos. _________ (position #1) and ____________
(position #2), has taken place at Toulouse, France, on the ______ day of
____________ , 19__.
In view of said inspection having been carried out with satisfactory results,
Midway hereby accepts delivery of the Aircraft as being in conformity with the
provisions of the Agreement, provided, however, that Midway's execution of this
Certificate of Acceptance shall not constitute a waiver of Midway's rights or
remedies in the enforcement of any and all of the Seller's warranty obligations
under the Purchase Agreement.
Midway specifically recognizes that it has waived any right it may have at law
or otherwise to revoke this acceptance of the Aircraft.
RECEIPT AND ACCEPTANCE OF THE
ABOVE-DESCRIBED AIRCRAFT
ACKNOWLEDGED
MIDWAY AIRLINES CORPORATION
By: _______________________
Title: ____________________
Exh. E-l
EXHIBIT "F"
TECHNICAL PUBLICATIONS
GENERAL
This Exhibit "F" lists the form, type, quantity and delivery dates for the
Technical Publications to be provided to the Buyer pursuant to Clause 14 of the
Agreement.
The Technical Publications are published in accordance with ATA Specification
100 revision 23, with the exception of certain Component Maintenance Manuals,
which may be written to an ATA Specification 100 revision other than revision
23.
The designation "C" after the title of a Technical Publication indicates that
such Technical Publication may be customized.
Exh. F-l
EXHIBIT "F"
1 ENGINEERING DOCUMENTS
1.1 Installation and Assembly Drawings (IAD)--C
The IAD will be delivered according to the Buyer's standard for the
major Assembly and Installation drawings.
1.2 Drawing Number Index (DNI)--C
The DNI lists applicable drawings of the Aircraft delivered under
the Agreement.
1.3 Process and Material Specification (PMS)
The PMS contains data related to manufacturing processes, material
identification and treatments used in the construction and assembly
of the Aircraft.
1.4 Standards Manual (SM)
The SM contains data about Seller approved standards and includes
cross reference lists.
2 MAINTENANCE AND ASSOCIATED MANUALS
2.1 APU Build-up Manual (ABM)
The ABM follows the format adopted for the Power Plant Build-up
Manual.
2.2 Aircraft Maintenance Manual (AMM)--C
The component location section of the AMM will show those components
detailed in the AMM maintenance procedures. The trouble shooting
part is covered in Subparagraph 2.21 below.
*Aircraft Maintenance Manual Chapter O5 Time Limits (Service Life
Limits) and Maintenance Checks are only delivered in hard copies.
2.3 Aircraft Time Limits/Maintenance Checks (TLMC)
The TLMC document provides the Manufacturer's recommended scheduled
time limits for inspections and maintenance checks.
2.4 Aircraft Schematics Manual (ASM)--C
The ASM is part of the Wiring Manual. Supplied as a separate manual
for schematics.
Exh. F-2
EXHIBIT "F"
2.5 Aircraft Wiring Manual (AWM)--C
The AWM is part of the Wiring Manual. Supplied as a separate manual
for wirings.
2.6 Aircraft Wiring Lists (AWL)--C
The AWL is part of the Wiring Manual. Supplied as a separate
document for lists.
2.7 Consumable Material List (CML)
The CML details the characteristics and gives procurement sources of
consumable materials such as grease, oil, etc.
2.8 Duct Repair Manual (DRM)
The DRM contains all the data necessary to locate, identify, repair
and/or replace sub-assemblies of metallic ducts. It also includes
details of tests necessary after repair.
2.9 ECAM System Logic Book (ESLB)
The ESLB contains the data that is used to generate the output
messages and/or the graphics that are shown on the ECAM display
units.
2.10 Fuel Pipe Repair Manual (FPRM)
The FPRM provides workshop repair procedures and data for specific
fuel pipes, after removal from any aircraft of the Manufacturer of
the type of the Aircraft.
2.11 Illustrated Parts Catalog (IPC)--C The IPC for the power plant is
provided separately.
2.12 Illustrated Parts Catalog (power plant) (PPIPC)--C
The PPIPC covers line replaceable parts and units of the power
plant, provided by the Propulsion Systems manufacturer.
2.13 Illustrated Tool and Equipment Manual (TEM)
The TEM provides information on Ground Equipment and Tools listed in
the Seller's Aircraft Maintenance Manual.
Exh. F-3
EXHIBIT "F"
2.14 Maintenance Facility Planning (MFP)
The MFP provides information that will assist airline personnel
concerned with long term planning of ramp or terminal operations,
Aircraft maintenance on the ramp and in the hangar, overhaul and
testing of structure and system components.
2.15 Maintenance Planning Document (MPD)
The MPD provides maintenance data necessary to plan and conduct
Aircraft maintenance checks and inspections.
2.16 Power Plant Build-up Manual (PPBM)
The PPBM provides instructions for the installation of a quick
engine change kit on a bare engine.
2.17 Support Equipment Summary (SES)
The SES lists support equipment recommended by the Seller, the
Propulsion Systems manufacturer and Vendors.
2.18 Tool Drawings (TD)
TD's will be supplied in the form of aperture cards for the Seller
and, when available, Vendor maintenance tools. A Tool Drawing Index
(TDI) will be supplied.
2.19 Tool Drawing Index (TDI)
The TDI is an alpha-numeric listing of the TD's.
2.20 Tool and Equipment Bulletin (TEB)
The TEB provides advance information related to tools and test
equipment development.
2.21 Trouble Shooting Manual (TSM)
The TSM complements the CFDS and provides troubleshooting data in
the following three levels:
Level 1 - Aimed at line use. Fault isolation guidance for
systems or parts of systems monitored mainly by CFDS.
Also guidance for systems not monitored by CFDS.
Level 2 - Aimed at hangar use. Fault isolation guidance for
non-CFDS monitored systems in the form of
functional block diagrams, charts and tables.
Exh. F-4
EXHIBIT "F"
Level 3 - Aimed at engineering use. List of CFDS messages
and decoding of trouble shooting data (decoding of
coded messages provided by the CFDS). Level 3 is
supplied on floppy disk.
3. MISCELLANEOUS DOCUMENTATION
3.1 Airplane Characteristics for Airport Planning (AC)
The AC will be in general accordance with Specification NAS 3601.
3.2 Aircraft Recovery Manual (ARM)
The ARM provides the following planning information: preparing and
moving a disabled aircraft that may be obstructing airport traffic.
3.3 Cargo Loading System Manual (CLS)
The CLS details handling procedures for the Cargo Loading System.
3.4 Crash Crew Chart (CCC)
The CCC provides information concerning access to the Aircraft
interior, location of safety equipment, hazardous liquids, etc.
3.5 Guidelines for Customer Originated Changes (COC)
The COC provides production and presentation rules for the data
covering Buyer originated changes on the Aircraft to be incorporated
by the Seller in the Technical Publications as per Subclause 14.11
of the Agreement.
3.6 List of Radioactive and Hazardous Elements (LRE)
The LRE provides information on components and materials for which
specific precautions have to be taken.
3.7 List of Applicable Publications (LAP)--C
The LAP will record the Seller's various Airframe Technical
Publications indicating the last valid revision number and issue
date.
Exh. F-5
EXHIBIT "F"
3.8 Livestock Transportation Manual (LTM)
The LTM details the facilities, equipment and procedures necessary
for live animal transportation in aircraft of the Manufacturer of
the type of the Aircraft.
3.9 Service Bulletins (SB)--C
The Buyer will receive all Service Bulletins applicable to the
Aircraft.
3.10 Service Bulletin Index (SBI)
The SBI is a listing of all Service Bulletins issued in ATA 100
chapter sequence.
The SBI provides details of SB number, SB title, associated
modification number, issue status, Vendor SB number (if applicable)
and affected fleet.
3.11 Service Information Letters (SIL)
SILs give information of a general nature and also about minor
changes or inspections the Buyer may wish to apply under the Buyer's
authority.
3.12 Transortability Manual (TM)
The TM gives cargo hold dimensions for currently available cargo
Aircraft, transportation information and requirements for large
Aircraft components. Component dimensions, weights and shelf life
limitations are also given.
3.13 Supplier Product Support Agreements (SPSA)
The SPSA is a collection of product support conditions negotiated by
the Manufacturer with the suppliers of Aircraft equipment.
3.14 Vendor Information Manual (VIM)
The VIM provides Vendor contact information.
3.15 Vendor Information Manual (GSE) (VIM/GSE)
The VIM/GSE gives contact names and addresses of Ground Support
Equipment (GSE) vendors and their product support organizations.
Exh. F-6
EXHIBIT "F"
4 OPERATIONAL MANUALS
4.1 Cabin Attendant Operating Manual (CAOM)--C
The CAOM describes the Aircraft in its standard version and provides
operating instructions for the equipment controlled by cabin
attendants.
4.2 Abnormal/Emergency Check List (CL)--C
The CL is an extract from the FCOM presented as a booklet for quick
in-flight use.
4.3 Flight Crew Operating Manual (FCOM)--C
The FCOM provides Aircraft and systems descriptions, normal,
abnormal and emergency procedures as well as operational
performance.
4.4 FAA Approved Flight Manual (AFM)--C
The AFM provides Aircraft performance operating limitations and
other flight data required by the relevant airworthiness authorities
for certification. It includes the Configuration Deviation List
(CDL).
4.5 Master Minimum Equipment List (MMEL)
The MMEL defines the components and the related conditions under
which, when the components are defective, the Aircraft may be
cleared for flight. In addition, the MMEL provides the necessary
information to establish the Buyer's own Minimum Equipment List
(XXX).
4.6 Noise Definition Manual (NDM)
The NDM provides all the necessary curves to determine noise levels
for various phases of operations: on the ground, at take-off and
during approach.
4.7 Trim Sheet (TS)
The TS enables the ground crew to determine the center of gravity of
the Aircraft according to the actual load (cargo, fuel, passengers).
Exh. F-7
EXHIBIT "F"
4.8 Performance Engineering Program (PEP)
The PEP consists of a Low Speed performance data base and a High
Speed Performance data base together with their respective programs.
The Performance Engineering Program may be used by the Buyer under
the license conditions set forth in Appendix A to this Exhibit "F."
The Low Speed Performance programs consist of the Takeoff and
Landing Chart computation program (TLC) which permits the
computation of:
- regulatory take-off and landing performance,
- noncertified take-off performance accounting for runway data and
weather, together with the Tabulation and Interpolation program
(TAB), issued with the AFM, which permits the reading, editing
and interpolation of the tables listed in the AFM.
The High Speed Performance programs are the In Flight Performance
computation program (IFP) which permits computation of Aircraft
performance for each flight phase and the Aircraft Performance
Monitoring program (APM) which permits analysis of Aircraft cruise
performance from data recorded during stabilized flight periods.
4.9 Performance Program Manual (PPM)
The PPM is the users' guide for the Performance Engineering Program
(PEP).
4.10 Weight and Balance Manual (WBM) and Weight and Balance Manual
Supplements--C
The corresponding supplements:
-Delivery Weighing Report,
-Equipment List,
will be delivered with each Aircraft.
5 OVERHAUL DATA
5.1 Component Documentation Status (CDS)--C
The CDS lists Component Maintenance Manuals in accordance with
Paragraphs 5.4 and 5.5 below.
Exh. F-8
EXHIBIT "F"
5.2 Component Evolution List (CEL)
The CEL is a noncustomized document listing all components on the
Aircraft and also gives the evolution of each component.
The information is provided in order of:
- part number
- FSCM
- ATA reference.
5.3 Cable Fabrication Manual (CFM)
The CFM contains all the data necessary to locate, identify,
manufacture and test control cables used on the Aircraft. An
appendix contains cable end fitting specification sheets, and
detailed manufacturing instructions.
5.4 Component Maintenance Manual Manufacturer (CMMM)
The CMMM contains all the data necessary to locate, identify and
maintain Aircraft components manufactured by the Seller.
5.5 Component Maintenance Manual Vendor (CMMV)
The Seller shall endeavor to ensure that each Vendor of repairable
components shall deliver to the Buyer a Component Maintenance Manual
Vendor with revision service.
6 STRUCTURAL MANUALS
6.1 Nondestructive Testing Manual (NTM)
The NTM supplies Airframe data necessary to carry out nondestructive
testing.
6.2 Structural Repair Manual (SRM)
The SRM contains descriptive information for identification and
repair of the Airframe primary and secondary structure.
Exh. F-9
EXHIBIT "F"
MANUAL FORMAT AND TYPE IDENTIFICATION
FORM AC APERTURE CARD. Refers to 35mm film contained on
punched aperture cards.
ADRES Aircraft Documentation Retrieval System on CD ROM.
D FLOPPY DISK
F MICROFILM. Refers to l6mm roll film in 3M type
cartridges.
MF MASTER FILM. Refers to thick diazo film suitable for
further reproduction.
MFC MICROFICHE.
MP Refers to paper printed one side, unpunched quality
shall be suitable for further reproduction or
microfilming.
MT MAGNETIC TAPE
P1 PRINTED ONE SIDE. Refers to manuals in paper with print
on one side of the sheets only.
P2 PRINTED BOTH SIDES. Refers to manuals with print on both
sides of the sheets.
TYPE C CUSTOMIZED. Refers to manuals which are customized to
specific MSNs.
E ENVELOPE. Refers to manuals which are not customized.
P PRELIMINARY. Refers to preliminary data or manuals which
may consist of:
-either one time issue not maintained by revision
service, or
-preliminary issues maintained by revision service until
final manual or data delivery, or
-supply of best available data under final format with
progressive completion through revision service.
DELIVERY Manual delivery is expressed either as the number of days prior to
delivery of the first Aircraft or as nil (0), which designates the
date of delivery of the first Aircraft.
It is agreed that the number of days indicated will be rounded up to
the next regular revision release date.
Exh. F-10
EXHIBIT "F"
MANUALS AVAILABLE (headlines)
1 - ENGINEERING DOCUMENTS
2 - MAINTENANCE & ASSOCIATED MANUALS
3 - MISCELLANEOUS PUBLICATIONS
4 - OPERATIONAL MANUALS AND DATA
5 - OVERHAUL DATA
6 - STRUCTURAL MANUALS
MANUALS AVAILABLE (detailed) Abbr Form Type Qty ATA Deliv.
---- ---- ---- --- --- ------
1. ENGINEERING DOCUMENTS
Installation and Assembly IAD AC C 1 NO 0
Drawings
Parts Usage (Effectivity) PU F E 1 NO 0
Schedule (Drawing S F E 1 NO 0
Nomenclature)
Drawing Number Index DNI P1 C 1 NO 0
Process and Material PMS F E 1 NO 0
Specification
Standards Manual SM F E 1 NO 0
2. MAINTENANCE & ASSOCIATED MANUALS
APU Build-up Manual ABM P2 E 2 NO 90
Aircraft Maintenance Manual XXX X0 X 0 XXX 00
X X 2 YES 90
MF C 1 YES 90
ADRES C 1 YES 90
MT* C 1 YES 90
Aircraft Time Limits/ TLMC P2 C 3 YES 90
Maintenance Checks
Aircraft Schematics Manual ASM P1 C 1 YES 90
F C 2 YES 90
MF C 1 YES 90
MT** C 1 YES 90
Aircraft Wiring Manual AWM P1 C 1 YES 90
F C 3 YES 90
MF C 1 YES 90
MT** C 1 YES 90
* Field trial of ADRES required to determine if MT needs to be shipped to
the Buyer. Seller to hold MT on stock until Buyer's notification to ship.
** If developed and available.
Exh. F-11
EXHIBIT "F"
MANUALS AVAILABLE (detailed) Abbr Form Type Qty ATA Deliv.
---- ---- ---- --- --- ------
Aircraft Wiring Lists AWL F C 3 YES 90
P1 C 1 YES 90
Consumable Material List CML P2 E 1 YES 90
Duct Repair Manual DRM P2 E 1 NO 90
ECAM System Logic Book ESLB P2 E 1 NO 90
Fuel Pipe Repair Manual FPRM P2 E 1 NO 90
Illustrated Parts Catalog IPC F C 3 YES 90*
(Airframe) MF C 1 YES 90
ADRES C 1 YES 90
MT** C 1 YES 90
Illustrated Parts Catalog PIPC F C 3 NO 90+
(Power Plant)
Illustrated Tool and TEM P2 E 3 YES 360
Equipment Manual
Maintenance Facility Planning MFP P2 E 3 NO 90
Maintenance Planning Document MPD P2 E 3 NO 360
Power Plant Build-up Manual PPBM P2 E 3 YES 90+
Support Equipment Summary SES P1 E 3 NO 360
Tool and Equipment Drawings XXX AC E 1 NO 360
Tool and Equipment Index TEI P2 E 2 NO 360
Tool and Equipment Bulletins TEB P1 E 3 NO 0
Trouble Shooting Manual TSM P2 C 3 NO 90
MF C 1 NO 90
* Issue date to be coordinated with Initial Provisioning Data delivery
provided for under the terms of Letter Agreement No. 1 to the Agreement.
** Field trial of ADRES required to determine if MT needs to be shipped to
the Buyer. Seller to hold MT on stock until Buyer's notification to ship.
+ Supplied by the Propulsion Systems manufacturer.
Exh. F-12
EXHIBIT "F"
MANUALS AVAILABLE (detailed) Abbr Form Type Qty ATA Deliv.
---- ---- ---- --- --- ------
3 MISCELLANEOUS PUBLICATIONS
Airplane Characteristics for XX X0 X 0 XX 000
Xxxxxxx Xxxxxxxx
Aircraft Recovery Manual ARM P2 E 2 YES 90
Cargo Loading System Manual CLS P2 E 3 NO 180
Crash Crew Chart CCC P1 E 5 NO 180
Guidelines for Customer GCOC P1 E 1 NO 0
Originated Changes
List of Radioactive and LRE P2 E 1 NO 90
Hazardous Elements
List of Applicable LAP P2 C 1 NO 90
Publications
Livestock Transportation LTM P2 E 1 NO 90*
Manual
Service Bulletin SB P2 C 2 YES 0
F E 1 YES 90
Service Bulletin Index SBI P2 E 1 YES 90
Service Information Letters SIL P1 E 2 YES 0
Transportability Manual TM P1 E 1 NO 90
Vendor Product Support VPSA P2 E 2 NO 360
Agreements
Vendor Information Manual VIM D E 2 NO 360
Vendor Information Manual VIM/ P2 E 2 NO 360
GSE GSE
* Available on specific request.
Exh. F-13
EXHIBIT "F"
MANUALS AVAILABLE (detailed) Abbr Form Type Qty ATA Deliv.
---- ---- ---- --- --- ------
4 OPERATIONAL MANUALS AND DATA
Cabin Attendant Operating CAOM P2 C 5+ NO 90
Manual
Abnormal/Emergency CL P2 C 5+ NO 90
Check List
Flight Crew Operating Manual FCOM P2 C 5* NO 90
MT^ C 1 NO 90
Flight Manual FM P2 C 11 NO 0
Master Minimum Equipment MMEL P2 E 3 NO 90
List
Noise Definition Manual NDM P2 E 1 NO 90
Trim Sheet TS P2 E 1 NO 90
Performance Engineering PEP D C 1 NO 90
Program
Performance Program Manual PPM P2 C 1 NO 90
Weight and Balance Manual WBM P2 C 1^^ YES 0++
+ Provided as part of the Flight Crew Training in Clause 16.
* In addition, the Seller will provide one FCOM manual for each pilot
trained under Clause 16. As of issuance to the Buyer of the first general
revision of the FCOM after execution of this Agreement, the Buyer's FCOM
shall be subject to revision service, pursuant to Clause 14 of the
Agreement.
^ Includes manuals provided upon delivery of each Aircraft.
^^ Per aircraft.
++ Weighing Equipment List delivered two weeks after delivery of the
Aircraft.
Exh. F-14
APPENDIX "A" to EXHIBIT "F"
MANUALS AVAILABLE (detailed) Abbr Form Type Qty ATA Deliv.
---- ---- ---- --- --- ------
5 OVERHAUL DATA
Component Documentation CDS P2 C 3 NO 180
Status D C NO 180
Component Evolution List CEL P2 E 3 NO *
Cable Fabrication Manual CFM P2 E 1 NO 90
Component Maintenance Manual CMMM P2 E 1 YES 180
Airframe Manufacturer F E 1 YES 180
MFC 1
Component Maintenance Manual CMMV P2 E 1 YES 180
Vendor (from the vendor) MFC 1
6 STRUCTURAL MANUALS
Nondestructive Testing NTM P2 E 2 YES 90
Manual
Structural Repair Manual SRM P2 E 1 YES 90
F E 2 YES 90
* Optional. Delivered as follow-on for CDS.
Exh. F-15
APPENDIX "A" to EXHIBIT "F"
LICENSE FOR USE
OF THE PERFORMANCE ENGINEERING PROGRAMS (PEP)
1. GRANT
The Seller grants to the Buyer the right to use the Performance
Engineering Programs (PEP) in machine readable form on a single computer
during the term of this license agreement (the "License Agreement")
Use of the PEP in readable form shall be limited to one (1) copy. However,
the Seller may make duplicate copies, provided that they are either
contained in the same computer as the original copy, or produced for
checkpoint and restart purposes or made with the consent of the Seller for
a specific need.
2. MERGING
The PEP may be used and adapted in machine readable form for the purpose
of merging it into other program material of the Buyer, but, on
termination of this License Agreement, the Buyer shall remove the PEP from
the other program material with which it has been merged.
The Buyer agrees to reproduce the copyright and other notices as they
appear on or within the original media on any copies that the Buyer makes
of the PEP.
3. PERSONAL LICENSE
The above described license is personal to the Buyer, nontransferable and
nonexclusive.
4. INSTALLATION
It is the Buyer's responsibility to install the PEP and to perform any
mergings and checks. The Seller shall, however, assist the Buyer's
operations engineers in the initial phase following the delivery of the
PEP until such personnel reach the familiarization level required to make
inputs and correlate outputs.
Exh. F-16
APPENDIX "A" to EXHIBIT "F"
5. PROPRIETARY RIGHTS AND NONDISCLOSURE
5.1 The PEP and the copyright and other proprietary rights of whatever nature
in the PEP are and shall remain with the Seller. The PEP and its contents
are designated as confidential.
5.2 The Buyer undertakes not to disclose the PEP, parts thereof or its
contents to any third party without the prior written consent of the
Seller. Insofar as it is necessary to disclose aspects of the PEP to
employees, such disclosure is permitted only for the purpose for which the
PEP is supplied and only to the employee who needs to know the same.
6. CONDITIONS OF USE
6.1 The Seller does not warrant that the PEP shall contain no errors. However,
should the PEP be found to contain any error at delivery, the Buyer shall
notify the Seller promptly thereof and the Seller shall take all proper
steps to correct the same at its own expense.
6.2 The Buyer shall ensure that the PEP is correctly used in appropriate
machines as indicated in the Performance Programs Manual (PPM) and that
staff are properly trained to use the same, to trace and correct running
faults, to restart and recover after fault and to operate suitable checks
for accuracy of input and output.
6.3 It is understood that the PPM is the user's guide of the PEP and that the
Buyer shall undertake to use the PEP in accordance with the PPM.
6.4 The PEP is supplied under the express condition that the Seller shall have
no liability in contract or in tort arising from or in connection with the
Buyer's use of or inability to use the PEP.
7. DURATION
Subject to the Buyer's compliance with the terms of this License
Agreement, the rights under this License Agreement shall be granted to the
Buyer for as long as the Buyer operates an Aircraft to which the PEP
refers.
Exh. F-17
EXHIBIT "G"
AIRFRAME PRICE REVISION FORMULA
1. BASE PRICE
The Base Price of the Airframe is as quoted above in Subclause 4.1.1 of
this Agreement for Aircraft that are A320-200 model aircraft and in
Subparagraph 9.4.1.1 of Letter Agreement No. 3 to the Agreement for
Aircraft that are Converted A319 Aircraft.
The Base Price of a set of two (2) nacelles and two (2) thrust reversers
is as quoted in Subclause 4.1.2.1(ii) of the Agreement for Aircraft that
are A320-200 model aircraft and in Subparagraph 9.4.1.2.1(ii) of Letter
Agreement No. 3 to the Agreement for Aircraft that are Converted A319
Aircraft.
The Base Price of the engine configuration option is as quoted in
Subclause 4.1.2.l(iii) or Subclause 4.1.2.2(ii) (as applicable).
2 Base Period
The above Base Prices have been established in accordance with the
economic conditions prevailing in December 1993/January 1994/February 1994
and corresponding to theoretical delivery conditions prevailing in January
1995, as defined by HEb and ICb index values indicated in Paragraph 4 of
this Exhibit "G."
These Base Prices are subject to adjustment for changes in economic
conditions as measured by data obtained from the US Department of Labor,
Bureau of Labor Statistics, and in accordance with the provisions of
Paragraphs 4 and 5 of this Exhibit "G."
HEb and ICb values indicated below in Paragraph 4 of this Exhibit "G" will
not be subject to any revision of these indexes.
3. Reference Indexes
Labor Index: "Aircraft and Parts," Standard Industrial Classification
372--Average hourly earnings (hereinafter referred to as "HE SIC 372"),
published by the US Department of Labor, Bureau of Labor Statistics, in
"Employment and Earnings," Establishment Data: Hours and Earnings (Table
B-15: Average hours and earnings of production or nonsupervisory workers
on private nonfarm payrolls by detailed industry).
Exh. G-l
EXHIBIT "G"
Material Index: "Industrial Commodities" (hereinafter referred to as
"IC-Index"), published by the US Department of Labor, Bureau of Labor
Statistics, in "Producer Prices and Price Indexes" (Table 6: Producer
price indexes for commodity groupings and individual items). (Base year
1982 = 100.)
4. Revision Formula
Pn = (Pb + F) (0.75 HEn/HEb + 0.25 ICn/ICb)
where
Pn = Revised Base Price of the Airframe, nacelles and thrust
reversers, or engine configuration option, as applicable, at
delivery of the Aircraft.
Pb = Base Price of the Airframe, nacelles and thrust reversers,
or engine configuration option, as applicable, at economic
conditions December 1993/January 1994/February 1994 averaged
(January 1995 delivery conditions).
F = (0.005 x N x Pb) where N = The calendar year of delivery of
the Aircraft minus 1995.
HEn = The arithmetic average of HE SIC 372 for the 11th, 12th and
13th months prior to the month of delivery of the Aircraft (2
decimals).
HEb = HE SIC 372 for December 1993/January 1994/February 1994
averaged (= 17.68).
ICn = The arithmetic average of the IC-Index for the 11th, 12th
and 13th months prior to the month of delivery of the Aircraft
(1 decimal).
ICb = IC-Index for December 1993/January 1994/February 1994
averaged (=118.5).
In determining the Revised Base Price at delivery of the Aircraft, each
quotient shall be calculated to the nearest ten thousandth (4 decimals).
If the next succeeding place is five (5) or more, the preceding decimal
place shall be raised to the next higher figure. The final factor shall be
rounded to the nearest ten thousandth (4 decimals).
After final computation, Pn shall be rounded to the next whole number (0.5
or more rounded to 1).
Exh. G-2
EXHIBIT "G"
5. General Provisions
5.1 If the US Department of Labor substantially revises the methodology or
discontinues any of the indexes referred to in this Subclause 5.1, the
Seller and the Buyer shall select a substitute for the revised or
discontinued index, such substitute index to lead in application to the
same adjustment result, insofar as possible, as would have been achieved
by continuing the use of the original index as it may have fluctuated had
it not been revised or discontinued.
Appropriate revision of the formula shall be made to accomplish this
result.
5.2 The Revised Base Price at delivery of the Aircraft shall be the final
price and will not be subject to further adjustments in the indexes.
Exh. G-3
EXHIBIT "H-1"
(For A320 Aircraft)
CFM ENGINES PRICE REVISION FORMULA
1. REFERENCE PRICE
The Reference Price of a set of two (2) CFM International CFM 56-5A-3
engines and additional equipment is as quoted in Subclause 4.1.2.1(i) of
the Agreement.
This Reference Price is valid for Aircraft delivered no later than
December 31, 1997, and is subject to adjustment for changes in economic
conditions as measured by data obtained from the US Department of Labor,
Bureau of Labor Statistics, and in accordance with the provisions of
Paragraphs 4 and 5 of this Exhibit "H-1."
2. REFERENCE PERIOD
The above Reference Price has been established in accordance with the
economic conditions prevailing in October 1985 (April 1986 theoretical
delivery conditions), as defined, according to CFM International, by the
Reference Composite Price Index of 108.66.
3. INDEXES
Labor Index: "Aircraft Engines and Engine Parts" Standard Industrial
Classification 3724--Average hourly earnings (hereinafter referred to as
"HE SIC 3724"), published by the US Department of Labor, Bureau of Labor
Statistics, in "Employment and Earnings," Establishment Data: Hours and
Earnings (Table B-15: Average hours and earnings of production or
nonsupervisory workers on private nonfarm payrolls by detailed industry).
Material Index (I): "Industrial Commodities" (hereinafter referred to as
"IC-Index"), published by the US Department of Labor, Bureau of Labor
Statistics, in "Producer Prices and Price Indexes" (Table 6: Producer
price indexes for commodity groupings and individual items). (Base year
1982 =100.)
Material Index (II): "Metals and Metal Products" Code 10 (hereinafter
referred to as "MMP-Index"), published by the US Department of Labor,
Bureau of Labor Statistics, in "Producer Prices and Price Indexes" (Table
6: Producer price indexes for commodity groupings and individual items).
(Base year 1982 = 100.)
Exh. H-1-1
EXHIBIT "H-l"
(For A320 Aircraft)
Energy Index: "Fuels and Related Products and Power" Code 5 (hereinafter
referred to as "EP-Index"), published by the US Department of Labor,
Bureau of Labor Statistics, in "Producer Prices and Price Indexes" (Table
6: Producer price indexes for commodity groupings and individual items).
(Base year 1982 = 100.)
4. REVISION FORMULA
Pn = Pb x CPIn/108.66
Where
Pn = Revised Reference Price of a set of two (2) engines at
delivery of the Aircraft.
Pb = Reference Price as defined above.
CPIn = Composite Price Index for the sixth month prior to the month
of delivery of the Aircraft.
Said Composite Price Index is composed as follows:
CPIn = 0.55 [(HEn/11.16) x 100] + 0.10 ICn + 0.25 MMPn + 0.10 EPn
Where
HEn = HE SIC 3724 for the sixth month prior to the month of
delivery of the Aircraft; the quotient HEn/11.16 is rounded to
the nearest third decimal place. The product by 0.55 is
rounded to the nearest second decimal place.
ICn = IC-Index for the sixth month prior to the month of delivery
of the Aircraft.
MMPn = MMP-Index for the sixth month prior to the month of delivery
of the Aircraft. The product by 0.25 is rounded to the nearest
second decimal place.
EPn = EP-Index for the sixth month prior to the month of delivery
of the Aircraft.
Exh. X-0-0
XXXXXXX "X-0"
(For A320 Aircraft)
The Composite Price Index shall be determined to the second decimal place.
If the next succeeding decimal place is five (5) or more, the preceding
decimal figure shall be raised to the next higher figure.
The final factor shall be rounded to the nearest thousandth (3 decimals).
5. GENERAL PROVISIONS
5.1 The Revised Reference Price at delivery of the Aircraft shall be the final
price and will not be subject to further adjustments in the indexes.
5.2 If no final index value is available for any of the applicable months, the
published preliminary figures will be the basis on which the Revised
Reference Price will be computed.
5.3 If the US Department of Labor substantially revises the methodology of
calculation of the indexes referred to in this Exhibit "H-1" or
discontinues any of these indexes, the Seller shall, in agreement with CFM
International, apply a substitute for the revised or discontinued index,
such substitute index to lead in application to the same adjustment
result, insofar as possible, as would have been achieved by continuing the
use of the original index as it may have fluctuated had it not been
revised or discontinued.
Appropriate revision of the formula shall be made to accomplish this
result.
5.4 Should the above escalation provisions become null and void by action of
the US Government, the Reference Price shall be adjusted to reflect
increases in the cost of labor, material and fuel which have occurred from
the period represented by the applicable Reference Price Indexes to the
sixth month prior to the scheduled delivery of the Aircraft.
5.5 The Revised Reference Price at delivery of the Aircraft in no event shall
be less than the Reference Price defined in Paragraph 1 of this Exhibit
"H-l."
Exh. H-l-3
EXHIBIT "H-2"
(For A319 Aircraft)
CFM ENGINES PRICE REVISION FORMULA
1. REFERENCE PRICE
The Reference Price of a set of two (2) CFM International CFM 56-5A-5
engines and additional equipment is as quoted in Subparagraph 9.4.1.2.1(i)
of Letter Agreement No. 3 to the Agreement.
This Reference Price is valid for Aircraft delivered no later than
December 31, 2002, and is subject to adjustment for changes in economic
conditions as measured by data obtained from the US Department of Labor,
Bureau of Labor Statistics, and in accordance with the provisions of
Paragraphs 4 and 5 of this Exhibit "H-2."
2. REFERENCE PERIOD - REFERENCE COMPOSITE PRICE INDEX
The above Reference Price has been established in accordance with the
economic conditions prevailing in September 1990 (March 1991 theoretical
delivery conditions), as defined, according to CFM International, by the
Reference Composite Price Index of 126.54.
3. REFERENCE INDEXES
Labor Index: "Aircraft Engines and Engine Parts," Standard Industrial
Classification 3724--Average hourly earnings (hereinafter referred to as
"HE SIC 3724"), published by the US Department of Labor, Bureau of Labor
Statistics, in "Employment and Earnings," Establishment Data: Hours and
Earnings (Table B-15: Average hours and earnings of production or
nonsupervisory workers on private nonfarm payrolls by detailed industry).
Material Index (I): "Industrial Commodities" (hereinafter referred to as
"IC-Index"), published by the US Department of Labor, Bureau of Labor
Statistics, in "Producer Prices and Price Indexes" (Table 6: Producer
price indexes for commodity groupings and individual items). (Base year
1982 = 100.)
Material Index (II): "Metals and Metal Products" Code 10 (hereinafter
referred to as "MMP-Index"), published by the US Department of Labor,
Bureau of Labor Statistics, in "Producer Prices and Price Indexes" (Table
6: Producer price indexes for commodity groupings and individual items).
(Base year 1982 = 100.)
Exh. H-2-l
EXHIBIT "H-2"
(For A319 Aircraft)
Energy Index: "Fuels and Related Products and Power" Code 5 (hereinafter
referred to as "EP-Index"), published by the US Department of Labor,
Bureau of Labor Statistics, in "Producer Prices and Price Indexes" (Table
6: Producer price indexes for commodity groupings and individual items).
(Base year 1982 = 100.)
4. REVISION FORMULA
Pn = Pb x CPIn/126.54
Where
Pn = Revised Reference Price of a set of two (2) engines at
delivery of the Aircraft.
Pb = Reference Price as defined above.
CPIn = Composite Price Index for the sixth month prior to the month
of delivery of the Aircraft.
Said Composite Price Index is composed as follows:
CPIn = 0.55 [(HEn/11.16) x 100] + 0.10 ICn + 0.25 MMPn + 0.10 EPn
Where
HEn = HE SIC 3724 for the sixth month prior to the month of
delivery of the Aircraft; the quotient HEn/11.16 is
rounded to the nearest third decimal place. The product
by 0.55 is rounded to the nearest second decimal place.
ICn = IC-Index for the sixth month prior to the month of
delivery of the Aircraft.
MMPn = MMP-Index for the sixth month prior to the month of
delivery of the Aircraft. The product by 0.25 is rounded
to the nearest second decimal place.
EPn = EP-Index for the sixth month prior to the month of
delivery of the Aircraft.
Exh. X-0-0
XXXXXXX "X-0"
(For A319 Aircraft)
The Composite Price Index shall be determined to the second decimal place.
If the next succeeding decimal place is five (5) or more, the preceding
decimal figure shall be raised to the next higher figure.
The final factor shall be rounded to the nearest thousandth (3 decimals).
5. GENERAL PROVISIONS
5.1 The Revised Reference Price at delivery of the Aircraft shall be the final
price and will not be subject to further adjustments in the indexes.
5.2 If no final index value is available for any of the applicable months, the
published preliminary figures will be the basis on which the Revised
Reference Price will be computed.
5.3 If the US Department of Labor substantially revises the methodology of
calculation of the indexes referred to in this Exhibit "H-2" or
discontinues any of these indexes, the Seller shall, in agreement with CFM
International, apply a substitute for the revised or discontinued index,
such substitute index to lead in application to the same adjustment
result, insofar as possible, as would have been achieved by continuing the
use of the original index as it may have fluctuated had it not been
revised or discontinued.
Appropriate revision of the formula shall be made to accomplish this
result.
5.4 Should the above escalation provisions become null and void by action of
the US Government, the Reference Price shall be adjusted to reflect
increases in the cost of labor, material and fuel which have occurred from
the period represented by the applicable Reference Price Indexes to the
sixth month prior to the scheduled delivery of the Aircraft.
5.5 The Revised Reference Price at delivery of the Aircraft in no event shall
be less than the Reference Price defined in Paragraph 1 of this Exhibit
"H-2."
Exh. X-0-0
XXXXXXX "X-0"
(For A320 Aircraft)
INTERNATIONAL AERO ENGINES PRICE REVISION FORMULA
1. REFERENCE PRICE
The Reference Price of a set of two (2) International Aero Engines
V2527-A5 engines is as quoted in Subclause 4.1.2.2(i) of the Agreement.
This Reference Price is valid for Aircraft delivered no later than
December 31, 1997, and is subject to adjustment for changes in economic
conditions as measured by data obtained from the US Department of Labor,
Bureau of Labor Statistics, and in accordance with the provisions of
Paragraphs 4 and 5 of this Exhibit "I-1."
2. REFERENCE PERIOD
The above Reference Price has been established in accordance with the
economic conditions prevailing in March 1988 (or July 1988 theoretical
delivery conditions) as defined, according to International Aero Engines,
by the HEb, MMPb and EPb index values indicated in Paragraph 4 of this
Exhibit "I-1."
3. INDEXES
Labor Index: "Aircraft Engines and Engine Parts" Standard Industrial
Classification 3724--Average hourly earnings (hereinafter referred to as
"HE SIC 3724"), published by the US Department of Labor, Bureau of Labor
Statistics, in "Employment and Earnings," Establishment Data: Hours and
Earnings (Table B-15: Average hours and earnings of production or
nonsupervisory workers on private nonfarm payrolls by detailed industry).
Material Index: "Metals and Metal Products" Code 10 (hereinafter referred
to as "MMP-Index"), published by the US Department of Labor, Bureau of
Labor Statistics, in "Producer Prices and Price Indexes" (Table 6:
Producer price indexes for commodity groupings and individual items).
(Base year 1982 = 100.)
Energy Index: "Fuels and Related Products and Power" Code 5 (hereinafter
referred to as "EP-Index"), published by the US Department of Labor,
Bureau of Labor Statistics, in Producer Prices and Price Indexes" (Table
6: Producer price indexes for commodity groupings and individual items).
(Base year 1982 = 100.)
Exh. X-0-0
XXXXXXX "X-0"
(For A320 Aircraft)
4. REVISION FORMULA
Pn = Pb [(0.60 HEn)/HEb + (0.30 MMPn)/MMPb + (0.10 EPn)/EPb)]
Where
Pn = Revised Reference Price of a set of two (2) engines at
delivery of the Aircraft.
Pb = Reference Price at March 1988 economic conditions.
HEn = HE SIC 3724 for the fourth month prior to the month of
delivery of the Aircraft.
HEb = HE SIC 3724 for March 1988 (= 13.58)
MMPn = MMP-Index for the fourth month prior to the month of
delivery of the Aircraft.
MMPb = MMP-Index for March 1988 (= 115.4)
EPn = EP-Index for the fourth month prior to the month of
delivery of the Aircraft.
EPb = EP-Index for March 1988 (=65.9)
In determining the Revised Reference Price each quotient ((0.60 HEn)/HEb,
(0.30 MMPn)/MMPb, (0.10 EPn)/EPb) shall be calculated to the nearest ten
thousandth (4 decimals). If the next succeeding place is five (5) or more
the preceding decimal place shall be raised to the next higher figure.
After final computation, Pn shall be rounded to the next whole number (0.5
or more rounded to 1).
5. GENERAL PROVISIONS
5.1 The Revised Reference Price at delivery of the Aircraft shall be the final
price and will not be subject to further adjustments in the indexes.
5.2 If no final index value is available for any of the applicable months, the
published preliminary figures will be the basis on which the Revised
Reference Price will be computed.
5.3 If the US Department of Labor substantially revises the methodology of
calculation of the indexes referred to in this Exhibit "I-1" or
discontinues any of these indexes, the Seller shall, in agreement with
International Aero Engines, apply a
Exh. I-1-2
EXHIBIT "I-1" (For
A320 Aircraft)
substitute for the revised or discontinued index, such substitute index to
lead in application to the same adjustment result, insofar as possible, as
would have been achieved by continuing the use of the original index as it
may have fluctuated had it not been revised or discontinued. Appropriate
revision of the formula shall be made to accomplish this result.
5.4 Should the above escalation provisions become null and void by action of
the US Government, the Reference Price shall be adjusted to reflect
increases in the cost of labor, material and fuel which have occurred from
the period represented by the applicable Reference Price Indexes to the
fourth month prior to the scheduled delivery of the Aircraft.
5.5 The Revised Reference Price at delivery of the Aircraft in no event shall
be less than the Reference Price defined in Paragraph 1 of this Exhibit
"I-1."
Exh. I-1-3
EXHIBIT "I-2"
(For A319 Aircraft)
INTERNATIONAL AERO ENGINES PRICE REVISION FORMULA
1. REFERENCE PRICE
The Reference Price of a set of two (2) International Aero Engines
V2524-A5 engines is as quoted in Subparagraph 9.4.1.2.2 of Letter
Agreement No. 3 to the Agreement.
This Reference Price is valid for Aircraft delivered no later than
December 31, 2000, and is subject to adjustment for changes in economic
conditions as measured by data obtained from the US Department of Labor,
Bureau of Labor Statistics, and in accordance with the provisions of
Paragraphs 4 and 5 of this Exhibit "I-2."
2. REFERENCE PERIOD
The above Reference Price has been established in accordance with the
economic conditions prevailing in November 1990 (or March 1991 theoretical
delivery conditions) as defined, according to International Aero Engines,
by the HEb, MMPb and EPb index values indicated in Paragraph 4 of this
Exhibit "I-2."
3. INDEXES
Labor Index: "Aircraft Engines and Engine Parts" Standard Industrial
Classification 3724--Average hourly earnings (hereinafter referred to as
"HE SIC 3724"), published by the US Department of Labor, Bureau of Labor
Statistics, in "Employment and Earnings," Establishment Data: Hours and
Earnings (Table B-15: Average hours and earnings of production or
nonsupervisory workers on private nonfarm payrolls by detailed industry).
Material Index: "Metals and Metal Products" Code 10 (hereinafter referred
to as "MMP-Index"), published by the US Department of Labor, Bureau of
Labor Statistics, in "Producer Prices and Price Indexes" (Table 6:
Producer price indexes for commodity groupings and individual items).
(Base year 1982 = 100.)
Energy Index: "Fuels and Related Products and Power" Code 5 (hereinafter
referred to as "EP-Index"), published by the US Department of Labor,
Bureau of Labor Statistics, in "Producer Prices and Price Indexes" (Table
6: Producer price indexes for commodity groupings and individual items).
(Base year 1982 = 100.)
Exh. X-0-0
XXXXXXX "X-0"
(For A319 Aircraft)
4. REVISION FORMULA
Pn = Pb [(0.60 HEn)/HEb + (0.30 MMPn)/MMPb + (0.10 EPn)/EPb]
Where
Pn = Revised Reference Price of a set of two (2) engines at
delivery of the Aircraft.
Pb = Reference Price at economic conditions November 1990.
HEn = HE SIC 3724 for the fourth month prior to the month of
delivery of the Aircraft.
HEb = HE SIC 3724 for November 1990 (= 15.20)
MMPn = MMP-Index for the fourth month prior to the month of
delivery of the Aircraft.
MMPb = MMP-Index for November 1990 (=123.3)
EPn = EP-Index for the fourth month prior to the month of delivery
of the Aircraft.
EPb = EP-Index for November 1990 (=97.4)
In determining the Revised Reference Price each quotient ((0.60 HEn)/HEb,
(0.30 MMPn)/MMPb, (0.10 EPn)/EPb) shall be calculated to the nearest ten
thousandth (4 decimals). If the next succeeding place is five (5) or more
the preceding decimal place shall be raised to the next higher figure.
After final computation, Pn shall be rounded to the next whole number (0.5
or more rounded to 1).
5. GENERAL PROVISIONS
5.1 The Revised Reference Price at delivery of the Aircraft shall be the final
price and will not be subject to further adjustments in the indexes.
5.2 If no final index value is available for any of the applicable months, the
published preliminary figures will be the basis on which the Revised
Reference Price will be computed.
Exh. I-2-2
EXHIBIT "I-2"
(For A319 Aircraft)
5.3 If the US Department of Labor substantially revises the methodology of
calculation of the indexes referred to in this Exhibit "I-2" or
discontinues any of these indexes, the Seller shall, in agreement with
International Aero Engines, apply a substitute for the revised or
discontinued index, such substitute index to lead in application to the
same adjustment result, insofar as possible, as would have been achieved
by continuing the use of the original index as it may have fluctuated had
it not been revised or discontinued. Appropriate revision of the formula
shall be made to accomplish this result.
5.4 Should the above escalation provisions become null and void by action of
the US Government, the Reference Price shall be adjusted to reflect
increases in the cost of labor, material and fuel which have occurred from
the period represented by the applicable Reference Price Indexes to the
fourth month prior to the scheduled delivery of the Aircraft.
5.5 The Revised Reference Price at delivery of the Aircraft in no event shall
be less than the Reference Price defined in Paragraph 1 of this Exhibit
"I-2."
Exh. I-2-3
[Letterhead of AIRBUS INDUSTRIE OF NORTH AMERICA, INC.]
December 21, 1995
Xx. Xxxxxx Xxxxxxxx
Chief Financial Officer
Midway Airlines Corporation
000 X. Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Dear Xx. Xxxxxxxx:
You will find enclosed signature copies of Amendment No. 1 to the A320
Purchase Agreement (including Appendix A) and Amendment No. 1 to the Financial
Matters Letter Agreement between Midway Airlines and AVSA, S.A.R.L. These
documents are being sent to you so that you will have a complete set of
documents that are not faxed copies. The enclosed documents are identical to the
documents executed by Midway today.
In addition, original AVSA signature pages are being sent to you under
separate cover for the above-referenced amendments and the Promissory Note
Security Agreement.
If you have any questions regarding the finalization of these documents,
do not hesitate to call me. Please note that as our offices will be closed next
week I will not be in after tomorrow.
Very truly yours,
/s/ Xxxxx Xxxxxxxxxx
Xxxxx Xxxxxxxxxx
Contracts Manager
cc: Xxxxxxxxx Xxxxxxxxx, Airbus Industrie of North America, Inc.
Xxx Xxxx, Airbus Industrie of North America, Inc.
Xxxxxxx Xxxxxx, AVSA, S.A.R.L.
Attachments
[Letterhead of AIRBUS INDUSTRIE OF NORTH AMERICA, INC.]
December 22, 1995
Xx. Xxxxxx Xxxxxxxx
Chief Financial Officer
Midway Airlines Corporation
000 X. Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Dear Xx. Xxxxxxxx:
As I indicated in my voice message to you today, it would appear that there was
a little mixup in the documents exchanged yesterday. Therefore, enclosed with
this letter is Midway Airlines' copy of Amendment No. 1 to the A320 Purchase
Agreement, as executed yesterday, December 21, 1995. In turn, please return to
my attention one executed copy of Amendment No. 1 to the Financial Matters
Letter Agreement.
In the first week of January, we will send you copies of both documents with
original AVSA signatures, for Midway records, and we will coordinate with Xxx
Xxxx the handling of the Promissory Note Security Agreement.
I trust you will pardon us for any confusion this mixup may have caused
Midway. Very truly yours,
/s/ Xxxxx Xxxxxxxxxx
Xxxxx Xxxxxxxxxx
Contracts Manager
cc: Xxxxxxxxx Xxxxxxxxx, Airbus Industrie of North America, Inc.
Xxx Xxxx, Airbus Industrie of North America, Inc.
Xxxxxxx Xxxxxx, AVSA, S.A.R.L.
Attachments
Amendment No. 1
TO THE A320 PURCHASE AGREEMENT
dated as of March 17, 1995
between
AVSA, S.A.R.L.
and
MIDWAY AIRLINES CORPORATION
This Amendment No. 1 (hereinafter referred to as the "Amendment") entered into
as of December 21,1995, by and between AVSA, S.A.R.L., a societe a
responsabilite limitee organized and existing under the laws of the Republic of
France, having its registered office located at 0, Xxxx Xxxxx Xxxxxxx Xxxxxxxx,
00000 Xxxxxxx XXXXXX, (hereinafter referred to as the "Seller"), and MIDWAY
AIRLINES CORPORATION, a body corporate, organized and existing under the laws of
the State of Delaware, United States of America, having its principal corporate
offices located at 000 Xxxx Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx, XX 00000
(hereinafter referred to as the "Buyer").
WITNESSETH:
WHEREAS, the Buyer and the Seller entered into a Purchase Agreement, dated
as of March 17,1995, relating to the sale by the Seller and the purchase by the
Buyer of certain Airbus Industrie A320-200 model aircraft (the "Aircraft"),
which, as previously amended by and supplemented with all Exhibits, Appendixes
and Letter Agreements attached thereto, is hereinafter called the "Agreement"
and a related letter agreement regarding "Financial Matters" which, as
previously amended, is hereinafter called the "Financial Matters Agreement";
WHEREAS, the Buyer has requested to make a certain Predelivery Payment
under the Agreement by way of a promissory note, and the Seller agrees to such
method of payment under the conditions set forth in this Amendment; and
WHEREAS, capitalized term's used herein and not otherwise defined in this
Amendment will have the meanings assigned to them in the Agreement, and the
terms "herein," "hereof," and hereunder and words of similar import refer to
this Amendment.
NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL COVENANTS, HEREINAFTER SET
FORTH, IT IS AS FOLLOWS.
1. PREDELIVERY PAYMENT PROMISSORY NOTE
1.1 As set forth in Subparagraph 6.2.2 of the Agreement, the third Predelivery
Payment is due no later than December 30, 1995, in respect of each of the
Firm Aircraft, and, as act forth in Subparagraph 6.2.3 of the Agreement,
the second Predelivery Payment is due no later than December 30, 1995, in
respect of each of the Option Aircraft (the "December 1995 Payments") The
total amount of the December 1995 Payments is [***] In answer to the
Buyer's prior request, the Seller hereby agrees to the Buyer' making the
December 1995 Payments by way of a promissory note made and dated
December 30, 1995, and maturing on April 30, 1996.
1.2 In consideration of the Seller's undertaking, as set forth above in
Subparagraph 1.1, the Buyer will do the following
(a) The Buyer will issue the Seller a secured negotiable note for the
total amount of the December 1995 Payments, which is [***] (the
"December 1995 Note"). The December 1995 Note will be dated as of
December 30, 1995, will mature and be payable in cash on April 30,
1996, and will be made in the form attached hereto as Appendix A.
All other terms and conditions applicable to "Notes" under Letter
Agreement No. 4 to the Agreement will also apply to the December
1995 Note except that the December 1995 Note will be noninterest
bearing. The December 1995 Note will be collateralized in the manner
set forth in the Promissory Note Security Agreement dated as of the
date hereof between the Buyer and the Seller (the "Promissory Note
Security Agreement").
(b) The Buyer will provide the Seller with satisfactory written
substantiation by January 31, 1996, of its having requested and
obtained from its other principal creditors (including, but not
limited to, American Airlines, Inc., and Fokker Aircraft U.S.A,
Inc.) payment deferrals generally similar in scope as the deferral
described in this Amendment.
(c) The December 1995 Note will become immediately due and payable on
February 1, 1996, in the event that any of the following conditions
have not been met by January 3l, 1996:
(x) The Seller or its designee has completed a satisfactory
physical inspection of the collateral delivered under the
Promissory Note Security Agreement.
(y) The Seller has obtained a perfected first priority security
interest in all the collateral described in the Promissory
Note Security Agreement.
(z) The Buyer has provided the Seller the written substantiation
described above in Subparagraph 1.2(b).
2. CONFIDENTIALITY
Subject to any legal or governmental requirements of disclosure, the
parties (which for this purpose shall include their employees, agents and
advisors) shall maintain the terms and conditions of this Amendment and
any reports or other data furnished hereunder strictly confidential.
Without limiting the generality of the foregoing, the Buyer and the Seller
shall use their best efforts to limit the disclosure of the contents of
this Agreement to the extent legally permissible in any filing required to
be made by the Buyer or the Seller, as the case may be, with any
governmental agency and shall make such applications as shall be necessary
to implement the foregoing. With respect to any public disclosure or
filing, each party agrees to submit to the other party a copy of the
proposed document to be filed or disclosed and will give the other party a
reasonable period of time in which to review the said document. The Buyer
and Seller shall consult with each other prior to the making of any public
disclosure or filing permitted hereunder, of this Amendment or the terms
and conditions thereof. The provisions of this Paragraph 2 shall survive
any termination of this Agreement.
3. EFFECT OF AMENDMENT
The Agreement will be deemed amended to the extent herein provided, and,
except as specifically amended hereby, will continue in full force and
effect in accordance with its original terms, except that if the Agreement
and this Agreement have specific provisions that are inconsistent, the
specific provisions contained in this Amendment will govern. It is
understood that this Amendment does not in any way constitute a waiver by
the Seller of any rights it has under the Agreement or under the Financial
Matters Agreement, provided, however, that the Seller agrees to waive
until April 30, 1996, its rights with respect to Insecurity Events
described in Subparagraph 21.2(a) and 21.2(b) of the Agreement.
Further, It is agreed that this Amendment is subject to the parties
executing as of the date hereof an amendment to the Financial Matters
Agreement and the Promissory Note Security Agreement.
4. INTERPRETATION AND LAW
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND THE PERFORMANCE
THEREOF SHALL BE DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK.
THE PARTIES HEREBY ALSO AGREE THAT THE UNITED NATIONS CONVENTION ON THE
INTERNATIONAL SALE OF GOODS SHALL NOT APPLY TO THIS TRANSACTION.
3
If the foregoing correctly sets forth our understanding. please execute
this Amendment in the space provided below, whereupon. as of the date first
above written, this Amendment will constitute part of the Agreement.
Agreed and accepted Yours sincerely,
MIDWAY AIRLINES AVSA, S.A.R.L.
CORPORATION
By: [Illegible] By: /s/ Xxxxxxxxxx Xxxxxx
-------------------------- ----------------------------
Its: President Its:____________________________
Xxxxxxxxxx XXXXXX
AVSA Chief Executive Officer
By: _____________________
Its: ____________________
4
If the foregoing correctly sets forth our understandihg,
please execute this Amendment in the space provided helow, whereupon, as of
the date firstahove written, this Amendment will constitute part of the
Agreement.
Agreed and accepted Yours sincerely,
MIDWAY AIRLINES AVSA, S.A.R.L.
CORPORATION
/s/ Xxxxxxxxxx Xxxxxx
By: ________________________ By: Xxxxxxxxxx Xxxxxx
Its: _______________________ Its: Chief Executive Officer
By: ________________________
Its: _______________________
December 21,1995 4
Appendix A
MIDWAY AIRLINES CORPORATION
Secured Registered Promissory Note
R. New York, New York
$______________________ ____________ - 19__
MIDWAY AIRLINES CORPORATION, a corporation duly organized and existing
under the laws of the State of Delaware, USA (the "Company"), for value
received, hereby promises to pay to the order of AVSA, S.A.R.L. ("AVSA") or
registered assigns on April 1996, (the "Payment Date"), the principal amount of
[***] in such coin or currency of the United States of America as at the time of
payment shall be legal tender for public and private debts, at the office of
AVSA at 0, xxxx-xxxxx Xxxxxxx Xxxxxxxx, 00000 Xxxxxxx, Xxxxxx (or at such other
office as the holder hereof shall designate to the Company in writing).
1. PAYMENT DATE; EXCHANGES; PREPAYMENTS
1.1 Transfer or Exchange
This Note is transferable by the holder hereof as herein provided. The
Company shall keep at its office or agency, maintained as provided in
Subparagraph 2.2, a register in which the Company shall provide for the
registration of this Note and for the registration of transfer of this
Note. The holder of this Note may, at its option and either in person or
by duly authorized attorney, surrender the same for registration of
transfer and receive in exchange herefor a Note, dated as of the transfer
of this Note, for the same aggregate unpaid principal amount as this Note
and registered in such name or names as may be designated by the holder
hereof. This Note, when presented or surrendered for registration of
transfer, shall be duly endorsed or shall be accompanied by a written
instrument of transfer duly executed by the holder of this Note or his
attorney duly authorized in writing. The Note so made and delivered in
exchange for this Note shall in all other respects be in the same form and
have the same terms as this Note and each such exchange or transfer shall
be made in such a manner that no gain or loss of principal shall result
therefrom. No transfer or exchange of this Note shall be valid unless made
in such manner at such office. The Company agrees that it will pay
shipping and insurance charges from and to the principal office of the
holder of this Note involved in any exchange by the holder of this Note.
Appendix A
1.2 Registered Holders; Payments
Prior to due presentment for registration of transfer of this Note, the
Company may deem and treat the registered holder hereof as the absolute
owner hereof for the purpose of receiving payment of or on account of the
principal of this Note and for the purposes of any notices, waivers or
consents thereunder, and payments of any Note shall be made only to or
upon the order in writing of the registered holder hereof. All payments
made hereunder shall be made in immediately available funds in United
States Dollars prior to 1:00 P.M., New York City time, by credit to Credit
Lyonnais, New York Branch, or to such other account as the holder hereof
shall advise the Company in writing. All payments due under this Note
shall be made in full without set-off, counterclaim, recoupment, or
defense and without deduction or withholding of any kind, provided,
however, the same shall not be deemed a waiver of any rights or remedies
of the Company against the Seller or any of its Affiliates. Consequently,
the Company shall assure that the sums received by the holder of this Note
hereunder shall be equal to the full amounts expressed to be due to the
holder hereunder, without deduction or withholding on account of and free
from any and all taxes, levies, imposts, dues or charges of whatever
nature imposed on the Company, except that if the Company is compelled by
law to make any such deduction or withholding the Company shall pay such
additional amounts as may be necessary in order that the net amount
received by the holder after such deduction or withholding shall equal the
amounts which would have been received in the absence of such deduction or
withholding.
1.3 Optional Prepayments
Upon notice given as provided in Subparagraph 1.5, the Company, at its
option, may prepay this Note, in whole and not in part, at anytime, at one
hundred percent (100%) of the outstanding principal amount thereof,
without premium. This Note shall be paid in whole, at one hundred percent
(100%) of the outstanding principal amount hereof, on the Payment Date.
1.4 Notice of Prepayment and Other Notices
The Company shall give written notice of optional prepayment of this Note
pursuant to Subparagraph 1.3 one (1) Business Day prior to the Payment
Date. Any notice of prepayment and all other notices to be given to any
holder of this Note shall be given by registered or certified mail to the
registered holder hereof at its address designated on the register
maintained by the Company on the date fixed for such notice of prepayment
or other notice. Upon notice of any optional prepayment pursuant to
Subparagraph 1.3, the Company covenants and agrees that it will prepay on
the date therein fixed for prepayment the entire outstanding principal
amount of this Note. The principal amount of this Note shall be due and
payable on the date specified in such notice.
2
Appendix A
2. COVENANTS
The Company covenants and agrees that so long as this Note shall be
outstanding:
2.1 To Pay Principal
The Company will punctually pay or cause to be paid the principal of this
Note according to the terms hereof at the place of payment hereinabove
specified.
2.2 Maintenance of Company Office
The Company will maintain an office or agency at 000 Xxxx Xxxxxx Xxxxxx,
Xxxxx 0000, Xxxxxx, Xxxxx Xxxxxxxx 00000, XXX or such other place in the
United States of America as the Company may designate in writing to the
holder hereof where notices, presentations and demands to or upon the
Company in respect of the Notes may be given or made.
2.3 To Keep Books
The Company will, and will cause each of its Material Subsidiaries to keep
proper books of record and account in which proper entries will be made of
its transactions in accordance with generally accepted accounting
principles.
2.4 Payment of Taxes; Corporate Existence; Maintenance of Properties
The Company will, and will cause each of its Material Subsidiaries to,
(a) pay and discharge promptly or cause to be paid and discharged
promptly (i) all taxes, assessments and governmental charges or
levies imposed upon it or upon its income or profits or upon any of
its property, real, personal or mixed, or upon any part thereof,
before the same shall become in default, unless the same is being
contested in good faith, (ii) all lawful claims for labor, materials
and supplies which if unpaid, might by law become a lien or charge
upon its property, unless the same is being contested in good faith,
and (iii) all obligations to the Pension Benefit Guaranty
Corporation (or any successor thereto under the Employee Retirement
Income Security Act of 1974, as amended ("ERISA")) ("PBGC").
(b do or cause to be done all things necessary to preserve and keep in
full force and effect its existence, materially advantageous
rights, licenses, privileges, permits and
3
Appendix A
franchises and comply in all material respects with all laws and
regulations applicable to it and its business; and
(c) maintain and keep, or cause to be maintained and kept, its
properties, including the Collateral as defined in the Promissory
Note Security Agreement, in good repair, working order and condition
and from time to time make or cause to be made all needful and
proper repairs, renewals, replacements and improvements so that the
business carried on in connection therewith may be properly
conducted at all times.
2.5 To Insure
The Company will, and will cause each of its Material Subsidiaries to,
(a) keep adequately insured, by financially sound and reputable
insurers, all property of a character usually insured by similar
corporations engaged in the same or a similar business similarly
situated against loss or damage of the kinds customarily insured
against by such corporations;
(b) carry, with financially sound and reputable insurers, such other
insurance (including, without limitation, liability insurance) and
in such amounts as is usually carried by corporations engaged in the
same or a similar business similarly situated; and
(c) maintain all such worker's compensation or similar insurance as may
be required under the laws of any state or jurisdiction in
which it may be engaged in business.
All insurance herein provided for shall be effected under a valid
and enforceable policy or policies.
2.6 Sale of Assets
The Company will not, and will not permit any unconsolidated subsidiary
to, sell, lease, transfer or otherwise dispose of all or substantially all
of its assets to any Person other than the Company or any Material
Subsidiary.
2.7 Merger or Consolidation
The Company will not, and will not permit any Material Subsidiary to,
consolidate with or merge into any Person or permit any Person to merge
into it except that
(a) a Material Subsidiary may merge into the Company if the Company is
the surviving corporation or may merge or consolidate with any other
Material Subsidiary or any other corporation if a Material
Subsidiary is the surviving corporation; and
4
Appendix A
(b) the Company may merge or consolidate with any other Person if (i)
the surviving or successor corporation is a corporation incorporated
or organized under the laws of the United States of America, one of
the states thereof or the District of Columbia, (ii) the surviving
or successor corporation (if not the Company) shall expressly assume
in writing (by an instrument a copy of which shall be mailed by
registered mail to the holder of this Note) the due and punctual
payment of the principal of this Note, according to its tenor, and
the due and punctual performance and observance of all of the terms,
covenants, agreements and conditions of this Note to be performed or
observed by the Company to the same extent as if such surviving or
successor corporation had originally executed this Note in the place
of the Company, and had been the original maker of this Note, (iii)
such Person is legally able to perform the Company's obligations
hereunder and has a Consolidated net worth, as determined in
accordance with generally accepted accounting principles
consistently applied, not less than the Consolidated net worth of
the Company (similarly determined) at the time of such merger or
consolidation, and (iv) immediately after such consolidation or
merger, no Event of Default or Insecurity Event or event which, with
notice or lapse of time or both, would become an Event of Default or
Insecurity Event, shall have occurred and be continuing under this
Note.
2.8 Information and Reports to be furnished by the Company
The Company will furnish to the holder of this Note:
(a) Reports
(i) Quarterly Reports. Within forty-five (45) days after the end
of each of the first three quarterly fiscal periods in each
fiscal year of the Buyer, a Consolidated balance sheet of the
Buyer and its Consolidated subsidiaries prepared as of the
close of such period, together with the related statements of
income and surplus; and
(ii) Annual Statements. Within ninety (90) days after the end of
each fiscal year of the Buyer, an audited Consolidated balance
sheet of the Buyer and its Consolidated subsidiaries as at the
end of such year (when they become available), and the related
statement of income and surplus.
(iii) Monthly Reports Within twenty (20) days after the end of each
month in each fiscal year of the Buyer, a Consolidated balance
sheet of the Buyer and its Consolidated subsidiaries prepared
as of the close of such month, together with the related
statements of income and surplus, statement of sources and
uses of cash, as well as such other historical information
5
Appendix A
relating to such period that the Buyer maintains. Such
information will include, but not be limited to, revenue per
available seat mile, cost per available seat mile, segment
profitability information, the number of total passengers, and
load factor and average fare information.
"Consolidated" means, as applied to any financial or accounting term
or amount, such term or amount determined on a consolidated basis in
accordance with generally accepted accounting principles.
(b) Publicly Filed Reports to Stockholders and the SEC
The Company will furnish the Seller with all publicly filed reports
to stockholders or the United States Securities and Exchange
Commission, if any.
(c) Notice of Default
Immediately upon the Company's becoming aware of the existence of
any default in its performance or observance of any covenant,
agreement or condition contained in this Note or in the Promissory
Note Security Agreement, a written notice specifying the nature and
status thereof and what action the Company is taking with respect
thereto.
(d) Notice of Acceleration
Immediately upon the Company's becoming aware that the holder of any
bond, debenture, promissory note (including any note other than this
Note issued by the Company in favor of Payee or issued pursuant to
Amendment No. 1 to the Agreement ("Other Notes")) or any similar
evidence of indebtedness of the Company or any Material Subsidiary
has demanded payment, given notice or taken any other action with
respect to a claimed Event of Default under any Other Note or
claimed default in respect of or under such bond, debenture or
promissory note, a written notice specifying the demand made, notice
given or action taken by such holder and the nature and status of
the claimed Event of Default or default and what action the Company
is taking with respect thereto.
(e) ERISA
As promptly as practicable (but in any event not later than fifteen
(1) days) after the Company or Related Person (i) engages in any
"prohibited transaction" (as defined in Section 406 of ERISA or
section 497 of the Internal Revenue Code of 1986, as amended (the
"Code")) with any "employee benefit plan" (as defined in
6
Appendix A
Section 3 (3) of ERISA ("Plan")), (ii) files a notice of intent
under Section 4041 of ERISA with the PBGC to terminate any such
Plan, (iii) receives a notice from the PBGC to appoint a trustee to
administer any such Plan, (iv) knows or has reason to know that
termination proceedings with respect to any such Plan have
commenced, (v) knows or has reason to know that any "reportable
event" (within the meaning of Section 4043(b) of ERISA) or other
condition with respect to any such Plan has occurred which will
result in a liability to the PBGC, (vi) fails to make a quarterly
installment contribution to any such Plan with respect to which a
lien may be imposed under section 412(n) of the Code, (vii) knows or
has reason to know that any "accumulated funding deficiency" (as
defined in Section 302 of ERISA), whether or not waived, shall exist
with respect to any such Plan, (viii) withdraws in a "complete
withdrawal" or a "partial withdrawal" from a "multiemployer plan"
pursuant to subtitle E of Title IV of ERISA or knows or has reason
to know that it will or is likely to incur a material liability in
connection with any reorganization or insolvency of such a Plan, or
(ix) is involved in a situation referred to in Section 4204 of
ERISA, a statement of an officer of the Company setting forth the
details with respect to the events resulting in such notice of
intent to terminate or to appoint a trustee, or with respect to such
termination proceedings, reportable event, other condition,
withdrawal, or other situation, as the case may be, and the action
which the Company or Related Person proposes to take with respect
thereto, together with a copy of any such notice of intent to
terminate or to appoint a trustee, a copy of any notice or other
papers received by the Company or Related Person with respect to
such termination proceedings, a copy of any notice of any such
reportable event or other condition filed by the Company or a
Related Person with PBGC, a copy of any notice received by the
Company or a Related Person pursuant to Section 4219 of ERISA, or a
copy of the papers pertaining to the situation described in Section
4204 of ERISA, as the case may be.
(f) Miscellaneous Information
From time to time upon request, when the Payee is not the holder of
the Note, such nonproprietary or nonconfidential information
regarding the business, affairs and condition of the Company and of
any Material Subsidiary and its properties in such detail as may
reasonably be requested. The Company covenants and agrees that any
authorized officer or representative of the holder of this Note
shall have the right, at such holder's expense and subject to
applicable governmental
7
Appendix A
regulations, to visit and inspect any of the properties of the
Company and of any Material Subsidiary, to examine its books of
account and to discuss its affairs, finances and accounts with, and
be advised as to the same by, its officers or its independent
certified public accountants all at such reasonable times and
intervals as may be reasonably requested upon not less that five (5)
days' notice.
(g) The Note holder agrees to keep strictly confidential the information
described above in Subparagraph 2.8(f) and to not disclose the same
to any other Person or entity.
2.9 Taxes, etc.
The Company will pay or cause to be paid all United States stamp taxes
(including interest and penalties), if any, solely attributable to the
execution and delivery of this Note, or of any amendment of, or waiver or
consent under or with respect to, this Note, and will indemnify and save
the holder hereof harmless from any loss or damage of any kind whatsoever
resulting from or arising out of the non-payment or delay in the payment
of such taxes.
2.10 Transactions with Affiliates
The Company will not permit any of its Material Subsidiaries to, sell or
transfer any assets (including capital stock of any Subsidiary) to, or
purchase or acquire any assets of, or otherwise engage in any material
transaction (including any merger) with, or permit any Affiliate to sell
or transfer assets (including capital stock of any Subsidiary) to, or
purchase or acquire any assets of, or otherwise engage in any other
material transaction (including any merger) with, any other Affiliate
except for (i) transactions expressly permitted by the Agreement, (ii)
transactions (a) between the Company and one or more Wholly-Owned
Subsidiaries of the Company, provided that in the case of any
consolidation or merger in which the Company is not the surviving
corporation, such transaction shall be permitted pursuant to Subparagraph
2.7 hereof or (b) between Wholly-Owned Subsidiaries of the Company, (iii)
transactions in the ordinary course of business and upon fair and
reasonable terms no less favorable than the Company or any of its
Subsidiaries could obtain or could become entitled to in an arm's-length
transaction with a Person which was not an Affiliate and then, in any
case, only if no default or Event of Default shall have occurred and be
continuing, or (iv) transactions pursuant to a capital investment by an
Affiliate into the Company on fair and reasonable terms. None of the
Company and its Subsidiaries shall be permitted to amend any material
agreement with an Affiliate if a default or Event of Default has occurred
and is continuing.
8
Appendix A
2.11 Certain Definitions
For purposes of this Note,
(a) "Affiliate" means with respect to any person or entity, any other
person or entity directly or indirectly controlling, controlled by
or under common control with such person or entity.
(b) "Agreement" means the Airbus A320 Purchase Agreement, dated as of
March 17, 1995, between AVSA, S.A.R.L. and the Company.
(c) "Business Day" means any day which is not a Saturday or a Sunday and
which is neither a legal holiday nor a day on which banking
institutions are authorized or required by law or regulation to
close in Xxx Xxxx xx Xxx Xxxx, Xxxxxx, Xxxxxxx or Toulouse, France.
(d) "Consolidated" means, as applied to any financial or accounting term
or amount, such term or amount determined on a consolidated basis in
accordance with generally accepted accounting principles;
(e) "Governmental Authority" means any nation or government, any state
or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government;
(f) "Letter Agreement" means the Financial Matters Letter Agreement,
dated March 17, 1995.
(g) "Material Subsidiary" of any Person means, at any time of
determination, each Subsidiary (or a group of Subsidiaries that
would constitute a Material Subsidiary if consolidated and which are
engaged in the same or related lines of business) of such Person now
existing or hereafter acquired or formed by such Person which (x)
accounted for more than 10% of the Consolidated revenues of such
Person and its Subsidiaries during the twelve-month period ending on
the date of the most recent Consolidated balance sheet of such
Person delivered to the holder of this Note pursuant to Subparagraph
2.8, or (y) was the owner of more than 10% of the Consolidated
assets of such Person and its Subsidiaries at the date of the most
recent Consolidated balance sheet of such Person delivered to the
holders of this Note pursuant to Subparagraph 2.8;
(h) "Person" means any natural person, corporation, partnership, joint
venture, joint-stock company, trust, unincorporated organization,
firm, association, government
9
Appendix A
(or political subdivision thereof), governmental agency, authority
or instrumentality, or any other entity, whether acting in an
individual, fiduciary or other capacity;
(i) "Promissory Note Security Agreement" means the Promissory Note
Security Agreement, dated as of December 21, 1995.
(j) "Related Person" means any corporation or any trade or business
(whether or not incorporated) which, together with the Company, is a
member of a controlled group of corporations within the meaning of
Section 163 (a) of the Code, determined without regard to Section
163(a)(4) and (e)(3)(C) of the Code, or is under common control
with the Company as described in Section 414(c) of the Code;
(k) "Requirement of Law" means as to any Person, the certificate of
incorporation and by-laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation or
determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or
any of its property or to which such Person or any of its property
is subject;
(l) "Subsidiary" of any Person means any corporation or other entity of
which such Person, directly or indirectly, shall at the time (a) own
shares of any class or classes with power for the election of at
least a majority of the members of the board of directors (or the
governing body) of such corporation or other entity other than
shares or other interest having such power only by reason of the
happening of a contingency or (b) otherwise have the legal right to
elect such a majority; and
(m) "Wholly-Owned Subsidiary" means, with respect to any Person, any
Subsidiary of such Person all of the outstanding shares of capital
stock of which (other than directors' qualifying shares) are owned
directly by such Person or a Wholly-Owned Subsidiary of such Person.
3. AMENDMENT AND WAIVER
Any term, covenant, agreement or condition of this Note may, with the
consent of the Company, be amended or compliance therewith may be waived
(either generally or in a particular instance and either retroactively or
prospectively), by one or more written instrument(s) signed by the holder
of this Note.
10
Appendix A
4. YIELD PROTECTION AND ILLEGALITY
4.1 Illegality
In the event that it becomes unlawful for the holder of this Note to
maintain the loan evidenced hereby on a LIBOR basis, then the holder shall
promptly notify the Company thereof.
4.2 Compensation
The Company shall pay to the holder of this Note, upon the request of the
holder, such amount or amounts as shall be sufficient (in the opinion of
the holder) to compensate it for any actual out-of-pocket loss, cost or
expense incurred by it as a result of any payment or prepayment of this
Note on a date other than the Payment Date, or any failure by the Company
to prepay this Note on the date for such prepayment specified herein.
5. DEFAULTS AND REMEDIES
5.1 Events of Default
This Note shall become and be due and payable upon demand of the holder
hereof, without presentation, protest, or further demand or notice of any
kind (all of which are hereby expressly waived by the Company), if any one
or more of the following events (herein called "Events of Default") shall
occur for any reason whatsoever (and whether such occurrence shall be
voluntary or involuntary or come about or be effected by operation of law
or pursuant to or in compliance with any judgment, decree or order of any
court or any order, rule or regulation of any administrative or
governmental body) and be continuing at the time of such demand:
(a) if default shall be made in the due and punctual payment of the
principal of this Note or of any Other Note when and as the same
shall become due and payable, whether at maturity or at a date fixed
for prepayment or by acceleration or otherwise;
(b) if default shall be made in the due and punctual payment of any
installment of interest on any Other Note, when and as such interest
installment shall become due and payable, and such default shall
have continued for a period of five (5) days;
(c) if default shall be made in the performance or observance of any
other of the covenants, agreements or conditions contained in this
Note, the Promissory Note Security Agreement or the Letter
Agreement, and such default shall have
11
Appendix A
continued for a period of thirty (30) days after written notice
thereof to the Company by the holder of this Note;
(d) if an event or condition occurs or exists, with respect to any Plan
or otherwise, concerning which the Company is under an obligation to
furnish a report to the holder hereof in accordance with
Subparagraph 2.8(e) hereof and as a result of such event or
condition, together with all other such events or conditions, the
Company or any Related Person has incurred or in the reasonable
opinion of the holder hereof is likely to incur a liability to a
Plan or the PBGC (or any combination of the foregoing) which is
material in relation to the financial position of the Company;
(e) if:
(1) the Company or any other party shall commence any case,
proceeding or other action with respect to the Company in any
jurisdiction relating to bankruptcy, insolvency,
reorganization, relief from debtors, an arrangement,
winding-up, liquidation, dissolution or other relief with
respect to its debts and such case, proceeding or other action
remains unstayed, undismissed or undischarged for sixty (60)
days;
(2) an action is commenced seeking the appointment of a receiver,
trustee, custodian or other similar official for the Company
for all or substantially all of its assets, or the Company
makes a general assignment for the benefit of its creditors;
(3) an action is commenced against the Company seeking issuance of
a warrant of attachment, execution, distraint or similar
process against all or any substantial part of its assets;
(4) the Company becomes insolvent or fails generally to pay its
debts as they become due; or
(5) there is a liquidation, winding up or analogous event with
respect to the Company.
5.2 In addition to the provisions of Subparagraph 5.1(a) through (d), only if
AVSA or an Affiliate of AVSA is the holder of this Note, the occurrence of
any Insecurity Event or Termination Event under Clause 21 of the Agreement
shall also constitute Events of Default for the purpose of this Amendment
to the Agreement.
12
Appendix A
5.3 Costs and Expenses
The Company covenants that if default be made in any payment of principal
on this Note, it will pay to the holder hereof, to the extent permitted
under applicable law, such further amount (in addition to any amounts due
under the Notes) as shall be sufficient to cover the cost and expense of
collection, including reasonable compensation to the attorneys and counsel
of the holder hereof for all services rendered in that connection.
6. COVENANTS BIND SUCCESSORS AND ASSIGNS
All the covenants, stipulations, promises and agreements in this Note
contained by or on behalf of the Company shall bind its successors and
assigns, whether so expressed or not.
7. GOVERNING LAW
THIS NOTE SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS WHICH ARE EXECUTED AND FULLY TO BE PERFORMED IN
THAT STATE. The Company hereby irrevocably and unconditionally submits to
the jurisdiction of the federal and state courts in New York, New York in
respect of any action or proceeding arising out of or in connection with
this Note. Final judgement against the Company in any such action or
proceeding shall be conclusive, and may be enforced in other jurisdictions
by suit on the judgment, a certified or true copy of which shall be
conclusive evidence of the fact and of the amount of indebtedness or
liability of the Company therein described; provided, however, that at all
times the holder of this Note may at its option bring suit, or institute
other judicial proceedings against the Company, in any court in any place
where the Company or any of its assets may be found.
8. HEADINGS
The headings of the Paragraphs and Subparagraphs of this Note are inserted
for convenience only and do not constitute a part of this Note.
9. LOST, ETC. NOTES
Upon receipt by the Company of evidence satisfactory to it of the loss,
theft, destruction or mutilation of this Note, and (in case of loss, theft
or destruction) or indemnity satisfactory to it, and upon surrender and
cancellation of this Note, if mutilated, the Company, at its expense, will
make and deliver a new Note of like tenor in lieu of this Note. Any Note
made and delivered in accordance with the provisions of this Subparagraph
9 shall be dated as of the date which such new Note is made and delivered.
13
Appendix A
The unsecured indemnity agreement of the holder of this Note shall
constitute indemnity satisfactory to the Company for the purposes of this
Subparagraph 9.
10. MISCELLANEOUS
(a) In the event any day for payment of an amount hereunder is not a
Business Day, such payment shall be due and payable on the
immediately preceding Business Day.
(b) All amounts payable under this Note shall be payable without
presentment or demand for payment, protest or further notice or
demand of any kind, all of which are expressly waived by the
Company, except to the extent expressly provided in this Note.
IN WITNESS WHEREOF, MIDWAY AIRLINES CORPORATION has caused this Note to be
signed in its corporate name by its officer thereunto duly authorized, and to be
dated as of the day and year first above written.
MIDWAY AIRLINES CORPORATION
By: ____________________________
Its: President
14
Amendment No. 2
TO THE A320 PURCHASE AGREEMENT
dated as of March 17, 1995
between
AVSA, S.A.R.L.,
and
MIDWAY AIRLINES CORPORATION
This Amendment No. 2 (hereinafter referred to as the "Amendment") entered into
as of January 31, 1996, by and between AVSA, S.A.R.L., a societe a
responsabilite limitee organized and existing under the laws of the Republic of
France, having its registered office located at 0, Xxxx Xxxxx Xxxxxxx Xxxxxxxx,
00000 Xxxxxxx, XXXXXX (hereinafter referred to as the "Seller"), and MIDWAY
AIRLINES CORPORATION, a body corporate, organized and existing under the laws of
the State of Delaware, United States of America, having its principal corporate
offices located at 000 Xxxx Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx, XX 00000
(hereinafter referred to as the "Buyer").
WITNESSETH:
WHEREAS, the Buyer and the Seller entered into a Purchase Agreement, dated
as of March 17, 1995, relating to the sale by the Seller and the purchase by the
Buyer of certain Airbus Industrie A320-200 model aircraft (the "Aircraft"),
which, as previously amended by Amendment No. 1 dated as of December 21, 1995,
and supplemented with all Exhibits, Appendixes and Letter Agreements attached
thereto, is hereinafter called the "Agreement";
WHEREAS, the Seller and the Buyer agree to amend the Agreement,
specifically Amendment No. 1 thereto, as set out below in this Amendment; and
WHEREAS, capitalized terms used herein and not otherwise defined in this
Amendment will have the meanings assigned to them in the Agreement, and the
terms "herein," "hereof," and hereunder and words of similar import refer to
this Amendment.
NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL COVENANTS HEREINAFTER SET
FORTH, IT IS AGREED AS FOLLOWS:
1. Subparagraph I.2(b) of Amendment No. 1 is deleted in its entirety and
replaced as follows:
QUOTE (b) The Buyer will provide the Seller with satisfactory written
substantiation by February 15, 1996, of its having requested
and obtained from its other principal creditors (including,
but not limited to, American Airlines, Inc., and Fokker
Aircraft U.S.A., Inc.) payment deferrals generally similar in
scope as the deferral described in this Amendment.
UNQUOTE
2. The first three lines of Subparagraph 1.2(c) of Amendment No. 1 are
deleted in their entirety and replaced as follows:
QUOTE (c) The December 1995 Note will become immediately due and
payable on February 16, 1996, in the event that any of the
following conditions have not been met by February 15, 1996:
UNQUOTE
3. CONFIDENTIALITY
Subject to any legal or governmental requirements of disclosure, the
parties (which for this purpose shall include their employees, agents and
advisors) shall maintain the terms and conditions of this Amendment and
any reports or other data furnished hereunder strictly confidential.
Without limiting the generality of the foregoing, the Buyer and the Seller
shall use their best efforts to limit the disclosure of the contents of
this Amendment to the extent legally permissible in any filing required to
be made by the Buyer or the Seller, as the case may be, with any
governmental agency and shall make such applications as shall be necessary
to implement the foregoing. With respect to any public disclosure or
filing, each party agrees to submit to the other party a copy of the
proposed document to be filed or disclosed and will give the other party a
reasonable period of time in which to review the said document. The Buyer
and Seller shall consult with each other prior to the making of any public
disclosure or filing, permitted hereunder, of this Amendment or the terms
and conditions thereof. The provisions of this Paragraph 3 shall survive
any termination of this Amendment.
4. EFFECT OF AMENDMENT
The Agreement will be deemed amended to the extent herein provided, and,
except as specifically amended hereby, will continue in full force and
effect in accordance with its original terms, except that if the Agreement
and this Amendment have specific provisions that are inconsistent, the
specific provisions contained in this Amendment will govern.
5. INTERPRETATION AND LAW
THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED AND THE PERFORMANCE
THEREOF SHALL BE DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK.
THE PARTIES HEREBY ALSO AGREE THAT THE UNITED NATIONS CONVENTION ON THE
INTERNATIONAL SALE OF GOODS SHALL NOT APPLY TO THIS TRANSACTION.
2
If the foregoing correctly sets forth our understanding, please execute
this Amendment in the space provided below, whereupon, as of the date first
above written, this Amendment will Constitute part of the Agreement.
Agreed and accepted Yours sincerely,
MIDWAY AIRLINES AVSA, S.A.R.L.
CORPORATION
/s/ Xxxxxxxxxx Xxxxxx
By: X X Xxxxxx By: Xxxxxxxxxx Xxxxxx
Its: __________________________ Its: Chief Executive Officer
XXXXXXXX X. XXXXXX
SENIOR VICE PRESIDENT
GENERAL COUNSEL
By: _________________
Its: ________________
3
Amendment Xx. 0
XX XXX X000 XXXXXXXX AGREEMENT
dated as of March 17, 1995
between
AVSA, S.A.R.L.,
and
MIDWAY AIRLINES CORPORATION
This Amendment No. 3 (hereinafter referred to as the "Amendment") entered into
as of February 28, 1996, by and between AVSA, S.A.R.L., a societe a
responsabilite limitee organized and existing under the laws of the Republic of
France, having its registered office located at 0, Xxxx Xxxxx Xxxxxxx Xxxxxxxx,
00000 Xxxxxxx, XXXXXX (hereinafter referred to as the "Seller"), and MIDWAY
AIRLINES CORPORATION, a body corporate, organized and existing under the laws of
the State of Delaware, United States of America, having its principal corporate
offices located at 000 Xxxx Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx, XX 00000
(hereinafter referred to as the "Buyer").
WITNESSETH:
WHEREAS, the Buyer and the Seller entered into a Purchase Agreement, dated
as of March 17, 1995, relating to the sale by the Seller and the purchase by the
Buyer of certain Airbus Industrie A320-200 model aircraft (the "Aircraft"),
which, as previously amended by Amendment No. 1 dated as of December 21, 1995,
and Amendment No. 2 dated as of January 31, 1996, and supplemented with all
Exhibits, Appendixes and Letter Agreements attached thereto, is hereinafter
called the "Agreement";
WHEREAS, the Seller and the Buyer agree to amend the Agreement,
specifically Amendment No. 1 and Amendment No. 2 thereto, as set out below in
this Amendment; and
WHEREAS, capitalized terms used herein and not otherwise defined in this
Amendment will have the meanings assigned to them in the Agreement, and the
terms "herein," "hereof," and hereunder and words of similar import refer to
this Amendment.
NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL COVENANTS HEREINAFTER SET
FORTH, IT IS AGREED AS FOLLOWS:
1. Subparagraph I.2(b) of Amendment No. 1, as amended by Amendment No. 2, is
deleted in its entirety and replaced as follows:
QUOTE (b) The Buyer will provide the Seller with satisfactory
written substantiation by February 29, 1996, of its
having requested and obtained from its other principal
creditors (including, but not limited to, American
Airlines, Inc., and Fokker Aircraft U.S.A., Inc.)
payment deferrals generally similar in scope as the
deferral described in this Amendment. UNQUOTE
2. The first three lines of Subparagraph 1.2(c) of Amendment No. 1, as
amended by Amendment No. 2, are deleted in their entirety and replaced as
follows:
QUOTE (c) The December 1995 Note will become immediately due and
payable on March 1, 1996, in the event that any of the
following conditions have not been met by
February 29, 1996: UNQUOTE
3. CONFIDENTIALITY
Subject to any legal or governmental requirements of disclosure, the
parties (which for this purpose shall include their employees, agents and
advisors) shall maintain the terms and conditions of this Amendment and
any reports or other data furnished hereunder strictly confidential.
Without limiting the generality of the foregoing, the Buyer and the Seller
shall use their best efforts to limit the disclosure of the contents of
this Amendment to the extent legally permissible in any filing required to
be made by the Buyer or the Seller, as the case may be, with any
governmental agency and shall make such applications as shall be necessary
to implement the foregoing. With respect to any public disclosure or
filing, each party agrees to submit to the other party a copy of the
proposed document to be filed or disclosed and will give the other party a
reasonable period of time in which to review the said document. The Buyer
and Seller shall consult with each other prior to the making of any public
disclosure or filing, permitted hereunder, of this Amendment or the terms
and conditions thereof. The provisions of this Paragraph 3 shall survive
any termination of this Amendment.
2
4. EFFECT OF AMENDMENT
The Agreement will be deemed amended to the extent herein provided, and,
except as specifically amended hereby, will continue in full force and
effect in accordance with its original terms, except that if the Agreement
and this Amendment have specific provisions that are inconsistent, the
specific provisions contained in this Amendment will govern.
5. INTERPRETATION AND LAW
THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED AND THE PERFORMANCE
THEREOF SHALL BE DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK.
THE PARTIES HEREBY ALSO AGREE THAT THE UNITED NATIONS CONVENTION ON THE
INTERNATIONAL SALE OF GOODS SHALL NOT APPLY TO THIS TRANSACTION.
If the foregoing correctly sets forth our understanding, please execute
this Amendment in the space provided below, whereupon, as of the date first
above written, this Amendment will constitute part of the Agreement.
Agreed and accepted Yours sincerely,
MIDWAY AIRLINES AVSA, S.A.R.L.
CORPORATION
By: /s/ X X Xxxxxx By: [Illegible]
Its: XXXXXXXX X. XXXXXX Its: ______________
SENIOR VICE PRESIDENT
GENERAL COUNSEL
3
[Letterhead of AIRBUS INDUSTRIE OF NORTH AMERICA, INC.]
February 27, 1996
VIA FEDERAL EXPRESS
Xx. Xxxxxxxx X. Xxxxxx
Senior Vice President and
General Counsel
Midway Airlines Corporation
000 X. Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, XX 00000
Dear Xxx,
Please find enclosed herewith two (2) originals of Amendment No.3 to the
A320 Purchase Agreement dated as of March 17, 1995, between AVSA, S.A.R.L. and
Midway Airlines Corporation. This Amendment extends the due date for completion
of payment deferral programs until February 29, 1996. I would be grateful if you
could arrange for both originals to be signed on behalf of Midway and return one
original to my attention.
Thank you for your cooperation in this matter.
Yours sincerely,
/s/ Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx
Enclosures
cc: C. Sabardine, AINA/C
X. X. Xxxxxxxxxx, AINA/C
X. Xxxxxx, AVSA
Amendment No. 4
TO THE A320 PURCHASE AGREEMENT
dated as of March 17, 1995
between
AVSA, S.A.R.L.,
and
MIDWAY AIRLINES CORPORATION
This Amendment No. 4 (hereinafter referred to as the "Amendment") entered into
as of March 27, 1996, by and between AVSA, S.A.R.L., a societe a responsabilite
limitee organized and existing under the laws of the Republic of France, having
its registered office located at 0, xxxx-xxxxx Xxxxxxx Xxxxxxxx, 00000 Xxxxxxx,
XXXXXX (hereinafter referred to as the "Seller"), and MIDWAY AIRLINES
CORPORATION, a body corporate, organized and existing under the laws of the
State of Delaware, United States of America, having its principal corporate
offices located at 000 Xxxx Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx, XX 00000
(hereinafter referred to as the "Buyer").
WITNESSETH:
WHEREAS, the Buyer and the Seller entered into (i) a Purchase Agreement,
dated as of March 17, 1995, relating to the sale by the Seller and the purchase
by the Buyer of certain Airbus Industrie A320-200 model aircraft (the
"Aircraft"), which, as previously amended by Amendment No. 1 dated as of
December 21, 1995, Amendment No. 2 dated as of January 31, 1996, and Amendment
No. 3 dated as of February 28, 1996, and supplemented with all Exhibits,
Appendixes and Letter Agreements attached thereto, is hereinafter called the
"Agreement," (ii) a related letter agreement regarding "Financial Matters,"
which, as previously amended by Amendment No. 1 dated as of December 21, 1995,
is hereinafter called the "Financial Matters Agreement," (iii) a related
Security Agreement, dated as of March 17,1995, hereinafter referred to as the
"Security Agreement," and (iv) a Promissory Note Security Agreement, dated as of
December 21,1995; and
WHEREAS, the Buyer has asked the Seller and the Seller agrees to
reschedule the maturity date of the December 1995 Note (made pursuant to
Amendment No. 1 of the Agreement), under the conditions set forth in this
Amendment;
WHEREAS, the Buyer has asked the Seller and the Seller agrees to
reschedule additional Predelivery Payments due under the Agreement on June 30,
1996, under the conditions set forth in this Amendment; and
WHEREAS, capitalized terms used herein and not otherwise defined in this
Amendment will have the meanings assigned to them in the Agreement, and the
terms "herein," "hereof," and hereunder and words of similar import refer to
this Amendment.
NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL COVENANTS HEREINAFTER SET
FORTH, IT IS AGREED AS FOLLOWS:
1. DECEMBER 1995 PREDELIVERY PAYMENTS
1.1 Pursuant to Paragraph 1 of Amendment No. 1 of the Agreement, the Buyer
issued to the Seller the December 1995 Note, which matures on April 30,
1996. The Seller hereby agrees, at the Buyer's request, to extend such
maturity date to October 1, 1996.
1.2 In consideration of the agreement above in Subparagraph 1.1, on execution
of this Amendment, the Seller will cancel and return the December 1995
Note to the Buyer, and the Buyer will issue to the Seller a new promissory
note (the "Replacement December 1995 Note"). The Replacement December 1995
Note will (i) be a secured, negotiable note for the same principal amount
as the December 1995 Note [***], (ii) be dated as of December 21, 1995,
(iii) mature and be payable to the Seller in cash on October 1, 1996, and
(iv) be made in the form attached hereto as Appendix A.
1.3 All other terms and conditions applicable to "Notes" under Letter
Agreement No. 4 of the Agreement will also apply to the Replacement
December 1995 Note, except that the Replacement December 1995 Note will
not bear interest. The Replacement December 1995 Note will be
collateralized in the manner set forth in an amendment to the Promissory
Note Security Agreement dated as of the date hereof.
2. JUNE 1996 PREDELIVERY PAYMENTS
2.1 As set forth in Subclause 6.2.2 of the Agreement, the fourth Predelivery
Payment is due no later than June 30, 1996, in respect of each of the Firm
Aircraft, and, as set forth in Subclause 6.2.3 of the Agreement, the third
Predelivery Payment is due no later than June 30, 1996, in respect of each
of the Option Aircraft (the "June 1996 Payments"). The total amount of
the June 1996 Payments is [***]. In answer to the Buyer's request, the
Seller hereby agrees to the Buyer's making the June 1996 Payment by way of
a promissory note made and dated as of the date hereof, and maturing on
October 1, 1996.
2.2 In consideration of the Seller's agreement set forth above in this
Subparagraph 2.1, the Buyer will issue the Seller a note for the total
amount of the June 1996 Payments (the
2
"Rescheduled Payments Note"). The Rescheduled Payments Note will (i) be
secured and negotiable, (ii) be dated as of the date hereof, (iii) mature
and be payable in cash on October 1, 1996, and (iv) be made in the form
attached hereto as Appendix B.
2.3 All other terms and conditions applicable to "Notes" under Letter
Agreement No. 4 to the Agreement will also apply to the Rescheduled
Payments Note, except that the Rescheduled Payments Note will not bear
interest. The Rescheduled Payments Note will be collateralized in the
manner set forth in an amendment to the Promissory Note Security Agreement
dated as of the date hereof.
3. FURTHER AGREEMENT
3.1 Subparagraph 1.2(b) of Amendment No. 1, as amended by Amendment No. 2
and as further amended by Amendment No. 3 of the Agreement, is deleted
in its entirety and replaced as follows:
QUOTE
(b) The Buyer will provide the Seller with satisfactory written
substantiation by April 15, 1996, of its having requested and
obtained from its other principal creditors (including, but not
limited to, American Airlines, Inc., and Fokker Aircraft U.S.A.,
Inc.) payment deferrals generally similar in scope as the deferral
described in this Amendment.
UNQUOTE
3.2 The first three lines of Subparagraph 1.2(c) of Amendment No. 1, as
amended by Amendment No. 2 and as further amended by Amendment No. 3 of
the Agreement, and Subparagraphs 1.2(c)(x) and 1.2(c)(y) of Amendment No.
1 of the Agreement are deleted in their entirety and replaced as follows:
QUOTE
(c) The Replacement December 1995 Note will become immediately due and
payable on April 16,1996, in the event that any of the following
conditions have not been met by April 15, 1996:
(x) The Seller or its designee has completed a satisfactory
physical inspection of the collateral delivered under an
amendment to each of the Promissory Note Security Agreement
and the Security Agreement dated as of the date of Amendment
No. 4 to the Agreement.
3
(y) The Seller has obtained a perfected first priority security
interest in all the collateral described in an amendment to
each of the Promissory Note Security Agreement and the
Security Agreement dated as of the date of Amendment No. 4 to
the Agreement.
UNQUOTE
3.3 In the event that the conditions of Subparagraphs 1.2(c)(x) through
1.2(c)(z) of Amendment No. 1 of the Agreement, as amended by this
Amendment, are not met by April 15, 1996, then the Seller will immediately
cancel and return to the Buyer the Rescheduled Payments Note, and the June
1996 Payments will become due and payable as originally scheduled under
Subclause 6.2.2 of the Agreement.
4. CONFIDENTIALITY
Subject to any legal or governmental requirements of disclosure, the
parties (which for this purpose shall include their employees, agents and
advisors) shall maintain the terms and conditions of this Amendment and
any reports or other data furnished hereunder strictly confidential
Without limiting the generality of the foregoing, the Buyer and the Seller
shall use their best efforts to limit the disclosure of the contents of
this Agreement to the extent legally permissible in any filing required to
be made by the Buyer or the Seller, as the case may be, with any
governmental agency and shall make such applications as shall be necessary
to implement the foregoing. With respect to any public disclosure or
filing, each party agrees to submit to the other party a copy of the
proposed document to be filed or disclosed and will give the other party a
reasonable period of time in which to review the said document. The Buyer
and Seller shall consult with each other prior to the making of any public
disclosure or filing, permitted hereunder, of this Amendment or the terms
and conditions thereof The provisions of this Paragraph 4 shall survive
any termination of this Agreement.
5. EFFECT OF AMENDMENT
The Agreement will be deemed amended to the extent herein provided, and,
except as specifically amended hereby, will continue in full force and
effect in accordance with its original terms, except that if the Agreement
and this Amendment have specific provisions that are inconsistent, the
specific provisions contained in this Amendment will govern. It is
understood that this Amendment does not in any way constitute a waiver by
the Seller of any rights it has under the Agreement or under the Financial
Matters Agreement, provided, however, that the Seller agrees to waive
until October 1, 1996, its rights with respect to Insecurity Events
described in Subparagraph 21.2(a) and 21.2(b) of the Agreement.
4
Further, it is agreed that this Amendment is subject to the parties'
executing as of the date hereof an amendment to each of the Financial
Matters Agreement, the Security Agreement and the Promissory Note
Security Agreement.
6. INTERPRETATION AND LAW
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND THE PERFORMANCE
THEREOF SHALL BE DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK.
THE PARTIES HEREBY ALSO AGREE THAT THE UNITED NATIONS CONVENTION ON THE
INTERNATIONAL SALE OF GOODS SHALL NOT APPLY TO THIS TRANSACTION.
If the foregoing correctly sets forth our understanding, please execute
this Amendment in the space provided below, whereupon, as of the date first
above written, this Amendment will constitute part of the Agreement.
Agreed and accepted Yours sincerely,
MIDWAY AIRLINES AVSA, S.A.R.L.
CORPORATION
By: /s/ Xxxxxxxx X. Xxxxxx By: /s/ Xxxxxxxxxx Xxxxxx
-------------------------------- ------------------------------------
Its: Senior Vice President Its: AVSA Chief Executive Officer
General Counsel
By: /s/ [ILLEGIBLE]
--------------------------------
Its: President
5
Appendix A
MIDWAY AIRLINES CORPORATION
Secured Registered Promissory Note
R. New York, New York
[***] December 21, 0000
XXXXXX XXXXXXXX CORPORATION, a corporation duly organized and existing
under the laws of the State of Delaware, USA (the "Company"), for value
received, hereby promises to pay to the order of AVSA, S.A.R.L. ("AVSA") or
registered assigns on October 1, 1996, (the "Payment Date"), the principal
amount of [***] in such coin or currency of the United States of America as at
the time of payment shall be legal tender for public and private debts, at the
office of AVSA at 0, xxxx-xxxxx Xxxxxxx Xxxxxxxx, 00000 Xxxxxxx, Xxxxxx (or at
such other office as the holder hereof shall designate to the Company in
writing).
1. PAYMENT DATE; EXCHANGES; PREPAYMENTS
1.1 Transfer or Exchange
This Note is transferable by the holder hereof as herein provided. The
Company shall keep at its office or agency, maintained as provided in
Subparagraph 2.2, a register in which the Company shall provide for the
registration of this Note and for the registration of transfer of this
Note. The holder of this Note may, at its option and either in person or
by duly authorized attorney, surrender the same for registration of
transfer and receive in exchange herefor a Note, dated as of the transfer
of this Note, for the same aggregate unpaid principal amount as this Note
and registered in such name or names as may be designated by the holder
hereof. This Note, when presented or surrendered for registration of
transfer, shall be duly endorsed or shall be accompanied by a written
instrument of transfer duly executed by the holder of this Note or his
attorney duly authorized in writing. The Note so made and delivered in
exchange for this Note shall in all other respects be in the same form and
have the same terms as this Note and each such exchange or transfer shall
be made in such a manner that no gain or loss of principal shall result
therefrom. No transfer or exchange of this Note shall be valid unless made
in such manner at such office. The Company agrees that it will pay
shipping and insurance charges from and to the principal office of the
holder of this Note involved in any exchange by the holder of this Note.
Appendix A
1.2 Registered Holders; Payments
Prior to due presentment for registration of transfer of this Note, the
Company may deem and treat the registered holder hereof as the absolute
owner hereof for the purpose of receiving payment of or on account of the
principal of this Note and for the purposes of any notices, waivers or
consents thereunder, and payments of any Note shall be made only to or
upon the order in writing of the registered holder hereof. All payments
made hereunder shall be made in immediately available funds in United
States Dollars prior to 1:00 P.M., New York City time, by credit to Credit
Lyonnais, New York Branch, or to such other account as the holder hereof
shall advise the Company in writing. All payments due under this Note
shall be made in full without set-off, counterclaim, recoupment, or
defense and without deduction or withholding of any kind, provided,
however, the same shall not be deemed a waiver of any rights or remedies
of the Company against the Seller or any of its Affiliates. Consequently,
the Company shall assure that the sums received by the holder of this Note
hereunder shall be equal to the full amounts expressed to be due to the
holder hereunder, without deduction or withholding on account of and free
from any and all taxes, levies, imposts, dues or charges of whatever
nature imposed on the Company, except that if the Company is compelled by
law to make any such deduction or withholding the Company shall pay such
additional amounts as may be necessary in order that the net amount
received by the holder after such deduction or withholding shall equal the
amounts which would have been received in the absence of such deduction or
withholding.
1.3 Optional Prepayments
Upon notice given as provided in Subparagraph 1.5, the Company, at its
option, may prepay this Note, in whole and not in part, at anytime, at one
hundred percent (100%) of the outstanding principal amount thereof,
without premium. This Note shall be paid in whole, at one hundred percent
(100%) of the outstanding principal amount hereof, on the Payment Date.
1.4 Notice of Prepayment and Other Notices
The Company shall give written notice of optional prepayment of this Note
pursuant to Subparagraph 1.3 one (1) Business Day prior to the Payment
Date. Any notice of prepayment and all other notices to be given to any
holder of this Note shall be given by registered or certified mail to the
registered holder hereof at its address designated on the register
maintained by the Company on the date fixed for such notice of prepayment
or other notice. Upon notice of any optional prepayment pursuant to
Subparagraph 1.3, the Company covenants and agrees that it will prepay on
the date therein fixed for prepayment the entire outstanding principal
amount of this Note. The principal amount of this Note shall be due and
payable on the date specified in such notice.
2
Appendix A
2. COVENANTS
The Company covenants and agrees that so long as this Note shall be
outstanding:
2.1 To Pay Principal
The Company will punctually pay or cause to be paid the principal of this
Note according to the terms hereof at the place of payment hereinabove
specified.
2.2 Maintenance of Company Office
The Company will maintain an office or agency at 000 Xxxx Xxxxxx Xxxxxx,
Xxxxx 0000, Xxxxxx, Xxxxx Xxxxxxxx 00000, XXX or such other place in the
United States of America as the Company may designate in writing to the
holder hereof where notices, presentations and demands to or upon the
Company in respect of the Notes may be given or made.
2.3 To Keep Books
The Company will, and will cause each of its Material Subsidiaries to keep
proper books of record and account in which proper entries will be made of
its transactions in accordance with generally accepted accounting
principles.
2.4 Payment of Taxes; Corporate Existence; Maintenance of Properties
The Company will, and will cause each of its Material Subsidiaries to,
(a) pay and discharge promptly or cause to be paid and discharged
promptly (i) all taxes, assessments and governmental charges or
levies imposed upon it or upon its income or profits or upon any
of its property, real, personal or mixed, or upon any part
thereof, before the same shall become in default, unless the same
is being contested in good faith, (ii) all lawful claims for
labor, materials and supplies which if unpaid, might by law
become a lien or charge upon its property, unless the same is
being contested in good faith, and (iii) all obligations to the
Pension Benefit Guaranty Corporation (or any successor thereto
under the Employee Retirement Income Security Act of 1974, as
amended ("ERISA")) ("PBGC").
(b) do or cause to be done all things necessary to preserve and keep in
full force and effect its existence, materially advantageous rights,
licenses, privileges, permits and franchises and comply in all
material respects with all laws and regulations applicable to it and
its business; and
3
Appendix A
(c) maintain and keep, or cause to be maintained and kept, its
properties, including the Collateral as defined in the Promissory
Note Security Agreement, in good repair, working order and condition
and from time to time make or cause to be made all needful and
proper repairs, renewals, replacements and improvements so that the
business carried on in connection therewith may be properly
conducted at all times.
2.5 To Insure
The Company will, and will cause each of its Material Subsidiaries to,
(a) keep adequately insured, by financially sound and reputable
insurers, all property of a character usually insured by similar
corporations engaged in the same or a similar business similarly
situated against loss or damage of the kinds customarily insured
against by such corporations;
(b) carry, with financially sound and reputable insurers, such other
insurance (including, without limitation, liability insurance) and
in such amounts as is usually carried by corporations engaged in the
same or a similar business similarly situated; and
(c) maintain all such worker's compensation or similar insurance as may
be required under the laws of any state or jurisdiction in which it
may be engaged in business.
All insurance herein provided for shall be effected under a valid and
enforceable policy or policies.
2.6 Sale of Assets
The Company will not, and will not permit any unconsolidated subsidiary
to, sell, lease, transfer or otherwise dispose of all or substantially all
of its assets to any Person other than the Company or any Material
Subsidiary.
2.7 Merger or Consolidation
The Company will not, and will not permit any Material Subsidiary to,
consolidate with or merge into any Person or permit any Person to merge
into it except that
(a) a Material Subsidiary may merge into the Company if the Company is
the surviving corporation or may merge or consolidate with any other
Material Subsidiary or any other corporation if a Material
Subsidiary is the surviving corporation; and
4
Appendix A
(b) the Company may merge or consolidate with any other Person if (i)
the surviving or successor corporation is a corporation
incorporated or organized under the laws of the United States of
America, one of the states thereof or the District of Columbia,
(ii) the surviving or successor corporation (if not the Company)
shall expressly assume in writing (by an instrument a copy of
which shall be mailed by registered mail to the holder of this
Note) the due and punctual payment of the principal of this Note,
according to its tenor, and the due and punctual performance and
observance of all of the terms, covenants, agreements and
conditions of this Note to be performed or observed by the
Company to the same extent as if such surviving or successor
corporation had originally executed this Note in the place of the
Company, and had been the original maker of this Note, (iii) such
Person is legally able to perform the Company's obligations
hereunder and has a Consolidated net worth, as determined in
accordance with generally accepted accounting principles
consistently applied, not less than the Consolidated net worth of
the Company (similarly determined) at the time of such merger or
consolidation, and (iv) immediately after such consolidation or
merger, no Event of Default or Insecurity Event or event which,
with notice or lapse of time or both, would become an Event of
Default or Insecurity Event, shall have occurred and be
continuing under this Note.
2.8 Information and Reports to be furnished by the Company
The Company will furnish to the holder of this Note:
(a) Reports
(i) Quarterly Reports. Within forty-five (45) days after the end
of each of the first three quarterly fiscal periods in each
fiscal year of the Buyer, a Consolidated balance sheet of the
Buyer and its Consolidated subsidiaries prepared as of the
close of such period, together with the related statements of
income and surplus; and
(ii) Annual Statements. Within ninety (90) days after the end of
each fiscal year of the Buyer, an audited Consolidated balance
sheet of the Buyer and its Consolidated subsidiaries as at the
end of such year (when they become available), and the related
statement of income and surplus.
(iii) Monthly Reports Within twenty (20) days after the end of each
month in each fiscal year of the Buyer, a Consolidated balance
sheet of the Buyer and its Consolidated subsidiaries prepared
as of the close of such month, together with the related
statements of income and surplus, statement of
5
Appendix A
sources and uses of cash, as well as such other historical
information relating to such period that the Buyer maintains.
Such information will include, but not be limited to, revenue
per available seat mile, cost per available seat mile, segment
profitability information, the number of total passengers, and
load factor and average fare information.
"Consolidated" means, as applied to any financial or accounting term
or amount, such term or amount determined on a consolidated basis in
accordance with generally accepted accounting principles.
(b) Publicly Filed Reports to Stockholders and the SEC
The Company will furnish the Seller with all publicly filed reports
to stockholders or the United States Securities and Exchange
Commission, if any.
(c) Notice of Default
Immediately upon the Company's becoming aware of the existence of
any default in its performance or observance of any covenant,
agreement or condition contained in this Note or in the Promissory
Note Security Agreement, a written notice specifying the nature and
status thereof and what action the Company is taking with respect
thereto.
(d) Notice of Acceleration
Immediately upon the Company's becoming aware that the holder of any
bond, debenture, promissory note (including any note other than this
Note issued by the Company in favor of Payee or issued pursuant to
Amendment No. 1 to the Agreement ("Other Notes")) or any similar
evidence of indebtedness of the Company or any Material Subsidiary
has demanded payment, given notice or taken any other action with
respect to a claimed Event of Default under any Other Note or
claimed default in respect of or under such bond, debenture or
promissory note, a written notice specifying the demand made, notice
given or action taken by such holder and the nature and status of
the claimed Event of Default or default and what action the Company
is taking with respect thereto.
(e) ERISA
As promptly as practicable (but in any event not later than fifteen
(1) days) after the Company or Related Person (i) engages in any
"prohibited transaction" (as defined in Section 406 of ERISA or
section 497 of the Internal Revenue Code of
6
Appendix A
1986, as amended (the "Code")) with any "employee benefit plan" (as
defined in Section 3 (3) of ERISA ("Plan"))) (ii) files a notice of
intent under Section 4041 of ERISA with the PBGC to terminate any
such Plan, (iii) receives a notice from the PBGC to appoint a
trustee to administer any such Plan, (iv) knows or has reason to
know that termination proceedings with respect to any such Plan have
commenced, (v) knows or has reason to know that any "reportable
event" (within the meaning of Section 4043(b) of ERISA) or other
condition with respect to any such Plan has occurred which will
result in a liability to the PBGC, (vi) fails to make a quarterly
installment contribution to any such Plan with respect to which a
lien may be imposed under section 412(n) of the Code, (vii) knows or
has reason to know that any "accumulated funding deficiency" (as
defined in Section 302 of ERISA), whether or not waived, shall exist
with respect to any such Plan, (viii) withdraws in a "complete
withdrawal" or a "partial withdrawal" from a "multiemployer plan"
pursuant to subtitle E of Title IV of ERISA or knows or has reason
to know that it will or is likely to incur a material liability in
connection with any reorganization or insolvency of such a Plan, or
(ix) is involved in a situation referred to in Section 4204 of
ERISA, a statement of an officer of the Company setting forth the
details with respect to the events resulting in such notice of
intent to terminate or to appoint a trustee, or with respect to such
termination proceedings, reportable event, other condition,
withdrawal, or other situation, as the case may be, and the action
which the Company or Related Person proposes to take with respect
thereto, together with a copy of any such notice of intent to
terminate or to appoint a trustee, a copy of any notice or other
papers received by the Company or Related Person with respect to
such termination proceedings, a copy of any notice of any such
reportable event or other condition filed by the Company or a
Related Person with PBGC, a copy of any notice received by the
Company or a Related Person pursuant to Section 4219 of ERISA, or a
copy of the papers pertaining to the situation described in Section
4204 of ERISA, as the case may be.
(f) Miscellaneous Information
From time to time upon request, when the Payee is not the holder of
the Note, such nonproprietary or nonconfidential information
regarding the business, affairs and condition of the Company and of
any Material Subsidiary and its properties in such detail as may
reasonably be requested. The Company covenants and agrees that any
authorized officer or representative of the holder of this Note
shall have the right, at such holder's expense and subject to
applicable governmental regulations, to visit and inspect any of the
properties of the Company and of any Material Subsidiary, to examine
its books of account and to discuss its affairs, finances and
accounts with, and be advised as to the same by, its officers or its
7
Appendix A
independent certified public accountants all at such reasonable
times and intervals as may be reasonably requested upon not less
that five (5) days' notice.
(g) The Note holder agrees to keep strictly confidential the information
described above in Subparagraph 2.8(f) and to not disclose the same
to any other Person or entity.
2.9 Taxes, etc.
The Company will pay or cause to be paid all United States stamp taxes
(including interest and penalties), if any, solely attributable to the
execution and delivery of this Note, or of any amendment of, or waiver or
consent under or with respect to, this Note, and will indemnify and save
the holder hereof harmless from any loss or damage of any kind whatsoever
resulting from or arising out of the non-payment or delay in the payment
of such taxes.
2.10 Transactions with Affiliates
The Company will not permit any of its Material Subsidiaries to, sell or
transfer any assets (including capital stock of any Subsidiary) to, or
purchase or acquire any assets of; or otherwise engage in any material
transaction (including any merger) with, or permit any Affiliate to sell
or transfer assets (including capital stock of any Subsidiary) to, or
purchase or acquire any assets of, or otherwise engage in any other
material transaction (including any merger) with, any other Affiliate
except for (i) transactions expressly permitted by the Agreement, (ii)
transactions (a) between the Company and one or more Wholly-Owned
Subsidiaries of the Company, provided that in the case of any
consolidation or merger in which the Company is not the surviving
corporation, such transaction shall be permitted pursuant to Subparagraph
2.7 hereof or (b) between Wholly-Owned Subsidiaries of the Company, (iii)
transactions in the ordinary course of business and upon fair and
reasonable terms no less favorable than the Company or any of its
Subsidiaries could obtain or could become entitled to in an arm's-length
transaction with a Person which was not an Affiliate and then, in any
case, only if no default or Event of Default shall have occurred and be
continuing, or (iv) transactions pursuant to a capital investment by an
Affiliate into the Company on fair and reasonable terms. None of the
Company and its Subsidiaries shall be permitted to amend any material
agreement with an Affiliate if a default or Event of Default has occurred
and is continuing.
8
Appendix A
2.11 Certain Definitions
For purposes of this Note,
(a) "Affiliate" means with respect to any person or entity, any other
person or entity directly or indirectly controlling, controlled by
or under common control with such person or entity.
(b) "Agreement" means the Airbus A320 Purchase Agreement, dated as of
March 17, 1995, between AVSA, S.A.R.L. and the Company.
(c) "Business Day" means any day which is not a Saturday or a Sunday and
which is neither a legal holiday nor a day on which banking
institutions are authorized or required by law or regulation to
close in Xxx Xxxx xx Xxx Xxxx, Xxxxxx, Xxxxxxx or Toulouse, France.
(d) "Consolidated" means, as applied to any financial or accounting term
or amount, such term or amount determined on a consolidated basis in
accordance with generally accepted accounting principles;
(e) "Governmental Authority" means any nation or government, any state
or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government;
(f) "Letter Agreement" means the Financial Matters Letter Agreement,
dated March 17, 1995.
(g) "Material Subsidiary" of any Person means, at any time of
determination, each Subsidiary (or a group of Subsidiaries that
would constitute a Material Subsidiary if consolidated and which
are engaged in the same or related lines of business) of such
Person now existing or hereafter acquired or formed by such
Person which (x) accounted for more than l0% of the Consolidated
revenues of such Person and its Subsidiaries during the
twelve-month period ending on the date of the most recent
Consolidated balance sheet of such Person delivered to the holder
of this Note pursuant to Subparagraph 2.8, or (y) was the owner
of more than 10% of the Consolidated assets of such Person and
its Subsidiaries at the date of the most recent Consolidated
balance sheet of such Person delivered to the holders of this
Note pursuant to Subparagraph 2.8;
(h) "Person" means any natural person, corporation, partnership, joint
venture, joint-stock company, trust, unincorporated organization,
firm, association, government
9
Appendix A
(or political subdivision thereof), governmental agency, authority
or instrumentality, or any other entity, whether acting in an
individual, fiduciary or other capacity;
(i) "Promissory Note Security Agreement" means the Promissory Note
Security Agreement, dated as of December 21, 1995.
(j) "Related Person" means any corporation or any trade or business
(whether or not incorporated) which, together with the Company, is a
member of a controlled group of corporations within the meaning of
Section 163(a) of the Code, determined without regard to Section
163(a) (4) and (e)(3)(C) of the Code, or is under common control
with the Company as described in Section 414(c) of the Code;
(k) "Requirement of Law" means as to any Person, the certificate of
incorporation and by-laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation or
determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or
any of its property or to which such Person or any of its property
is subject;
(l) "Subsidiary" of any Person means any corporation or other entity
of which such Person, directly or indirectly, shall at the time
(a) own shares of any class or classes with power for the
election of at least a majority of the members of the board of
directors (or the governing body) of such corporation or other
entity other than shares or other interest having such power only
by reason of the happening of a contingency or (b) otherwise have
the legal right to elect such a majority; and
(m) "Wholly-Owned Subsidiary" means, with respect to any Person, any
Subsidiary of such Person all of the outstanding shares of capital
stock of which (other than directors' qualifying shares) are owned
directly by such Person or a Wholly-Owned Subsidiary of such Person.
3. AMENDMENT AND WAIVER
Any term, covenant, agreement or condition of this Note may, with the
consent of the Company, be amended or compliance therewith may be waived
(either generally or in a particular instance and either retroactively or
prospectively), by one or more written instrument(s) signed by the holder
of this Note.
10
Appendix A
4. YIELD PROTECTION AND ILLEGALITY
4.1 Illegality
In the event that it becomes unlawful for the holder of this Note to
maintain the loan evidenced hereby on a LIBOR basis, then the holder shall
promptly notify the Company thereof.
4.2 Compensation
The Company shall pay to the holder of this Note, upon the request of the
holder, such amount or amounts as shall be sufficient (in the opinion of
the holder) to compensate it for any actual out-of-pocket loss, cost or
expense incurred by it as a result of any payment or prepayment of this
Note on a date other than the Payment Date, or any failure by the Company
to prepay this Note on the date for such prepayment specified herein.
5. DEFAULTS AND REMEDIES
5.1 Events of Default
This Note shall become and be due and payable upon demand of the holder
hereof, without presentation, protest, or further demand or notice of any
kind (all of which are hereby expressly waived by the Company), if any one
or more of the following events (herein called "Events of Default") shall
occur for any reason whatsoever (and whether such occurrence shall be
voluntary or involuntary or come about or be effected by operation of law
or pursuant to or in compliance with any judgment, decree or order of any
court or any order, rule or regulation of any administrative or
governmental body) and be continuing at the time of such demand:
(a) if default shall be made in the due and punctual payment of the
principal of this Note or of any Other Note when and as the same
shall become due and payable, whether at maturity or at a date fixed
for prepayment or by acceleration or otherwise;
(b) if default shall be made in the due and punctual payment of any
installment of interest on any Other Note, when and as such interest
installment shall become due and payable, and such default shall
have continued for a period of five (5) days;
(c) if default shall be made in the performance or observance of any
other of the covenants, agreements or conditions contained in this
Note, the Promissory Note Security Agreement or the Letter
Agreement, and such default shall have
11
Appendix A
continued for a period of thirty (30) days after written notice
thereof to the Company by the holder of this Note;
(d) if an event or condition occurs or exists, with respect to any
Plan or otherwise, concerning which the Company is under an
obligation to furnish a report to the holder hereof in accordance
with Subparagraph 2.8(e) hereof and as a result of such event or
condition, together with all other such events or conditions, the
Company or any Related Person has incurred or in the reasonable
opinion of the holder hereof is likely to incur a liability to a
Plan or the PBGC (or any combination of the foregoing) which is
material in relation to the financial position of the Company;
(e) if:
(1) the Company or any other party shall commence any case,
proceeding or other action with respect to the Company in any
jurisdiction relating to bankruptcy, insolvency,
reorganization, relief from debtors, an arrangement,
winding-up, liquidation, dissolution or other relief with
respect to its debts and such case, proceeding or other action
remains unstayed, undismissed or undischarged for sixty (60)
days;
(2) an action is commenced seeking the appointment of a receiver,
trustee, custodian or other similar official for the Company
for all or substantially all of its assets, or the Company
makes a general assignment for the benefit of its creditors;
(3) an action is commenced against the Company seeking issuance of
a warrant of attachment, execution, distraint or similar
process against all or any substantial part of its assets;
(4) the Company becomes insolvent or fails generally to pay its
debts as they become due; or
(5) there is a liquidation, winding up or analogous event with
respect to the Company.
5.2 In addition to the provisions of Subparagraph 5.1(a) through (d), only if
AVSA or an Affiliate of AVSA is the holder of this Note, the occurrence of
any Insecurity Event or Termination Event under Clause 21 of the Agreement
shall also constitute Events of Default for the purpose of this Amendment
to the Agreement.
12
Appendix A
5.3 Costs and Expenses
The Company covenants that if default be made in any payment of principal
on this Note, it will pay to the holder hereof, to the extent permitted
under applicable law, such further amount (in addition to any amounts due
under the Notes) as shall be sufficient to cover the cost and expense of
collection, including reasonable compensation to the attorneys and counsel
of the holder hereof for all services rendered in that connection.
6. COVENANTS BIND SUCCESSORS AND ASSIGNS
All the covenants, stipulations, promises and agreements in this Note
contained by or on behalf of the Company shall bind its successors and
assigns, whether so expressed or not.
7. GOVERNING LAW
THIS NOTE SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS WHICH ARE EXECUTED AND FULLY TO BE PERFORMED IN
THAT STATE. The Company hereby irrevocably and unconditionally submits to
the jurisdiction of the federal and state courts in New York, New York in
respect of any action or proceeding arising out of or in connection with
this Note. Final judgement against the Company in any such action or
proceeding shall be conclusive, and may be enforced in other jurisdictions
by suit on the judgment, a certified or true copy of which shall be
conclusive evidence of the fact and of the amount of indebtedness or
liability of the Company therein described; provided, however, that at all
times the holder of this Note may at its option bring suit, or institute
other judicial proceedings against the Company, in any court in any place
where the Company or any of its assets may be found.
8. HEADINGS
The headings of the Paragraphs and Subparagraphs of this Note are inserted
for convenience only and do not constitute a part of this Note.
9. LOST, ETC. NOTES
Upon receipt by the Company of evidence satisfactory to it of the loss,
theft, destruction or mutilation of this Note, and (in case of loss, theft
or destruction) or indemnity satisfactory to it, and upon surrender and
cancellation of this Note, if mutilated, the Company, at its expense, will
make and deliver a new Note of like tenor in lieu of this Note. Any Note
made and delivered in accordance with the provisions of this Subparagraph
9 shall be dated as of the date which such new Note is made and delivered.
13
Appendix A
The unsecured indemnity agreement of the holder of this Note shall
constitute indemnity satisfactory to the Company for the purposes of this
Subparagraph 9.
10. MISCELLANEOUS
(a) In the event any day for payment of an amount hereunder is not a
Business Day, such payment shall be due and payable on the
immediately preceding Business Day.
(b) All amounts payable under this Note shall be payable without
presentment or demand for payment, protest or further notice or
demand of any kind, all of which are expressly waived by the
Company, except to the extent expressly provided in this Note.
IN WITNESS WHEREOF, MIDWAY AIRLINES CORPORATION has caused this Note to be
signed in its corporate name by its officer thereunto duly authorized, and to be
dated as of the day and year first above written.
MIDWAY AIRLINES CORPORATION
By: /s/ [ILLEGIBLE]
-------------------------
Its: President
14
Appendix B
MIDWAY AIRLINES CORPORATION
Secured Registered Promissory Note
R. New York, New York
[***] March 27, 0000
XXXXXX XXXXXXXX CORPORATION, a corporation duly organized and existing
under the laws of the State of Delaware, USA (the "Company"), for value
received, hereby promises to pay to the order of AVSA, S.A.R.L. ("AVSA") or
registered assigns on October 1, 1996; (the "Payment Date"), the principal
amount of [***] in such coin or currency of the United States of America as at
the time of payment shall be legal tender for public and private debts, at the
office of AVSA at 0, xxxx-xxxxx Xxxxxxx Xxxxxxxx, 00000 Xxxxxxx, Xxxxxx (or at
such other office as the holder hereof shall designate to the Company in
writing).
1. PAYMENT DATE; EXCHANGES; PREPAYMENTS
1.1 Transfer or Exchange
This Note is transferable by the holder hereof as herein provided. The
Company shall keep at its office or agency, maintained as provided in
Subparagraph 2.2, a register in which the Company shall provide for the
registration of this Note and for the registration of transfer of this
Note. The holder of this Note may, at its option and either in person or
by duly authorized attorney, surrender the same for registration of
transfer and receive in exchange herefor a Note, dated as of the transfer
of this Note, for the same aggregate unpaid principal amount as this Note
and registered in such name or names as may be designated by the holder
hereof. This Note, when presented or surrendered for registration of
transfer, shall be duly endorsed or shall be accompanied by a written
instrument of transfer duly executed by the holder of this Note or his
attorney duly authorized in writing. The Note so made and delivered in
exchange for this Note shall in all other respects be in the same form and
have the same terms as this Note and each such exchange or transfer shall
be made in such a manner that no gain or loss of principal shall result
therefrom. No transfer or exchange of this Note shall be valid unless made
in such manner at such office. The Company agrees that it will pay
shipping and insurance charges from and to the principal office of the
holder of this Note involved in any exchange by the holder of this Note.
Appendix B
1.2 Registered Holders; Payments
Prior to due presentment for registration of transfer of this Note, the
Company may deem and treat the registered holder hereof as the absolute
owner hereof for the purpose of receiving payment of or on account of the
principal of this Note and for the purposes of any notices, waivers or
consents thereunder, and payments of any Note shall be made only to or
upon the order in writing of the registered holder hereof. All payments
made hereunder shall be made in immediately available funds in United
States Dollars prior to 1:00 P.M., New York City time, by credit to Credit
Lyonnais, New York Branch, or to such other account as the holder hereof
shall advise the Company in writing. All payments due under this Note
shall be made in full without set-off, counterclaim, recoupment, or
defense and without deduction or withholding of any kind, provided,
however, the same shall not be deemed a waiver of any rights or remedies
of the Company against the Seller or any of its Affiliates. Consequently,
the Company shall assure that the sums received by the holder of this Note
hereunder shall be equal to the full amounts expressed to be due to the
holder hereunder, without deduction or withholding on account of and free
from any and all taxes, levies, imposts, dues or charges of whatever
nature imposed on the Company, except that if the Company is compelled by
law to make any such deduction or withholding the Company shall pay such
additional amounts as may be necessary in order that the net amount
received by the holder after such deduction or withholding shall equal the
amounts which would have been received in the absence of such deduction or
withholding.
1.3 Optional Prepayments
Upon notice given as provided in Subparagraph 1.5, the Company, at its
option, may prepay this Note, in whole and not in part, at anytime, at one
hundred percent (100%) of the outstanding principal amount thereof,
without premium. This Note shall be paid in whole, at one hundred percent
(100%) of the outstanding principal amount hereof, on the Payment Date.
1.4 Notice of Prepayment and Other Notices
The Company shall give written notice of optional prepayment of this Note
pursuant to Subparagraph 1.3 one (1) Business Day prior to the Payment
Date. Any notice of prepayment and all other notices to be given to any
holder of this Note shall be given by registered or certified mail to the
registered holder hereof at its address designated on the register
maintained by the Company on the date fixed for such notice of prepayment
or other notice. Upon notice of any optional prepayment pursuant to
Subparagraph 1.3, the Company covenants and agrees that it will prepay on
the date therein fixed for prepayment the entire outstanding principal
amount of this Note. The principal amount of this Note shall be due and
payable on the date specified in such notice.
2
Appendix B
2. COVENANTS
The Company covenants and agrees that so long as this Note shall be
outstanding:
2.1 To Pay Principal
The Company will punctually pay or cause to be paid the principal of this
Note according to the terms hereof at the place of payment hereinabove
specified.
2.2 Maintenance of Company Office
The Company will maintain an office or agency at 000 Xxxx Xxxxxx Xxxxxx,
Xxxxx 0000, Xxxxxx, Xxxxx Xxxxxxxx 00000, XXX or such other place in the
United States of America as the Company may designate in writing to the
holder hereof where notices, presentations and demands to or upon the
Company in respect of the Notes may be given or made.
2.3 To Keep Books
The Company will, and will cause each of its Material Subsidiaries to keep
proper books of record and account in which proper entries will be made of
its transactions in accordance with generally accepted accounting
principles.
2.4 Payment of Taxes: Corporate Existence; Maintenance of Properties
The Company will, and will cause each of its Material Subsidiaries to,
(a) pay and discharge promptly or cause to be paid and discharged
promptly (i) all taxes, assessments and governmental charges or
levies imposed upon it or upon its income or profits or upon any
of its property, real, personal or mixed, or upon any part
thereof, before the same shall become in default, unless the same
is being contested in good faith, (ii) all lawful claims for
labor, materials and supplies which if unpaid, might by law
become a lien or charge upon its property, unless the same is
being contested in good faith, and (iii) all obligations to the
Pension Benefit Guaranty Corporation (or any successor thereto
under the Employee Retirement Income Security Act of 1974, as
amended ("ERISA")) ("PBGC").
(b) do or cause to be done all things necessary to preserve and keep in
full force and effect its existence, materially advantageous rights,
licenses, privileges, permits and franchises and comply in all
material respects with all laws and regulations applicable to it and
its business; and
3
Appendix B
(c) maintain and keep, or cause to be maintained and kept, its
properties, including the Collateral as defined in the Promissory
Note Security Agreement, in good repair, working order and condition
and from time to time make or cause to be made all needful and
proper repairs, renewals, replacements and improvements so that the
business carried on in connection therewith may be properly
conducted at all times.
2.5 To Insure
The Company will, and will cause each of its Material Subsidiaries to,
(a) keep adequately insured, by financially sound and reputable
insurers, all property of a character usually insured by similar
corporations engaged in the same or a similar business similarly
situated against loss or damage of the kinds customarily insured
against by such corporations;
(b) carry, with financially sound and reputable insurers, such other
insurance (including, without limitation, liability insurance) and
in such amounts as is usually carried by corporations engaged in the
same or a similar business similarly situated; and
(c) maintain all such worker's compensation or similar insurance as may
be required under the laws of any state or jurisdiction in which it
may be engaged in business.
All insurance herein provided for shall be effected under a valid and
enforceable policy or policies.
2.6 Sale of Assets
The Company will not, and will not permit any unconsolidated subsidiary
to, sell, lease, transfer or otherwise dispose of all or substantially all
of its assets to any Person other than the Company or any Material
Subsidiary.
2.7 Merger or Consolidation
The Company will not, and will not permit any Material Subsidiary to,
consolidate with or merge into any Person or permit any Person to merge
into it except that
(a) a Material Subsidiary may merge into the Company if the Company is
the surviving corporation or may merge or consolidate with any other
Material Subsidiary or any other corporation if a Material
Subsidiary is the surviving corporation; and
4
Appendix B
(b) the Company may merge or consolidate with any other Person if (i)
the surviving or successor corporation is a corporation
incorporated or organized under the laws of the United States of
America, one of the states thereof or the District of Columbia,
(ii) the surviving or successor corporation (if not the Company)
shall expressly assume in writing (by an instrument a copy of
which shall be mailed by registered mail to the holder of this
Note) the due and punctual payment of the principal of this Note,
according to its tenor, and the due and punctual performance and
observance of all of the terms, covenants, agreements and
conditions of this Note to be performed or observed by the
Company to the same extent as if such surviving or successor
corporation had originally executed this Note in the place of the
Company, and had been the original maker of this Note, (iii) such
Person is legally able to perform the Company's obligations
hereunder and has a Consolidated net worth, as determined in
accordance with generally accepted accounting principles
consistently applied, not less than the Consolidated net worth of
the Company (similarly determined) at the time of such merger or
consolidation, and (iv) immediately after such consolidation or
merger, no Event of Default or Insecurity Event or event which,
with notice or lapse of time or both, would become an Event of
Default or Insecurity Event, shall have occurred and be
continuing under this Note.
2.8 Information and Reports to be furnished by the Company
The Company will furnish to the holder of this Note:
(a) Reports
(i) Quarterly Reports. Within forty-five (45) days after the end
of each of the first three quarterly fiscal periods in each
fiscal year of the Buyer, a Consolidated balance sheet of the
Buyer and its Consolidated subsidiaries prepared as of the
close of such period, together with the related statements of
income and surplus; and
(ii) Annual Statements. Within ninety (90) days after the end of
each fiscal year of the Buyer, an audited Consolidated balance
sheet of the Buyer and its Consolidated subsidiaries as at the
end of such year (when they become available), and the related
statement of income and surplus.
(iii) Monthly Reports Within twenty (20) days after the end of each
month in each fiscal year of the Buyer, a Consolidated balance
sheet of the Buyer and its Consolidated subsidiaries prepared
as of the close of such month, together with the related
statements of income and surplus,
5
Appendix B
statement of sources and uses of cash, as well as such other
historical information relating to such period that the Buyer
maintains. Such information will include, but not be limited
to, revenue per available seat mile, cost per available seat
mile, segment profitability information, the number of total
passengers, and load factor and average fare information.
"Consolidated" means, as applied to any financial or accounting term
or amount, such term or amount determined on a consolidated basis in
accordance with generally accepted accounting principles.
(b) Publicly Filed Reports to Stockholders and the SEC
The Company will furnish the Seller with all publicly filed reports
to stockholders or the United States Securities and Exchange
Commission, if any.
(c) Notice of Default
Immediately upon the Company's becoming aware of the existence of
any default in its performance or observance of any covenant,
agreement or condition contained in this Note or in the Promissory
Note Security Agreement, a written notice specifying the nature and
status thereof and what action the Company is taking with respect
thereto.
(d) Notice of Acceleration
Immediately upon the Company's becoming aware that the holder of any
bond, debenture, promissory note (including any note other than this
Note issued by the Company in favor of Payee or issued pursuant to
Amendment No. 1 to the Agreement ("Other Notes")) or any similar
evidence of indebtedness of the Company or any Material Subsidiary
has demanded payment, given notice or taken any other action with
respect to a claimed Event of Default under any Other Note or
claimed default in respect of or under such bond, debenture or
promissory note, a written notice specifying the demand made, notice
given or action taken by such holder and the nature and status of
the claimed Event of Default or default and what action the Company
is taking with respect thereto.
(e) ERISA
As promptly as practicable (but in any event not later than fifteen
(1) days) after the Company or Related Person (i) engages in any
"prohibited transaction" (as
6
Appendix B
defined in Section 406 of ERISA or section 497 of the Internal
Revenue Code of 1986, as amended (the "Code")) with any "employee
benefit plan" (as defined in Section 3 (3) of ERISA ("Plan")), (ii)
files a notice of intent under Section 4041 of ERISA with the PBGC
to terminate any such Plan, (iii) receives a notice from the PBGC to
appoint a trustee to administer any such Plan, (iv) knows or has
reason to know that termination proceedings with respect to any such
Plan have commenced, (v) knows or has reason to know that any
"reportable event" (within the meaning of Section 4043(b) of ERISA)
or other condition with respect to any such Plan has occurred which
will result in a liability to the PBGC, (vi) fails to make a
quarterly installment contribution to any such Plan with respect to
which a lien may be imposed under section 412(n) of the Code, (vii)
knows or has reason to know that any "accumulated funding
deficiency" (as defined in Section 302 of ERISA), whether or not
waived, shall exist with respect to any such Plan, (viii) withdraws
in a complete withdrawal" or a "partial withdrawal" from a
"multiemployer plan" pursuant to subtitle E of Title IV of ERISA or
knows or has reason to know that it will or is likely to incur a
material liability in connection with any reorganization or
insolvency of such a Plan, or (ix) is involved in a situation
referred to in Section 4204 of ERISA, a statement of an officer of
the Company setting forth the details with respect to the events
resulting in such notice of intent to terminate or to appoint a
trustee, or with respect to such termination proceedings, reportable
event, other condition, withdrawal, or other situation, as the case
may be, and the action which the Company or Related Person proposes
to take with respect thereto, together with a copy of any such
notice of intent to terminate or to appoint a trustee, a copy of any
notice or other papers received by the Company or Related Person
with respect to such termination proceedings, a copy of any notice
of any such reportable event or other condition filed by the Company
or a Related Person with PBGC, a copy of any notice received by the
Company or a Related Person pursuant to Section 4219 of ERISA, or a
copy of the papers pertaining to the situation described in Section
4204 of ERISA, as the case may be.
(f) Miscellaneous Information
From time to time upon request, when the Payee is not the holder of
the Note, such nonproprietary or nonconfidential information
regarding the business, affairs and condition of the Company and of
any Material Subsidiary and its properties in such detail as may
reasonably be requested. The Company covenants and agrees that any
authorized officer or representative of the holder of this Note
shall have the right, at such holder's expense and subject to
applicable governmental regulations, to visit and inspect any of the
properties of the Company and of any Material Subsidiary, to examine
its books of account and to discuss its affairs,
7
Appendix B
finances and accounts with, and be advised as to the same by, its
officers or its independent certified public accountants all at such
reasonable times and intervals as may be reasonably requested upon
not less that five (5) days' notice.
(g) The Note holder agrees to keep strictly confidential the information
described above in Subparagraph 2.8(f) and to not disclose the same
to any other Person or entity.
2.9 Taxes, etc.
The Company will pay or cause to be paid all United States stamp taxes
(including interest and penalties), if any, solely attributable to the
execution and delivery of this Note, or of any amendment of, or waiver or
consent under or with respect to, this Note, and will indemnify and save
the holder hereof harmless from any loss or damage of any kind whatsoever
resulting from or arising out of the non-payment or delay in the payment
of such taxes.
2.10 Transactions with Affiliates
The Company will not permit any of its Material Subsidiaries to, sell or
transfer any assets (including capital stock of any Subsidiary) to, or
purchase or acquire any assets of, or otherwise engage in any material
transaction (including any merger) with, or permit any Affiliate to sell
or transfer assets (including capital stock of any Subsidiary) to, or
purchase or acquire any assets of, or otherwise engage in any other
material transaction (including any merger) with, any other Affiliate
except for (i) transactions expressly permitted by the Agreement, (ii)
transactions (a) between the Company and one or more Wholly-Owned
Subsidiaries of the Company, provided that in the case of any
consolidation or merger in which the Company is not the surviving
corporation, such transaction shall be permitted pursuant to Subparagraph
2.7 hereof or (b) between Wholly-Owned Subsidiaries of the Company, (iii)
transactions in the ordinary course of business and upon fair and
reasonable terms no less favorable than the Company or any of its
Subsidiaries could obtain or could become entitled to in an arm's-length
transaction with a Person which was not an Affiliate and then, in any
case, only if no default or Event of Default shall have occurred and be
continuing, or (iv) transactions pursuant to a capital investment by an
Affiliate into the Company on fair and reasonable terms. None of the
Company and its Subsidiaries shall be permitted to amend any material
agreement with an Affiliate if a default or Event of Default has occurred
and is continuing.
8
Appendix B
2.11 Certain Definitions
For purposes of this Note,
(a) "Affiliate" means with respect to any person or entity, any other
person or entity directly or indirectly controlling, controlled by
or under common control with such person or entity.
(b) "Agreement" means the Airbus A320 Purchase Agreement, dated as of
March 17, 1995, between AVSA, S.A.R.L. and the Company.
(c) "Business Day" means any day which is not a Saturday or a Sunday and
which is neither a legal holiday nor a day on which banking
institutions are authorized or required by law or regulation to
close in Xxx Xxxx xx Xxx Xxxx, Xxxxxx, Xxxxxxx or Toulouse, France.
(d) "Consolidated" means, as applied to any financial or accounting term
or amount, such term or amount determined on a consolidated basis in
accordance with generally accepted accounting principles;
(e) "Governmental Authority" means any nation or government, any state
or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government;
(f) "Letter Agreement" means the Financial Matters Letter Agreement,
dated March 17, 1995.
(g) "Material Subsidiary" of any Person means, at any time of
determination, each Subsidiary (or a group of Subsidiaries that
would constitute a Material Subsidiary if consolidated and which
are engaged in the same or related lines of business) of such
Person now existing or hereafter acquired or formed by such
Person which (x) accounted for more than l0% of the Consolidated
revenues of such Person and its Subsidiaries during the
twelve-month period ending on the date of the most recent
Consolidated balance sheet of such Person delivered to the holder
of this Note pursuant to Subparagraph 2.8, or (y) was the owner
of more than 10% of the Consolidated assets of such Person and
its Subsidiaries at the date of the most recent Consolidated
balance sheet of such Person delivered to the holders of this
Note pursuant to Subparagraph 2.8;
(h) "Person" means any natural person, corporation, partnership, joint
venture, joint-stock company, trust, unincorporated organization,
firm, association, government
9
Appendix B
(or political subdivision thereof), governmental agency, authority
or instrumentality, or any other entity, whether acting in an
individual, fiduciary or other capacity;
(i) "Promissory Note Security Agreement" means the Promissory Note
Security Agreement, dated as of December 21, 1995.
(j) "Related Person" means any corporation or any trade or business
(whether or not incorporated) which, together with the Company, is a
member of a controlled group of corporations within the meaning of
Section 163(a) of the Code, determined without regard to Section
163(a) (4) and (e)(3)(C) of the Code, or is under common control
with the Company as described in Section 414(c) of the Code;
(k) "Requirement of Law" means as to any Person, the certificate of
incorporation and by-laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation or
determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or
any of its property or to which such Person or any of its property
is subject;
(l) "Subsidiary" of any Person means any corporation or other entity
of which such Person, directly or indirectly, shall at the time
(a) own shares of any class or classes with power for the
election of at least a majority of the members of the board of
directors (or the governing body) of such corporation or other
entity other than shares or other interest having such power only
by reason of the happening of a contingency or (b) otherwise have
the legal right to elect such a majority; and
(m) "Wholly-Owned Subsidiary" means, with respect to any Person, any
Subsidiary of such Person all of the outstanding shares of capital
stock of which (other than directors' qualifying shares) are owned
directly by such Person or a Wholly-Owned Subsidiary of such Person.
3. AMENDMENT AND WAIVER
Any term, covenant, agreement or condition of this Note may, with the
consent of the Company, be amended or compliance therewith may be waived
(either generally or in a particular instance and either retroactively or
prospectively), by one or more written instrument(s) signed by the holder
of this Note.
10
Appendix B
4. YIELD PROTECTION AND ILLEGALITY
4.1 Illegality
In the event that it becomes unlawful for the holder of this Note to
maintain the loan evidenced hereby on a LIBOR basis, then the holder shall
promptly notify the Company thereof.
4.2 Compensation
The Company shall pay to the holder of this Note, upon the request of the
holder, such amount or amounts as shall be sufficient (in the opinion of
the holder) to compensate it for any actual out-of-pocket loss, cost or
expense incurred by it as a result of any payment or prepayment of this
Note on a date other than the Payment Date, or any failure by the Company
to prepay this Note on the date for such prepayment specified herein.
5. DEFAULTS AND REMEDIES
5.1 Events of Default
This Note shall become and be due and payable upon demand of the holder
hereof, without presentation, protest, or further demand or notice of any
kind (all of which are hereby expressly waived by the Company), if any one
or more of the following events (herein called "Events of Default") shall
occur for any reason whatsoever (and whether such occurrence shall be
voluntary or involuntary or come about or be effected by operation of law
or pursuant to or in compliance with any judgment, decree or order of any
court or any order, rule or regulation of any administrative or
governmental body) and be continuing at the time of such demand:
(a) if default shall be made in the due and punctual payment of the
principal of this Note or of any Other Note when and as the same
shall become due and payable, whether at maturity or at a date fixed
for prepayment or by acceleration or otherwise;
(b) if default shall be made in the due and punctual payment of any
installment of interest on any Other Note, when and as such interest
installment shall become due and payable, and such default shall
have continued for a period of five (5) days;
(c) if default shall be made in the performance or observance of any
other of the covenants, agreements or conditions contained in this
Note, the Promissory Note Security Agreement or the Letter
Agreement, and such default shall have
00
Xxxxxxxx X
continued for a period of thirty (30) days after written notice
thereof to the Company by the holder of this Note;
(d) if an event or condition occurs or exists, with respect to any
Plan or otherwise, concerning which the Company is under an
obligation to furnish a report to the holder hereof in accordance
with Subparagraph 2.8(e) hereof and as a result of such event or
condition, together with all other such events or conditions, the
Company or any Related Person has incurred or in the reasonable
opinion of the holder hereof is likely to incur a liability to a
Plan or the PBGC (or any combination of the foregoing) which is
material in relation to the financial position of the Company;
(e) if:
(1) the Company or any other party shall commence any case,
proceeding or other action with respect to the Company in any
jurisdiction relating to bankruptcy, insolvency,
reorganization, relief from debtors, an arrangement,
winding-up, liquidation, dissolution or other relief with
respect to its debts and such case, proceeding or other action
remains unstayed, undismissed or undischarged for sixty (60)
days;
(2) an action is commenced seeking the appointment of a receiver,
trustee, custodian or other similar official for the Company
for all or substantially all of its assets, or the Company
makes a general assignment for the benefit of its creditors;
(3) an action is commenced against the Company seeking issuance of
a warrant of attachment, execution, distraint or similar
process against all or any substantial part of its assets;
(4) the Company becomes insolvent or fails generally to pay its
debts as they become due; or
(5) there is a liquidation, winding up or analogous event with
respect to the Company.
5.2 In addition to the provisions of Subparagraph 5.1(a) through (d), only if
AVSA or an Affiliate of AVSA is the holder of this Note, the occurrence of
any Insecurity Event or Termination Event under Clause 21 of the Agreement
shall also constitute Events of Default for the purpose of this Amendment
to the Agreement.
00
Xxxxxxxx X
5.3 Costs and Expenses
The Company covenants that if default be made in any payment of principal
on this Note, it will pay to the holder hereof to the extent permitted
under applicable law, such further amount (in addition to any amounts due
under the Notes) as shall be sufficient to cover the cost and expense of
collection, including reasonable compensation to the attorneys and counsel
of the holder hereof for all services rendered in that connection.
6. COVENANTS BIND SUCCESSORS AND ASSIGNS
All the covenants, stipulations, promises and agreements in this Note
contained by or on behalf of the Company shall bind its successors and
assigns, whether so expressed or not.
7. GOVERNING LAW
THIS NOTE SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS WHICH ARE EXECUTED AND FULLY TO BE PERFORMED IN
THAT STATE. The Company hereby irrevocably and unconditionally submits to
the jurisdiction of the federal and state courts in New York, New York in
respect of any action or proceeding arising out of or in connection with
this Note. Final judgement against the Company in any such action or
proceeding shall be conclusive, and may be enforced in other jurisdictions
by suit on the judgment, a certified or true copy of which shall be
conclusive evidence of the fact and of the amount of indebtedness or
liability of the Company therein described; provided, however, that at all
times the holder of this Note may at its option bring suit, or institute
other judicial proceedings against the Company, in any court in any place
where the Company or any of its assets may be found.
8. HEADINGS
The headings of the Paragraphs and Subparagraphs of this Note are inserted
for convenience only and do not constitute a part of this Note.
9. LOST, ETC. NOTES
Upon receipt by the Company of evidence satisfactory to it of the loss,
theft, destruction or mutilation of this Note, and (in case of loss, theft
or destruction) or indemnity satisfactory to it, and upon surrender and
cancellation of this Note, if mutilated, the Company, at its expense, will
make and deliver a new Note of like tenor in lieu of this Note. Any Note
made and delivered in accordance with the provisions of this Subparagraph
9 shall be dated as of the date which such new Note is made and delivered.
00
Xxxxxxxx X
The unsecured indemnity agreement of the holder of this Note shall
constitute indemnity satisfactory to the Company for the purposes of this
Subparagraph 9.
10. MISCELLANEOUS
(a) In the event any day for payment of an amount hereunder is not a
Business Day, such payment shall be due and payable on the
immediately preceding Business Day.
(b) All amounts payable under this Note shall be payable without
presentment or demand for payment, protest or further notice or
demand of any kind, all of which are expressly waived by the
Company, except to the extent expressly provided in this Note.
IN WITNESS WHEREOF, MIDWAY AIRLINES CORPORATION has caused this Note to be
signed in its corporate name by its officer thereunto duly authorized, and to be
dated as of the day and year first above written.
MIDWAY AIRLINES CORPORATION
By: /s/ [ILLEGIBLE]
-------------------------
Its: President
14
Amendment No. 5
TO THE A320 PURCHASE AGREEMENT
dated as of March 17, 1995
between
AVSA, S.A.R.L.,
and
MIDWAY AIRLINES CORPORATION
This Amendment No. 5 (hereinafter referred to as the "Amendment") entered into
as of October 29, 1996, by and between AVSA, S.A.R.L., a societe a
responsabilite limitee organized and existing under the laws of the Republic of
France, having its registered office located at 0, xxxx-xxxxx Xxxxxxx Xxxxxxxx,
00000 Xxxxxxx, XXXXXX (hereinafter referred to as the "Seller"), and MIDWAY
AIRLINES CORPORATION, a body corporate, organized and existing under the laws of
the State of Delaware, United States of America, having its principal corporate
offices located at 000 Xxxx Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx, XX 00000
(hereinafter referred to as the "Buyer").
WITNESSETH:
WHEREAS, the Buyer and the Seller entered into (i) a Purchase Agreement,
dated as of March 17, 1995, relating to the sale by the Seller and the purchase
by the Buyer of certain Airbus Industrie A320-200 model aircraft (the
"Aircraft"), which, as previously amended by Amendment No. 1 dated as of
December 21, 1995, Amendment No. 2 dated as of January 31, 1996, Amendment No. 3
dated as of February 28, 1996, and Amendment No. 4 dated as of March 27, 1996,
and supplemented with all Exhibits, Appendixes and Letter Agreements attached
thereto, is hereinafter called the "Agreement," (ii) a related letter agreement
regarding "Financial Matters," which, as previously amended by Amendment No. 1
dated as of December 21, 1995, Amendment No. 2 dated as of March 27, 1996 and
Amendment No. 3 dated the date hereof, is hereinafter called the "Financial
Matters Agreement," (iii) a related Security Agreement, dated as of March 17,
1995, hereinafter referred to as the "Security Agreement," and (iv) a Promissory
Note Security Agreement, dated as of December 21, 1995; and
WHEREAS, the Buyer has asked the Seller and the Seller agrees to
reschedule the maturity date of the Replacement December 1995 Note and the
Rescheduled Payments Note, (made pursuant to Amendment No. 4 of the Agreement),
under the conditions set forth in this Amendment;
WHEREAS, the Buyer and the Seller agree to reschedule the delivery
positions for the Aircraft; and
WHEREAS, capitalized terms used herein and not otherwise defined in this
Amendment will have the meanings assigned to them in the Agreement, and the
terms "herein," "hereof," and hereunder and words of similar import refer to
this Amendment.
NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL COVENANTS HEREINAFTER SET
FORTH, IT IS AGREED AS FOLLOWS:
1. DELIVERY POSITIONS
1.1 The Buyer and the Seller agree that the delivery schedule for Firm
Aircraft set forth in Subclause 9.1 of the Agreement is superseded and
replaced by the following schedule:
QUOTE
Firm Aircraft Month of Delivery
------------- -----------------
No. 1 December 2000
No. 2 January 2001
No. 3 February 2001
No. 4 December 2001
UNQUOTE
1.2 The Buyer and the Seller agree that the delivery schedule for Option
Aircraft set forth in Paragraph 3 of Letter Agreement No. 3 to the
Agreement is superseded and replaced by the following schedule:
QUOTE
Option Aircraft No. Month of Delivery
------------------- -----------------
No. 1 January 2002
No. 2 February 2002
No. 3 November 2002
No. 4 December 2002
UNQUOTE
2. DECEMBER 1995 PREDELIVERY PAYMENTS
2.1 Pursuant to Paragraph 1 of Amendment No. 1 of the Agreement, the Buyer
issued to the Seller the December 1995 Note, which was to mature on April
30, 1996. Pursuant to Paragraph 1 of Amendment No. 4 of the Agreement, in
substitution of the December 1995 Note, the Buyer issued to the Seller the
Replacement December 1995 Note, which was to mature on October 1, 1996.
The Seller hereby agrees, at the Buyer's request, to extend the maturity
date of the Replacement December 1995 Note to October 1, 1998.
2.2 In consideration of the agreement above in Subparagraph 2.1, on execution
of this Amendment, the Seller will cancel and return the Replacement
December 1995 Note to the Buyer, and the Buyer will issue to the Seller a
new promissory note (the "New Replacement December 1995 Note"). The New
Replacement December 1995 Note will (i) be a secured, negotiable note for
the same principal amount as the December 1995 Note and the Replacement
December 1995 Note, which is [***], (ii) be dated as of December 21,
1995, (iii) mature and be payable to the Seller in cash on October 1,
1998, and (iv) be made in the form attached hereto as Appendix A.
2.3 All other terms and conditions applicable to "Notes" under Letter
Agreement No. 4 of the Agreement will also apply to the New Replacement
December 1995 Note, except that the New Replacement December 1995 Note
will not bear interest. The New Replacement December 1995 Note will be
collateralized in the manner set forth in an amendment to the Promissory
Note Security Agreement dated as of the date hereof.
3. JUNE 1996 PREDELIVERY PAYMENTS
3.1 Pursuant to Paragraph 2 of Amendment No. 4 of the Agreement, the Buyer
issued to the Seller the Rescheduled Payments Note, which was to mature on
October 1, 1996. The Seller hereby agrees, at the Buyer's request, to
extend the maturity date of the Rescheduled Payments Note to October 1,
1998.
3.2 In consideration of the Seller's agreement set forth above in Subparagraph
3.1, on execution of this Amendment, the Seller will cancel and return the
Rescheduled Payments Note to the Buyer, and the Buyer will issue to the
Seller a new promissory note (the "New Rescheduled Payments Note"). The
New Rescheduled Payments Note will (i) be secured and negotiable, (ii) be
dated as of Xxxxx 00, 0000, (xxx) mature and be payable in cash on October
1, 1998, and (iv) be made in the form attached hereto as Appendix B.
3
3.3 All other terms and conditions applicable to "Notes" under Letter
Agreement No. 4 to the Agreement will also apply to the New Rescheduled
Payments Note, except that the New Rescheduled Payments Note will not bear
interest. The New Rescheduled Payments Note will be collateralized in the
manner set forth in an amendment to the Promissory Note Security Agreement
dated as of the date hereof.
4. FURTHER AGREEMENT
4.1 Subparagraph 1.2(b) of Amendment No. 1, as amended by Amendment Xx. 0,
Xxxxxxxxx Xx. 0 and Amendment No. 4 of the Agreement, is deleted in its
entirety and replaced as follows:
QUOTE
(b) The Buyer will provide the Seller with satisfactory written
substantiation by November 28, 1996, of its having requested and
obtained from its other principal creditors (including, but not
limited to, American Airlines, Inc., and Fokker Aircraft U.S.A.,
Inc.) payment deferrals generally similar in scope as the deferral
described in this Amendment.
UNQUOTE
4.2 The first three lines of Subparagraph 1.2(c) of Amendment No. 1, as
amended by Amendment Xx. 0, Xxxxxxxxx Xx. 0 and Amendment No. 4 of the
Agreement, and Subparagraphs 1.2(c)(x) through 1.2(c)(z) of Amendment No.
1, as partially amended by Amendment No. 4 of the Agreement are deleted in
their entirety and replaced as follows:
QUOTE
(c) The New Replacement December 1995 Note and the New Rescheduled
Payments Note will become immediately due and payable on November
29, 1996, in the event that any of the following conditions have not
been met by November 28, 1996:
(x) The Seller or its designee has completed a satisfactory
physical inspection of the collateral delivered under an
amendment to each of the Promissory Note Security Agreement
and the Security Agreement dated as of the date of the
Amendment.
(y) The Seller has obtained a perfected first priority security
interest in all the collateral described in an amendment to
each of the Promissory Note
4
Security Agreement and the Security Agreement dated as of the
date of Amendment No. 4 to the Agreement.
(z) The Buyer has provided the Seller the written substantiation
described above in Subparagraph 1.2(b).
UNQUOTE
4.3 The Seller agrees to review after the date hereof the availability to the
Buyer of earlier delivery positions for the Aircraft than those set forth
in Paragraph 1 above after completion of its production planning review
and subject to its commercial and industrial constraints.
5. CONFIDENTIALITY
Subject to any legal or governmental requirements of disclosure, the
parties (which for this purpose shall include their employees, agents and
advisors) shall maintain the terms and conditions of this Amendment and
any reports or other data furnished hereunder strictly confidential.
Without limiting the generality of the foregoing, the Buyer and the Seller
shall use their best efforts to limit the disclosure of the contents of
this Agreement to the extent legally permissible in any filing required to
be made by the Buyer or the Seller, as the case may be, with any
governmental agency and shall make such applications as shall be necessary
to implement the foregoing. With respect to any public disclosure or
filing, each party agrees to submit to the other party a copy of the
proposed document to be filed or disclosed and will give the other party a
reasonable period of time in which to review the said document. The Buyer
and Seller shall consult with each other prior to the making of any public
disclosure or filing, permitted hereunder, of this Amendment or the terms
and conditions thereof. The provisions of this Paragraph 5 shall survive
any termination of this Agreement.
6. EFFECT OF AMENDMENT
The Agreement will be deemed amended to the extent herein provided, and,
except as specifically amended hereby, will continue in full force and
effect in accordance with its original terms, except that if the Agreement
and this Amendment have specific provisions that are inconsistent, the
specific provisions contained in this Amendment will govern. It is
understood that this Amendment does not in any way constitute a waiver by
the Seller of any rights it has under the Agreement or under the Financial
Matters Agreement.
Further, it is agreed that this Amendment is subject to the parties'
executing as of the date hereof an amendment to each of the Financial
Matters Agreement, the Security Agreement and the Promissory Note
Security Agreement, if applicable.
5
7. INTERPRETATION AND LAW
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND THE
PERFORMANCE THEREOF SHALL BE DETERMINED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
THE PARTIES HEREBY ALSO AGREE THAT THE UNITED NATIONS
CONVENTION ON THE INTERNATIONAL SALE OF GOODS SHALL NOT APPLY
TO THIS TRANSACTION.
If the foregoing correctly sets forth our understanding, please execute
this Amendment in the space provided below, whereupon, as of the date first
above written, this Amendment will constitute part of the Agreement.
Agreed and accepted Yours sincerely,
MIDWAY AIRLINES AVSA, S.A.R.L.
CORPORATION
By: /s/ Xxxxxxxx X. Xxxxxx By: /s/ [ILLEGIBLE]
-------------------------------- ------------------------------------
Its: Senior Vice President Its:
General Counsel ------------------------------------
By:
--------------------------------
Its:
--------------------------------
6
Appendix A
MIDWAY AIRLINES CORPORATION
Secured Registered Promissory Note
R. New York, New York
[***] December 21, 0000
XXXXXX XXXXXXXX CORPORATION, a corporation duly organized and existing
under the laws of the State of Delaware, USA (the "Company"), for value
received, hereby promises to pay to the order of AVSA, S.A.R.L. ("AVSA") or
registered assigns on October 1, 1998, (the "Payment Date"), the principal
amount of [***] in such coin or currency of the United States of America as
at the time of payment shall be legal tender for public and private debts, at
the office of AVSA at 0, xxxx-xxxxx Xxxxxxx Xxxxxxxx, 00000 Xxxxxxx, Xxxxxx (or
at such other office as the holder hereof shall designate to the Company in
writing).
l. PAYMENT DATE; EXCHANGES; PREPAYMENTS
1.1 Transfer or Exchange
This Note is transferable by the holder hereof as herein provided. The
Company shall keep at its office or agency, maintained as provided in
Subparagraph 2.2, a register in which the Company shall provide for the
registration of this Note and for the registration of transfer of this
Note. The holder of this Note may, at its option and either in person or
by duly authorized attorney, surrender the same for registration of
transfer and receive in exchange herefor a Note, dated as of the transfer
of this Note, for the same aggregate unpaid principal amount as this Note
and registered in such name or names as may be designated by the holder
hereof. This Note, when presented or surrendered for registration of
transfer, shall be duly endorsed or shall be accompanied by a written
instrument of transfer duly executed by the holder of this Note or his
attorney duly authorized in writing. The Note so made and delivered in
exchange for this Note shall in all other respects be in the same form and
have the same terms as this Note and each such exchange or transfer shall
be made in such a manner that no gain or loss of principal shall result
therefrom. No transfer or exchange of this Note shall be valid unless made
in such manner at such office. The Company agrees that it will pay
shipping and insurance charges from and to the principal office of the
holder of this Note involved in any exchange by the holder of this Note.
Appendix A
1.2 Registered Holders; Payments
Prior to due presentment for registration of transfer of this Note, the
Company may deem and treat the registered holder hereof as the absolute
owner hereof for the purpose of receiving payment of or on account of the
principal of this Note and for the purposes of any notices, waivers or
consents thereunder, and payments of any Note shall be made only to or
upon the order in writing of the registered holder hereof. All payments
made hereunder shall be made in immediately available funds in United
States Dollars prior to 1:00 P.M., New York City time, by credit to Credit
Lyonnais, New York Branch, or to such other account as the holder hereof
shall advise the Company in writing. All payments due under this Note
shall be made in full without set-off, counterclaim, recoupment, or
defense and without deduction or withholding of any kind, provided,
however, the same shall not be deemed a waiver of any rights or remedies
of the Company against the Seller or any of its Affiliates. Consequently,
the Company shall assure that the sums received by the holder of this Note
hereunder shall be equal to the full amounts expressed to be due to the
holder hereunder, without deduction or withholding on account of and free
from any and all taxes, levies, imposts, dues or charges of whatever
nature imposed on the Company, except that if the Company is compelled by
law to make any such deduction or withholding the Company shall pay such
additional amounts as may be necessary in order that the net amount
received by the holder after such deduction or withholding shall equal the
amounts which would have been received in the absence of such deduction or
withholding.
1.3 Optional Prepayments
Upon notice given as provided in Subparagraph 1.5, the Company, at its
option, may prepay this Note, in whole and not in part, at anytime, at one
hundred percent (100%) of the outstanding principal amount thereof,
without premium. This Note shall be paid in whole, at one hundred percent
(100%) of the outstanding principal amount hereof, on the Payment Date.
1.4 Notice of Prepayment and Other Notices
The Company shall give written notice of optional prepayment of this Note
pursuant to Subparagraph 1.3 one (1) Business Day prior to the Payment
Date. Any notice of prepayment and all other notices to be given to any
holder of this Note shall be given by registered or certified mail to the
registered holder hereof at its address designated on the register
maintained by the Company on the date fixed for such notice of prepayment
or other notice. Upon notice of any optional prepayment pursuant to
Subparagraph 1.3, the Company covenants and agrees that it will prepay on
the date therein fixed for prepayment the entire outstanding principal
amount of this Note. The principal amount of this Note shall be due and
payable on the date specified in such notice.
2
Appendix A
2. COVENANTS
The Company covenants and agrees that so long as this Note shall be
outstanding:
2.1 To Pay Principal
The Company will punctually pay or cause to be paid the principal of this
Note according to the terms hereof at the place of payment hereinabove
specified.
2.2 Maintenance of Company Office
The Company will maintain an office or agency at 000 Xxxx Xxxxxx Xxxxxx,
Xxxxx 0000, Xxxxxx, Xxxxx Xxxxxxxx 00000, XXX or such other place in the
United States of America as the Company may designate in writing to the
holder hereof where notices, presentations and demands to or upon the
Company in respect of the Notes may be given or made.
2.3 To Keep Books
The Company will, and will cause each of its Material Subsidiaries to keep
proper books of record and account in which proper entries will be made of
its transactions in accordance with generally accepted accounting
principles.
2.4 Payment of Taxes; Corporate Existence; Maintenance of Properties
The Company will, and will cause each of its Material Subsidiaries to,
(a) pay and discharge promptly or cause to be paid and discharged
promptly (i) all taxes, assessments and governmental charges or
levies imposed upon it or upon its income or profits or upon any
of its property, real, personal or mixed, or upon any part
thereof, before the same shall become in default, unless the same
is being contested in good faith, (ii) all lawful claims for
labor, materials and supplies which if unpaid, might by law
become a lien or charge upon its property, unless the same is
being contested in good faith, and (iii) all obligations to the
Pension Benefit Guaranty Corporation (or any successor thereto
under the Employee Retirement Income Security Act of 1974, as
amended ("ERISA")) ("PBGC").
(b) do or cause to be done all things necessary to preserve and keep in
full force and effect its existence, materially advantageous rights,
licenses, privileges, permits
3
Appendix A
and franchises and comply in all material respects with all laws and
regulations applicable to it and its business; and
(c) maintain and keep, or cause to be maintained and kept, its
properties, including the Collateral as defined in the Promissory
Note Security Agreement, in good repair, working order and condition
and from time to time make or cause to be made all needful and
proper repairs, renewals, replacements and improvements so that the
business carried on in connection therewith may be properly
conducted at all times.
2.5 To Insure
The Company will, and will cause each of its Material Subsidiaries to,
(a) keep adequately insured, by financially sound and reputable
insurers, all property of a character usually insured by similar
corporations engaged in the same or a similar business similarly
situated against loss or damage of the kinds customarily insured
against by such corporations;
(b) carry, with financially sound and reputable insurers, such other
insurance (including, without limitation, liability insurance) and
in such amounts as is usually carried by corporations engaged in the
same or a similar business similarly situated; and
(c) maintain all such worker's compensation or similar insurance as may
be required under the laws of any state or jurisdiction in which it
may be engaged in business.
All insurance herein provided for shall be effected under a valid and
enforceable policy or policies.
2.6 Sale of Assets
The Company will not, and will not permit any unconsolidated subsidiary
to, sell, lease, transfer or otherwise dispose of all or substantially all
of its assets to any Person other than the Company or any Material
Subsidiary.
2.7 Merger or Consolidation
The Company will not, and will not permit any Material Subsidiary to,
consolidate with or merge into any Person or permit any Person to merge
into it except that
4
Appendix A
(a) a Material Subsidiary may merge into the Company if the Company is
the surviving corporation or may merge or consolidate with any other
Material Subsidiary or any other corporation if a Material
Subsidiary is the surviving corporation; and
(b) the Company may merge or consolidate with any other Person if (i)
the surviving or successor corporation is a corporation
incorporated or organized under the laws of the United States of
America, one of the states thereof or the District of Columbia,
(ii) the surviving or successor corporation (if not the Company)
shall expressly assume in writing (by an instrument a copy of
which shall be mailed by registered mail to the holder of this
Note) the due and punctual payment of the principal of this Note,
according to its tenor, and the due and punctual performance and
observance of all of the terms, covenants, agreements and
conditions of this Note to be performed or observed by the
Company to the same extent as if such surviving or successor
corporation had originally executed this Note in the place of the
Company, and had been the original maker of this Note, (iii) such
Person is legally able to perform the Company's obligations
hereunder and has a Consolidated net worth, as determined in
accordance with generally accepted accounting principles
consistently applied, not less than the Consolidated net worth of
the Company (similarly determined) at the time of such merger or
consolidation, and (iv) immediately after such consolidation or
merger, no Event of Default or Insecurity Event or event which,
with notice or lapse of time or both, would become an Event of
Default or Insecurity Event, shall have occurred and be
continuing under this Note.
2.8 Information and Reports to be furnished by the Company
The Company will furnish to the holder of this Note:
(a) Reports
(i) Quarterly Reports. Within forty-five (45) days after the end
of each of the first three quarterly fiscal periods in each
fiscal year of the Buyer, a Consolidated balance sheet of the
Buyer and its Consolidated subsidiaries prepared as of the
close of such period, together with the related statements of
income and surplus; and
(ii) Annual Statements. Within ninety (90) days after the end of
each fiscal year of the Buyer, an audited Consolidated balance
sheet of the Buyer and its Consolidated subsidiaries as at the
end of such year (when they become
5
Appendix A
available), and the related statement of income and surplus.
(iii) Monthly Reports Within twenty (20) days after the end of each
month in each fiscal year of the Buyer, a Consolidated balance
sheet of the Buyer and its Consolidated subsidiaries prepared
as of the close of such month, together with the related
statements of income and surplus, statement of sources and
uses of cash, as well as such other historical information
relating to such period that the Buyer maintains. Such
information will include, but not be limited to, revenue per
available seat mile, cost per available seat mile, segment
profitability information, the number of total passengers, and
load factor and average fare information.
"Consolidated" means, as applied to any financial or accounting term
or amount, such term or amount determined on a consolidated basis in
accordance with generally accepted accounting principles.
(b) Publicly Filed reports to Stockholders and the SEC
The Company will furnish the Seller with all publicly filed reports
to stockholders or the United States Securities and Exchange
Commission, if any.
(c) Notice of Default
Immediately upon the Company's becoming aware of the existence of
any default in its performance or observance of any covenant,
agreement or condition contained in this Note or in the Promissory
Note Security Agreement, a written notice specifying the nature and
status thereof and what action the Company is taking with respect
thereto.
(d) Notice of Acceleration
Immediately upon the Company's becoming aware that the holder of any
bond, debenture, promissory note (including any note other than this
Note issued by the Company in favor of Payee or issued pursuant to
Amendment No. 1 to the Agreement ("Other Notes")) or any similar
evidence of indebtedness of the Company or any Material Subsidiary
has demanded payment, given notice or taken any other action with
respect to a claimed Event of Default under any Other Note or
claimed default in respect of or under such bond, debenture or
promissory note, a written notice specifying the demand made, notice
given or action taken by such holder and the nature and status of
the claimed Event of Default or default
6
Appendix A
and what action the Company is taking with respect thereto.
(e) ERISA
As promptly as practicable (but in any event not later than fifteen
(1) days) after the Company or Related Person (i) engages in any
"prohibited transaction" (as defined in Section 406 of ERISA or
section 497 of the Internal Revenue Code of 1986, as amended (the
"Code")) with any "employee benefit plan" (as defined in Section 3
(3) of ERISA ("Plan")), (ii) files a notice of intent under Section
4041 of ERISA with the PBGC to terminate any such Plan, (iii)
receives a notice from the PBGC to appoint a trustee to administer
any such Plan, (iv) knows or has reason to know that termination
proceedings with respect to any such Plan have commenced, (v) knows
or has reason to know that any "reportable event" (within the
meaning of Section 4043(b) of ERISA) or other condition with respect
to any such Plan has occurred which will result in a liability to
the PBGC, (vi) fails to make a quarterly installment contribution to
any such Plan with respect to which a lien may be imposed under
section 412(n) of the Code, (vii) knows or has reason to know that
any "accumulated funding deficiency" (as defined in Section 302 of
ERISA), whether or not waived, shall exist with respect to any such
Plan, (viii) withdraws in a "complete withdrawal" or a "partial
withdrawal" from a "multiemployer plan" pursuant to subtitle E of
Title IV of ERISA or knows or has reason to know that it will or is
likely to incur a material liability in connection with any
reorganization or insolvency of such a Plan, or (ix) is involved in
a situation referred to in Section 4204 of ERISA, a statement of an
officer of the Company setting forth the details with respect to the
events resulting in such notice of intent to terminate or to appoint
a trustee, or with respect to such termination proceedings,
reportable event, other condition, withdrawal, or other situation,
as the case may be, and the action which the Company or Related
Person proposes to take with respect thereto, together with a copy
of any such notice of intent to terminate or to appoint a trustee, a
copy of any notice or other papers received by the Company or
Related Person with respect to such termination proceedings, a copy
of any notice of any such reportable event or other condition filed
by the Company or a Related Person with PBGC, a copy of any notice
received by the Company or a Related Person pursuant to Section 4219
of ERISA, or a copy of the papers pertaining to the situation
described in Section 4204 of ERISA, as the case may be.
(f) Miscellaneous Information
From time to time upon request, when the Payee is not the holder of
the Note,
7
Appendix A
such nonproprietary or nonconfidential information regarding the
business, affairs and condition of the Company and of any Material
Subsidiary and its properties in such detail as may reasonably be
requested. The Company covenants and agrees that any authorized
officer or representative of the holder of this Note shall have the
right, at such holder's expense and subject to applicable
governmental regulations, to visit and inspect any of the properties
of the Company and of any Material Subsidiary, to examine its books
of account and to discuss its affairs, finances and accounts with,
and be advised as to the same by, its officers or its independent
certified public accountants all at such reasonable times and
intervals as may be reasonably requested upon not less that five (5)
days' notice.
(g) The Note holder agrees to keep strictly confidential the information
described above in Subparagraph 2.8(f) and to not disclose the same
to any other Person or entity.
2.9 Taxes, etc.
The Company will pay or cause to be paid all United States stamp taxes
(including interest and penalties), if any, solely attributable to the
execution and delivery of this Note, or of any amendment of, or waiver or
consent under or with respect to, this Note, and will indemnify and save
the holder hereof harmless from any loss or damage of any kind whatsoever
resulting from or arising out of the non-payment or delay in the payment
of such taxes.
2.10 Transactions with Affiliates
The Company will not permit any of its Material Subsidiaries to, sell or
transfer any assets (including capital stock of any Subsidiary) to, or
purchase or acquire any assets of; or otherwise engage in any material
transaction (including any merger) with, or permit any Affiliate to sell
or transfer assets (including capital stock of any Subsidiary) to, or
purchase or acquire any assets of, or otherwise engage in any other
material transaction (including any merger) with, any other Affiliate
except for (i) transactions expressly permitted by the Agreement, (ii)
transactions (a) between the Company and one or more Wholly-Owned
Subsidiaries of the Company, provided that in the case of any
consolidation or merger in which the Company is not the surviving
corporation, such transaction shall be permitted pursuant to Subparagraph
2.7 hereof or (b) between Wholly-Owned Subsidiaries of the Company, (iii)
transactions in the ordinary course of business and upon fair and
reasonable terms no less favorable than the Company or any of its
Subsidiaries could obtain or could become entitled to in an arm's-length
transaction with a Person which was not an Affiliate and then, in any
case, only if no default or Event
8
Appendix A
of Default shall have occurred and be continuing, or (iv) transactions
pursuant to a capital investment by an Affiliate into the Company on fair
and reasonable terms. None of the Company and its Subsidiaries shall be
permitted to amend any material agreement with an Affiliate if a default
or Event of Default has occurred and is continuing.
2.11 Certain Definitions
For purposes of this Note,
(a) "Affiliate" means with respect to any person or entity, any other
person or entity directly or indirectly controlling, controlled by
or under common control with such person or entity.
(b) "Agreement" means the Airbus A320 Purchase Agreement, dated as of
March 17, 1995, between AVSA, S.A.R.L. and the Company.
(c) "Business Day" means any day which is not a Saturday or a Sunday and
which is neither a legal holiday nor a day on which banking
institutions are authorized or required by law or regulation to
close in Xxx Xxxx xx Xxx Xxxx, Xxxxxx, Xxxxxxx or Toulouse, France.
(d) "Consolidated" means, as applied to any financial or accounting term
or amount, such term or amount determined on a consolidated basis in
accordance with generally accepted accounting principles;
(e) "Governmental Authority" means any nation or government, any state
or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government;
(f) "Letter Agreement" means the Financial Matters Letter Agreement,
dated March 17, 1995.
(g) "Material Subsidiary" of any Person means, at any time of
determination, each Subsidiary (or a group of Subsidiaries that
would constitute a Material Subsidiary if consolidated and which
are engaged in the same or related lines of business) of such
Person now existing or hereafter acquired or formed by such
Person which
9
Appendix A
(x) accounted for more than l0% of the Consolidated revenues of such
Person and its Subsidiaries during the twelve-month period ending on
the date of the most recent Consolidated balance sheet of such
Person delivered to the holder of this Note pursuant to Subparagraph
2.8, or (y) was the owner of more than 10% of the Consolidated
assets of such Person and its Subsidiaries at the date of the most
recent Consolidated balance sheet of such Person delivered to the
holders of this Note pursuant to Subparagraph 2.8;
(h) "Person" means any natural person, corporation, partnership, joint
venture, joint-stock company, trust, unincorporated organization,
firm, association, government (or political subdivision thereof),
governmental agency, authority or instrumentality, or any other
entity, whether acting in an individual, fiduciary or other
capacity;
(i) "Promissory Note Security Agreement" means the Promissory Note
Security Agreement, dated as of December 21, 1995.
(j) "Related Person" means any corporation or any trade or business
(whether or not incorporated) which, together with the Company, is a
member of a controlled group of corporations within the meaning of
Section 163(a) of the Code, determined without regard to Section
163(a) (4) and (e)(3)(C) of the Code, or is under common control
with the Company as described in Section 414(c) of the Code;
(k) "Requirement of Law" means as to any Person, the certificate of
incorporation and by-laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation or
determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or
any of its property or to which such Person or any of its property
is subject;
(l) "Subsidiary" of any Person means any corporation or other entity
of which such Person, directly or indirectly, shall at the time
(a) own shares of any class or classes with power for the
election of at least a majority of the members of the board of
directors (or the governing body) of such corporation or other
entity other than shares or other interest having such power only
by reason of the happening of a contingency or (b) otherwise have
the legal right to elect such a majority; and
(m) "Wholly-Owned Subsidiary" means, with respect to any Person, any
Subsidiary of such Person all of the outstanding shares of capital
stock of which (other than
10
Appendix A
directors' qualifying shares) are owned directly by such Person or a
Wholly-Owned Subsidiary of such Person.
3. AMENDMENT AND WAIVER
Any term, covenant, agreement or condition of this Note may, with the
consent of the Company, be amended or compliance therewith may be waived
(either generally or in a particular instance and either retroactively or
prospectively), by one or more written instrument(s) signed by the holder
of this Note.
4. YIELD PROTECTION AND ILLEGALITY
4.1 Illegality
In the event that it becomes unlawful for the holder of this Note to
maintain the loan evidenced hereby on a LIBOR basis, then the holder shall
promptly notify the Company thereof.
4.2 Compensation
The Company shall pay to the holder of this Note, upon the request of the
holder, such amount or amounts as shall be sufficient (in the opinion of
the holder) to compensate it for any actual out-of-pocket loss, cost or
expense incurred by it as a result of any payment or prepayment of this
Note on a date other than the Payment Date, or any failure by the Company
to prepay this Note on the date for such prepayment specified herein.
5. DEFAULTS AND REMEDIES
5.1 Events of Default
This Note shall become and be due and payable upon demand of the holder
hereof, without presentation, protest, or further demand or notice of any
kind (all of which are hereby expressly waived by the Company), if any one
or more of the following events (herein called "Events of Default") shall
occur for any reason whatsoever (and whether such occurrence shall be
voluntary or involuntary or come about or be effected by operation of law
or pursuant to or in compliance with any judgment, decree or order of any
court or any order, rule or regulation of any administrative or
governmental body) and be continuing at the time of such demand:
(a) if default shall be made in the due and punctual payment of the
principal of this
11
Appendix A
Note or of any Other Note when and as the same shall become due and
payable, whether at maturity or at a date fixed for prepayment or by
acceleration or otherwise;
(b) if default shall be made in the due and punctual payment of any
installment of interest on any Other Note, when and as such interest
installment shall become due and payable, and such default shall
have continued for a period of five (5) days;
(c) if default shall be made in the performance or observance of any
other of the covenants, agreements or conditions contained in this
Note, the Promissory Note Security Agreement or the Letter
Agreement, and such default shall have continued for a period of
thirty (30) days after written notice thereof to the Company by the
holder of this Note;
(d) if an event or condition occurs or exists, with respect to any
Plan or otherwise, concerning which the Company is under an
obligation to furnish a report to the holder hereof in accordance
with Subparagraph 2.8(e) hereof and as a result of such event or
condition, together with all other such events or conditions, the
Company or any Related Person has incurred or in the reasonable
opinion of the holder hereof is likely to incur a liability to a
Plan or the PBGC (or any combination of the foregoing) which is
material in relation to the financial position of the Company;
(e) if:
(1) the Company or any other party shall commence any case,
proceeding or other action with respect to the Company in any
jurisdiction relating to bankruptcy, insolvency,
reorganization, relief from debtors, an arrangement,
winding-up, liquidation, dissolution or other relief with
respect to its debts and such case, proceeding or other action
remains unstayed, undismissed or undischarged for sixty (60)
days;
(2) an action is commenced seeking the appointment of a receiver,
trustee, custodian or other similar official for the Company
for all or substantially all of its assets, or the Company
makes a general assignment for the benefit of its creditors;
(3) an action is commenced against the Company seeking issuance of
a warrant of attachment, execution, distraint or similar
process against all
12
Appendix A
or any substantial part of its assets;
(4) the Company becomes insolvent or fails generally to pay its
debts as they become due; or
(5) there is a liquidation, winding up or analogous event with
respect to the Company.
5.2 In addition to the provisions of Subparagraph 5.1(a) through (d), only if
AVSA or an Affiliate of AVSA is the holder of this Note, the occurrence of
any Insecurity Event or Termination Event under Clause 21 of the Agreement
shall also constitute Events of Default for the purpose of this Amendment
to the Agreement.
5.3 Costs and Expenses
The Company covenants that if default be made in any payment of principal
on this Note, it will pay to the holder hereof to the extent permitted
under applicable law, such further amount (in addition to any amounts due
under the Notes) as shall be sufficient to cover the cost and expense of
collection, including reasonable compensation to the attorneys and counsel
of the holder hereof for all services rendered in that connection.
6. COVENANTS BIND SUCCESSORS AND ASSIGNS
All the covenants, stipulations, promises and agreements in this Note
contained by or on behalf of the Company shall bind its successors and
assigns, whether so expressed or not.
7. GOVERNING LAW
THIS NOTE SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS WHICH ARE EXECUTED AND FULLY TO BE PERFORMED IN
THAT STATE. The Company hereby irrevocably and unconditionally submits to
the jurisdiction of the federal and state courts in New York, New York in
respect of any action or proceeding arising out of or in connection with
this Note. Final judgement against the Company in any such action or
proceeding shall be conclusive, and may be enforced in other jurisdictions
by suit on the judgment, a certified or true copy of which shall be
conclusive evidence of the fact and of the amount of indebtedness or
liability of the Company therein described; provided, however, that at all
times the holder of this Note may at its option bring suit, or institute
other judicial proceedings against the Company, in any court in any place
where the Company or any of its assets may be found.
13
Appendix A
8. HEADINGS
The headings of the Paragraphs and Subparagraphs of this Note are inserted
for convenience only and do not constitute a part of this Note.
9. LOST, ETC. NOTES
Upon receipt by the Company of evidence satisfactory to it of the loss,
theft, destruction or mutilation of this Note, and (in case of loss, theft
or destruction) or indemnity satisfactory to it, and upon surrender and
cancellation of this Note, if mutilated, the Company, at its expense, will
make and deliver a new Note of like tenor in lieu of this Note. Any Note
made and delivered in accordance with the provisions of this Subparagraph
9 shall be dated as of the date which such new Note is made and delivered.
The unsecured indemnity agreement of the holder of this Note shall
constitute indemnity satisfactory to the Company for the purposes of this
Subparagraph 9.
10. MISCELLANEOUS
(a) In the event any day for payment of an amount hereunder is not a
Business Day, such payment shall be due and payable on the
immediately preceding Business Day.
(b) All amounts payable under this Note shall be payable without
presentment or demand for payment, protest or further notice or
demand of any kind, all of which are expressly waived by the
Company, except to the extent expressly provided in this Note.
IN WITNESS WHEREOF, MIDWAY AIRLINES CORPORATION has caused this Note to be
signed in its corporate name by its officer thereunto duly authorized, and to be
dated as of the day and year first above written.
MIDWAY AIRLINES CORPORATION
By: /s/ Xxxxxxxx X. Xxxxxx
--------------------------------
Its: Senior Vice President
General Counsel
14
Appendix B
MIDWAY AIRLINES CORPORATION
Secured Registered Promissory Note
R. New York, New York
[***] March 27, 0000
XXXXXX XXXXXXXX CORPORATION, a corporation duly organized and existing
under the laws of the State of Delaware, USA (the "Company"), for value
received, hereby promises to pay to the order of AVSA, S.A.R.L. ("AVSA") or
registered assigns on October 1, 1998, (the "Payment Date"), the principal
amount of [***] in such coin or currency of the United States of America as at
the time of payment shall be legal tender for public and private debts, at the
office of AVSA at 0, xxxx-xxxxx Xxxxxxx Xxxxxxxx, 00000 Xxxxxxx, Xxxxxx (or at
such other office as the holder hereof shall designate to the Company in
writing).
1. PAYMENT DATE; EXCHANGES; PREPAYMENTS
1.1 Transfer or Exchange
This Note is transferable by the holder hereof as herein provided. The
Company shall keep at its office or agency, maintained as provided in
Subparagraph 2.2, a register in which the Company shall provide for the
registration of this Note and for the registration of transfer of this
Note. The holder of this Note may, at its option and either in person or
by duly authorized attorney, surrender the same for registration of
transfer and receive in exchange herefor a Note, dated as of the transfer
of this Note, for the same aggregate unpaid principal amount as this Note
and registered in such name or names as may be designated by the holder
hereof. This Note, when presented or surrendered for registration of
transfer, shall be duly endorsed or shall be accompanied by a written
instrument of transfer duly executed by the holder of this Note or his
attorney duly authorized in writing. The Note so made and delivered in
exchange for this Note shall in all other respects be in the same form and
have the same terms as this Note and each such exchange or transfer shall
be made in such a manner that no gain or loss of principal shall result
therefrom. No transfer or exchange of this Note shall be valid unless made
in such manner at such office. The Company agrees that it will pay
shipping and insurance charges from and to the principal office of the
holder of this Note involved in any exchange by the holder of this Note.
Appendix B
1.2 Registered Holders; Payments
Prior to due presentment for registration of transfer of this Note, the
Company may deem and treat the registered holder hereof as the absolute
owner hereof for the purpose of receiving payment of or on account of the
principal of this Note and for the purposes of any notices, waivers or
consents thereunder, and payments of any Note shall be made only to or
upon the order in writing of the registered holder hereof. All payments
made hereunder shall be made in immediately available funds in United
States Dollars prior to 1:00 P.M., New York City time, by credit to Credit
Lyonnais, New York Branch, or to such other account as the holder hereof
shall advise the Company in writing. All payments due under this Note
shall be made in full without set-off, counterclaim, recoupment, or
defense and without deduction or withholding of any kind, provided,
however, the same shall not be deemed a waiver of any rights or remedies
of the Company against the Seller or any of its Affiliates. Consequently,
the Company shall assure that the sums received by the holder of this Note
hereunder shall be equal to the full amounts expressed to be due to the
holder hereunder, without deduction or withholding on account of and free
from any and all taxes, levies, imposts, dues or charges of whatever
nature imposed on the Company, except that if the Company is compelled by
law to make any such deduction or withholding the Company shall pay such
additional amounts as may be necessary in order that the net amount
received by the holder after such deduction or withholding shall equal the
amounts which would have been received in the absence of such deduction or
withholding.
1.3 Optional Prepayments
Upon notice given as provided in Subparagraph 1.5, the Company, at its
option, may prepay this Note, in whole and not in part, at anytime, at one
hundred percent (100%) of the outstanding principal amount thereof,
without premium. This Note shall be paid in whole, at one hundred percent
(100%) of the outstanding principal amount hereof, on the Payment Date.
1.4 Notice of Prepayment and Other Notices
The Company shall give written notice of optional prepayment of this Note
pursuant to Subparagraph 1.3 one (1) Business Day prior to the Payment
Date. Any notice of prepayment and all other notices to be given to any
holder of this Note shall be given by registered or certified mail to the
registered holder hereof at its address designated on the register
maintained by the Company on the date fixed for such notice of prepayment
or other notice. Upon notice of any optional prepayment pursuant to
Subparagraph 1.3, the Company covenants and agrees that it will prepay on
the date therein fixed for prepayment the entire outstanding principal
amount of this Note. The principal amount of this Note shall be due and
payable on the date specified in such notice.
2
Appendix B
2. COVENANTS
The Company covenants and agrees that so long as this Note shall be
outstanding:
2.1 To Pay Principal
The Company will punctually pay or cause to be paid the principal of this
Note according to the terms hereof at the place of payment hereinabove
specified.
2.2 Maintenance of Company Office
The Company will maintain an office or agency at 000 Xxxx Xxxxxx Xxxxxx,
Xxxxx 0000, Xxxxxx, Xxxxx Xxxxxxxx 00000, XXX or such other place in the
United States of America as the Company may designate in writing to the
holder hereof where notices, presentations and demands to or upon the
Company in respect of the Notes may be given or made.
2.3 To Keep Books
The Company will, and will cause each of its Material Subsidiaries to keep
proper books of record and account in which proper entries will be made of
its transactions in accordance with generally accepted accounting
principles.
2.4 Payment of Taxes; Corporate Existence; Maintenance of Properties
The Company will, and will cause each of its Material Subsidiaries to,
(a) pay and discharge promptly or cause to be paid and discharged
promptly (i) all taxes, assessments and governmental charges or
levies imposed upon it or upon its income or profits or upon any
of its property, real, personal or mixed, or upon any part
thereof, before the same shall become in default, unless the same
is being contested in good faith, (ii) all lawful claims for
labor, materials and supplies which if unpaid, might by law
become a lien or charge upon its property, unless the same is
being contested in good faith, and (iii) all obligations to the
Pension Benefit Guaranty Corporation (or any successor thereto
under the Employee Retirement Income Security Act of 1974, as
amended ("ERISA")) ("PBGC").
(b) do or cause to be done all things necessary to preserve and keep in
full force and effect its existence, materially advantageous rights,
licenses, privileges, permits
3
Appendix B
and franchises and comply in all material respects with all laws and
regulations applicable to it and its business; and
(c) maintain and keep, or cause to be maintained and kept, its
properties, including the Collateral as defined in the Promissory
Note Security Agreement, in good repair, working order and condition
and from time to time make or cause to be made all needful and
proper repairs, renewals, replacements and improvements so that the
business carried on in connection therewith may be properly
conducted at all times.
2.5 To Insure
The Company will, and will cause each of its Material Subsidiaries to,
(a) keep adequately insured, by financially sound and reputable
insurers, all property of a character usually insured by similar
corporations engaged in the same or a similar business similarly
situated against loss or damage of the kinds customarily insured
against by such corporations;
(b) carry, with financially sound and reputable insurers, such other
insurance (including, without limitation, liability insurance) and
in such amounts as is usually carried by corporations engaged in the
same or a similar business similarly situated; and
(c) maintain all such worker's compensation or similar insurance as may
be required under the laws of any state or jurisdiction in which it
may be engaged in business.
All insurance herein provided for shall be effected under a valid and
enforceable policy or policies.
2.6 Sale of Assets
The Company will not, and will not permit any unconsolidated subsidiary
to, sell, lease, transfer or otherwise dispose of all or substantially all
of its assets to any Person other than the Company or any Material
Subsidiary.
2.7 Merger or Consolidation
The Company will not, and will not permit any Material Subsidiary to,
consolidate with or merge into any Person or permit any Person to merge
into it except that
4
Appendix B
(a) a Material Subsidiary may merge into the Company if the Company is
the surviving corporation or may merge or consolidate with any other
Material Subsidiary or any other corporation if a Material
Subsidiary is the surviving corporation; and
(b) the Company may merge or consolidate with any other Person if (i)
the surviving or successor corporation is a corporation
incorporated or organized under the laws of the United States of
America, one of the states thereof or the District of Columbia,
(ii) the surviving or successor corporation (if not the Company)
shall expressly assume in writing (by an instrument a copy of
which shall be mailed by registered mail to the holder of this
Note) the due and punctual payment of the principal of this Note,
according to its tenor, and the due and punctual performance and
observance of all of the terms, covenants, agreements and
conditions of this Note to be performed or observed by the
Company to the same extent as if such surviving or successor
corporation had originally executed this Note in the place of the
Company, and had been the original maker of this Note, (iii) such
Person is legally able to perform the Company's obligations
hereunder and has a Consolidated net worth, as determined in
accordance with generally accepted accounting principles
consistently applied, not less than the Consolidated net worth of
the Company (similarly determined) at the time of such merger or
consolidation, and (iv) immediately after such consolidation or
merger, no Event of Default or Insecurity Event or event which,
with notice or lapse of time or both, would become an Event of
Default or Insecurity Event, shall have occurred and be
continuing under this Note.
2.8 Information and Reports to be furnished by the Company
The Company will furnish to the holder of this Note:
(a) Reports
(i) Quarterly Reports. Within forty-five (45) days after the end
of each of the first three quarterly fiscal periods in each
fiscal year of the Buyer, a Consolidated balance sheet of the
Buyer and its Consolidated subsidiaries prepared as of the
close of such period, together with the related statements of
income and surplus; and
(ii) Annual Statements. Within ninety (90) days after the end of
each fiscal year of the Buyer, an audited Consolidated balance
sheet of the Buyer and its Consolidated subsidiaries as at the
end of such year (when they
0
Xxxxxxxx X
become available), and the related statement of income and
surplus.
(iii) Monthly Reports Within twenty (20) days after the end of each
month in each fiscal year of the Buyer, a Consolidated balance
sheet of the Buyer and its Consolidated subsidiaries prepared
as of the close of such month, together with the related
statements of income and surplus, statement of sources and
uses of cash, as well as such other historical information
relating to such period that the Buyer maintains. Such
information will include, but not be limited to, revenue per
available seat mile, cost per available seat mile, segment
profitability information, the number of total passengers, and
load factor and average fare information.
"Consolidated" means, as applied to any financial or accounting term
or amount, such term or amount determined on a consolidated basis in
accordance with generally accepted accounting principles.
(b) Publicly Filed Reports to Stockholders and the SEC
The Company will furnish the Seller with all publicly filed reports
to stockholders or the United States Securities and Exchange
Commission, if any.
(c) Notice of Default
Immediately upon the Company's becoming aware of the existence of
any default in its performance or observance of any covenant,
agreement or condition contained in this Note or in the Promissory
Note Security Agreement, a written notice specifying the nature and
status thereof and what action the Company is taking with respect
thereto.
(d) Notice of Acceleration
Immediately upon the Company's becoming aware that the holder of any
bond, debenture, promissory note (including any note other than this
Note issued by the Company in favor of Payee or issued pursuant to
Amendment No. 1 to the Agreement ("Other Notes")) or any similar
evidence of indebtedness of the Company or any Material Subsidiary
has demanded payment, given notice or taken any other action with
respect to a claimed Event of Default under any Other Note or
claimed default in respect of or under such bond, debenture or
promissory note, a written notice specifying the demand made, notice
given or action taken by
6
Appendix B
such holder and the nature and status of the claimed Event of
Default or default and what action the Company is taking with
respect thereto.
(e) ERISA
As promptly as practicable (but in any event not later than fifteen
(1) days) after the Company or Related Person (i) engages in any
"prohibited transaction" (as defined in Section 406 of ERISA or
section 497 of the Internal Revenue Code of 1986, as amended (the
"Code")) with any "employee benefit plan" (as defined in Section 3
(3) of ERISA ("Plan")), (ii) files a notice of intent under Section
4041 of ERISA with the PBGC to terminate any such Plan, (iii)
receives a notice from the PBGC to appoint a trustee to administer
any such Plan, (iv) knows or has reason to know that termination
proceedings with respect to any such Plan have commenced, (v) knows
or has reason to know that any "reportable event" (within the
meaning of Section 4043(b) of ERISA) or other condition with respect
to any such Plan has occurred which will result in a liability to
the PBGC, (vi) fails to make a quarterly installment contribution to
any such Plan with respect to which a lien may be imposed under
section 412(n) of the Code, (vii) knows or has reason to know that
any "accumulated funding deficiency" (as defined in Section 302 of
ERISA), whether or not waived, shall exist with respect to any such
Plan, (viii) withdraws in a "complete withdrawal" or a "partial
withdrawal" from a "multiemployer plan" pursuant to subtitle E of
Title IV of ERISA or knows or has reason to know that it will or is
likely to incur a material liability in connection with any
reorganization or insolvency of such a Plan, or (ix) is involved in
a situation referred to in Section 4204 of ERISA, a statement of an
officer of the Company setting forth the details with respect to the
events resulting in such notice of intent to terminate or to appoint
a trustee, or with respect to such termination proceedings,
reportable event, other condition, withdrawal, or other situation,
as the case may be, and the action which the Company or Related
Person proposes to take with respect thereto, together with a copy
of any such notice of intent to terminate or to appoint a trustee, a
copy of any notice or other papers received by the Company or
Related Person with respect to such termination proceedings, a copy
of any notice of any such reportable event or other condition filed
by the Company or a Related Person with PBGC, a copy of any notice
received by the Company or a Related Person pursuant to Section 4219
of ERISA, or a copy of the papers pertaining to the situation
described in Section 4204 of ERISA, as the case may be.
(f) Miscellaneous Information
7
Appendix B
From time to time upon request, when the Payee is not the holder of
the Note, such nonproprietary or nonconfidential information
regarding the business, affairs and condition of the Company and of
any Material Subsidiary and its properties in such detail as may
reasonably be requested. The Company covenants and agrees that any
authorized officer or representative of the holder of this Note
shall have the right, at such holder's expense and subject to
applicable governmental regulations, to visit and inspect any of the
properties of the Company and of any Material Subsidiary, to examine
its books of account and to discuss its affairs, finances and
accounts with, and be advised as to the same by, its officers or its
independent certified public accountants all at such reasonable
times and intervals as may be reasonably requested upon not less
that five (5) days' notice.
(g) The Note holder agrees to keep strictly confidential the information
described above in Subparagraph 2.8(f) and to not disclose the same
to any other Person or entity.
2.9 Taxes, etc.
The Company will pay or cause to be paid all United States stamp taxes
(including interest and penalties), if any, solely attributable to the
execution and delivery of this Note, or of any amendment of, or waiver or
consent under or with respect to, this Note, and will indemnify and save
the holder hereof harmless from any loss or damage of any kind whatsoever
resulting from or arising out of the non-payment or delay in the payment
of such taxes.
2.10 Transactions with Affiliates
The Company will not permit any of its Material Subsidiaries to, sell or
transfer any assets (including capital stock of any Subsidiary) to, or
purchase or acquire any assets of, or otherwise engage in any material
transaction (including any merger) with, or permit any Affiliate to sell
or transfer assets (including capital stock of any Subsidiary) to, or
purchase or acquire any assets of, or otherwise engage in any other
material transaction (including any merger) with, any other Affiliate
except for (i) transactions expressly permitted by the Agreement, (ii)
transactions (a) between the Company and one or more Wholly-Owned
Subsidiaries of the Company, provided that in the case of any
consolidation or merger in which the Company is not the surviving
corporation, such transaction shall be permitted pursuant to Subparagraph
2.7 hereof or (b) between Wholly-Owned Subsidiaries of the Company, (iii)
transactions in the ordinary course of business and upon fair and
reasonable terms no less favorable than the Company or any of its
Subsidiaries could obtain or could become entitled to in an arm's-length
transaction
8
Appendix B
with a Person which was not an Affiliate and then, in any case, only if no
default or Event of Default shall have occurred and be continuing, or (iv)
transactions pursuant to a capital investment by an Affiliate into the
Company on fair and reasonable terms. None of the Company and its
Subsidiaries shall be permitted to amend any material agreement with an
Affiliate if a default or Event of Default has occurred and is continuing.
2.11 Certain Definitions
For purposes of this Note,
(a) "Affiliate" means with respect to any person or entity, any other
person or entity directly or indirectly controlling, controlled by
or under common control with such person or entity.
(b) "Agreement" means the Airbus A320 Purchase Agreement, dated as of
March 17, 1995, between AVSA, S.A.R.L. and the Company.
(c) "Business Day" means any day which is not a Saturday or a Sunday and
which is neither a legal holiday nor a day on which banking
institutions are authorized or required by law or regulation to
close in Xxx Xxxx xx Xxx Xxxx, Xxxxxx, Xxxxxxx or Toulouse, France.
(d) "Consolidated" means, as applied to any financial or accounting term
or amount, such term or amount determined on a consolidated basis in
accordance with generally accepted accounting principles;
(e) "Governmental Authority" means any nation or government, any state
or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government;
(f) "Letter Agreement" means the Financial Matters Letter Agreement,
dated March 17, 1995.
(g) "Material Subsidiary" of any Person means, at any time of
determination, each Subsidiary (or a group of Subsidiaries that
would constitute a Material Subsidiary if consolidated and which
are engaged in the same or related lines of business) of such
Person now existing or hereafter acquired or formed by such
Person which
9
Appendix B
(x) accounted for more than l0% of the Consolidated revenues of such
Person and its Subsidiaries during the twelve-month period ending on
the date of the most recent Consolidated balance sheet of such
Person delivered to the holder of this Note pursuant to Subparagraph
2.8, or (y) was the owner of more than 10% of the Consolidated
assets of such Person and its Subsidiaries at the date of the most
recent Consolidated balance sheet of such Person delivered to the
holders of this Note pursuant to Subparagraph 2.8;
(h) "Person" means any natural person, corporation, partnership, joint
venture, joint-stock company, trust, unincorporated organization,
firm, association, government (or political subdivision thereof),
governmental agency, authority or instrumentality, or any other
entity, whether acting in an individual, fiduciary or other
capacity;
(i) "Promissory Note Security Agreement" means the Promissory Note
Security Agreement, dated as of December 21, 1995.
(j) "Related Person" means any corporation or any trade or business
(whether or not incorporated) which, together with the Company, is a
member of a controlled group of corporations within the meaning of
Section 163(a) of the Code, determined without regard to Section
163(a) (4) and (e)(3)(C) of the Code, or is under common control
with the Company as described in Section 414(c) of the Code;
(k) "Requirement of Law" means as to any Person, the certificate of
incorporation and by-laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation or
determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or
any of its property or to which such Person or any of its property
is subject;
(l) "Subsidiary" of any Person means any corporation or other entity
of which such Person, directly or indirectly, shall at the time
(a) own shares of any class or classes with power for the
election of at least a majority of the members of the board of
directors (or the governing body) of such corporation or other
entity other than shares or other interest having such power only
by reason of the happening of a contingency or (b) otherwise have
the legal right to elect such a majority; and
(m) "Wholly-Owned Subsidiary" means, with respect to any Person, any
Subsidiary of such Person all of the outstanding shares of capital
stock of which (other than
00
Xxxxxxxx X
directors' qualifying shares) are owned directly by such Person or a
Wholly-Owned Subsidiary of such Person.
3. AMENDMENT AND WAIVER
Any term, covenant, agreement or condition of this Note may, with the
consent of the Company, be amended or compliance therewith may be waived
(either generally or in a particular instance and either retroactively or
prospectively), by one or more written instrument(s) signed by the holder
of this Note.
4. YIELD PROTECTION AND ILLEGALITY
4.1 Illegality
In the event that it becomes unlawful for the holder of this Note to
maintain the loan evidenced hereby on a LIBOR basis, then the holder shall
promptly notify the Company thereof.
4.2 Compensation
The Company shall pay to the holder of this Note, upon the request of the
holder, such amount or amounts as shall be sufficient (in the opinion of
the holder) to compensate it for any actual out-of-pocket loss, cost or
expense incurred by it as a result of any payment or prepayment of this
Note on a date other than the Payment Date, or any failure by the Company
to prepay this Note on the date for such prepayment specified herein.
5. DEFAULTS AND REMEDIES
5.1 Events of Default
This Note shall become and be due and payable upon demand of the holder
hereof, without presentation, protest, or further demand or notice of any
kind (all of which are hereby expressly waived by the Company), if any one
or more of the following events (herein called "Events of Default") shall
occur for any reason whatsoever (and whether such occurrence shall be
voluntary or involuntary or come about or be effected by operation of law
or pursuant to or in compliance with any judgment, decree or order of any
court or any order, rule or regulation of any administrative or
governmental body) and be continuing at the time of such demand:
(a) if default shall be made in the due and punctual payment of the
principal of this
00
Xxxxxxxx X
Note or of any Other Note when and as the same shall become due and
payable, whether at maturity or at a date fixed for prepayment or by
acceleration or otherwise;
(b) if default shall be made in the due and punctual payment of any
installment of interest on any Other Note, when and as such interest
installment shall become due and payable, and such default shall
have continued for a period of five (5) days;
(c) if default shall be made in the performance or observance of any
other of the covenants, agreements or conditions contained in this
Note, the Promissory Note Security Agreement or the Letter
Agreement, and such default shall have continued for a period of
thirty (30) days after written notice thereof to the Company by the
holder of this Note;
(d) if an event or condition occurs or exists, with respect to any
Plan or otherwise, concerning which the Company is under an
obligation to furnish a report to the holder hereof in accordance
with Subparagraph 2.8(e) hereof and as a result of such event or
condition, together with all other such events or conditions, the
Company or any Related Person has incurred or in the reasonable
opinion of the holder hereof is likely to incur a liability to a
Plan or the PBGC (or any combination of the foregoing) which is
material in relation to the financial position of the Company;
(e) if:
(1) the Company or any other party shall commence any case,
proceeding or other action with respect to the Company in any
jurisdiction relating to bankruptcy, insolvency,
reorganization, relief from debtors, an arrangement,
winding-up, liquidation, dissolution or other relief with
respect to its debts and such case, proceeding or other action
remains unstayed, undismissed or undischarged for sixty (60)
days;
(2) an action is commenced seeking the appointment of a receiver,
trustee, custodian or other similar official for the Company
for all or substantially all of its assets, or the Company
makes a general assignment for the benefit of its creditors;
(3) an action is commenced against the Company seeking issuance of
a warrant of attachment, execution, distraint or similar
process against all
00
Xxxxxxxx X
or any substantial part of its assets;
(4) the Company becomes insolvent or fails generally to pay its
debts as they become due; or
(5) there is a liquidation, winding up or analogous event with
respect to the Company.
5.2 In addition to the provisions of Subparagraph 5.1(a) through (d), only if
AVSA or an Affiliate of AVSA is the holder of this Note, the occurrence of
any Insecurity Event or Termination Event under Clause 21 of the Agreement
shall also constitute Events of Default for the purpose of this Amendment
to the Agreement.
5.3 Costs and Expenses
The Company covenants that if default be made in any payment of principal
on this Note, it will pay to the holder hereof to the extent permitted
under applicable law, such further amount (in addition to any amounts due
under the Notes) as shall be sufficient to cover the cost and expense of
collection, including reasonable compensation to the attorneys and counsel
of the holder hereof for all services rendered in that connection.
6. COVENANTS BIND SUCCESSORS AND ASSIGNS
All the covenants, stipulations, promises and agreements in this Note
contained by or on behalf of the Company shall bind its successors and
assigns, whether so expressed or not.
7. GOVERNING LAW
THIS NOTE SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS WHICH ARE EXECUTED AND FULLY TO BE PERFORMED IN
THAT STATE. The Company hereby irrevocably and unconditionally submits to
the jurisdiction of the federal and state courts in New York, New York in
respect of any action or proceeding arising out of or in connection with
this Note. Final judgement against the Company in any such action or
proceeding shall be conclusive, and may be enforced in other jurisdictions
by suit on the judgment, a certified or true copy of which shall be
conclusive evidence of the fact and of the amount of indebtedness or
liability of the Company therein described; provided, however, that at all
times the holder of this Note may at its option bring suit, or institute
other judicial proceedings against the Company, in any court in any place
where the Company or any of its assets may be found.
00
Xxxxxxxx X
8. HEADINGS
The headings of the Paragraphs and Subparagraphs of this Note are inserted
for convenience only and do not constitute a part of this Note.
9. LOST, ETC. NOTES
Upon receipt by the Company of evidence satisfactory to it of the loss,
theft, destruction or mutilation of this Note, and (in case of loss, theft
or destruction) or indemnity satisfactory to it, and upon surrender and
cancellation of this Note, if mutilated, the Company, at its expense, will
make and deliver a new Note of like tenor in lieu of this Note. Any Note
made and delivered in accordance with the provisions of this Subparagraph
9 shall be dated as of the date which such new Note is made and delivered.
The unsecured indemnity agreement of the holder of this Note shall
constitute indemnity satisfactory to the Company for the purposes of this
Subparagraph 9.
10. MISCELLANEOUS
(a) In the event any day for payment of an amount hereunder is not a
Business Day, such payment shall be due and payable on the
immediately preceding Business Day.
(b) All amounts payable under this Note shall be payable without
presentment or demand for payment, protest or further notice or
demand of any kind, all of which are expressly waived by the
Company, except to the extent expressly provided in this Note.
IN WITNESS WHEREOF, MIDWAY AIRLINES CORPORATION has caused this Note to be
signed in its corporate name by its officer thereunto duly authorized, and to be
dated as of the day and year first above written.
MIDWAY AIRLINES CORPORATION
By: /s/ Xxxxxxxx X. Xxxxxx
--------------------------------
Its: Senior Vice President
General Counsel
14
Amendment No. 6
TO THE A320 PURCHASE AGREEMENT
dated as of March 17, 1995
between
AVSA, S.A.R.L.,
and
MIDWAY AIRLINES CORPORATION
This Amendment No. 5 (hereinafter referred to as the "Amendment") entered into
as of February __, 1997, by and between AVSA, S.A.R.L., societe a responsabilite
limitee organized and existing under the laws of the Republic of France, having
its registered office located at 0, xxxx-xxxxx Xxxxxxx Xxxxxxxx, 00000 Xxxxxxx,
XXXXXX (hereinafter referred to as the "Seller"), and MIDWAY AIRLINES
CORPORATION, a body corporate, organized and existing under the laws of the
State of Delaware, United States of America, having its principal corporate
offices located at 000 Xxxx Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx, XX 00000
(hereinafter referred to as the "Buyer").
WITNESSETH:
WHEREAS, the Buyer and the Seller entered into (i) a Purchase Agreement,
dated as of March 17, 1995, relating to the sale by the Seller and the purchase
by the Buyer of certain Airbus Industrie A320-200 model aircraft (the
"Aircraft"), which, as previously amended by Amendment No. 1 dated as of
December 21, 1995, Amendment No. 2 dated as of January 31, 1996, Amendment No. 3
dated as of February 28, 1996, Amendment No. 4 dated as of March 27, 1996, and
Amendment No. 5 dated as of October 29, 1996, and supplemented with all
Exhibits, Appendixes and Letter Agreements attached thereto, is hereinafter
called the "Agreement," (ii) a related letter agreement regarding "Financial
Matters," which, as previously amended by Amendment No. 1 dated as of December
21, 1995, Amendment No. 2 dated as of March 27, 1996, Amendment No. 3 dated as
of October 29, 1996, and Amendment No. 4 dated the date hereof, is hereinafter
called the "Financial Matters Agreement," (iii) a related Security Agreement,
dated as of March 17, 1995, and (iv) a Promissory Note Security Agreement, dated
as of December 21, 1995, hereinafter referred to as the "Promissory Note
Security Agreement" and
WHEREAS, in connection with the Buyer's reorganization, the Buyer has
asked the Seller and the Seller agrees to reschedule the delivery dates of the
Aircraft and make other changes to the Agreement, under the conditions set forth
in this Amendment; and
WHEREAS, capitalized terms used herein and not otherwise defined in this
Amendment will have the meanings assigned to them in the Agreement, and the
terms "herein," "hereof," and hereunder and words of similar import refer to
this Amendment.
NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL COVENANTS HEREINAFTER SET
FORTH, IT IS AGREED AS FOLLOWS:
1. FIRM AIRCRAFT DELIVERY POSITIONS
The Buyer and the Seller agree that the delivery schedule for Firm
Aircraft set forth in Subclause 9.1 of the Agreement is superseded and
replaced by the following schedule:
QUOTE
Firm Aircraft Month of Delivery
------------- -----------------
No. 1 December 2005
No. 2 January 2006
No. 3 February 2006
No. 4 December 2006
UNQUOTE
2. OPTION AIRCRAFT DELIVERY POSITIONS
The Buyer and the Seller agree that the delivery schedule for Option
Aircraft set forth in Paragraph 3 of Letter Agreement No. 3 to the
Agreement is superseded and replaced by the following schedule:
QUOTE
Option Aircraft No. Month of Delivery
------------------- -----------------
No. 1 January 2007
No. 2 February 2007
No. 3 November 2007
No. 4 December 2007
UNQUOTE
2
3. PROMISSORY NOTES
The Seller will cancel and return to the Buyer the two (2) promissory
notes (referred to as the "New Replacement December 1995 Note" and the
"New Rescheduled Payments Note" under Amendment No. 5 to the Agreement)
and will take all steps necessary to terminate and release all of its
security interest under the Promissory Note Security Agreement, made by
the Buyer and the Seller to secure the Buyer's obligations under the New
Replacement December 1995 Note and under the New Rescheduled Payments
Note.
4. FIRM AIRCRAFT PREDELIVERY PAYMENTS
The Buyer and the Seller agree that the schedule for Predelivery Payments
for each of the Firm Aircraft set forth in Subclause 6.2.3 of the
Agreement is amended by deleting the requirement that the Buyer make the
third payment no later than December 30, 1995, and the fourth payment no
later than June 30, 1996, and by instead requiring the Buyer to make the
third and fourth payments together (representing a total of two-thirds of
one percent of the Predelivery Payment Reference Price) twenty-four (24)
months prior to delivery.
5. OPTION AIRCRAFT PREDELIVERY PAYMENTS
The Buyer and the Seller agree that the schedule for Predelivery Payments
for each of the Option Aircraft set forth in Subclause 6.2.3 of the
Agreement is amended by deleting the requirement that the Buyer make the
second payment no later than December 30, 1995, and the third payment no
later than June 30, 1996, and by instead requiring the Buyer to make the
second and third payments together ([***] for each of the
Option Aircraft) at the same time the fourth payment is due, upon Option
Aircraft exercise but not later than twenty-four (24) months prior to
delivery.
6. INSECURITY EVENTS
The Buyer and the Seller agree that the Agreement is amended by deleting
Subclauses 21.2(a), 21.2(b), 21.2(g) and 21.2(h) thereof in their
entirety.
7. MERGER
The Buyer intends to become the surviving corporation of the merger of
GoodAero, Inc., a Delaware corporation, into the Buyer (the "Merger"),
pursuant to which Merger the Buyer's current majority shareholder will
cease to control eighty percent (80%) of the outstanding voting shares of
the Buyer. Following the consummation of the Merger, the shareholders of
GoodAero, Inc., will have the right to vote that number of votes that will
3
equal to seventy percent (70%) of all votes in the aggregate on each
matter submitted to a vote of the holders of the Buyer's common stock. The
Seller agrees that the consummation of the Merger will not constitute an
Insecurity Event under Subclause 21.2(e) of the Agreement.
8. ADVANCEMENT OF DELIVERIES
Upon twenty-four (24) months' advance written notice to the Seller by the
Buyer, the Seller agrees to review the availability of delivery dates for
the Aircraft earlier than those set forth in Subclause 9.1 of the
Agreement (as amended hereby) and in Paragraph 3 of Letter Agreement No. 3
(as amended hereby), subject to the Seller's commercial and industrial
constraints.
9. CONFIDENTIALITY
Subject to any legal or governmental requirements of disclosure, the
parties (which for this purpose shall include their employees, agents and
advisors) shall maintain the terms and conditions of this Amendment and
any reports or other data furnished hereunder strictly confidential.
Without limiting the generality of the foregoing, the Buyer and the Seller
shall use their best efforts to limit the disclosure of the contents of
this Amendment to the extent legally permissible in any filing required to
he made by the Buyer or the Seller, as the case may be, with any
governmental agency and shall make such applications as shall he necessary
to implement the foregoing. With respect to any public disclosure or
filing, each party agrees to submit to the other party a copy of the
proposed document to be filed or disclosed and will give the other party a
reasonable period of time in which to review the said document. The Buyer
and Seller shall consult with each other prior to the making of any public
disclosure or filing, permitted hereunder, of this Amendment or the terms
and conditions thereof. The provisions of this Paragraph 9 shall survive
any termination of this Amendment.
10. EFFECT OF AMENDMENT
The Agreement will be deemed amended to the extent herein provided, and,
except as specifically amended hereby, will continue in full force and
effect in accordance with its original terms, except that if the Agreement
and this Amendment have specific provisions that are inconsistent, the
specific provisions contained in this Amendment will govern. It is
understood that this Amendment does not in any way constitute a waiver by
the Seller of any rights it has under the Agreement or under the Financial
Matters Agreement.
Further, it is agreed that this Amendment is subject to the parties'
executing as of the date hereof an amendment to the Financial Matters
Agreement and the Promissory Note Security Agreement, if applicable.
4
11. INTERPRETATION AND LAW
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND THE PERFORMANCE
THEREOF SHALL BE DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK.
THE PARTIES HEREBY ALSO AGREE THAT THE UNITED NATIONS CONVENTION ON THE
INTERNATIONAL SALE OF GOODS SHALL NOT APPLY TO THIS TRANSACTION.
5
If the foregoing correctly sets forth our understanding, please execute
this Amendment in the space provided below, whereupon, as of the date first
above written, this Amendment will constitute part of the Agreement.
Agreed and accepted Yours sincerely,
MIDWAY AIRLINES AVSA, S.A.R.L.
CORPORATION
By: /s/ Xxxxxxxx X. Xxxxxx By: /s/ Xxxxxxxxxx Xxxxxx
----------------------------- ----------------------------------
Its: Senior Vice President Its: AVSA Chief Executive Officer
By:
--------------------------------
Its:
--------------------------------
6
LETTER AGREEMENT NO. 2
As of March 17, 1995
Midway Airlines Corporation
0000 X. Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Re: PURCHASE INCENTIVES AND MISCELLANEOUS MATTERS
Dear Sir or Madam:
Midway Airlines Corporation (the "Buyer"), and AVSA, S.A.R.L. (the
"Seller"), have entered into an Airbus X000-000 Xxxxxxxx Agreement dated as of
even date herewith (the "Agreement"), which covers, among other things, the sale
by the Seller and the purchase by the Buyer of certain Aircraft. The Buyer and
the Seller have agreed to set forth in this Letter Agreement No. 2 (the "Letter
Agreement") certain additional terms and conditions regarding the sale of the
Aircraft. The terms "herein," "hereof" and "hereunder" and words of similar
import refer to this Letter Agreement. Capitalized terms used herein and not
otherwise defined in this Letter Agreement shall have the meanings assigned
thereto in the Agreement.
Both parties agree that this Letter Agreement shall constitute an
integral, nonseverable part of said Agreement, that the provisions of said
Agreement are hereby incorporated herein by reference, and that this Letter
Agreement shall be governed by the provisions of said Agreement, except that if
the Agreement and this Letter Agreement have specific provisions that are
inconsistent, the specific provisions contained in this Letter Agreement shall
govern.
1. AIRFRAME CREDIT
The Seller will provide the Buyer a credit memorandum of [***] at January
1995 delivery conditions, subject to escalation as per the Airframe
escalation formula set forth in Exhibit "G" to the Agreement, on delivery
of each Aircraft. This credit memorandum may either be applied against the
Final Contract Price of the Aircraft or may be used for the purchase of
goods and services from Seller or any of its affiliates.
2. SCN CREDIT
The Seller will provide the Buyer an SCN credit memorandum of [***]
[***] per Aircraft at January 1995 delivery conditions, subject to
escalation as per the Airframe escalation formula set forth in Exhibit "G"
to the Agreement, on delivery of each Aircraft. This credit will be
applied against the price of SCNs for the Aircraft.
3. AIRCRAFT DELIVERY RELATED MATTERS
3.1 Notwithstanding the provisions of Clause 9 of the Agreement, the Buyer may
request in writing to the Seller not later than thirty (30) days prior to
delivery of an Aircraft, to have an Aircraft closing procedure take place
in a location other than Toulouse, France, and other than the United
States of America or Canada (the "Alternate Closing Site"), provided,
however, that:
(i) the Buyer's request is solely to facilitate the Buyer's financing of
the Aircraft; and
(ii) such Alternate Closing Site is acceptable to the Seller and the
Seller agrees in writing to such Alternate Closing Site; and
(iii) the Buyer agrees to pay the Seller all direct incremental costs
arising from the relocation to the Alternate Closing Site, if any;
and
(iv) the acceptance of the Aircraft shall have taken place in Toulouse,
France, and all documentation required by the Seller to effect the
delivery shall have been signed.
3.2 The Buyer may request the Seller (not fewer than sixty (60) days prior to
the first day of the month of delivery of an Aircraft, pursuant to Clause
9 of the Agreement) to reschedule the delivery of an Aircraft by no more
than two (2) weeks, provided, however, that such request shall be
evidenced in writing and state that such request is based exclusively on
operational constraints of the Buyer. The Seller shall then, subject to
its reasonable commercial and industrial constraints, notify the Buyer of
a rescheduled (if applicable) delivery date for the Aircraft within the
timeframe set forth in the immediately preceding sentence. The Buyer's
obligation to take delivery of the Aircraft under this Agreement shall not
be altered in any manner by the provisions of this Subparagraph 3.2.
LA No. 2-2
4. DELIVERY DELAY RELATED MATTERS
4.1 Notwithstanding the provisions of Clauses 10 and 11 of the Agreement, if
the Agreement is terminated with respect to any Aircraft under Clause 10
or Clause 11 of the Agreement, then, in respect of Buyer Furnished
Equipment in the possession of the Seller at the time of such termination,
the Seller, at its option, will take one of the following actions:
(i) install such Buyer Furnished Equipment on another Aircraft; or
(ii) install such Buyer Furnished Equipment on another aircraft in
production (subject to reasonable industrial and commercial
constraints), and provided the Seller has been able to so install
such Buyer Furnished Equipment, refund to the Buyer an amount equal
to the price it paid for such Buyer Furnished Equipment; or
(iii) obtain the Buyer's consent, such consent not to be unreasonably
withheld, to sell the Buyer Furnished Equipment as "used," and,
after such sale, pay an amount equal to the proceeds of such sale to
the Buyer; or
(iv) in the event of an Aircraft that is lost, destroyed or damaged
beyond economic repair, if the Seller is insured for loss of such
Buyer Furnished Equipment, obtain compensation therefor from the
Seller's insurance company and pay the Buyer an amount equal to the
lower of (a) the amount the Buyer paid for such Buyer Furnished
Equipment and (b) the amount the Seller received from its insurance
company for, such Buyer Furnished Equipment.
The Seller shall have no other obligation to the Buyer with respect to
such Buyer Furnished Equipment.
4.2 The provisions of Clause 5 of the Agreement notwithstanding, for each
A320-200 model Aircraft delivered that is the subject of an inexcusable
delay under Clause 11 of the Agreement, the Final Contract Price (set
forth in Subclause 4.2 of the Agreement), the airframe credit memorandum
and SCN credit memorandum (set forth in, respectively, Paragraphs 1 and 2
of this Letter Agreement), shall be revised in accordance with Exhibit
"G", "H" or "I" (as
LA No. 2-3
applicable) to, at the Buyer's option, either (i) the month of delivery
originally scheduled and set forth in Subclause 9.1 of the Agreement or in
Paragraph 3 of Letter Agreement No. 3 to the Agreement (as applicable) for
such Aircraft or (ii) the rescheduled delivery date.
4.3 The provisions of Clause 5 of the Agreement notwithstanding, for each
Converted A319 Aircraft delivered that is the subject of an inexcusable
delay under Clause 11 of the Agreement, the Final Contract Price (set
forth in Subparagraph 9.4.2.2 of Letter Agreement No. 3 to the Agreement),
and the airframe credit memorandum, SCN credit memorandum and CFM credit
memorandum (set forth in, respectively, Subparagraphs 9.5.1, 9.5.2 and
9.5.3 of Letter Agreement No. 3 to the Agreement), shall be revised in
accordance with Exhibit "G," "H" or "I" (as applicable) to, at the Buyer's
option, either (i) the month of delivery originally scheduled and set
forth in Subparagraph 9.3 of Letter Agreement No. 3 to the Agreement for
such Converted A319 Aircraft or (ii) the rescheduled delivery date.
4.4 Notwithstanding the provisions of Subclause 11.1 of the Agreement and
beginning only with the third Aircraft that is the subject of an
inexcusable delay under Clause 11 and for which delivery is delayed
thirty-one (31) or more days, the Seller will also pay or credit to the
Buyer, at the Buyer's option and subject to the provisions of Subclause
11.3 of the Agreement, liquidated damages for the first thirty (30) days
of the inexcusable delay period. Such liquidated damages will be in the
amount of [***] for each of the first thirty (30) days of delay in
delivery of the affected Aircraft.
No other provision of Clause 11 of the Agreement shall be amended by this
Subparagraph 4.4.
5. PROPULSION SYSTEMS SELECTION
The Buyer hereby irrevocably selects International Aero Engines as the
Propulsion Systems manufacturer to equip the Aircraft.
6. TAX RELATED MATTERS
6.1 Notwithstanding the provisions of Subclause 4.4 of the Agreement, in the
event a material tax, tariff or duty has been levied, assessed, charged or
collected by the
XX Xx. 0-0
Xxxxxx Xxxxxx xx Xxxxxxx specifically and exclusively on goods imported
from the Republic of France (due to a situation of trade retaliation by
the United States government specifically and exclusively against the
Republic of France), the Buyer and the Seller shall cooperate to reduce
the amount of or obtain a waiver of the obligation to pay such tax, tariff
or duty.
6.2 Notwithstanding the provisions of Subclause 4.4 of the Agreement, in the
event a material tax, tariff or duty has been levied, assessed, charged or
collected by the Commonwealth of Virginia in connection with the
fabrication, manufacture, modification, assembly, sale, delivery, use of
or payment under this Agreement for any Aircraft, component, accessory,
equipment or part delivered or furnished hereunder, then the Buyer and the
Seller shall cooperate to reduce the amount of or obtain a waiver of the
obligations to pay such tax, tariff or duty.
7. [***]
7.1 In consideration of the following conditions, the terms of Subparagraph
7.2 will apply:
7.1.1 The Buyer's operation, over time starting in April 1995, of ten (10)
A320-200 aircraft leased medium to long term by the Buyer from operating
lessors (including not fewer than four (4) A320 aircraft from ORIX), such
leases to begin between on or about April 1995 and the end of 1996; and
7.1.2 The Buyer's execution of the Agreement with the Seller for the purchase by
the Buyer from the Seller of four (4) Firm Aircraft to be delivered by the
Seller to the Buyer starting in December 1998 with an option to purchase
four (4) additional Option Aircraft; and
7.1.3 The Buyer's request and the Seller's acceptance to advance certain product
support services prior to the time when they would otherwise have been
available under the Agreement (excluding for this purpose only the Letter
Agreements).
7.2 The Buyer and the Seller agree to the following terms with respect to the
provision by the Seller of the [***] (as defined in Paragraph 7.2.1
below):
7.2.1 [***]
LA No. 2-5
January 1995 delivery conditions subject to escalation pursuant to the
Airframe Price Revision Formula set forth in Exhibit "G" of the Agreement)
[***] based on the support of ten (l0) A320 aircraft; and
7.2.2 The [***] shall include product support goods and services from the Seller
or its Affiliates as further described in Subparagraphs 7.3 through 7.7
hereafter; and
7.2.3 The Seller and the Buyer agree, from time to time (but not later than at
the end of 1996), to review the number of leased A320 aircraft in the
Buyer's fleet in order to monitor the [***], should the number of A320
aircraft leased medium to long term be fewer than ten (10). The Buyer will
use its commercially reasonable efforts, whenever practicable, to have
product support allowances assigned by operating lessors (other than by
ORIX for the first four (4) A320 aircraft leased by the Buyer) included as
part of its A320 aircraft lease transactions. Any such allowances received
by the Buyer may be used by it to purchase goods and services from the
Seller or its Affiliates without affecting the Upfront Support Package.
7.2.4 Except as may otherwise be mutually agreed from time to time by the Seller
and the Buyer, at no time prior to the delivery of the first Firm Aircraft
shall the Seller be required to provide support services [***]
7.2.5 [***]
7.3 [***]
As part of the contractual allowances set forth in Clause 14 and Exhibit
"F" of the Agreement, it is hereby agreed that the Seller shall provide
the Buyer with certain advanced Technical Publications (the "Upfront
Technical Publications).
It is agreed that the Seller shall not, by virtue of this Letter Agreement
or otherwise, be required to
LA No. 2-6
deliver technical publications and revision services thereto at any time
in excess of the provisions for Technical Publications set forth in the
Agreement and the total requirements set forth in said Exhibit "F" to
the Agreement (including, but not limited to, the quantities, format,
total aggregate duration of the revision service and customization).
Notwithstanding the foregoing, the Seller hereby agrees to integrate and
customize the Upfront Technical Publications beginning with the first
revision cycle following December 1996, provided, however, that the Buyer
then operates at least ten (10) A320 aircraft.
7.4 UPFRONT SUPPORT WITH RESPECT TO FIELD ASSISTANCE
As part of the contractual allowance set forth in Clause 15 of the
Agreement, it is agreed that the Seller shall provide the Customer Support
Representatives referred to therein starting with the month of April 1995
with respect to one Customer Support Representative. The allocation of
further Customer Support Representatives will be further reviewed between
the Buyer and the Seller as operational requirements dictate.
In no event shall the total aggregate number of man-months of Customer
Support Representatives exceed a total of [***]
7.5 UPFRONT SUPPORT WITH RESPECT TO TRAINING
As part of the contractual allowance set forth in Clause 16 of the
Agreement, it is agreed that the Seller will provide the Buyer with
advanced training (the "Upfront Training"). The Upfront Training will
include the following goods and services:
(i) Flight crew instructor familiarization training for [***] (each of
which consists of a captain and a first officer). Among these [***]
shall also receive flight-crew instructor familiarization training.
Each such flight crew may be converted to (a) dry or wet lease full
flight or fixed base simulator hours or (b) computer based training
or (c) maintenance training or (d) maintenance line training or (e)
flight crew line training, at the conversion rates set forth in
Appendix 1 to this Letter Agreement.
LA No. 2-7
At any point in time, in lieu of such flight crew training (or the
converted flight crew training as per above) then unused and
remaining, the Buyer may elect to receive a cash payment equal to
[***] per crew trained by a third party. Alternatively and in lieu
of such cash payment, the Buyer may elect to either (x) apply the
amount equal to the cash payment (to the extent available) against
the Final Contract Price of each Firm Aircraft at a rate in no
event to [***] per delivered Firm Aircraft or (y) use an amount
equal to the cash payment (to the extent available) to purchase
goods and services from the Seller or its Affiliates.
(ii) [***] including on-the-job training, at the Buyer's facilities, if
desired and when feasible.
At any point in time, in lieu of such maintenance training then
unused and remaining, the Buyer may elect to receive a cash payment
equal to [***] per maintenance trainee day of training performed by
a third party. Alternatively and in lieu of such cash payment, the
Buyer may elect to either (x) apply the amount equal to the cash
payment (to the extent available) against the Final Contract Price
of each Firm Aircraft at a rate in no event to [***] per delivered
Firm Aircraft or (y) use an amount equal to the cash payment (to
the extent available) to purchase goods and services (including but
not limited to VACBI) from the Seller or its Affiliates.
(iii) [***] of performance/ operations courses.
(iv) Cabin attendant training for up to [***] cabin attendants.
7.6 UPFRONT SUPPORT WITH RESPECT TO SPARE PARTS PROCUREMENT
The Buyer shall have the option to (i) purchase spare parts from the
Seller pursuant to Letter Agreement No. 1 to the Agreement and (ii) have
access to a pool of
LA No. 2-8
spare parts under a standard exchange support program developed by the
Seller, under terms to be mutually agreed between the Buyer and the Seller
after execution of the Agreement.
7.7 TOOLING AND SUPPORT EQUIPMENT
As a portion of and included in the [***], upon
execution of the first operating lease agreement for A320 aircraft, the
Seller will provide the Buyer with a credit memorandum (not to be
escalated) in an amount of [***]
[***] may be used for the purchase of A320 tooling and support equipment
from the Seller (the "Tooling Equipment"). In the event no further A320
tooling and support equipment is required by the Buyer, then the Buyer may
use the remaining portion of the Tooling Credit (if applicable) for the
purchase of Material from the Seller.
The Buyer will ensure and hereby undertakes that the Tooling Equipment be
free of all lien charges or other encumbrances at all times.
The Buyer hereby grants and conveys to the Seller a first-priority lien on
and security interest in all right, title and interest, if any, of the
Buyer in the Tooling Equipment. The Buyer shall cooperate with the Seller
in the preparation and filing for recordation with the FAA under the
Federal Aviation Act of 1958, as amended, of the relevant documentation
relating to security on the Tooling Equipment.
Further requirements relating to the security and collateralization of the
Tooling Equipment are outlined in the Security Agreement between the Buyer
and the Seller dated the date hereof.
8. TRAINING SUPPORT
Upon execution of the Agreement, the Seller will provide the Buyer with a
credit memorandum in addition to the [***] in the amount of [***] for the
purchase of training goods and services from the Seller (the "Supplemental
Credit"). In the event the Supplemental Credit has not been utilized at
the time of delivery of the first Firm Aircraft, then, upon delivery of
such first Firm Aircraft and each further
LA No. 2-9
three (3) Firm Aircraft thereafter, the Seller will provide the Buyer with
a credit memorandum in the amount of [***] to be applied against the Final
Contract Price of each of the four (4) Firm Aircraft.
9. OTHER MATTERS
In the event (i) the Buyer is entitled to use a credit memorandum from the
Seller (when available) to purchase Material from a Vendor, and (ii) the
Buyer has negotiated terms and conditions relating to the provision of
such Material directly with the Vendor of Material, then the Seller shall
agree to pay such Vendor directly for the price of such Material,
provided, however, that the Seller shall be entitled to charge a
reasonable administrative fee to the Buyer (if applicable).
10. ASSIGNMENT
Notwithstanding any other provision of this Letter Agreement or of the
Agreement, this Letter Agreement and the rights and obligations of the
Buyer hereunder shall not be assigned or transferred in any manner without
the prior written consent of the Seller, and any attempted assignment or
transfer in contravention of the provisions of this Paragraph 10 shall be
void and of no force or effect.
LA No. 2-10
If the foregoing correctly sets forth our understanding, please execute
the original and one (1) copy hereof in the space provided below and return a
copy to the Seller.
Very truly yours,
AVSA, S.A.R.L.
By: /s/ Xxxxxxxxxx Xxxxxx
------------------------------------
Its: AVSA Chief Executive Officer
Date: March 17, 1995
Accepted and Agreed
Midway Airlines Corporation
By: /s/ Xxxxx X. Xxxx
---------------------------
Xxxxx X. Xxxx
Its: Executive Vice President
Chief Operating Officer
APPENDIX 1 TO LETTER AGREEMENT
In lieu of each flight crew trained pursuant to Paragraph 7.5 (i) of this Letter
Agreement, the Buyer shall have the flexibility to receive any one of the items
listed below:
(i) Simulator time:
================================================================================
Full-flight Simulator Fixed Based Simulator
--------------------------------------------------------------------------------
Dry Lease [***] [***]
--------------------------------------------------------------------------------
Wet Lease [***] [***]
(with Simulator
instructor
================================================================================
or
(ii) [***] trainee days of maintenance instruction
or
(iii) Computer-based training:
================================================================================
Company Licensing CBT Courseware
--------------------------------------------------------------------------------
Flight Crew [***] [***]
--------------------------------------------------------------------------------
Maintenance [***] [***]
================================================================================
or
(iv) [***] maintenance line instructor days.
or
(v) [***] flight crew line instructor days.
LA No. 2-12
LETTER AGREEMENT NO. 3
As of March 17, 1995
Midway Airlines Corporation
0000 X. Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Re: OPTION AIRCRAFT
Dear Sir or Madam:
Midway Airlines Corporation (the "Buyer"), and AVSA, S.A.R.L. (the
"Seller"), have entered into an Airbus X000-000 Xxxxxxxx Agreement dated as of
even date herewith (the "Agreement"), which covers, among other things, the sale
by the Seller and the purchase by the Buyer of certain Aircraft. The Buyer and
the Seller have agreed to set forth in this Letter Agreement No. 3 (the "Letter
Agreement") certain additional terms and conditions regarding the sale of the
Aircraft. The terms "herein," "hereof" and "hereunder" and words of similar
import refer to this Letter Agreement. Capitalized terms used herein and not
otherwise defined in this Letter Agreement shall have the meanings assigned
thereto in the Agreement.
Both parties agree that this Letter Agreement shall constitute an
integral, nonseverable part of said Agreement, that the provisions of said
Agreement are hereby incorporated herein by reference, and that this Letter
Agreement shall be governed by the provisions of said Agreement, except that if
the Agreement and this Letter Agreement have specific provisions that are
inconsistent, the specific provisions contained in this Letter Agreement shall
govern.
The Seller hereby grants the Buyer the right to convert its Option Aircraft into
Aircraft, as set forth in this Letter Agreement.
1. SCOPE
The Seller hereby grants the Buyer and the Buyer hereby takes
options on up to four (4) Option Aircraft under the terms and
conditions set forth in the Agreement except as set forth in this
Letter Agreement.
2. SPECIFICATION
The specification for the Option Aircraft will be as set forth in
Subclause 2.2 of the Agreement.
3. DELIVERY
Subject to the provisions of the Agreement, the Seller shall have
the Option Aircraft ready for delivery at Aerospatiale's works near
Toulouse, France, and the Buyer shall accept the same, during the
months set forth below:
Option Aircraft No. Month of Delivery
------------------- -----------------
1 January 2000
2 February 2000
3 November 2000
4 December 2000
4. OPTION EXERCISE
The Buyer shall exercise its option to purchase an Option Aircraft
by written notification to the Seller and payment of the fourth
Predelivery Payment therefor as stipulated in Paragraph 7 hereof no
later than the first day of the twenty-fourth (24th) month prior to
the scheduled month of delivery of such Option Aircraft, according
to the schedule set forth in Paragraph 3 of this Letter Agreement.
Provided that the first three Predelivery Payments for the Option
Aircraft have been received pursuant to Subclause 6.2.3 of the
Agreement, an Option Aircraft for which written notification and the
fourth Predelivery Payment have been received as set forth in this
paragraph shall be deemed a "Converted Option Aircraft."
In the event that the Seller does not receive both written
notification and all of the first four Predelivery Payments due in
accordance with Subclause 6.2.3 of the Agreement with respect to an
Option Aircraft being converted into an Aircraft, then the Buyer's
right to exercise its rights with respect to such individual Option
Aircraft shall expire and the parties shall have no further
obligations to one another with respect thereto.
5. OPTION AIRCRAFT BASE PRICE
The Base Price of the Converted Option Aircraft shall be the same as
for the Aircraft, the terms and conditions of which are set forth in
Clause 4 of the Agreement. The Base Price of the Propulsion Systems
shall be as quoted by the Propulsion Systems manufacturer at the
time of Option Aircraft exercise.
6. CREDIT MEMORANDA
Subject to the provisions of Paragraph 5 above, the Seller will
provide the Buyer with an airframe credit memorandum, and SCN credit
memorandum for each Option Aircraft equal to (in January 1995
delivery conditions) and determined in the same
LA No. 3-2
manner as for the Aircraft. The terms and conditions of such credit
memoranda are set forth in Paragraph 1 and Paragraph 2,
respectively, of Letter Agreement No. 2 to the Agreement.
7. PREDELIVERY PAYMENTS
Predelivery Payments for each Converted Option Aircraft shall be due
as set forth in Subclause 6.2.3 of the Agreement. The fourth
Predelivery Payment for each Converted Option Aircraft shall be paid
no later than upon the Buyer's written notification to the Seller of
its exercise of the option to purchase such Option Aircraft.
8. OTHER MATTERS
Each Converted Option Aircraft shall be an Aircraft for the
purposes of the provisions of Clauses 1 through 22 of the Agreement,
the Exhibits to the Agreement, Letter Agreement No. 1 to the
Agreement and Paragraphs 1, 2, 3, 4.1, 4.2, 4.4, 5 and 6 of Letter
Agreement No. 2 to the Agreement. No other provisions of the
Agreement shall apply to such Converted Option Aircraft.
9. A319 AIRCRAFT OPTION CONVERSION FLEXIBILITY
9.1 Scope
In lieu of the conversion of A320 Option Aircraft into firmly
ordered Aircraft as described in Paragraphs 1 through 8 above, the
Seller grants the Buyer the right to convert Option Aircraft into
firmly ordered A319 aircraft (the "Converted A319 Aircraft") upon
the commercial terms set forth in this Paragraph 9.
9.2 Specification
The Converted A319 Aircraft shall be manufactured in accordance with
the A319-100 Standard Specification, Document No. J.000.0l000, Issue
2, dated March 30, 1994, (the "A319 Standard Specification"). Such
Standard Specification, a copy of which is annexed hereto as Exhibit
"A-2" to the Agreement is hereinafter referred to as the "A319
Specification." The Specification may be further modified from time
to time pursuant to the provisions of Clause 3 of the Agreement.
LA No. 3-3
9.3 Delivery
Paragraph 3 above will apply to the delivery of the Converted A319
Aircraft, except that the Seller shall have the Converted A319
Aircraft ready for delivery at Daimler-Benz's works in Hamburg,
Germany.
9.4 Converted A319 Aircraft Pricing
9.4.1 Base Price of the Converted A319 Aircraft
The "Base Price" of each Converted A319 Aircraft is the sum of:
(i) the Base Price of the Airframe, and
(ii) the Base Price of the Propulsion Systems.
9.4.1.1 Base Price of the Airframe
9.4.1.1.1 The Base Price of the Airframe shall be the sum of the Base Prices
set forth below in (i) and (ii):
(i) the Base Price of the Standard Airframe, as defined in the
Standard Specification set forth in Exhibit "A-2" to the
Agreement (excluding Buyer Furnished Equipment, Propulsion
Systems and SCNs), at delivery conditions prevailing in
January 1995, which is:
[***]
(ii) the Base Price of the estimated change orders to the A319
Standard Specification (SCN estimate) referred to in Exhibit
"B" to the Agreement, at delivery conditions prevailing in
January 1995, which is estimated at:
[***]
9.4.1.1.2 The Base Price of the Airframe of each Converted A319 Aircraft shall
be revised to the actual delivery date of such Converted A319
Aircraft in accordance with the Airframe Price Revision Formula set
forth in Exhibit "G" to the Agreement.
LA No. 3-4
9.4.1.2 Base Price of the Propulsion Systems
9.4.1.2.1 The Base Price of the CFM 56-5A-5 Propulsion Systems is the sum of
(i) and (ii) below:
(i) Base Price of the CFM 56-5A-5 Engines
The Base Price of a set of two (2) CFM International CFM
56-5A-5 engines and additional standard equipment at delivery
conditions prevailing in January 1995 is:
[***]
Said Base Price has been calculated with reference to the
Reference Price indicated by CFM of [***] in accordance with
economic conditions prevailing in September 1990.
Said Reference Price is subject to adjustment to the date of
delivery of the Converted A319 Aircraft in accordance with the
CFM Price Revision Formula set forth in Exhibit "H-2" to the
Agreement.
(ii) Base Price of Nacelles and Thrust Reversers
The Base Price for a set of two (2) nacelles and two (2)
thrust reversers at delivery conditions prevailing in January
1995 is:
[***]
Said Base Price is subject to adjustment to the date of
delivery of the Converted A319 Aircraft in accordance with the
Airframe Price Revision Formula set forth in Exhibit "G" to
the Agreement.
9.4.1.2.2 Base Price of the IAE V2524-A5 Propulsion Systems
The Base Price of the IAE V2524-A5 Propulsion Systems is:
The Base Price of a set of two (2) IAE V2524-A5 Propulsion
Systems, including related equipment,
LA No. 3-5
nacelles and thrust reversers, at delivery conditions
prevailing in January 1995 is:
[***]
Said Base Price has been calculated with reference to the
Reference Price indicated by International Aero Engines of
[***] in accordance with economic conditions prevailing in
November 1990.
Said Reference Price is subject to adjustment to the date of
delivery of the Converted A319 Aircraft in accordance with the
IAE Price Revision Formula set forth in Exhibit "1-2" to the
Agreement.
9.4.2.2 Final Contract Price
The Final Contract Price of a Converted A319 Aircraft shall be the
sum of:
(i) the Base Price of the Airframe constituting a part of such
Converted A319 Aircraft, together with the Base Price of
nacelles and thrust reversers (when applicable), as adjusted
to the date of delivery of such Converted A319 Aircraft in
accordance with Subclause 5.1 of this Agreement;
(ii) the price (as of delivery conditions prevailing in January
1995) of any other SCNs constituting a part of such Converted
A319 Aircraft that are entered into pursuant to Clause 3 of
the Agreement after the date of execution of the Agreement, as
adjusted to the date of delivery of such Converted A319
Aircraft in accordance with Subclause 5.1 of the Agreement;
(iii) the Reference Price of the installed Propulsion Systems
(excluding the nacelles and thrust reversers, when
applicable), constituting a part of such Converted A319
Aircraft, as adjusted to the date of delivery of such
Converted A319 Aircraft in accordance with Subclause 5.2 of
the Agreement; and
(iv) any other amount resulting from any other provisions of this
Agreement and/or any other
LA No. 3-6
written agreement between the Buyer and the Seller relating to
the Converted A319 Aircraft and specifically making reference
to the Final Contract Price of an Aircraft.
9.4.3 Validity of Propulsion Systems Prices
It is understood that the prices cited above and the price revision
formulas referred to in Subparagraph 9.4.1.2 of this Letter
Agreement concerning the Propulsion Systems and related equipment
are based on information received from the Propulsion Systems
manufacturer and remain subject to any modifications that might be
communicated by said Propulsion Systems manufacturer to the Seller,
the Manufacturer and/or the Buyer.
9.5 Converted A319 Aircraft Purchase Incentives
9.5.1 Airframe Credit
The Seller will provide the Buyer a credit memorandum of [***] at
January 1995 delivery conditions, subject to escalation as per the
Airframe Price Revision Formula set forth in Exhibit "G" to the
Agreement, on delivery of each Converted A319 Aircraft. This credit
memorandum may be applied against the Final Contract Price of the
Converted A319 Aircraft or may be used for the purchase of goods and
services from the Seller or any of its affiliates.
9.5.2 SCN Credit
The Seller will provide the Buyer an SCN credit memorandum of
[***] per Converted A319 Aircraft at January 1995 delivery
conditions, subject to escalation as per the Airframe Price Revision
Formula set forth in Exhibit "G" to the Agreement, on delivery of
each Converted A319 Aircraft. This credit may be applied against
the price of SCNs for the Converted A319 Aircraft.
9.5.3 Special CFM Credit
In the event the Buyer converts an Option Aircraft to a Converted
A319 Aircraft, and selects CFM International as the Propulsion
Systems manufacturer for such Converted A319 Aircraft, then, on
behalf of CFM International, the Seller will provide the Buyer a
credit memorandum of [***]
LA No. 3-7
[***] per Converted A319 Aircraft at delivery conditions prevailing
in January 1995.
Said Base Price has been calculated with reference to the Reference
Price indicated by CFM of [***] in accordance with economic
conditions prevailing in September 1990.
Said Reference Price is subject to adjustment to the date of
delivery of the Converted A319 Aircraft in accordance with the CFM
Price Revision Formula set forth in Exhibit "H-2" to the Agreement.
9.6 A319 Option Aircraft Exercise and Predelivery Payments
The Buyer shall exercise its option to convert an Option Aircraft
into a Converted A319 Aircraft by written notification to the Seller
and payment of the fourth Predelivery Payment therefor as stipulated
in Paragraph 7 hereof no later than the first day of the
twenty-fourth (24th) month prior to the scheduled month of delivery
of such Option Aircraft being converted, according to the schedule
set forth in Paragraph 3 of this Letter Agreement. Paragraphs 4 and
7 of this Letter Agreement will apply to the Converted A319 Aircraft
using the Converted A319 Aircraft pricing set forth in Subparagraph
9.4 above, for the purpose of computing the Converted A319 Aircraft
Predelivery Payment Reference Price.
9.7 OTHER MATTERS
Each Converted A319 Aircraft shall be an Aircraft for the purposes
of the provisions of Clauses 1 through 22 of the Agreement, the
Exhibits to the Agreement, Letter Agreement No. 1 to the Agreement,
Paragraph 3, 5 and 6 and Subparagraphs 4.1, 4.3 and 4.4 of Letter
Agreement No. 2 to the Agreement and Paragraph 9 of this Letter
Agreement. No other provisions of the Agreement shall apply to such
Converted Option Aircraft.
10. ASSIGNMENT
Notwithstanding any other provision of this Letter Agreement or of
the Agreement, this Letter Agreement and the rights and obligations
of the Buyer hereunder shall not be assigned or transferred in any
manner without the prior written consent of the Seller, such consent
not to be unreasonably withheld, and any attempted assignment or
transfer in contravention of the provisions of this Paragraph 10
shall be void and of no force or effect.
LA No. 3-8
Notwithstanding Subclause 6.6 of the Agreement, in the event (i) the
Buyer requests the Seller, at a date prior to the Option Aircraft
exercise date, to assign this Letter Agreement and the rights and
obligations of the Buyer hereunder to a third party (the "Third
Party"), (ii) such Third Party clearly states in writing to the
Seller that it is bound by and will comply with all applicable
terms, conditions and limitations of this Letter Agreement, and
provides evidence satisfactory to the Seller of its ability to
undertake such obligations, (iii) the Seller does not grant its
written consent to the Buyer pursuant to the immediately preceding
sentence, and (iv) the Buyer therefore then elects not to exercise
the right to purchase the Option Aircraft, then (and only in this
instance) the Seller will reimburse the Buyer an amount equal to the
suin of the first three Predelivery Payments received by the Seller
from the Buyer pursuant to Subclause 6.2.3 of the Agreement. The
Buyer shall not be entitled to the refund of any other Predelivery
Payments under any other circumstances.
LA No. 3-9
If the foregoing correctly sets forth our understanding, please execute
the original and one (1) copy hereof in the space provided below and return a
copy to the Seller.
Very truly yours,
AVSA, S.A.R.L.
By: /s/ Xxxxxxxxxx Xxxxxx
------------------------------------
Its: AVSA Chief Executive Officer
Date: March 17, 1995
Accepted and Agreed
Midway Airlines Corporation
By: /s/ Xxxxx X. Xxxx
---------------------------
Xxxxx X. Xxxx
Its: Executive Vice President
Chief Operating Officer
LETTER AGREEMENT
As of March 17, 1995
Midway Airlines Corporation
0000 X. Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Re: FINANCIAL MATTERS
Dear Sir or Madam:
Midway Airlines Corporation (the "Buyer"), and AVSA, S.A.R.L. (the
"Seller"), have entered into an Airbus X000-000 Xxxxxxxx Agreement dated as of
even date herewith (the "Agreement"), which covers, among other things, the sale
by the Seller and the purchase by the Buyer of certain Aircraft. The Buyer and
the Seller have agreed to set forth in this Letter Agreement (the "Letter
Agreement") certain additional terms and conditions regarding the sale of the
Aircraft. The terms "herein," "hereof" and "hereunder" and words of similar
import refer to this Letter Agreement. References to Paragraphs, save where the
context otherwise requires, are to Paragraphs contained in this Letter
Agreement.
Both parties agree that this Letter Agreement shall not constitute
part of said Agreement, but shall be a separate and independent contract of
financial accommodation to assist the Buyer in operating certain A320 aircraft.
Capitalized terms used herein and not otherwise defined in this Letter Agreement
shall have the meanings assigned thereto in the Agreement.
1. UPFRONT SUPPORT CREDIT
1.1 In consideration of the following conditions set forth in
Subparagraphs 1.1.1 through 1.1.4, the terms of Subparagraph 1.2
will apply:
1.1.1 The Buyer's operation, over time starting in April 1995, of ten (10)
A320-200 aircraft leased medium to long term by the Buyer from
operating lessors (including not fewer than four (4) A320 aircraft
from ORIX Aviation Systems Limited), such leases to begin between
(i) on or about April 1995 and (ii)the end of 1996.
1.1.2 The Buyer's execution of the Agreement with the Seller for the
purchase by the Buyer from the Seller of four
(4) Firm Aircraft to be delivered by the Seller to the Buyer
starting in December 1998 with an option to purchase up to four (4)
additional Option Aircraft.
1.1.3 The Seller's agreement pursuant to the terms of Letter Agreement No.
2 to the Agreement to provide to the Buyer certain product support
services in advance of the time when such services will have been
made available under the Agreement (excluding for this purpose the
Letter Agreements to the Agreement).
1.1.4 The provision by the Buyer of Collateral (as defined in the Security
Agreement) to the Seller to secure the advancement of product
support services, until delivery of the last Firm Aircraft, and
repayment of the Utilized Amount (as defined in Subparagraph 1.2.1
below) as further described in Paragraph 2 below.
1.2 The Buyer and the Seller agree to the following terms set forth in
Subparagraphs 1.2.1 through 1.2.8 with respect to the provision by
the Seller of the Upfront Support Credit (as defined in Subparagraph
1.2.1 below).
1.2.1 [***] (at January 1995 delivery conditions, subject to escalation
pursuant to the Airframe Price Revision Formula set forth in Exhibit
"G" of the Agreement (the "Formula")) (the [***]), based on the
support of ten (10) A320 aircraft, provided, however, that the
Buyer's right to draw under the line of credit shall be further
limited as described in Subparagraph 1.2.7 below. The term "Utilized
Amount" at any time shall mean all amounts of the Upfront Support
Credit (as escalated in accordance with the Formula) that have been
extended as of such time to the Buyer.
1.2.2 The Upfront Support Credit shall be used for the purchase by the
Buyer of product support goods and services from the Seller or its
Affiliates (as defined below) and include goods and services as
further described in Letter Agreement No. 2 to the Agreement.
The term "Affiliates" is defined as follows:
Affiliate - with respect to any person or entity, any other person
or entity directly or indirectly controlling, controlled by or under
common control with such person or entity.
2
1.2.3 The Buyer's obligation to repay to the Seller the Utilized Amount
of the Upfront Support Credit shall be deemed satisfied only upon
actual delivery of each Firm Aircraft to the Buyer unless the
Agreement is terminated for reasons set forth in Clause 10 or 11
of the Agreement and shall be reduced at the rate of [***] (at
January 1995 delivery conditions, subject to escalation through
application of the Formula) per delivered Firm Aircraft.
1.2.4 In the event (i) a Termination Event (as defined below in
Subparagraph 3.1.1) has occurred and is continuing or (ii) any of
the Firm Aircraft are not delivered or will not be delivered to
the Buyer for any reason other than on account of a termination
of the Agreement under Clause 10 or 11 thereof (including, but
not limited to, failure to satisfy the conditions set forth in
the Agreement or this Letter Agreement), then, provided that the
Buyer has met all its payment obligations to the Seller prior to
July 1, 1995, pursuant to the terms of the Agreement, the
Utilized Amount less an amount equal to $858,000 (US
dollars--eight hundred fifty-eight thousand) (as the result of
such subtraction is escalated in accordance with the Formula),
shall become due and payable immediately together with interest
thereon calculated as LIBOR for six-month deposits of US dollars
plus two hundred (200) basis points (the "Applicable Rate") from
(and including) the date of the Termination Event to the date of
payment of all of the Utilized Amount.
"LIBOR" shall be defined as, for each stated interest period, the
rate determined on the basis of the offered rates for deposits in US
dollars, which appear on the Reuters Screen LIBO Page as of 11:00
a.m., London time, on the day that is two (2) days (other than a
Saturday, Sunday or a day that is a legal holiday or a day on which
banking institutions are authorized to close in the City of New
York, New York, London, England, or Paris, France) before the first
day of an interest period. If at least two (2) such offered rates
appear on the Reuters Screen LIBO Page, the rate for that interest
period will be the arithmetic mean of such offered rates rounded to
the nearest basis point (0.5 rounds to 1). If only one (1) offered
rate appears, the rate for that interest period will be "LIBOR" as
quoted by National Westminster Bank, plc. "Reuters Screen LIBO Page"
means the display designated as page "LIBO" on the Reuters Monitor
Money Rates Service (or any successor to such page or service).
3
1.2.5 The Upfront Support Credit shall be deemed drawn or utilized by the
Buyer in amounts calculated based on the Seller's then current
labor, material and service rates. In order to evidence to the Buyer
and the Seller the Utilized Amount, the Seller will send to the
Buyer on a monthly basis (to be reduced to a quarterly basis after
June 1996) statements and/or invoices, which, in the absence of
manifest error shall be conclusive, outlining (i) the increase in
the Utilized Amount of the Upfront Support Credit occurring during
such month (or quarter, as applicable) (ii) the total amount of the
Utilized Amount outstanding under the Upfront Support Credit as of
the date thereof and (iii) the portion, as of the date of such
statement and/or invoice, of the Upfront Support Credit remaining
outstanding and available from the Seller subject to the terms of
this Letter Agreement. It is agreed and understood between the
parties that failure by the Seller to issue such statements and/or
invoices to the Buyer shall in no manner release the Buyer from its
obligations under this Letter Agreement and the parties may agree to
adjust the administrative procedure described above at any time.
1.2.6 The Seller and the Buyer agree, from time to time (but not later
than at the end of 1996), review the number of leased A320 aircraft
in the Buyer's fleet in order to monitor the unutilized Upfront
Support Credit, should the number of A320 aircraft leased medium to
long term be fewer than ten (10). The Buyer will use its
commercially reasonable efforts, whenever practicable, to have
product support allowances assigned by operating lessors (other than
by ORIX Aviation Systems Limited for the first four (4) A320
aircraft leased by the Buyer) as part of its A320 aircraft lease
transactions. The Buyer's operation of fewer than ten (10) leased
A320 aircraft in 1995 and 1996 shall in no event be understood as an
acceleration of the Buyer's obligation to repay the Utilized Amount,
unless an event described above in Subparagraph 1.2.4 has occurred.
Notwithstanding the foregoing, the leasing of four (4) or five (5)
A320 aircraft will allow the Buyer to draw from the [***].
1.2.7 Notwithstanding the provisions set forth in Subparagraphs 1.2.1
through 1.2.6 above, it is hereby agreed and understood between the
Buyer and the Seller that the [***] (at January 1995 delivery
conditions, subject to escalation through
4
application of the Formula) unless and until the time the Buyer has
provided Additional Collateral to the Seller's satisfaction (as
further described in Paragraph 2 below). In lieu of providing the
Additional Collateral (as described in Paragraph 2 below), the Buyer
shall have the option to pay the Seller in cash for further product
support services.
1.2.8 Except as may otherwise be mutually agreed from time to time by the
Seller and the Buyer, at no time shall the Seller be required to
provide support services in excess of the Upfront Support Credit and
as described in Letter Agreement No. 2 to the Agreement.
1.2.9 The Upfront Support Credit shall represent a portion of, and be
included in, the product support allowances set forth in Clauses 14,
15, and 16 of the Agreement and Letter Agreement No. 1 to the
Agreement and shall not be a duplication of or additional to such
allowances.
1.2.10 Notwithstanding the provisions of Subparagraphs 1.2.1 through 1.2.9
above, in the event (i) an A320 operating lessor from which the
Buyer leases A320 aircraft assigns to the Buyer certain product
support allowances in addition to the Upfront Support Credit (the
"Allowances") and (ii) such Allowances are applied by the Buyer to
acquire from the Seller or its Affiliates A320 product support goods
and services to support the operation of the leased A320 aircraft
and (iii) the Upfront Support Credit is not fully utilized to its
authorized limit at the time of delivery of the first Aircraft,
then, the Seller agrees to credit to the Buyer upon delivery of each
Firm Aircraft an amount equal to one-fourth of the unused portion of
the then authorized Upfront Support Credit (as escalated from
January 1995, through application of the Formula) to be applied
against the Final Contract Price of the Firm Aircraft.
2. COLLATERAL
2.1 As security for its obligations under this Letter Agreement,
including the due and punctual repayment of the Upfront Support
Credit (as the same may be escalated in accordance with the Formula)
and any interest thereon payable under Subparagraph 1.2.4, upon the
occurrence, if any, of a Termination Event, the Buyer has agreed to
execute and deliver with this Letter Agreement the following
agreements (collectively, the "Transaction Security Agreements"): a
Security Agreement dated the date hereof, and such other additional,
replacement or supplemental security agreements that the Seller may
reasonably request from time to time.
5
2.2 It is hereby agreed and understood that pursuant to Subparagraph
1.2.7 above and upon the Utilized Amount reaching [***] (at January
1995 delivery conditions, subject to escalation through application
of the Formula) (the "Capped Amount") the Buyer shall provide the
Seller with collateral beyond the Collateral currently contemplated
in the Security Agreement between the Buyer and the Seller dated the
date hereof (the "Additional Collateral"). The provision by the
Seller of Upfront Support Credit in excess of the Capped Amount
shall also be subject to the satisfaction of the conditions set
forth in further security agreements between the Buyer and the
Seller and to the conditions set forth in Subparagraph 3.4
hereafter. The provision by the Buyer to the Seller of the
Additional Collateral to the Seller's satisfaction shall be a
condition precedent to the Seller's obligation to provide a line of
credit with respect to the Upfront Support Credit in an amount
greater than the Capped Amount.
Upon the Utilized Amount becoming equal to the Capped Amount, the
Buyer and the Seller agree to conduct a collateral review in order
to provide the Seller with Additional Collateral (if applicable).
Further collateral meetings shall take place not less than quarterly
thereafter and will allow the Seller to receive further collateral,
if applicable.
3. TERMINATION FOR CERTAIN EVENTS; INSECURITY EVENTS; FURTHER
ASSURANCES
3.1 Termination Events
3.1.1 Each of the following shall constitute a "Termination Event" under
this Letter Agreement:
(1) The Buyer or any other party shall commence any case,
proceeding or other action with respect to the Buyer in any
jurisdiction relating to bankruptcy, insolvency,
reorganization, relief from debtors, an arrangement,
winding-up, liquidation, dissolution or other relief with
respect to its debts and such case, proceeding or other action
remains unstayed, undismissed or undischarged for sixty (60)
days.
(2) An action is commenced seeking the appointment of a receiver,
trustee, custodian or other similar official for the Buyer for
all or substantially all of its assets, and such action
remains unstayed, undismissed or undischarged for sixty
6
(60) days, or the Buyer makes a general assignment for the
benefit of its creditors.
(3) An action is commenced against the Buyer seeking issuance of a
warrant of attachment, execution, distraint or similar process
against all or any substantial part of its assets, and such
action remains unstayed, undismissed or undischarged for sixty
(60) days.
(4) The Buyer becomes insolvent or fails generally to pay its
debts as they become due.
(5) There is a liquidation, winding up or analogous event with
respect to the Buyer.
(6) The Buyer fails to make (i) any payment required to be made
pursuant to this Letter Agreement, the Agreement, the
Transaction Security Agreements, or any other agreement
between the Buyer and the Seller dated as of the date hereof
when such payment comes due, (ii) any Predelivery Payment
required to be made pursuant to Subclause 6.2 of the
Agreement, (iii) payment of all or part of the Final Contract
Price required to be made pursuant to Subclause 6.3 of the
Agreement, or (iv) any payments as they become due the
Propulsion Systems manufacturer or an A320 operating lessor,
under their respective agreements with the Buyer.
(7) The Buyer shall default on any payment of principal or
interest on any indebtedness or in the payment of any
guarantee obligation to the Seller or any of its Affiliates.
(8) The Buyer shall default on any payment of any lease obligation
relating to any Aircraft.
(9) The Buyer shall default in its obligation to take delivery of
an Aircraft as provided in Subclause 9.3 of the Agreement.
(10) The Buyer shall default in the observance or performance of
any other covenant or undertaking contained in this Letter
Agreement or the Agreement or the Transaction Security
Agreements or any other agreement between the Buyer and the
Seller dated as of the date hereof, beyond the five (5) day
cure period.
7
(11) The Buyer shall fail to provide Comfort (as defined in
Subparagraph 3.2 hereafter) to the Seller within forty-five
(45) days of the occurrence of an Insecurity Event (as defined
in Subparagraph 3.2 hereafter).
Immediately upon the occurrence of a Termination Event, the Buyer
shall notify the Seller of such occurrence in writing and by courier
or telecopier, provided, however, that any failure by the Buyer to
notify the Seller shall not prejudice the Seller's rights hereunder.
3.1.2 Upon the occurrence of a Termination Event, the Seller may (i) by
written notice to the Buyer terminate the unutilized Upfront
Support Credit and it shall thereupon terminate, (ii) by written
notice to the Buyer declare the Utilized Amount to be immediately
due and payable without presentment, demand, protest, or other
notice of any kind, all of which are hereby expressly waived by
the Buyer, (iii) proceed to enforce performance by the Buyer of
the applicable covenants contained in the Transaction Security
Agreements or to recover damages for breach thereof, and (iv)
exercise any other right, power, privilege or remedy provided by
law or in the Transaction Security Agreements; provided that in
the case of any of the Termination Events specified in Clauses
(1) through (6) of Subparagraph 3.1.1, without any notice to the
Buyer or any other act by the Seller, the unutilized Upfront
Support Credit shall thereupon terminate and the Utilized Amount
shall become immediately due and payable without presentment,
demand, protest or other notice of any kind, all of which are
hereby expressly waived by the Buyer. Nothing contained in this
Subparagraph 3.1.2 shall be construed to limit in any way any
rights, powers or privileges of the Seller under the Transaction
Security Agreements, or under any applicable law, upon the
occurrence of a Termination Event. Each and every right, power
and privilege hereby given to, or retained by the Seller shall be
in addition to and not in limitation of every other right, power
and privilege given under the Transaction Security Agreements, or
now or hereafter existing at law or in equity.
3.2 Insecurity Events
Any of the following shall constitute an "Insecurity Event" and any
remedies therefor provided in this Letter Agreement shall be in
addition to and not in substitution for any rights the Seller may
have at law to terminate this Letter Agreement as set forth in
Subparagraph 3.1.2:
8
(a) At the end of each of the following months, the Buyer shall
fail to have unencumbered cash balances of not less than the
product of (i) $225,000 (US dollars--two hundred twenty-five
thousand) at the end of April 1995; $150,000 (US dollars--one
hundred fifty thousand) at the end of May 1995; $150,000 (US
dollars--one hundred fifty thousand) at the end of June 1995;
$250,000 (US dollars--two hundred fifty thousand) at the end
of July 1995; $300,000 (US dollars--three hundred thousand) at
the end of August 1995; $325,000 (US dollars--three hundred
twenty-five thousand) at the end of September 1995; and
$350,000 (US dollars--three hundred fifty thousand) at the end
of each month thereafter until the termination of this Letter
Agreement; (in each case as adjusted to any month of
determination from March 1995 by multiplying the relevant
requisite unencumbered cash balance by the ratio of (A) to
(B), where (A) is equal to the Consumer Price Index ("CPI")
reported for the third month prior to such month of
determination and (B) is equal to the CPI reported for March
1995) (provided, however, that in no event shall the number
computed thereby be less than one (1)) multiplied by (ii) the
number of jet-powered aircraft then owned, acquired pursuant
to a conditional sale agreement or leased by the Buyer (in
each case whether or not then operated by the Buyer);
(b) The ratio of current assets to current liabilities, as those
amounts would be determined through the application of
Generally Accepted Accounting Principles, is 0.80 to 1 or
less; or
(c) If at any time the Buyer shall enter into a revolving credit
agreement, line of credit or similar extension of credit and
such agreement is terminated (other than by its own terms or
by the Buyer) or a covenant is breached and such breach is not
waived or ceases to exist within thirty (30) days after the
occurrence thereof; or
(d) With respect to the Agreement of Sublease dated January 18,
1995, between the Buyer and American Airlines, Inc.
("American"), relating to property which American has leased
or will lease to the Buyer (as such agreement may be amended
from time to time); if such agreement is terminated prior to
March 31, 1997, and at any subsequent date if such termination
results in an unfavorable change
9
in the Buyer's financial condition or if such agreement
becomes subject to revision in a manner that is materially
unfavorable to the Buyer; or
(e) With respect to the current holders of the Buyer's outstanding
shares, the current majority shareholder ceases to control
eighty percent (80%) of the outstanding voting shares of the
Buyer or its successor, provided that this shall not apply in
the event of a public offering of the Buyer, as long as such
public offering provides the Buyer (or its successor) with a
total debt-to-net worth ratio, as those amounts would be
determined through the application of Generally Accepted
Accounting Principles, of at least three to one; or
(f) With respect to any or all of the seven operating leases or
any other leases, in replacement thereof for the Buyer's use
of the Fokker F-l00 aircraft ("Fokker F-l00 Aircraft Leases"),
the Buyer fails to make a payment when due or a financial
covenant thereunder is breached; provided, however, that such
provision shall not apply for as long as the earlier of the
following events has occurred and/or is continuing: (i) the
Buyer fails to make a payment under the Fokker F-l00 Aircraft
Leases and such nonpayment is not cured to the satisfaction of
the lessor under the Fokker F-l00 Aircraft Leases and the
Buyer within thirty (30) days and (ii) the Lessor under the
Fokker F-l00 Aircraft Leases delivers to the Buyer a notice of
termination or seeks to repossess the aircraft; or
(g) With respect to any or all of the four aircraft leases for the
Buyer's use of A320 aircraft between the Buyer and ORIX
Aviation Systems Limited or any of its Affiliates, or any
successor or assignee, the Buyer fails to make a payment when
due or a financial covenant thereunder is breached; or
(h) With respect to the Term Loan Agreement, dated as of April 14,
1994, between the Buyer and American National Bank and Trust
Company of Chicago or any successor thereto, the Buyer fails
to make a payment when due or a financial covenant thereunder
is breached; or
(i) With respect to any other significant credit or lease
financing facility or similar agreement, including but not
limited to any agreement signed subsequent to this date for
the lease of aircraft, either (i) the commitment to lend,
10
finance or lease, as the case may be, thereunder is terminated
(other than by the Buyer) or (ii) a financial covenant
thereunder is breached and such breach is not waived or ceases
to exist within forty-five (45) days after the occurrence
thereof; or
(j) The Buyer is involuntarily removed from active membership and
participation in the airline clearinghouse (or any substitute
or replacement arrangement) among domestic airlines or the
Buyer is placed on a cash basis by such clearinghouse (or any
such substitute or replacement arrangement).
Within five (5) days of the occurrence of an Insecurity Event, the
Buyer shall notify the Seller of such occurrence in writing and by
courier or telecopier, provided, however, that any failure by the
Buyer to notify the Seller shall not prejudice the Seller's rights
hereunder.
If Comfort is not received by the Seller within forty-five (45) days
after the date of the Insecurity Event, the Seller may treat this
Letter Agreement as terminated by giving written notice of such
termination to the Buyer. Such termination shall constitute a
Termination Event and Subparagraph 3.1.2 above shall apply.
The term "Comfort" is defined as follows:
Comfort - at the time of determination, assurance from the Buyer to
the Seller of the Buyer's ability to duly perform each of the
Buyer's obligations under this Agreement and any agreement between
the Buyer and the Seller dated the date hereof (including with
respect to all Option Aircraft, assuming such options have been
exercised at the time) at the time and in the manner that each such
obligation is required to be performed, provided that such assurance
shall:
(a) consist of assurance substantially identical to that
constituting "adequate assurance of due performance" within
the meaning of Article 2-609 of the Uniform Commercial Code as
in effect on the date hereof in the State of New York, as if
this was a contract for the sale of goods or the supply of
services, and
(b) be in writing or evidenced by a writing.
11
In addition, Comfort shall be deemed to have been received hereunder
if the event or circumstance which caused the Insecurity Event to
occur hereunder has been cured satisfactorily as set forth above and
the same has been evidenced in writing to the Seller.
3.3 The Seller's obligations to make each extension of credit under the
Upfront Support Credit ("Credit Extension") pursuant to this Letter
Agreement are subject to the satisfaction of the conditions set
forth in the Transaction Security Agreements and each of the
following conditions:
(a) The representations and warranties of the Buyer contained
herein and in the Transaction Security Agreements shall be
true in all material respects on and as of the date of such
Credit Extension, except to the extent that such
representations and warranties relate solely to an earlier
date (in which case such representations and warranties shall
have been true as of such earlier date);
(b) No Insecurity Event (as defined hereafter) or Termination
Event shall have occurred and be continuing;
(c) The Buyer shall have furnished prior to March 31, 1995, the
Seller with an opinion of counsel to the Buyer, dated the
initial Credit Extension Date, in substantially the same form
as required by Clause 4.18 below;
(d) The Buyer shall have entered into the Transaction Security
Agreements;
(e) Uniform Commercial Code financing statements, covering the
"Collateral," the subject of the Transaction Security
Agreements, prior to March 31, 1995, duly completed and
executed by the Buyer as debtor and the Seller as secured
party. Each such financing statement shall have been properly
filed in each of the appropriate jurisdictions and the Seller
shall have received evidence satisfactory to it of each such
filing; and
(f) Such other filings, instruments and documents with respect to
the Buyer as the Seller may reasonably request in order to
establish the taking by the Buyer of all necessary corporate
action in connection herewith.
12
(g) The Buyer shall have permitted prior to March 31, 1995,
representatives of the Seller or third party certified
inspectors to visit and inspect (and at the Buyer's expense)
any of the Buyer's properties where any of the collateral (as
defined in Paragraph 2) or any of the Assignor's books and
records relating to the Collateral are located and to inspect
the Collateral and to examine and make abstracts from any of
its books and records at any reasonable time and as often as
may reasonably be desired and to discuss the condition and
operation of the Collateral with officers and employees of the
Assignor and with its independent certified public accounts.
(h) The Buyer shall have obtained prior to March 31, 1995, to the
satisfaction of the Seller, all waivers, consents, or
agreements which are necessary, or which the Seller shall
reasonably request, in respect of any Contractual Obligation
of the Buyer. In this Letter Agreement, "Contractual
Obligation" shall mean any provision of any security issued by
the Buyer or of any agreement, instrument or undertaking to
which the Buyer is a party or by which it or any of its
property is bound.
(i) The Buyer shall have provided prior to March 31, 1995, the
detailed content and location of the Collateral together with
all appropriate insurance certificates covered under the
Security Agreement between the Buyer and the Seller dated the
day hereof.
3.4 In addition to the provisions of Subparagraph 3.3, the provision by
the Seller of Upfront Support Credit in excess of the Capped Amount
shall be subject to the satisfaction of the conditions set forth in
further security agreements between the Buyer and the Seller and to
the following conditions:
(a) Each of the representations and warranties made by the Buyer
in or pursuant to this Letter Agreement or any Transaction
Security Agreement (or in any amendment, modification or
supplement hereto or thereto), shall be true and correct in
all material respects on and as of the date of determination
by the Buyer.
(b) No Insecurity Event or Termination Event shall have occurred
and be continuing as of the date of determination by the
Seller.
13
(c) The security interests granted to the Seller by the Buyer in
respect of the Collateral (as defined in the Transaction
Security Agreements) constitute legal, valid perfected and
binding obligations of the Buyer, enforceable in accordance
with their terms, and (a) are prior to all other Liens (other
than the Permitted Lien as defined in the Security Agreement)
on the Collateral in existence as of the date of determination
by the Seller and (b) are enforceable as such against (i) all
creditors of and purchasers from the Buyer (except purchasers
of Inventory (as defined in the Uniform Commercial Code in
effect in the State of New York (the "Code") in ordinary
course of business) and (ii) any Person having any interest in
the real property where any of the Equipment (as defined in
the Code) is located, except in each case as enforceability is
affected by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to
or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at
law) and an implied covenant of good faith and fair dealing.
(d) The Buyer shall have granted to the Seller a valid, legally
binding, perfected, unavoidable first priority security
interest over the Additional Collateral.
(e) The Buyer shall have provided a legal opinion, in form and
substance satisfactory to the Seller confirming that the
requirements of Subparagraph 3.4(d) above have been satisfied
in respect of such Additional Collateral.
3.5 Further Assurances
The Buyer shall promptly and duly execute and deliver to the Seller,
and to such other persons as the Seller shall reasonably designate,
such further instruments and documents as the Seller may from time
to time reasonably request in order to establish and protect the
Seller's interests in the Collateral hereunder.
14
4. Miscellaneous Provisions
4.1 Notices
All notices and requests required or authorized hereunder shall be
given in writing either by personal delivery to a responsible
officer of the party to whom the same is given or by certified air
mail (return receipt requested) or by telex or cable at the
addresses set forth below. The date upon which any such notice or
request is so personally delivered, or if such notice or request is
given by mail, the date upon which it is deposited in the mails or,
in the case of a telex or cable, the date upon which sent, shall be
deemed to be the effective date of such notice or request.
Notices and requests to the Seller shall be addressed to:
AVSA, X.X.X.X.
0, xxxx-xxxxx Xxxxxxx Xxxxxxxx
00000 XXXXXXX
XXXXXX
Attention: Director - Contracts
Telephone: 00 00 00 00 00
Telex: AVSA 521155F
Telecopy: 33 61 30 40 11
Notices and requests to the Seller shall be addressed to:
Midway Airlines Corporation
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000 XXX
Attention: President
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
or at such other address or to such other person as the party
receiving the notice or request may designate from time to time.
4.2 Interpretation and Law; Jurisdiction; Payment Currency
This Letter Agreement shall be governed by and construed and the
performance thereof shall be determined in accordance with the laws
of the State of New York.
15
Each party (I) hereby irrevocably submits itself to the nonexclusive
jurisdiction of the courts of the State of New York in New York
County, and, to the extent permitted by applicable law, to the
nonexclusive jurisdiction of the United States District Court for
the Southern District of New York, for the purposes of any suit,
action or other proceeding arising out of this Letter Agreement or
any of the transactions contemplated hereby brought by any party or
parties hereto, or their successors or assigns, and (II) hereby
irrevocably waives, and agrees not to assert, by way of motion, as a
defense, counterclaim or otherwise, in any such action or proceeding
with respect to this Letter Agreement, the defense of sovereign
immunity, any claim that it is not personally subject to the
jurisdiction of the above-named courts by reason of sovereign
immunity or otherwise that it or its property is exempt or immune
from jurisdiction of any court or from any legal process (whether
through service of notice, attachment prior to judgment or
otherwise), and to the fullest extent permitted by applicable law,
that the suit, action or proceeding is brought in an inconvenient
forum, that the venue of the suit, action or proceeding is improper
or that this Letter Agreement, or the subject matter hereof or
thereof may not be enforced in or by such courts and further
irrevocably waives, to the fullest extent permitted by applicable
law, the benefit of any defense that would hinder, xxxxxx or delay
the levy, execution or collection of any amount to which the parties
hereto or beneficiaries hereunder are entitled pursuant to a final
judgment of any court having jurisdiction; provided that this
sentence shall not be construed as a waiver of any requirement of
service of process. Each party hereby generally consents to service
of process by registered mail, return receipt requested, at its
address set forth in Paragraph 4, or such other office as from time
to time may be designated by the Buyer or the Seller in writing to
the other party.
It is of the essence of this Letter Agreement that the Buyer and the
Seller make the payments due hereunder in lawful currency of the
United States of America ("Dollars"). The obligation to make each
payment in Dollars shall not be discharged or satisfied by any
tender, or any recovery pursuant to any judgment, which is expressed
in or converted into any other currency until and except to the
extent such tender or recovery shall result in the actual receipt by
the receiving party in Dollars of the amount expressed to be payable
in Dollars. The obligation to make payments in Dollars shall be
enforceable as an alternative or additional
16
cause of action for the purpose of recovery in Dollars of the amount
(if any) by which such actual receipt shall fall short of the full
amount of Dollars and shall not be affected by judgment being
obtained for any other sums due hereunder.
4.3 Provisions as to Payments
All payments and prepayments under this Letter Agreement shall be
made by the Buyer on the due date thereof in immediately available
funds to a bank account of the Seller at the New York Branch of
Credit Lyonnais, the account number of which will be provided by the
Seller to the Buyer. The Buyer agrees to initiate the wire transfer
of each such payment no later than noon, New York City time, on such
due date, provided that nothing in this sentence shall affect the
Buyer's obligation to make each such payment on the due date
thereof. In the event that any such payment to be made to the Seller
shall become due on a day that is not a Business Day, such payment
shall be made on the next succeeding Business Day.
"Business Day" shall be defined as a day that is not a Saturday or a
Sunday and that is neither a legal holiday nor a day on which
banking institutions are authorized to close in the City of New
York, New York, London, England, or Paris, France.
4.4 Prepayments
The Buyer may prepay, upon no less than seven Business Days'
irrevocable prior written notice to the Seller, in whole or in part
and without premium or penalty, the Utilized Amount, together with
interest, if any, accrued on such amount to the date of such
prepayment calculated at the Applicable Rate. Amounts prepaid
pursuant to this Subparagraph 4.4 cannot be the subject of a further
extension of Credit under this Letter Agreement.
4.5 Buyer's Representations and Warranties
The Buyer represents and warrants that:
(a) Organization and Qualification. The Buyer is a corporation,
was duly organized and is validly existing in good standing
under the laws of the state of Delaware and has the corporate
power and authority to own or lease its properties and to
enter into and perform its obligations hereunder and under the
Transaction Security Agreements; and is duly qualified to do
business
17
as a foreign corporation in good standing in each state in
which the failure to be so qualified or licensed would have a
materially adverse effect on the ability of the Buyer to
perform its obligations hereunder or under the Transaction
Security Agreements.
(b) Corporate Authority, Etc. The execution, delivery and
performance of this Letter Agreement or the Transaction
Security Agreements have been duly authorized by all necessary
corporate action on the part of the Buyer, and do not and will
not contravene any Requirement of Law (as defined in the
Transaction Security Agreements) applicable to the Buyer.
(c) Government Approvals. Neither the execution and delivery by
the Buyer of this Letter Agreement or the Transaction Security
Agreements, nor the consummation by the Buyer of any of the
transactions contemplated thereby requires the consent or
approval of, the giving of notice to, the registration with,
or the taking of any other action in respect of the Federal
Aviation Administration, or any other Governmental Authority
(as defined in the Transaction Security Agreements) except as
expressly contemplated by the provisions thereof.
(d) Valid and Binding Agreements. This Letter Agreement and the
Transaction Security Agreements constitute legal, valid and
binding obligations of the Buyer enforceable against the Buyer
in accordance with the terms thereof and create the security
interest they purport to create, subject, as to
enforceability, to applicable bankruptcy, insolvency and
similar laws affecting creditors' rights generally and to
general principles of equity.
(e) Compliance with Other Instruments. The execution, delivery and
performance by the Buyer of this Letter Agreement or the
Transaction Security Agreements do not and will not constitute
or result in a material default under, or a material violation
or contravention of, any term or provision of the charter or
bylaws of the Buyer or of any certificate, exemption or order
issued by the United States Department of Transportation or
the Federal Aviation Administration or of any indenture,
mortgage, lease, contract or agreement binding
18
upon the Buyer or of any law, statute, ordinance, judgment,
decree, order or governmental rule, regulation or law binding
upon or applicable to the Buyer.
(f) Security Agreement. The Transaction Security Agreements, when
executed and delivered in accordance with this Letter
Agreement and upon the filing of Uniform Commercial Code
financing statements as provided herein and therein, will
(unless expressly excepted therein) create for the benefit of
the Seller a valid first and prior perfected security interest
in the Collateral (as defined in the Transaction Security
Agreements).
(g) No Insecurity Event or Termination. No Insecurity Event or
Termination has occurred and the Buyer has not admitted in
writing its inability generally to pay its debts as they
become due.
4.6 Method of Credit Extension
The Buyer hereby gives the Seller irrevocable notice in writing to
extend the line of credit contemplated under the Upfront Support
Credit, under the terms and conditions set forth in this Letter
Agreement ("Credit Extension Notice").
4.7 Taxes
All payments made by the Buyer under this Letter Agreement or under
the Transaction Security Documents shall be made free and clear of,
and without reduction or withholding for or on account of, any
present or future taxes or other charges now or hereafter imposed or
collected by any Governmental Authority and withheld from such
payments.
4.8 Waiver
The failure of any party to enforce at any time any of the
provisions of this Letter Agreement, or to exercise any right herein
provided, or to require at any time performance by any other party
of any of the provisions hereof, shall in no way be construed to be
a present or future waiver of such provisions nor in any way to
affect the validity of this Letter Agreement or any part thereof or
the right of any other party thereafter to enforce each and every
such provision. The express waiver by any party of any provision,
condition or requirement of this Letter Agreement shall not
constitute a waiver of any future obligation to comply with such
provision, condition or requirement.
19
4.9 Confidentiality
Subject to any legal or governmental requirements of disclosure, the
parties (which for this purpose shall include their employees,
agents and advisors) shall maintain the terms and conditions of this
Letter Agreement strictly confidential. Without limiting the
generality of the foregoing, the Buyer shall use its best efforts to
limit the disclosure of the contents of this Letter Agreement to the
extent legally permissible in any filing required to be made by the
Buyer with any governmental agency and shall make such applications
as shall be necessary to implement the foregoing. With respect to
any public disclosure or filing, the Buyer agrees to submit to the
Seller a copy of the proposed document to be filed or disclosed and
will give the Seller a reasonable period of time in which to review
the said document. The Buyer and the Seller shall consult with each
other prior to the making of any public disclosure or filing,
otherwise permitted hereunder, of this Letter Agreement or the terms
and conditions thereof. The provisions of this Subparagraph 4.5
shall survive any termination of this Letter Agreement.
4.10 Severability
In the event that any provisions of this Letter Agreement should for
any reason be held ineffective, the remainder of this Letter
Agreement shall remain in full force and effect. To the extent
permitted by applicable law, each party hereto hereby waives any
provision of law which renders any provision of this Letter
Agreement prohibited or unenforceable in any respect.
4.11 Alterations to Contract
This Letter Agreement contains the entire agreement between the
parties with respect to the subject matter hereof and thereof and
supersedes any previous understanding, commitments or
representations whatsoever, oral or written. This Letter Agreement
shall not be varied except by an instrument in writing of even date
herewith or subsequent hereto executed by all parties or by their
duly authorized representatives.
4.12 Language
All correspondence, documents and any other written matter in
connection with this Letter Agreement shall be in English.
20
4.13 Headings
All headings in this Letter Agreement are for convenience of
reference only and do not constitute a part of this Letter
Agreement.
4.14 Counterparts
This Letter Agreement may be executed by the parties hereto in
separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
4.15 Assignment
Notwithstanding any other provision of this Letter Agreement, this
Letter Agreement and the rights and obligations of the Buyer
hereunder shall not be assigned or transferred in any manner without
the prior written consent of the Seller, and any attempted
assignment or transfer in contravention of the provisions of this
Paragraph shall be void and of no force and effect.
4.16 Reports
The Buyer will furnish to the Seller:
(i) Quarterly Reports. Within sixty (60) days after the end of
each of the first three quarterly fiscal periods in each
fiscal year of the Buyer, a Consolidated (as hereinafter
defined) balance sheet of the Buyer and its Consolidated
subsidiaries prepared as of the close of such period, together
with the related statements of income and surplus; and
(ii) Annual Statements. Within one hundred twenty (120) days after
the end of each fiscal year of the Buyer, an audited
Consolidated balance sheet of the Buyer and its Consolidated
subsidiaries as at the end of such year, and the related
statement of income and surplus.
"Consolidated" means, as applied to any financial or
accounting term or amount, such term or amount determined on a
consolidated basis in accordance with generally accepted
accounting principles.
21
4.17 Fees and Disbursements
The Buyer will bear the reasonable fees and out-of-pocket expenses
(if any) incurred by the Seller after the date hereof pursuant to
Paragraph 2 of this Letter Agreement and in the enforcement of its
remedies under this Letter Agreement or any Transaction Security
Agreement.
4.18 Opinion of Counsel
The Buyer shall, concurrently with the execution of this Agreement,
deliver to the Seller an opinion of counsel for the Buyer reasonably
satisfactory to the Seller and dated as of such date to the effect
that the execution, delivery and performance of this Letter
Agreement are within the corporate power of the Buyer, that the
execution, delivery and performance of this Letter Agreement, in
accordance with the respective terms by the Buyer, do not, to such
counsel's knowledge, constitute a breach of any agreement to which
the Buyer is a party, and that this Letter Agreement has been duly
executed and delivered by, and constitutes legal, valid and binding
obligations of, the Buyer enforceable in accordance with their
respective terms.
22
If the foregoing correctly sets forth our understanding, please
execute the original and one (1) copy hereof in the space provided below and
return a copy to the Seller.
Very truly yours,
AVSA, S.A.R.L.
By: /s/ Xxxxxxxxxx Xxxxxx
------------------------------------
Its: AVSA Chief Executive Officer
Date: March 17, 1995
Accepted and Agreed
Midway Airlines Corporation
By: /s/ Xxxxx X. Xxxx
---------------------------
Xxxxx X. Xxxx
Its: Executive Vice President
Chief Operating Officer
SECURITY AGREEMENT
SECURITY AGREEMENT, dated _________, 1995, made by MIDWAY AIRLINES
CORPORATION, a Delaware corporation (the "Assignor"), and AVSA, S.A.R.L., a
societe a responsibilite limitee organized and existing under the laws of the
Republic of France (the "Assignee");
The Assignee has agreed to extend an upfront support line of credit (the
"Line of Credit") to the Assignor pursuant to, and subject to the terms and
conditions set forth in the Letter Agreement relating to Financial Matters,
dated March 17, 1995 (the "Letter Agreement");
It is a condition precedent to the obligation of the Assignee to extend
the Line of Credit to the Assignor under the Letter Agreement that, among other
things, the Assignor shall have executed and delivered this Security Agreement,
described herein, to the Assignee; and
In consideration of the premises and to induce the Assignee to enter into
the Letter Agreement and to extend the Line of Credit to the Assignor, the
Assignor hereby agrees with the Assignee as follows:
Section 1. DEFINITIONS
(a) Each term which is defined in the Letter Agreement and not
otherwise defined herein shall have for purposes hereof the meaning set forth
therein.
(b) The following terms when used in this Agreement shall have the
following meanings:
"Airbus Spare Parts" shall mean the following items:
(a) all rotable, nonconsumable parts (including rotable line replaceable
parts) whether titled in the name of the Assignor, regardless from whom
acquired, or leased by the Assignee to the Assignor and which are usable
in connection with Airframes, but excluding parts which relate to the
propulsion systems installed on such Airframes; and
(b) industrial proprietary components, equipment, accessories or parts
manufactured by Airbus Industrie to the detailed design of Airbus
Industrie or a subcontractor of it and bearing official part numbers of
Airbus Industrie or material for which the Assignee has exclusive sales
rights in the United States;
(c) ground support equipment and special-to-type tools; and
2
(d) all the spare parts identified on Schedule 1, Part A hereto and not
previously identified in clauses (a) through (c) of this definition.
"Airframe" shall mean, as appropriate, any and all Airbus Industrie
aircraft and Fokker Aircraft B.V. model F100 aircraft but excluding the
engines installed thereon whether now or hereafter owned or leased by the
Assignor.
"Agreement" shall mean this Security Agreement, as the same may be
amended, modified or otherwise supplemented from time to time.
"Approval Tag" shall mean the Authorized Release Certificate
Airworthiness Approval Tag on FAA Form 8130-3 (or successor form)
associated with any appropriate item of Collateral.
"Code" shall mean the Uniform Commercial Code as from time to time
in effect in the State of New York.
"Collateral" has the meaning set forth in Section 2.
"Contractual Obligation" shall mean as to any Person, any provision
of any security issued by such Person or of any agreement, instrument or
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Delisted Locations" shall mean any locations which have been the
subject of a Delisting and which have not currently been redesignated as a
Designated Location pursuant to subsection 4.9(b).
"Delisting" has the meaning set forth in subsection 4.9(a).
"Designated Location" shall mean, as appropriate, (i) each of the
locations where Collateral is kept for use by the Assignor or where
Collateral is repaired, maintained or overhauled by the Assignor and (ii)
each location where Collateral is kept for use by third parties on behalf
of the Assignor in the repair and maintenance of aircraft or where
Collateral is repaired, maintained or overhauled by third parties on
behalf of the Assignor including, without limitation, the locations listed
in Schedule 2 hereto, as the same may be amended from time to time by the
addition of locations pursuant to subsection 4.7 hereof, but excluding any
Delisted Locations.
"Event of Loss" shall mean any of the following events with respect
to any of the Collateral, as appropriate, (i) any
3
loss or loss of use thereof due to destruction, damage beyond repair,
wearing out, obsolescence or rendition of such property permanently unfit
for normal use for any reason whatsoever; (ii) any damage to any of the
Collateral which results in an insurance settlement with respect to such
property on the basis of a total loss; (iii) the theft or disappearance of
any of the Collateral which shall have resulted in the loss of possession
of such Collateral by the Assignor for a period of sixty (60) consecutive
days or more; or (iv) the condemnation, confiscation, seizure or other
expropriation of, or requisition of title to or use of, or the assumption
of management of any of the Collateral by any government or any officer,
agency or instrumentality thereof.
"Federal Aviation Act" shall mean the Sections of Title 49 of the
United States Code relating to aviation, as amended from time to time, or
any similar legislation of the United States enacted in substitution or
replacement thereof.
"Fokker Spare Parts" shall mean all rotable, nonconsumable parts
(including rotable line replaceable parts), aircraft components, systems,
accessories, test equipment and tools used on or in connection with Fokker
100 aircraft, including but not limited to test boxes, towbars, covers,
emergency slides, de-icing equipment, galley equipment, spare aircraft
seats, jacks and rigging kits, in each case whether titled in the name of
the Assignor, regardless from whom acquired, or leased to the Assignor and
which are usable in connection with Airframes, but excluding parts which
relate to the propulsion systems installed on such Airframes and
identified on Schedule 1, Part B hereto, and all replacements or
substitutions thereof.
"Governmental Authority" shall mean any nation or government, any
state or any political subdivision of any thereof, and any entity of
competent authority exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government.
"Ground Equipment" shall mean all cars, trucks, trailers, ground
support vehicles, construction and earth moving equipment and other
vehicles covered by a certificate of title under the law of any state and
all tires and other appurtenances to any of the foregoing and identified
on Schedule 3 hereto.
"Hereof", "hereto", "hereunder", "herewith" and similar terms
refer to the document in which such term is used and not to any particular
section or provision of such document.
4
"Lien" shall mean any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge or
other security interest or any preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title
retention agreement and any financing lease having substantially the same
economic effect as any of the foregoing).
"Miscellaneous Spare Parts" shall exclude the Fokker Spare Parts and
shall mean all rotable, nonconsumable parts (including rotable line
replaceable parts), aircraft components, systems, accessories, test
equipment and tools used on or in connection with Fokker aircraft, in each
case whether titled in the name of the Assignor, regardless from whom
acquired, or leased to the Assignor and which are usable in connection
with Airframes, but excluding parts subject to the Permitted Lien or which
relate to the propulsion systems installed on such Airframes and
identified on Schedule 1, Part C hereto, and all replacements or
substitutions thereof.
"Obligations" shall mean the collective reference to:
(a) the unpaid principal of, and interest accrued and unpaid on or with
respect to, the Line of Credit (as the same may be escalated in
accordance with the Formula referred to in the Letter Agreement) and all
other obligations and liabilities of the Assignor to the Assignee
(including, without limitation, interest accruing at the then applicable
rate provided in the Letter Agreement after the Line of Credit becomes
due and payable and interest accruing after the filing of any petition in
bankruptcy, or the commencement of any insolvency, reorganization or like
proceeding, relating to the Assignor, whether or not a claim for
post-filing or post-petition interest is allowed in such proceeding),
whether direct or indirect, absolute or contingent, due or to become due,
or now existing or hereafter incurred, which may arise under, out of, or
as a result of the Letter Agreement, this Agreement, any Supplemental
Security Agreement or any other document made, delivered or given in
connection therewith but specifically excluding the Agreement (as defined
in the Letter Agreement); and
(b) all obligations and liabilities of the Assignor which may arise
under or in connection with the Letter Agreement or this Agreement or any
other document made, delivered or given in connection therewith but
specifically excluding the Agreement (as defined in the Letter Agreement);
5
in each case whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses or otherwise (including,
without limitation, all fees and disbursements of counsel to the Assignee
that are required to be paid by the Assignor or the Assignor pursuant to
the terms of the Letter Agreement or this Agreement).
"Permitted Lien" shall mean the first priority security interest
granted by the Assignor (under its then name of Jet Express, Inc.) in
favor of Fokker Aircraft U.S.A., Inc. under the Credit and Security
Agreement, dated as of October 1, 1993 (the "Permitted Lien"), in respect
of the Fokker Spare Parts.
"Person" shall mean an individual, partnership, corporation,
business trust, joint stock company, trust, unincorporated association,
joint venture, Governmental Authority or other legal entity of whatever
nature.
"Proceeds" shall have the meaning assigned to it under the Code and,
in any event, shall include, but not be limited to, (a) any and all
proceeds of any insurance, indemnity, warranty or guaranty payable to the
Assignor from time to time with respect to any of the Collateral, (b) any
and all payments (in any form whatsoever) made or due and payable to the
Assignor from time to time in connection with any requisition,
confiscation, condemnation, seizure or forfeiture of all or any part of
the Collateral by any governmental body, authority, bureau or agency (or
any person acting under color of Governmental Authority) and (c) any and
all other amounts from time to time paid or payable under or in connection
with any of the Collateral.
"Security Account" shall have the meaning set forth in subsection
5.1.
"Security Instrument" shall mean any security agreement, chattel
mortgage, assignment, financing or similar statement or notice,
continuation statement, other agreement or instrument, or amendment,
modification or supplement to any thereof, providing for, evidencing or
perfecting the security interest created by this Agreement.
"Spare Parts" shall collectively mean the Airbus Spare Parts and
the Fokker Spare Parts.
"Supplemental Security Agreements" shall mean the collective
reference to such other additional, replacement or supplemental security
agreements that the Assignor or any other assignor may execute, from time
to time, in favor of the Assignee as security for the Line of Credit or
any extension
6
or increase thereof.
"Tooling Equipment" shall mean all tooling and support equipment and
tooling and support equipment for scheduled tasks and tooling and support
equipment acquired from Seller or its affiliates and as more particularly
described on Schedule 4 together with all replacements and substitutions
therefor.
2. GRANT OF SECURITY
As security for the due and punctual payment and performance in full
by the Assignor of all Obligations, the Assignor hereby grants, pledges,
transfers, bargains, assigns, hypothecates and sets over to the Assignee, and
hereby grants to, and creates in the Assignee, a continuing first (except in the
case of the Fokker Spare Parts subject to the Permitted Lien, a second) priority
security interest in, all of the Assignor's right, title and interest which it
now has or hereafter may acquire in the following property (the "Collateral"):
(a) All Airbus Spare Parts;
(b) All Fokker Spare Parts;
(c) All Miscellaneous Spare Parts;
(d) All Tooling Equipment;
(e) All Ground Equipment;
(f) All Approval Tags, records, logs, manuals and other documents at
any time maintained or used with respect to any item in clauses (a)
through (e) above;
(g) All warranties and indemnifications payable to the Assignor by
any manufacturer or vendor with respect to any of the foregoing;
(h) All insurance proceeds and other funds of the Assignor whether
or not paid or payable into the Security Account pursuant to the terms of
this Agreement including, without limitation, proceeds of condemnation or
requisition with respect to any of the foregoing; and
(i) All Proceeds, revenues and other income of any of the foregoing.
7
3. Representations and Warranties. The Assignor hereby represents and
warrants that:
3.1 Power and Authority. The Assignor has the corporate power and
authority and the legal right to execute and deliver, to perform its obligations
under, and to grant the security interest in the Collateral pursuant to, this
Agreement and has taken all necessary corporate action to authorize its
execution, delivery and performance of, and grant of the security interest in
the Collateral pursuant to, this Agreement.
3.2 Enforceable Obligation; Perfected, First Priority Security
Interests. This Agreement constitutes a legal, valid and binding obligation of
the Assignor, enforceable in accordance with its terms, and the security
interests granted pursuant to this Agreement (a) upon completion of the Code
filings and other actions will constitute perfected security interests on the
Collateral in favor of the Assignee, (b) are prior to all other Liens (other
than the Permitted Lien) on the Collateral in existence on the date hereof and
(c) are enforceable as such against (i) all creditors of and purchasers from the
Assignor (except purchasers of Inventory in the ordinary course of business) and
(ii) any Person having any interest in the real property where any of the
Equipment is located, except in each case as enforceability is affected by
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights generally, general
equitable principles (whether considered in a proceeding in equity or at law)
and an implied covenant of good faith and fair dealing.
3.3 No Violation. The execution, delivery and performance of this
Agreement by the Assignor will not violate any provision of any Requirement of
Law binding upon the Assignor or Contractual Obligation (including, without
limitation, the Permitted Lien) of the Assignor and will not result in the
creation or imposition of any Lien on any of the properties or revenues of the
Assignor pursuant to any Requirement of Law binding upon the Assignor or
Contractual Obligation of the Assignor, except the security interests created
hereby.
3.4 No Consents Required. No consent or authorization of, filing
with, other than those consents, authorizations or filings which have been
obtained, or other act by or in respect of, any arbitrator or Governmental
Authority and no consent of any other Person (including, without limitation, any
stockholder or creditor of the Assignor), is required in connection with the
execution, delivery or performance of this Agreement by Assignor, or the
validity or enforceability of this Agreement.
3.5 No Litigation. No litigation, investigation or
8
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the knowledge of the Assignor, threatened by or against the Assignor or
against any of its properties or revenues with respect to this Agreement or any
of the transactions contemplated hereby.
3.6 Chief Executive Office. The Assignor's chief executive office
and chief place of business is located at 0000 Xxxxx Xxxxxxx Xxxxxx, Xxxxxxx, XX
00000.
4. COVENANTS OF ASSIGNOR
The Assignor covenants and agrees that, so long as any amount shall
remain outstanding under the Letter Agreement or unless the Assignee shall
otherwise consent in writing:
4.1 Designated Locations. The Assignor shall maintain the Collateral
at the Designated Locations listed in Schedule 2 hereto or (ii) as otherwise
expressly permitted under Section 6 hereof.
4.2 Performance of Obligations. The Assignor shall perform promptly
and faithfully all the Obligations.
4.3 Compliance With Laws. The Assignor shall comply in all material
respects with all laws, rules, regulations and orders applicable to the
Assignor, noncompliance with which would, in the Assignee's reasonable judgment,
have a material and adverse effect upon the Collateral or its security interest
therein.
4.4 Notice of Event of Loss. The Assignor shall give prompt written
or telephonic notice followed by written notice to the Assignee of the
occurrence of any Event of Loss affecting any of the Collateral having an
aggregate value more than $500,000, which notice shall set forth in reasonable
detail the circumstances of such Event of Loss, shall describe in reasonable
detail any action the Assignor is taking or proposes to take with respect
thereto and shall be furnished within five (5) days after knowledge of such
Event of Loss by an officer of Assignor.
4.5 Further Acts and Assurances. The Assignor shall at all times and
from time to time at the Assignor's own cost and expense:
(a) Cause this Agreement, and all Security Instruments executed in
connection herewith, and the security interests created thereby, so far as
permitted by applicable law or regulations, to be properly perfected and
to be maintained so perfected;
9
(b) Make, execute, acknowledge and deliver, and file and record in
the proper filing and recording places, all such further and additional
Security Instruments, including appropriate financing statements with
respect to the security interest created by this Agreement and the
Supplemental Security Agreements, as may be required by the Code; in each
case as may be necessary or as the Assignee or its counsel may reasonably
request in order to perfect and preserve the security interest created by
this Agreement and the Supplemental Security Agreements. Except as
otherwise provided by Section 8 hereof, the Assignee shall have no duty as
to the collection or protection of the Collateral or any part thereof or
any income thereon, or as to the preservation of any rights pertaining
thereto, beyond the safe custody of any Collateral in the actual
possession of the Assignee;
(c) Not change its name or do business under any other name except
after giving prior written notice thereof to the Assignee on the same day
the Assignor announces such name change to the public but in no event
later than the effective date of such change and not change the location
of its principal office or place of business, except for a change to a
location within a jurisdiction in which the Code is in effect, and of
which the Assignor shall have been given the lesser of (i) sixty (60)
days' prior written notice or (ii) the amount of days' prior written
notice required by the appropriate Governmental Authority which must be
notified prior to a change of location of the Assignor's principal office
or place of business in order for the Assignee to maintain the security
interest created by this Agreement and the Supplemental Security
Agreements;
(d) Provide to the Assignee on the first day of each month after the
execution and delivery of this Agreement a complete listing by
manufacturer's serial number, as appropriate, of all Collateral and of its
physical location; and
(e) Upon a request by the Assignee to do so, provide evidence that
the Collateral is readily identifiable and separate from any other parts
or equipment located at any Designated Location that do not constitute
Collateral.
4.6 Limitation on Dispositions and Liens; Further Documentation;
After Acquired Property. (a) The Assignor will not sell, transfer, lease or
otherwise dispose of any of the Collateral, or attempt, offer or contract to do
so, except as permitted by this Agreement or the Supplemental Security
Agreements.
10
(b) The Assignor will not create, incur or permit to exist any Lien
(except the Permitted Lien) or claim on or to the Collateral, other than the
security interests created hereby, will maintain the security interests created
by this Agreement as first (except with respect to the Permitted Lien, a
second), perfected security interests and will defend such security interests
against claims and demands of all Persons whomsoever.
(c) At any time and from time to time, upon the written request of the
Assignee, and at the sole expense of the Assignor, the Assignor will promptly
and duly execute and deliver the Supplemental Security Agreements and such
further security agreements, instruments and documents and take such further
action as the Assignee may reasonably request for the purpose of obtaining or
preserving the full benefits of the Letter Agreement or this Agreement and of
the rights and powers therein and herein granted, including, without limitation,
the filing of any financing or continuation statements under the Code in effect
in any jurisdiction with respect to the security interests created hereby.
4.7 Notice of Designated Locations Not Listed on Schedule 2. The
Assignor shall not (i) maintain, repair or overhaul Collateral at a Designated
Location which is not listed in Schedule 2 hereto or (ii) deliver Collateral to
a location described in clause (ii) of the definition of "Designated Location"
which is not listed in Schedule 2 hereto except, in each case, after giving 30
days prior notice thereof to the Assignee and furnishing to the Assignee a
corporate officer's certificate certifying that such actions as are necessary to
perfect the security interests created by this Agreement in such Collateral have
been taken by the Assignor and executing, delivering and/or filing any Security
Instruments the Assignee may reasonably request in connection therewith.
Schedule 2 shall automatically be amended without further act to reflect the
addition of any such Designated Location upon receipt by the Assignee of such
written notice and corporate officer's certificate.
4.8 Maintenance of Collateral. The Assignor shall maintain all
Collateral at the Designated Locations and such locations shall constitute the
primary maintenance facilities of the Assignor.
4.9 Delisting or Redesignating Designated Locations. (a) If, in
accordance with the other terms of this Agreement, a certain Designated Location
no longer contains or will contain Collateral, the Assignor may notify the
Assignee in writing of its desire that such location that is a Designated
Location no longer be considered or treated as a Designated Location (such
action hereinafter referred to as "Delisting"), and such Delisting shall occur
upon receipt of such notice by the Assignee.
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(b) The Assignor may from time to time notify the Assignee of its
desire to redesignate Delisted Locations as Designated Locations. In order for
such locations to be considered a Designated Location hereunder, the Assignor
shall furnish to the Assignee a corporate officer's certificate certifying that
such actions as are necessary to perfect the security interests intended to be
created by this Agreement in the Collateral located at such redesignated
location have been taken by the Assignor and shall execute any Security
Instruments the Assignee may reasonably request in connection therewith.
Schedule 2 shall automatically be amended without future act to reflect the
redesignation of such location as a Designated Location upon receipt by the
Assignee of such written notice and corporate officer's certificate.
5. COVENANTS OF THE ASSIGNEE
5.1 Security Account. At its option and subject to the provisions of
Sections 7 and 8 hereof, all insurance or other proceeds received by the
Assignee in connection with an Event of Loss, all surplus insurance or other
proceeds paid in connection with an Event of Loss, and all other amounts which
the Assignee may receive pursuant to this Agreement as a direct or indirect
result of the occurrence or continuance of a Termination Event shall be
deposited by the Assignee in a special deposit account in a United States
banking institution (herein called the "Security Account") maintained by the
Assignee in its name and titled in such manner as to identify appropriately the
nature of such account. As between the Assignor and the Assignee, the Assignee
shall have sole control over the Security Account and shall invest all amounts
deposited therein at the Assignee's direction and risk. The Assignor shall have
no right to withdraw any funds deposited in the Security Account except as
otherwise expressly provided herein. The Assignee shall have the right to apply
any funds deposited in the Security Account only as expressly provided herein.
Interest earned with respect to funds deposited in the Security Account shall be
credited to the Security Account and be available for application in any manner
in which such funds may be applied hereunder.
Upon the occurrence and during the continuance of a Termination
Event, all balances in the Security Account may be applied by the Assignee in
discharge of all the Obligations. In addition, the Assignee may, from time to
time, in its discretion, release all or any portion of the balance in the
Security Account to the Assignor, provided that, any such release shall not be
deemed to constitute a waiver by the Assignee of any rights, powers or
privileges. The Assignor shall remain liable for the Obligations after any
application or release of funds from the Security Account.
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5.2 Release of All Security. Upon the termination of the Assignor's
obligations under the Letter Agreement including the payment in full by the
Assignor of the Obligations, the Assignee shall, subject to the following
sentence, without recourse, representation or warranty whatsoever, release its
security interests in the Collateral. In effecting the release from such
security interests of any Collateral, the Assignee shall at the request (which
may be telephonic to be followed by writing) and expense of the Assignor,
execute and deliver such instruments and perform such acts as may, in the
Assignor's reasonable judgment, be necessary or appropriate for such purpose.
6. POSSESSION, USE, TRANSFER AND MAINTENANCE OF COLLATERAL
6.1 Possession and Use of Collateral. Unless a Termination Event
shall have occurred and be continuing, and subject to the other terms and
provisions of this Agreement and the Supplemental Security Agreements, the
Assignor shall be entitled to the possession and use of the Collateral in the
ordinary course of the Assignor's operations.
6.2 Installation of the Collateral on Aircraft Owned or Leased the
Assignor. The Assignor may, as appropriate, install the Collateral on aircraft
leased to, or owned by, the Assignor subject to a lease, conditional sale
agreement, trust indenture or other Lien, including first priority Liens.
Immediately upon any Replacement Collateral (as hereinafter defined) being
removed from such aircraft for replacement or substitution by any Collateral,
(i) title to such Collateral installed or placed on such aircraft shall be
released from the security interests created by this Agreement, and (ii) such
Replacement Collateral shall be stored, maintained, repaired and overhauled at a
Designated Location and shall be deemed Collateral for all purposes hereof to
the same extent as that which it replaced or substituted, provided that such
Replacement Collateral shall meet the requirements of subsection 6.5. For the
purposes of this Agreement, the term "Replacement Collateral" shall mean, as
appropriate, all Collateral, which may for all purposes act as a replacement or
substitute for any item of Collateral. In the event the security interests
created by this Agreement shall attach to Replacement Collateral, such
Replacement Collateral shall be deemed to be an item of Collateral for the
purposes of this Agreement.
6.3 Permitted Transfers. The Assignor shall not, without the prior
written consent of the Assignee, lease, sublease or otherwise in any manner
deliver, transfer or relinquish possession of any item of Collateral or install
any Collateral or permit any Collateral to be installed on any aircraft other
than
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pursuant to subsection 6.2; provided however, that, so long as no Termination
Event shall have occurred and be continuing, the Assignor may, without the prior
written consent of the Assignee:
(a) Subject any Collateral to normal interchange or pooling
agreements or arrangements, in each case customary in the commercial
airline industry and entered into by the Assignor in the ordinary course
of its business with other United States or Canadian certificated air
carriers, or with such non-United States or non-Canadian air carriers as
the Assignee may permit in writing from time to time; provided however,
that no transfer of any interest shall be effected in connection therewith
and that the terms of this Agreement shall be observed; and provided,
further, that (i) no such agreement or arrangement contemplates or
requires the transfer of title to any Collateral, and (ii) such Collateral
is required to be returned to the Assignor upon termination or cessation
of such pooling or interchange;
(b) Deliver possession of any Collateral to the manufacturer thereof
for testing, service, repair, maintenance, overhaul work or any other
similar purpose, or to any other organization for testing, service,
repair, maintenance, overhaul work or any other similar purpose or for
alterations or modifications in or additions to such Collateral to the
extent required or permitted by the terms of subsection 6.4 hereof;
(c) Transfer possession of any Collateral to the United States
Government or any instrumentality or agency thereof pursuant to the Civil
Reserve Air Fleet Program administered pursuant to Executive Order No.
10999, as amended, or any similar or substitute programs; the Assignor
shall provide written notice to the Assignee upon (i) installing any
component of Collateral on any aircraft subject to such programs and (ii)
such aircraft being transferred to the United States Government pursuant
to such programs;
(d) Sell any Collateral for fair market value; provided however,
that all proceeds of any such sale shall be immediately applied either to
make payments or prepayments of the Obligations; or
(e) Transfer Collateral from one Designated Location to another
Designated Location.
6.4 Maintenance of Collateral. The Assignor shall, at its own cost
and expense, at all times maintain the Collateral in as good condition as when
delivered to the Assignor (reasonable wear and tear excepted), and in accordance
with all applicable
14
orders, directives and instructions issued by the United States Federal Aviation
Administration or other governmental authorities having jurisdiction over the
Assignor. The Assignor shall comply with all applicable maintenance, service,
repair and overhaul manuals issued by the respective manufacturers of the
Collateral.
6.5 Replacement of Collateral. The Assignor, at its own cost and
expense, shall promptly replace all Collateral as to which an Event of Loss has
occurred, provided Assignee makes insurance or other proceeds, if any, payable
on account of such Event of Loss available to Assignor to make such replacement.
All such replacements shall be free and clear of all Liens in favor of any
Person and shall be in as good operating condition as, and shall have
performance and durability characteristics and a value and utility at least
equal to, the Collateral replaced assuming such replaced Collateral were in the
condition and repair required to be maintained under subsection 6.4 hereof.
6.6 FAA Records. The Assignor shall maintain all Approval Tags,
records, logs and other materials required by the FAA to be maintained in
respect of the Collateral, and in the event that the Assignee, obtains
possession of any Collateral pursuant to Section 8 hereof, the Assignor will
promptly deliver to the Assignee all such Approval Tags, records, logs and other
materials relating to such Collateral.
6.7 Inspection by Representative of the Assignee. The Assignor shall
permit the Assignee or any Person designated by the Assignee to visit any
Designated Location and inspect the Collateral located thereon, and the Approval
Tags, records, logs and other materials referred to in subsection 6.6, all at
such reasonable times and places and as often as the Assignee may reasonably
request.
6.8 Release of a Portion of the Collateral. Any Collateral which is
(i) removed from any Designated Location and installed on an aircraft pursuant
to subsection 6.2 or (ii) sold, assigned or otherwise transferred in accordance
with subsection 6.3(d) or 6.5 of this Section 6, shall without further act be
released from the security interests created by this Agreement. In effecting the
release from such security interests of any Collateral, the Assignee shall at
the request (which may be telephonic to be followed by writing) and expense of
the Assignor, execute and deliver such instruments and perform such acts as may
be necessary or appropriate for such purpose.
7. INSURANCE
7.1 General Requirements. The Assignor shall procure
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and at all times maintain on all Collateral at its sole cost and expense,
policies of insurance with insurers which shall be insurance companies or
underwriters of recognized responsibility of standing in the aviation insurance
industry not materially lower taken as a whole than that of the insurance
companies or underwriters utilized by the Assignor as of the date hereof, in
form, amounts and limits complying with the requirements of this Section 7 and
which, in any event, shall include "All-Risk" property insurance in an agreed
amount of not less than the replacement value (in the case of casualty
insurance) of the Collateral with a deductible of not more than the industry
standard. The "All-Risk" Property Insurance Policy, which shall be against risks
customarily insured against by companies engaged in the same or similar business
as the Assignor and which shall not be in an amount less than customary in the
industry for similar Collateral, shall include the following endorsements or
extensions of coverage:
(a) Notwithstanding anything herein to the contrary, the use of the
Collateral in the service of the Government of the United States (other
than a use that constitutes a confiscation by the Government of the United
States) will not prejudice the cover provided under this policy.
(b) It is understood and agreed that this insurance, as to the
interest of the Assignee as secured party with respect to the Collateral,
shall not be invalidated or in any way prejudiced by any action or
inaction of the Assignor, and shall insure the Assignee and its respective
directors, officers and employees regardless of breach or violations of
any warranties, declarations, conditions or exclusions contained in
policies held by the Assignor.
(c) Losses shall be adjusted with the Assignor and payable directly
to the Assignee (except as otherwise provided in this Agreement and except
that the Assignor shall consult with the Assignee throughout the
adjustment process) for the account of all interests in United States
Dollars in the United States.
(d) Insurers shall provide thirty (30) days' written notice of
cancellation, or such lesser period as is customary with respect to war
risk perils or material alteration and ten (10) days' written notice of
intent not to renew to the Assignee prior to the effective date of
cancellation or termination and in each case whether or not such
cancellation or termination is instituted by insurers or the Assignor.
(e) Insurers agree that neither the Assignee, nor its respective
assigns, officers, directors, agents and employees
16
shall be liable for insurance premiums of the Assignor arising out of or
resulting from this Agreement. Insurers further agree that there will be
no setoff against any claims that may be payable to the Assignee or the
Assignor or their respective assigns, officers, directors, agents and
employees.
7.2 The Assignee as Loss Payee. The Assignor shall cause all
insurance covering loss of or damage to the Collateral as required by subsection
7.1 hereof to name the Assignee as loss payee and to provide that all payments
in respect of any loss shall be payable to the Assignee, provided that, unless
the Assignee shall provide notice to such insurers that an Insecurity Event or a
Termination Event has occurred and is continuing, any payment not in excess of
$1,000,000 shall be paid directly to the Assignor. The Assignor shall cause all
policies in which the Assignee is included as loss payee or as an additional
named insured to include an agreement by the insurer that the Assignee shall not
be responsible for the representations and warranties of the Assignor nor for
any premiums due under any insurance coverage of the Collateral.
7.3 Application of Payments if Event of Loss. All amounts received
at any time by the Assignee or the Assignor from any insurer or other Person
with respect to an Event of Loss shall be paid over to the Assignee or the
Assignor, as the case may be, as provided in subsection 7.2 hereof in the case
of insurance proceeds, provided that, any payments in respect of a requisition
in excess of $500,000 in the aggregate in any calendar year shall be paid over
to the Assignee; provided however, that all such amounts paid over to the
Assignee shall be deposited in the Security Account and thereafter the
provisions of subsection 5.1 shall apply to such amounts.
7.4 Application of Payments if No Event of Loss. All amounts
received at any time by the Assignee or the Assignor from any insurer or other
Person with respect to damage or loss to the Collateral which does not
constitute an Event of Loss in excess of $500,000 shall be applied in payment
of, or to reimburse the Assignor for, repairs to or for replacement of
Collateral in accordance with the terms of subsections 6.4 and 6.5 hereof, and
any balance of such amounts remaining after compliance with subsections 6.4 and
6.5 with respect to such damage or loss (including any such amounts attributable
to Collateral which the Assignor is not required to replace or repair pursuant
to the proviso in the first sentence of subsection 6.5) shall be paid over to,
or retained by, the Assignor, provided that, all such amounts shall be paid over
to, or retained by, the Assignee for deposit in the Security Account if at the
time such payment or retention would be made there shall have occurred and be
continuing an Insecurity Event or a Termination Event. Payment to, or retention
by, the
17
Assignee of any such amounts shall not relieve the Assignor of its obligations
to make promptly all repairs and replacements required by subsections 6.4 and
6.5 and to pay for the same at the Assignor's own cost and expense. The Assignee
shall have no obligation to release the proceeds of such insurance to the party
or parties who are to make such repairs or the vendors of such replacement
Collateral unless the Assignor shall have first provided the Assignee with a
corporate officer's certificate specifying the repair for which such proceeds
are to be applied and the party or parties (which may be the Assignor) who are
to make such repair and/or the vendor or vendors of such replacement Collateral.
On receipt of such corporate officer's certificate from the Assignor and
provided no Insecurity Event or Termination Event has occurred and is
continuing, the Assignee shall become obligated to release all, or such portion
as the Assignor shall specify, of such proceeds to such party or parties making
such repairs or to such vendor or vendors in accordance with the customary
payment requirements of each such party or vendor. On completion of such repair
or delivery of such replacement Collateral, the Assignor shall provide the
Assignee with an corporate officer's certificate as to such completion or
delivery. Notwithstanding the foregoing, upon repair, restoration or replacement
of all damaged property for which such insurance proceeds have been paid to the
Assignee, the Assignee shall, provided no Insecurity Event or Termination Event
shall have occurred and be continuing, upon receipt of an corporate officer's
certificate to the effect that all such damaged property has been restored,
repaired or replaced as provided by subsections 6.4 and 6.5, pay to the Assignor
the balance of such insurance proceeds.
7.5 Evidence of Insurance. The Assignor agrees to furnish the
Assignee as of the date of the first extension of credit under the Line of
Credit, and thereafter upon the renewal of the insurance policies referred to
below, but in no event less than once per calendar year, a certificate, as
hereinafter described, signed by an independent aviation insurance broker
recognized in the aviation insurance industry (who may be the broker regularly
retained by the Assignor). Such broker's certificate shall (i) certify that the
insurance required by this Section 7 is in full force and effect, specifically
referring to this Agreement and Section 7; (ii) describe the perils covered by
each policy of insurance then in force, identify the insurer with which such
policies of insurance are carried and maintained, specify the amounts of
insurance coverage provided against each such peril, and describe the date of
expiration and other provisions contained in such policies of insurance so as to
evidence compliance with the requirements of this Section 7; and (iii) state
that all such policies of insurance are carried and maintained with insurers of
recognized responsibility of standing in the aviation insurance industry not
materially lower taken as a whole than that of the
18
insurers utilized by the Assignor as of the date hereof. Such broker shall
undertake to cause to be provided thirty (30) days' prior written notice to the
Assignee of any cancellation of such policies of insurance for failure to pay
insurance premiums on such policies.
7.6 Failure to Maintain Insurance. If the Assignor shall fail to
maintain insurance as herein provided (including, but not limited to, the
renewal thereof), the Assignee may, but shall not be obligated to, provide such
insurance (whether or not such insurance duplicates insurance maintained by the
Assignor) and, in such event, the Assignor shall, upon demand, reimburse the
Assignee for the expense thereof, together with interest thereon at the interest
rates from time to time in effect under the Letter Agreement with respect to
overdue payments, provided that, any such action by the Assignee shall not in
any way affect any of the rights, powers and privileges of the Assignee under
this Agreement, the Letter Agreement, or any Security Instrument executed in
connection herewith.
7.7 Distribution of Funds. Any amount referred to in this Section 7
which is being retained by the Assignee solely because of the occurrence and
continuation of an Insecurity Event or a Termination Event shall be paid over to
the Assignor at such time as there shall not be continuing any such Insecurity
Event or Termination Event unless such amount has theretofore been applied in
the exercise of remedies provided in Section 8 or as otherwise expressly
required or permitted pursuant to this Agreement.
8. REMEDIES
8.1 Obtaining Collateral Upon Default under the Letter Agreement. If
any Termination Event shall have occurred and be continuing and the Obligations
shall have been declared or shall otherwise have become due and payable as
provided in the Letter Agreement, the Assignee may, subject to any mandatory
requirements of applicable law then in effect and in addition to any and all
other rights it may have under applicable law:
(a) Personally, or by agents or attorneys, take possession of the
Collateral or any portion thereof from the Assignor or any other Person
who then has possession of same, with or without notice or process of law,
and for that purpose may enter upon the Designated Locations or other
premises of the Assignor or such Person, as the case may be, where any
such Collateral is located and may remove the same and use in connection
with such removal any and all services, supplies, aids and other
facilities of the Assignee; and
19
(b) Take possession of the Collateral or any portion thereof by
directing the Assignor in writing to deliver any of the same to the
Assignee, at any place or places designated by the Assignee, in which
event the Assignor shall at its own cost and expense:
(i) Promptly cause the same to be moved to the place or places
so designated by the Assignee and there delivered to the Assignee;
and
(ii) If directed by the Assignee, store and keep the
Collateral so delivered to the Assignee at such place or places
pending further action by the Assignee as provided in subsection 8.2
hereof, and during such storage provide such guards and maintenance
services as shall be necessary to protect the same and to preserve
and maintain it in good condition;
it being understood that the Assignor's obligation so to deliver any such
Collateral is of the essence of this Agreement and the Letter Agreement and
that, accordingly, upon application to a court having jurisdiction, the Assignee
shall be entitled to a decree requiring specific performance by the Assignor of
said obligation.
8.2 Disposition of Collateral. Any Collateral repossessed by the
Assignee under or pursuant to subsection 8.1 may be sold, leased or otherwise
disposed of under one or more contracts, in parcels or as an entirety, and
without the necessity of gathering at the place of sale the Collateral to be
sold, and in general in such manner, at such time or times, at such place or
places and on such terms as the Assignee may determine to be commercially
reasonable. Any Collateral may be sold, leased or otherwise disposed of, in the
condition in which the same existed when taken by the Assignee or after any
overhaul or repair which the Assignee shall determine to be commercially
reasonable, and all costs incurred by the Assignee, directly or indirectly in
connection with any such overhaul or repair, shall be paid by the Assignor.
Any such disposition which shall be a private sale or other private
proceeding shall be made upon not less than ten (10) days' written notice to the
Assignor specifying the time after which such disposition may be made. Any such
disposition which shall be a public sale shall be made upon not less than ten
(10) days' written notice to the Assignor specifying the time and place of such
sale.
The Assignee may bid for and purchase any Collateral offered for
sale in accordance with this Section, without accountability to the Assignor
(except to the extent of surplus
20
money received as provided in subsection 8.4). In the event that the Assignee
becomes the purchaser at any such sale, it shall be entitled to credit the
Obligations against the purchase price of all such Collateral purchased. Any
amounts not so credited against such purchase price shall remain as obligations
of the Assignor to the Assignee and the Assignee shall have all of its rights,
powers and privileges under this Agreement, and the Security Instruments
executed in connection herewith, with respect to such obligations.
The rights, powers and privileges of the Assignee under this Section
shall, in all respects, be subject to mandatory requirements of applicable law,
provided that if, and to the extent that, any such right, power or privilege
shall be available to the Assignee, under applicable law, only upon the
agreement of the Assignee and the Assignor or the waiver by the Assignor of any
right, power or privilege, such agreement or waiver shall be deemed to have been
made (to the extent permitted by applicable law) for all purposes of this
Agreement, and all Security Instruments executed in connection herewith.
8.3 Waiver of Claims. Except as otherwise provided in this Agreement
(and without limiting any other term or provision of this Agreement, or any
Security Instrument executed in connection herewith), THE ASSIGNOR HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO PRIOR NOTICE OR
JUDICIAL HEARING IN CONNECTION WITH THE ASSIGNEE'S TAKING POSSESSION OR THE
ASSIGNEE'S DISPOSITION OF ANY COLLATERAL, INCLUDING, WITHOUT LIMITATION, ANY AND
ALL PRIOR NOTICE AND HEARING FOR ANY PREJUDGMENT REMEDY OR REMEDIES AND ANY SUCH
RIGHT WHICH THE ASSIGNOR WOULD OTHERWISE HAVE UNDER THE CONSTITUTION OF OR ANY
STATUTE OF THE UNITED STATES OR OF ANY STATE, and the Assignor hereby further
waives:
(a) All damages occasioned by such taking of possession except
damages arising from willful misconduct or gross negligence by the
Assignee or any other Person taking possession on behalf of the Assignee;
(b) All other requirements as to the time, place and terms of sale
or other requirements with respect to the enforcement of the Assignee's
rights hereunder; and
(c) All rights of redemption, appraisement, valuation, stay,
extension or moratorium now or hereafter in force under any applicable law
in order to prevent or delay the enforcement of this Agreement, or any
Security Instrument executed in connection herewith, or the absolute sale
of any Collateral, and the Assignor, for itself and all who may claim
under it, insofar as it or they now or hereafter lawfully may, hereby
waives the benefit of all such laws.
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Any sale of, or the grant of options to purchase, or any other
realization upon, any Collateral shall operate to divest all right, title,
interest, claim and demand, either at law or in equity, of the Assignor therein
and thereto, and shall be a perpetual bar both at law and in equity against the
Assignor and against any and all Persons claiming or attempting to claim any
Collateral so sold, optioned or realized upon, or any part thereof, from,
through and under the Assignor.
8.4 Application of Proceeds. Subject to the mandatory requirements
of applicable law, the proceeds of any disposition of any Collateral pursuant to
subsection 8.2 and, except as otherwise expressly provided herein, the proceeds
of any insurance or other payments received by the Assignee including, without
limitation, with respect to an Event of Loss or other loss or damage to the
Collateral shall be applied as follows:
(a) To the reimbursement of all fees, costs and expenses incurred by
the Assignee, the Obligations and any amounts payable by the Assignor,
under the Letter Agreement, interest on each such amount at the Applicable
Rate (as defined in the Letter Agreement) from and after the date such
amount is due and owing until paid in full; and
(b) Any surplus then remaining shall be paid to the Assignor, its
successors or assigns, subject, however, to the rights of the holder of
any then existing Lien of which the Assignee has actual notice (without
investigation).
8.5 Fees and Expenses. The Assignor shall pay to the Assignee all
reasonable fees, costs and expenses (including reasonable legal fees and
disbursements) incurred by the Assignee in protecting all or any portion of the
security interests created by this Agreement or exercising or enforcing rights
or remedies under this Agreement. All fees, costs and disbursements payable by
the Assignor pursuant to this Section shall bear interest at the rate payable
from time to time under the Letter Agreement for overdue payments, payable on
demand.
8.6 Remedies Cumulative. Nothing contained in this Section shall be
construed to limit in any way any right, power or privilege of the Assignee
under this Agreement, any Supplemental Security Agreement or any other Security
Instrument executed in connection herewith, or under applicable law upon the
occurrence of a Termination Event under the Letter Agreement. Each and every
right, power and privilege hereby given to, or retained by, the Assignee in this
Section 8 shall be in addition to and not in limitation of every other right,
power and privilege given under this Agreement, the Letter Agreement or any
other instrument executed in connection herewith or therewith, or now or
hereafter
22
existing at law or in equity. Each and every right, power and privilege of the
Assignee may be exercised from time to time or simultaneously and as often and
in such order as may be deemed expedient by the Assignee. All such rights,
powers and privileges shall be cumulative and not mutually exclusive and the
exercise of one shall not be deemed a waiver of the right to exercise any other.
The Assignor hereby waives, to the extent permitted by applicable law, any right
which it may have to require Assignee to choose or elect remedies. If and to the
extent that any such right, power or privilege or other right, power or
privilege shall be available to the Assignee under applicable law, only upon the
agreement of the Assignee and the Assignor, or the waiver by the Assignor of any
right, power or privilege, then (to the extent permitted by applicable law) such
agreement or waiver shall be deemed to have been validly and irrevocably made
for all purposes of this Agreement, and all Security Instruments executed in
connection herewith.
9. MISCELLANEOUS
9.1 Representation and Warranty of the Assignor. The Assignor hereby
represents and warrants that it is a "citizen of the United States" as defined
in Section 40102(a)(15) of the Federal Aviation Act and that it holds a carrier
operating certificate issued by the Secretary of Transportation pursuant to
Chapter 447 of Title 49, United States Code, for aircraft capable of carrying
ten or more individuals or 6,000 pounds or more of cargo.
9.2 Termination, Waivers, Amendments. This Agreement and the
security interests created by this Agreement shall terminate when the
Obligations have been discharged. The provisions of this Agreement and any other
Security Instrument executed in connection herewith may from time to time be
amended, modified, discharged, or waived, only if such amendment, modification,
discharge or waiver is in writing and signed by the party against which
enforcement of the amendment, modification, discharge or waiver is sought. No
failure or delay on the part of the Assignee in exercising any right, power or
privilege under this Agreement shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right, power or privilege preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. Notice to or demand on the Assignor made by the Assignee in one case
or circumstance shall not entitle the Assignor to any notice or demand in any
similar or other case.
9.3 Notices, Communications and Information. All notices,
communications and other information under this Agreement, or any Security
Instrument executed in connection herewith, shall
23
be in writing and shall be given by overnight delivery or by facsimile, or
similar writing, addressed as follows:
(a) If to the Assignor, to
Midway Airlines Corporation
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: President
Telephone: (000) 000 0000
Facsimile: (000) 000-0000
(b) If to the Assignee, to
AVSA, S.A.R.L.
0, xxxx-xxxxx Xxxxxxx Xxxxxxxx
00000 XXXXXXX
XXXXXX
Attention: Director - Contracts
Telephone: 00 00 00 00 00
Facsimile: 33 61 30 40 11
or as to any party hereto, at such other address as shall be notified by such
party to the other party. Any notice shall be deemed received (i) if given by
facsimile, when confirmed by telephone by the sender or (ii) if given by other
means, when delivered at the address specified in this subsection 9.3.
9.4 Severability. Any provision of this Agreement, which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions of this Agreement or affecting the
validity or enforceability of any provision in any other jurisdiction. To the
extent permitted by applicable law, the Assignor hereby waives any provision of
law which renders any provision hereof prohibited or unenforceable in any
respect.
9.5 Headings. The various headings of this Agreement are inserted
for convenience only and shall not affect the meaning or interpretation of this
Agreement or any provision hereof.
9.6 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
shall constitute together but one and the same agreement.
9.7 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND BE
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW
24
OF THE STATE OF NEW YORK.
9.8 Successors and Assigns. This Agreement shall remain in full
force and effect and be binding in accordance with and to the extent of its
terms upon the Assignor and the successors and assigns thereof, and shall inure
to the benefit of the Assignee, and its respective successors, indorsees,
transferees and assigns, until the Obligations shall have been satisfied by
payment in full.
9.9 JURISDICTION. ALL ACTIONS OR PROCEEDINGS WITH RESPECT TO THIS
AGREEMENT OR THE OTHER FINANCING DOCUMENTS MAY BE INSTITUTED IN THE COURTS OF
THE STATE OF NEW YORK, THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK, OR ELSEWHERE TO THE EXTENT THAT JURISDICTION SHALL EXIST
APART FROM THE PROVISIONS OF THIS SUBSECTION, AS THE ASSIGNEE MAY ELECT, AND BY
EXECUTION AND DELIVERY OF THIS AGREEMENT, THE ASSIGNOR IRREVOCABLY AND
UNCONDITIONALLY SUBMITS TO THE JURISDICTION (BOTH SUBJECT MATTER AND PERSONAL)
OF EACH SUCH COURT, AND IRREVOCABLY AND UNCONDITIONALLY WAIVES (I) ANY OBJECTION
IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE IN ANY OF SUCH COURTS, AND
(II) ANY CLAIM THAT ANY ACTION OR PROCEEDING BROUGHT IN ANY OF SUCH COURTS HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM.
9.10 WAIVER OF JURY TRIAL. THE ASSIGNOR HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT AND FOR ANY COUNTERCLAIM THEREIN.
If the foregoing correctly sets forth our understanding, please execute
the original and one (1) copy hereof in the space provided below and return a
copy to the Seller.
Very truly yours,
AVSA, S.A.R.L.
By: /s/ Xxxxxxxxxx Xxxxxx
------------------------------------
Its: AVSA Chief Executive Officer
Date:
-----------------
Accepted and Agreed
Midway Airlines Corporation, as Assignor
By: /s/ Xxxxx X. Xxxx
---------------------------
Xxxxx X. Xxxx
Its: Executive Vice President
Chief Operating Officer
SCHEDULE 1 to
Security Agreement
Part A
Airbus Spare Parts
SCHEDULE 1 to
Security Agreement
Part B
Fokker Spare Parts
SCHEDULE 1 to
Security Agreement
Part C
Miscellaneous Spare Parts
SCHEDULE 2 to
Security Agreement
Designated Locations
SCHEDULE 3 to
Security Agreement
Ground Equipment
SCHEDULE 4 to
Security Agreement
Tooling Equipment
Amendment No. 1
TO THE "FINANCIAL MATTERS" LETTER AGREEMENT
dated as of March 17, 1995
between
AVSA, S.A.R.L.,
and
MIDWAY AIRLINES CORPORATION
This Amendment No. 1 (hereinafter referred to as the "Amendment") entered into
as of December 21, 1995, by and between AVSA, S.A.R.L., a societe a
responsabilite limitee organized and existing under the laws of the Republic of
France, having its registered office located at 0, Xxxx Xxxxx Xxxxxxx Xxxxxxxx,
00000 Xxxxxxx, XXXXXX (hereinafter referred to as the "Seller"), and MIDWAY
AIRLINES CORPORATION, a body corporate, organized and existing under the laws of
the State of Delaware, United States of America, having its principal corporate
offices located at 000 Xxxx Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx, XX 00000
(hereinafter referred to as the "Buyer").
WITNESSETH:
WHEREAS, the Buyer and the Seller entered into a Purchase Agreement, dated
as of March 17, 1995, relating to the sale by the Seller and the purchase by the
Buyer of certain Airbus Industrie A320-200 model aircraft (the "Aircraft"),
which, as previously amended by and supplemented with all Exhibits, Appendixes
and Letter Agreements attached thereto, is hereinafter called the "Agreement"
and a related letter agreement regarding "Financial Matters" which, as
previously amended, is hereinafter called the "Financial Matters Agreement";
WHEREAS, the Buyer has requested to make a certain Predelivery Payment
under the Agreement by way of a promissory note, and the Seller agrees to such
method of payment under the conditions set forth in this Amendment; and
WHEREAS, capitalized terms used herein and not otherwise defined in this
Amendment will have the meanings assigned to them in the Agreement, and the
terms "herein," "hereof," and hereunder and words of similar import refer to
this Amendment.
NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL COVENANTS HEREINAFTER SET
FORTH, IT IS AGREED AS FOLLOWS:
1. REPORTS
In connection with and in consideration of the Seller's entering into an
amendment to the Agreement dated as of the date hereof, Subparagraph 4.16
of the Financial Matters Agreement will be amended to include the
following quoted provisions:
QUOTE
(iii) Monthly Reports Within twenty (20) days after the end of each month
in each fiscal year of the Buyer, a Consolidated balance sheet of
the Buyer and its Consolidated subsidiaries prepared as of the close
of such month, together with the related statements of income and
surplus, statement of sources and uses of cash, as well as such
other historical information relating to such period that the Buyer
maintains. Such information will include, but not be limited to,
revenue per available seat mile, cost per available seat mile,
segment profitability information, the number of total passengers,
and load factor and average fare information. The previous sentence
notwithstanding, the requirement for the Buyer to provide segment
profitability information will expire on the Seller's receipt of
such information for the entire month of April 1996, provided that
no Insecurity Event has occurred under the Agreement.
UNQUOTE
2. COLLATERAL
It is hereby agreed that, notwithstanding the provisions of Subparagraph
2.2 of the Financial Matters Agreement, the Seller will not provide
Upfront Support Credit in excess of the Capped Amount until April 30,
1996.
3. CONFIDENTIALITY
Subject to any legal or governmental requirements of disclosure, the
parties (which for this purpose shall include their employees, agents and
advisors) shall maintain the terms and conditions of this Amendment and
any reports or other data furnished hereunder strictly confidential.
Without limiting the generality of the foregoing, the Buyer and the Seller
shall use their best efforts to limit the disclosure of the contents of
this Agreement to the
2
extent legally permissible in any filing required to be made by the Buyer
or the Seller, as the case may be, with any governmental agency and shall
make such applications as shall be necessary to implement the foregoing.
With respect to any public disclosure or filing, each party agrees to
submit to the other party a copy of the proposed document to be filed or
disclosed and will give the other party a reasonable period of time in
which to review the said document. The Buyer and Seller shall consult with
each other prior to the making of any public disclosure or filing,
permitted hereunder, of this Amendment or the terms and conditions
thereof. The provisions of this Paragraph 2 shall survive any termination
of this Agreement.
4. EFFECT OF AMENDMENT
The Agreement will be deemed amended to the extent herein provided, and,
except as specifically amended hereby, will continue in full force and
effect in accordance with its original terms, except that if the Agreement
and this Amendment have specific provisions that are inconsistent, the
specific provisions contained in this Amendment will govern. It is
understood that this Amendment does not in any way constitute the a waiver
by the Seller of any rights it has under the Financial Matters Agreement
or under the Agreement, provided, however, that the Seller agrees to waive
until April 30, 1996, its rights with respect to Insecurity Events
described in Subparagraph 21.2(a) and 21.2(b) of the Agreement.
Further, it is agreed that this Amendment is subject to the parties
executing as of the date hereof an amendment to the Agreement and a
promissory note security agreement.
5. INTERPRETATION AND LAW
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND THE PERFORMANCE
THEREOF SHALL BE DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK.
THE PARTIES HEREBY ALSO AGREE THAT THE UNITED NATIONS CONVENTION ON THE
INTERNATIONAL SALE OF GOODS SHALL NOT APPLY TO THIS TRANSACTION.
3
If the foregoing correctly sets forth our understanding, please execute
this Amendment in the space provided below, whereupon, as of the date first
above written, this Amendment will constitute part of the Agreement.
Agreed and accepted Yours sincerely,
MIDWAY AIRLINES AVSA, S.A.R.L.
CORPORATION
By: /s/ [ILLEGIBLE] By: /s/ Xxxxxxxxxx Xxxxxx
-------------------------------- -----------------------------------
Its: President Its: AVSA Chief Executive Officer
By:
--------------------------------
Its:
--------------------------------
4
If the foregoing correctly sets forth our understanding, please execute
this Amendment in the space provided below, whereupon, as of the date first
above written, this Amendment will constitute part of the Agreement.
Agreed and accepted Yours sincerely,
MIDWAY AIRLINES AVSA, S.A.R.L.
CORPORATION
By: By: /s/ Xxxxxxxxxx Xxxxxx
-------------------------------- -----------------------------------
Its: Its: Chief Executive Officer
--------------------------------
By:
--------------------------------
Its:
--------------------------------
4
Amendment No. 2
TO THE "FINANCIAL MATTERS" LETTER AGREEMENT
dated as of March 17, 1995
between
AVSA, S.A.R.L.,
and
MIDWAY AIRLINES CORPORATION
This Amendment No. 2 (hereinafter referred to as the "Amendment") entered into
as of March 27, 1996, by and between AVSA, S.A.R.L., a societe a responsabilite
limitee organized and existing under the laws of the Republic of France, having
its registered office located at 0, xxxx-xxxxx Xxxxxxx Xxxxxxxx, 00000 Xxxxxxx,
XXXXXX (hereinafter referred to as the "Seller"), and MIDWAY AIRLINES
CORPORATION, a body corporate, organized and existing under the laws of the
State of Delaware, United States of America, having its principal corporate
offices located at 000 Xxxx Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx, XX 00000
(hereinafter referred to as the "Buyer").
WITNESSETH:
WHEREAS, the Buyer and the Seller entered into (i) a Purchase Agreement,
dated as of March 17, 1995, relating to the sale by the Seller and the purchase
by the Buyer of certain Airbus Industrie A320-200 model aircraft (the
"Aircraft"), which, as previously amended by Amendment No. 1 dated as of
December 21, 1995, Amendment No. 2 dated as of January 31, 1996, and Amendment
No. 3 dated as of February 28,1996, and supplemented with all Exhibits,
Appendixes and Letter Agreements attached thereto, is hereinafter called the
"Agreement," (ii) a related letter agreement regarding "Financial Matters,"
which, as previously amended by Amendment No. 1 dated as of December 21, 1995,
is hereinafter called the "Financial Matters Agreement," (iii) a related
Security Agreement, dated as of March 17, 1995, hereinafter referred to as the
"Security Agreement," and(iv) a Promissory Note Security Agreement, dated as of
December 2l, 1995; and
WHEREAS, capitalized terms used herein and not otherwise defined in this
Amendment will have the meanings assigned to them in the Agreement, and the
terms "herein," "hereof" and hereunder and words of similar import refer to this
Amendment.
NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL COVENANTS HEREINAFTER SET
FORTH, IT IS AGREED AS FOLLOWS:
1. REPORTS
In connection with and in consideration of the Seller's entering into an
amendment to the Agreement dated as of the date hereof, Subparagraph 4.16
of the Financial Matters Agreement will be amended to include the
following quoted provisions:
QUOTE
(iii) Monthly Reports Within twenty (20) days after the end of each month
in each fiscal year of the Buyer, a Consolidated balance sheet of
the Buyer and its Consolidated subsidiaries prepared as of the close
of such month, together with the related statements of income and
surplus, statement of sources and uses of cash, as well as such
other historical information relating to such period that the Buyer
maintains. Such information will include, but not be limited to,
revenue per available seat mile, cost per available seat mile,
segment profitability information, the number of total passengers,
and load factor and average fare information. The previous sentence
notwithstanding, the requirement for the Buyer to provide segment
profitability information will expire on the Seller's receipt of
such information for the entire month of September 1996, provided
that no Insecurity Event has occurred under the Agreement.
UNQUOTE
2. COLLATERAL AND UPFRONT SUPPORT
It is hereby agreed that, notwithstanding the provisions of Subparagraph
2.2 of the Financial Matters Agreement, as amended by Amendment No. 1 of
the Financial Matters Agreement, the Seller will not provide Upfront
Support Credit in excess of the Capped Amount before October 1, 1996, and
as of such date only, on the earlier of (i) the Buyer's operation of at
least five (5) A320-200 aircraft leased by the Buyer from operating
lessors medium to long term and (ii) six (6) months or fewer before
delivery of the first Aircraft.
2
3. CONFIDENTIALITY
Subject to any legal or governmental requirements of disclosure, the
parties (which for this purpose shall include their employees, agents and
advisors) shall maintain the terms and conditions of this Amendment and
any reports or other data furnished hereunder strictly confidential.
Without limiting the generality of the foregoing, the Buyer and the Seller
shall use their best efforts to limit the disclosure of the contents of
this Agreement to the extent legally permissible in any filing required to
be made by the Buyer or the Seller, as the case may be, with any
governmental agency and shall make such applications as shall be necessary
to implement the foregoing. With respect to any public disclosure or
filing, each party agrees to submit to the other party a copy of the
proposed document to be filed or disclosed and will give the other party a
reasonable period of time in which to review the said document. The Buyer
and Seller shall consult with each other prior to the making of any public
disclosure or filing, permitted hereunder, of this Amendment or the terms
and conditions thereof. The provisions of this Paragraph 3 shall survive
any termination of this Agreement.
4. EFFECT OF AMENDMENT
The Agreement will be deemed amended to the extent herein provided, and,
except as specifically amended hereby, will continue in full force and
effect in accordance with its original terms, except that if the Agreement
and this Amendment have specific provisions that are inconsistent, the
specific provisions contained in this Amendment will govern. It is
understood that this Amendment does not in any way constitute the a waiver
by the Seller of any rights it has under the Financial Matters Agreement
or under the Agreement, provided, however, that the Seller agrees to waive
until October 1, 1996, its rights with respect to insecurity Events
described in Subparagraph 21.2(a) and 21.2(b) of the Agreement.
Further, it is agreed that this Amendment is subject to the parties'
executing as of the date hereof an amendment to each of the Agreement, the
Security Agreement and the Promissory Note Security Agreement.
5. INTERPRETATION AND LAW
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND THE PERFORMANCE
THEREOF SHALL BE DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK.
THE PARTIES HEREBY ALSO AGREE THAT THE UNITED NATIONS CONVENTION ON THE
INTERNATIONAL SALE OF GOODS SHALL NOT APPLY TO THIS TRANSACTION.
3
If the foregoing correctly sets forth our understanding, please execute
this Amendment in the space provided below, whereupon, as of the date first
written above, this Amendment will constitute part of the Agreement.
Agreed and accepted Yours sincerely,
MIDWAY AIRLINES AVSA, S.A.R.L.
CORPORATION
By: /s/ Xxxxxxxx X. Xxxxxx By: /s/ Xxxxxxxxxx Xxxxxx
-------------------------------- ------------------------------------
Its: Senior Vice President Its: AVSA Chief Executive Officer
General Counsel
By: /s/ [ILLEGIBLE]
--------------------------------
Its: President
4
Amendment No. 3
TO THE "FINANCIAL MATTERS" LETTER AGREEMENT
dated as of March 17, 1995
between
AVSA, S.A.R.L.,
and
MIDWAY AIRLINES CORPORATION
This Amendment No. 3 (hereinafter referred to as the "Amendment") entered into
as of October 29, 1996, by and between AVSA, S.A.R.L., a societe a
responsabilite limitee organized and existing under the laws of the Republic of
France, having its registered office located at 0, xxxx-xxxxx Xxxxxxx Xxxxxxxx,
00000 Xxxxxxx, XXXXXX (hereinafter referred to as the "Seller"), and MIDWAY
AIRLINES CORPORATION, a body corporate, organized and existing under the laws of
the State of Delaware, United States of America, having its principal corporate
offices located at 000 Xxxx Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx, XX 00000
hereinafter referred to as the "Buyer").
WITNESSETH:
WHEREAS, the Buyer and the Seller entered into (i) a Purchase Agreement,
dated as of March 17, 1995, relating to the sale by the Seller and the purchase
by the Buyer of certain Airbus Industrie A320-200 model aircraft (the
"Aircraft"), which, as previously amended by Amendment No. 1 dated as of
December 21, 1995, Amendment No. 2 dated as of January 31, 1996, Amendment No. 3
dated as of February 28, 1996, Amendment No. 4 dated as of March 27, 1996, and
Amendment No. 5 dated the date hereof and supplemented with all Exhibits,
Appendixes and Letter Agreements attached thereto, is hereinafter called the
"Agreement," (ii) a related letter agreement regarding "Financial Matters,"
which, as previously amended by Amendment No. 1 dated as of December 21, 1995,
and Amendment No. 2 dated as of March 27, 1996, is hereinafter called the
"Financial Matters Agreement," (iii) a related Security Agreement, dated as of
March 17, 1995, hereinafter referred to as the "Security Agreement," and (iv) a
Promissory Note Security Agreement, dated as of December 21, 1995; and
WHEREAS, capitalized terms used herein and not otherwise defined in this
Amendment will have the meanings assigned to them in the Agreement, and the
terms "herein," "hereof," and hereunder and words of similar import refer to
this Amendment.
NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL COVENANTS HEREINAFTER SET
FORTH, IT IS AGREED AS FOLLOWS:
1. REPORTS
In connection with and in consideration of the Seller's entering into an
amendment to the Agreement dated as of the date hereof, Subparagraph 4.16
of the Financial Matters Agreement will be amended to include the
following quoted provisions:
QUOTE
(iii) Monthly Reports Within twenty (20) days after the end of each month
in each fiscal year of the Buyer, a Consolidated balance sheet of
the Buyer and its Consolidated subsidiaries prepared as of the close
of such month, together with the related statements of income and
surplus, statement of sources and uses of cash, as well as such
other historical information relating to such period that the Buyer
maintains. Such information will include, but not be limited to,
revenue per available seat mile, cost per available seat mile,
segment profitability information, the number of total passengers,
and load factor and average fare information. The previous sentence
notwithstanding, the requirement for the Buyer to provide segment
profitability information will expire on the Seller's receipt of
such information for the entire month of September 1998, provided
that no Insecurity Event has occurred under the Agreement.
UNQUOTE
2. COLLATERAL AND UPFRONT SUPPORT
It is hereby agreed that, notwithstanding the provisions of Subparagraph
2.2 of the Financial Matters Agreement, as amended by Amendment No. 1 and
Amendment No. 2 of the Financial Matters Agreement, the Seller will not
provide Upfront Support Credit in excess of the Capped Amount before
October 1, 1998, and as of such date only, on the earlier of (i) the
Buyer's operation of at least five (5) A320-200 aircraft leased by the
Buyer from operating lessors medium to long term and (ii) six (6) months
or fewer before delivery of the first Aircraft.
2
3. CONFIDENTIALITY
Subject to any legal or governmental requirements of disclosure, the
parties (which for this purpose shall include their employees, agents and
advisors) shall maintain the terms and conditions of this Amendment and
any reports or other data furnished hereunder strictly confidential.
Without limiting the generality of the foregoing, the Buyer and the Seller
shall use their best efforts to limit the disclosure of the contents of
this Agreement to the extent legally permissible in any filing required to
be made by the Buyer or the Seller, as the case may be, with any
governmental agency and shall make such applications as shall be necessary
to implement the foregoing. With respect to any public disclosure or
filing, each party agrees to submit to the other party a copy of the
proposed document to be filed or disclosed and will give the other party a
reasonable period of time in which to review the said document. The Buyer
and Seller shall consult with each other prior to the making of any public
disclosure or filing, permitted hereunder, of this Amendment or the terms
and conditions thereof. The provisions of this Paragraph 3 shall survive
any termination of this Agreement.
4. EFFECT OF AMENDMENT
The Agreement will be deemed amended to the extent herein provided, and,
except as specifically amended hereby, will continue in full force and
effect in accordance with its original terms, except that if the Agreement
and this Amendment have specific provisions that are inconsistent, the
specific provisions contained in this Amendment will govern. It is
understood that this Amendment does not in any way constitute a waiver by
the Seller of any rights it has under the Financial Matters Agreement or
under the Agreement.
Further, it is agreed that this Amendment is subject to the parties'
executing as of the date hereof an amendment to each of the Agreement, the
Security Agreement and the Promissory Note Security Agreement, if
applicable.
5. INTERPRETATION AND LAW
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND THE PERFORMANCE
THEREOF SHALL BE DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK.
THE PARTIES HEREBY ALSO AGREE THAT THE UNITED NATIONS CONVENTION ON THE
INTERNATIONAL SALE OF GOODS SHALL NOT APPLY TO THIS TRANSACTION.
3
If the foregoing correctly sets forth our understanding, please execute
this Amendment in the space provided below, whereupon, as of the date first
above written, this Amendment will constitute part of the Agreement.
Agreed and accepted Yours sincerely,
MIDWAY AIRLINES AVSA, S.A.R.L.
CORPORATION
By: /s/ Xxxxxxxx X. Xxxxxx By: /s/ Xxxxxxxxxx Xxxxxx
-------------------------------- ------------------------------------
Its: Senior Vice President Its:
General Counsel
By:
--------------------------------
Its:
--------------------------------
4
Amendment No. 4
TO THE "FINANCIAL MATTERS" LETTER AGREEMENT
dated as of March 17,1995
between
AVSA, S.A.R.L.,
and
MIDWAY AIRLINES CORPORATION
This Amendment No. 4 (Hereinafter referred to as the "Amendment") entered into
as of February __, 1997, by and between AVSA, S.A.R.L., a societe a
responsabilite limitee organized and existing under the laws of the Republic of
France, having its registered office located at 0, xxxx-xxxxx Xxxxxxx Xxxxxxxx,
00000 Xxxxxxx, XXXXXX (hereinafter referred to as the "Seller"), and MIDWAY
AIRLINES CORPORATION, a body corporate, organized and existing under the laws of
the State of Delaware, United States of America, having its principal corporate
offices located at 000 Xxxx Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx, XX 00000
(hereinafter referred to as the "Buyer").
WITNESSETH:
WHEREAS, the Buyer and the Seller entered into (i) a Purchase Agreement,
dated as of March 17, 1995, relating to the sale by the Seller and the purchase
by the Buyer of certain Airbus Industrie A320-200 model aircraft (the
"Aircraft"), which, as previously amended by Amendment No. 1 dated as of
December 21, 1995, Amendment No. 2 dated as of January 31, 1996, Amendment No. 3
dated as of February 28, 1996, Amendment No. 4 dated as of March 27, 1996,
Amendment No. 5 dated as of October 29, 1996, and Amendment No. 6 dated the date
hereof and supplemented with all Exhibits, Appendixes and Letter Agreements
attached thereto, is hereinafter called the "Agreement," (ii) a related letter
agreement regarding "Financial Matters," which, as previously amended by
Amendment No. 1 dated as of December 21, 1995, Amendment No. 2 dated as of March
27, 1996 and Amendment No. 3 dated as of October 29, 1996, is hereinafter called
the "Financial Matters Agreement," (iii) a related Security Agreement,
dated as of March 17, 1995, and (iv) a Promissory Note Security Agreement, dated
as of December 21, 1995, hereinafter referred to as the "Promissory Note
Security Agreement"; and
WHEREAS, capitalized terms used herein and not otherwise defined in this
Amendment will have the meanings assigned to them in the Agreement, and the
terms "herein," "hereof," and hereunder and words of similar import refer to
this Amendment.
NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL COVENANTS HEREINAFTER SET
FORTH, IT IS AGREED AS FOLLOWS:
1. INSECURITY EVENTS
The Buyer and the Seller agree that the Financial Matters Agreement is
amended by deleting Subparagraphs 3.2(a), 3.2(b), 3.2(g) and 3.2(h)
thereof in their entirety.
2. MERGER
The Buyer intends to become the surviving corporation of the merger of
GoodAero, Inc., a Delaware corporation, into the Buyer (the "Merger"),
pursuant to which Merger the Buyer's current majority shareholder will
cease to control eighty percent (80%) of the outstanding voting shares of
the Buyer. Following the consummation of the Merger, the shareholders of
GoodAero, Inc., will have the right to vote that number of votes that will
equal to seventy percent (70%) of all votes in the aggregate on each
matter submitted to a vote of the holders of the Buyers common stock. The
Seller agrees that the consummation of the Merger will not constitute an
Insecurity Event under Subparagraph 3.2(e) of the Financial Matters
Agreement.
3. UPFRONT SUPPORT
The Buyer and the Seller agree to negotiate in good faith the execution of
amendments to the Agreement, the Financial Matters Agreement and any other
necessary agreement or letter agreement between the Seller and the Buyer
with respect to the Utilized Amount and the Upfront Support Package (as
such terms are defined in the Financial Matters Agreement), based upon the
following:
The Buyer's obligation to the Seller with respect to the Utilized
Amount of the Upfront Support Package may be satisfied (i) fully, by
the Buyer's payment of such Utilized Amount to the Seller in cash or
(ii) partially, by the Buyers delivery and return to the Seller of
serviceable Airbus aircraft parts and/or tooling currently owned by
the Buyer to the extent of the mutually agreed value of such parts
and/or tooling (the "Agreed Amount"). Subclause (ii) in the
2
immediately preceding sentence will be subject to such parts and/or
tooling being serviceable and in operating condition, tagged and
otherwise having the necessary documentation and, further, to
inspection by the Seller. The Agreed Amount will be (i) recredited
against the product support package available under the Agreement,
or (ii) in the event that the Buyer does not need such product
support (or a portion thereof), the Agreed Amount can be provided as
a price reduction at the time of Aircraft delivery (subject to
escalation as set forth in Subparagraph 1.2.1 of the Financial
Matters Agreement).
4. CONFIDENTIALITY
Subject to any legal or governmental requirements of disclosure, the
parties (which for this purpose shall include their employees, agents and
advisors) shall maintain the terms and conditions of this Amendment and
any reports or other data furnished hereunder strictly confidential.
Without limiting the generality of the foregoing, the Buyer and the Seller
shall use their best efforts to limit the disclosure of the contents of
this Amendment to the extent legally permissible in any filing required to
be made by the Buyer or the Seller, as the case may be, with any
governmental agency and shall make such applications as shall be necessary
to implement the foregoing. With respect to any public disclosure or
filing, each party agrees to submit to the other party a copy of the
proposed document to be filed or disclosed and will give the other party a
reasonable period of time in which to review the said document. The Buyer
and Seller shall consult with each other prior to the making of any public
disclosure or filing, permitted hereunder, of this Amendment or the terms
and conditions thereof. The provisions of this Paragraph 4 shall survive
any termination of this Amendment.
5. EFFECT OF AMENDMENT
The Agreement will be deemed amended to the extent herein provided, and,
except as specifically amended hereby, will continue in full force and
effect in accordance with its original terms, except that if the Agreement
and this Amendment have specific provisions that are inconsistent, the
specific provisions contained in this Amendment will govern. It is
understood that this Amendment does not in any way constitute a waiver by
the Seller of any rights it has under the Financial Matters Agreement or
under the Agreement.
Further, it is agreed that this Amendment is subject to the parties'
executing as of the date hereof an amendment to the Agreement and the
Promissory Note Security Agreement, if applicable.
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6. INTERPRETATION AND LAW
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND THE PERFORMANCE
THEREOF SHALL BE DETERMINED TN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK.
THE PARTIES HEREBY ALSO AGREE THAT THE UNITED NATIONS CONVENTION ON THE
INTERNATIONAL SALE OF GOODS SHALL NOT APPLY TO THIS TRANSACTION.
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If the foregoing correctly sets forth our understanding, please execute
this Amendment in the space provided below, whereupon, as of the date first
above written, this Amendment will constitute part of the Agreement.
Agreed and accepted Yours sincerely,
MIDWAY AIRLINES AVSA, S.A.R.L.
CORPORATION
By: /s/ Xxxxxxxx X. Xxxxxx By: /s/ Xxxxxxxxxx Xxxxxx
-------------------------------- ------------------------------------
Its: Senior Vice President Its: AVSA Chief Executive Officer
By:
--------------------------------
Its:
--------------------------------
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