* Confidential treatment has been requested for portions of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as "*". A complete
version of this exhibit has been filed separately with the Securities and
Exchange Commission.
Exhibit 10.4
V2500 ENGINE MAINTENANCE AGREEMENT
dated September 14, 2000
between
TAM - Transportes Aereos Regionais S.A.
Xx. Xxxxxxxx, 000
Xxxxxxxxx - XXX 00000-000 Xxx Xxxxx
Xxxxxx
acting for and on behalf of itself or any other subsidiary or affiliate of TAM
- Transportes Aereos Regionais
- hereinafter collectively referred to as "Operator" -
and
MTU Maintenance Hannover GmbH
Munchner Xxxxxxx 00
00000 Xxxxxxxxxxx
Xxxxxxx
- hereinafter referred to as "MTU" -
- Operator and MTU hereinafter collectively referred to as the "Parties" -
page 2 of 40
TABLE OF CONTENTS
RECITAL
Clause 1 DEFINITIONS
Clause 2 SCOPE OF SERVICES
Clause 3 RECORDS AND STANDARDS
Clause 4 DELIVERY
Clause 5 TURNAROUND TIMES AND EXCUSABLE DELAY
Clause 6 ORDER PROCESSING
Clause 7 REJECTED PARTS
Clause 8 CHARGES
Clause 9 PAYMENT
Clause 10 TAXES, DUTIES AND CUSTOMS FEES
Clause 11 SUBCONTRACTING
Clause 12 WARRANTY
Clause 13 LIABILITY
Clause 14 MISCELLANEOUS
Clause 15 DURATION AND TERMINATION
Clause 16 REPRESENTATIONS AND WARRANTIES
Clause 17 LAW AND ARBITRATION
Clause 18 NOTICES
Appendix A (1) ENGINE(S)
Appendix A (2) AIRCRAFT/ENGINE DELIVERY SCHEDULE
Appendix B CHARGES
Appendix C ESCALATION FORMULAE
Appendix D AIRWORTHINESS AUTHORITIES APPROVALS
Appendix E (1) MAINTENANCE COST GUARANTEE
Appendix E (2) MAINTENANCE COST GUARANTEE
Appendix F ADJUSTMENT OF GUARANTEED MAINTENANCE COST PER
FLIGHT HOUR FOR ACHIEVED CYCLE RATIO
Appendix G PARENT COMPANY GUARANTEE
page 3 of 40
RECITAL
WHEREAS Operator requires maintenance, refurbishment, repair
and modification services with respect to Engines (as
hereinafter defined).
WHEREAS MTU acknowledges and agrees that any subsidiary or
affiliate of TAM - Transportes Aereos Regionais S.A.
may from time to time operate the Engines and may
therefore utilise the services specified in this
Agreement, in its own name.
WHEREAS MTU has the facilities, expertise and experience and is
willing and prepared to provide such services according
to MTU's standards, procedures and valid airworthiness
authority regulations as provided in Appendix D.
WHEREAS MTU shall perform such services based on rates as
provided in Appendix B.
WHEREAS Operator and MTU intend to meet in reasonable intervals
(approximately twice per year) to consult on the technical
and organizational aspects of this Agreement.
WHEREAS Operator will * place purchase orders for Services on
Engines on MTU and MTU will accept the same, in each
case, subject to the terms and conditions of this
Agreement.
NOW THEREFORE, in consideration thereof and reliance on the mutual
promises given herein, the Parties hereto agree as follows:
page 4 of 40
CLAUSE 1 DEFINITIONS
Within the scope of this Agreement, unless otherwise individually
stipulated, the following definitions shall apply:
1.1 AOG
"Aircraft on Ground" indicates that an aircraft is unable to
continue or be returned to revenue service until appropriate
corrective action is taken.
1.2 CSLV
The number of cycles an item of Supplies has completed since last
Shop Visit.
1.3 CSN
The number of cycles an item of Supplies has completed since
manufacture.
1.4 DAC Brasil
The Brasilian airworthiness authority, or any successor organization
thereof.
1.5 Days
Any calendar days.
1.6 Effective Date
Shall have the meaning set forth in Clause 15.1.
1.7 Engine(s)
Each V2500-A5 engine listed in Appendix A (1), subject to additions
or deletions as may be specified by Operator and notified in writing
to MTU from time to time provided, however, that the application of
Appendices E1 and E2 to any additional engine shall require the
written consent of MTU.
1.8 Engine Flight Hour (EFH)
The cumulative number of airborne hours in operation of an Engine
computed from the time an aircraft leaves the ground until it
touches the ground at the end of the flight.
page 5 of 40
1.9 Engine Lease Agreement
The Engine lease agreement to be entered into between MTU and
Operator pursuant to Clause 15.4 on the basis of which MTU acting as
lessor will lease to Operator and Operator acting as lessee will
lease from MTU up to six (6) V 2500-A5 spare Engines.
1.10 Engine Sale and Purchase Agreement
The Engine sale and purchase agreement to be entered into between
MTU and Operator pursuant to Clause 15.4 on the basis of which MTU
acting as purchaser will purchase from Operator and Operator acting
as seller will sell to MTU up to twelve (12) V2500-A5 aircraft
engines.
1.11 Flight Cycle
A completed Engine thermal cycle including the application of take
off power.
1.12 Foreign Object Damage or FOD
Damage to any portion of the Engine caused by any object other than
an integral part of the Engine including but not limited to an
impact or ingestion of birds, stones, hail and/or runway, taxiway or
apron gravel and for the avoidance of doubt excluding DOD.
1.13 Incoterms
Incoterms 2000 plus later amendments as published by the I.C.C.
Paris valid at the time of conclusion of this Agreement.
1.14 Life Limited Part
Any Part which is admitted by the manufacturer for a defined service
life.
1.15 Line Maintenance
Routine checks, inspections and rectification of malfunctions
performed en route and at base stations during transit, turnaround
or night stop.
1.16 Module
"Major Engine Build Group" as specified in ATA Chapter 72 of the
OEM's illustrated parts catalogue.
page 6 of 40
1.17 MTU
Shall also mean any company of the MTU Maintenance group of
companies.
1.18 Operator
Shall also mean any affiliate or subsidiary of TAM - Regionais S.A.
from time to time.
1.19 Operator Owned Part/Module
Any Operator owned Repair Part or Module used during Work in order
to expedite the Turnaround Time.
1.20 Original Equipment Manufacturer (OEM)
IAE International Aero Engines AG, Xxxx Xxxxxxxx, XX 00000, XXX.
1.21 Part
Any part of an Engine.
1.22 Pool Parts/Modules
All Parts/Modules required in replacement of Parts/Modules for which
the Repair time exceeds the applicable Turnaround Time.
1.23 Purchase Order
An order stating that it is subject to the terms and conditions of
this Agreement issued by Operator to MTU and includes:
a) The Purchase Order number to be referenced to in all invoices
and other correspondence related to the Work under such
Purchase Order;
b) A statement of or reference to the applicable Work Statement;
c) Return delivery instructions, including packaging and
shipping.
1.24 Rejected Part
Any item removed by MTU from a Module or Engine and consequently
replaced by a Part.
1.25 Repair Part
Any Part which is repaired to serviceable condition.
page 7 of 40
1.26 Services
All Work in:
- Maintenance Those actions required for restoring or
maintaining Supplies in serviceable
condition, including servicing, repair,
modification, overhaul, inspection and
determination of condition.
- Modification Services agreed upon between MTU and
Operator, which are based upon a
manufacturer's Service Bulletin.
- Testing As defined in the applicable Engine
manufacturer's Overhaul and Repair manual
as well as additional Testing if required
by the MTU test procedures.
- Reconditioning The Work necessary to return Modules or
(Overhaul) Parts to the highest standard specified in
the relevant manual.
- Refurbishment The Work necessary to restore an Engine or
(Engine, Module to ensure that cost effective
Module) operation will be achieved.
- Repair To make an Engine or Modules serviceable by
replacing or processing failed or damaged
Parts.
- Restoration The Work (on/off the aircraft) necessary to
restore Modules or Parts to a specific
standard.
- Rework To carry out Work on uninstalled Modules or
Parts.
- Replacement The action whereby a Module or Part is
removed and another Module or Part is
installed in its place for any reason.
- Inspection An examination of Supplies against a
specific standard.
1.27 Service Bulletin (SB)
Any document issued by the OEM to notify Operator and MTU of
recommended Modifications, substitution of Parts, special
Inspections/checks, reduction of existing life limits or
establishment of first time life limits and conversion from one
Module to another.
page 8 of 40
1.28 Shop Handling Guide
The shop handling guide agreed by the Parties pursuant to
Clause 2.3 (iii).
1.29 Shop Visit
The performance of Services at MTU's facilities or the
facilities of any subcontractor on an Engine or Module which
entails either the separation of pairs of major mating engine
flanges or the removal of a disc, hub, or spool.
1.30 Supplies
Engines, Modules, Parts or any other items of associated
equipment delivered to MTU.
1.31 TSLV
The time expressed in operation hours an item of Supplies has
completed since last Shop Visit.
1.31 TSN
The time expressed in operation hours an item of supplies has
completed since manufacture.
1.32 Turnaround Time (TAT)
The agreed time of performance of Services in respect of an
Engine by MTU. Unless otherwise agreed and subject to the
provisions of Clause 5 of this Agreement, the TAT shall
commence the Day after receipt of an Engine or Module by MTU
Maintenance do Brasil Ltda. ("MTU Brasil") and ends upon
redelivery of such Engine or Module according to Clause 4. For
purposes of TAT an Engine shall be deemed delivered on the
Scheduled Delivery Date (as defined in Clause 5.3) if such
Engine is removed from wing, mounted to a transportation stand
ready to be shipped from Operator's facility together with the
documentation to be furnished to MTU pursuant to Clause 3.2.
1.33 Work
The performance of Services according to the terms and
conditions of this Agreement.
1.34 Work Statement
Statement or statements being part of the Purchase Order which
include(s) the Work requirements applicable to Engines,
Modules or Parts. The Work Statement(s) shall include details
relating to:
page 9 of 40
- reason for Shop Visit
- disassembly and re-assembly requirements
- Inspection requirements
- Repairs to be accomplished
- Modification standard to be accomplished
- Testing,
and any other information notified by MTU to Operator with five (5)
Days prior written notice from time to time.
page 10 of 40
CLAUSE 2 SCOPE OF CONTRACT
2.1 During the term of this Agreement, Operator agrees to place
any and all purchase orders for off-wing services required on
all Engines, Modules and Parts owned or operated by it * on
MTU subject to the provisions of Clauses 5.8 and 15.3.
2.2 MTU agrees to accept all Purchase Orders and will perform all
Services on Engines, Modules and Parts subject to the terms
and conditions of this Agreement.
2.3 All Services will be performed in accordance with
(i) the airworthiness requirements of the FAA and JAA, and
shall comply with applicable requirements of the DAC
Brasil from time to time;
(ii) the Engine manufacturer's overhaul and repair manuals as
supplemented by MTU's/MTU's subcontractors' procedures
which procedures shall be agreed and approved by
Operator; and
(iii) a shop handling guide to be mutually agreed between the
Parties within four (4) weeks following an initial
meeting between Operator and MTU to be scheduled within
ten (10) Days of signature of this Agreement.
2.4 The Services will include but not be limited to the following:
2.4.1 Disassembly, cleaning, Inspection and rebuilding of Engines;
2.4.2 Exchange of Parts;
2.4.3 Rework of Engines, Modules and Parts to a serviceable
condition;
2.4.4 Engine Testing according to the specifications of the Original
Equipment Manufacturer, or other relevant manufacturer and
MTU;
2.4.5 Parts Management
Incorporation of Modifications such as prescribed or advised
from the Original Equipment Manufacturer or other relevant
manufacturer, MTU and/or Operator.
Technical support including Engineering services when
requested by Operator, provided the following Engine
documentation is made available to MTU:
- Log book or equivalent
- Life of all Life Limited Parts
- In-flight readings of all parameters of the Engine;
page 11 of 40
2.4.6 Replacement of Life Limited Parts.
2.5 Operator's Responsibility
2.5.1 In case of defects or deficiencies in the design or
manufacture of the Supplies by the OEM Operator agrees to
exercise all commercially reasonable endeavours to assist and
allow MTU to recover from the OEM all cost and expenses
associated with any measure taken by MTU to rectify or repair
such defects and deficiencies.
2.5.2 Operator shall use all commercially reasonable endeavours to
increase the on-wing time of the Engines under consideration
of reliability and costs in cooperation with MTU. Moreover,
the Operator agrees to cooperate with MTU with respect to the
determination of the optimum removal date for each eligible
Engine. For the avoidance of doubt it is expressly agreed by
the Parties that nothing contained herein shall limit or shall
be construed as limiting Operator's airworthiness
responsibilities (which shall be paramount).
2.5.3 Operator will report to MTU by the tenth (10th) day of each
month the Engine Flight Hours (EFH) of the preceding month for
each Engine.
2.5.4 Operator will report to MTU each month the Engine on-wing data
in order to allow MTU to evaluate those data by MTU's
engineering personnel.
2.5.5 Operator agrees that MTU shall perform, at no additional
charge, for and on behalf of Operator the administration of
maintenance related guarantees, warranties or other remedies
specified in the general terms agreement between Operator and
the OEM regarding the sale of the Engines, in particular any
of the following:
- New Engine Guarantee
- Shop Visit Rate Guarantee
- EGT Guarantee
- Campaign Change Allowance
- New Part Warranty
- FOD Guarantee
- Spare Parts Warranty
- Spare Engine Availability
- Hot/Cold Section Guarantee
- V2500 Maintenance Cost Guarantee
Operator agrees to use all commercially reasonable endeavours
to support MTU in the administration of such warranties and
guarantees, in particular their enforcement.
page 12 of 40
2.5.6 Operator shall maintain the following V2500-A5 spare Engine
level:
quantity quantity quantity
year of Aircraft of installed of spare
Engines Engines
--------- ----------- ------------ --------
2000 10 20 2
2001 17 34 3
2002 22 44 4
2003 29 58 5
2004 34 68 6
2005 38 76 6
2.6 Should it become necessary for the proper performance to carry
out Services substantially different from those specified in
the Work Statement, MTU will promptly notify Operator (in
sufficient detail) of the nature and extent of such Services
and seek Operator's authorization to carry out such different
Services. Operator shall respond in writing (to include telex
and telefax) to such request within forty-eight (48) hours.
The Turnaround Time will be increased by the additional time
that is needed and verified by MTU due to the delay in
question. Any impact on the agreed TAT resulting from such
delay will be promptly advised by MTU (with supporting
evidence if requested).
In the event Operator withholds the authorization or direction
for the necessary alteration of the Work Statement for a
period exceeding ten (10) Days, MTU may remove the Engine,
Module or Part from the production line.
2.7 In recognition of Operator's and MTU's desire to stabilize the
financial expectations resulting from this Agreement, the
Parties agree to meet annually to discuss and reconcile the
overall technical and business aspects of this Agreement.
page 13 of 40
CLAUSE 3 RECORDS AND STANDARDS
3.1 MTU will prior to commencement of Services establish and shall
maintain throughout the duration of this Agreement a service
organization and facilities for Services on Engines, Modules,
Parts and Accessories in accordance with the respective
manufacturer's manuals and other applicable documentation.
These facilities shall be approved by the FAA/JAA and/or
accepted by the DAC Brasil.
3.2 In respect of individual Engines or Modules, Operator shall
provide to MTU all documents and supply all information within
Operator's possession or control necessary to establish the
extent of Services required. This includes:
3.2.1 The technical documentation (or any other applicable
documentation):
3.2.2 Any required variations to the applicable standard Work
specification including Modifications which are required to be
embodied in the Engine or Module during the performance of
Work. Further variations to any specific Work on an Engine or
Module will be agreed between MTU and Operator;
3.2.3 Any further information concerning the condition of the
Engine or Module;
3.2.4 Life of all Life Limited and/or time tracking Parts, Life
Limited Parts list;
3.2.5 Module tracking list;
3.2.6 AD-Note status;
3.2.7 Service Bulletin status and Service Bulletin requirements (may
be included in workscope);
3.2.8 Operator's special requirements;
3.2.9 Removal reason;
3.2.10 Installed powerplant accessory component sheet, a listing by
nomenclature of each accessory component, Part number,
quantity, time and cycles and serial number (EBU List
Accessory List/Accessory Life List);
3.2.11 Log book or equivalent and Part (Module) cards;
3.2.12 Engine/Part installation data records;
3.2.13 Purchase Order; and
page 14 of 40
3.2.14 Trend monitoring and in-flight readings (as mutually agreed
upon) of all Engine parameters on that specific Engine from
its last flight prior to removal.
3.3 The MTU record system will include documentation of all
Services performed, Rework operations required and disposition
of all Parts replaced. MTU agrees to keep all records herein
described in form and detail sufficient for accurate and
expeditious administration of the Agreement and shall furnish
to Operator the following records and reports, as applicable
for each Shop Visit:
3.3.1 Engine, Module, Part or accessory serial numbers;
The general exterior condition of the Engine, Module or Part
and shipping conveyance;
List of the missing and/or damaged external Parts; and
Borescope/chamberscope results, as applicable.
3.3.2 The following information for each cycle controlled and Life
Limited Part installed during a Shop Visit:
a) Nomenclature;
b) Part number;
c) Serial number;
d) Total operating cycles and hours accumulated to date;
e) Total cycles remaining;
f) Major maintenance events (date, TSN, CSN) if available.
3.3.3 A list of all Life Limited Parts determined to be scrap
identified by Module installed, Part number, quantity and
reason for scrappage.
3.3.4 A list by nomenclature of each accessory component, Part
number, quantity, Part time and serial number.
3.3.5 One (1) copy of the applicable engine and/or accessory test
logs.
3.3.6 A report summarizing condition detected subsequent to Engine
disassembly.
3.4 MTU shall be required to complete and properly execute
Federal Aviation Administration (FAA) Form 8130-3, and for
major repairs FAA Form 337, or its equivalent for Supplies
repaired, modified and/or tested by MTU under this Agreement.
MTU undertakes to store all records provided to it by Operator
hereunder safely as the property of Operator and to return the
same to Operator upon request or expiry of this Agreement (in
respect of an Engine).
Upon the request from Operator accident and damage reports,
including pictures and laboratory investigation results will
be issued by MTU.
page 15 of 40
CLAUSE 4 DELIVERY
4.1 MTU shall appoint MTU Brasil to handle on behalf of Operator
relevant import/export procedures related to the transactions
contemplated in this Agreement, except for the payment of any
Taxes (as defined in Clause 10) due upon such import/export
transactions, which shall subject to the provisions of Clause
10 be the entire and sole responsibility of Operator. In this
regard, the parties agree and acknowledge that Operator
itself shall be the importer/exporter of record of all
Engines, Modules, Parts and other items imported into/exported
from Brasil under this Agreement. Operator agrees that, upon
request of MTU or MTU Brasil, Operator will timely do,
execute, acknowledge and/or deliver and/or to cause to be
done, executed, acknowledged and/or delivered, all such acts
and documents as may be required to allow MTU Brasil to
conduct all relevant imports/exports for and on behalf of
Operator. Delivery of Engines, Modules, Parts and other items
requiring Work to MTU Brasil shall be the obligation of
Operator.
4.2 Operator shall advise MTU of its intention to deliver Engines,
Modules, Parts and other items no less than * Days prior to
their dispatch.
4.3 Risk of loss or damage shall be borne by Operator until
arrival at MTU Brasil.
4.4 Upon receipt of Engines, Modules or Parts to MTU Brasil (as
evidenced by signature of an acknowledgement of delivery) risk
of loss or damage shall pass to MTU.
4.5 After completion of Work, MTU shall be obliged to redeliver
Engines, Modules, Parts and other items to Operator at
Operator's facility and give notice to Operator of such
redelivery in due course of time. Risk of loss or damage shall
remain with MTU until the relevant Engines, Parts or Modules
are received by Operator's evidenced by signature of an
acknowledgement of receipt by Operator.
page 16 of 40
CLAUSE 5 TURNAROUND TIME (TAT) AND EXCUSABLE DELAY
5.1 Prior to delivery of an Engine, Module, Part or other item to
MTU and after inspection by MTU, MTU and Operator shall agree
on a reasonable TAT for such Engine, Module or Part and upon
delivery of an Engine to MTU and after Inspection by MTU, MTU
shall perform its Services within the following TAT:
The TAT for a complete Engine shall be * Days * .
If a shorter TAT will have to be met on certain
occasions upon requirement of Operator, MTU will use
commercially reasonable efforts to try to comply with such
request and shall keep Operator informed, if requested by
Operator, of the TAT.
5.2 TAT shall start the Day after receipt of an Engine, Module,
Part or other item by MTU, provided all documents according to
Clause 3 are made available to MTU.
5.3 Compliance with an agreed TAT requires * advance notification
by Operator that an Engine or Module is being or will be
shipped for Services ("Scheduled Delivery Date"). In the event
that MTU does not receive such advance notification (e.g. in
the event of an unscheduled Engine removal), the TAT shall
commence with the start of Services on the Engine or Module
but not later than * after receiving the Engine or Module at
MTU including the documentation listed in Clause 3.3.
5.4 Any technical requests from MTU to Operator which will affect
the TAT have to be answered by Operator within * provided
always that if such a request is received by Operator later
than 4 p.m. (Sao Paulo time) on a Friday, Operator's response
shall be received by MTU no later than 6 p.m. (Sao Paulo time)
of the following Monday. If no replies are received within
that time, the TAT will be increased by the additional time
which is needed and verified by MTU due to the delay in
question. Any impact on the TAT resulting from this decision
will be advised by MTU together with supporting evidence of
any delay in the TAT.
5.5 MTU shall not be liable for exceeding the TAT due to reasons
contained in Clause 5.8 - Excusable Delays.
5.6 MTU shall promptly notify Operator when Excusable Delays
occur or impending delays are likely to occur and shall
continue to advise Operator of new shipping schedules and/or
changes thereto.
5.7 If the actual TAT in respect of an Engine exceeds the TAT
referred to in this Clause 5 (as such period may be extended
pursuant to this Agreement) and if Operator is in, or during
such event of delay enters into, a zero spare engine
situation, Operator may as its sole remedy for such delay (i)
require MTU to have a spare engine delivered to
page 17 of 40
Operator (at Operator's facility in Sao Paulo) within * of
MTU being notified of such zero spare engine situation, or
failing which (ii) claim damages from MTU in an amount not
exceeding the cost of leasing an engine until such time as the
delayed Engine is delivered to Operator (including, for the
avoidance of doubt, any costs incurred in delivering or
re-delivering such leased engine). Any maintenance reserves to
be paid for such leased engine shall be borne by Operator.
Such claim is only permitted (i) if Operator has maintained an
appropriate quantity of spare Engines as specified in Clause
2.5.6, and (ii) is furthermore limited to the costs of a
leased Engine until the Engine so delayed is redelivered to
Operator. In the event MTU provides a lease Engine, such lease
shall be subject to a separate lease agreement.
5.8 The party actually performing Services hereunder (the "Service
Provider"), i.e. MTU (if performing Services), or MTU's
subcontractors (if performing Services) shall not be charged
with any liability for delay or non-delivery when due to any
of the following events ("Excusable Delays")
(i) delays of Operator, single source suppliers of the
Service Provider, or the OEM;
(ii) acts of God or the public enemy, fires, riots;
(iii) compliance in good faith with any applicable foreign or
domestic governmental regulations or order whether or
not it proves to be valid or invalid provided that
compliance with any governmental or domestic regulations
or orders in Germany, Brazil (or where the Services are
to be provided by a subcontractor, the jurisdiction of
such subcontractor) which the Service Provider ought
reasonably to have been aware of and ought reasonably to
have complied with shall not constitute an Excusable
Delay;
(iv) labor disputes;
(v) unusually severe weather or
(vi) any other cause beyond the control of the Service
Provider which could not be reasonably foreseen.
To the extent the occurrence of an Excusable Delay causes
actual delay to the Turnaround Times or renders them in part
or whole impossible, the time for the performance shall be
extended for as many Days beyond the agreed TAT as is required
to obtain removal of such causes.
This provision shall, however, not relieve the Service
Provider from using its best efforts to avoid or remove such
causes and to continue performance with reasonable dispatch
whenever such causes are removed. In case that upon occurrence
of an Excusable Delay it is evident that the resulting impact
on the Service Provider is such as to delay the performance of
Services on the Engines, Modules and Parts then undergoing
Services at the Service Provider (hereinafter the "Affected
Items") for more than three weeks, Operator shall have the
page 18 of 40
right to either (i) terminate the Purchase Order relating to
the Services for the Affected Items to the extent the Services
can not be completed by the Service Provider due to such
Excusable Delay and take possession of the Affected Items in
the possession of the Service Provider or shipping agents and
cause such Services to be completed by another maintenance
provider without any obligation on the Service Provider's part
for any Services so performed by another maintenance provider,
or (ii) cause MTU to have the Services provided by another
Service Provider not affected by the Excusable Delay.
For the avoidance of doubt it is expressly agreed that once
such impact on MTU is removed, Operator will continue to send
all Engines, Modules and Parts needing Services to MTU.
page 19 of 40
CLAUSE 6 ORDER PROCESSING
6.1 Operator will provide MTU with a Purchase Order number before
commencement of Services.
6.2 In the event that Operator delivers an incomplete Engine or
Module, MTU will promptly following discovery of any such
deficiency inform Operator in writing of the missing Parts. In
case Operator does not react within * Days upon such
information, the TAT may be increased accordingly. Should
Operator promptly request to add the missing Parts, MTU will
use reasonable efforts to deliver the requested Parts together
with the Engine or Module.
Requested accessories which are not available at the date of
redelivery of an Engine or Module will be separately sent to
Operator when such accessories become available.
6.3 In case of Reworks MTU shall not perform uneconomical Rework,
i.e. when the costs for the Rework of a Part exceed * of the
then current list price for the respective new Part. In such
case MTU shall replace the removed Part by a new one and
charge the price for it according to Appendix B.
page 20 of 40
CLAUSE 7 REJECTED PARTS
All Parts removed during Work and determined by MTU as
rejected shall become Mt.'s property and shall be disposed of
locally by MTU.
All Parts removed during Work and determined by MTU as scrap
will be held for Operator's review and disposition. Such
disposition by Operator shall occur twice per calendar year.
If such disposition for any such Parts is delayed for any
reason whatsoever for more than * months, following written
notice to Operator, it shall be conclusively deemed that
Operator has transferred title to any such Parts to MTU, and
MTU may dispose of such Parts at its sole discretion.
page 21 of 40
CLAUSE 8 CHARGES
For all Services Operator shall pay the sums charged in accordance
with Appendix B subject to the Escalation Formulae contained in
Appendix C. Engines delivered for the performance of Services in a
given year shall be invoiced at the charges applicable to such year.
page 22 of 40
CLAUSE 9 PAYMENT
9.1 MTU shall render an initial invoice at least * after completion of
Work. The final invoice shall be issued not later than * after
completion of Work.
9.2 Invoices shall be issued in US-Dollars and promptly forwarded to
Operator in duplicate.
9.3 Unless otherwise provided herein, all invoices shall be payable *
(the due date) after date of issue; all payments shall be made * -
in US-Dollars on MTU's bank account with
*
Operator shall promptly furnish copies of the documents evidencing
wire transfer of all such payments to the attention of the Financial
Director, MTU.
9.4 In case of Excusable Delays, MTU shall be entitled to payment of an
adequate and reasonable partial payment for Services already
rendered as may be agreed by MTU and Operator on a case by case
basis.
9.5 If sums due are received by MTU within * after issuance of an
invoice, MTU may credit * of the respective invoiced amount.
9.6 If Operator is in default of any payment obligation, MTU is without
reminder and prejudice to any other rights entitled to charge
interest at a rate of * for any outstanding sum, starting from the
due date of payment until the date payment is received.
9.7 If Operator is in default of any payment obligation, MTU may
postpone the performance of its own obligations under this Agreement
until such payment is made.
9.8 Operator is not entitled to withhold payments or to make any
deductions whatsoever unless accepted by MTU or affirmed by an
arbitral ruling under Clause 16 or a judgment of a court of
competent jurisdiction.
page 23 of 40
9.9
*
9.10 MTU shall be entitled to a general lien on any of the Supplies
delivered by Operator which are in the care, custody and control of
MTU under this Agreement together with any amounts due to MTU from
Operator which have arisen with respect to respect to other or
previous Services performed by MTU for Operator. Such provision
shall also apply if any Supply owned or leased by Operator passes
into the hands of MTU at a later date and MTU has claims out of the
business relationship at the time the lien is claimed.
page 24 of 40
CLAUSE 10 TAXES, DUTIES AND CUSTOMS FEES
10.1 MTU shall pay all Taxes (as defined below) levied on either Party by
authorities in the Federal Republic of Germany.
10.2 Any and all Taxes levied by any authority in Brazil on MTU or
Operator, including, but not limited to, the Import Duty (ID) and
Tax on Industrialized Products (IPI) levied on the importation of
goods into Brazil, shall be borne by Operator, except for (a) the
Income Tax Withholding (Imposto xx Xxxxx xx Xxxxx - "Current Income
Tax"), which shall be withheld by Operator from amounts due to MTU
under this Agreement, if thus required by Brazilian law; and (b) the
Tax on Transactions Related to the Circulation of Goods and
Interstate and Intermunicipal Transport and Communication Services
("ICMS"), if any, due upon the importation of new Engines, Modules;
and Parts into Brazil in connection with MTU's performance of its
obligations under this Agreement. In this regard, MTU shall grant
Operator a rebate on the charges due by Operator under this
Agreement in the exact amount of the ICMS actually paid by Operator
(if any) upon importation by Operator of relevant Engines, Modules
and Parts into Brazil, provided (i) Operator evidences actual
payment of such ICMS in a form satisfactory to MTU; (ii) the rate at
which the ICMS is paid by Operator is not higher than 4%; (iii)
Operator does not fail to benefit from any ICMS benefit (including
ICMS reduction or exemption) that may be available; (iv) Operator is
unable to and actually does not offset such ICMS against any Taxes
due by Operator, nor directly or indirectly recover such ICMS in any
form whatsoever; AND (v) if so allowed by applicable regulations,
upon written request of MTU, Operator promptly assigns, transfers or
makes in any form available to MTU and/or any company indicated by
MTU the ICMS credits earned by Operator upon the above mentioned
imports. If any of the conditions set forth in items (i) and (iii)
through (v) above is not met, MTU's obligation set forth in the
immediately preceding sentence (i.e. to grant Operator a rebate at a
rate of 4%) shall not apply.
The Parties hereby acknowledge and agree that (i) the compensation
due by Operator to MTU under this Agreement, was established
assuming that (i) invoices issued hereunder will be issued by MTU
Maintenance Hannover GmbH, and (ii) the only Taxes that will levy in
Brazil on payments by Operator to MTU Maintenance Hannover GmbH in
connection with the transactions contemplated in this Agreement are
Current Income Tax and ICMS; (ii) in the event (a) the Current
Income Tax and/or the ICMS become due at a rate higher than its
current rate; (b) it is later determined that other Taxes are also
due in Brazil on payments made by Operator to MTU in connection with
MTU's performance of its obligations under this Agreement; and/or
(c) new Taxes are created and become due in Brazil on payments due
by Operator to MTU in connection with MTU's performance of its
obligations under this Agreement, MTU shall be entitled to, upon
written notice to TAM, increase the compensation due by Operator to
page 25 of 40
*
For purposes of this Agreement, the term "Tax" or "Taxes" shall mean
all federal, state, or municipal taxes, charges, fees, levies,
imposts, duties (including import duties), tariffs, surcharges, or
other assessments, including, without limitation, sales, use,
transfer, gross receipts, excise, withholding or any similar charges
or assessments and all taxes, charges, fees, levies, imposts,
duties, tariffs, surcharges, or other assessments placed by, or
replacing, any of the above, or other tax or governmental fee of any
kind whatsoever directly or indirectly imposed by any governmental
authority, including any interest or penalties or additions thereto,
whether disputed or not.
Taxes imposed in any other jurisdiction shall be borne by the
relevant Party on whom such taxes are levied, provided that TAM
shall not be responsible for any Taxes due in any jurisdiction other
than Brazil in connection with the performance by MTU of its
obligations under this Agreement.
In the event that any Party shall be held responsible by any taxing
authority for the collection or payment of Taxes to be borne by the
other Party and shall be required to pay the same to such authority,
such other Party shall reimburse the first Party the full amount of
such payment and any expenses connected therewith upon the first
Party's first demand therefor.
10.3 Operator reserves the right to use its commercially reasonable
efforts to negotiate and enter into an arrangement with the
Brazilian taxing authorities for an exemption for the assessment
and payment of import duties, tariffs or similar taxes imposed on
any and all goods, material or services imported to Brazil under
this Agreement.
10.4 *
page 26 of 40
CLAUSE 11 SUBCONTRACTING
MTU may subcontract any Services upon prior approval by Operator.
Such approval may not be unreasonably withheld.
Any subcontracting shall not release MTU from its obligations under
this Agreement and MTU shall remain liable to Operator for the
performance of Services under this Agreement by any subcontractor as
if such Services were performed by MTU. MTU shall use best
endeavours to ensure that all Work subcontracted is undertaken by
reputable Maintenance facilities appropriately certified by all
relevant authorities and able to perform the Services to the
standard required of MTU pursuant to this Agreement. Nothing in this
Clause will cause MTU to be liable for any default by a
subcontractor where MTU or another subcontractor remedies that
default.
page 27 of 40
CLAUSE 12 WARRANTY
12.1 MTU warrants that at the time of delivery of serviced Engines the
Services will have been performed in a skilled and workmanlike
manner in accordance with best industry practice and in accordance
with the requirements of this Agreement. This warranty is limited to
MTU's correcting at its facilities within a reasonably prompt period
of time and at its own cost and expense such Services as are shown
to MTU's reasonable satisfaction to be defective, provided that the
defect has arisen within * months after installation by Operator or
the * following delivery or within * after the date of delivery
whichever shall first occur, provided further that written notice of
the defect is received by MTU within * after discovery by Operator.
Transportation charges for return of defective Engines to MTU and
their reshipment will be borne by MTU, subject to Clause 12.7
herebelow. In the event of a justified warranty claim hereunder the
warranty period shall be extended by the time required to carry out
the work.
12.2 Non-compliance of an Engine with the specified performance and
consumption rates can only be determined and demonstrated by a test
run at MTU's facilities or any test cell agreed between both
Parties.
12.3 MTU's warranty shall not apply if after redelivery by MTU Operator,
its servants, agents, subcontractors or third parties have abused,
altered or repaired the Engine or Module or have not operated the
Engine or Module in accordance with the manufacturer's operating
instructions or recommendations.
12.4 If an Engine defect was caused due to the failure of a new Part
properly installed by MTU, MTU will assign to the fullest extent
possible the warranty granted by the manufacturer of such new part
to Operator. In the event that the warranty related to such new Part
cannot be assigned, MTU will administer and enforce the warranty
claim against the manufacturer on behalf of Operator and pass the
respective remedies on to Operator. In any event MTU's liability
shall be limited to the extent outlined in this Clause 12 and Clause
13 herebelow and shall apply if all attempts at judicial actions
against the manufacturer have failed.
12.5 MTU assumes no warranty for Parts supplied by Operator and properly
installed by MTU.
12.6 Within * after notification by Operator MTU will use its reasonable
efforts to determine if a warranty claim can be accepted.
page 28 of 40
12.7 In case Operator asserts a warranty claim according to this Clause
12 and as a result of the investigation it is established that MTU
is not liable for the defects claimed, the reasonable and properly
incurred costs of investigation as well as any other reasonable and
properly incurred costs and expenses connected with such claim shall
be borne by Operator and due and payable upon receipt of the
respective invoice.
12.8 MTU acknowledges and agrees that it shall bear responsibility in
accordance with this Clause 12 for any Engine defect caused due to
Work performed by any of MTU's subcontractors and that Operator
shall not be required to take any action against such subcontractor.
Operator agrees that the provisions of Clause 12.4 above will apply
where the defect is caused by a new Part installed by a
subcontractor.
12.9 EXCLUSIVE WARRANTIES AND REMEDIES
THE FOREGOING WARRANTIES ARE EXCLUSIVE AND ARE GIVEN AND ACCEPTED IN
LIEU OF (i) ANY AND ALL OTHER WARRANTIES, EXPRESSED OR IMPLIED,
INCLUDING WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE; AND (ii) ANY
OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY IN CONTRACT, TORT OR
STRICT LIABILITY, WHETHER OR NOT ARISING FROM MTU'S NEGLIGENCE,
ACTUAL OR IMPUTED. THE REMEDIES OF OPERATOR SHALL BE LIMITED TO
THOSE PROVIDED IN THIS AGREEMENT TO THE EXCLUSION OF ANY AND ALL
OTHER REMEDIES, INCLUDING WITHOUT LIMITATION, INCIDENTAL OR
CONSEQUENTIAL DAMAGES. NO AGREEMENT VARYING OR EXTENDING THE
FOREGOING WARRANTY, REMEDIES OR THIS LIMITATION WILL BE BINDNG UPON
MTU UNLESS IN WRITING, SIGNED BY TWO DULY AUTHORIZED OFFICERS OF
MTU.
page 29 of 40
CLAUSE 13 LIABILITY
13.1 MTU, its officers, directors, employees, agents and subcontractors
(collectively herein "the Indemnified Parties") shall not be liable
for any damage to or loss of the aircraft and other properties owned
or operated by Operator or injury or death or any other damage
sustained by Operator, its personnel or third parties due to or in
connection with or in consequence of the performance or
non-performance of Services under this Agreement unless caused by
willful misconduct or negligence of an Indemnified Party.
13.2 In cases of negligence any liability of the Indemnified Parties
shall be limited for any and all claims which might arise under or
out of this Agreement to * per occurrence or in the aggregate per
year.
Throughout the term of this Agreement, MTU shall maintain in full
force, at its expense, appropriate aviation products third party
liability insurances in respect of the liabilities specified in
Clause 13.2 in accordance with current aviation insurance practice.
MTU shall provide evidence of such insurances to Operator from time
to time.
13.3 Except for the Indemnified Parties' liability outlined in Clauses
13.1 and 13.2 above, Operator shall indemnify and hold harmless the
Indemnified Parties from any and all liability claims including
costs and expenses incident thereto. The obligation by TAM to
indemnify pursuant to this Clause 13 shall, however, exclude (i)
MTU's officers, directors and employees, (ii) MTU's property, and
(iii) the property of third parties in the care custody and control
of MTU.
13.4 Throughout the term of this Agreement, Operator shall maintain in
full force, at its expense, the following insurance:
a) Comprehensive aircraft third party, passenger (including
personal injury), baggage (checked or unchecked), cargo and
mail legal liability insurance for a combined single limit of
* per occurrence. Such insurance shall name the Indemnified
Parties as additional insured.
b) Hull All Risks, Hull War and Allied Perils insurances covering
Operator's aircraft against loss or damage. Such Hull
insurances shall contain a waiver of recourse in favour of the
Indemnified Parties, except in cases of the Indemnified
Parties' liability outlined above in this Clause 13.
Upon MTU's request Operator shall have its insurers provide
certificates of insurance evidencing the coverages required under a)
and b) above. Each insurance certificate shall provide for at least
fourteen (14) days' written notice to MTU prior to any premature
page 30 of 40
termination or reduction of coverages or limits. Any deductibles
shall be the sole responsibility of Operator.
13.5 For the purposes of this Clause 13, the term "Indemnified Parties"
shall also include the companies of the MTU group of companies (MTU
Motoren- und Turbinen-Union Munchen GmbH etc.).
page 31 of 40
CLAUSE 14 MISCELLANEOUS
14.1 Interpretation
The rule of construction that ambiguities or inconsistencies are to
be resolved against the drafting Party shall not be employed in the
interpretation of this Agreement to favour any Party against the
other. Ambiguities or inconsistencies shall be resolved by applying
the most reasonable interpretation under the circumstances, giving
full consideration to the intentions of the Parties at the time of
conclusion of this Agreement.
14.2 Order of Precedence
In the event that there are any conflicts of inconsistencies between
the provisions of this Agreement and the appendices hereto, the
provisions of this Agreement shall prevail.
14.3 Merger of Negotiations
The terms and provisions contained herein constitute the entire
agreement between the Parties with respect to the subject matter
hereof and the Parties agree that neither of them has placed any
reliance whatsoever on any representations, agreements, statements
or understandings made prior to the signature of this Agreement
whether orally or in writing relating to the scope of this Agreement
other than those expressly incorporated in this Agreement which has
been negotiated on the basis that its provisions represent their
entire agreement relating to the subject matter hereof and shall
supersede all such representations, agreements, statements and
understandings, provided, however, this provision is not intended to
abrogate any other written agreement between the Parties executed
with or after this Agreement, including without limitation the
Engine Purchase Agreement and the Engine Lease Agreement.
14.4 Property and Risk
The risk in respect of loss of or damage to the Supplies shall pass
to MTU on delivery to MTU in accordance with Clause 4 hereof and
shall remain with MTU until redelivered in accordance with Clause 4
hereof.
MTU shall maintain and shall procure that any subcontractor
performing services also maintains insurance coverage in an amount
of not less than * against loss of or damage to the Supplies
while they are in its or any of its subcontractor's care,
custody and control in accordance with current aviation insurance
practice. MTU shall provide evidence of such insurances if requested
by Operator, from time to time.
page 32 of 40
Should any item of Supplies delivered to MTU or any of its
subcontractors according to Clause 4 above while being in MTU's or
any of its subcontractor's care, custody and control be damaged,
howsoever, MTU as its sole responsibility and as Operator's sole
remedy with regard thereto, will either (as MTU may in its
discretion decide) provide an adequate replacement or pay to
Operator the actual replacement cost of such item of Supplies.
MTU shall at all times ensure that Supplies in its care, custody and
control or in the care, custody and control of any subcontractor do
not by its or its subcontractor's act or omission become the subject
of any lien, tax, charge, duty or encumbrance and MTU shall
indemnify Operator against all costs, expenses and damages which
Operator may incur or suffer by reason of MTU failing to carry out
its obligations under this Clause.
14.5 Lien
Except as otherwise provided in this Agreement, MTU shall ensure
that the Engines remain free and clear of all liens other than liens
arising by operation of the law.
14.6 Title to Parts
MTU shall ensure that full legal and beneficial title to Parts
incorporated into Engines during Services shall pass to the owner of
such Engines free and clear of all liens and encumbrances upon
re-delivery of such Engines to Operator.
14.7 Title to Exchanged Parts
Operator and MTU each represent and warrant that they will
accomplish transfer of the full legal title of any item exchanged
hereunder free and clear of all charges, liens and encumbrances.
Operator warrants the authorization of the owner of such items to
effect such exchange of title. Either Party will only with the prior
written consent of the other enter into any arrangement or
agreement which might prejudice or impair its ability to perform
its obligations under this Clause.
14.8 Assignment
Neither Party hereto may assign any of its rights or obligations
hereunder without prior written consent of the other Party except
that MTU may assign claims for monies due hereunder to a bank or to
a bank or other financial institution. Any assignment by MTU as
aforementioned shall be on terms that Operator's obligations
hereunder shall not be increased as a result of such assignments.
MTU shall remain liable for the performance of all its obligations
hereunder, notwithstanding any such assignment. Any assignment made
in
page 33 of 40
violation of this Clause shall be null and void.
14.9 Alterations and Amendments
This Agreement shall not be altered or amended in any way other than
by agreement in writing (to include telex) entered into by the
Parties after the date of this Agreement, which is expressly stated
to amend or alter this Agreement.
14.10 Negation of Waiver
Failure of either Party at any time to enforce any of the provisions
of this Agreement shall not be construed as a waiver or forbearance
by such Party of such provisions or in any way affect the validity
of this Agreement or part thereof.
14.11 Partial Invalidity
In case one or more of the provisions contained in this Agreement
should be or become fully or in part invalid, illegal or
unenforceable, the validity, legality or enforceability of the
remaining provisions contained in this agreement shall not be
affected in any way or impaired thereby, and the Parties shall to
the extent possible replace such invalid, illegal or unenforceable
provision(s) by another clause or clauses considering the economic
intention of the Parties.
14.12 Precedent
None of the provisions of this Agreement shall be considered by
either Party as precedent for any further agreements between the
Parties which relate to the same subject matter hereof.
14.13 Representative
Operator shall have the right to appoint a representative at MTU to
consult with MTU during performance of Services. All costs connected
with such appointment shall be borne by Operator.
If requested by Operator, MTU will appoint a representative in
Brasil to consult with Operator during performance of Services. All
costs associated with such appointment shall be borne by MTU.
14.14 Communication and Accommodation
MTU shall provide Operator's representative with reasonable office
space and adequate telephone access at MTU's expense.
page 34 of 40
14.15 Inspection
The appropriate airworthiness authorities and Operator's
representatives may at all reasonable times, upon advance notice,
inspect the performance of Services. Any such inspection shall not
constitute an acceptance of Services.
14.16 Training
MTU will provide training (class room and / or on site) for
Operator's personnel on the V2500 engine type on request of
Operator. *
14.17 Maintenance Cost Guarantees
Appendices E (1) and E (2) each contain the maintenance costs
guarantees granted by MTU to Operator in accordance with the terms
and conditions stated therein. In no event shall the maintenance
cost guarantees contained in Appendices E(l) or E(2) be applicable
unless the application of Appendix E(2) is more favorable to
Operator than is the application of Appendix E(l) in which event
Appendix E(2) shall become applicable for the differential (i.e. the
amount that Appendix E(2) is more favorable to Operator than
Appendix E(l)).
page 35 of 40
CLAUSE 15 DURATION AND TERMINATION
15.1 Subject to Clause 15.4 below, this Agreement shall become effective
on July 1, 1999 regardless of the date this Agreement is signed by
both Parties, and it shall automatically terminate and become null
and void on June 30, 2014. For any Purchase Orders placed prior to
the date of expiration or termination this Agreement shall continue
to be valid until fulfillment of all obligations of the Parties
thereunder.
15.2 The rights and obligations of the Parties under the following
clauses shall survive any termination or expiration of this
Agreement:
Clause 12 (WARRANTY)
Clause 13 (LIABILITY)
Clause 17 (APPLICABLE LAW AND ARBITRATION).
15.3 Termination
If either Operator or MTU makes an agreement with creditors
compounding debts, enters into liquidation whether compulsory or
voluntary (otherwise than for the purpose of amalgamation or
reconstruction), becomes insolvent, suffers a receiver of the whole
or parts of its assets to be appointed, or commits a breach of any
of its obligations under this Agreement (hereinafter collectively
"Termination Events"), the defaulting Party shall have thirty (30)
Days upon notification by the non-defaulting Party to remedy any
such Termination Event or provide an acceptable plan for the remedy
otherwise the non-defaulting Party shall have the right without
prejudice to its other rights or remedies under applicable laws
which rights or remedies shall be cumulative and not exclusive:
a) to terminate this Agreement or any Purchase Order hereunder by
written notice (to include telex), and
b) to stop any Work already commenced and to refuse to commence
any further Work.
For the avoidance of doubt, it is expressly agreed between the
Parties that Purchase Orders placed by Operator with MTU on or
before the effective date of termination shall continue to be
subject to the provisions of this Agreement.
page 36 of 40
15.4 Condition Precedent
The Agreement and its Annexes shall become effective subject to the
following conditions precedent being fulfilled:
a) MTU, not later than thirty (30) Days of execution of the Agreement
by the Parties, receives approval by its Board of Management to
enter into this transaction,
b) signature of the Engine Sale and Purchase Agreement relating to the
sale of up to twelve (12) V2500-A5 engines from Operator to MTU, and
c) signature of the Engine Lease Agreement between the Parties relating
to the lease of six (6) V2500-A5 engines from MTU to Operator.
page 37 of 40
CLAUSE 16 REPRESENTATIONS AND WARRANTIES
Each of the Parties hereby represents and warrants that:
16.1 It is a limited liability company duly constituted and validly
existing under the laws of its country of incorporation, its
obligations under and pursuant to this Agreement constitute its
legal, valid, binding and enforceable obligations (save to the
extent that enforcement may be limited by applicable bankruptcy,
insolvency, moratorium or other laws for the protection of creditors
and debtors generally and general principles of equity) and that
this Agreement has been duly executed by it;
16.2 The execution and delivery by it of this Agreement, the consummation
by it of any of the transactions contemplated hereby and compliance
by it with any of the terms and conditions hereof do not require any
consent of any trustee or holder of any indebtedness or other
obligation of it, violate any term or condition of its constitutive
documents, contravene any provision of or constitute or will
constitute a default under or pursuant to or result in any breach of
or the creation of any lien (other than as contemplated under this
Agreement) on or over any of its assets or any other agreement or
instrument to which it is party or by which it is bound;
16.3 No consent of, giving of notice to, registration with or taking of
any other action in respect of any government entity in its country
of incorporation is required for the execution by it of this
Agreement.
page 38 of 40
CLAUSE 17 LAW AND ARBITRATION
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York, United States of America, but
without giving effect to the principles of conflicts of laws
thereof. The United Nations Convention on Contracts for the
International Sale of Goods shall not govern this Agreement or the
rights and obligations of the Parties hereunder. Any and all
disputes arising out of or in connection with this Agreement between
the Parties shall be finally settled under the rules of the American
Arbitration Association by three (3) arbitrators. Each Party shall
name one (1) arbitrator within thirty (30) Days following
notification by the other Party; the two (2) arbitrators so chosen
shall then select a third arbitrator as chairman. Should one (1)
Party delay nomination of its arbitrator or if an arbitrator does
not take up his office or if he is prevented from taking up his
office at the correct time for any other reason, or if the two (2)
arbitrators cannot agree within thirty (30) Days as to the choice of
the chairman, the President of the American Arbitration Association
shall be asked to appoint such arbitrator. The Rules of Conciliation
and Arbitration of the American Arbitration Association shall apply
for the arbitration proceedings. The place of arbitration shall be
New York, New York, United States of America. All arbitration
filings and proceedings shall be in the English language.
A Party entitled under an award by the arbitrators to receive an
amount of money shall be entitled to recover its costs, including
reasonable attorneys' fees, incurred in preparing for and
participating in the arbitration proceeding and any ancillary
proceedings, including proceedings to compel or enjoin arbitration
or to request, confirm or set aside an award, in the same ratio as
the total amount of money ultimately awarded to such Party divided
by the amount claimed by such Party.
page 39 of 40
CLAUSE 18 NOTICES
Any notice or communication to be served pursuant to this Agreement
shall be sent by registered mail, telefax, telex or delivered
personally (and a copy - which shall not constitute notice hereunder
- shall also be promptly transmitted by e-mail to the other Party)
and shall be deemed to have been duly given when received by the
addressees under the following address:
For Operator:
TAM - Transportes Aereos Regionais S.A.
Xx. Xxxxxxxx, 000 - Xxxx 0 - Xxxxxx XXX
Attn. Xx. Xxxx Xxxxx
Contracts Director
Aeroporte - CEP 04072-000 Sao Paulo
Brasil
Phone: x00-00-0000-0000
Fax: x00-00-0000-0000
E-mail: xxxxx@xxx.xxx.xx
For MTU:
MTU Maintenance Hannover GmbH
Attn: General Counsel
Munchner Xxxxxxx 00
00000 Xxxxxxxxxxx
Xxxxxxx
Phone: x00-000-0000-000
Fax: x00-000-0000-000
E-mail: Andreas. Xxxxxx@xxx.xxx.xx
or such other place of business as may be notified in writing by the
other Party to this Agreement from time to time.
All notices, reports, certificates, data and communications
pertaining to this Agreement shall be in the English language. The
giving of any notice required hereunder may be waived in writing by
the Party entitled to receive such notice.
page 40 of 40
IN WITNESS WHEREOF, each of the Parties hereto has caused this
Agreement to be executed and delivered on its behalf by its
duly authorized representative(s) as of the Effective Date.
TAM - Transportes Aereos MTU Maintenance Hannover
Regionais S.A. GmbH
By By
------------------ ----------------------------
Title V. P. Title
By By
------------------ ----------------------------
Title Contracts Director Title General Counsel
----------------------------
APPENDIX A (1)
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APPENDIX A (2)
[this page is intentionally blank]
APPENDIX B
CHARGES
For Services the Operator shall pay the amounts invoiced in accordance with the
provisions hereunder:
1 Hourly Rate for Engine/Module Repair Work *
2 Fixed Price for test run, incl. fuel and oil *
3 Price of Spare Parts
All Parts supplied by MTU during Repair will be charged for prices at the
date as indicated in MTU's delivery note as follows:
3.1
Replacement Parts out of MTU' stock (if original Parts are determined
rejected)
- Parts according to the Manufacturer's Spare Parts Price List *
with a xxxx-up of limited to * per piece Part and * per line item
3.2
Used material supplied by MTU for the Service shall be charged at*
the Manufacturer's list price without surcharge
3.3
For all serviceable Parts supplied by MTU on a * *
exchange basis an exchange fee of on the current Manufacturer's list
prices shall be charged to the Operator limited to * per piece Part
and * per line item
4 In case of subcontracting the Operator will be charged a handling *
fee of on all vendor cost (outside vendor charges, transportation cost
(including all risks transportation insurance) of the applicable Part or
component)
5 The storage of a mutually agreed amount of Operator owned Parts at MTU's
facilities and maintaining a current inventory of those Parts will be free
of charge to the Operator. F.O.C.
6 Life Cycle Adjustment
For life cycle adjustment the following formula shall apply:
Cycles New - Cycles Used X Then Current Spare Parts Price Cycles New x 0,9
[ILLEGIBLE]
page 1 of 2
7 The charges for technical services provided at Operator's *
facilities are for a working day plus actual travel, hotel accommodation
and transfer costs.
8 All prices shall be valid * For each following calendar year the prices
will be adjusted in accordance with the escalation formulae contained in
Appendix C. Escalation for hourly rate is limited to *
page 2 of 2
APPENDIX C
ESCALATION FORMULAE
1. Labor Rate Escalation
The Labor rate will be adjusted [ * ] using the cumulated adjustment
factor for labor costs as published in [ * ]. MTU will inform the
Operator of the [ * ] variation of the factor for financial year in April
of the previous year. The change in the factor will reflect the actual
effects of labor costs incurred by MTU.
Escalation for hourly rate is limited to [ * ]
2. Material Price Escalation
Material prices [ * ] will be adjusted [ * ] using the [ * ]
page 1 of 1
page 1 of 8
BUNDESREPUBLIK DEUTSCHLAND
LUFTFAHRT-BUNDESAMT
[LOGO]
Mitglied der
a member of the
JOINT AVIATION AUTHORITIES
GENEHMIGUNGSURKUNDE
APPROVAL CERTIFICATE
GENEHMIGUNGSZEICHEN: LBA. 000
GemaB den zur Zeit gultigen Rechtsvorschriften und abhangig von der
Einhaltung der nachfolgend aufgefuhrten Bedingungen genehmigt das
Luftfahrt-Bundesamt
Pursuant to the National Regulations for the time being in force and subject
to the conditions specified below, the Luftfahrt-Bundesamt hereby
Certifies
MTU Maintenance Gmbh
als JAR-145 Instandhaltungsbetrieb fur die Instandhaltung der
Luftfahrtgerate, die in dem anliegenden Anhang zur Genehmigung aufgefuhrt
sind, und fur die Erteilung der zugehorigen Freigabebescheinigungen unter
dem vorgenannten Genehmigungszeichen.
as a JAR-145 maintenance organisation approved to maintain the products listed
in the attached approval schedule and issue related certificates of
release to service using the above reference.
Bedingungen:
Conditions:
1. Diese Genehmigung ist beschrankt auf die im Abschnitt "Umfang der
Genehmigung" des genehmigten JAR-145 Instandhaltungbetriebshandbuches
aufgefuhrte Instandhaltung und
This approval is limited to that specified in the scope of approval
section of the jar-145 approved maintenance organisation exposition, and
2. Diese Genehmigung erfordert die Einhaltung der Verfahren, die in dem
genehmigten JAR-143 Instandhaltungsbe-triebshandbuch festgelegt sind, und
This approval requires compliance with the procedures specified in the
jar-145 approved maintenance organisation exposition, and
3. Diese Genehmigung ist gultig, xxxxxxx xxx xxxxxxxxxx XXX-000
Instandhaltungsbetrieb die Vorschriften der JAR-145 erfullt.
This approval is valid whilst the jar-145 approved maintenance
organisation remains in compliance with jar-145.
Abhangig von der Erfullung der vorstehenden Bedingungen bleibt diese Genehmigung
bis zum im Anhang zur Genehmigung genannten Datum gultig, es sei denn, sie wird
vorzeitig zuruckgegeben, einstweilig aubetaer Kraft gesetzt oder widerrufen.
Subject to compliance with foregoing conditions, this approval shall remain
valid until the date of expiry specified in the approval schedule unless the
approval has been surrendered, suspended or revoked.
Xxxxxxxxxxxx, 00. Xxx 0000 Xxxxxxxxx-Xxxxxxxxx
Im Auftrag
page 2 of 0
Xxxxxx xxx Xxxxxxxxxxx
Approval Schedule
Firmenbezeichnung: MTU Maintenance Hannover
Company: Xxxxxxxx XxxxXx 00
00000 Xxxxxxxxxxx
Genehmigungszeichen: LBA.0008
Approval reference:
Diese Genehmigung wird erteilt fur folgende Standorte:
This approval is limited for following locations:
MTU Maintenance Hannover
Airport Hannover
Xxxxxxxx XxxxXx 00
00000 Xxxxxxxxxxx
Luftfahrt-Bundesamt
Im Auftrag
/s/ Xxxxxx
-------------------
Xxxxxx SEITE 1 VON 4
Page 1 of 4
Revision 06
page 3 of 0
Xxxxxx xxx Xxxxxxxxxxx
Approval Schedule
Firmenbezeichnung: MTU Maintenance Hannover
company: Xxxxxxxx XxxxXx 00
00000 Xxxxxxxxxxx
Klasse Berechtigung Einschrankung
Class Rating Limitation
Flugmotoren B1 Turbinenflugmotoren
- General Electric
Engines Turbine Engines -CF 6 series
-CFM-56 series
- Xxxxx & Xxxxxxx
-XX 2000 series
- International Aero Engines
-V2500 series
- Rolls Xxxxx
- XX 211 series
Luftfahrt-Bundesamt
Im Auftrag
/s/ Xxxxxx
------------------
Xxxxxx SEITE 2 VON 4
Page 2 of 4
Revision 06
page 4 of 0
Xxxxxx xxx Xxxxxxxxxxx
Approval Schedule
Firmenbezeichnung: MTU Maintenance Hannover
company: Xxxxxxxx XxxxXx 00
00000 Xxxxxxxxxxx
Klasse Berechtigung Einschrankung
Class Rating Limitalion
Bauteile ausgenommen C7 Flugmotoren und Baugruppen und
vollstandige Flugmotoren Hilfskraftanlagen Komponenten gem.
und Hilfskraftanlagen MTU-H Cap. List Nr.
PHF 5040 D.
Components other than complete Engine and APUs Moduls and components
engines or APUs according to MTU-H Cap.
List Nr. PHF 5040 D.
Luftfahrt-Bundesamt
Im Auftrag
/s/ Xxxxxx
-------------------
Xxxxxx SEITE 3 VON 4
Page 3 of 4
Revision 06
page 5 of 0
Xxxxxx xxx Xxxxxxxxxxx
Approval Schedule
Firmenbezeichnung: MTU Maintenance Hannover
company: Xxxxxxxx XxxxXx 00
X-00000 Xxxxxxxxxxx
Klasse Berechtigung Einschrankung
Class Rating Limitation
Besondere Prozesse D1 Zerstorungsfreie
Prufungen -Ultraschallprufung
ultrasonic inspection
MIL-STD 2154
Specialised Services Non destructive -Durchstahlungsprufung
Inspection radiographic inspection
ASTM-E-1742
-Magnetpulverprufung
magnetic particle inspection
per DIN 00000/XXXX-X-0000
-Xxxxxxxxxxxxxxx
penetrant inspection
per DIN54152/ASTM-E-1417
-Wirbelstromprufung
eddy current inspection
MIL-STD 1537
Dieser Anhang zur Genehmigung ist beschrankt auf die Luftfahrtgerate und
Arbeiten, die im genehmigten JAR-145 Instandhaltungsbetriebshandbuch LBA.0008
aufgefuhrt sind.
This approval schedule is limited to those products and activities specified in
the scope of approval section contained in JAR-145 approved maintenance
organisation exposition LBA.0008.
Xxxxxxxxxxxxxxxxxxx xxx Xxxxxxxxxxx: 00. Marz 1999 bis 02. Marz 2001
Approval validity period:
Ausstellungsdatum: 23. Februar 1999
Date of issue:
Luftfahrt-Bundesamt
Im Auftrag
/s/ Xxxxxx
-------------------
Xxxxxx SEITE 4 VON 4
Page 4 of 4
Revision 06
page 6 of 8
UNITED STATES OF AMERICA
DEPARTMENT_OF TRANSPORTATION
FEDERAL AVIATION ADMINISTRATION
Air Agency Certificate
Number CQ5Y788M
This certificate is issued to
MTU-MAINTENANCE HANNOVER GMBH
whose business, address is
MUNCHNER XXXXXXX 00
00000 XXXXXXXXXXX, XXXXXXX
upon finding that its organization complies in all respects with the
requirements of the Federal Aviation Regulations relating to the establishment
of an Air Agency; and is empowered to operate an approved REPAIR STATION
with the following ratings:
LIMITED ENGINE (5/27/99)
LIMITED NONDESTRUCTIVE TESTING & INSPECTION (5/27/99))
This certificate; unless canceled suspended; or revoked shall continue in
effect UNTIL MARCH 2, 2001
Date issued: MAY 27,1999 /s/ Xxxxxxx X. Xxxxx
--------------------------------------------
MARCH 2,1984 XXXXXXX X. XXXXX
------------------------ --------------------------------------------
ORIGINAL ISSUE DATE ACTING MANAGER, INTERNATIONAL FIELD OFFICE
This Certificate is not Transferable, AND ANY MAJOR CHANGE IN THE BASIC
FACILITIES, OR IN THE LOCATION THE REOF, SHALL BE IMMEDIATELY REPORTED TO THE
APPROPRIATE REGIONAL OFFICE OF THE FEDERAL AVIATION ADMINISTRATION
FAA Form 8000-4 (1-67) SUPERSEDES FAA FORM 390.
page 7 of 8
UNITED STATES OF AMERICA
DEPARTMENT OF TRANSPORTATION
FEDERAL AVIATION ADMINISTRATION
Repair Station Operations Specifications
(Continuation)
Limitations PAGE 1 OF 2
The rating (s) set forth are Air Agency Certificate Number CQ5Y788M is/are
the following: limited to
MTU-MAINTENANCE HANNOVER GMBH IS PERFORMING MAINTENANCE AND/OR ALTERATIONS OF
AERONAUTICAL PRODUCTS TO BE INSTALLED ON U.S. REGISTERED AIRCRAFT UNDER THE
TERMS AND CONDITIONS OF A BILATERAL AVIATION SAFETY AGREEMENT AND ASSOCIATED
MAINTENANCE IMPLEMENTATION PROCEDURES AGREEMENT BETWEEN THE UNITED STATES AND
THE FEDERAL REPUBLIC OF GERMANY.
LIMITED RATINGS:
ENGINE
GENERAL ELECTRIC -MODEL CF6 SERIES.
XXXXX & XXXXXXX -MODEL PW2000 SERIES.
INTERNATIONAL AERO ENGINES -MODEL V2500 SERIES.
CFM INTERNATIONAL S.A. -MODEL CFM 56-7 SERIES (NOTE 1)
NOTE1: MINOR MAINTENANCE AND REMOVAL AND REPLACEMENT OF MIDULES ONLY. NO
OVERHAUL OF MODULES.
NONDESTRUCTIVE TESTING
& INSPECTION RADIOGRAPHIC
ULTRASONIC
Delegated authorities: NONE
Date issued or For the Administration
/s/ XXXXXX X. XXXXXXXX
---------------------------------------
MAY 27, 1999 XXXXXX X. XXXXXXXX
AVIATION SAFETY INSPECTOR
FAA Form 8000 -- 4 -- FORMERLY FAA FORM 390.1 PAGE 2
page 8 of 8
UNITED STATES OF AMERICA
DEPARTMENT OF TRANSPORTATION
FEDERAL AVIATION ADMINISTRATION
Repair Station Operations Specifications
(Continuation)
Limitations:
PAGE 2 OF 2
The rating(s) set forth one Air Agency Certificate Number CQ5Y788M is/are
the following: limited to
LIMITED RATINGS: (CONT.)
NONDESTRUCTIVE TESTING (CONT.)
& INSPECTION MAGNETIC PARTICLE
DYE PENETRANT
EDDY CURRENT
ALL NONDESTRUCTIVE TESTING PERSONNEL QUALIFICATION AND CERTIFICATION TO BE
IN ACCORDANCE WITH NAS-AIA-410 OR FAA APPROVED EQUIVALENT CERTIFICATION.
EXEMPTION: MTU - MAINTENANCE GMBH IS AUTHORIZED TO CONTRACT OUT THE
MAINTENANCE AND REPAIR OF ENGINE COMPONENTS ON INTERNATIONAL AERO ENGINES
AG (IAE) MODEL V2500 TURBINE ENGINES TO FACILITIES THAT ARE NOT
CERTIFICATED REPAIR STATIONS, U.S. ORIGINAL EQUIPMENT LICENSEES FOR SUCH
ENGINES, IN ACCORDANCE WITH FAA EXEMPTION NO 5337C, VALID UNTIL AUGUST 31,
2000.
Delegated authorities: NONE
Date issued or For the Administrator:
/S/ XXXXXX X. XXXXXXXX
----------------------------------------
XXXXXX X. XXXXXXXX
AVIATION SAFETY INSPECTOR
FAA Form 8000- FORMERLY FAA FORM 390.l PAGE 0
XXXXXXXX X (1)
V2500 MAINTENANCE COST GUARANTEE
I INTRODUCTION
MTU assures Operator that upon expiration of this Agreement commencing with
Operator's first commercial operation of Aircraft powered by V2500 Engines, the
cumulative cost of Eligible Maintenance for Engines will not, subject to
escalation, exceed a Guaranteed Cost Rate per Engine Flight Hour. Operator has a
choice of either $39.00 (1/97) per Engine Flight Hour for Parts Costs and
Outside Service Costs plus an average of 1800 Manhours per Eligible Shop Visit
for Labor with an MTU sharing of 75% of excess costs, or $ 40.00 (1/97) per
Engine Flight Hour for Parts Costs and Outside Service Costs plus an average of
1800 Manhours per Eligible Shop Visit for Labor with an MTU sharing of 100% of
excess costs. Under this Guarantee, if the cumulative cost per Engine Flight
Hour for Eligible Maintenance of Operator's Engines over the period of this
Guarantee exceeds the escalated Guaranteed Cost Rate, MTU will credit Operator's
account with MTU the appropriate amount of the excess.
II GUARANTEE
A. Period of Guarantee
The Period of Guarantee will start on the date Operator initiates
commercial operation on its first Aircraft powered by Engines and
will terminate upon expiration of this Agreement on June 30, 2014.
B. Eligible Maintenance
Eligible Maintenance shall comprise maintenance of Engines or Parts
thereof required for the following reasons:
1. a Failure of a Part in such Engines;
2. foreign object damage caused by the ingestion of birds,
hailstones or runway gravel;
3. an Airworthiness Directive issued by the applicable
Certification Authority; and
4. maintenance as specified in the Shop Handling Guide or as
otherwise recommended by MTU or the OEM.
page 1 of 8
C. Eligible Maintenance Costs
Eligible Maintenance Costs shall comprise:
i) Parts Costs which shall comprise the costs of Operator of all
Parts removed from Engines during Eligible Maintenance which
are unfit for further service except Parts removed upon expiry
of their Limited Life and vendor proprietary accessories and
parts therein;
ii) Labor Costs which shall comprise direct shop labor man hours
actually incurred during Eligible Maintenance valued at the
labor rate established by MTU for Operator (which labor rate
shall be nondiscriminatory based on general industry practices
and standards); and
iii) Outside Services Costs which shall comprise costs invoiced to
Operator for Eligible Proprietary Repair Maintenance
undertaken by outside contractors approved by MTU (approval
not to be unreasonably withheld).
D. Net Maintenance Cost
Within thirty (30) days following to each anniversary of the
commencement of the Period of Guarantee, Operator will report to MTU
the Eligible Maintenance Costs incurred by Operator during the
preceding year together with a statement of any contributions
received from MTU, the OEM or other third parties towards such
Eligible Maintenance Costs. Within the following sixty (60) days,
MTU and Operator will jointly calculate the Net Maintenance Cost for
that year making appropriate reductions for contributions received
by Operator from the OEM and third parties and for disallowed costs
incurred by Operator on maintenance undertaken contrary to OEM or
MTU recommendations or otherwise excluded from this Guarantee.
E. Guaranteed Maintenance Cost
Within thirty (30) days following each anniversary of the
commencement of the Period of Guarantee, Operator will report to MTU
the Flight Hours of Engines operated by Operator in the preceding
year. Within the following sixty (60) days, MTU and Operator will
jointly calculate the Guaranteed Maintenance Cost for Operator for
that year using the following formula:
GMC = A x Escalated GCR
where:
A is the flight hours of Engines operated by Operator in that
year;
page 2 of 8
Escalated GCR is the Escalated Guaranteed Cost Rate for that
year;
and the Escalated Guaranteed Cost Rate for any year is calculated by
determining the arithmetic average of the Guaranteed Cost Rates
calculated for each month of that year using the escalation formula
set forth in Article VII below for the base month of January 1997.
F. Annual Settlement
Within one hundred and twenty (120) days following the second and each
subsequent anniversary of the commencement of the Period of Guarantee, MTU
will credit Operator's account with MTU an amount equal to either 75% or
100% (based on Operator's plan selection) of the difference between the
sum of the Net Maintenance Costs for each preceding year and the sum of
the Guaranteed Maintenance Costs for each preceding year. If subsequent
annual calculations show that on a cumulative basis, a previous interim
credit (or portion thereof) was excessive, such excess amount shall be
subject to repayment which will be effected by MTU issuing a debit against
Operator's account with MTU.
III DEFINITIONS
A. CAMPAIGN CHANGE is an IAE International Aero Engines AG program, so
designated in writing, for the Reoperation, replacement, addition or
deletion of Part(s) and is characterized by the granting of certain Credit
Allowances to the Operator when such program recommendations are complied
with by the Operator.
B. COMMERCIAL AVIATION USE is the operation of Engines in Aircraft used for
commercial, corporate or private transport purposes.
C. DIRECT DAMAGE is the damage suffered by a Part itself upon its Failure.
D. ECONOMICALLY REPAIRABLE shall generally mean that the cost of the repair
as determined by MTU, exclusive of modification and transportation costs,
will be equal to or less than sixty-five percent (65%) of the MTU
commercial price of the Part at the time the repair is considered, or,
shall be otherwise reasonably determined by MTU.
E. ENGINE OR MODULE TIME is the total number of flight hours of operation of
an Engine or a Module.
F. EXPENDABLE PARTS means those nonreusable Parts, as determined by MTU,
which are required to be replaced during inspection or Reconditioning,
regardless of the condition of the Part.
G. FAILURE (FAILED) is the breakage, injury, or malfunction of a Part
rendering it unserviceable and incapable of continued operation without
corrective action.
H. MODULEC(S) means any one or more of the following assemblies of Parts:
page 3 of 8
page 3 of 8
Fan Assembly and Low Pressure Compressor Assembly
High Pressure Compressor Assembly
High Pressure Turbine Assembly
Low Pressure Turbine Assembly
Main gearbox
Any other Assembly of Parts so designated by MTU.
I. PARTS CYCLE(S) means the aggregate total number of times a Part completes
an Aircraft takeoff and landing cycle, whether or not thrust reverse is
used on landing. As pilot training will involve extra throttle transients
such a touch and go landings and takeoffs, MTU shall evaluate such
transients for Parts Cycle determination.
J. PARTS LIFE LIMIT is the maximum allowable total Parts Time or total Parts
Cycles for specific Parts, including Reoperation if applicable, as
established by MTU or by the United States Federal Aviation
Administration. Parts Life Limits are published in the Time Limits Section
(Chapter 05) of the applicable V2500 Series Engine Manual.
K. PARTS REPAIR means the MTU designated restoration of Failed Parts to
functional serviceable status, excluding repair of normal wear and tear,
as determined by MTU.
L. PARTS TIME is the total number of flight hours of operation of a Part.
M. REOPERATION is the alteration to or modification of a Part.
N. RESULTANT DAMAGE is the damage suffered by a Part because of the Failure
of another Part within the same Engine.
O. SCRAPPED PARTS (SCRAP, SCRAPPED, SCRAPPAGE) shall mean those Parts
determined by MTU to be unserviceable and not Economically Repairable. The
Operator shall cause such Parts to be mutilated or disposed of in such a
manner as to preclude any possible further use as an Engine Part.
page 4 of 8
IV GENERAL CONDITIONS
Engines and Engine Maintenance excluded by the General Conditions
contained in this Article IV shall be excluded from this Guarantee except
that Engine Maintenance resulting from ingestion of birds, hailstones or
runway gravel shall be included as Eligible under this Guarantee.
The following general conditions govern the application of this Guarantee:
A. Records and Audit
The Operator shall maintain adequate records for the administration
of this Guarantee and shall permit MTU to audit such records at
reasonable intervals.
B. Exclusions from Guarantee
This Guarantee will not apply to any Engine, Module or Part if it
has been determined to the reasonable satisfaction of MTU that said
Engine, Module or Part has Failed because it:
1. Has not be properly installed or maintained in accordance with
OEM and/or MTU recommendations unless such improper
installation or maintenance was performed by MTU, or
2. Has been used contrary to the operating and maintenance
instructions or recommendation authorized or issued by the OEM
and/or MTU and current at the time, or
3. Has been repaired or altered other than by an FAA certified
V2500 Repair Station in such a way as to impair its safety,
operation or efficiency, or
4. Has been subjected to:
a. Misuse, neglect, or accident, or
b. Ingestion of foreign material, or
5. Has been affected in any way by a part not defined as a Part
herein, or
6. Has been affected in any way by occurrences not associated
with ordinary use, such as, but not limited to, acts of war,
rebellion, seizure or other belligerent acts.
C. Assignment of Guarantee
This Guarantee shall not be assigned, either in whole or in part,
by either Party.
page 5 of 8
V SPECIFIC CONDITIONS
A. The Guaranteed Cost Rate is predicated on the use by Operator of:
1. An average flight cycle of no less than 1.4 hours for the A319
Aircraft and 2.0 hours for the A320 Aircraft;
2. Thrust levels which are derated an average of ten percent
(10%) for Takeoff relative to full Takeoff ratings;
3. An Average Aircraft utilization equal to or less than 2,700
flight hours per year for the A319 Aircraft and 3,000 flight
hours per year for the A320 Aircraft;
4. An Aircraft and Engine delivery schedule in respect of thirty
eight (38) aircraft as set out in Appendix A(2) and eight (8)
spare engines, and
5. An average ambient temperature at Takeoff which is no greater
than ISA + 4 degrees C.
B. MTU reserves the right to make appropriate adjustments to the
Guaranteed Rate if there is, during the Period of Guarantee, (a) a
variation from the Specific Conditions upon which the Guaranteed
Rate is predicated (including, but not limited to Operator's
acquisition of additional option Aircraft and/or additional spare
Engines), or (b) a discontinuation of operation by TAM of any Engine
or any V2500 powered Aircraft subsequent to delivery to TAM.
Appendix F contains an adjustment chart to allow for adjustment by
MTU of the Guaranteed Cost Rate if the actual Flight Hour/Flight
Cycle ratio deviates from the ratios contained in paragraph A. 1.
above.
C. In the event credits are issued under Section II above, such credits
will first to the extent reasonably required be dedicated to the
procurement of Parts identified within a reasonable time aimed at
correction of the situations contributing to excess Engine
Maintenance Costs. Accordingly, Operator and MTU will establish
jointly the modifications or Parts to be selected, and Operator will
incorporate the changes into Engines. Otherwise, such credits may be
used to procure Supplies or Services from MTU.
D. Upon signing of this Agreement, TAM shall advise MTU in writing of
its selection of either the 75 % of excess cost option or the 100%
of excess cost option.
E. Operator may only select this guarantee or a Fleet Hour Agreement
with MTU. This Guarantee does not apply if Operator elects a
Fly-by-Hour Agreement with MTU.
page 6 of 8
VI EXCLUSION OF BENEFITS
The intent of this Guarantee is to provide specified benefits to Operator
as a result of the failure of Engines to achieve the maintenance cost
level stipulated in the Guarantee. It is not the intent, however, to
duplicate benefits provided to Operator by MTU, the OEM or any other third
party under any other applicable guarantee, sales warranty, service
policy, or any special benefit of any kind as a result of the same
failure. Therefore, the terms and conditions of this Guarantee
notwithstanding, if the terms of this Guarantee should make duplicate
benefits available to Operator from MTU, the OEM or any other third party,
Operator may elect to receive the benefits under this Guarantee or under
any of the other benefits described above, but not both.
VII ESCALATION FORMULA
1. The Basic Guaranteed Cost Rate expressed to be subject to escalation
from a base month to a month of delivery or other date of
determination will be subject to adjustment in accordance with the
following formula:
P = Pb (0.60 L + 0.30 M + 0.10 E)
--- --- ---
Lo Mo Eo
Where:
P = The escalated Guaranteed Cost Rate.
Pb = The Basic Guaranteed Cost Rate value.
Lo = The "Average Hourly Earnings of Aircraft Engine and Engine
Parts Production Workers" SIC Code 3724 published by the
Bureau of Labor Statistics in the U.S. Department of Labor for
the month preceding the Base Month by four months.
L = The "Average Hourly Earnings of Aircraft Engine and Engine
Parts Production Workers" SIC Code 3724 for the month
preceding the month of delivery or other date of determination
by four months.
Mo = The "Producer Price Index, Code 10, For Metals and Metal
Products" published by the Bureau of Labor Statistics in the
U.S. Department of Labor for the month preceding the Base
Month by four months.
M = The "Producer Price Index, Code 10, For Metals and Metal
Products" for the month preceding the month of delivery or
other date of determination by four months.
Eo = The "Producer price Index, Code 5, For Fuel and Related
Products and Power" published by the Bureau of Labor
Statistics in the U.S. Department of Labor for the month
preceding the Base Month by four months.
page 7 of 8
E = The "Producer Price Index, Code 5, For Fuel and Related
Products and Power" for the month preceding the month of
delivery or other date of determination by four months.
2. The values of the factors 0.60 L and 0.30 M and 0.10 E
--- --- ----
Lo Mo Eo
respectively, shall be determined to the nearest forth decimal
place. If the fifth decimal is five or more, the forth decimal place
shall be raised to the next higher number.
3. If the U.S. Department of Labor ceases to publish the above
statistics or modifies the basis of their calculation, then MTU may
substitute any officially recognized and substantially equivalent
statistics.
4. The Basic Guaranteed Cost Rate contained in this Appendix E is
subject to escalation from a Base Month of January 1997 to the month
of delivery using Lo, Mo and Eo values for September 1996.
5. If the application of the formula contained in this Appendix E
results in a Cost Rate which is lower than the Basic Guaranteed Cost
Rate, the Basic Guaranteed Cost Rate will be deemed to be the
Guaranteed Cost Rate.
6. For greater clarity, the escalation formula contained in this
Article VII shall only apply for purposes of this Guarantee.
page 8 of 0
XXXXXXXX X (2)
V2500 MAINTENANCE COST GUARANTEE
I INTRODUCTION
MTU assures Operator that upon expiration of this Agreement commencing with
Operator's first commercial operation of Aircraft powered by V2500 Engines, the
cumulative cost of Eligible Maintenance for Engines will not, subject to
escalation, exceed a Guaranteed Cost Rate per Engine Flight Hour. Operator has a
choice of either $38.70 (1/97) per Engine Flight Hour for Parts Costs and
Outside Service Costs plus an average of 1800 Manhours per Eligible Shop Visit
for Labor with an MTU sharing of 75% of excess costs, or $ 39.70 (1/97) per
Engine Flight Hour for Parts Costs and Outside Service Costs plus an average of
1800 Manhours per Eligible Shop Visit for Labor with an MTU sharing of 100% of
excess costs. Under this Guarantee, if the cumulative cost per Engine Flight
Hour for Eligible Maintenance of Operator's Engines over the period of this
Guarantee exceeds the escalated Guaranteed Cost Rate, MTU will credit Operator's
account with MTU the appropriate amount of the excess.
II GUARANTEE
A. Period of Guarantee
The Period of Guarantee will start on the date Operator initiates
commercial operation on its first Aircraft powered by Engines and
will terminate upon expiration of this Agreement on June 30, 2014.
B. Eligible Maintenance
Eligible Maintenance shall comprise maintenance of Engines or Parts
thereof required for the following reasons:
1. a Failure of a Part in such Engines;
2. foreign object damage caused by the ingestion of birds,
hailstones or runway gravel;
3. an Airworthiness Directive issued by the applicable
Certification Authority; and
4. maintenance as specified in the Shop Handling Guide or as
otherwise recommended by MTU.
C. Eligible Maintenance Costs
Eligible Maintenance Costs shall comprise:
i) Parts Costs which shall comprise the costs of Operator of all
Parts removed from Engines during Eligible Maintenance which
are unfit for further service except Parts removed upon expiry
of their Limited Life and vendor proprietary accessories and
parts therein;
page 1 of 8
ii) Labor Costs which shall comprise direct shop labor man hours
actually incurred during Eligible Maintenance valued at the
labor rate established by MTU for Operator (which labor rate
shall be nondiscriminatory based on general industry practices
and standards); and
Outside Services Costs which shall comprise costs invoiced to
Operator for Eligible Proprietary Repair Maintenance undertaken by
outside contractors approved by MTU (approval not to be unreasonably
withheld).
D. Net Maintenance Cost
Within thirty (30) days following to each anniversary of the
commencement of the Period of Guarantee, Operator will report to MTU
the Eligible Maintenance Costs incurred by Operator during the
preceding year together with a statement of any contributions
received from MTU, the OEM or other third parties towards such
Eligible Maintenance Costs. Within the following sixty (60) days,
MTU and Operator will jointly calculate the Net Maintenance Cost for
that year making appropriate reductions for contributions received
by Operator from MTU and third parties and for disallowed costs
incurred by Operator on maintenance undertaken contrary to MTU
recommendations or otherwise excluded from this Guarantee.
E. Guaranteed Maintenance Cost
Within thirty (30) days following each anniversary of the
commencement of the Period of Guarantee, Operator will report to MTU
the Flight Hours of Engines operated by Operator in the preceding
year. Within the following sixty (60) days, MTU and Operator will
jointly calculate the Guaranteed Maintenance Cost for Operator for
that year using the following formula:
GMC = A x Escalated GCR
where:
A is the flight hours of Engines operated by Operator in that
year;
Escalated GCR is the Escalated Guaranteed Cost Rate for that
year;
and the Escalated Guaranteed Cost Rate for any year is calculated by
determining the arithmetic average of the Guaranteed Cost Rates
calculated for each month of that year using the escalation formula
set forth in Article VII below for the base month of January 1997.
page 2 of 8
F. Annual Settlement
Within one hundred and twenty (120) days following the second and
each subsequent anniversary of the commencement of the Period of
Guarantee, MTU will credit Operator's account with MTU an amount
equal to either 75% or 100% (based on Operator's plan selection) of
the difference between the sum of the Net Maintenance Costs for each
preceding year and the sum of the Guaranteed Maintenance Costs for
each preceding year. If subsequent annual calculations show that on
a cumulative basis, a previous interim credit (or portion thereof)
was excessive, such excess amount shall be subject to repayment
which will be effected by MTU issuing a debit against Operator's
account with MTU.
III DEFINITIONS
A. CAMPAIGN CHANGE is an IAE International Aero Engines AG program, so
designated in writing, for the Reoperation, replacement, addition or
deletion of Part(s) and is characterized by the granting of certain Credit
Allowances to the Operator when such program recommendations are complied
with by the Operator.
B. COMMERCIAL AVIATION USE is the operation of Engines in Aircraft used for
commercial, corporate or private transport purposes.
C. DIRECT DAMAGE is the damage suffered by a Part itself upon its Failure.
D. ECONOMICALLY REPAIRABLE shall generally mean that the cost of the repair
as determined by MTU, exclusive of modification and transportation costs,
will be equal to or less than sixty-five percent (65%) of the MTU
commercial price of the Part at the time the repair is considered, or,
shall be otherwise reasonably determined by MTU.
E. ENGINE OR MODULE TIME is the total number of flight hours of operation of
an Engine or a Module.
F. EXPENDABLE PARTS means those nonreusable Parts, as determined by MTU,
which are required to be replaced during inspection or Reconditioning,
regardless of the condition of the Part.
G. FAILURE (FAILED) is the breakage, injury, or malfunction of a Part
rendering it unserviceable and incapable of continued operation without
corrective action.
H. MODULE(S) means any one or more of the following assemblies of Parts:
Fan Assembly and Low Pressure Compressor Assembly
High Pressure Compressor Assembly
High Pressure Turbine Assembly
Low Pressure Turbine Assembly
Main gearbox
page 3 of 8
Any other Assembly of Parts so designated by MTU.
I. PARTS CYCLE(S) means the aggregate total number of times a Part completes
an Aircraft takeoff and landing cycle, whether or not thrust reverse is
used on landing. As pilot training will involve extra throttle transients
such a touch and go landings and takeoffs, MTU shall evaluate such
transients for Parts Cycle determination.
J. PARTS LIFE LIMIT is the maximum allowable total Parts Time or total Parts
Cycles for specific Parts, including Reoperation if applicable, as
established by MTU or by the United States Federal Aviation
Administration. Parts Life Limits are published in the Time Limits Section
(Chapter 05) of the applicable V2500 Series Engine Manual.
K. PARTS REPAIR means the MTU designated restoration of Failed Parts to
functional serviceable status, excluding repair of normal wear and tear,
as determined by MTU.
L. PARTS TIME is the total number of flight hours of operation of a Part.
M. REOPERATION is the alteration to or modification of a Part.
N. RESULTANT DAMAGE is the damage suffered by a Part because of the Failure
of another Part within the same Engine.
O. SCRAPPED PARTS (SCRAP, SCRAPPED, SCRAPPAGE) shall mean those Parts
determined by MTU to be unserviceable and not Economically Repairable. The
Operator shall cause such Parts to be mutilated or disposed of in such a
manner as to preclude any possible further use as an Engine Part.
page 4 of 8
IV GENERAL CONDITIONS
Engines and Engine Maintenance excluded by the General Conditions
contained in this Article IV shall be excluded from this Guarantee except
that Engine Maintenance resulting from ingestion of birds, hailstones or
runway gravel shall be included as Eligible under this Guarantee.
The following general conditions govern the application of this Guarantee:
A. Records and Audit
The Operator shall maintain adequate records for the administration
of this Guarantee and shall permit MTU to audit such records at
reasonable intervals.
B. Exclusions from Guarantee
This Guarantee will not apply to any Engine, Module or Part if it
has been determined to the reasonable satisfaction of MTU that said
Engine, Module or Part has Failed because it:
1. Has not be properly installed or maintained in accordance with
OEM and/or MTU recommendations unless such improper
installation or maintenance was performed by MTU, or
2. Has been used contrary to the operating and maintenance
instructions or recommendation authorized or issued by the OEM
and/or MTU and current at the time, or
3. Has been repaired or altered other than by an FAA certified
V2500 Repair Station in such a way as to impair its safety,
operation or efficiency, or
4. Has been subjected to:
a. Misuse, neglect, or accident, or
b. Ingestion of foreign material, or
5. Has been affected in any way by a part not defined as a Part
herein, or
6. Has been affected in any way by occurrences not associated
with ordinary use, such as, but not limited to, acts of war,
rebellion, seizure or other belligerent acts.
C. Assignment of Guarantee
This Guarantee shall not be assigned, either in whole or in part, by
either Party.
page 5 of 8
V SPECIFIC CONDITIONS
A. The Guaranteed Cost Rate is predicated on the use by Operator of:
1. An average flight cycle of no less than 1.4 hours for the A319
Aircraft and 2.0 hours for the A320 Aircraft;
2. Thrust levels which are derated an average of ten percent
(10%) for Takeoff relative to full Takeoff ratings;
3. An Average Aircraft utilization equal to or less than 2,700
flight hours per year for the A319 Aircraft and 3,000 flight
hours per year for the A320 Aircraft;
4. An Aircraft and Engine delivery schedule in respect of thirty
eight (38) aircraft as set out in Appendix A (2) and eight (8)
spare engines, and;
5. An average ambient temperature at Takeoff which is no greater
than ISA +4(degree) C.
B. MTU reserves the right to make appropriate adjustments to the
Guaranteed Rate if there is, during the Period of Guarantee, a
variation from the Specific Conditions upon which the Guaranteed
Rate is predicated (including, but not limited to Operator's
acquisition of additional option Aircraft and/or additional spare
Engines). Appendix F contains an adjustment chart to allow for
adjustment by MTU of the Guaranteed Cost Rate if the actual Flight
Hour/Flight Cycle ratio deviates from the ratios contained in
paragraph A. 1. above. Otherwise, such credits may be used to
procure Supplies or Services from MTU.
C. In the event credits are issued under Section II above, such credits
will first to the extent reasonably required be dedicated to the
procurement of Parts identified within a reasonable time aimed at
correction of the situations contributing to excess Engine
Maintenance Costs. Accordingly, Operator and MTU will establish
jointly the modifications or Parts to be selected, and Operator will
incorporate the changes into Engines.
D. Upon signing of this Agreement, TAM shall advise MTU in writing of
its selection of either the 75 % of excess cost option or the 100%
of excess cost option.
E. Operator may only select this guarantee or a Fleet Hour Agreement
with MTU. This Guarantee does not apply if Operator elects a
Fly-by-Hour Agreement with MTU.
page 6 of 8
VI EXCLUSION OF BENEFITS
The intent of this Guarantee is to provide specified benefits to Operator
as a result of the failure of Engines to achieve the maintenance cost
level stipulated in the Guarantee. It is not the intent, however, to
duplicate benefits provided to Operator by MTU, the OEM or any other third
party under any other applicable guarantee, sales warranty, service
policy, or any special benefit of any kind as a result of the same
failure. Therefore, the terms and conditions of this Guarantee
notwithstanding, if the terms of this Guarantee should make duplicate
benefits available to Operator from MTU, the OEM or any other third party,
Operator may elect to receive the benefits under this Guarantee or under
any of the other benefits described above, but not both.
VII ESCALATION FORMULA
1. The Basic Guaranteed Cost Rate expressed to be subject to escalation
from a base month to a month of delivery or other date of
determination will be subject to adjustment in accordance with the
following formula:
P1 = P0 (0,10 x A + 0,90) x M1)
--
M0
Where:
P(1) = The effective Flat Rate per EFH after adjustment
P0 = The basis Flat Rate per EFH.
A Yearly adjusted according to the increased gross hourly
wage taken from Federal Republic of Germany as published
by "Verband der Metallindustriellen Niedersachsen e.V."
M0 = Price niveau of the IAE Spare Parts Price Catalogue of
the previous year 1/1997 e.g. 100).
M(1) = New Material Rate like M0 but adjusted with the yearly
average material price increase according to IAE Spare
Parts Price Catalogue based on the 100 top price
purchased Pats used for Operator's Engine Shop Visits in
the previous year.
2. Labor Rate
Yearly adjusted according to the increased gross hourly wage taken from
Federal Republic of Germany as published by "Verband der
Metallindustriellen Niedersachsen e.V.". Escalation for hourly rate is
limited to 3% p.a. until 2004.
page 7 of 8
3. Material
Material adjusted with the yearly material price increase
according to IAE Parts Price Catalogue at the date of IAE
price change.
4. For greater clarity, the escalation formular contained in this
Article VII shall only apply for purposes of this Guarantee.
page 8 of 8
APPENDIX F
FLIGHT HOUR/FLIGHT CYCLE RATIO ADJUSTMENT
GRAPH
page 1 of 1
APPENDIX G
TO THE V2500 ENGINE MAINTENANCE AGREEMENT TAM / MTU
GUARANTY
GUARANTY, dated________________________, 2000, made by TAM-Compania De
Investimentos Em Transportes S.A., a company (sociedade por acoes), a
corporation organised and existing under the laws of Brazil (the "GUARANTOR"),
in favor of MTU Maintenance Hannover GmbH ("MTU").
PRELIMINARY STATEMENTS:
WHEREAS, MTU desires to enter into that certain V2500 Engine Maintenance
Agreement dated as of September 14, 2000 (said Agreement, as it may hereafter be
amended or otherwise modified from time to time, being the "MAINTENANCE
Agreement", the terms defined therein and not otherwise defined herein being
used herein as therein defined) with TAM-Transportes Aereos Regionais S.A., a
corporation organized and existing under the laws of Brazil ("TAM").
NOW, THEREFORE, in consideration of the premises and in order to induce
MTU to enter into the Maintenance Agreement, the Guarantor hereby agrees as
follows:
SECTION 1.01. GUARANTY.
The Guarantor hereby unconditionally guarantees the punctual payment when
due and the punctual performance of all obligations of TAM now or hereafter
existing under the Maintenance Agreement (such obligations being the
"OBLIGATIONS"), and agrees to pay any and all expenses (including counsel fees
and expenses) reasonably incurred by MTU in enforcing any rights under this
Guaranty within five business days of receipt of a written demand notice under
this Guaranty. Without limiting the generality of the foregoing, the Guarantor's
liability shall extend to all amounts which constitute part of the Obligations
and would be owed by TAM under the Maintenance Agreement but for the fact that
they are unenforceable or not allowable due to the existence of a bankruptcy,
reorganization, or similar proceeding involving TAM.
SECTION 1.02. GUARANTY ABSOLUTE.
The Guarantor guarantees that the Obligations will be paid or performed,
respectively, strictly in accordance with the terms of the Maintenance
Agreement, regardless of any law, regulation, or order now or hereafter in
effect in any jurisdiction affecting any of such terms or the rights of MTU with
respect thereto. The obligations of the Guarantor under this Guaranty are
independent of the Obligations, and a separate action or actions may be brought
and prosecuted against the Guarantor to enforce this Guaranty, irrespective of
whether any action is brought
APPG/V2500
Page 2 of 4
against TAM or whether TAM is joined in any such action or actions. The
liability of the Guarantor under this Guaranty shall be absolute and
unconditional irrespective of:
(i) any lack of validity or enforceability of the Maintenance
Agreement;
(ii) any change in the time, manner or place of payment of, or in
any other term of, all or any of the Obligations, or any other amendment
or waiver of or any consent to departure from the Maintenance Agreement,
including, without limitation, any increase in the Obligations resulting
from the extension of additional services or forbearance to TAM or any of
its subsidiaries or otherwise;
(iii) any taking, exchange, release, or non-perfection of any
collateral, or any taking, release, or amendment or waiver of or consent
to departure from any other guaranty, for all or any of the Obligations;
(iv) any manner of application of collateral, or proceeds thereof,
to all or any of the Obligations, or any manner of sale or other
disposition of any collateral for all or any of the Obligations or any
other assets of TAM or any of its affiliates;
(v) any change, restructuring, or termination of the corporate
structure or existence of TAM; or
(vi) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, TAM or a guarantor.
(vii) this Guaranty shall continue to be effective or be reinstated,
as the case may be, if at any time any payment or performance of any of
the Obligations is rescinded or must otherwise be returned by MTU upon the
insolvency, bankruptcy, or reorganization of TAM or otherwise, all as
though such payment had not been made.
SECTION 1.03. WAIVER.
The Guarantor hereby waives promptness, diligence, notice of acceptance,
and any other notice with respect to any of the Obligations and any requirement
that MTU protect, secure, perfect, or insure any security interest or lien or
any property subject thereto or exhaust any right or take any action against TAM
or any other person or entity or any collateral.
SECTION 1.04. SUBROGATION.
The Guarantor will not exercise any right which it may acquire by way of
subrogation under this Guaranty, by any payment made hereunder or otherwise,
until all the Obligations and all other amounts payable under this Guaranty
shall have been paid or performed in full and MTU shall cease to be obligated
under the Maintenance Agreement for any reason ("MTU'S COMMITMENT"). If any
amount shall be paid to the Guarantor on account of such subrogation rights at
any time prior to the later of (x) the payment or performance in full of the
Obligations and payment in full of all other amounts payable under this Guaranty
or (y) the expiration or termination of MTU's Commitment, such amount shall be
held in trust for the benefit of MTU and shall forthwith be paid to MTU to be
credited and applied upon the Obligations, whether
APPG/V2500
page 3 of 4
matured or unmatured, in accordance with the terms of the Maintenance Agreement
or to be held by MTU as collateral security for any Obligation thereafter
existing. If (i) the Guarantor shall make payment to MTU, or fulfill, of all or
any part of the Obligations, (ii) all the Obligations shall be paid or performed
in full and all other amounts payable under this Guaranty shall be paid in full,
and (iii) the Commitment shall have expired or terminated, MTU will, at the
Guarantor's request, execute, and deliver to the Guarantor appropriate
documents, without recourse and without representation or warranty, necessary to
evidence the transfer by subrogation to the Guarantor of an interest in the
Obligation resulting from such payment by the Guarantor.
SECTION 1.05. CONSENT TO JURISDICTION; WAIVER OF IMMUNITIES.
(a) The Guarantor hereby irrevocably submits to the jurisdiction of any
New York State or Federal court sitting in New York City, Borough of Manhattan
and any appellate court from any thereof in any action or proceeding arising out
of or relating to this Guaranty, and the Guarantor hereby irrevocably agrees
that all claims in respect of such action or proceeding may be heard and
determined in such New York State court or in such Federal court. The Guarantor
hereby irrevocably waives, to the fullest extent it may effectively do so, the
defense of an inconvenient forum to the maintenance of such action or
proceeding. The Guarantor hereby irrevocably appoints__________________(the
"PROCESS AGENT"), with an office on the date hereof at __________________, New
York, New York 100_________, United States, as its agent to receive on behalf of
the Guarantor and its property service of copies of the summons .and complaint
and any other process which may be served in any such action or proceeding. Such
service may be made by mailing or delivering a copy of such process to the
Guarantor in care of the Process Agent at the Process Agent's above address, and
the Guarantor hereby irrevocably authorizes and directs the Process Agent to
accept such service on its behalf. As an alternative method of service, the
Guarantor also irrevocably consents to the service of any and all process in any
such action or proceeding by the mailing of copies of such process to the
Guarantor at its address specified in Section 1.07. The Guarantor agrees that a
final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law.
(b) Nothing in this Section shall affect the right of MTU to serve legal
process in any other manner permitted by law or affect the right of MTU to bring
any action or proceeding against the Guarantor or its property in the courts of
any other jurisdictions.
(c) To the extent that the Guarantor has or hereafter may acquire any
immunity from jurisdiction of any court or from any legal process (whether
through service or notice, attachment prior to judgment, attachment in aid of
execution, execution, or otherwise) with respect to itself or its property, the
Guarantor hereby irrevocably waives such immunity in respect of its obligations
under this Guaranty and, without limiting the generality of the foregoing,
agrees that the waivers set forth in this subsection (c) shall have the fullest
scope permitted under the Foreign Sovereign Immunities Act of 1976 of the United
States and are intended to be, irrevocable for purposes of such Act.
APPG/V2500
page 4 of 4
SECTION 1.06. AMENDMENTS, ETC.
No amendment or waiver of any provision of this Guaranty, and no consent
to any departure by the Guarantor herefrom, shall in any event be effective
unless the same shall be in writing and signed by MTU, and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given.
SECTION 1.07. ADDRESSES FOR NOTICES.
All notices and other communications provided for hereunder shall be in
writing (including telecopier) and mailed, telecopied, or delivered to it, if to
the Guarantor, at its address at TAM - Transportes Aereos Regionais S.A., Xx.
Xxxxxxxx, 000 - Xxxx 0 - Xxxxxx VII, Attn. Xx. Xxxx Xxxxx, Contracts Director,
Aeroporte - CEP 04072-000 Sao Paulo, Brasil, Phone: +55 - 11 - 0000-0000, Fax:
+55 - 11 - 0000-0000, E-mail: xxxxx@xxx.xxx.xx, and if to MTU, at its address
specified in the Maintenance Agreement, or, as to either party, at such other
address as shall be designated by such party in a written notice to the other
party. All such notices and other communications shall, when mailed or
telecopied, be effective on the day following the day when deposited in the
mails or telecopied (and OK transmission receipt is obtained), respectively.
SECTION 1.08. NO WAIVER; REMEDIES.
No failure on the part of MTU to exercise, and no delay in exercising, any
right hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any right hereunder preclude any other or further exercise
thereof or the exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
SECTION 1.09. GOVERNING LAW.
This Guaranty shall be governed by, and construed in accordance with, the
laws of the State of New York without regard to the provisions on conflict of
laws thereof.
SECTION 1.10. ASSIGNMENT.
MTU may not assign any of its rights hereunder without prior written
consent of the Guarantor. Any assignment made in violation of this Section shall
be null and void.
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.
TAM-Compania De Investimentos Em Transportes S.A.
By -----------------
Name:
Title:
UNITED STATES OF AMERICA
DEPARTMENT OF TRANSPORTATION
FEDERAL AVIATION ADMINISTRATION
AIR AGENCY CERTIFICATE
- NZQY006J
This certificate is issued to
UNIVERSAL MAINTENANCE CENTER OF PT NTP
whose business address is
XXXXX XXXXXXXXX 000, XXXXXXX,00000 XXXXXXXXX
finding that its organigation complies in all respects
with the of the Federal Aviation Regulations
Relating to the establishment of an Air Agency and is
empowered to operate an approved REPAIR STATION
with the following ratings;
LIMITED POWERPLANT(11-03-2000))
LIMITED ACCESSORY(10-18-1999)
LIMITED NON DESTRUCTIVE INSPECTION(07-15-1999)
LIMITED SPECIALIZED SERVICE(08-07-2000)
This certificate unless canceled suspended or
shall continued in effect UNTILL AUGUST 31, 2001
Date issued :
/s/ XXXXX X.
-----------------------
JANUARY 19, 1993 XXXXX X.
REISSUED : NOVEMBER 3, 2000 MANAGER SIN-IFO
PT. NUSANTARA XXXXXX & PROPULSI
[NTP LOGO] Universal Maintenance Center
================================================================================
Bandung, 24 November 2000
Nomor :
:
Lamplran :
Kepada :
Pimpinan 'BANK MANDIRI'
Cabang Bandung IPTN
II. Pajajaran 154
[SEAL]
Dengan Hormat,
Kepada : DEPARTMENTO DE AVIACAO CIVIL
Data Bank : BANCO DO BRASIL,3602-I BRANCH
Agencia Ministerio da , dos
[ILLEGIBLE] - Loco P-Terreo
Plano Piloto - Brasilis- D.F. 70048-900
A/C: 170 500-8 Identification Code: 120033/12901/053-6
Jumlah : USD 6800,00 (Enam delaplan ratus Dollar USA)
Catatan : - Unluck Pemb. PO Nomor 1552F-011
- Pembebanan biaya transfer beban Rekening diatas
Denikian bantuannya diucapkan terima kasih.
PT. NTP.
BY: By:
------------ -------------
Ir. SUBIAKTO, MBA DANANG WS, SF.
Tembusan:
---------
V.P & GM UMC Aero Engine Services [SEAL]
Manager Procurement.
UNITED STATES OF AMERICA
DEPARTMENT OF TRANSPORTATION
FEDERAL AVIATION ADMINISTRATION
REPAIR STATION OPERATIONS SPECIFICATIONS
SPECIALIZED SERVICE
WELDING - TUNGSTEN INERT GAS - IN ACCORDANCE WITH
PLATING:
COPPER - IN ACCORDANCE WITH AMS 2418 (AS REVISED)
NICKEL - IN ACCORDANCE WITH AMS 2414 (AS REVISED)
HARD CHROME - IN ACCORDANCE WITH AMS 2406 (AS REVISED)
NICKEL CADMIUM - IN ACCORDANCE WITH AMS 2414 (AS REVISED)
ELECTROLESS NICKEL - IN ACCORDANCE WITH AMS 2404 (AS REVISED)
SILVER - IN ACCORDANCE WITH AMS [ILLEGIBLE] (AS REVISED)
TIN - IN ACCORDANCE WITH AMS [ILLEGIBLE](AS REVISED)
CADMIUM - IN ACCORDANCE WITH AMS 2411 (AS REVISED)
CHROMATE TREATMENT - IN ACCORDANCE WITH AMS M-3171 (AS REVISED)
BLACK - IN ACCORDANCE WITH AMS 2405 (AS REVISED)
ALOOINE - IN ACCORDANCE WITH AMS 2473 (AS REVISED)
HEAT TREATMENT OF STEEL - IN ACCORDANCE WITH AMS-H - (AS REVISED)
THERMAL SPRAY - IN ACCORDANCE WITH AMS 2437 & MIL - STD- (AS REVISED)
NONE
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------
AUGUST 7,2000 XXXXXX X. XXXXX
PRINCIPAL MAINTENANCE INSPECTOR
UNITED STATES OF AMERICA
DEPARTMENT OF TRANSPORTATION
FEDERAL AVIATION ADMINISTRATION
REPAIR STATION OPERATIONS SPECIFICATIONS
Limitations:
NON DESTRUCTIVE INSPECTIONS
CURRENT INSPECTION IN ACCORDANCE WITH ASTM B244,ASTM B499 AND
COMPONENT MAINTENANCE MANUAL(AS REVISED)
FLUORESCENT PARTICLE INSPECTION IN ACCORDANCE WITH ASTM E,1417,AMS 2644 AND
COMPONENT MAINTENANCE MANUAL(AS REVISED)
MAGNETIC PARTICLE INSPECTION IN ACCORDANCE WITH ASTM AND COMPONENT
MAINTENANCE MANUAL ( AS REVISED)
RADIOGRAPHIC INSPECTION IN ACCORDANCE WITH ASTM E94, ASTM E-1742, AND COMPONENT
MAINTENANCE MANUAL ( AS REVISED)
ULTRASONIC INSPECTION IN ACCORDANCE WITH ASTM E, ASTM E 164 AND
COMPONENT MAINTENANCE MANUAL ( AS REVISED)
NON DESTRUCTIVE TESTING PERSONNEL MUST MEET THE QUALIFICATION & CERTIFICATION
REQUIREMENTS CONTAINED INNAS 410
NONE
By: /s/ Xxxxxx X. Xxxxx
--------------------------------
JULY 15,1999 XXXXXX X. XXXXX
PRINCIPAL MAINTENANCE INSPECTOR
UNITED STATES OF AMERICA
DEPARTMENT OF TRANSPORTATION
FEDERAL AVIATION ADMINISTRATION
REPAIR STATION OPERATIONS SPECIFICATIONS
LIMITATIONS:
NON DESTRUCTIVE INSPECTIONS
CURRENT INSPECTION IN ACCORDANCE WITH ASTM B244,ASTM B499 AND
COMPONENT MAINTENANCE MANUAL(AS REVISED)
FLUORESCENT PARTICLE INSPECTION IN ACCORDANCE WITH ASTM B,1417,AMS 2644 AND
COMPONENT MAINTENANCE MANUAL(AS REVISED)
MAGNETIC PARTICLE INSPECTION IN ACCORDANCE WITH ASTM AND COMPONENT
MAINTENANCE MANUAL ( AS REVISED)
RADIOGRAPHIC INSPECTION IN ACCORDANCE WITH ASTM B94,ASTM E-1742, AND COMPONENT
MAINTENANCE MANUAL ( AS REVISED)
ULTRASONIC INSPECTION IN ACCORDANCE WITH ASTM AND COMPONENT
MAINTENANCE MANUAL ( AS REVISED)
NON DESTRUCTIVE TESTING PERSONNEL MUST MEET THE QUALIFICATION & CERTIFICATION
REQUIREMENTS CONTAINED NAS 410
DELIGATED
NONE
-------------------------------
JULY 15,1999 XXXXXX X. XXXXX By: /s/ Xxxxxx X. Xxxxx
PRINCIPAL MAINTENANCE INSPECTOR
UNITED STATES OF AMERICA
DEPARTMENT OF TRANSPORTATION
FEDERAL AVIATION ADMINISTRATION
REPAIR STATION OPERATIONS SPECIFICATIONS
LIMITATIONS:
PAGE 1 of
LIMITED RATINGS
POWERPLANT
GENERAL ELECTRIC MODEL CT-7, SERIES
OARRETT MODEL TPE-, SERIES
XXXXX & XXXXXXX MODEL JT&D, SERIES
ROLLS ROYCE MODEL DART 520 SERIES & 530, SERIES
ROLLS ROYCE MODEL TAY 650-15,MODULES 1,2,3,4 & 5
ROLLS ROYCE MODEL TAY 650-, REMOVAL,REPLACEMENT, & INSTALLATION OF
ALL MODULES
ACCESSORY
LIMITED TO THOSE ACCESSORIES INSTALLED ON GENERAL ELECTRIC CT-7 SERIES, XXXXX &
XXXXXXX SERIES, XXXXXXX SERIES, & ROLLS XXXXX XXXX
520 SERIES AND 530 SERIES ENGINES
NONE
-------------------------------
NOVEMBER 3, 2000 XXXXXX X. XXXXX By: /s/ Xxxxxx X. Xxxxx
PRINCIPAL MAINTENANCE INSPECTOR
