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EXHIBIT 10.6
AMENDMENT SIX
TO THAT CERTAIN PURCHASE AGREEMENT
DATED OCTOBER 22, 1992
BETWEEN FEDERAL EXPRESS CORPORATION AND POSTAL AIR, INC.
THIS AMENDMENT TO THE PURCHASE AGREEMENT ("Amendment #6") is entered
into by and between Federal Express Corporation ("FedEx") and Kitty Hawk Air
Cargo, Inc., as successor-in-interest to Postal Air, Inc., and Aircraft
Leasing, Inc., an affiliate of Kitty Hawk Air Cargo, Inc. ("Buyer"), and amends
the Purchase Agreement dated October 22, 1992 (and as amended by Amendments
One, Two, Three, Four and Five dated November 17, 1992, February, 1993, June
11, 1993, May 10, 1994, and September 29, 1995, respectively, the "Purchase
Agreement"), by and between FedEx and Buyer. Terms capitalized herein which
are not otherwise defined in this Amendment shall have the meanings set forth
for such terms as provided in the Purchase Agreement unless the context clearly
requires otherwise.
RECITALS
1. Buyer has purchased and taken Delivery of Five Aircraft Kits pursuant
to the Agreement;
2. Buyer holds open firm orders for two (2) Aircraft Kits and options for
six (6) Aircraft Kits under the Agreement;
3. Buyer and FedEx wish to amend the Agreement to provide for additional
Firm Order Aircraft Kits and options for additional Aircraft Kits for
Delivery to Buyer between January 7, 1997 and May 31, 1999 in
accordance with the terms and conditions of the Agreement;
NOW, THEREFORE, in consideration of the foregoing, and subject to the
terms and conditions set forth herein, the parties hereto agree as follows:
1. Articles 4 and 6 of the Agreement shall be replaced in their entirety
with the revised terms attached hereto as Attachment I to this
Amendment #6.
2. With respect to Firm Order Kits #6 through #15, Exhibit C of the
Purchase Agreement shall be replaced in its entirety with the new
Delivery Schedule in Attachment II to this Amendment #6.
3. With respect to Firm Order Kits #6 through #15, Exhibit D shall be
replaced in its entirety with Attachment III to this Amendment #6.
4. All Option Kits provided under Amendment #5, Exhibit D shall be
canceled and replaced with the option grant provided in Attachment II
to this Amendment #6.
5. Exhibit F (Escalation Formula) shall be modified as follows:
A. The formula term for Pbase shall be defined as follows:
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Pbase = Base Kit Price (December 1996 dollars).
B. The formula term for Ppw1 shall be defined as follows:
Ppw1 = Xxxxx & Xxxxxxx (PW) Commercial Parts Support Price
List prices as of December 1, 1996.
C. The formula for CPIbase shall be modified as follows:
CPIbase = U.S. Government Consumer Price Index for all urban
areas as of December 1996.
6. Except as otherwise specified in this Amendment, all terms and
conditions of the Purchase Agreement shall remain in full force and
effect.
IN WITNESS WHEREOF, the parties hereto have signed this Amendment on
this 6th day of December, 1996.
FEDERAL EXPRESS CORPORATION
("FedEx")
By: /s/ XXXXX X. XXXXXX
Name: Xxxxx X. Xxxxxx
Title: Vice President
KITTY HAWK AIR CARGO, INC.
("Buyer")
By: /s/ XXXXXX X. XXXXXX
Name: Xxxxxx X. Xxxxxx
Title: President
AIRCRAFT LEASING, INC.
("Buyer")
By: /s/ XXXXXXX X. XXXXXXXXX, XX.
Name: Xxxxxxx X. Xxxxxxxxx, Xx.
Title: President
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ATTACHMENT #1 TO AMENDMENT #6
ARTICLE 4
INDEMNIFICATION
SECTION 4.1 - BUYER'S INDEMNIFICATION.
(a) EXCEPT FOR THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OR
MALICIOUS ACTS OF THE PARTIES INDEMNIFIED IN THIS SECTION, BUYER SHALL BE
SOLELY LIABLE FOR, AND SHALL INDEMNIFY, DEFEND AND HOLD HARMLESS, FEDEX, ITS
OFFICIALS, DIRECTORS, AGENTS AND EMPLOYEES FROM AND AGAINST ALL LIABILITIES,
DAMAGES, LOSSES, COSTS AND EXPENSES OF ANY KIND WHATSOEVER FOR (1) BODILY
INJURIES TO OR DEATHS OF PERSONS, AND (2) LOSS OR DAMAGE TO, OR LOSS OF USE OF
PROPERTY, INCLUDING THE AIRCRAFT, WHETHER OR NOT CAUSED BY OR ARISING IN TORT
OR OCCASIONED IN WHOLE OR IN PART BY THE FAULT OR NEGLIGENCE OF FEDEX, ITS
OFFICERS, DIRECTORS, AGENTS, AND EMPLOYEES OR OF ITS VENDORS, CONTRACTORS,
SUBCONTRACTORS OR CONSULTANTS. BUYER SPECIFICALLY AGREES TO INDEMNIFY, DEFEND
AND HOLD HARMLESS FEDEX, ITS OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS FROM AND
AGAINST ANY CLAIM ARISING FROM OR RELATED TO THE NOISE CREATED BY THE OPERATION
OF AIRCRAFT UPON WHICH THE KIT IS INSTALLED.
(b) If any claim for damages, losses, costs and expenses is made
or suit is brought against any indemnified party, the liability for which has
been expressly assumed by Buyer, the party against whom such claim is so made
or suit is so brought shall promptly notify Buyer, and Buyer shall have the
right to assume and conduct the defense thereof or to effect any settlement
which it, in its opinion, deems proper.
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ARTICLE 6
INSURANCE
SECTION 6.1 - BUYER'S INSURANCE. Buyer shall, at all times from the
date of Delivery of the first Kit hereunder, at Buyer's own expense, carry and
maintain in effect with respect to the Aircraft upon which a Kit is installed,
all-risk aircraft hull, third-party public liability and property damage
insurance covering the liability assumed by Buyer under this Agreement. Such
coverage shall be in an amount (i) as to aircraft hull insurance, at the values
set by Buyer under its insurance policy, and (ii) as to third-party public
liability and property damage insurance, $[BLACKED-OUT] combined single limit.
Additionally, such hull insurance shall contain a waiver of subrogation
provision in favor of FedEx, its officers, directors, agents and employees, and
FedEx vendors, subcontractors and consultants, and such public liability and
property damage insurance shall name FedEx, its officers, directors, agents and
employees and FedEx's vendors, subcontractors and consultants as additional
insureds.
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AMENDMENT #6, ATTACHMENT II
EXHIBIT C
TO THAT CERTAIN PURCHASE AGREEMENT
BETWEEN
FEDERAL EXPRESS CORPORATION
("FEDEX")
AND
KITTY HAWK AIR CARGO, INC. AND AIRCRAFT LEASING, INC., AS
SUCCESSORS IN INTEREST TO POSTAL AIR, INC. ("BUYER")
DATED OCTOBER 22, 1992
AIRCRAFT KIT DELIVERY SCHEDULE _
AIRCRAFT MODEL/ SCHEDULED
KIT NO. TYPE OF KIT DELIVERY DATE
------- ----------- -------------
6* 727-200 / Lightweight On or about 3-Jan-97
7* 727-200 / Heavyweight On or about 6-Feb-97
8 727-200 / Heavyweight On or about 6-Feb-97
9 TBD/TBD Between 4-Feb-97 & 31-May-99
10 TBD/TBD Between 4-Feb-97 & 31-May-99
11 TBD/TBD Between 4-Mar-97 & 31-May-99
12 TBD/TBD Between 4-Apr-97 & 31-May-99
13 TBD/TBD Between 4-Apr-97 & 31-May-99
14 TBD/TBD Between 4-Apr-97 & 31-May-99
15 TBD/TBD Between 4-Apr-97 & 31-May-99
* Note: Firm Order Kits #6 & #7 are carried over from Amendment #5.
Buyer shall provide FedEx with the FAA-approved flight manual pages referencing
the Aircraft serial number, engine power rating, the maximum takeoff and
landing weights for the Aircraft on which each Kit shall be installed, and
copies of Airframe major repairs and installed supplemental type certificates,
not later than sixty (60) days prior to the delivery date established above.
Buyer acknowledges its understanding that the normal FAA processing time for
the Stage 3 aircraft flight manual supplement is 30-60 days and that FedEx
shall not be liable for delays resulting from not receiving the above
referenced information at least (60) days prior to each scheduled Kit Delivery
Date.
Unless otherwise specified, Buyer shall also provide FedEx with at least (60)
days notice of whether the double chamfer-cut C-1 fan blades should be
delivered concurrent with Delivery of each Kit or
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at a later date upon (30) days notice from Buyer (i.e., to facilitate the 5-
day return requirement on the removed C-1 fan blades). Unless otherwise
specified, Heavyweight Kit Buyers shall also provide FedEx with at least 180
days notice of whether -15, -15A, -17 or -17A engines will be installed.
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COMMISSION
AMENDMENT #6, ATTACHMENT III
EXHIBIT D
TO THAT CERTAIN
PURCHASE AGREEMENT
BETWEEN
FEDERAL EXPRESS CORPORATION
("FEDEX")
AND
KITTY HAWK AIR CARGO, INC. AND AIRCRAFT LEASING, INC.
AS SUCCESSORS IN INTEREST TO POSTAL AIR, INC. ("BUYER")
DATED OCTOBER 22, 1992
_
PURCHASE PRICE AND PAYMENT SCHEDULE
Notwithstanding anything in this Agreement to the contrary, the entire Purchase
Price for any Kit must be paid not later than the Delivery Date of such Kit.
I. PURCHASE PRICE AND DELIVERY OF KITS
A. FIRM ORDER KIT. The 1997 Base Purchase Price for the ten (10) Firm
Order Aircraft Kits described in Exhibit C shall be [BLACKED-OUT]
Dollars ($[BLACKED-OUT]) per 727-200 Lightweight Kit and [BLACKED-
OUT] Dollars ($[BLACKED-OUT]) per 727-200 Heavyweight Kit. For any
deliveries after December 31, 1997, the above 1997 Base Kit Price
shall be adjusted according to the formula outlined in Exhibit F.
B. OPTION KITS. In addition to the Kits described in paragraph I.A
above, Buyer shall be granted five (5) options exercisable upon at
least 180 days written notice for delivery on dates to be mutually
agreed upon between March 1, 1997 and May 31, 1999, subject to
availability. Option Kits shall be available only following delivery
of all Firm Order Kits under the Agreement. The 1997 Base Purchase
Price for Option Kits shall be as follows:
727-200 727-200
Lightweight Heavyweight
Kit Kit
----------------- ------------------
Option Kit #1-#5 $[BLACKED-OUT] $[BLACKED-OUT]
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For deliveries after December 31, 1997, the above Base Purchase Price
shall be adjusted according to the formula outlined in Exhibit F. All
costs of meeting the Configuration Specification in Exhibit A shall be
for Buyer's account.
C. CREDITS. FedEx shall extend to Buyer a credit of $[BLACKED-OUT] per
engine if such Engine is already installed with Xxxxx & Xxxxxxx double
chamfer cut C-1 fan blades or is in compliance with Xxxxx & Whitney
service bulletin 6072 (as appropriate). These credits shall only be
available if specifically requested by Buyer prior to Kit Delivery.
D. DELIVERY OF KITS. All Kits shall be delivered F.O.B. Memphis,
Tennessee. With respect to Option Kits, and Firm Order Kits which do
not have a specific Delivery Date, Buyer shall provide FedEx with at
least 180 days written notice of the date delivery of each Kit is
requested and the type of Kit being ordered. Subject to delivery
position availability, FedEx shall confirm delivery position
availability to Buyer in writing within five (5) Business Days of
Buyer's request.
E. TRANSFER OF KITS BETWEEN BUYER'S AIRCRAFT. Following Aircraft Kit
Installation on an Aircraft, Buyer shall be permitted, upon 210 days
written notice to FedEx, to purchase Transfer Kits, as available from
FedEx, to allow the transfer of the Stage 3 Kit engines from such
Aircraft to another Buyer-owned or operated Aircraft, subject to the
payment of the following transfer fees:
i. The 1997 Base Purchase Price of each Transfer Kit to allow
transfer of a Lightweight Kit shall be [BLACKED-OUT] Dollars
($[BLACKED-OUT]).
ii. The 1997 Base Purchase Price of each Transfer Kit to allow the
transfer of a Heavyweight Kit shall be [BLACKED-OUT] Dollars
($[BLACKED-OUT]).
The Transfer Kit Prices in this paragraph shall be escalated, as
appropriate, in accordance with the formula in Exhibit F. All costs
of meeting the Configuration Specification in Exhibit A shall be at
Buyer's expense.
II. PAYMENT AND DEPOSIT SCHEDULE
A. DEPOSITS
i. INITIAL DEPOSITS: FedEx acknowledges its previous receipt of
Buyer's initial $[BLACKED-OUT] per Kit deposits for Firm Order
Kits #6 and #7. Upon contract execution, Buyer shall pay to
FedEx a non-refundable deposit of [BLACKED-OUT] Dollars
($[BLACKED-OUT]) per Kit for Firm Order Kits #6 and #7,
[BLACKED-OUT] Dollars ($[BLACKED-OUT]) per Kit for Firm Order
Kit #8, and [BLACKED-OUT] Dollars ($[BLACKED-OUT]) per Kit for
Firm Order Kits #9 through #15 as an advance payment
applicable to the Purchase Price.
ii. PROGRESS PAYMENTS FOR FIRM ORDER KITS #9 THROUGH #15 ONLY: At
least 180 days prior to the scheduled Delivery Date of each
Firm Order Kit, Buyer shall pay to FedEx a non- refundable
deposit of [BLACKED-OUT] Dollars ($[BLACKED-OUT]) as an
advance payment applicable to the Purchase Price at Delivery.
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iii. OPTION KITS: Upon exercising each option pursuant to paragraph
I.B above, Buyer shall pay to FedEx a non- refundable deposit
of [BLACKED-OUT] Dollars ($[BLACKED-OUT]) as an advance
payment applicable to the Purchase Price at Delivery.
iv. TRANSFER KITS: Upon ordering Transfer Kits, Buyer shall pay to
FedEx a non-refundable deposit of [BLACKED-OUT] Dollars
($[BLACKED-OUT]) for each Lightweight Transfer Kit and
[BLACKED-OUT] Dollars ($[BLACKED-OUT] ) for each Heavyweight
Transfer Kit.
B. PAYMENT OF BALANCE OF PURCHASE PRICE
Upon delivery of each Kit or Transfer Kit to Buyer, Buyer shall pay
FedEx the balance of the Kit price. All payments shall be made by
wire transfer in immediately available U.S. funds to the account of
Federal Express Corporation, account number 00000000, at Citibank
N.A., New York, NY (ABA number 000000000).
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