GENERAL TERMS AGREEMENT
BETWEEN
ROLLS-ROYCE DEUTSCHLAND LTD & CO KG
AND
MIDWEST EXPRESS AIRLINES, INC.
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Rolls-Royce Deutschland/Midwest Express Airlines
General Terms Agreement
TABLE OF CONTENTS
CLAUSE 1. Definitions.......................................................4
CLAUSE 2. Scope of Agreement................................................6
CLAUSE 3. Purchase Orders...................................................7
CLAUSE 4. Delivery..........................................................8
CLAUSE 5. Prices............................................................9
CLAUSE 6. Payment..........................................................10
CLAUSE 7. Taxes and Other Charges..........................................11
CLAUSE 8. Delay............................................................12
CLAUSE 9. Events of Default and Termination................................14
CLAUSE 10. Non-disclosure...................................................15
CLAUSE 11. Intellectual Property............................................16
CLAUSE 12. Grant of Warranty and Limitation of Liability....................17
CLAUSE 13. Indemnification..................................................18
CLAUSE 14. General..........................................................19
CLAUSE 15. Export/Import Shipment (Not Applicable)..........................23
Exhibit A - Aircraft Delivery Schedule.......................................25
Exhibit B - Operating Assumptions............................................26
Exhibit C - Warranties.......................................................27
EXHIBIT D - OPERATOR SERVICES................................................36
EXHIBIT E - FLEET PROVISIONING SUPPORT.......................................39
EXHIBIT F - FLEET GUARANTEES.................................................47
Exhibit G - TOTAL SUPPORT PACKAGE............................................55
Exhibit H - CONTRACT SPECIFICATION...........................................69
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Rolls-Royce Deutschland/Midwest Express Airlines
General Terms Agreement
THIS AGREEMENT is made this ______ day of April 2002.
BETWEEN
Rolls-Royce Deutschland Ltd & Co KG Whose registered office is at Xxxxxxxxx
00, 00000 Xxxxxxxxx, Xxxxxxx,
(hereinafter called "Rolls-Royce") of
the first part, and
Midwest Express Airlines, Inc. Whose registered office is at 0000
Xxxxx Xxxxxx Xxxxxx, Xxx Xxxxx,
Xxxxxxxxx, X.X.X. 00000 (hereinafter
called "Operator"), of the second part
Operator or Rolls-Royce may hereinafter be referred to as a "Party" or
collectively as the "Parties".
WHEREAS:
A. Operator has entered into an agreement for the purchase from XxXxxxxxx
Xxxxxxx Corporation, a wholly-owned subsidiary of The Boeing Company, of
new Rolls-Royce BR715 powered B717-200 aircraft.
B. Operator and Rolls-Royce desire to enter into this Agreement for the sale
and support by Rolls-Royce and the purchase by Operator from Rolls-Royce
of Products and Services.
NOW THEREFORE IT IS AGREED AS FOLLOWS:-
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General Terms Agreement
CLAUSE 1. Definitions
The following words and phrases, when used in this Agreement, shall have the
meaning and definition set forth below. Should the definitions used in this
Agreement differ from the definitions contained in the Manuals, the definitions
used in this Agreement shall take precedence for the purpose of this Agreement.
Definitions specific to only one Exhibit to this Agreement are contained in the
relevant Exhibit.
"Agreement" shall mean this agreement, including all exhibits attached hereto.
"Aircraft" means the twenty-five (25) Firm B717-200 Aircraft and up to
twenty-five (25) Option B717-200 Aircraft (referred to separately as the "Firm
Aircraft" or "Option Aircraft", or collectively as the "Aircraft") powered by
Engines which are being purchased by Operator from Airframer (or, in the case of
the Option Aircraft, may be so purchased by Operator) for delivery in accordance
with the schedule set out in Exhibit A.
"Airframer" means XxXxxxxxx Xxxxxxx Corporation, a wholly-owned subsidiary of
The Boeing Company .
"Airworthiness Authority" means the FAA.
"ATA Specifications" means then current revisions of ATA specifications No's
100, 101, 102, 103, 200, 300, 400 and spec 2000 or equivalent.
"CAA" means the United Kingdom Civil Aviation Authority (Airworthiness
Division).
"Commercial Price List(s)" means Rolls-Royce's published price catalogues of
Parts, Tooling and other Products and Services as may be published from time to
time.
"Covered Components" shall mean the Parts and components of Qualified Equipment
that are identified in Schedule F to Exhibit G of this Agreement.
"Designated Part" means any Part listed in Schedule 1 to Exhibit C.
"Effective Date" means the date on which this Agreement has been duly executed
by its authorized representatives.
"EMP" means the Rolls-Royce Engine Management Program to be proposed by
Rolls-Royce and accepted by Operator after meaningful review and an opportunity
to provide input (such acceptance not to be unreasonably withheld) which, among
other things, specifies the Engine configuration and shop management
requirements for the Rework of Engines, as it may be amended by mutual agreement
between Rolls-Royce and Operator from time to time. Rolls-Royce shall ensure
that the EMP conforms to the requirements of the FAA; Operator shall ensure that
the EMP is included in the Aircraft Maintenance Plan which is approved by the
FAA.
"Engine(s)" means the Rolls-Royce BR715 turbofan engines acquired by Operator in
support of the Aircraft, and delivered either to Operator on Aircraft or as
spare Engines pursuant to Exhibit D, E, F or G hereto.
"FAA" means the United States Federal Aviation Administration.
"Failure" means, subject to the applicable warranty periods identified in
Exhibit C, the mandatory removal of a Part or the breakdown or deterioration of
a Part which necessitates the removal of the Engine or Module or Part from the
Aircraft or is discovered during the Rework performed in connection with such a
removal.
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General Terms Agreement
"Flight Cycle" means the operation of an Engine from the time an Aircraft leaves
the ground until it touches the ground at the end of a flight. A touch and go
landing shall also be considered as a Flight Cycle.
"Flight Hours" means the airborne hours in operation of each Engine computed
from the time an Aircraft leaves the ground until it touches the ground at the
end of a flight.
"FOD" means damage to an Engine resulting from the non-negligent ingestion of
material not resident within the Engine and where such damage requires removal
of the Engine, Module or Part from service.
"Information" means confidential or proprietary non-public information which is
disclosed by Rolls-Royce to Operator and confidential or proprietary non-public
information which is disclosed by Operator to Rolls-Royce, including but not
limited to all oral, electronic or written information, know how, data, reports,
drawings and specifications....
"Inspection" means an examination of an Engine or any Parts through disassembly
and/or other non-destructive means to determine its serviceability.
"JAA" means the Joint Airworthiness Authority.
"Lease Agreement" means Standard Terms of Business for Leasing reference MG751,
of even date herewith, between Rolls-Royce North America, Inc. and Operator.
"Life Limited Parts" means Engine Parts for which either Rolls-Royce or the
Airworthiness Authority has established a maximum period of operational Flight
Cycles with periodic Rework and/or restoration.
"Manuals" means the Rolls-Royce Engine series manuals as produced by Rolls
Royce.
"Module(s)" means the Rolls-Royce Engine sections purchased by Operator from
Rolls-Royce, or installed in Engines delivered to Operator on Aircraft, or
embodied by an Authorized Facility (as that term is defined in Exhibit G), as
detailed in Clause 1.2.1 of the Specification attached in Exhibit H to this
Agreement.
"Part" means any part including a Designated Part manufactured or supplied by
Rolls-Royce.
"Product(s)" means Engines, Modules, Parts, Covered Components and Tooling.
"QEC Kit" means a quick engine change kit manufactured by the relevant nacelle
supplier.
"Rework" means the repair, replacement, and/or refurbishment at an Authorized
Facility (including the provision of Parts) necessary to return Engines, Modules
or Parts to a serviceable condition in accordance with the applicable Manuals
and the EMP.
"Services" means the services to be provided pursuant to Exhibits D, G and H
hereto.
"Spare Engine" means a spare Dressed Engine as detailed in Clause 1.2.2 of the
Specification in Exhibit H to this Agreement, but excluding the following:
P20/T20 measuring system; Engine Starter Motor; and Independent Overspeed
Protection (IOP).
"Tooling" means tools, jigs, fixtures and other products which are not for
installation in the Engine.
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General Terms Agreement
CLAUSE 2. Scope of Agreement
Rolls-Royce agrees to sell to Operator and Operator agrees to purchase Products
and Services from Rolls-Royce in accordance with the terms, conditions and
warranties contained in this Agreement in lieu of the general terms and
conditions on or attached to or otherwise forming part of any purchase order,
quotation, acknowledgment, invoice or other document issued by either Party
(provided that Operator's purchase orders shall contain quantities and the other
items described in Clause 3.1).
Clauses 1 to 15 of this Agreement set forth the general terms governing the
supply of Products and Services that are common across all such Products and
Services, while the Exhibits of this Agreement set forth the terms, conditions
and warranties that apply to specific Products and Services.
Subject to the provisions authorizing termination for cause in Clause 9 below,
Rolls-Royce hereby agrees that it will sell repair or replacement Parts,
Modules, Covered Components and Tooling to Operator on the terms set forth in
this Agreement from the Effective Date through and including the date that is
twenty (20) years after the date on which the last Aircraft purchased by
Operator is delivered to Operator.
The Total Support Program set out in Exhibit G is an option offered to Operator
whereby Rolls-Royce will take certain responsibilities for the repair and rework
of Engines. Operator will inform Rolls-Royce in writing three (3) months prior
to entry-into-service of the first Aircraft (i) whether it wishes to select the
Total Support Program, and (ii) if so, which options under such Total Support
Program, as contained in paragraphs 7.1.2, 7.1.3, 7.1.4 and 7.1.5 of Exhibit G
to this Agreement, it wishes to select.
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General Terms Agreement
CLAUSE 3. Purchase Orders
3.1 Products and Services purchased under the terms of this Agreement shall
be ordered by means of purchase orders issued by Operator in an agreed
format consistent with the requirements of ATA Specifications. The
terms, conditions and warranties set forth in this Agreement shall
apply to all purchase orders. Any purchase order issued hereunder,
unless otherwise specified, shall contain at a minimum: description,
quantity, delivery dates and the unit and extended price of the
Products and Services, restatement of payment terms, container price
and shipping instructions.
3.2 Rolls Royce shall provide written and/or electronic acknowledgment of
its acceptance of purchase orders. Should Rolls-Royce be unable to meet
any requirements under a purchase order, Rolls-Royce will so notify
Operator and propose an alternative delivery schedule in a timely
manner. Rolls-Royce undertakes that such alternative delivery schedule
will not unduly disadvantage Operator relative to other purchasers of
the same goods or services at such time.
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General Terms Agreement
CLAUSE 4. Delivery
4.1 Rolls-Royce shall deliver Products and, where applicable, Services Ex
Works, Rolls-Royce Dahlewitz (Incoterms 2000). Upon request by
Operator, Rolls-Royce will arrange for the transportation from
Dahlewitz to the United States of America.
4.2 Shipping documents, invoices, packaging and marking of packaging for
Products and Services shall be in accordance with ATA Specifications.
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General Terms Agreement
CLAUSE 5. Prices
5.1 Except for the spare Engines (the pricing of which is established in
Exhibit E-1 and Schedules 1 and 2 to Exhibit E) and TSP Charges (the
pricing of which is established in Exhibit G), all Products and
Services shall be as described in the applicable Commercial Price List,
or for those Products and Services not specified in such a listing,
available from Rolls-Royce on a quotation basis. The Rolls-Royce Spare
Parts Price Catalogue for the Engine, and such other Commercial Price
Lists and any revisions and updates thereof shall be published by
Rolls-Royce to all operators of the Engine, and shall not be specific
to operators but shall generally apply to the purchase of such goods or
services from Rolls-Royce during their respective period of validity.
5.2 All prices, and all amounts stated to be payable by Operator in this
Agreement exclude value added tax, sales tax, goods and services tax,
tax on turnover or tax on turnover or similar charges (but include any
income taxes incurred by or imposed upon Rolls-Royce; Rolls-Royce shall
be solely responsible for all such income taxes).
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General Terms Agreement
CLAUSE 6 Payment
6.1 Immediately following or concurrent with supply of Products and
Services, Rolls-Royce shall submit an invoice to Operator stating
amounts due. Unless otherwise specified in this Agreement, payment
shall be made by Operator in United States Dollars within thirty days
after the later of (a) the delivery date of the Products or Services,
or (b) the date of invoice.
6.2 Without prejudice to Rolls-Royce's other rights and remedies,
Rolls-Royce shall be entitled to enforce a late payment amount
calculated at a rate of (i) 0.05% (five hundredths of one percent) per
day; or (ii) the highest interest rate permitted by applicable law,
whichever is the lower, which shall be applied to any amounts not paid
when due. In the case of payments for other Products or Services made
by Operator in the form of a check pursuant to Clause 6.3 below, the
late payment amounts described in this Clause 6.2 shall not be levied
against any such payments made where the check is received at
Rolls-Royce's registered office, clearly marked with the recipient
"Treasury Department", no later than the due date for payment, provided
that the subsequent presentation for payment of such check by
Rolls-Royce to its bank results in cleared or good value funds being
received by Rolls-Royce.
6.3 Unless agreed otherwise, all payments required under this Agreement
shall be made in United States Dollars without any withholding for
sales taxes imposed by any State of the United States of America on the
basis of the purchase price of the Products or Services, by (in the
case of payments for Spare Engines and TSP Charges, if applicable,
purchased hereunder) wire transfer to Rolls-Royce's account as follows:
Bank: HSBC Trinkaus und Xxxxxxxxx KGaA
Account Number: 400 2372 016
Bankleitzahl: 300 308 80
Swift: XXXXXXXX
or by (in the case of payments for other Products or Services) wire
transfer to Rolls-Royce's above-identified account or check sent to
Rolls-Royce's registered office clearly marked with the recipient
"Treasury Department". For the purpose of this Clause 6.3 "Payment"
shall only be deemed to have been made when cleared or good value funds
are received in the numbered Rolls-Royce bank account specified above.
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General Terms Agreement
CLAUSE 7. Taxes and Other Charges
Operator in addition to the price of Products and Services, agrees to pay
Rolls-Royce upon demand, or furnish to Rolls-Royce evidence of exemption
therefrom, any taxes (including without limitation, sales, use, excise,
turnover, value added taxes or goods and services taxes), duties, fees, charges,
fines, penalties or assessments of any nature (but excluding any taxes in the
nature of income taxes), legally assessed or levied by any Governmental
authority against Rolls-Royce or its employees, its divisions or subsidiaries or
their employees, as a result of any sale, delivery, transfer, use, export,
import or possession of such Product or Service to or by Operator, or otherwise
in connection with this Agreement. If claim is made against Rolls-Royce for any
such taxes, duties, fees, charges, fines, penalties or assessments, Rolls-Royce
shall immediately notify Operator. If requested by Operator, Rolls-Royce shall
not pay except under protest, and if payment be made, shall use all reasonable
effort to obtain a refund thereof. If all or any part of any such taxes, duties,
fees, charges, fines, penalties or assessments be refunded, Rolls-Royce shall
repay to Operator such part which Operator had paid to Rolls-Royce. Operator
shall pay to Rolls-Royce upon demand, all costs (including penalties and
interest) incurred by Rolls-Royce in protesting payment and in endeavoring to
obtain such refund at the request of Operator.
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General Terms Agreement
CLAUSE 8. Delay
8.1 If and to the extent Rolls-Royce is prevented from manufacturing or
delivering any Product within the time for delivery specified in this
Agreement (as such time may be extended pursuant to the other
provisions of this Agreement) by reason of:-
war, insurrection, explosion, flood, fire, strike, act of government
occurring after the date of this Agreement (but only to the extent said
act becomes effective after the Effective Date) or act or omission of
Operator in breach of this Agreement, then
the time for scheduled delivery shall be extended by a period equal to
the period for which manufacture or delivery shall have been so
prevented and Rolls-Royce shall not be under any liability whatsoever
in respect of such delay; provided, however, that Rolls-Royce will not
be entitled to rely upon this provision unless it notifies Operator in
writing of any such event within ten (10) calendar days after its
occurrence, including in such notice details of the event and an
estimate of its effects on the timing of delivery. Rolls-Royce shall
use its commercially reasonable efforts to overcome the effects of any
such event and resume performance as promptly as possible.
8.2 If delivery of any Product or Service is delayed beyond the time for
delivery specified in this Agreement (as such time may be extended
pursuant to the provisions of this Agreement) for any reason not
contemplated in Clause 8.1 above, then the following shall appy:
Should Rolls-Xxxxx xxxxx any agreed date of delivery of any Product or
Service for reasons other than those set out in Clause 8.1 hereof then
in respect of the first month of such delay Rolls-Royce shall not be
under any liability. In respect of any further delay the damages
recoverable by Operator from Rolls-Royce as Operator sole remedy shall
not exceed 0.5 % (one half of one per cent) of the purchase price of
the Product or Service so delayed in respect of each month of such
further delay (and pro rata for any period of less than one month)
subject to an overall maximum of * of the purchase price of the Product
or Service so delayed.
8.3 Should Rolls-Xxxxx xxxxx any agreed date of delivery for any spare
Engine for reasons other than those set out in Clause 8.1 hereof, and
Operator has an urgent operational requirement for a spare Engine to
avoid an "Aircraft on Ground" situation, then Operator may request that
Rolls-Royce shall provide to Operator a lease engine in accordance with
the Lease Agreement.
Dependant under which maintenance support program the Operator operates
its Engines, Operator shall pay charges in respect of such lease engine
as follows:
o If Operator operates under the Total Support Package including
Life Limited Parts then the charges shall be the applicable daily
rental charge in accordance with the Standard Terms of Business
for Leasing subject to a maximum amount per month equal to a then
applicable monthly operating lease rate for a ten-year term at
market rates, plus the then applicable Total Support Package
charge limited to the Shop Visit Coverage and LLP elements and ;
or
o If Operator operates under the Total Support Package excluding
Life Limited Parts then the charges shall be the applicable daily
rental charge in accordance with the Standard Terms of Business
for Leasing subject to a maximum amount per month equal to a then
applicable monthly operating lease rate for a ten-year term at
market rates, plus the then applicable Total Support Package
charge limited to the Shop Visit Coverage element , plus the then
applicable cyclic charge in accordance with the Standard Terms of
Business for Leasing ; or
* Indicates that material has been omitted and confidential treatment has been
requested therefor. All such omitted material has been filed separately with
the SEC pursuant to Rule 24b-2.
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General Terms Agreement
o If Operator does not operate under the Total Support Package then
the charges shall be the applicable daily rental charge in
accordance with the Standard Terms of Business for Leasing
subject to a maximum amount per month equal to a then applicable
monthly operating lease rate for a ten-year term at market rates,
plus the then applicable cyclic and hourly charge in accordance
with the Standard Terms of Business for Leasing ; or
o If upon such request by Operator Rolls-Royce fails to provide
such lease engine to Operator then in respect of the first day of
the non-excusable delay Rolls-Royce shall not be under any
liability, and in respect of any further non-excusable delay in
excess of 1 (one) day Rolls-Royce as its sole obligation shall
provide to Operator a credit note in the amount of the then
current daily rental charge applicable to Engines in accordance
with the Standard Terms of Business for Leasing in respect of
each day of such delay beyond the first day of such delay.
The total liability of Rolls-Royce under this Clause 8.3 in respect of
each spare Engine shall not exceed an amount equal to the then current
daily rental charge for a period of 180 (one hundred and eighty) days
in accordance with the Standard Terms of Business for Leasing.
The remedies available to Operator under this Clause 8.3 shall be in
lieu of the remedies set out in Clause 8.2 above.
8.4 Should Rolls-Xxxxx xxxxx delivery of any Products or Services for a
period of 12 (twelve) months then, in addition to the right of Operator
under Clause 8.2 above, Operator shall be entitled to refuse to take
delivery of such item on giving Rolls-Royce notice in writing within
one month after the expiration of such period of 12 (twelve) months.
Upon receipt of such notice Rolls-Royce shall be free from any further
obligation in respect of such item of Supplies except that Rolls-Royce
shall refund to Operator any deposits plus reasonable amount for
interest made in respect of the purchase price of such Products or
Services, if applicable
The right of Operator to claim damages shall be conditional upon the
submission of a written claim therefor within thirty days from the date
of which Rolls-Royce notifies Operator that the Products or Services so
delayed is ready for delivery or from the date on which Operator
exercises the right of cancellation in respect of such item as set out
below, whichever date shall first occur.
8.5 Rolls-Royce and Operator acknowledge that the liquidated damages
calculated as set forth in Clause 8.2 and Clause 8.3 are reasonable
damages in light of the anticipated harm that will be caused by such
non-excused delay in delivery or failure to provide a warranty remedy
(as the case may be), the difficulties of proof of loss, and the
inconvenience or non-feasibility of Operator's otherwise obtaining an
adequate remedy. Liquidated damages due pursuant to Clause 8.2 or
Clause 8.3 shall be payable by Rolls-Royce to Operator on demand;
provided, however, that Operator may, at its option, apply the amount
of said liquidated damages as a credit against the purchase price of
Products or Services obtained hereunder.
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General Terms Agreement
CLAUSE 9. Events of Default and Termination
9.1 If either party hereto makes any agreement with creditors generally
compounding debts, enters liquidation whether compulsory or voluntary
(except as a solvent company for the purpose of amalgamation or
reconstruction), becomes insolvent or suffers a receiver of the whole
or part of its assets to be appointed, then the other party shall have
the right, without prejudice to its other rights or remedies, to
terminate this Agreement. Such termination shall be effected by the
party entitled to terminate issuing notice of termination in writing to
the other party and such notice shall be effective twenty-four (24)
hours after it is issued.
9.2 If Rolls-Royce terminates this Agreement in accordance with the
provisions of Clause 9.1 above, Operator shall promptly pay to
Rolls-Royce any amounts then due or owed for all Products and Services
ordered and delivered at the time of the termination, and Rolls-Royce
shall also be entitled to retain all amounts paid to Rolls-Royce under
this Agreement.
9.3 Operator shall be in full compliance with the payment terms set forth
in Clause 6 of this Agreement and all other material terms of this
Agreement and any related agreement with Rolls-Royce or its affiliate
companies with respect to the Aircraft, including spare Engine Lease
agreements with Rolls-Royce & Partners Finance, if applicable, and any
Standard Terms of Business for Leasing with Rolls-Royce North America,
Inc., if applicable, and any Aircraft advance payment or long-term
finance agreements with Rolls-Royce Capital, Inc., if applicable (for
the purpose of this Clause collectively the "Agreements"). If Operator
is in breach of any material obligation under these Agreements and such
breach continues for a period exceeding (a) in the event of a payment
breach, ten (10) days following receipt of Rolls-Royce's written
notification of such breach, or (b) in the event of any other breach,
thirty (30) days following receipt of Rolls-Royce's written
notification of such breach or such longer period as is necessary to
remedy such non-payment breach, then without prejudice to Rolls-Royce's
other rights or remedies, Rolls-Royce may, without being obliged to,
terminate this Agreement or exercise any one or more of the following
rights:
9.3.1 stop all work under this Agreement and refuse to deliver (or
redeliver if applicable) any further Products and Services;
9.3.2 divert affected Products and Services to other Operators or for
its own purposes;
9.3.3 treat all amounts then owing hereunder by Operator to be
immediately due;
9.3.4 exercise a mechanic's lien upon any engine which may from time
to time be in the possession of Rolls-Royce or one of its
authorized Rework facilities to secure any monies due to
Rolls-Royce under this Agreement; and
9.3.5 If any monies due to Rolls-Royce under this Agreement remain
due and unpaid for more than three (3) months and Rolls-Royce
has exercised any of its rights under Clause 9 above,
Rolls-Royce may make a reasonable charge in respect of storage
and insurance of Products or any items held in connection with
such Products and transportation equipment held by Rolls-Royce
and at any time after such period of three (3) months sell any
such Products and apply the proceeds of such sale in
satisfaction of such unpaid monies and any attorneys' fees
incurred in association with such default.
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General Terms Agreement
CLAUSE 10. Non-disclosure
10.1 Subject to Clause 10.2 below each Party agrees to hold in confidence
any Information which it acquires directly or indirectly from the other
Party or any of its subsidiaries and agrees not to disclose at any time
the same to any third person without the written approval of other
Party. These obligations shall continue for so long as this Agreement
remains in effect, and for one (1) year thereafter.
10.2 Each Party shall be responsible for the observance of the provisions of
Clause 10.1 above by its employees.
10.3 The provisions of Clause 10.1 above shall not apply to Information
which is or becomes generally known in the aero engine industry nor
shall the provisions of Clause 10.1 above prevent any necessary
disclosure of Information to enable Operator itself to use, operate,
maintain or overhaul Products and Services.
10.4 Notwithstanding Clause 10.1 above, each Party shall be entitled to
disclose the other's Information if required to do so by law or the
requirements of regulatory authorities (including without limitation
the U.S. Securities and Exchange Commission), or for purposes of
enforcing this Agreement or pursuant to or in the context of any
dispute resolution process (including but not limited to arbitration
proceedings), or to such Party's own lenders, financial advisors or
attorneys (provided such lenders, advisors or attorneys are subject to
an appropriate confidentiality agreement). Notwithstanding Clause 10.1
above, both Parties shall be entitled to disclose financial information
concerning business between Rolls-Royce and Operator to appointed
auditors, and Rolls-Royce shall be entitled to disclose financial
information concerning business between Rolls-Royce and Operator to
Rolls-Royce's risk and revenue sharing partners and to Rolls-Royce
affiliates for the purposes of fulfilling obligations hereunder.
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CLAUSE 11. Intellectual Property
11.1 Rolls-Royce shall, subject to the conditions set out in this Clause and
as the sole liability of Rolls-Royce in respect of any claims for
infringement of intellectual or industrial property rights, defend and
indemnify Operator against any claim that the purchase or use of any of
the Products or Services by Operator within any country to which at the
date of such claim the benefits of Clause 27 of the Convention on
International Civil Aviation of 7th December 1944 (The Chicago
Convention) apply, infringes any patent, trademark, copyright, design,
or model duly granted or registered; provided, however, that
Rolls-Royce shall not be liable to Operator for any loss (whether
direct or indirect):-
11.1.1 of profit, agreements, revenue or goodwill; or
11.1.2 of use of the Products and Services or of the Aircraft in
which the Products and Services may be incorporated arising as
a result directly or indirectly of any such claim.
11.2 Operator will give prompt notice in writing to Rolls-Royce of any such
claim whereupon Rolls-Royce shall elect to either assume the defense of
or dispose of or settle such claim, at its own expense and in its sole
discretion, and Operator will give Rolls-Royce all reasonable
assistance (at Rolls-Royce's expense) and will not by any act or
omission do anything which may directly or indirectly prejudice
Rolls-Royce in this connection. Rolls-Royce shall pay any settlement
amounts or judgments arising out of any such claims.
11.3 If any of the Products and Services become subject to any claim, suit
or proceeding for infringement, Rolls-Royce may (at its expense)
substitute any allegedly infringing Product or Service with
non-infringing Products and Services that are substantially equivalent
to the items being replaced in terms of performance, functionality, and
cost and ease of use and maintenance, or modify said Products and
Services so as to be non-infringing (so long as the modification does
not adversely affect their performance, functionality, or cost or ease
of use or maintenance), or seek to obtain for Operator the perpetual
right to use the item affected without charge to Operator. If in any
claim, suit or proceeding use of any of the Products or Services is
enjoined or otherwise restrained due to infringement, Rolls-Royce
shall, at its expense, either (a) procure for Operator the perpetual
right to continue using the infringing items, (b) modify the items (in
such a way that does not adversely affect their performance,
functionality, or cost or ease of use or maintenance) to render them
non-infringing, or (c) replace the infringing items with non-infringing
items that are substantially equivalent to or better than the items
being replaced in terms of performance, functionality and cost and ease
of use and maintenance.
11.4 The indemnity contained in Clause 11.1 above shall not apply to claims
for infringement to the extent they are in respect of Products and
Services manufactured to the specified design instructions of Operator,
or the manner or method in which any of the Products and Services is
installed in the Aircraft or any combination of any of the Products and
Services with any item or items other than Products and Services.
Page 16 of 78
Rolls-Royce Deutschland/Midwest Express Airlines
General Terms Agreement
CLAUSE 12. Grant of Warranty and Limitation of Liability
Rolls-Royce grants to Operator the Warranties set out in Exhibit C and the
Guarantees set out in Exhibit F hereto and the Total Support Package set out in
Exhibit G hereto.
12.1 Operator ACCEPTS AND AGREES THAT THE WARRANTIES AND GUARANTEES AND
SUPPORT PACKAGE GRANTED TO OPERATOR UNDER THIS AGREEMENT ARE EXCLUSIVE
AND ARE EXPRESSLY IN LIEU OF AND OPERATOR HEREBY WAIVES, RELEASES AND
DISCLAIMS (I) ALL OTHER CONDITIONS AND WARRANTIES, EXPRESS OR IMPLIED,
INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTY OF MERCHANTABILITY
OR OF FITNESS, AND ANY IMPLIED WARRANTY ARISING FROM COURSE OF
PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE, (II) ALL OTHER
OBLIGATIONS AND LIABILITIES WHATSOEVER OF ROLLS-ROYCE WHETHER IN
CONTRACT, WARRANTY OR TORT (INCLUDING WITHOUT LIMITATION, NEGLIGENCE,
ACTIVE, PASSIVE OR IMPUTED LIABILITY OR STRICT LIABILITY) OR BY STATUTE
OR OTHERWISE FOR ANY NONCONFORMANCE, DEFECT, DEFICIENCY, FAILURE,
MALFUNCTIONING, OR FAILURE TO FUNCTION OF ANY ITEM OF THE PRODUCTS AND
SERVICES REFERRED TO IN THIS AGREEMENT, (III) STRICT LIABILITY OR
PRODUCT LIABILITY, AND (IV) ALL DIRECT, INDIRECT, SPECIAL,
CONSEQUENTIAL AND INCIDENTAL DAMAGES OF ANY NATURE WHATSOEVER, AND
OPERATOR AGREES THAT ROLLS-ROYCE SHALL NOT BE LIABLE TO OPERATOR UPON
ANY CLAIM THEREFOR OR UPON ANY CLAIM HOWSOEVER ARISING OUT OF THE
MANUFACTURE OR SUPPLY OR INSPECTION BY ROLLS-ROYCE OR ANY OF ITS
AFFILIATES OF ANY ITEM OF THE PRODUCTS AND SERVICES OF THIS AGREEMENT
WHETHER IN CONTRACT, WARRANTY OR TORT (INCLUDING WITHOUT LIMITATION,
NEGLIGENCE, ACTIVE, PASSIVE OR IMPUTED LIABILITY OR STRICT LIABILITY)
OR BY STATUTE OR OTHERWISE EXCEPT AS EXPRESSLY PROVIDED IN THE
WARRANTIES AND GUARANTEES AND SUPPORT PACKAGE, AND OPERATOR ASSUMES ALL
RISK AND LIABILITY WHATSOEVER NOT EXPRESSLY ASSUMED BY ROLLS-ROYCE IN
THE WARRANTIES.
12.2 ROLLS-ROYCE AND OPERATOR AGREE THAT THIS CLAUSE 12 HAS BEEN THE SUBJECT
OF DISCUSSION AND NEGOTIATION, IS FULLY UNDERSTOOD BY THE PARTIES AND
THE PRICE OF THE PRODUCTS AND SERVICES AND OTHER MUTUAL AGREEMENTS OF
THE PARTIES SET FORTH IN THE AGREEMENT ARE ARRIVED AT HAVING DUE REGARD
TO:
12.2.1 THE EXPRESS WARRANTIES AND GUARANTEES AND SUPPORT PACKAGE OF
ROLLS-ROYCE AND OPERATOR'S RIGHTS THEREUNDER; AND
12.2.2 THE EXCLUSIONS, WAIVERS AND LIMITATIONS SET FORTH IN CLAUSE
12.1 ABOVE.
12.3 IN CASE OF ANY CONFLICT BETWEEN THIS CLAUSE 12 AND ANY OTHER CLAUSE OF
THIS AGREEMENT, THE PROVISIONS OF THIS CLAUSE 12 SHALL PREVAIL.
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General Terms Agreement
CLAUSE 13. Indemnification
In the event either employees or agents of Rolls-Royce or Operator enter upon
the property occupied by or under the control of the other Party in the
performance of this Agreement, the Party entering the other Party's premises
assumes responsibility for and agrees to pay for any loss, cost, damage to
property, or for personal injury or death of any persons (other than employees
of the other Party covered by Workers' Compensation Insurance or other
comparable insurance) arising out of, as a result of, or in connection with the
actions or omissions of the Party entering the property occupied by or under the
control of the other Party. If a claim or demand is asserted against a Party by
reason of the act or omission of the other Party, then such other Party will be
offered the opportunity to participate at its own expense in the defense against
such claim or demand. Each Party also agrees that it will maintain public
liability and property damage insurance in reasonable limits consistent with
industry standards covering the obligations set forth above and will maintain
proper Workers' Compensation Insurance (or other comparable insurance) covering
all of its employees performing this Agreement.
Page 18 of 78
Rolls-Royce Deutschland/Midwest Express Airlines
General Terms Agreement
CLAUSE 14. General
14.1 Effective Date and Expiration
This Agreement shall become effective immediately following the date
first written here before (the "Effective Date") and shall remain in
effect until it expires or is terminated by either Party. Unless sooner
terminated, pursuant to other provisions hereof, or unless renewed and
extended by the Parties hereto, this Agreement shall expire without
further action or notice by either Party on the date that is twenty
(20) years following the date the last Aircraft purchased by Operator
is delivered to Operator.
14.2 Survival
The provisions of Clauses 10 (Non-Disclosure), 11 (Patents), 12
(Limitation of Liability), 13 (Indemnification), 14.9 (Applicable Law
and Jurisdiction) and Exhibit C (Warranties) of this Agreement, and any
other provision of this Agreement that by its express terms or nature
is meant to survive termination or expiration hereof, shall survive and
continue to have effect should this Agreement expire or be terminated
for any reason or after this Agreement becomes impossible of
performance or is otherwise frustrated.
14.3 Notices
Any notice required to be given by either Party to the other under or
in connection with this Agreement shall be in writing and delivered
personally, by certified mail or by facsimile. Notices to Operator
shall be directed to:
Midwest Express Airlines, Inc.
0000 Xxxxx Xxxxxx Xxxxxx
Xxx Xxxxx, Xxxxxxxxx, X.X.X. 00000
Attn: Chief Financial Officer
Facsimile: (000) 000-0000
with a copy to the ATTN: General Counsel
Notices to Rolls-Royce shall be directed to:
Rolls-Royce Deutschland Ltd & Co XX
Xxxxxxxxx 00
00000 Xxxxxxxxx
Xxxxxxx
Attn: General Counsel
Facsimile: xx00 00000 00000
or in each case to such other place of business as may be notified from
time to time by the receiving party.
Page 19 of 78
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General Terms Agreement
14.4 Assignment
Neither Party may assign any of its rights or obligations hereunder
without the written consent of the other Party (except that (a) either
Party may assign its interest to any entity that results from any
merger, reorganization or acquisition of or involving such Party, or
that acquires all or substantially all of the assets of such Party; (b)
as long as Operator operates the Aircraft, then Operator may assign its
rights or obligations hereunder in connection with a sale and
lease-back of one or more Aircraft for financing purposes); and (c)
Rolls-Royce may assign its rights to receive money hereunder). Any
assignment made in violation of this Clause 14.4 shall be null and
void.
14.5 Amendment
14.5.1 This Agreement shall not be amended in any way other than by
agreement in writing, entered into by the Parties hereto on or
after the date of this Agreement, which is expressly stated to
amend this Agreement.
14.5.2 This Agreement shall not be amended or terminated orally.
14.6 Headings
The Clause headings and the Index do not form a part of this Agreement
and shall not govern or affect the interpretation of this Agreement.
14.7 Waiver
Failure by either party at any time to enforce any of the provisions of
this Agreement shall not be construed as a waiver by such party of such
provisions or in any way affect the validity of this Agreement or any
part thereof.
14.8 Severability
If any provision of this Agreement is or becomes or is declared
invalid, unenforceable or illegal by any court of competent
jurisdiction or any other Competent Authority such invalidity,
unenforceability or illegality shall not prejudice or affect the
remaining provisions of this Agreement which shall continue in full
force and effect notwithstanding such invalidity, unenforceability or
illegality. 'Competent Authority' means any agency, authority,
department, inspectorate, minister, ministry, official or public or
statutory person (whether autonomous or not) of, or of the government
of the United Kingdom or of the European Union.
In addition, the parties shall in good faith endeavor to reach
agreement on a provision to replace the invalid provision which, as
nearly as possible, will reflect the intent of the original provision.
14.9 Applicable Law and Jurisdiction
THIS AGREEMENT SHALL BE SUBJECT TO AND INTERPRETED AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF WASHINGTON EXCLUDING ITS
CONFLICT OF LAW RULES AND EXCLUDING THE UNITED NATIONS CONVENTION FOR
THE INTERNATIONAL SALE OF GOODS (CISG, 1980, "VIENNA CONVENTION").
Page 20 of 78
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General Terms Agreement
14.9.1. It is the intent of the Parties and the Airframer
(collectively, the "Contracting Parties") that any and all
disputes arising out of or relating to this Agreement, the
Aircraft, the Engines, the Products or the Services that
cannot be resolved through negotiation ("Disputes") and that
involve one or more Contracting Parties (whether or not a
particular such Dispute also involves disputants that are not
Contracting Parties) be resolved to the greatest extent
possible in a single, comprehensive, definitive litigation
proceeding. Accordingly, the Parties hereby agree that (a) any
Contracting Party that files or responds to a complaint or
other initial pleading (in any form and however denominated)
in connection with a Dispute shall notify the other
Contracting Parties of the same and provide copies of said
complaint or response to each of them; (b) any Contracting
Party which thereafter wishes to assert a claim or grievance
amounting to a Dispute against any other Contracting Party
shall do so by way of a claim, counterclaim, cross-claim or
third-party claim in the first complying litigation that is
the subject of a notification provided for in sub-clause (a)
above, unless the court refuses for procedural reasons to
entertain such claim as part of that litigation; and (c) in
the event that suits relating to Disputes are initiated in
more than one court, the parties to all such suits shall
promptly stipulate that all such suits may be consolidated
into a single case before the U.S. District Court for the
Eastern District of Wisconsin or, if such court lacks subject
matter jurisdiction, a state court of competent jurisdiction
within the geographic area included in that district (in
either case, the "Forum Court"), and may be heard and
determined in a single and integrated proceeding. Each Party
hereby consents to the exercise of personal jurisdiction over
it by the Forum Court for the purpose of resolving any
Dispute.
14.9.2 Notwithstanding anything to the contrary herein, this
Agreement and each Party's respective rights and obligations
are expressly subject to all applicable laws and regulations.
14.9.3 The official text of this Agreement is the English language.
If this Agreement is translated into another language for the
convenience of Operator or its personnel, the English text
shall govern any question with respect to interpretation.
14.10 Sole Agreement of Parties
14.10.1 This Agreement contains the only provisions governing the sale
and purchase of Products and Services and shall apply to the
exclusion of any other provisions on or attached to or
otherwise forming part of any order form of Operator or any
acknowledgement or acceptance by Rolls-Royce or of any other
document which may be issued by either Party relating to the
sale and purchase of Products and Services.
14.10.2 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 Products and
Services 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
Products and Services and shall supersede all such
representations, agreements, statements and understandings.
The Parties further agree that neither of them shall place any
reliance whatsoever on any and all future representations
whatsoever in respect of the performance of this Agreement
unless such representations are expressly agreed by the
Parties hereto in writing to form a term of this Agreement.
14.10.3 The foregoing exclusions, waivers and limitations, however,
shall not in any way limit Rolls-Royce's liability arising
from its willful breach of contract or its failure to comply
with applicable laws, regulations, codes or ordinances, or
limit Rolls-Royce's liability under Clause 11 or Clause 13 of
this Agreement.
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General Terms Agreement
CLAUSE 15. Export/Import Shipment
Rolls-Royce shall be responsible for obtaining any required export license and
Operator shall be responsible for obtaining any other required authorization
such as import licenses, exchange permits or other required authorizations,
except as otherwise provided herein. Rolls-Royce and Operator shall assist each
other in every manner reasonably possible in securing and complying with such
authorizations as may be required.
Rolls-Royce shall restrict disclosure of all Information and data which is
disclosed by Operator and furnished to Rolls-Royce in accordance with Clause 10,
and shall ship the direct product of such Information and data so disclosed by
Operator and furnished to Rolls-Royce to only those destinations which are
authorized by the United States Government. At the request of Operator,
Rolls-Royce will provide Operator with a list of such authorized destinations,
and Operator shall assist Rolls-Royce in every manner reasonably possible in
compiling such list of authorized destinations. Rolls-Royce shall not be liable
if any authorization is delayed, denied, revoked, restricted or not renewed.
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General Terms Agreement
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be signed
on their behalf by the duly authorized representatives, the day and year first
written before.
Signed for and on behalf of: Signed for and on behalf of:
ROLLS-ROYCE DEUTSCHLAND LTD & CO KG MIDWEST EXPRESS AIRLINES, INC.
By /s/ X.X. Xxxxxx By: /s/ Xxxxxxx X. Xxxxxxxx
-------------------------- ---------------------------------
Printed X.X. Xxxxxx Printed Xxxxxxx X. Xxxxxxxx
-------------------------- ----------------------------
Title: Director Title: Chairman of the Board,
-------------------------- President and Chief
Executive Officer
By /s/ J.W.N. Xxxxxxx
--------------------------
Printed J.W.N. Xxxxxxx
--------------------------
Title: Director of Regional
Programmes
--------------------------
Page 23 of 78
Rolls-Royce Deutschland/Midwest Express Airlines
General Terms Agreement
EXHIBIT A - AIRCRAFT DELIVERY SCHEDULE
Firm B717-200 Aircraft:
2003 2004 2005
February January January
March February February
April March
May April
June May
July June
August July
September August
October September
November October
December November
December
Option B717-200 Aircraft: Up to twenty-five (25) Aircraft, subject to
Operator's purchase rights, for delivery prior to
12/31/09. Such total quantity of option Aircraft
shall, if Operator's purchase rights are not
exercised, decrease by a quantity of six (6)
Aircraft on 12/31/04, by a further quantity of six
(6) on 12/31/06, by a further quantity of six (6)
on 12/31/07 and by a final quantity of seven (7)
on 12/31/08.
Midwest Express has certain rights under certain circumstances to delay or
terminate all or part of the Aircraft deliveries under the Airframer contract.
As a consequence, the schedule reflected in this exhibit , may change.
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General Terms Agreement
EXHIBIT B - OPERATING ASSUMPTIONS
Aircraft maximum take-off weight of 110,000 lbs.;
Aircraft operating empty weight (OEW) of 70,000 lbs.;
Engines rated at 18,500 lbf. max. take-off thrust;
An average annual ambient daily maximum temperature of ISA -2 (0)C (Milwaukee)
at take-off;
Average take-off derate of 10%;
Average climb derate of 10%;
Aircraft will operate in a benign operational environment (not containing,
without limitation, abnormal levels of corrosive or abrasive pollutants),
Operator's current operation and route structure (2001) is deemed to be
considered as a `benign' operation;
An average stage length of 1.6 flight hours per cycle;
An average annual Aircraft utilization of 2,960 hours;
An average minimum annual Aircraft utilization of 2,500 hours;
Subject to all of Operator's rights and remedies under its contract with the
Airframer for the purchase of Aircraft, Operator will purchase and take delivery
of the Firm Aircraft and, in the event and to the extent it exercises its option
to purchase, the Option Aircraft, in accordance with the delivery schedule
contained in Exhibit A hereto and operate the purchased Aircraft in regular and
frequent commercial airline service;
Operator will acquire and retain for its operation the spare Engines subject to
the terms of Exhibit E and in accordance with the delivery schedule contained in
Exhibit E hereto;
Operator will procure and maintain a mutually-agreed upon level of spare
Modules, LRU's and Parts (including but not limited to initial provisioning and
maintain a mutually-acceptable level of line maintenance provisioning across its
route network.
Engines will be operated by Operator in accordance with Rolls-Royce's Operating
Instructions and maintained in accordance with the Aircraft Maintenance manual
and the EMP.
Page 25 of 78
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General Terms Agreement
EXHIBIT C - WARRANTIES
1 DEFINITIONS
In addition to those words and phrases defined in the main body of the
Agreement, the following words and phrases when used in this Exhibit C,
Warranties, shall have the meaning and definition set forth below.
"Engine Time" means the total number of hours flown by an Engine since new.
"Module Time" means the total number of hours flown by a Module since all Parts
of the Module were new.
"Parts Time" means the total number of hours flown by a Part since new.
"Price" means the net selling price of a Part to Operator, last published prior
to the time when the Failure is discovered against which Operator purchases
Parts from Rolls-Royce or an affiliate Company.
"Resultant Damage" means the damage suffered by a Part, necessitating the
scrapping of that Part because that Part is beyond economic repair in accordance
with Maintenance schemes issued by Rolls-Royce, providing such damage is caused
by the Failure of another Part.
"Ultimate Flight Cycle" means the maximum permitted Flight Cycles imposed by
Rolls-Royce or the Airworthiness Authority.
"Warranted Life" means the warranted life for a Designated Part as described in
Schedule 1 to Exhibit C hereto.
"Warranty Labor Rate" means the then average direct hourly wages multiplied by a
factor of 1.5 paid by Operator to those of its employees and contractors that
provide Line Maintenance or other maintenance labor with respect to Engines.
2 NEW ENGINE WARRANTY
Rolls-Royce warrants new Engines against defect in design, material or and
workmanship which result in Failure or Resultant Damage as follows:
2.1 Warranty Period
The period of this Clause 2 warranty shall be:
2.1.1 the first * hours or cycles, whichever is first completed
("First Engine Run"), and
2.1.2 the * through * hours or cycles, whichever is first
completed ("Extended Engine Run").
* Indicates that material has been omitted and confidential treatment has been
requested therefor. All such omitted material has been filed separately with
the SEC pursuant to Rule 24b-2.
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General Terms Agreement
2.2 Warranty Remedies
2.2.1 First Engine Run
If an Engine suffers Failure or Resultant Damage during its
First Engine Run warranty period as defined in Clause 2.1.1,
then:
2.2.1.1 where such Failure or Resultant Damage necessitates
repair of the Engine, Rolls-Royce will arrange to
have such repair carried out promptly, correctly and
at no charge to Operator, or
2.2.1.2 where such Failure or Resultant Damage does not
necessitate repair of the Engine, Rolls-Royce will
provide a one hundred percent (100%) allowance on the
Price of the affected Engine Parts.
2.2.2 Extended Engine Run
If an Engine suffers Failure or Resultant Damage during its
Extended Engine Run warranty period as defined in Clause
2.1.2, then
2.2.2.1 where such Failure or Resultant Damage necessitates
repair of the Engine, Rolls-Royce will arrange to
have such repair carried out promptly and correctly
and will accept repair charges for an amount equal to
(* - Engine Time) / * x invoiced repair
charges, or
2.2.2.2 where such Failure or Resultant Damage does not
necessitate repair of the Engine, Rolls-Royce will
provide an allowance in respect of the affected
Engine Parts for an amount equal to:
(* - Engine Time) / * x [Price of such Engine
Parts
2.3 BFE Exclusion
The Boeing and BFGoodrich Furnished Equipment (hereinafter referred to
as "MDFE") as set out in Section 3 of the Specification for the Engine
(Exhibit H) shall not be warranted by Rolls-Royce and the benefits to
Operator under any of the warranties contained in this Exhibit C shall
not apply to such MDFE.
3 DESIGNATED PARTS WARRANTY
Rolls-Royce warrants Designated Parts as listed in Schedule 1 hereto
(i) assembled into or attached to new Engines, or
(ii) acquired by Operator as spare Parts
against defect in design, material and workmanship in the manufacture of the
Designated Part which result in Failure or Resultant Damage as set out in
Clauses 3.1 and 3.2 below:
* Indicates that material has been omitted and confidential treatment has been
requested therefor. All such omitted material has been filed separately with
the SEC pursuant to Rule 24b-2.
Page 27 of 78
Rolls-Royce Deutschland/Midwest Express Airlines
General Terms Agreement
3.1 Warranty Period
The period of this Clause 3 warranty shall be:
3.1.1 the first 3,000 hours or cycles of Parts Time, whichever is
first completed ("First Parts Run"), and
3.1.2 the 3,001 through DPWL hours or cycles of Parts Time,
whichever is first completed ("Extended Parts Run"),
where DPWL ("Designated Part Warranted Life") shall mean the warranted
life of each Designated Part as set out in Schedule 1 hereto.
3.2 Warranty Remedies
3.2.1 First Parts Run
If, during its First Parts Run warranty period as defined in
Clause 3.1.1, a Designated Part suffers either (a) a Failure,
or (b) Resultant Damage due to the Failure of another
Designated Part within that other Part's warranty period, then
Rolls-Royce will, at its option, either:
3.2.1.1 give a 100 percent (100%) allowance on the Price of
the affected Designated Part, or
3.2.1.2 repair or exchange such Designated Part promptly,
correctly and at no charge to Operator.
3.2.2 Extended Parts Run
If, during its Extended Parts Run warranty period as defined
in Clause 3.1.2, a Designated Part suffers either (a) Failure,
or (b) Resultant Damage due to the Failure of another
Designated Part within that other Part's warranty period, then
Rolls-Royce will grant allowances on the Price of such Part as
set out in 3.2.1.1, but factored as follows:
DPWL-PartsTime
Factor --------------
DPWL-1,000
Page 28 of 78
Rolls-Royce Deutschland/Midwest Express Airlines
General Terms Agreement
3.3 Other Engine spare Parts
Rolls-Royce warrants new Engine spare Parts other than Designated Parts
against defect in design, material or workmanship in the manufacture of
such Engine spare Part which result in Failure as follows:
3.3.1 Warranty Period
The period of this Clause 3.3 warranty shall be the first 500
hours of Parts Time, commencing with the original
incorporation of the Engine spare Part into an Engine.
3.3.2 Warranty Remedies
If, during its warranty period as defined in Clause 3.3.1
above, such Engine spare Part suffers Failure then Rolls-Royce
will, at its option, either:
3.3.2.1 grant a one hundred percent (100%) allowance on the
Price of the affected Engine spare Part , or
3.3.2.2 repair or exchange such Engine spare Part promptly,
correctly and at no charge to Operator.
3.4 Used Parts Warranty
Rolls-Royce warrants Used Parts against Failure as follows:
3.4.1 Warranty Period
The period of warranty shall be the first * Flight Hours
of Used Parts Time, commencing with the original incorporation
of the Used Part into an Engine.
3.4.2 Warranty Remedies
If, during its warranty period as defined in 3.4.1 above, such
Used Part suffers Failure then Rolls-Royce will, at its
option, either:
3.4.2.1 grant an allowance of one hundred percent 100% of the
Price of such Used Part, or
3.4.2.2 restore such Used Part to a serviceable condition at
no charge to Operator, or
3.4.2.3 replace such Used Part with another Used Part.
4 ULTIMATE LIFE WARRANTY
Ultimate Life Parts as listed in Schedule 2 to this Exhibit are warranted as
follows:
4.1 Warranty Period
The period of warranty shall be the first 15,000 cycles of Parts Time.
* Indicates that material has been omitted and confidential treatment has been
requested therefor. All such omitted material has been filed separately with
the SEC pursuant to Rule 24b-2.
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Rolls-Royce Deutschland/Midwest Express Airlines
General Terms Agreement
4.2 Warranty Remedies
Rolls-Royce will grant to Operator an allowance against the Price of
Ultimate Life Parts which are permanently removed from service because
of attaining a life limitation imposed by Rolls-Royce or the
Airworthiness Authorities or because of a defect. Such allowance shall
be equal to:
(15,000-PartsTime in cycles)
(--------------------------) x Price of such Part
( 15,000 )
5 VENDOR PARTS WARRANTY
5.1 Vendor Parts in New Engines
Vendor Parts installed in new Engines shall be warranted in accordance
with Clause 2 - New Engine Warranty hereof. Clause 11 of the Agreement
shall also apply to said Vendor Parts.
Rolls-Royce shall maintain a Vendor Parts support and control service,
and upon Operator request will assist in Vendor warranty issues arising
and resolve any such issues with the Vendor.
5.2 Vendor spare Parts
All Vendor spare Parts purchased by Operator directly from Rolls-Royce
shall be warranted in accordance with Clause 3 - Designated Parts
Warranty hereof. Clause 11 of the Agreement shall also apply to said
Vendor spare Parts purchased by Operator directly from Rolls-Royce
All Vendor spare Parts purchased by Operator directly from the
manufacturer shall be warranted in accordance with the warranty granted
by the manufacturer of the Vendor spare Part. Rolls-Royce shall
maintain a Vendor spare Parts support and control service, and upon
Operator request will assist in Vendor warranty issues arising and
resolve any such issues with the Vendor.
6 TOOLING AND GROUND SUPPORT EQUIPMENT WARRANTY
6.1 Warranty Period
Any Tooling and Ground Support Equipment shall be warranted by
Rolls-Royce against any defect in material, design and workmanship for
a period of twelve (12) months from delivery to Operator.
6.2 Warranty Remedies
In case of such defect Rolls-Royce at its discretion shall repair or
replace the defective product promptly and correctly and free of charge
to Operator.
Page 30 of 78
Rolls-Royce Deutschland/Midwest Express Airlines
General Terms Agreement
7 CAMPAIGN WARRANTY
7.1 Where Rolls-Royce stipulates in writing that campaign action is to be
taken in respect of a Designated Part such that Engines are to be
removed from service prior to the next planned shop visit, Rolls-Royce
will, to the exclusion of all other allowances, grant Operator an
allowance of:
7.1.1 One hundred percent (100%) of the Price of all such Designated
Parts which are at the time of such stipulation installed or
held by Operator as new or used serviceable stock when the
average parts time of such Designated Parts is less than *
EFH from new,
7.1.2 Pro-rated from one hundred percent (100%) of the Price of all
such Designated Parts which are at the time of such
stipulation installed or held by Operator as used serviceable
stock when the average parts time of such Designated Parts is
* EFH from new to zero percent (0%) of the Price of all
such Designated Parts which are at the time of such
stipulation installed or held by Operator as used serviceable
stock when the average parts time of such Designated Parts is
twice the warranted life of the Parts as specified in Schedule
1.
7.2 The Campaign allowances granted under this Clause 7 are given on the
basis that Operator will incorporate Parts as specified by the campaign
as soon as practicable after receipt of the campaign Parts within the
time period as may be specified by Rolls-Royce. Such allowances do not
apply when parts are replaced on-wing, whereby under such circumstance
the Warranty set out in Clause 3 of this Exhibit shall apply.
8 TECHNICAL PUBLICATIONS AND TECHNICAL SERVICES WARRANTY
8.1 Rolls-Royce warrants that all Information provided under this agreement
are prepared in accordance with the state of the art at the date of
their conception.
8.2 If any Information provided under this Agreement is shown to
Rolls-Royce's reasonable satisfaction to be incorrect, Rolls-Royce
will, in a timely manner, as appropriate and at its own cost, correct
such information.
8.3 No warranty is given in respect of third party data interpreted by
Rolls-Royce. Rolls-Royce assumes that all data supplied by Operator is
accurate, and accepts no responsibility for errors and unreliable
information contained in such data.
8.4 In respect of any work carried out by Rolls-Royce personnel under this
Agreement, Rolls-Royce warrants that such work shall be carried out
using due care and skill. Rolls-Royce's sole liability for
Rolls-Royce's failure to perform such work using due care and skill
shall be to re-perform such work using due care and skill, provided
that such failure to perform has been brought to Rolls-Royce's
attention within 90 days of performance of the work by Rolls-Royce.
8.5 Operator shall be responsible for making any modification to adapt for
its use any data furnished by Rolls-Royce pursuant to this Agreement
and the use to which the Information is put and the consequences
thereof shall be the responsibility solely of Operator.
* Indicates that material has been omitted and confidential treatment has been
requested therefor. All such omitted material has been filed separately with
the SEC pursuant to Rule 24b-2.
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General Terms Agreement
9 WORKMANSHIP WARRANTY - ENGINE SHOP MAINTENANCE
Rolls-Royce warrants engine shop maintenance performed by or arranged by
Rolls-Royce against faulty workmanship as follows:
9.1 Warranty Period
The period of this Clause 9 warranty shall be the shorter of:
9.1.1 the first 1,000 Engine Flight Hours of the repaired Engine,
commencing with the date of installation of the engine in an
Aircraft; and
9.1.2 a period of twelve (12) months from installation but no later
than * months from redelivery
unless such period is less than the period remaining under the original
warranty, in which case the period of the Clause 9 warranty shall be
the period remaining under the original warranty.
9.2 Warranty Remedies
If, during its warranty period as defined in 9.1 above, it is shown to
the reasonable satisfaction of Rolls-Royce that, a defect, deficiency,
failure, malfunction, or failure to function shall have become apparent
in such Engine due to faulty workmanship in carrying out the shop
maintenance, then Rolls-Royce warrants that it will either exchange or
repair any such Engine suffering from such defect, deficiency, failure,
malfunction or failure to function.
10 GENERAL WARRANTY CONDITIONS
10.1 The Warranties set out in this Exhibit C shall be subject to the
provisions of Clause 12 of the Agreement and the following conditions:
10.2 Rolls-Royce shall have no obligation under this warranty if and to the
extent in the reasonable opinion of Rolls-Royce any Engine or Part:
10.2.1 has not been properly stored, installed, operated and
maintained in accordance with the recommendations of
Rolls-Royce as contained in its manuals, operating procedures
or other written instructions, including instructions on life
limitations, or
10.2.2 has been repaired or altered in such a way as to impair its
safety, operation, efficiency or design features, or
10.2.3 has been subject to mis-use, negligence, accident or acts of
God, or
10.2.4 has suffered damage due to the ingestion of FOD, or
10.2.5 has been subjected to acts of war, rebellion, seizure or any
other defect or cause not within the control of Rolls-Royce
10.3 In lieu of granting any Parts allowance under this Warranty Rolls-Royce
may at its discretion repair or exchange or have repaired or exchanged
any Part. Any Part so exchanged shall have no greater Parts Time than
the Part returned by Operator (unless agreed with Operator).
10.4 The warranty on any Part provided under the New Engine Warranty, New
Parts Warranty or Used Parts Warranty shall be the unexpired portion of
the applicable Warranty.
* Indicates that material has been omitted and confidential treatment has been
requested therefor. All such omitted material has been filed separately with
the SEC pursuant to Rule 24b-2.
Page 32 of 78
Rolls-Royce Deutschland/Midwest Express Airlines
General Terms Agreement
10.5 Except as otherwise provided in this Exhibit C or elsewhere in this
Agreement, Rolls-Royce shall not be liable for any expenses or
liabilities sustained in connection with the removal of an Engine,
Module or Part from an aircraft or the replacement thereof in an
aircraft, or in connection with the removal of any Module or Part from
an Engine or the replacement thereof in an Engine, or for any expenses,
taxes, duties or liabilities sustained in connection therewith or in
connection with any shipment to or from an Authorized Facility.
10.6 Where Rolls-Royce requests Operator to hold a Part pending the
development of a repair scheme, Operator shall hold such Part for a
period of up to ninety (90) days following such request by Rolls-Royce.
If at the end of such period a repair scheme has not been developed, or
clearly will not be developed within a reasonable time thereafter,
Operator shall have the right to raise a claim.
10.7 Operator shall present any claim under Warranties to Rolls-Royce within
180 days after the date upon which the Failure was discovered and shall
keep and disclose accurate records of Engine operation, including
records of maintenance adequate to support such claims.
10.8 Operator shall keep accurate records of Engine, Module and Parts
operation, maintenance and storage, and engine condition monitoring
data and / or trend monitoring data (as applicable) adequate to support
claims hereunder, and shall permit Rolls-Royce to inspect such records
during normal business hours upon reasonable advance notice at a
location selected by Operator.
10.9 Operator shall make available all Engines, parts and spare parts for
inspection and for approval by Rolls-Royce of any claim by Operator
relating thereto during normal business hours upon reasonable advance
notice at a location selected by Operator.
10.10 Any Part for which any allowance other than for repair has been granted
by Rolls-Royce hereunder or which has been exchanged by Rolls-Royce
shall become the property of Rolls-Royce. Unless Rolls-Royce
specifically requests the return of such Parts Operator will consider
such Part its scrap.
10.11 Any allowance granted under this Warranty shall be made as a credit
note usable against Rolls-Royce goods and services.
10.12 Under the New Engine Warranty, Designated Parts Warranty and Ultimate
Life Warranty as of Clauses 2 to 4 above, only one allowance per Part
shall be paid per occurrence of a Failure or Resultant Damage. Operator
may claim under one only of the New Engine, Designated Part or Ultimate
Life Warranty, whichever results in the greatest allowance.
10.13 All credits granted to Midwest Express in this Exhibit C are personal
to Midwest Express, are (subject to Clause 14.4 of the Agreement)
non-assignable, and are not convertible to cash.
11 ADDITIONAL WARRANTIES
In addition to the other warranties set forth in this Exhibit C, Rolls-Royce
warrants as follows: (a) the Spare Engines and all Products and Services shall
be delivered free and clear of all liens and encumbrances, good and merchantable
title thereto being in Rolls-Royce; (b) the Spare Engines and all Products shall
have been manufactured solely from new and unused materials, parts and
components; (c) the Engines and all Products and Services shall comply and have
been produced, processed, labeled, delivered and sold in conformity with all
applicable laws; and (d) all Services shall be performed in a good and
workmanlike manner, in accordance with any established professional standards
for similar services.
Page 33 of 78
Rolls-Royce Deutschland/Midwest Express Airlines
General Terms Agreement
SCHEDULE 1 TO EXHIBIT C - DESIGNATED PARTS
Designated Parts, together with their warranted lives are as set out below
(hours or cycles of Parts Time, whichever is first completed).
For ease of reference only, the engine module and the ATA chapter are also
given.
Module Designated Part ATA Chapter Warranted Life
(Hours/Cycles)
LP Xxx
Xxx blades 72-31 3,500
Vanes, outlet guide 72-31 3,500
Booster
Vanes, inlet guide 72-32 3,500
Vanes, stator 72-32 3,500
HP Compressor
Blades, rotor stages 1 to 10 72-33 3,500
Stators, variable stages 0,1,2 and 72-33 3,500
3
Stators fixed, stages 4,5,6,7,8 72-33 3,500
and 9
Casings, front 72-33 12,000
Casings, rear 72-33 12,000
Combustor & HP Turbine
Vanes, outlet guide 72-41 3,500
CCOC 72-41 3,500
Combustion liner 72-41 3,500
CCIC 72-41 3,500
Rotor blade, stage one 72-41 3,500
Rotor blade, stage two 72-41 3,500
Vanes nozzle, stage one 72-41 3,500
Vanes nozzle, stage two 72-41 3,500
Seal segments, stage one 72-41 3,500
Seal segments, stage two 72-41 3,500
Turbine casing 72-41 12,000
LP Turbine
Rotor blade, stage one 72-51 3,500
Rotor blade, stage two 72-51 3,500
Rotor blade, stage three 72-51 3,500
Vanes, nozzle, stage one 72-51 3,500
Vanes, nozzle stage two 72-51 3,500
Vanes, nozzle, stage three 72-51 3,500
Seal segments, stage one 72-51 3,500
Seal segments, stage two 72-51 3,500
Seal segments, stage three 72-51 3,500
LP turbine casing 72-51 12,000
Turbine exhaust casing 72-51 12,000
LP Compressor Case
Fan casing 71-72 12,000
Page 34 of 78
Rolls-Royce Deutschland/Midwest Express Airlines
General Terms Agreement
SCHEDULE 2 TO EXHIBIT C - ULTIMATE WARRANTED LIFE PARTS
Ultimate Warranted Life Parts are as set out below:
For ease of reference only, the engine module and the ATA chapter are also
given.
Module Ultimate Life Part ATA Chapter
LP Xxx
Xxx disc 72-31
Fan shaft 72-31
Fan Casing / Booster
LP Compressor Drum (Blisk) 72-32
HP Compressor
HPC Drum, front 72-33
HPC Drum, rear 72-33
Combustor and HP turbine
Curvic Ring 72-41
HPT Disc, stage one 72-41
HPT Disc, stage two 72-41
LP Turbine
LPT Disc, stage one 72-51
LPT Disc, stage two 72-51
LPT Disc, stage three 72-51
LPT shaft 72-51
Page 35 of 78
Rolls-Royce Deutschland/Midwest Express Airlines
General Terms Agreement
EXHIBIT D - OPERATOR SERVICES
1 Scope
This Exhibit sets out Operator support services available to all
operators of Rolls-Royce Products. Subject to the terms and conditions
of this Agreement, Rolls-Royce shall supply to Operator and Operator
shall purchase from Rolls-Royce certain Services as discussed in this
Exhibit and as specified in Rolls-Royce's Commercial Price List.
Rolls-Royce reserves the right to revise or update the Commercial Price
List, any prices therein and any Information at any time, upon notice
to Operator. The Rolls-Royce Spare Parts Price Catalogue for the
Engine, and such other Commercial Price Lists and any revisions and
updates thereof shall be published by Rolls-Royce to all operators of
the Engine, and shall not be specific to operators but shall generally
apply to the purchase of such goods or services from Rolls-Royce during
their respective period of validity.
General Policies and Procedures
Standardized procedures and policies will be followed to ensure that
requirements are performed in accordance with industry accepted
standards. These procedures and policies include but are not limited to
ATA specifications and Airworthiness Authority rules and or guidance.
All Services supplied to Operator will be in compliance with the then
current World Operators Supplier Guide (hereinafter "WASG") and the
current revision ATA Specifications.
2 Rolls-Royce Operator Services Package
2.1 Operator Support Manager
Rolls-Royce will designate an Operator support manager based
in the United States who will provide co-ordination and
liaison between Operator and Rolls-Royce in respect of the
operation of the Engines by Operator. Such services extend to
issues including:
2.1.1 Managing emergency Operator requirements,
2.1.2 Managing plans to incorporate Products into Operators'
operations,
2.1.3 Agreeing shop visit forecasts with Operators,
2.1.4 Providing technical and operational direction to
operators and field support recommendations, and
2.1.5 Interpretation of the Manuals, and
2.1.6 Assist with the resolution of warranty claims.
The services of Operator support manager are free of charge to
all operators of Rolls-Royce Products.
2.2 Visiting Service Support
Rolls-Royce will designate a field service representative and
advise Operator of the location of the field service
representative. The field service representative will make
scheduled visits to Operator on a free of charge basis for the
purposes of liaison and to answer any general operational and
technical questions.
Should Operator require additional or specialist visits to
Operator's facilities to assist in the operation of Engines or
training activities, including but not limited to, boroscope
inspections and other line maintenance activities, Rolls-Royce
may charge for such services in accordance with pricing
established in its Commercial Price List.
Page 36 of 78
Rolls-Royce Deutschland/Midwest Express Airlines
General Terms Agreement
2.3 On Site Service Representative
At one (1) month notice of request from Operator (but not
earlier than three (3) months prior to entry-of-service of the
first Aircraft), Rolls-Royce will make available the services
of a field service representative at Operator's facilities at
Milwaukee. Such representative will provide, in addition to
those services as described above, the following:
2.3.1 Local technical support to assist in the resolution
of technical problems,
2.3.2 Training in the operation and maintenance of Engines,
2.3.3 Advice regarding the borescoping and life management
of installed Engines, and
2.3.4 To effectively communicate to Rolls-Royce all aspects
of in-services issues affecting Operator's operation
of the Engine, and
2.3.5 Assist with the resolution o warranty claims.
Operator will make available to Rolls-Royce's representative
on a free of charge basis the following:
2.3.6 reasonable work space, services and facilities,
including free telephone calls in accordance with
his/ her duties;
2.3.7 free emergent medical attention to the extent
normally provided to Operator's own employees;
2.3.8 cost of travel and a reasonable daily allowance for
subsistence and accommodation while the
representative is required by Operator to travel away
from Operator's location at Milwaukee with Operator;
2.3.9 holiday privileges in accordance with Operator's
normal practice; upon Operator's request, Rolls-Royce
will send a field-representative on a temporary basis
to cover such holiday period.
2.3.10 access to Operator's computer network for all
non-sensitive data and information pursuant to the
representative's duties.
While working at Operator's facilities, Rolls-Royce's
representative shall comply with Operator's rules and
regulations. If Operator is dissatisfied with any
representative, Rolls-Royce will upon request provide a
replacement representative.
2.4 Supply of Technical Publications
2.4.1 Rolls-Royce provides a full suite of technical
publications (defined as Manuals) to enable the
operation and maintenance of the Engine in accordance
with Rolls-Royce operating instructions. The full
listing of technical publications available for
purchase, together with prices for ongoing revision
services are provided in Rolls-Royce's Commercial
Price List.
2.4.2 Manuals will be supplied in simplified English and
any translation or interpretation that may be
required by Operator is the responsibility of
Operator.
2.4.3 Operator acknowledges that although Rolls-Royce may
provide instruction, training and advice under this
Agreement, Products are only to be maintained,
operated and otherwise handled in accordance with the
Manuals.
2.5 Operator Training
Rolls-Royce provides training courses in the operation and
maintenance of Engines at one of the following locations: the
Rolls-Royce Corporation Training Center in Indianapolis,
Indiana, USA; Rolls-Royce plc training facilities in Derby,
England UK; or the Rolls-Royce/CASC training center in
Tianjin, China in accordance with a schedule published by
Rolls-Royce.
Page 37 of 78
Rolls-Royce Deutschland/Midwest Express Airlines
General Terms Agreement
Rolls-Royce's training for the Engine comprises the following
courses:
o General Familiarization, Course Duration 2 Day, Training
Level ATA 104 level I
o Line and Base Maintenance, Course Duration 8 Day, Training
Xxxxx XXX 000 xxxxx XXX
o Boroscope Inspection, Course Duration 2 Day, Training Level
ATA 104 level IV
The following general provisions apply to training:
2.5.1 One (1) copy of the training material per student
will be provided.
2.5.2 Preferred class size is fifteen (15) students.
2.5.3 Operator will be responsible for providing
transportation, subsistence, accommodations, salaries
and all other related expenses for its personnel
attending class at a Rolls-Royce training facility.
Charges for the training are specified in Rolls-Royce's
Commercial Price List.
Page 38 of 78
Rolls-Royce Deutschland/Midwest Express Airlines
General Terms Agreement
EXHIBIT E - FLEET PROVISIONING SUPPORT
Exhibit E - 1 Spare Engine Purchase
1. Supply
Subject to the provisions of this Agreement Rolls-Royce agrees to sell
and deliver to Operator and Operator agrees to buy and take delivery of
spare Engines as set in Schedule 1 to this Exhibit. The schedule of
spare Engines has been predicated upon the purchase by Operator of the
Firm Aircraft; the schedule is subject to all of Operator's rights and
remedies under its contract with Airframer for the purchase of
Aircraft. If and to the extent Operator is entitled to terminate said
contract with Airframer, or is otherwise not required to purchase
Aircraft from Airframer, Operator's obligation to buy and take delivery
of spare Engines from Rolls-Royce shall be proportionately reduced, and
Operator shall not be liable to Rolls-Royce in connection with such
reduction.
Rolls-Royce also agrees that in the event Operator exhausts its pool of
spare Engines, resulting in an Aircraft on ground situation, then
emergency spare Engine(s) may be leased by Operator in accordance with
the Lease Agreement. Subject to Clause 4.4.3 of Exhibit G, and
notwithstanding anything to the contrary in the Lease Agreement, the
applicable emergency lease rates shall be as follows:
18,500 lb. Rating:
To the extent Operator has purchased the recommended level of spare
Engines the following rates apply:
Daily Charge USD2,840
Security Deposit USD185,850
Take-off Charge USD91
Flying Hour Charge USD133
The above charges shall also apply should Operator be in a zero spare
engine situation due to Failure (as defined in the Warranties), failure
to achieve generally acceptable turn-around times, late delivery of
spare engines (see Clause 9 above).
To the extent Operator has purchased less than the recommended level of
spare Engines the following rates apply:
Daily Charge USD5,680
Security Deposit USD185,850
Take-off Charge USD91
Flying Hour Charge USD133
The charges set out herein are applicable to a lease commencing in
2002, however Rolls-Royce reserves the right to revise charges
quarterly.
2. Type Approval/Changes
All Products shall at time of delivery conform to a type certificate
issued by the Airworthiness Authority and will be manufactured in
compliance with the official interpretations of the relevant
Airworthiness Authority.
Page 39 of 78
Rolls-Royce Deutschland/Midwest Express Airlines
General Terms Agreement
If, after the date of signature of this Agreement, a change is required
to the Engines, either:
2.1 to conform to the requirements of the Airworthiness Authority
that were promulgated after the Effective Date and the
official interpretations of such requirements in force at the
date of delivery of such Engines, or
2.2 to incorporate a modification or change which has been agreed
between Operator and Rolls-Royce,
then Rolls-Royce will issue a written change order, which shall
constitute an amendment to this Agreement. Unless otherwise agreed, any
increase in any price that is a result of any change order is to be
borne by Operator, except that if the change is required due to a flaw
or defect in the Engines, any increase in price resulting from the
change order shall be borne by Rolls-Royce.
3. Inspection and Acceptance
Conformance to the Specification of Products will be assured by
Rolls-Royce through the maintenance of procedures (including Engine
acceptance testing), systems and records approved by the
Luftfahrt-Bundesamt based on JAR 21-G by the JAA. An authorized Release
Certificate will be issued and signed by Rolls-Royce personnel
authorized for such purposes. Operator shall be given full access to
review all such procedures, systems, records and certificates at any
reasonable time and from time to time.
4. Price and Payment
The base price of Engines is set out in Schedule 1 to this Exhibit. The
deposits and price of Engines shall be calculated in accordance with
the formulae specified in Schedule 2 to this Exhibit.
Unless otherwise agreed by the Parties, Operator will make payments in
United States Dollars as follows:-
o Ten percent (10%) of the Engine base price upon signature of
this Agreement, plus;
o Ten percent (10%) of the Engine base price eighteen (18) months
before scheduled delivery, plus;
o Ten percent (10%) of the Engine base price twelve (12) months
before scheduled delivery, plus;
o Balance of the Purchase Price upon delivery of the Engine.
Rolls-Royce will issue invoices to cover each of the above payments.
Page 40 of 78
Rolls-Royce Deutschland/Midwest Express Airlines
General Terms Agreement
Exhibit E - 2 Spare Parts Supply
1. Intent and Term
Rolls-Royce shall sell spare Parts to Operator in quantities sufficient
to meet Operator's requirements.
Operator shall buy from Rolls-Royce all of its requirements for spare
Parts. In the following circumstances Operator may obtain from
established and approved sources other than Rolls-Royce or from other
airline operators spare Parts which are required to be purchased from
Rolls-Royce:
o as a temporary expedient in the event of a failure by RR to
supply spare Parts as required herein which has an impact on
Operator's operations; or
o during any period when Rolls-Royce is hindered or prevented
from delivering spare Parts due to circumstances beyond its
control provided Operator is thereby able to obtain the spare
Parts it requires sooner than Rolls-Royce is able to supply
them, and provided further that Operator will not unreasonably
thereby increase its stock of the spare Parts; or
o industry standard parts as identified in the Rolls-Royce
Illustrated Parts Catalogue.
Where Operator has an urgent requirement for any Tooling which
Rolls-Royce has in stock or otherwise has reasonably available to it,
Rolls-Royce shall sell to the Operator such Tooling, at a reasonable
price and reasonable Lead Time.
Rolls-Royce and Operator shall comply with the ATA Specifications with
regard to supply of spare Parts except as specifically amended herein.
Operator is required to provide information required to become
established on the Rolls-Royce on line spares management system.
Rolls-Royce shall sell spare Parts to Operator on the terms set forth
in this Agreement from the Effective Date through and including the
date that is sixteen and one-half (16 1/2) years after the date on
which the last Aircraft purchased by Operator is delivered to Operator.
Upon, Operator's request, Rolls-Royce shall assist Operator in locating
and facilitating the sale of spare Parts held by consignment with other
operator or airframer, if any.
Nothing in this clause shall be deemed to extend the obligations of RR
or to diminish the limitations upon such obligations under the
Warranties.
2. Provisioning
Operator shall purchase and maintain a mutually-agreed stock of spare
Parts and Tooling to support its operation.
Rolls-Royce and Operator shall agree upon the required stock of spare
Parts and Tooling within a timescale commensurate with Operator's
operational requirements.
Consistent with changes in Operator's operational requirements,
Rolls-Royce and Operator will regularly review and agree upon changes
to required stock levels of spare Parts and Tooling.
3. Forecasting
Operator shall, upon request, provide Rolls-Royce with forecasts
specifying projected requirements for spare Parts to cover a period of
at least 12 months. Operator shall give Rolls-Royce as much notice as
possible of any change in such estimated requirements. All such
forecasts, projections and estimates will be non-binding and will not
obligate Operator.
Page 41 of 78
Rolls-Royce Deutschland/Midwest Express Airlines
General Terms Agreement
Operator shall, upon reasonable request, inform Rolls-Royce of the
intended use of the Products, including details of the end user of the
Products.
Operator shall provide Rolls-Royce with the following information and
thereafter shall give Rolls-Royce as much notice as possible of any
change in its operation likely to affect spare Parts requirements:
- a twenty-four (24) month non-binding shop visit forecast, detailing
Engine Serial Numbers, such forecast shall be updated on a monthly
basis,
- a thirty-six (36) month shop-visit forecast, detailing Engine type
and xxxx, such forecast shall be updated on a quarterly basis.
4. Ordering Procedure
Operator shall issue an order for spare Parts in an agreed format in
accordance with the ATA Specifications.
Rolls-Royce shall promptly acknowledge receipt of each order for spare
Parts in accordance with the ATA Specifications. Unless qualified, such
acknowledgement shall constitute an acceptance of the order under the
terms of this Agreement.
5. Order Cancellation
Where Operator wishes to cancel an order placed in accordance with
Clause 4, Operator shall inform Rolls-Royce immediately. Rolls-Royce
shall use all reasonable efforts to place the part elsewhere with the
effect of Operator not facing a cancellation fee. If Rolls-Royce is
unable to sell or use the ordered part elsewhere Rolls-Royce may make a
reasonable cancellation charge representing the actual costs incurred
for such cancellation.
6. Lead Times
Unless otherwise agreed by the Parties, spare Parts shall be delivered
within the lead time specified in the Commercial Price List current at
the receipt of Operator's order except for:
spare Parts required for provisioning in accordance with
Clause 2, or
Orders significantly in excess of Operator's normal
requirements, in which case, the Parties shall mutually
agree upon the applicable lead time.
Where Operator has an urgent requirement for a spare Part Rolls-Royce
shall endeavor to deliver such spare Part within the time limits
specified by Operator, and it shall be Rolls-Royce's objective to
advise the Operator of Rolls-Royce's proposed action in response to
such orders as follows:-
a) AOG orders - within 4 hours;
b) other urgent orders - within 24 hours;
c) orders for items of which the Purchaser is
out-of-stock - within 7 days.
Page 42 of 78
Rolls-Royce Deutschland/Midwest Express Airlines
General Terms Agreement
Notwithstanding the foregoing, Rolls-Royce shall use its reasonable
endeavors to comply with the following:-
a) in the case of AOG orders to deliver the required
spare Part within four (4) hours after receipt of
notice of the AOG:
b) in the case of non-urgent AOG orders to advise
Operator of Rolls-Royce's proposed action within
24 hours;
c) in the case of non-urgent orders for items of
which the Operator is out of stock to fill such
orders within 7 calendar days.
7 Modifications to spare Parts
Rolls-Royce shall be entitled to substitute modified spare Parts in
place of spare Parts ordered by the Operator hereunder, provided that
the said modification has received the approval of the Airworthiness
Authority in accordance with the relevant Rolls-Royce Service Bulletin,
and shall notify Operator of such substitution prior to delivery.
Rolls-Royce shall reimburse Operator for obsolete new parts in stock
current at the time of delivery of the modified parts and up to the
level that is normally required to support Operator's operation, if
any.
Modified spare Parts will be supplied unless the modifications stated
in the Service Bulletins are non-mandatory and Operator states in
writing to Rolls-Royce within 90 days of the issue of the relevant
Service Bulletin that the modification is not required, in which case
Operator shall be entitled to receive pre-modified spare Parts on terms
to be agreed.
8 Conformance
All spare Parts, and where necessary Tooling will be assured by
Rolls-Royce through the maintenance of procedures, systems and records
approved by the Airworthiness Authority. An Authorized Release
Certificate will be issued and signed by Rolls-Royce authorized
personnel for such purpose.
Page 43 of 78
Rolls-Royce Deutschland/Midwest Express Airlines
General Terms Agreement
Exhibit E Schedule 1 - Engine Delivery Schedule and Base Price
Specification Base Price each
Description Reference Qty Delivery Date** (July 2001 US$)
Spare Engine (without QEC Kit) Clause 1.2.2* 1 January 2003 *
Transportation Stand Clause 4 January 2003 *
Spare Engine (without QEC Kit) Clause 1.2.2* 1 April 2004 *
Transportation Stand Clause 4 April 2004 *
Spare Engine (without QEC Kit) Clause 1.2.2* 1 January 2005 *
Transportation Stand Clause 4 January 2005 *
Spare Engine (without QEC Kit) Clause 1.2.2* 1 November 2005 *
Transportation Stand Clause 4 November 2005 *
Spare Engine (without QEC Kit) Clause 1.2.2* 1 January 2007 *
Transportation Stand Clause 4 January 2007 *
*The Spare Engine consists of the parts as detailed in Clause 1.2.2 of the
Specification contained in Exhibit H to this Agreement excluding the following
items: P20/T20 measuring system, Engine Starter Motor, and Independent Overspeed
Protection (IOP).
**All delivery dates are subject to the delivery of Firm Aircraft by Airframer
to Operator, and to the exercise by Operator of all its rights and remedies
under its contract with Airframer for the purchase of Aircraft; the general
intent is for the first Spare Engine to be delivered at approximately the same
time as the first Firm Aircraft, for the second Spare Engine to be delivered at
approximately the same time as the fifteenth Firm Aircraft, for the third Spare
Engine to be delivered at approximately the same time as the twenty-fourth Firm
Aircraft, for the fourth Spare Engine to be delivered at approximately nine (9)
months from delivery of the last Firm Aircraft, and for the fifth Spare Engine
to be delivered at approximately twenty-four (24) months from delivery of the
last Firm Aircraft.
Rolls-Royce and Operator hereby agree that Operator shall have the option (but
not the obligation) to purchase one (1) additional Spare Engine from Rolls-Royce
for every five (5) Option Aircraft that Operator (in its sole discretion)
purchases from Airframer. The Base Price for each such additional Spare Engine
that Operator chooses to purchase * shall be * , subject to escalation pursuant
to the formula set forth in Schedule 2 to Exhibit E; the delivery date shall be
as mutually agreed upon by the Parties; and any such purchases shall otherwise
be governed by the terms of this Agreement. *
* Indicates that material has been omitted and confidential treatment has been
requested therefor. All such omitted material has been filed separately with
the SEC pursuant to Rule 24b-2.
Page 44 of 78
Rolls-Royce Deutschland/Midwest Express Airlines
General Terms Agreement
Exhibit E Schedule 2 - Escalation
Engine Base Price Escalation Formula
The Price of each of the Spare Enginesand TSP charges shall be calculated as
follows:
PF = BP[0.7(I1/B1) + 0.3(I2/B2)] x 1.005
Where: PF = Purchase Price / TSP Charge for Calendar Year Y
BP = Engine Base Price / TSP Charge in 2001
L M E
P=P x(0.60--+0.30--+0.10--)x(1+0.005xN)
b Lo Mo Eo
provided that P shall always be equal to or greater than Pb.
The factors
L M E L M E
0.60-- , 0.30-- , 0.10-- and (0.60--+0.30--+0.10--)x(1+0.005xN)
Lo Mo Eo Lo Mo Eo
respectively shall be determined to the nearest fourth decimal place. Thus if
the fifth decimal place is five or more, the fourth decimal place shall be
raised to the next higher number.
P shall be rounded to the next full Dollar.
WHERE:
P = The Purchase Price.
Pb = The Base Price.
N = The number of years from base year (2001) to year of scheduled
delivery.
Lo = the arithmetic average of the values of the Average Hourly Earnings
-SIC Code 3721 for the industry group "Aircraft " as published by the
US Department of Labor - Bureau of Labor Statistics for the months of
June, July and August 2000.
L = the arithmetic average of the corresponding Average Hourly Earnings
for the 11th, 12th and 13th months prior to the month of scheduled
delivery. Such arithmetic average shall be determined to the third
decimal place; if the fourth decimal place is five or more, the third
decimal place shall be raised to the next higher number.
Mo = the arithmetic average of the values of the Producer Price Index -
Code 10 for the commodity group "Metals and Metal Products" as
published by the US Department of Labor - Bureau of Labor Statistics
for the months of June, July and August 2000.
M = the arithmetic average of the corresponding Producer Price Index for
the 11th, 12th and 13th months prior to the month of scheduled
delivery. Such arithmetic average shall be determined to the third
decimal place; if the fourth decimal place is five or more, the third
decimal place shall be raised to the next higher number.
Eo = the arithmetic average of the values of the Producer Price Index -
code 5 for the commodity group "Fuel and Related Products and Power" as
published by the US Department of Labor - Bureau of Labor Statistics
for the months of June, July and August 2000.
Page 45 of 78
Rolls-Royce Deutschland/Midwest Express Airlines
General Terms Agreement
E = the arithmetic average of the corresponding Producer Price Indices
for the 11th, 12th and 13th months prior to the month of scheduled
delivery. Such arithmetic average shall be determined to the nearest
third decimal place; if the fourth decimal place is five or more, the
third decimal place shall be raised to the next higher number.
If the United States government ceases to publish any of the statistics referred
to in this schedule or significantly modifies the basis of their calculation,
then Rolls-Royce shall have the right on giving written notice to Operator to
substitute any officially recognized, proper and substantially equivalent
statistics, such substitution to lead in application to the same adjustment
result, in so far as possible, as would have been achieved by continuing the use
of the original data or statistic had it not been so ceased to have been
published or modified as the case may be.
Page 46 of 78
Rolls-Royce Deutschland/Midwest Express Airlines
General Terms Agreement
EXHIBIT F - FLEET GUARANTEES
PRODUCT ASSURANCE GUARANTEES
Rolls-Royce grants and Operator accepts the following product assurance
guarantees listed in this Exhibit F ("Guarantees") in respect of Engines first
installed in the Aircraft and Products delivered pursuant to this Agreement:
DEFINITIONS
In addition to those words and phrases defined in the main body of the
Agreement, the following words and phrases when used in the Product Assurance
Guarantees shall have the meaning and definition set forth below.
"Anniversary Date(s)" means any or all of the anniversary dates from the date of
delivery of the first Firm Aircraft to Operator through the Term of Guarantee.
"Period of Calculation" means the relevant period for which a calculation is
made under any of the Guarantees detailed in Exhibit F to this Agreement.
"Term of Guarantee" means that period of time commencing with the date of
delivery of the first Aircraft to Operator and ending after ten (10) years.
GOVERNING CONDITIONS AND ADMINISTRATION
1. The obligations of Rolls-Royce under the Guarantees are subject to the
following Governing Conditions:
o compliance by Operator with the material terms of the Warranties;
o Operator taking delivery of, retaining and maintaining for
operational use Products as mutually agreed upon by the Parties;
and
o Subject to the exercise by Operator of its rights and remedies
under its contract with Airframer for the purchase of Aircraft,
and to any changes in the schedule of delivery of Aircraft under
said contract, Operator taking delivery of each Firm Aircraft in
accordance with the schedule set out in this Agreement and
operating each Firm Aircraft in regular and frequent airline
operation;
2. In establishing the Guarantees Rolls-Royce has assumed the Operational
Assumptions set out in Exhibit B.
3 If during the term of the Guarantees the actual operation differs
significantly from the above assumptions set out in Exhibit B above or
the conditions set forth in Clause 1 above or if any other significant
operational change occurs including, without limitation, the introduction
of any mandatory modifications outside Rolls-Royce's control (other than
modifications necessitated by defects in Engines or their components) or
significantly inconsistent with Rolls-Royce's reasonable understanding at
the time the guarantee levels were established, the Parties may revise,
such revision not to be unreasonably withheld by either party, the
Guarantees to take into account the effect of such difference.
4 Any credit granted under any of the Guarantees shall be solely used by
Operator against 50% of the purchase price of any Rolls-Royce proprietary
BR715 Parts purchased from Rolls-Royce.
Page 47 of 78
Rolls-Royce Deutschland/Midwest Express Airlines
General Terms Agreement
5 If credits granted under any of the Guarantees are in excess of the
amount which would have accrued to Operator under such Product Assurance
Guarantee as determined by a single calculation over the entire Term of
Guarantee of such Product Assurance Guarantee, such excess shall first be
offset against any amounts due to Operator under any of the Guarantees.
Any remaining excess shall be promptly refunded to Rolls-Royce by
Operator.
6 If Operator is entitled to similar credit pursuant to the terms of more
than one Warranty or Product Assurance Guarantee as a result of the same
event then Operator shall not be entitled to receive credits pursuant to
each Warranty or Product Assurance Guarantee but shall elect to claim
credit under the particular Warranty or Product Assurance Guarantee which
Operator considers most beneficial.
7 All credits granted to Midwest Express in this Exhibit F are personal to
Midwest Express, are non-assignable (except as allowed under Clause 14.4
of the Agreement), and are not convertible to cash.
Operator operates and maintains the Engines in accordance with the Manuals and
the reasonable written recommendations of Rolls-Royce (which recommendations
shall be given only after consultation with Operator).
Page 48 of 78
Rolls-Royce Deutschland/Midwest Express Airlines
General Terms Agreement
Exhibit F - 1 In-Flight Shutdown Guarantee
1 This guarantee provides cover against Qualified Shutdowns in excess of a
cumulative fleet average rate of * per 1,000 Engine Flying Hours
("EFH").
2 At the end of each calendar month during the Term of Guarantee, Operator
shall provide Rolls-Royce with (i) a list of all in-flight shutdowns
during such calendar month which Operator considers to be Qualified
Shutdowns and (ii) such information as Rolls-Royce may require to enable
Rolls-Royce to determine which of such in-flight shutdowns are Qualified
Shutdowns.
3 At the end of the Term of Guarantee, the Actual Shutdown Rate shall be
calculated.
4 If the Actual Shutdown Rate for a Period of Calculation exceeds * per
1,000 EFH, Rolls-Royce's sole obligation will be to grant to Operator a
credit note of 20,000 US Dollars for each cumulative excess Qualified
Shutdown as compensation less any credits already provided under the
In-Flight Shutdown Guarantee.
5 "Qualified Shutdown" means the in-flight shutdown of a Dressed Engine (as
defined in the Exhibit H, Specification) during the course of a scheduled
revenue flight of the Aircraft by Operator which is determined to have
been caused solely by a Dressed Engine-caused Failure. Multiple in-flight
shutdowns of the same Dressed Engine during the same flight leg for the
same problem will be counted as one in-flight shutdown. A subsequent
in-flight shutdown on a subsequent flight leg for the same problem
because corrective action has not been taken shall be excluded.
6 "Actual Shutdown Rate" means the total number of Qualified Shutdowns of
all Qualified Equipment during a Period of Calculation multiplied by one
thousand (1,000) and divided by the Flight Hours during such period.
* Indicates that material has been omitted and confidential treatment has been
requested therefor. All such omitted material has been filed separately with
the SEC pursuant to Rule 24b-2.
Page 49 of 78
Rolls-Royce Deutschland/Midwest Express Airlines
General Terms Agreement
Exhibit F - 2 Fuel Consumption Retention Guarantee
1. This guarantee provides cover against Operator's BR715 average cruise
fuel consumption increasing by more than * above an established
baseline for Qualified Equipment during the Term of Guarantee.
2 Following each Engine's entry into service Operator will measure fuel
consumption and record the following data for each Qualified Equipment
in order to establish a performance baseline (hereinafter referred to
as a "Performance Baseline") :
Engine serial number
Aircraft Serial Number
Date
Time
Altitude
Mach Number
Total Air Temperature (TAT)
Calibrated Air Speed (CAS)
Engine Pressure Ratio (EPR)
Fuel Flow
Fuel Temperature
Low Pressure Compressor Rotor Speed (N1)
High Pressure Compressor Rotor Speed (N2)
Exhaust Gas Temperature (EGT)
Bleed Air Configuration
Anti-Ice Wing
Anti-Ice Nose
Vibration
Annually thereafter Operator will establish an annual performance level
(hereinafter referred to as an "Annual Performance Level"). Performance
Baseline and Annual Performance results are referred to collectively as
Data. Rolls-Royce may be represented on measurement flights.
Performance Baselines and Annual Performance Levels shall be expressed
as percentage deviations from the Model with performance better than
the Model being expressed as a negative percentage and performance
worse than the Model as a positive percentage.
3 Instrumentation used in the recording of Data will be within
calibration. If upon review of Data by both Parties and any necessary
checking of instrumentation, in the reasonable judgment of the Parties
the calibration of such instrumentation appears to be out of date or
inadequate, Operator will re-calibrate the instrumentation. Rolls-Royce
may require the correction of Data or re-establishment of Data
hereunder.
4 The fleet average Performance Baseline shall be calculated at each
Anniversary Date as the average of the Performance Baselines
established pursuant to Clause 2 hereof and in existence at that
Anniversary Date. If the fleet average specific fuel consumption for
Engines as demonstrated on new production pass-off tests is better than
the new engine test bed specific fuel consumption acceptance limit
stated in the Specification, then for the purposes of this guarantee,
the fleet average Performance Baseline shall be changed in a positive
direction by the same amount.
5 The fleet average Annual Performance Level at each Anniversary Date
shall be calculated as the average of the Annual Performance Levels at
that Anniversary Date as established pursuant to Clause 2 hereof.
* Indicates that material has been omitted and confidential treatment has been
requested therefor. All such omitted material has been filed separately with
the SEC pursuant to Rule 24b-2.
Page 50 of 78
Rolls-Royce Deutschland/Midwest Express Airlines
General Terms Agreement
6 If at the second or subsequent Anniversary Date during the Term of
Guarantee the Weighted Average Deterioration (as defined by the term
"WDi" in Clause 6 below) as a percentage exceeds *, and to the
extent that such fuel consumption deterioration is attributable to a
Basic Engine (as defined in the Specification in Exhibit H) deficiency,
then Rolls-Royce's sole obligation shall be to compensate Operator by
credit note for such excess fuel consumption deterioration for the
period up to the Anniversary Date for which the Weighted Average
Deterioration is being calculated.
Reimbursement due to Operator hereunder shall be calculated for a given
Anniversary Date (i) pursuant to the following formula:
S = R --R
n n n-1
(For the purposes of such formula, negative values of Rn-1 shall have a
value of zero.)
Where
Sn = the amount of reimbursement in US Dollars to be granted to
Operator for Anniversary Date n (for positive values of Sn only).
Rn-1 = the total value of credit paid to Operator under this guarantee
in respect of the period from the commencement of the Term of Guarantee
up to the Anniversary Date immediately prior to the said Anniversary
Date (n).
Rn = the total value of credit due to Operator from the commencement of
the Term of Guarantee up to the said Anniversary Date (n), calculated
in accordance with the following formula:
(WD -- GD)
( n )
R = ---------- x (G x H x WC )
n 100 8
Where:
WDn means the cumulative average fuel consumption deterioration of the
Qualified Equipment from the start of the Term of Guarantee up to the
said Anniversary Date (n), calculated in accordance with the following
formula:
n
E (D x H )
( i i)
i=1
WD = -----------
n H
(FD + FD )
( i-1 i)
D = ----------- - F
i 2
Where:
F = the fleet average Annual Performance Baseline calculated pursuant
to Clause 4 of this Guarantee.
FDi= the Annual Performance Baseline calculated pursuant to Clause 4 of
this Guarantee at Anniversary Date (i).
FDi-1 = the Annual Performance Baseline calculated pursuant to Clause 4
of this Guarantee at the Anniversary Date immediately preceding the
Anniversary Date (i-1).
Hi = the total of all Qualified Engine Flight Hours by Operator as
logged during the period between the Anniversary Dates relating to
FDi-1 and FDi.
* Indicates that material has been omitted and confidential treatment has been
requested therefor. All such omitted material has been filed separately with
the SEC pursuant to Rule 24b-2.
Page 51 of 78
Rolls-Royce Deutschland/Midwest Express Airlines
General Terms Agreement
H = the total of all Engine Flight Hours by Operator as logged on all
Qualified Equipment from the start of the Term of Guarantee up to the
said Anniversary Date n.
GD = the guaranteed level allowable pursuant to Clause 5 hereof.
WCn = the weighted average cost of fuel in US dollars from the start of
the Term of Guarantee up to the said Anniversary Date (n), calculated
in accordance with the following formula:
n
E (C x H )
( i i)
i=1
WC = -----------
n H
Where
Ci = the average cost to Operator of aviation fuel (after deduction of
any subsidies or Government or other allowances received by Operator,
and excluding, without limitation, pumping fees, taxes and fuel
surcharges) consumed by Operator's Qualified Equipment during the
period specified in the definition of Hi above in US dollars per US
gallon and calculated by dividing the total amount actually paid during
such period Hi by the number of US gallons of fuel so purchased.
G = the block mission fuel burn expressed in US gallons per engine
flight hour for the Typical Mission calculated using the Performance
Document.
7. If at the third or subsequent Anniversary Date during the Term of
Guarantee the value of Sn is negative then Operator shall refund to
Rolls-Royce an amount equal to the value of Rn-1 - Rn. If the value of
Rn is zero or negative, Operator shall refund an amount equal to Rn-1.
To calculate Si at the following Anniversary Date the Value of Rn-1 is
set to zero.
8. Any liability under this guarantee will continue until such time as
Rolls-Royce may elect to make fuel improvement modifications available.
If such modifications have not been incorporated into the Engines at
delivery, then to the extent that any Rolls-Royce charge for such
modification parts is in excess of parts charges which Operator would
otherwise have incurred, such excess will be offset by credit notes
issued by Rolls-Royce.
9 Intentionally left blank.
10 "Model" means the Rolls-Royce datum Engine model as may be amended from
time to time.
11 "Typical Mission" means the standard aircraft mission agreed between
the parties from time to time on a block hour basis (including taxi
time) to be reasonably representative of Operator's average operation
of the Aircraft in terms of those flight parameters affecting fuel burn
including but not limited to range, payload, flight profile, climatic
conditions and take off derate. The parties shall change the Typical
Mission if either can reasonably demonstrate to the other that a
material change has occurred in any of such parameters.
12 "Performance Document" means the Airframer performance document for the
Aircraft.
Page 52 of 78
Rolls-Royce Deutschland/Midwest Express Airlines
General Terms Agreement
13 If, after the date of signature of this Agreement, modifications are
required to be made to Engines as a result of Airworthiness Authority's
requirements and such modifications have the effect of increasing fuel
consumption, Rolls-Royce may (unless the modifications are necessitated
by a defect in the Engines) require that within 30 (thirty) days after
incorporation of any such modification the initial performance baseline
for each Qualified Engine in which any such modification is
incorporated shall be adjusted to take into account the effect of such
modification. The average of such new performance baselines for all
such Qualified Equipment shall thereafter constitute the fleet average
Performance Baseline and shall thereafter be used to determine any
liability of Rolls-Royce under this Guarantee. However, if further
modifications are introduced which alleviate the effect of the original
modifications then Operator may require that within 30 (thirty) days
after incorporation of any such modification a further revised
performance baseline for each Qualified Engine in which any such
modification is incorporated shall be established. The average of such
new performance baselines for all such Qualified Equipment shall
thereafter constitute the fleet average Performance Baseline and shall
thereafter be used to determine any liability of Rolls-Royce under this
Guarantee.
Page 53 of 78
Rolls-Royce Deutschland/Midwest Express Airlines
General Terms Agreement
Exhibit F - 3 *
1. *
2. *
3. *
* Indicates that material has been omitted and confidential treatment has been
requested therefor. All such omitted material has been filed separately with
the SEC pursuant to Rule 24b-2.
Page 54 of 78
Rolls-Royce Deutschland/Midwest Express Airlines
General Terms Agreement
Exhibit G - TOTAL SUPPORT PACKAGE
1. Definitions
In addition to those words and phrases contained in the main body of
the Agreement, the following words and phrases when in this Total
Support Package shall have the meaning and definition set forth below.
"Additional Services" means (i) the Rework of Non-Qualified Events in
accordance with the EMP or (ii) the incorporation of any optional
performance improvement modifications which Rolls-Royce may offer to
Operator from time to time.
"Authorized Facility" means a Rolls-Royce approved Rework station as
may be specified by Rolls-Royce to Operator from time to time and which
is certified by the Airworthiness Authorities for the Rework of
Engines, Modules and Parts.
"Covered Services" means the Rework at an Authorized Facility
(including the provision of Parts) necessary to return Qualified
Equipment suffering Qualified Events to a serviceable condition in
accordance with the applicable Manuals and the EMP and which cannot be
accomplished by timely Line Maintenance.
"Line Maintenance" means any work required to be carried out on an
Engine in accordance with the Manuals and which Operator may accomplish
without returning such Engine to an Authorized Facility. Line
Maintenance includes, without limitation, the provision, rework or
replacement of Parts and the provision of labor in the course of work
as mentioned in the preceding sentence.
"Line Replaceable Unit (LRU)" means those Parts listed in Schedule F of
Exhibit G hereto.
"Non-Qualified Event" means the removal of any Engine, Module or Part
which requires a shop visit and which is not a Qualified Event,
including without limitation, such a removal caused by FOD or events
which are found by the Authorized Facility not to be Qualified Events
or to be within the applicable limits set forth in the Manual,
including but not limited to, "no fault found", accidents, improper
maintenance, misuse or improper transportation, storage or handling.
"Period of Cover" means the period of time commencing upon delivery of
the first Aircraft to Operator and ending either (i.) ten (10) years
thereafter; provided, however, that Operator may at its option, and
with a notice period of one year prior to the end of the ten-year
period, extend the Period of Cover to five (5) additional years, or
(ii.) fifteen (15) years thereafter. The Charges that apply to those
options are described in Clause 7 below.
"Qualified Equipment" means any installed or Spare Engine (including
all Modules and Parts thereof or incorporated therein but excluding
Line Replaceable Units and Life Limited Parts, unless such Line
Replaceable Units and/ or Life Limited Part coverage is selected
pursuant to Clause 2 of this Agreement) which was acquired by Operator
from Rolls-Royce or the Airframer or channels specifically approved by
Rolls-Royce.
Page 55 of 78
Rolls-Royce Deutschland/Midwest Express Airlines
General Terms Agreement
"Qualified Event" means the removal of an item of Qualified Equipment
which is unserviceable as a result of any one or more of the following:
o Normal wear and tear or performance deterioration beyond
appropriate Manual limits which requires restoration following
appropriate on-wing troubleshooting and Line Maintenance; or
o Airworthiness Directives or Mandatory Service Bulletins; or at
Rolls-Royce's written recommendation; or
o Time expiry of a Life Limited Part (For the avoidance of doubt
this applies only if LLP option is selected); or
o Failure (as defined in Clause 1 of the Agreement) of a Part, and
which requires a shop visit at an Authorized Facility to return
such item to a serviceable condition.
"Replacement Parts" shall mean any serviceable Part incorporated in an
Engine in the course of Covered Services or Additional Services
pursuant to this Total Support Package.
2. Scope
This Exhibit records that Operator has agreed to participate in
Rolls-Royce's Total Care Program, whereby Rolls-Royce provides Rework
and maintenance support for Qualified Equipment used by Operator in the
operation of its Aircraft, and in accordance with the terms hereof.
3. Provision of Services and Exclusivity
During the Term of this Agreement, Rolls-Royce will provide Engine
off-wing Covered Services and Additional Services to Operator on the
terms and conditions contained herein.
In consideration of the mutual agreements contained herein, Operator
hereby grants to Rolls-Royce exclusivity in respect of the
accomplishment of any Rework of any item of Products which becomes
unserviceable during the Period of Cover.
4 Rolls-Royce's Undertakings
4.1 Provision of Services
Rolls-Royce shall arrange for the prompt provision of Covered Services
and Additional Services to be undertaken at an Authorized Facility
during the Period of Cover.
4.2 Records
Rolls-Royce will require the Authorized Facility to maintain records of
Covered Services and Additional Services undertaken in accordance with
Operator's Airworthiness Authority's requirements, and to provide
Operator with access to review such records at all reasonable times and
from time to time.
Page 56 of 78
Rolls-Royce Deutschland/Midwest Express Airlines
General Terms Agreement
4.3 Re-delivery and Acceptance
4.3.1 Following Covered Services and any Additional Services
Rolls-Royce will redeliver Engines (in a Dressed Engine
configuration) to Operator ex-works (Incoterms 2000) the
Authorized Facility. Notwithstanding anything to the contrary
herein, however, Operator shall only be responsible for return
transportation costs in an amount equal to the transportation
expenses Operator would have incurred in shipping the Engine
from an Authorized Facility in the United States to Operator's
facilities in Milwaukee. Rolls-Royce shall be responsible for
any return transportation expenses in excess of this amount.
To the extent necessary, Rolls-Royce shall be responsible for
clearing Engines through customs.
4.3.2 Rolls-Royce will require the Authorized Facility to maintain
records of Rework undertaken in accordance with Operator's
Airworthiness Authority's requirements and deliver such
documentation as is reasonably required by Operator.
4.3.3 Operator will be deemed to have accepted Rework undertaken on
Qualified Equipment upon the issuance of a properly authorized
JAA or FAA release note or other approval certificate by
Rolls-Royce or Authorized Facility (as applicable).
4.4 Spare Engine Support
When Operator has purchased and taken delivery of the Rolls-Royce's
recommended level of Spare Engines, then
4.4.1 If Operator's total quantity of available serviceable Spare
Engines falls to one (1) as a direct and sole result of
Qualified Events, then Rolls-Royce use all reasonable efforts
to expedite the Rework of an Engine by the Authorized
Facility; and further
4.4.2 If Operator's total quantity of available serviceable Spare
Engines is zero (0) as a direct and sole result of Qualified
Events, then in addition to expediting Rework of Engines,
Rolls-Royce will use all reasonable efforts to identify a
non-exclusive lease engine which could be made available to
Operator until such time as the level of Spare Engine support
increases to one (1) or more.
4.4.3 If Operator and Rolls-Royce agree that Operator will
imminently declare an Aircraft on ground, as defined in World
Airline Glossary (WATOG), or Operator agree with Rolls-Royce
that a scheduled Engine removal in accordance with the
requirements of the EMP or predictive trending results is
required, then a non-exclusive lease engine shall, within 24
hours of such agreement, be made available to Operator under
the terms of the Lease Agreement. The daily rental charges
under the Lease Agreement will be waived until the seventh
(7th) calendar day after the level of serviceable Spare Engine
support increases to one (1) or more. Operator will remain
responsible for the Flight Hour and Flight Cycle charges under
the Lease Agreement, except that the Flight Hour charge will
be reduced to the Flight Hour charge as provided in Clause 7.1
of this Total Support Package, and, to the extent Operator has
selected the LLP coverage under the Total Support Package, the
Flight Cycle charge will be reduced to the Flight Cycle charge
as provided in Clause 7.1 of this Total Support Package.
Operator shall substitute the first available Reworked Engine
for the Rolls-Royce furnished non-exclusive lease engine as
soon as possible and return the lease engine to Rolls-Royce
(but in no event more than ten (10) calendar days) after
receipt of such Reworked Engine.
Page 57 of 78
Rolls-Royce Deutschland/Midwest Express Airlines
General Terms Agreement
4.4.4 If Operator has requested Additional Services (which in the
reasonable opinion of Rolls-Royce will cause an AOG) or if
Rolls-Royce or its Authorized Facility is prevented from
undertaking Rework or redelivering any Qualified Equipment by
reason of failure by Operator to comply with its obligations
under this Total Support Package, Rolls-Royce's liability with
respect to Clause 4.4.3 shall be suspended for a period equal
to the period during which the Rework or redelivery, as the
case may be, shall have been so prevented, and Rolls-Royce
shall be under no liability whatsoever in respect of such
delay. The Parties shall promptly notify each other in writing
of the reasons of any such delay, part performance and the
likely duration of the delay.
4.4.5 If Rolls-Royce is unable to meet its obligations under Clause
4.4.3 above for reason other than as contemplated in Clause
4.4.4 above, Rolls-Royce's sole liability to Operator shall be
to reimburse Operator its reasonable and substantiated daily
usage costs paid to a third party by Operator or, should no
other engine be available, a liquidated damage of 120% of the
then current Rolls-Royce daily rental charge for and Engine as
per the Leasing Agreement until either Rolls-Royce makes a
lease engine available to Operator or redelivers a Reworked
Engine to Operator. Rolls-Royce and Operator acknowledge that
the liquidated damages calculated as set forth above are
reasonable damages in light of the anticipated harm that will
be caused by Rolls-Royce's failure to meet its obligations,
the difficulties of proof of loss, and the inconvenience or
nonfeasibility of Operator's otherwise obtaining an adequate
remedy. Any such liquidated damages shall be payable by
Rolls-Royce to Operator upon demand; provided that Operator
may, at its option, apply the amount of said liquidated
damages as a credit against the purchase price of Products or
Services, and/or to the charges identified in Clause 7.1
below.
4.5 Loss or Damage
4.5.1 If any Qualified Equipment delivered to Rolls-Royce or
Authorized Facility is lost, destroyed or damaged during the
time between such delivery and return to Operator then
Rolls-Royce will, promptly and at its sole discretion, either:
4.5.1.1 Rework such damage free of charge, or
4.5.1.2 provide Operator a credit note to the value of the
item as mutually agreed upon, taking into account
age, usage and condition, not to exceed the original
price of the item; or
4.5.2.3 provide a replacement of equal value and use.
4.6 Suspended Warranty
4.6.1 In respect of all Replacement Parts incorporated by
Rolls-Royce, the Warranties granted by Rolls-Royce as set out
in Exhibit C shall apply subject to all the provisions
contained therein.
4.6.2 During the Period of Cover Operator shall not be entitled to
receive any benefit whatsoever whether by way of Rework,
replacement parts cost allowance, labour charges or otherwise
under the Warranties as set out in Exhibit C in relation to
any rework of Qualified Equipment which are covered by this
Exhibit; but save as expressly provided herein the Warranties
shall remain in full force and effect.
Page 58 of 78
Rolls-Royce Deutschland/Midwest Express Airlines
General Terms Agreement
5. Operator's Undertakings
5.1 Operation and Line Maintenance
5.1.1 Operator shall operate and maintain Qualified Equipment in
accordance with the Manuals including the water washing of
Engines (unless prohibited by EPA regulations) and the
performance of all reasonable Rolls-Royce recommended Engine
troubleshooting procedures that are conveyed in writing to
Operator to extend the on-Aircraft life of Engines.
5.1.2 Operator shall, at its own expense, perform all scheduled and
unscheduled Line Maintenance on Engines as may be required
pursuant to the Manuals and the requirements of the EMP, and
perform any mutually agreed recommendations of Rolls-Royce
which may from time to time be notified to Operator in
writing.
5.1.3 Operator shall comply with the requirements and
recommendations of Rolls-Royce with respect to the
introduction of mandatory Service Bulletins, Airworthiness
Directives or Service Bulletins at Rolls-Royce written
recommendation, as stated in the EMP, at Rolls-Royce's
expense, unless (i) the purpose of such Service Bulletins is
improved fuel efficiency or other economic value to Operator,
or (ii) such Airworthiness Directives or Service Bulletins may
be accomplished by Operator through Line Maintenance, in which
case such Airworthiness Directives or Service Bulletins shall
be at Operator's expense. If Operator experiences a
significant additional Line Maintenance burden as a direct
result of the accomplishment of such Airworthiness Directives
or Service Bulletins, Rolls-Royce shall recompense Operator at
the Warranty Labor Rate for incremental labor hours expended
in accomplishing such Airworthiness Directives or Service
Bulletins. If the aircraft is in service, Rolls-Royce shall
provide sufficient training and instruction for Operator to
perform the Service Bulletin itself.
5.1.4 Operator shall, in accordance with normal airline operating
procedures, provide an adequate level of training for line
station personnel and shall ensure that such line station
personnel receive initial and follow up training from time to
time on Engine maintenance troubleshooting techniques.
5.1.5 Operator shall, at its own expense, acquire and maintain
during the Period of Cover Engine stands and other support
equipment sufficient (as mutually agreed by the Parties) to
support its operation and maintenance of the Qualified
Equipment.
5.2 Preparation, Transport and Shipment of Qualified Equipment
5.2.1 If any Qualified Equipment requires removal due to a Qualified
Event, Operator shall promptly deliver such Qualified
Equipment to the Authorized Facility in accordance with the
provisions of this Clause 5.2.
5.2.2 Operator shall be responsible at its expense for performing
the removal of all Qualified Equipment from Aircraft, the
configuration of Engines to a Dressed Engine standard (as
defined in the Specification in Exhibit H), the subsequent
preparation of redelivered Qualified Equipment for
installation, the installation of Qualified Equipment on
Aircraft, the preparation of Qualified Equipment for transport
and for the provision of appropriate transportation equipment.
Page 59 of 78
Rolls-Royce Deutschland/Midwest Express Airlines
General Terms Agreement
5.2.3 Operator shall deliver Qualified Equipment DDP (Incoterms
2000) accompanied, where appropriate, by an up to date Engine
Log Book to the Authorized Facility. Notwithstanding anything
to the contrary herein, however, Operator shall not be liable
for any transportation expenses related to the delivery of
Qualified Equipment to an Authorized Facility above the amount
it would have cost Operator to transport the Qualified
Equipment to an Authorized Facility in North America.
Rolls-Royce shall be responsible for any transportation
expenses in excess of this amount, and (if applicable) for
clearing Qualified Equipment through Customs. Operator shall
comply with the relevant paragraphs of the Rolls-Royce
maintenance manual in respect of the shipping and storage of
Qualified Equipment and/or Parts.
5.3 Records and Reporting
5.3.1 Operator shall maintain such airworthiness certificates,
licenses, log books, flight manuals, records and other data
pertaining to Engines including Engine accessories and the
operation and maintenance thereof as required by law, and
shall permit Rolls-Royce or its authorized representative to
inspect such records and data during normal business hours
upon reasonable advance notice.
5.3.2 Operator shall maintain full and up to date records of Engine
operation, Engine Flight Hours and cycles flown and shall
permit Rolls-Royce or its authorized representative to inspect
such records during normal business hours upon reasonable
advance notice.
5.3.3 Within seven (7) days after the end of each calendar month or
part calendar month during the Period of Cover Operator shall
submit to Rolls-Royce a certified statement including:
Engine cumulative Flight Hours (CFH) and Flight Cycles (CFC),
and Flight Hours and Flight Cycles operated for the monthly
period reporting (MFH and MFC respectively), using the
Operating Report form (Schedule C) to this Exhibit).
5.3.4 Rolls-Royce will arrange for Data Systems and Solutions
("DS&S"), a joint venture of Rolls-Royce and SAIC, to provide
a comprehensive Engine health monitoring service to Operator
during the Period of Cover. Such service will include, without
limitation, daily notification of significant alerts and
weekly reports of Engine condition to assist Operator in
planning its Engine maintenance activity and provide the data
necessary to manage Operator's fleet performance on-condition
most effectively.
DS&S require the following electronic data from Operator:
For every flight the following parameters to be accurately and
consistently recorded for both engines at stabilized cruise
conditions.
Date, Flight no, XXX, X0, X0, TGT, Fuel Flow Oil Pressure, Oil
Temperature, N1 Vibration, N2 Vibration, Altitude, Mach, IAS,
Total Air Temperature
This data needs to be sent to DS&S within three days of
recording, such that if an engine develops a problem,
Rolls-Royce has a chance to respond before it develops into an
unplanned event, or engine removal.
Oil Consumption
Operator is expected to monitor oil consumption (Oil uplift
versus flight hours) and report any exceedances or significant
deviations to Rolls-Royce.
Format of data received by DS&S.
Page 60 of 78
Rolls-Royce Deutschland/Midwest Express Airlines
General Terms Agreement
Operator shall provide the data in COMPASS compliant
electronic format - ASCII text format. If the data entry
method is manual, then DS&S can provide a data-entry
spreadsheet tool for this purpose and this can be formatted to
suit Operator.
6 Rework procedures
6.1 Replacement of Parts
Rolls-Royce reserves the right, at its sole discretion, to fit any new
or used serviceable Replacement Parts in the course of Covered Services
and Additional Services, providing such parts meet the requirements of
the EMP.
In the event that any Engine received by Rolls-Royce from Operator is
not complete, or has missing or non-OEM parts, then Rolls-Royce
reserves the right to replace such parts and will charge Operator as
specified in Clause 7.3 below.
6.2 Title
6.2.1 Title to and risk of loss of or damage to any Parts replaced
under this Exhibit, whether scrap or reworkable, shall pass to
Rolls-Royce upon removal from Qualified Equipment for
Rolls-Royce's disposal. A Part shall be considered to be scrap
when such Part in the opinion of Rolls-Royce is beyond
economic Rework, or when such part requires replacement in
accordance with rejection criteria as set out in the Manuals.
6.2.2 Any Replacement Parts incorporated in the course of Rework
pursuant to this Exhibit shall be deemed to have been sold to
Operator and title to and risk of loss of and damage to such
Replacement Parts shall pass to Operator upon redelivery of
Qualified Equipment to Operator pursuant to Clause 4.3.1 of
this Exhibit.
6.2.3 Operator and Rolls-Royce each represent and warrant to the
other that each will accomplish the transfer to the other of
the full legal title to any equipment exchanged under Clauses
6.2.1 and 6.2.2 above, free and clear of all charges, liens
and encumbrances. Operator warrants that it will obtain the
authorization of the owner of such equipment (if Operator is
not the owner), to effect such exchanges of title. Operator
shall not without the prior written consent of Rolls-Royce
enter into any arrangement or agreement which might prejudice
or impair its ability to perform its obligations under this
Clause 6.2. Operator and Rolls-Royce shall each take all
necessary steps to secure the release with respect to any
charges, liens and encumbrances with respect to any such
equipment exchanged. Each party shall indemnify the other
party for its failure to comply with this Clause 6.2.
7 Charges
7.1 Charges for Covered Services
During the Period of Cover, the charges payable by Operator to
Rolls-Royce in respect of Covered Services shall be calculated by
multiplying the Flight Hours for each Engine during each month by the
following Charges (in United States Dollars).
Page 61 of 78
Rolls-Royce Deutschland/Midwest Express Airlines
General Terms Agreement
7.1.1 Shop Visit Coverage
----------------------------------------------------------------------------
10-Year term, Firm Aircraft Annual Utilization (FH per Year)
--------------------------------------------------------------------------------------------------------------
Mission Length (FH/Cycle) 2,500 2,600 2,960 3,300 3,600
--------------------------------------------------------------------------------------------------------------
1.3 * * * * *
--------------------------------------------------------------------------------------------------------------
1.6 * * * * *
--------------------------------------------------------------------------------------------------------------
1.9 * * * * *
--------------------------------------------------------------------------------------------------------------
2.1 * * * * *
--------------------------------------------------------------------------------------------------------------
As an alternative payment plan, Rolls-Royce offers the
following stepped Charges. Operator shall inform Rolls-Royce
no later than three (3) months prior to entry-into-service of
the first Aircraft which of the two options Operator wishes to
elect.
Based on an annual utilization of 2,960 EFH and a Stage Length
of 1.6 EFH.
Years 1-2: *
Years 3-5: *
Years 6-10: *
Rolls-Royce offers to extend the term of the Total Support
Package to 15 years. Based on an annual utilization of 2,960
EFH and a Stage Length of 1.6 EFH the Charge for years 11-15
would be *. Operator shall inform Rolls-Royce no later
than twelve (12) months prior to the end of the ten-year term
whether Operator wishes to extend the term of the Total
Support Package to 15 years.
Firm and Option Aircraft:
Should Operator take delivery of any Option Aircraft, then
upon Operator's request, Rolls-Royce will cover such Option
Aircraft under the Total Support Package. Based on an Option
Aircraft delivery schedule of 1 (one) aircraft every month
starting in March 2005, the following charges would apply:
15-Years Flat Charge,
30 Aircraft fleet: * from EIS of the first Aircraft
15-Years Flat Charge,
50 Aircraft fleet: * from EIS of the first Aircraft
7.1.2 Life Limited Parts
This service is offered to Operator as an optional coverage
and additional to the Shop Visit Coverage above and includes
the rework or replacement of LLP's in Covered Services.
Operator shall inform Rolls-Royce no later than three (3)
months prior to entry-into-service of the first Aircraft
whether Operator wishes to select this option.
----------------------------------------------------------------------------
10-Year term, Firm Aircraft Annual Utilization (FH per Year)
--------------------------------------------------------------------------------------------------------------
Mission Length (FH/Cycle) 2,500 2,600 2,960 3,300 3,600
--------------------------------------------------------------------------------------------------------------
1.3 ---- * * * *
--------------------------------------------------------------------------------------------------------------
1.6 ---- ---- ---- * *
--------------------------------------------------------------------------------------------------------------
1.9 ---- ---- ---- ---- ----
--------------------------------------------------------------------------------------------------------------
2.1 ---- ---- ---- ---- ----
--------------------------------------------------------------------------------------------------------------
* Indicates that material has been omitted and confidential treatment has been
requested therefor. All such omitted material has been filed separately with
the SEC pursuant to Rule 24b-2.
Page 62 of 78
Rolls-Royce Deutschland/Midwest Express Airlines
General Terms Agreement
7.1.3 Transportation
This service is offered to Operator as an optional coverage
and additional to the Shop Visit Coverage above and covers the
round-trip transportation of Engines and Covered Components
for Rework to and from the Authorized Facilities. Operator
shall inform Rolls-Royce no later than three (3) months prior
to entry-into-service of the first Aircraft whether Operator
wishes to select this option.
----------------------------------------------------------------------------
10-Year term, Firm Aircraft Annual Utilization (FH per Year)
--------------------------------------------------------------------------------------------------------------
Mission Length (FH/Cycle) 2,500 2,600 2,960 3,300 3,600
--------------------------------------------------------------------------------------------------------------
1.3 * * * * *
--------------------------------------------------------------------------------------------------------------
1.6 * * * * *
--------------------------------------------------------------------------------------------------------------
1.9 * * * * *
--------------------------------------------------------------------------------------------------------------
2.1 * * * * *
--------------------------------------------------------------------------------------------------------------
(Assumption: Main Base Milwaukee)
7.1.4 Foreign Object Damage
This service is offered to Operator as an optional coverage
and additional to the Shop Visit Coverage and covers the
removal of Engines for Rework due to the non-negligent
ingestion of ice, birds, hailstones or runway gravel. Operator
shall inform Rolls-Royce no later than three (3) months prior
to entry-into-service of the first Aircraft whether Operator
wishes to select this option.
----------------------------------------------------------------------------
10-Year term, Firm Aircraft Annual Utilization (FH per Year)
--------------------------------------------------------------------------------------------------------------
Mission Length (FH/Cycle) 2,500 2,600 2,960 3,300 3,600
--------------------------------------------------------------------------------------------------------------
1.3 * * * * *
--------------------------------------------------------------------------------------------------------------
1.6 * * * * *
--------------------------------------------------------------------------------------------------------------
1.9 * * * * *
--------------------------------------------------------------------------------------------------------------
2.1 * * * * *
--------------------------------------------------------------------------------------------------------------
7.1.5 Covered Components
This service is offered to Operator as an optional coverage
and additional to the Shop Visit Coverage above and covers the
rework of Covered Components rejected and removed on the line
due to a Qualified Event. Operator shall inform Rolls-Royce no
later than three (3) months prior to entry-into-service of the
first Aircraft whether Operator wishes to select this option.
----------------------------------------------------------------------------
10-Year term, Firm Aircraft Annual Utilization (FH per Year)
--------------------------------------------------------------------------------------------------------------
Mission Length (FH/Cycle) 2,500 2,600 2,960 3,300 3,600
--------------------------------------------------------------------------------------------------------------
1.3 * * * * *
--------------------------------------------------------------------------------------------------------------
1.6 * * * * *
--------------------------------------------------------------------------------------------------------------
1.9 * * * * *
--------------------------------------------------------------------------------------------------------------
2.1 * * * * *
--------------------------------------------------------------------------------------------------------------
(Assumption: Main Base Milwaukee)
7.1.6 The charges referred to in Clauses 4.4 and 7.1.1 to 7.1.5 are
in July 2001 economic conditions, and are subject to
escalation in accordance with Exhibit E Schedule 2 of this
Agreement.
* Indicates that material has been omitted and confidential treatment has been
requested therefor. All such omitted material has been filed separately with
the SEC pursuant to Rule 24b-2.
Page 63 of 78
Rolls-Royce Deutschland/Midwest Express Airlines
General Terms Agreement
7.2 Adjustment of Charges
The above pricing has been calculated based on certain understandings
as set out in Clause 5.1 above and the assumptions as specified in
Exhibit B to this Agreement. The Parties shall review the validity of
these assumptions no earlier than one year after the effective date of
this agreement. If Operator's operation of the Aircraft and Engines is
at any time during the Period of Cover materially different from these
understandings and assumptions, then the Parties by mutual agreement
shall make adjustments on a going-forward basis as set out below to the
pricing contained in Clause 7.1 to reasonably reflect the effect of
such different operation on the cost to Rolls-Royce of providing the
services specified herein. In connection with any agreement by the
Parties to implement a new hourly rate due to a change in the
assumptions, the Parties shall also agree to a date, corresponding to
the date that the original assumption became invalid, that the new rate
shall be effective. To the extent that the retroactive application of
the new rate creates an overage or shortage in payments due to
Rolls-Royce, then the Parties shall mutually agree upon a schedule to
offset the overage or shortage commencing no later than three months
after the overage or shortage is identified. The overage or shortage
may be reimbursed in one lump sum or over time, but in no event shall
the duration for reimbursement exceed two years.
7.3 Charges for Additional Services
Rolls-Royce shall invoice Operator, and Operator shall pay, for all
Additional Services and any and all Parts incorporated in accordance
with, and the then current applicable Authorized Facility's commercial
rates for labor, subcontract charges, handling fees and test facility,
fuel and oil fees.
8 Payment
8.1 During the Period of Cover, Rolls-Royce shall invoice Operator for
charges established under Clauses 7.1 on a monthly basis based upon
information for the previous month provided by Operator through the
Operating Report form (Schedule C to this Exhibit). Within five (5)
business days of the date of invoice (such invoice to be faxed to the
fax number set out in Clause 14.3 above), Operator will pay for such
invoice. Should Operator not provide an Operating Report within the
schedule set out above, then Rolls-Royce may send Operator a monthly
invoice based on the hours and cycles flown in the preceding month.
8.2 Payment by Operator of any amounts due in accordance with Clause 7.3
above shall be made within thirty (30) calendar days after the later of
(a) Rolls-Royce's date of invoice, or (b) redelivery to Operator of any
item of Products following the Rework of such item of Products.
Page 64 of 78
Rolls-Royce Deutschland/Midwest Express Airlines
General Terms Agreement
Schedule A To Exhibit G (Total Support Package)
Engine Serial Numbers
To be amended
Page 65 of 78
Rolls-Royce Deutschland/Midwest Express Airlines
General Terms Agreement
Schedule B to Exhibit G (Total Support Package)
NOT APPLICABLE
Page 66 of 78
Rolls-Royce Deutschland/Midwest Express Airlines
General Terms Agreement
Schedule C to Exhibit G (Total Support Package)
Operating Report
Operating Report for the month of _____________, ______
Engine Serial Number TSN CSN MFH MFC
BR12345 10,000 8,000 200 50
----- -----
Monthly Total
% of Flight Cycles using of ATO/1 during month: XX%
OR
Average Derate achieved During Month: XX%
Page 67 of 78
Rolls-Royce Deutschland/Midwest Express Airlines
General Terms Agreement
Schedule D to Exhibit G (Total Support Package)
RESERVED
Page 68 of 78
Rolls-Royce Deutschland/Midwest Express Airlines
General Terms Agreement
Schedule E to Exhibit G (Total Support Package) - NOT APPLICABLE
Page 69 of 78
Rolls-Royce Deutschland/Midwest Express Airlines
General Terms Agreement
Schedule F to Exhibit G (Total Support Package)
Covered Components:
Covered Components shall include the following major line replaceable units:
1 COOLER, SURFACE AIR COOLED 241201 01-100
2 PUMP, FUEL 731101 01-100
3 VALVE; BYPASS AND VENT 731304 01-100
4 CONTROLLER,ELECTR.ENGINE 732101 01-400
5 METER, FUEL (FMU) 732103 01-100
6 PROBE,P20/T20 732105 01-100
7 CONTROLLER, OVERSPEED PROT. 732111 01-100
8 TRANSMITTER, FUEL FLOW 733101 01-100
9 VALVE, AIR BUFFER 752201 01-100
10 ACTUATOR, VAR STATOR VANE 753101 01-200
11 SOLENOID, BLEED VALVE HANDLING 753102 01-100
12 ACTUATOR, BOOSTER BLEED VALVE 753201 01-100
13 PUMP, OIL UNIT 792101 01-100
14 COOLER, FUEL COOLED OIL 792201 01-400
15 STARTER,AIR TURBINE 801101 01-100
16 VALVE,STARTER AIR 801103 01-100
Page 70 of 78
Rolls-Royce Deutschland/Midwest Express Airlines
General Terms Agreement
Schedule G to Exhibit G (Total Support Package)
(RESERVED)
Page 71 of 78
Rolls-Royce Deutschland/Midwest Express Airlines
General Terms Agreement
Exhibit H - CONTRACT SPECIFICATION
1 Engine Supply Details
This Section 1 defines the standard of the certified production version of the
Rolls-Royce BR715 turbofan Aero Engine (Engine) to be supplied as spare
equipment for 717-200 installation.
1.1 Engine Build Standard
a) Code Name(s):
BR700-715A1-30 Series Rated MTOT SLS at ISA +15(0)C 18,500 lb.
b) Type and Description:
The Dressed Engine is a two-spool, high bypass ratio configuration
featuring:
o 58 inch single stage wide chord fan
o Two stage LP booster
o Ten stage HP compressor
o Annular combustor
o Two stage HP turbine
Three stage LP turbine
Full Authority Digital Engine Control (FADEC)
c) Direction of Rotation:
The LP and HP systems are co-rotational and will turn clockwise when
viewed from the rear looking forward.
1.2 Module Assemblies and Dressed Engine
The following describes module assemblies and the Dressed Engine.
1.2.1 Basic Engine
The Engine consists of eight major module assemblies which constitute a Basic
Engine:
Module 3-1 LP Fan
Module 3-2 Intermediate Case (including LP booster)
Module 3-3 HP compressor
Module 3-4 LP Fan Case
Module 4-1 Combustor/HP Turbine
Module 5-1 LP Turbine
Module 6-1 Accessory gearbox
Page 72 of 78
Rolls-Royce Deutschland/Midwest Express Airlines
General Terms Agreement
1.2.2 Dressed Engine
The Dressed Engine consists of the Basic Engine as set out in Section 1.2.1
above together with the following items:
i) Nose cone
ii) Core Engine Fairings
iii) Engine mounts - engine items
iv) Engine Bleed Air Control System
v) Electrical system - engine items
vi) Fuel system - engine items
vii) Engine Oil system
viii) Turbine gas temperature measuring system
ix) Ignition system
x) Engine LP and HP speed signal generation system
xi) T30 temperature measuring system
xii) Turbine overheat temperature measuring system
xiii) P20/T20 measuring system - engine items
xiv) Engine starting system - engine items (excluding Air Starter Motor)
xv) Electronic Engine Controller (EEC)
xvi) Independent Overspeed Protection (IOP)
xvii) Full-Authority Digital Engine Control System (FADEC) - items iii)
to xv)
xviii) Fire detection system - core, upper splitter and lower splitter
detectors only
xix) Air system - engine items
Page 73 of 78
Rolls-Royce Deutschland/Midwest Express Airlines
General Terms Agreement
2 Engine Line Replaceable Units
The following items are designated as Line Replaceable Units (LRU's):
i) Fuel filter (LP)
ii) Fuel filter (HP)
iii) Oil pressure filter
iv) Magnetic chip detector
v) Oil quantity transmitter
vi) Oil pressure transmitter - each
vii) Oil filter differential pressure switch
viii) Oil temperature sensor - each
ix) Fuel low pressure switch - each
x) Fuel filter differential pressure switch
xi) Fuel temperature sensor - each
xii) Igniter boxes - each
xiii) Igniters - each
xiv) Engine vibration transducer
xv) Drains tank ejector
xvi) Drains Tank Ejector Filter
xvii) Starter air valve, ship loose item
xviii) HP speed probe
xix) Dedicated Generator
xx) Starter motor
xxi) Fire detectors - core, upper splitter and lower splitter
xxii) Fuel nozzles - each
xxiii) TGT thermocouples - each
xxiv) Fuel Flow Transmitter
xxv) Engine Electronic Controller (EEC)
xxvi) Handling bleed valve solenoid
xxvii) Oil pump
xxviii) Igniter lead - each
xxix) Fuel pump
xxx) Buffer air valve
xxxi) Turbine overheat thermocouple
xxxii) Bleed valve - each
xxxiii) Booster bleed valve actuator
xxxiv) T30 thermocouple
xxxv) Fuel Metering Unit (FMU)
xxxvi) Variable Stator Vane Actuator (VSVA)
xxxvii) Fan blade - each
xxxviii) Booster Bleed Valve Actuator
xxxix) Fuel Overspeed Splitter Unit (OSU)
xl) Surface Air Cooler Oil Cooler (SACOC) - for IDG oil
xli) Combined Fuel Cooled Oil Cooler (CFCOC) - for IDG and engine oil
xlii) P20/T20 probe, ship loose item
xliii) Bubble pipe educator
Page 74 of 78
Rolls-Royce Deutschland/Midwest Express Airlines
General Terms Agreement
xliv) By-pass and Vent valve
xlv) Oil Filter Pop-up Indicator
xlvi) Independent Overspeed Protection Unit (IOP), ship loose item
3 Boeing & BFGoodrich Furnished Equipment
The following LRU's are Boeing/BFG Furnished Equipment (MDFE):
i) Hydraulic Pump, V-band clamp and hoses
ii) Integrated Drive Generator (IDG), V-Band Clamp and harnesses
iii) Check Valves (x2), High Stage Valve, Pressure Regulating Shutoff
Valve (PRSOV), Pilot Valves (x2), temperature and pressure sensors -
required A/C Bleed Air Supply
iv) Precooler (inc. inlet and outlet ducts) and Fan Air Valve (FAV)
v) Nose-cowl ice detector - customer option
vi) Nose cowl
vii) Thrust Reverser and adapter ring
viii) Cowls - upper and lower
ix) Fixed apron
x) Engine fire extinguishing system (excluding bottles)
xi) Gearbox fire detector
xii) Exhaust fire detector
xiii) Anti-ice valve and ducts
xiv) Engine air and start system ducts and hoses
Page 75 of 78
Rolls-Royce Deutschland/Midwest Express Airlines
General Terms Agreement
4 Engine Transportation and Handling Equipment
The following transportation and handling equipment can be purchased directly
from Rolls-Royce:
ATA CH. TOOL No. DESCRIPTION ACTIVITY QTY MFR REV-ISION
------- -------- ----------- -------- --- --- ---------
Line Main 8546603 Extractor, VSV actuator Removal & installation of the VSV 1 RR R1
tie rod actuator
Line Main 8546608 Traverse tool, VSVA Removal & installation of the VSVA, 1 RR R1
trouble shooting and HPC borescoping
Line Main 8547060 Socket, rotor, dedicated Removal & installation of the dedicated 1 RR R1
generator generator rotor
Line Main 8547257 Locking tool, rotor, Removal & installation of the dedicated 1 RR R4
dedicated generator generator rotor
Line Main 8548913 Adustment tool, BBV Trouble shooting BBV mechanism 1 XX X0
Xxxx Xxxx 0000000 Dressing stand, engine or Removal & installation of EBU 1 RR R1
powerplant
Line Main 8549101 Lifting sling, engine or Removal & installation of the engine or 1 RR R1
powerplant powerplant
Line Main 8549700 Trunnions, dressing stand Removal & installation of EBU 2 RR R1
Transport 8549742 Transportation stand Transportation of engine or powerplant 1 XX X0
Xxxxxxxxx 0000000 Rear trunnions, Transportation of engine or powerplant 1 Set RR R3
transportation stand
Transport 8549745 MVP bag, transportation Transportation and storage of engine or 1 RR R1
powerplant
Transport 8549747 Drop cover, transportation Transportation of engine 1 RR R1
stand
Line Main 8549753 Rigging pin, BBV, VSVA and Trouble shooting BBV, VSVA and BAV 3 RR R1
BAV mechanisms
Line Main 8600004 Extension adapters, Removal & installation of EBU 1 Set RR R1
transportation stand
Transport 8600134 Tow bar, transportation Transportation of engine or powerplant 1 RR R1
stand
Line Main 8600152 Extractor, rotor, Removal & installation of the dedicated 1 RR R5
dedicated generator generator rotor
Line Main 8600176 Adapters, front, front Removal & installation of EBU 1 Set RR R1
pedestals
Line Main 8600177 Adapters, rear, rear Removal & installation of EBU 1 Set RR R1
pedestals
Line Main 8600178 Front pedestals Removal & installation of EBU 1 Set RR R1
Line Main 8600179 Rear pedestals Removal & installation of EBU 1 Set RR R1
Line Main 8600213 Lifting trolley, accessory Removal & installation of the accessory 1 RR R3
gearbox gearbox
Transport 8600221 Front trunnions, Transportation of engine or powerplant 1 Set RR R3
transportation stand
Line Main 8600222 Adapter, LP, inhibiting rig Inhibiting of the engine 1 RR R2
Line Main 8600223 Adapter, HP, inhibiting rig Inhibiting of the engine 1 RR R2
Line Main 8600224 Adapter, OSU, inhibiting Inhibiting of the engine 1 RR R2
rig
Line Main 8600225 Protective cover, SACOC Protection of the SACOC during 1 RR R2
maintenance activities
Line Main 29001J Inhibiting rig Inhibiting of the engine 1 Xxxxxx R2
Eng. Ltd.
Page 76 of 78
Rolls-Royce Deutschland/Midwest Express Airlines
General Terms Agreement
5 Engine General Features
5.1 Type Approval
The BR700-715A1-30 Engine has received the Engine Type Certificate Number
E00061EN issued by the Federal Aviation Administration (FAA).
5.2 Acceptance Test
The Dressed Engine is constructed and tested under Rolls-Royce Inspection, as
approved by JAA/FAA in accordance with JAR-E/FAR Part 33 Requirements.
5.3 Materials
All material and process specifications and subsequent revisions shall be
approved by JAA and FAA.
5.4 Lifting
Lift slinging or hoist points are provided on the Engine compressor intermediate
casing, and rear mount ring.
5.5 Log Book
A log book duly filled in and signed, together with an inspection and test
certificate is supplied with each Engine as specified by Rolls-Royce.
5.6 Leading Particulars
A summary of leading particulars is detailed below. Additional information
including but not limited to performance, weight, thrust and dimensions of the
BR715 engine will be listed in the Maintenance Manual and in the Operating
Instructions.
5.6.1 Dimensions
inch mm
length (spinner tip to exhaust cone) 147.18 3738.39
height 80.77 2051.55
width 67.83 1722.91
5.6.2 Thrust Ratings
Thrust ratings are given at sea level test bed rating thrusts, no offtakes, for:
BR700-715A1-30 Series Rated MTOT SLS at ISA +15(0)C 18,500 lb.
-----------------------------------------------------------------------
Flat Rated To : FN 18,500 lbf
-----------------------------------------------------------------------
Take Off ISA + 15 18,699
-----------------------------------------------------------------------
M / CT ISA + 10 17,696
-----------------------------------------------------------------------
6 Engine Fuel and Oil Types
Page 77 of 78
Rolls-Royce Deutschland/Midwest Express Airlines
General Terms Agreement
6.1 Fuel Specifications
The Engine is currently approved for operation with fuels conforming to the
following specifications and requirements:
American: ASTM D1655-94 Jet A or A-1 or Xxx X, XXX-X-00000X XX0, XXX-X-0000X,
and Grade JP5
6.2 Oil Specifications
Lubricating oils shall be per MIL-L-23699C, DERD 2497, or DERD 2499. Lubricating
oils shall be approved individually by brand name and the manufacturing quality
and consistency shall be controlled by a separate Rolls-Royce laboratory
approval letter for each oil.
Maintenance Manuals shall provide lists of all approved oils. Oils evaluated for
approval shall include Mobil Jet II and Mobil Jet 254.
Page 78 of 78
PRIVATE DATA
NOT TO BE DISCLOSED WITHOUT THE PRIOR WRITTEN CONSENT OF BOTH PARTIES
April 12, 2002
Midwest Express Airlines, Inc.
0000 Xxxxx Xxxxxx Xxxxxx
Xxx Xxxxx, XX 00000
Dear Sirs:
Side Letter Agreement Number One to General Terms Agreement
RR/MWE/M055.01.00/MG752
Rolls-Royce Deutschland Ltd & Co KG ("Rolls-Royce") and Midwest Express
Airlines, Inc. ("Midwest Express") have entered into a General Terms Agreement
referenced RRD/MWE/M055.01.00/MG752, of even date herewith, relating to amongst
other things the purchase of support equipment and the provision of warranties
and guarantees (the "GTA").
In consideration of Midwest Express entering into the GTA the parties agree to
amend and supplement the GTA as follows:
Terms used herein and not defined herein shall have the meanings assigned to
them in the GTA.
1. Installed Engine Credit
1.1 Firm Aircraft
Upon delivery to Midwest Express of each of the twenty-five (25)
Firm Aircraft delivered prior to February 28, 2006, Rolls-Royce
will provide to Midwest Express a credit in the amount of *
United States Dollars (*).
* Indicates that material has been omitted and confidential treatment has been
requested therefor. All such omitted material has been filed separately with
the SEC pursuant to Rule 24b-2.
PRIVATE DATA
NOT TO BE DISCLOSED WITHOUT THE PRIOR WRITTEN CONSENT OF BOTH PARTIES
For the avoidance of doubt, pursuant to paragraph 1.6 of the
Business Consideration Letter between Midwest Express and Boeing,
of even date herewith (the "Business Consideration Letter"),
Boeing has agreed to provide to Midwest Express a portion of such
total credit of * United States Dollars (*) per Firm Aircraft,
such portion amounting to * United States Dollars (*) per Firm
Aircraft (the "Boeing Firm Aircraft Credits"). To the extent that
Boeing provides Midwest Express with the Boeing Firm Aircraft
Credits and payment by Boeing to Midwest Express of such credits
is funded by Rolls-Royce, Rolls-Royce and Midwest Express agree
that the credits to be provided directly to Midwest Express by
Rolls-Royce pursuant to this Clause 1.1 shall be reduced to *
United States Dollars (*) per Firm Aircraft.
1.2 Option Aircraft
Upon delivery to Midwest Express of up to twenty-five (25) Option
Aircraft delivered prior to December 31, 2009, Rolls-Royce will
provide to Midwest Express (i) a credit in the amount of * United
States Dollars (*) for each of the first five (5) such Option
Aircraft, and (ii) a credit in the amount of * United States
Dollars (*) for each of the remaining twenty (20) such Option
Aircraft.
For the avoidance of doubt, pursuant to paragraph 1.6 of the
Business Consideration Letter Boeing has agreed to provide to
Midwest Express a portion of the credit of * United States Dollars
(*) due against each of the first five (5) Option Aircraft, such
portion amounting to * United States Dollars (*) per Option
Aircraft (the "Boeing Option Aircraft Credits"). To the extent
that Boeing provides Midwest Express with the Boeing Option
Aircraft Credits against each of the first five (5) Option
Aircraft and payment by Boeing to Midwest Express of such credits
is funded by Rolls-Royce, Rolls-Royce and Midwest Express agree
that the credits to be provided directly to Midwest Express by
Rolls-Royce against each of the first five (5) Option Aircraft
pursuant to this Clause 1.2 shall be reduced to * United States
Dollars (*) per Firm Aircraft.
1.3 If Midwest Express should not accept delivery of and operate the
Aircraft contemplated in this Side Letter Agreement and the Spare
Engines ordered in accordance with the GTA, then the value of any
credits on a per aircraft basis becoming due to or received by
Midwest Express pursuant to this Side Letter or the GTA will be
reduced on a pro-rata basis.
* Indicates that material has been omitted and confidential treatment has been
requested therefor. All such omitted material has been filed separately with
the SEC pursuant to Rule 24b-2.
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PRIVATE DATA
NOT TO BE DISCLOSED WITHOUT THE PRIOR WRITTEN CONSENT OF BOTH PARTIES
1.4 The credits set out in Clauses 1.1 and 1.2 above may be used
towards any of the following purposes:
1.4.1 Reduction of the acquisition price of the Aircraft;
1.4.2 To pay for up to * of the Spare Engine list price for
each of the five (5) firm Spare Engines purchased by
Midwest Express from Rolls-Royce;
1.4.3 Acquisition of IP spares and support equipment purchased
from Rolls-Royce;
1.4.4 Reduction of up to 50% of any invoice relating to charges
for Covered Services under the TSP set out in Exhibit G of
the GTA; or
1.4.5 Reduction of lease rentals associated with the lease of
Spare Engines from Rolls-Royce and Partners Finance
Limited.
2. Used Spare Engine Supply
Rolls-Royce and Midwest Express agree that one of the five firm Spare
Engines to be purchased by Midwest Express pursuant to Schedule 1 to
Exhibit E to the GTA shall be a used Spare Engine without QEC kit (the
"Used Spare Engine"). Rolls-Royce shall elect the delivery date of such
Used Spare Engine, which will be one of the delivery dates specified for
Spare Engines in Exhibit E Schedule 1 to the GTA. The purchase by Midwest
Express of the Used Spare Engine shall be subject to the following terms.
2.1 Used Spare Engine Purchase Price
The purchase price of the Used Spare Engine shall be * at July
2001 levels, subject to escalation pursuant to the formula set forth in
Schedule 2 to Exhibit E to the GTA.
2.2 Used Spare Engine Credits
Upon delivery to Midwest Express of the Used Spare Engine, Rolls-Royce
will provide to Midwest Express the following credits, usable solely to
reduce the purchase price of such Used Spare Engine.
2.2.1 Delivery Credit
Upon delivery to Midwest Express of the Used Spare Engine,
Rolls-Royce will provide to Midwest Express a credit in the
amount of * United States Dollars (*).
* Indicates that material has been omitted and confidential treatment has been
requested therefor. All such omitted material has been filed separately with
the SEC pursuant to Rule 24b-2.
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PRIVATE DATA
NOT TO BE DISCLOSED WITHOUT THE PRIOR WRITTEN CONSENT OF BOTH PARTIES
2.2.2 Usage Credit
If, upon delivery to Midwest Express, the Used Spare Engine
has in excess of 2,000 (two thousand) engine flying hours
of operation since new, Rolls-Royce shall provide Midwest
Express with an additional usage credit of * (* United
States Dollars) for each such engine flying hour in excess
of 2,000 (two thousand) that such Used Spare Engine has
been operated.
2.2.3 LLP Utilization Credit
Upon delivery to Midwest Express of the Used Spare Engine,
Rolls-Royce shall provide Midwest Express with an
additional LLP Utilization Credit of * (* United States
Dollars) for each cycle completed by such Used Spare Engine
since new.
2.2.4 Selection of the FHA
If Midwest Express elects to operate under the FHA
contained in Exhibit G to the GTA, the credits detailed in
this Clause 2 will be amended in accordance with the
following. If Midwest Express elects to operate under the
Shop Visit Coverage pursuant to Clause 7.1.1 of Exhibit G
to the GTA but elects not to select the LLP coverage
pursuant to Clause 7.1.2 of Exhibit G to the GTA, the Usage
Credit detailed in Clause 2.2.2 herein shall not apply to
the purchase of the Used Spare Engine by Midwest Express.
If, Midwest Express elects to operate under the Shop Visit
Coverage pursuant to Clause 7.1.1 of Exhibit G to the GTA,
and also selects the LLP coverage pursuant to Clause 7.1.2
of Exhibit G to the GTA, then neither the Usage Credit
detailed in Clause 2.2.2 herein nor the LLP Utilization
Credit detailed in Clause 2.2.3 herein shall apply to the
purchase of the Used Spare Engine by Midwest Express.
The credits detailed herein, which are at July 2001 levels and are
subject to escalation pursuant to the formula set forth in
Schedule 2 to Exhibit E to the GTA, are provided in addition to
the use by Midwest Express of the Installed Engine Credits
pursuant to Clause 1.1 and 1.2 herein against up to * of the
Purchase Price pursuant to Clause 1.4.2 above.
2.3 Used Spare Engine Warranty
The provisions of Clause 12 (Grant of Warranty and Limitation of
Liability) of the GTA shall apply to the Used Spare Engine
purchased by Midwest Express, except as follows.
* Indicates that material has been omitted and confidential treatment has been
requested therefor. All such omitted material has been filed separately with
the SEC pursuant to Rule 24b-2.
Page 4 of 10
PRIVATE DATA
NOT TO BE DISCLOSED WITHOUT THE PRIOR WRITTEN CONSENT OF BOTH PARTIES
2.3.1 New Engine Warranty
Clause 2 of Exhibit C (New Engine Warranty) to the GTA,
shall be deleted in its entirety and replaced by the Used
Engine Warranty contained in Attachment A to this Side
Letter Agreement.
2.3.2 Ultimate Life Warranty
Clause 4 of Exhibit C (Ultimate Life Warranty) to the GTA,
shall apply to the Used Spare Engine, except that any
allowances granted by Rolls-Royce against the Used Spare
Engine pursuant to Clause 4.2 of such Exhibit C shall be
reduced by the amount of any credits provided by
Rolls-Royce to Midwest Express pursuant to Clause 2.2.3
herein.
Except as amended by the provisions of this Clause 2.3, Clause 12
(Grant of Warranty and Limitation of Liability) of the GTA shall
continue in full force and effect.
Except as amended and supplemented by this Side Letter Agreement, the
purchase by Midwest Express of the Used Spare Engine shall be subject to
the terms of the GTA.
3. Reduced Spare Engine Pre-Delivery Payments
The parties agree to amend Clause 4 of Exhibit of E-1 of the GTA with
respect to the five (5) firm Spare Engines, as follows:
* Therefore, Midwest Express shall make payments in respect of Spare
Engines as follows:
o * and
o *
4. Training
4.1 Rolls-Royce will provide free of charge training to Midwest
Express for the following courses:
4.1.1 General Familiarization (2 days) - For management, planning
engineers, and peripheral engine support personnel;
4.1.2 Line Maintenance (7 days) - For licensed engineers
responsible for supervising routine and non-routine engine
maintenance and troubleshooting tasks; and
* Indicates that material has been omitted and confidential treatment has been
requested therefor. All such omitted material has been filed separately with
the SEC pursuant to Rule 24b-2.
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PRIVATE DATA
NOT TO BE DISCLOSED WITHOUT THE PRIOR WRITTEN CONSENT OF BOTH PARTIES
4.1.3 Borescope (2 days) - For personnel who specialize in
borescope inspection damage assessment.
4.2 Free of charge training shall be provided for up to * students for
each Aircraft delivered, and must be attended within two (2) years
after the delivery of the last Aircraft.
4.3 Each student will be provided with one (1) copy of the training
material. Five (5) additional copies and a reproducible master of
the training material shall be provided for Midwest Express'
internal use.
5. Manuals
Rolls-Royce will provide free of charge Manuals (as detailed in Exhibit
D, Clause 2.4 of the GTA) to Midwest Express, together with a * year
revision service.
6. Representative Services
Rolls-Royce will make available the services of a field service
representative (as detailed in Exhibit D, Clause 2.3 of the GTA) at
Midwest Express' facilities in Milwaukee *.
7. Obligations of Midwest Express
The obligations of Rolls-Royce set out herein are subject to the
following conditions:
7.1 Midwest Express shall acquire and take delivery of at least
twenty-five (25) new Aircraft before February 28, 2006;
7.2 Midwest Express shall operate in regular and frequent airline
service any Aircraft delivered from delivery of such Aircraft, *
7.3 Midwest Express shall not be in material breach of any of its
obligations under the GTA or any other contract with Rolls-Royce
or an affiliate of Rolls-Royce;
7.4 Midwest Express undertakes that the Aircraft that Midwest Express
may acquire will be BR715 powered;
7.5 The GTA shall remain in effect and not be terminated in accordance
with Clause 9 of the GTA.
* Indicates that material has been omitted and confidential treatment has been
requested therefor. All such omitted material has been filed separately with
the SEC pursuant to Rule 24b-2.
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PRIVATE DATA
NOT TO BE DISCLOSED WITHOUT THE PRIOR WRITTEN CONSENT OF BOTH PARTIES
8. General Conditions
8.1 All credits granted to Midwest Express in this Side Letter
Agreement and the GTA are personal to Midwest Express, are
non-assignable, and are not convertible to cash.
8.2 Unless otherwise amended herein, the provisions of the GTA are
hereby incorporated by reference in this Side Letter Agreement. In
the event of any inconsistency or conflict between this Side
Letter Agreement and the GTA, the provisions hereof shall control.
8.3 This Side Letter Agreement shall not be amended in any way other
than by agreement in writing, entered into by the parties hereto
after the date of this Side Letter Agreement, which is expressly
stated to amend this Side Letter Agreement. This Side Letter
Agreement shall not be amended or terminated orally.
8.4 THIS SIDE LETTER AGREEMENT SHALL BE SUBJECT TO AND INTERPRETED AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF WASHINGTON
EXCLUDING ITS CONFLICT OF LAW RULES, AND EXCLUDING THE UNITED
NATIONS CONVENTION FOR THE INTERNATIONAL SALE OF GOODS (CISG,
1980, "VIENNA CONVENTION").
It is the intent of the Parties and the Airframer (collectively,
the "Contracting Parties") that any and all disputes arising out
of or relating to this Agreement, the Aircraft, the Engines, the
Products or the Services that cannot be resolved through
negotiation ("Disputes") and that involve one or more Contracting
Parties (whether or not a particular such Dispute also involves
disputants that are not Contracting Parties) be resolved to the
greatest extent possible in a single, comprehensive, definitive
litigation proceeding. Accordingly, the Parties hereby agree that
(a) any Contracting Party that files or responds to a complaint or
other initial pleading (in any form and however denominated) in
connection with a Dispute shall notify the other Contracting
Parties of the same and provide copies of said complaint or
response to each of them; (b) any Contracting Party which
thereafter wishes to assert a claim or grievance amounting to a
Dispute against any other Contracting Party shall do so by way of
a claim, counterclaim, cross-claim or third-party claim in the
first complying litigation that is the subject of a notification
provided for in sub-clause (a) above, unless the court refuses for
procedural reasons to entertain such claim as part of that
litigation; and (c) in the event that suits relating to Disputes
are initiated in more than one court, the parties to all such
suits shall promptly stipulate that all such suits may be
consolidated into a single case before the U.S. District Court for
the Eastern District of Wisconsin or, if such court lacks subject
matter jurisdiction, a state court of competent jurisdiction
within the geographic area included in that district
Page 7 of 10
PRIVATE DATA
NOT TO BE DISCLOSED WITHOUT THE PRIOR WRITTEN CONSENT OF BOTH PARTIES
(in either case, the "Forum Court"), and may be heard and
determined in a single and integrated proceeding. Each Party
hereby consents to the exercise of personal jurisdiction over it
by the Forum Court for the purpose of resolving any Dispute.
Please confirm your agreement to the above by executing this letter in the space
provided below.
Yours faithfully,
For Rolls-Royce Deutschland Ltd & For Midwest Express Airlines,
Co KG Inc.
By /s/ X.X. Xxxxxx By: /s/ Xxxxxxx X. Xxxxxxxx
-------------------------- ---------------------------------
Printed X.X. Xxxxxx Printed Xxxxxxx X. Xxxxxxxx
-------------------------- ----------------------------
Title: Director Title: Chairman of the Board,
-------------------------- President and Chief
Executive Officer
By /s/ J.W.N. Xxxxxxx
--------------------------
Printed J.W.N. Xxxxxxx
--------------------------
Title: Director of Regional
Programmes
--------------------------
Page 8 of 10
PRIVATE DATA
NOT TO BE DISCLOSED WITHOUT THE PRIOR WRITTEN CONSENT OF BOTH PARTIES
ATTACHMENT A
USED SPARE ENGINE WARRANTY
Rolls-Royce warrants the Used Spare Engine against defect in design, material
and workmanship which result in Failure or Resultant Damage as follows:
1 Warranty Period
The period of this Used Spare Engine warranty shall be:
1.1 the first * hours or cycles following delivery of the Used
Spare Engine to Midwest Express, whichever is first completed
("First Engine Run"), and
1.2 the * through * hours or cycles following delivery of
the Used Spare Engine to Midwest Express, whichever is first
completed ("Extended Engine Run").
2 Warranty Remedies
2.1 First Engine Run
If the Used Spare Engine suffers Failure or Resultant Damage
during its First Engine Run warranty period as defined in
Clause 1.1, then:
2.1.1 where such Failure or Resultant Damage necessitates
repair of the Used Spare Engine, Rolls-Royce will
arrange to have such repair carried out promptly,
correctly and at no charge to Operator, or
2.1.2 where such Failure or Resultant Damage does not
necessitate repair of the Used Spare Engine,
Rolls-Royce will provide a one hundred percent
(100%) allowance on the Price of the affected
Engine Parts.
* Indicates that material has been omitted and confidential treatment has been
requested therefor. All such omitted material has been filed separately with
the SEC pursuant to Rule 24b-2.
Page 9 of 10
PRIVATE DATA
NOT TO BE DISCLOSED WITHOUT THE PRIOR WRITTEN CONSENT OF BOTH PARTIES
2.2 Extended Engine Run
If the Used Spare Engine suffers Failure or Resultant Damage
during its Extended Engine Run warranty period as defined in
Clause 1.2, then
2.2.1 where such Failure or Resultant Damage necessitates
repair of the Used Spare Engine, Rolls-Royce will
arrange to have such repair carried out promptly
and correctly and will accept repair charges for an
amount equal to
(* - Engine Time) / * x invoiced repair
charges, or
2.2.2 where such Failure or Resultant Damage does not
necessitate repair of the Used Spare Engine,
Rolls-Royce will provide an allowance in respect of
the affected Engine Parts for an amount equal to:
(* - Engine Time) / * x Price of such Engine
Parts
3 BFE Exclusion
The Boeing and BFGoodrich Furnished Equipment (hereinafter referred to
as "MDFE") as set out in Section 3 of the Specification for the Engine
(Exhibit H to the GTA) shall not be warranted by Rolls-Royce and the
benefits to Operator under any of the warranties contained in this
Attachment A shall not apply to such MDFE.
* Indicates that material has been omitted and confidential treatment has been
requested therefor. All such omitted material has been filed separately with
the SEC pursuant to Rule 24b-2.
Page 10 of 10
