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EXHIBIT 10.1
Contract No. 98-0903
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AIRCRAFT PAINTING SERVICES AGREEMENT
THIS AIRCRAFT PAINTING SERVICES AGREEMENT ("Agreement"), is made and
entered into as of this 24th day of April, 1998, by and between FEDERAL EXPRESS
CORPORATION, a Delaware corporation ("FedEx"), and PRIDE AVIATION, INC., an
Oklahoma corporation ("Contractor").
RECITALS
1. FedEx desires that Contractor perform certain painting services with
respect to FedEx's aircraft, at those locations set forth in Exhibit A (the
"Location").
2. Contractor is willing and able to perform the services for FedEx pursuant
to the terms and subject to the conditions of this Agreement.
FOR AND IN CONSIDERATION of the mutual covenants set forth in this
Agreement, FedEx and Contractor (the "Parties") agree as follows:
ARTICLE 1
SERVICES
SECTION 1.01. SERVICES TO BE PROVIDED. (a) Contractor shall furnish
personnel to perform on FedEx's aircraft ("Aircraft") the scheduled painting
services ("Services") more completely described in Exhibit A, subject to the
terms and conditions set forth in this Agreement.
SECTION 1.02. ADDITIONAL SERVICES. In addition to the Services, FedEx may
request that Contractor perform other services on an Aircraft ("Additional
Services") and Contractor shall advise FedEx if it is willing to perform such
Additional Services and the rates applicable to them. Each request by FedEx for
Additional Services must be confirmed by FedEx in writing (which may include a
facsimile). Additional Services shall be performed in accordance with the terms
and subject to the conditions of this Agreement.
SECTION 1.03. CUSTODY AND CONTROL. FedEx agrees that, during the term of
this Agreement, at any time Contractor is performing transit or Services on an
Aircraft, an employee or agent of FedEx shall be in charge of and in custody and
control of the Aircraft, and Contractor will not be considered a bailee of or in
custody or control of the Aircraft.
SECTION 1.04. PERMITS AND LICENSES. Contractor shall obtain all permits and
licenses and at its expense pay all fees necessary for the lawful and proper
performance of the Services.
SECTION 1.05. DISCIPLINE AND SAFETY. Contractor shall enforce strict
discipline and good order among its employees, if any, and shall provide proper
safeguards for the safe performance of the Services. If any person shall appear
to be incompetent, disorderly or intemperate, in any
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way disrupts or interferes with performance of the Services, or is in any other
way disqualified for or unfaithful to his job, such person shall be removed
immediately by Contractor and shall not be employed for the Services without
Federal's prior written consent
SECTION 1.06. EXCUSABLE DELAY. Contractor shall not be liable to FedEx for
Contractor's failure to perform or any delay in the performance of the Services
or Additional Services (collectively referred to as the "Services") if such
failure to perform or delay in performance is occasioned by causes beyond
Contractor's control, including but not limited to acts of God or of public
enemies, fires, floods, lock-outs, strikes or labor disputes, riots,
insurrections or unusually severe weather.
ARTICLE 2
TERM
SECTION 2.01. EFFECTIVE DATE. This Agreement shall become effective as of
the date of this Agreement and shall commence as-of the date of this Agreement
and continue until April 30, 2001 (the "Term"), unless earlier terminated.
SECTION 2.02. TERMINATION. FedEx shall have the unlimited right to
terminate this Agreement prior to expiration of the Term by giving Contractor
thirty (30) days prior written notice. In such event, Contractor shall be
entitled only to portions of the Fee earned and Reimbursables actually incurred
as of the effective date of termination.
ARTICLE 3
RATES AND PAYMENT: RIGHT TO AUDIT
SECTION 3.01. RATES AND CHARGES. As consideration for Contractor's
performance of the Services, FedEx shall pay to Contractor sums based on the
rates and charges set forth in Exhibit A (the "Fee") and payable as provided in
Exhibit A. No portion of the Fee shall be payable unless properly documented in
accordance with this Article 3.
SECTION 3.02. REIMBURSABLES. In addition to the Fee, FedEx shall reimburse
Contractor for reasonable and necessary expenses incurred by Contractor in the
performance of the Services ("Reimbursables") up to the Maximum Reimbursable
Amount specified in Exhibit A. Reimbursables for travel expenses will be paid
only in accordance with FedEx's policy for the payment of expenses to its own
employees, a copy of which will be provided to Contractor upon request. Any
expenses incurred by Contractor in excess of the Maximum Reimbursable Amount
shall not be deemed Reimbursables, and no Reimbursable claimed will be payable
unless properly documented in accordance with this Article 3.
SECTION 3.03. INVOICES AND PAYMENT. (a) Contractor shall invoice FedEx for
sums payable under this Agreement as provided in Exhibit A. Contractor shall
submit to FedEX an invoice (original and two copies) for Services completed and
Reimbursables incurred during the invoice period. Contractor's invoices must be
accompanied by copies of invoices from its subcontractors, suppliers,
materialmen and vendors (if any), together with complete documentation of any
Reimbursables claimed and any other documentation as may be requested by FedEx
for its proper review of Contractor's invoice.
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(b) An original and two copies of each invoice shall be submitted to
FedEx at the following address:
Federal Express Corporation
0000 Xxxxxxxx Xxxx
Xxxx. X
Xxxxxxx, Xxxxxxxxx 00000-0000
Attn: Senior Manager, Airframe Vendor Management
(c) FedEx shall promptly review Contractor's invoice and payment by
FedEx shall be made within thirty (30) days of FedEx's receipt and approval of
Contractor's invoice. FedEx shall state in writing its reason for withholding
any or all of the monies requested by Contractor.
SECTION 3.04. RIGHT TO AUDIT. Contractor shall keep full and accurate
records and documentation to substantiate the amounts claimed in any invoice,
which records shall be made available to FedEx at all times during the Term or
any renewal Term of this Agreement, and until two years after completion of the
Services or earlier termination of this Agreement, whichever occurs first.
ARTICLE 4
TAXES
SECTION 4.01. TAXES. (a) FedEx shall pay federal, state and local sales,
use or other applicable taxes (except those based upon Contractor's gross
receipts or net income) which may be imposed upon the Services performed under
this Agreement ("Taxes"). Any Taxes owing by FedEx shall be set forth by
Contractor as a separate invoice item.
(b) Contractor shall, upon FedEx's reasonable written request and at
FedEx's expense, assist FedEx in contesting the validity or application of any
Taxes. Contractor agrees that if it receives a refund of all or part of any
Taxes (including interest and penalties) previously paid by FedEx, it shall
promptly remit the refund to FedEx.
ARTICLE 5
STANDARDS OF PERFORMANCE
SECTION 5.01. STANDARDS OF PERFORMANCE. All Services shall be performed
in a good and workmanlike manner and Contractor shall observe all applicable
requirements of the Federal Aviation Administration and any other governmental
authority having jurisdiction over the Services. Contractor shall comply with
any written procedures of FedEx which are furnished to Contractor including, but
not limited to FedEx's General Maintenance Manual (the "GMM") or, if authorized
by FedEx, the Services shall be performed in accordance with Contractor's
standard aircraft maintenance procedures.
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ARTICLE 6
SCHEDULING AND WORKSCOPE
SECTION 6.01. SCHEDULING. (a) FedEx will provide Contractor a written
forecast schedule of planned maintenance visits. Such forecast will be updated
periodically.
(b) FedEx and Contractor, by mutual written agreement may amend the
forecast schedule from time to time during the Term of this Agreement.
SECTION 6.02. WORKSCOPE. (a) Federal will provide Contractor a written
Airframe Workscope Letter describing the scope of Services to be performed on
Federal's Aircraft and a listing of all of the FedEx supplied materials/kits no
later than thirty (30) calendar days prior to the Aircraft's specified Delivery
Date.
(b) FedEx and Contractor, by mutual written agreement, may amend the
Airframe Workscope Letter and list of materials/kits from time to time, prior to
an Aircraft's Delivery Date.
ARTICLE 7
WARRANTY
SECTION 7.01. CONTRACTOR'S WARRANTY. (a) Contractor warrants its work
against workmanship defects for a period of three (3) years. This includes paint
adhesion but does not include adhesion of the previous paint job nor does it
include abnormal erosion or chipping from impact damage. This warranty is
non-transferable.
(b) Contractor shall assign to FedEx all assignable warranties,
service life policies and patent indemnities of manufacturers or suppliers of
components other than Contractor. At FedEx's reasonable request, Contractor
shall give FedEx reasonable assistance in enforcing FedEx's rights arising under
such warranties, service life policies and patent indemnities. If required under
such warranties, service life policies or patent indemnities, Contractor shall
give notice of any such manufacturers or suppliers of their assignment by
Contractor to FedEx.
ARTICLE 8
INDEMNIFICATION
SECTION 8.01. CONTRACTOR'S INDEMNIFICATION. Contractor agrees to indemnify,
defend, and hold harmless FedEx, its officers, directors and employees from and
against any and all liabilities, damages, expenses, claims, suits or judgments,
including reasonable attorneys' fees and expenses, for the death of or bodily
injury to any person (other than an officer, director or employee of FedEx) and
for the loss of, damage to or destruction of any property (including the
Aircraft) in any manner to the extent attributable to the negligence or willful
misconduct of Contractor, its officers, directors or employees in the
performance of the Services.
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SECTION 8.02. FEDEX'S INDEMNIFICATION. FedEx agrees to indemnify, defend,
and hold harmless Contractor, its officers, directors and employees from and
against any and all liabilities, damages, expenses, claims, suits or judgments,
including reasonable attorneys' fees and expenses, for the death of or bodily
injury to any person (other than an officer, director or employee of Contractor)
and for the loss of, damage to or destruction of any property (including the
Aircraft) in any manner to the extent attributable to the negligence or willful
misconduct of FedEx, its officers, directors or employees in the performance of
the Services.
ARTICLE 9
INSURANCE
SECTION 9.01. CONTRACTOR'S INSURANCE REQUIREMENTS. (a) Throughout the Term,
Contractor shall maintain the following insurance and, upon request, shall
furnish FedEx with certificates of insurance evidencing such insurance to be in
effect (and indicating on the certificate of insurance that insurance will not
be modified or canceled unless FedEx is given thirty (30) days' prior notice in
writing), with limits and with the endorsements specified below:
(i) Workers' Compensation Insurance with limits as required
by the laws of the state where the Services are performed
with "Broad Form" all States' endorsement and Employer's
Liability Insurance.
(ii) Hangarkeeper's legal liability insurance with limits not
less than the actual value of the Aircraft.
(iii) Comprehensive Bodily Injury and Property Damage Liability
Insurance with combined single limit of coverage not less
than $25,000,000.00 insuring bodily injury, property
damage and Contractor's contractual liability under the
Agreement.
(b) All insurance policies maintained by Contractor shall be primary
and FedEx's own insurance shall be non-contributing.
(c) All insurance maintained by Contractor shall provide that
insurance will not be subject to cancellation, termination or material change
except after thirty days' notice to, FedEx.
(d) All liability insurance policies maintained by Contractor pursuant
to this Agreement shall be endorsed to name FedEx, its officers, directors and
employees as additional insureds, and all property damage shall be endorsed with
a waiver of subrogation by the insurer as to FedEx, its officers, directors and
employees; but only to the extent that Contractor has agreed to indemnify,
defend or hold harmless FedEx under this Agreement.
ARTICLE 10
INDEPENDENT CONTRACTOR
SECTION 10.01. RELATIONSHIP OF PARTIES. Contractor shall be deemed to be,
for all purposes, an independent contractor and will not at any time directly or
indirectly act as agent,
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servant, or employee of FedEx. FedEx agrees that it is interested only in the
performance of the Services and the results achieved and shall not exercise any
control over the conduct Or supervision of the Services or the means of their
performance. Contractor shall have full responsibility for the payment of all
federal, state and local taxes and contributions, including penalties and
interest, imposed pursuant to unemployment insurance, social security, income
tax, workers' compensation or any other similar statute.
ARTICLE 11
COMPLIANCE WITH LAWS
SECTION 11.01. COMPLIANCE WITH LAWS. (a) To the extent applicable,
Contractor agrees to comply with the affirmative action requirements applicable
to contracts with U.S. government contractors as set forth in Title 41 of the
Code of Federal Regulations ("C.F.R."). The provisions of said regulations are
incorporated by reference into this Agreement. Contractor further agrees to
employ only persons who are legally authorized to work in the United States
(when employing within the United States) and to have an I-9 employment
authorization form, if required, for each person employed by it in the United
States.
(b) Contractor assumes the complete responsibility for and shall fully
comply with the provisions of 40 C.F.R. Parts 261 through 265, as amended from
time to time, for any unusable material removed from an Aircraft which unusable
material is intended for disposal.
ARTICLE 12
MISCELLANEOUS
SECTION 12.01. ASSIGNMENT. This Agreement shall not be assignable or
delegable by either party without the prior written consent of the other. This
Agreement shall be binding upon and inure to the benefit of the parties, their
respective successors, assigns, and legal representatives.
SECTION 12.02. SECTION HEADINGS AND CAPTIONS. All section headings and
captions used in this Agreement are purely for convenience and shall not affect
the interpretation of this Agreement.
SECTION 12.03. EXHIBITS. All exhibits described in this Agreement shall be
deemed to be incorporated in and made a part of this Agreement, except that if
there is any inconsistency between this Agreement and the provisions of any
Exhibit the provisions of this Agreement shall control. Terms used in an Exhibit
and also used in this Agreement shall have the same meaning in the Exhibit as in
this Agreement.
SECTION 12.04. APPLICABLE LAW. This Agreement shall be deemed entered into
and shall be governed by and interpreted in accordance with the laws of the
state of Tennessee, without regard to any conflict of law principles, and the
Parties submit to the jurisdiction of any appropriate court within Tennessee for
adjudication of disputes arising out of this Agreement.
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SECTION 12.05. AMENDMENTS. Except as otherwise provided, this Agreement
shall not be modified except by written agreement signed on behalf of Contractor
and FedEx by their respective authorized officers.
SECTION 12.06. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter hereof and
supersedes all prior agreements correspondence, representations or understanding
between the parties. This Agreement may be modified only by written agreement
signed by duly authorized officers of the parties.
SECTION 12.07. LEGALITY OF PROVISIONS. If any provision of this Agreement
is held to be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall in no way be affected or
impaired.
SECTION 12.08. NO WAIVER. The failure of either party at any time to
require performance by the other of any provision of this Agreement shall in no
way affect that party's right to enforce such provision, nor shall the waiver by
either party of any breach of any provision of this Agreement be taken or held
to be a waiver of any further breach of the same provision or any other
provision.
SECTION 12.09. SURVIVAL OF TERMS. The provisions of this Agreement which by
their nature extend beyond the expiration or earlier termination of this
Agreement will survive and remain in effect until all obligations are satisfied.
Specifically, Contractor's obligations to indemnify FedEx shall survive this
Agreement.
SECTION 12.10. NOTICES. Notices given hereunder shall be in writing and
shall be deemed to have been given and delivered when received if
hand-delivered, sent by Federal Express service, or sent by United States
certified or registered mail, postage prepaid, addressed as follows:
If to FedEx: Federal Express Corporation
0000 Xxxxxxxx Xxxx
Xxxx. X.
Xxxxxxx, Xxxxxxxxx 00000-0000
Attn: Sr. Manager, Airframe Vendor Management
If to Contractor: Pride Aviation, Inc
Attn.: Xxxx Xxxxxxxxxx President
0000 Xxxxxx Xxxxx
Xxx Xxxxxx, XX 00000
or to such other address as either party shall from time to time designate by
notice to the other party.
SECTION 12.11. CHANGE IN CONTROL. In addition to any other rights as FedEx
may have, FedEx shall have the right to immediately terminate this Agreement
upon any change in the majority ownership or voting control of the capital
stock, business or assets of Contractor. Contractor shall promptly notify FedEx
in writing of any such change in control.
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SECTION 12.12. FURTHER ASSURANCES. Each party agrees to take such actions,
provide such documents, and do such things as may reasonably be required by the
other party to assure the performance of the obligations under this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
first above written.
PRIDE AVIATION, INC. FEDERAL EXPRESS CORPORATION
By: /s/ XXXX XXXXXXXXXX By: /s/ XXXXX XXXX
----------------------------- ------------------------------
Xxxxx Xxxx
Title: President Title: Vice President - Base Maint.
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("Contractor") ("FedEx")
APPROVED
AS TO LEGAL FORM
SSL 4/23/98
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LEGAL DEPT.
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Exhibit A
to that certain
Aircraft Painting Services Agreement
between
Federal Express Corporation
("FedEx")
and
Pride Aviation, Inc.
("Contractor")
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DESCRIPTION OF SERVICES AND RATE SCHEDULES
A. SERVICES.
The Aircraft applicable to this Agreement is the Xxxxxxx DC10,
XxXxxxxxx Xxxxxxx MD-11, Boeing 727, and Airbus Corporation Model A300 and A310
Aircraft.
B. LOCATIONS.
Contractor's facilities at Portland, Oregon and New Iberia, Louisiana.
C. SCOPE OF WORK.
o Prewash aircraft as required
o Depaint all aluminum surfaces on fuselage and vertical with
chemical stripper
o Sand all surfaces on wings and horizontals to be painted
o Scuff sand to remove imperfections and gloss on all composite
surfaces to be painted
o Alkaline wash and abrade to remove stripper and sanding residues
o Perform corrosion inspection and treat as required
o Proseal all seams as required
o Perform water break free test
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o Solvent clean with MEK/Toluene any areas failing water break test
o Power abrade all aluminum surfaces to be painted
o Surface condition (etch) to clean water break free test
o Desmut aluminum surfaces as required with Cee Bee A-601
o Alodine
o Epoxy prime
o Apply two (2) wet coats of white to recommended manufacturer's
spec as per FedEx blueprints
o Lay out purple on fuselage and vertical as per FedEx blueprints.
Apply two (2) coats of color to manufacturer's spec.
o Apply BAC707 xxxx to the lower wings and upper wing panels
o Apply Aeroflex to upper wing spar
o Apply masks for logo and name, spray appropriate colors to
manufacturer's specs as per FedEx blueprints
o Apply N#'s and fleet #'s
o Apply required placards as per the maintenance manual
LANDING GEAR
o Painting of main and nose landing gear doors is included in the
bid price, but wheel xxxxx and landing gear are not included
MATERIALS
o All materials necessary to degloss and paint prep will be
furnished by Contractor
o All paint to be supplied by Contractor
o Paint mask for name, N#'s, and placards/decals to be furnished by
Contractor
FLIGHT CONTROLS
o Removal, balance, and reinstallation of the flight controls is
not included in the bid price and will be handled as over and
above ("O&A") items. Calculated balance on the aircraft as
allowed by the SRM and GMM is included in the bid price.
COMPOSITES
o If composites have extreme checking, crazing, chipping or
delamination, the additional prep required will be handled as an
O&A item
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SPECIAL TOOLS
o All tools and equipment as related to the specific work scope
will be furnished by Contractor
o All tools and equipment required to accomplish O&A items will
be subject to definition at time of discovery and/or inclusion
into the work scope
o FedEx will furnish special test equipment as required
o Contractor will furnish normal hand and ship tools and equipment
MANUALS
o FedEx will furnish specific aircraft type maintenance manuals as
may be required, ie: SRM, IPC, MM
o FedEx will furnish paperwork, ie: task work cards and other
customer documents, as may be required to accomplish the work
scope
RETURN TO SERVICE AND REQUIRED INSPECTION ITEMS (RII)
o In accordance with FedEx FAA approved procedures, FedEx will
accomplish return to service and RII signatures or authorize
qualified Contractor designated personnel to accomplish said task
AUTHORITY FOR WORK SCOPE
o Depaint and paint procedures will be I.A.W. FedEx Engineering
documents or as per manufacturers procedures where applicable
o The FedEx representative will be notified of any O&A work upon
discovery. No work will proceed on those items until written
approval is received from the FedEx representative
WEIGHING OF AIRCRAFT
o Weighing of the aircraft is not included in the Price. Weighing
will be accomplished with no additional time required from the
quoted turn times.
OUTSIDE VENDOR SERVICES AND MATERIAL PURCHASES
o Third-Party vendor services and material purchases will be billed
at cost plus 10% with no line item to exceed (US) $250.00
HANGAR AVAILABILITY
o Work already scheduled at the time of commitment will determine
hangar availability.
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TURN TIME
o 7 days for strip and paint of the B-727
o 8 days for strip and paint of the DC-10
o 8 days for strip and paint of the MD-11
o 9 days for strip and paint of the A-300
o 8 days for strip and paint of the A-310
o An additional two days will be required on the first aircraft,
and an additional day on the second aircraft in order to
familiarize Contractor's operations with the FedEx requirements
PRICING
Strip and paint fuselage and vertical to FedEx specifications. Sand and
paint wings, horizontals, and engine cowls (as applicable) to FedEx
specifications. All paint, paint masks and consumables supplied by
Contractor:
o Volume pricing is offered for any one of the following conditions:
1. Yearly totals of 10 or more of that fleet type
2. Five or more consecutive aircraft, regardless of fleet type
o no more than 4 days between wide body aircraft
o 727 aircraft nose to tail
D. BASIC LABOR RATES
All O & A items will be worked at the shop rate of (US) $36.00 per
hour straight time and (US) $42.00 per hour for customer authorized overtime.
1. Term of effective rates - FedEx FY'98 thru FY'99 (FedEx's Fiscal
year is June 1 thru May 31)
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2. The labor rates and firm fixed prices represented in this Exhibit
A to the Agreement may be adjusted effective June 1 of each year
and will remain in effect for the remainder of FedEx's fiscal
year. Such adjustments to the firm fixed prices and the labor
rates shall be negotiated and established no later than January
31 of each year unless otherwise agreed to by the parties.
E. FREIGHT
Invoiced at actual cost.
F. STORAGE OF FEDERAL FURNISHED MATERIAL AND SUPPLIES
No charge when the quantity of stored material is consistent with the
requirements of work to be performed by Contractor. Taxes, insurance and other
such direct costs, if applicable, will be passed through to FedEx with no
markup.
G. COMMUNICATIONS FOR ON-SITE
One telephone line for local calls and Contractor facility service
will be provided at no additional charge. Additional telephone lines, all long
distance telephone and telefax charges, and exclusive telefax equipment will be
provided at cost as an O & A charge.
H. FEDEX'S REPRESENTATIVE OFFICE SPACE AND FURNISHINGS
Contractor will provide at no additional charge standard and
reasonable office accommodations for two (2) FedEx representatives on site at
Contractor's facilities, essential to the conduct of FedEx's responsibilities
under this Agreement.
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