1
EXHIBIT 10.114
ENGINE MAINTENANCE AGREEMENT
Between
ATLAS AIR, INC.
and
GE ENGINE SERVICES, INC.
Portions of this document have been redacted and confidential treatment
has been requested for these portions from the Securities and Exchange
Commission. Redacted portions are indicated by "***".
Proposal No. ESI-97-0078E
March, 1998
This Proposal Shall Remain Valid Through March 15, 1998
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PROPRIETARY INFORMATION NOTICE
The information contained in this document is ESI Proprietary Information and is
disclosed in confidence. It is the property of ESI and shall not be used,
disclosed to others, or reproduced without the express written consent of ESI.
If consent is given for reproduction in whole or in part, this notice and the
notice set forth on each page of this document shall appear on any such
reproduction, in whole or in part. The information contained in this document
may also be controlled by the U.S. export control laws. Unauthorized export or
re-export is prohibited.
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TABLE OF CONTENTS
Article Description Page
------- ----------- ----
Title Page i
Proprietary Information Legend ii
Table of Contents iii
Recitals iv
Section 1 - Commercial Terms
I. Introduction 1-1
II. Price and Price Adjustment 1-1
III. Terms of Payment 1-3
Section 2 - Technical
I. Scope of Work 2-1
II. ESI Obligations 2-1
III. Buyer Obligations 2-4
IV. *** 2-6
V. Term of Agreement 2-6
VI. Entire Agreement and Amendments 2-7
Section 3 - Appendices
A. Glossary 3-A-1
B. Engine Serial Numbers and Aircraft Delivery Schedule 3-B-1
C. *** 3-C-1
D. MCPH Price Adjustment 3-D-1
E. *** 3-E-1
F. Supplemental Work Definition and Pricing 3-F-1
F-1 Fixed Price Labor 3-F-1-1
G. Bench Stock Pricing 3-G-1
Attachment A: ***
Attachment I: Terms and Conditions
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CF6-80C2B1F ENGINE MAINTENANCE AGREEMENT
THIS AGREEMENT, by and between GE Engine Services, Inc., a corporation organized
and existing under the law of the State of Delaware, U.S.A. and having an office
in Cincinnati, Ohio, ("ESI"), and Atlas Air, Inc., a corporation organized under
the law of Delaware, with its principal place of business at Building 243, Xxxx
X. Xxxxxxx International Airport, Jamaica, New York, USA ("Buyer").
RECITALS
WHEREAS, ESI, maintains and operates an approved United States Federal Aviation
Administration ("FAA") Repair Station holding Certificate No.: PR3R772L for the
repair, maintenance, overhaul, modification, and functional testing of aircraft
engines, engine accessories, parts, and components thereof; and
WHEREAS, Buyer has expressed its desire to have ESI perform modification and/or
repair services and/or refurbishment services ("Services") on Buyer's
CF6-80C2B1F Engines, Engine Modules, Engine Maintenance Units, and Engine Parts,
which Engines, Engine Modules, Engine Maintenance Units, and Engine Parts are
hereinafter sometimes referred to respectively as the "Engines," "Modules,"
"EMU's," and "Parts," or collectively as the "Equipment",
NOW THEREFORE, in consideration of the foregoing and of the mutual covenants and
conditions herein contained, the parties hereto agree as follows:
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SECTION 1 - COMMERCIAL TERMS
ARTICLE I. - INTRODUCTION
A. Coverage
This Engine Maintenance Agreement ("the Agreement") will cover the
maintenance of CF6-80C2B1F Engines operated by Buyer in its B747-400
aircraft fleet ("Eligible Engines") as follows:
1. Services covered on a Maintenance Cost Per Hour ("MCPH") basis as
specified in Section 2 - Article I., "Scope of Work", Paragraph A.,
below; and,
2. Other Services covered on a Time and Material ("T&M") basis and
defined in Appendix "F" as "Supplemental Work", below.
3. This Agreement shall remain in full force and effect to achieve one
hundred twenty (120) months coverage under this Agreement for
individual Engines added on or after the Effective Date in
accordance with the provisions of Section 2 - Article V., below,
unless extended by mutual agreement. Services set forth in this
Agreement shall commence thirty (30) days after the Effective Date.
B. Specification
Buyer's CF6-80C2B1F Engines will be inspected, Repaired, modified, and
tested in accordance with ESI's MCPH Engine Repair Specification in
coordination with FAA approved manufacturer's Engine Manuals and Service
Bulletins and other associated technical documents.
C. Configuration
Buyer and ESI shall mutually define an external Equipment configuration
specification for Equipment to be covered under this Agreement.
ARTICLE II. - PRICE AND PRICE ADJUSTMENT
A. Contract Parameters
The MCPH Rate is predicated on the parameters set forth below:
1. A fleet of ten (10) new B747-400 aircraft, powered by new
CF6-80C2B1F Engines, to be identified by serial number and estimated
to be delivered as set forth in Appendix "B" attached hereto,
operated by Buyer for the duration of this Agreement, provided that
Buyer takes delivery of at least two (2) aircraft per year beginning
in 1998 and takes delivery of at least ten (10) aircraft by the end
of 2001. In addition these parameters will apply to up to ten (10)
optional aircraft which may be acquired by Buyer.
2. ***
3. ***
4. ***
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Article II. (Continued)
5. A route structure which includes not more than *** of total takeoffs
and landings by aircraft contemplated by this Agreement in Africa,
the Middle East, India, and Mexico. Should Buyer exceed the ***
threshold, Buyer shall pay ***, per aircraft in the covered fleet
per year for each percentage point (rounded to the next whole
percentage point) in excess of the threshold. Should Buyer exercise
the option to include additional Engines under this Agreement, the
threshold for those option Engines shall be ***. The parties shall
evaluate route structure data quarterly and reconcile any payments
due for Buyer operation in excess of the threshold during January of
each year.
The parameters set forth in Paragraphs 2. through 5. above will be
evaluated by ESI and Buyer quarterly. Buyer shall provide information
relative to Engines covered by this Agreement, at ESI's request, including
(but not limited to information available through ACARS) in accordance
with a mutually agreed upon format. In addition to the adjustment
specified in Paragraph A.7., below, should Buyer deviate from the
parameters specified above, the Base Price per Engine Flying Hour ("EFH")
shall be adjusted as set forth in Attachment "A". Such adjustment shall
apply to all future EFH until a subsequent adjustment occurs.
6. Line Maintenance performed by Buyer, as set forth in Section 2.,
Article III., Paragraph A.6.
7. Engine spares and Equipment quantity as set forth in Section 2 -
Article II., below, for Buyer's Fleet of Ten (10) B747-400 Aircraft.
B. Base Pricing
The Base Year for Prices specified in this Agreement is ***. All Base
Prices(s) are stated in United States Dollars per EFH.
C. MCPH Rate
1. Base Price
Base Prices are as follows:
Basic Engine Price Per Basic Engine Price Per
Engine Year EFH (10 Firm Aircraft) EFH (10 Option Aircraft)
----------- ---------------------- ------------------------
Years 1-2 *** ***
Years 3-4 *** ***
Years 5-6 *** ***
Years 7-10 ***
MCPH rate is applicable on all EFH covered by this Agreement
commencing with the Effective Date of the Agreement and the term
"MCPH Rate" may be used to refer to the Basic Engine Price Per EFH.
Basic Engine Price includes ***.
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Article II (Continued)
2. Price Adjustment
The Base Price shall be adjusted for fluctuation of the economy as
described in Appendix "D", MCPH Price Adjustment, hereto. ***
D. Supplemental Work Price
Supplemental Work shall be charged shall be charged as set forth in
Appendix "F", hereto.
E. Addition or Removal of Engines
1. Addition of Engines under this Agreement shall be as follows:
a. Engines over and above those contemplated by Paragraph A.1. of
this Article II., which are transitioned into the Buyer fleet
after the execution of this Agreement, will be included at
Buyer's written request and ESI's concurrence. Such written
request shall include Engine serial number, aircraft
identification (including previous owner), TSN, TSLV, CSN,
CSLV and Component identification by serial number.
b. New Engines may be added to MCPH at the pricing set forth in
Paragraph C.1., as adjusted in accordance with Paragraph C.2
of this Article II. New Engines are defined as those with ***
flying hours or less since new.
c. Used Engines may be added to MCPH after such used Engine has
been Redelivered to Buyer after Buyer has Delivered the used
Engine to ESI for a full performance restoration workscope
(restoration of combustor, compressor, and HPT) shop visit,
using the MCPH Repair Specification, on a Supplemental Work
basis. At that time, the parties must agree as to the Engine
Year, as contemplated in Paragraph C.1. of this Article II.,
applicable to that Engine as it enters the MCPH program. Such
determination shall be based upon cycles since new and number
of shop visits for such added Engines.
2. Removal of Engines from this Agreement shall be as follows:
Selection of Engines to be phased out of this Agreement prior to one
hundred twenty (120) months coverage under this Agreement shall be
mutually agreed upon by ESI and Buyer. ESI and Buyer shall negotiate
any adjustment to the MCPH Rate and/or credits, if applicable.
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ARTICLE III. - TERMS OF PAYMENT
A. MCPH:
Buyer shall remit to ESI, ***, an amount equivalent to the actual EFH for
each Aircraft in Buyer's fleet for the preceding month, multiplied by the
applicable MCPH rate as adjusted in accordance with the provisions of
Appendix "D". ***
B. All payments hereunder shall be made in United States Dollars via
electronic funds transfer to the account of ESI at:
Pittsburgh National Bank
Account No. 2-158944
ABA # 000000000
Xxxxxxxxxx XX 00000-0000
C. Subject to ESI's then current credit and collection status for the Buyer,
or, in the event Buyer's account becomes delinquent, ESI reserves the
right to impose different terms of payment and collection.
D. Payment for any Services performed by ESI as Supplemental Work, performed
pursuant to the provisions of Appendix "F" Paragraph II., or as a result
of route structure adjustments as contemplated by Section 1., Article II.,
Paragraph A.7. of this Agreement, shall be made by Buyer within thirty
(30) days after date of invoice. Any disputed invoiced amounts withheld by
Buyer shall be resolved by the parties and, upon resolution, shall be paid
within thirty (30) days of such resolution. Undisputed invoiced amounts
shall be due thirty (30) days after the date of the initial invoice.
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SECTION 2 - TECHNICAL
ARTICLE I. - SCOPE OF WORK
A. Scope of MCPH:
1. MCPH Qualifying Shop Visits
Buyer's Engines meeting any of the following criteria shall be
eligible for maintenance on a MCPH basis ("Qualifying Shop Visit"):
a. The shop visit is necessary to correct a known defect,
failure, or performance deterioration which is beyond service
limits and cannot be corrected on-wing (See Paragraph e.,
below).
b. The shop visit is necessary to comply with an Airworthiness
Directive issued by the FAA or with recommendations contained
in GE's Mandatory Compliance Service Bulletins.
c. The shop visit is necessary to comply with a ESI written
recommendation requiring shop visits of Engines at scheduled
intervals.
d. The shop visit is necessary to replace Life Limited Parts
("LLP").
e. The shop visit is necessary because troubleshooting in
accordance with the applicable Engine Maintenance Manual by
Buyer on-wing could not resolve the problem. Such Qualifying
Shop Visits shall be included as MCPH Qualifying Shop Visits
if ESI's designated Senior Field Service Representative or his
duly authorized alternate is in agreement that required
maintenance could not reasonably have been accomplished
on-wing.
f. The shop visit occurs as maintenance for convenience with
prior written concurrence from ESI.
ARTICLE II. - ESI OBLIGATIONS
A. Services to be provided by ESI for Qualifying Shop Visits and other MCPH
Support are:
1. Except as provided for in Paragraph 1.c., below and as specified in
Appendix "F", provide all labor, Materials, and Parts (new or
Repaired Serviceable) whether the effort is performed at ESI's
facility, an off-site location, or subcontracted, for refurbishment
or Repair necessary to:
a. Return an Engine to Serviceable condition, ***
b. Repair or replace damaged LLP. Note: LLP replaced for life
expiration is not included in the MCPH Rate.
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Article II. (Continued)
c. Comply with basic Engine Airworthiness Directives ("AD"),
issued by the FAA, and GE Mandatory Compliance Service
Bulletins; ***
d. Repair "Other FOD" ( as defined in Appendix "A").
e. ***
f. ***
2. Perform out station Repairs, which may otherwise require a shop
visit, at ESI's option, to avoid a shop visit at ESI's designated
Repair facility.
3. Services associated with the purchase, warehousing and control of
Rotable Inventory or use of Rotable Parts used to support Qualifying
Shop Visits.
4. All labor, Material and fees associated with Engine testing or use
of test cell, including fuel and oil for Qualifying Shop Visits.
5. ESI will assign a Program Manager who will be the point of contact
for Buyer with respect to Services specified in this Agreement. The
Program Manager will be responsible for:
a. With the assistance of Buyer, defining the work to be
accomplished for each Qualifying Shop Visit ***.
b. Assisting Buyer with Supplemental Work requirements to be
performed under this Agreement.
c. Maintaining the necessary liaison between ESI and Buyer.
d. Providing Buyer's authorized personnel with reasonable access
to Buyer's Equipment, when such Equipment is in ESI's
possession, and to the maintenance records related to Buyer's
Equipment.
e. Developing with Buyer, on a monthly basis, an estimated
removal schedule ("ERS") of Buyer's Equipment to be provided
to ESI for Repair hereunder. The ERS shall identify by serial
number the Engine(s) to be delivered during the following six
(6) month period and the general workscope to be performed on
each. ESI shall use its best efforts with respect to the
accuracy and completeness of the data contained in the ERS.
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Article II. (Continued)
f. Ensuring that all routine correspondence from ESI to Buyer
relative to the administration of the Agreement, except for
formal Notices under Paragraph VI. of Attachment "I" to this
Agreement, shall be directed to the attention of:
Atlas Air, Inc.
000 Xxxxxxx Xxxxx
Xxxxxx, Xxxxxxxx, 00000
Attention: Vice President, Maintenance
6. ESI will provide engineering support services for Eligible Engines
as follows:
a. Develop a mutually agreeable maintenance plan, including
Repair Specification, and plan for removal and input of
Engines into ESI's designated ***, commencing within thirty
(30) days of the Effective Date, to be completed and approved
by the FAA prior to Buyer operational service of the aircraft.
b. Maintain current files on published CF6-80C2B1F Service
Bulletins, engineering specifications, and applicable Repair
documents as well as their application and introduction to
Buyer's Equipment.
c. Notify Buyer of any deviations found to Buyer's configuration
specification on Equipment coming into the shop for Repair and
request disposition of same.
d. Provide Engine test logs and Service Bulletin introduction
status for each Engine Redelivered to Buyer.
e. Provide a findings report stating any damage detected and
Repair(s) accomplished, including photographs, (if any).
7. Documentation
a. ESI will provide the following records to Buyer, ***, at the
time the Equipment is Redelivered to Buyer:
1) Major Repair/Alteration Certification FAA No. 337
(including AD Compliance).
2) Life Limited Parts Log.
3) Serviceable Tag.
4) Original records and related documentation for all work
performed by ESI during Repair. A copy of all such
records and related documentation shall be retained by
ESI.
5) Incoming Inspection Report.
6) Off/On Log.
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Article II. (Continued)
7) Service Bulletin Status Report.
8) AD Status Report.
9) Test Cell Data Summary Sheet.
b. ESI will provide a Shop Findings Report to Buyer within thirty
(30) days after Equipment is Redelivered to Buyer.
8. Transportation
a. Buyer shall arrange and coordinate all transportation. ESI
shall, for each Qualifying Shop Visit, credit the cost of
domestic (forty-eight (48) contiguous States) ground
transportation of Buyer's Equipment to and from ESI's
designated Repair facility. *** Delivery and Redelivery are
defined in Appendix "A".
b. ESI shall provide maintenance services, as required, for
Buyer's Equipment transportation stands and containers while
at ESI's facility; however, replacement of stands and/or
containers is not included.
***
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Article II. (Continued)
C. Workmanship
Notwithstanding the provisions of Attachment "I" - Paragraph XX.
"Warranty", below, the parties agree that with respect to Buyer's
Equipment Repaired and Redelivered under this Agreement ***, if Buyer
discovers an alleged defect in workmanship within twelve (12) calendar
months of Redelivery or one thousand (1,000) EFH from Redelivery,
whichever comes first, and Buyer provides written notice to ESI of such
defect within thirty (30) days of its discovery, ESI shall pay any direct
costs for Engine Repairs resulting therefrom. The foregoing shall
constitute the sole remedy of Buyer and the sole liability of ESI for
repair of defective workmanship, relative to Buyer's Equipment covered by
this Paragraph C.
ARTICLE III. - BUYER OBLIGATIONS
A. During the term of this Agreement, Buyer shall:
1. Deliver to ESI's facility or make otherwise accessible to ESI all
Equipment from Buyer's fleet of CF6-80C2B1F Engines, as specified in
Appendix "B", requiring Repair. However, ESI shall have the option
to perform Repairs with a field team at other locations.
2. Provide to ESI's authorized personnel reasonable access to Buyer's
Equipment when such Equipment is in Buyer's possession, as well as
to all operating and maintenance records maintained by Buyer related
to Buyer's Equipment.
3. Make every reasonable effort to provide incoming transportation
information in writing to ESI within at least three (3) calendar
days prior to Delivery of Buyer's Equipment at ESI's facility. Upon
removal of an Engine from Buyer's aircraft, Buyer shall Deliver such
Engine to ESI's facility within seven (7) days. Failure to Deliver
such Engine to ESI's facility within seven (7) days shall constitute
an excusable delay should such delay result in a requirement for a
lease Engine as set forth in Section 2., Article II., Paragraph B.
4. Designate in writing one (1) or more of its employees as a
representative during the term of this Agreement. Such
representative(s) shall represent Buyer hereunder.
5. Develop with ESI, on a monthly basis, an ERS of Buyer's Equipment to
be provided to ESI for Repair hereunder. The ERS shall identify by
serial number the type of Equipment, quantities and general
workscope expected to be delivered to ESI during the next six (6)
months. Buyer shall utilize its best efforts with respect to the
accuracy and completeness of the data contained in the ERS.
6. Provide all line maintenance in accordance with the GE/Boeing
Maintenance Manual, applicable published airframe and Engine
manuals, mutually agreed-to Engine Repair Specification, Buyer
Troubleshooting Manual, and Buyer's FAA approved B747-400
Maintenance Specification Manual. In addition, Buyer shall be
responsible for all required scrap replacement of LRUs on the line
and Repair of LRUs not included in Appendix "C"..
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Article III. (Continued)
7. ***
8. Supply to ESI complete historical information to facilitate Repairs
hereunder which shall include, at a minimum, the following:
a. Total Engine Operating Time Since New ("TSN").
b. Time Since Last Visit ("TSLV").
c. Cycles Since New ("CSN").
d. Cycles Since Last Visit ("CSLV").
e. Reason for this shop visit.
f. LRU In/Out Sheet during operating period prior to this shop
visit and reason for removal, using Buyer's best reasonable
efforts.
g. TSN, CSN on all LLP.
LLP replaced hereunder due to lack of adequate records, as specified
above, will be at Buyer's expense; however, prior to replacing such
LLP, ESI will first advise Buyer that certain records are missing
and allow Buyer five (5) working days to acknowledge and forward
such records to ESI. If, after the allotted five (5) working days,
the records are not complete, ESI will assume that the time and
cycles as specified in Buyer supplied historical information have
expired on all Life Limited Parts for which there is a lack of
record ***.
9. Provide to ESI an external Equipment configuration specification for
Equipment, pursuant to Section 1 - Article I., Paragraph C., above.
10. Ensure that adequate office space, parking, telephone, facsimile and
computer equipment is available for the ESI technical representative
assigned to the Buyer facility, as applicable.
11. Maintain a minimum of five (5) Spare Engines to be made available in
accordance with the schedule set forth in Appendix "B", in support
of the ten (10) aircraft fleet. In the event additional aircraft are
added to this Agreement Buyer shall maintain a Spare Engine quantity
of twelve and one-half percent (12.5%) of installed Engines, rounded
to the next whole Engine.
12. Provide ACARS data to ESI at times and in a format specified ***.
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***
ARTICLE V. - TERM OF AGREEMENT
This Agreement shall commence upon execution of this Agreement by both parties,
or the latter of the two signature dates if the parties do not sign concurrently
("Effective Date") and shall remain in full force and effect to achieve one
hundred twenty (120) months coverage under this Agreement for included Engines
added after the Effective Date, unless extended in writing by mutual agreement
or in accordance with Section I., Article II., Paragraph A.1., as a result of
exercise of option in accordance with Section I., Article II., Paragraph F., or
until terminated by either party as provided for in Attachment "I", Paragraph I.
"Termination".
ARTICLE VI. - ENTIRE AGREEMENT AND AMENDMENTS
This Agreement, together with Appendices "A" - "G" and Attachments "A" and "I",
contains and constitutes the entire understanding and agreement between the
parties hereto respecting the subject matter hereof, and supersedes and cancels
all previous negotiations, agreements, commitments, and writings in connection
herewith. This Agreement may not be released, discharged, abandoned,
supplemented, changed, or modified in any manner, orally or otherwise, except by
an instrument in writing of concurrent or subsequent date signed by a duly
authorized officer or representative of each of the parties hereto.
IN WITNESS WHEREOF, the ESI and Buyer have caused this Agreement to be signed in
duplicate by their duly authorized officers and representatives as of the date
written below.
For and On Behalf Of: For and On Behalf Of:
GE Engine Services, Inc. Atlas Air, Inc.
By: By:
----------------------------- -----------------------------
Title: Title:
Date: Date:
----------------------------- -----------------------------
(the "Effective Date") (the "Effective Date")
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SECTION 3 - APPENDICES
APPENDIX "A"
GLOSSARY
For purposes of this Agreement, the following terms shall be defined as follows:
A. Buyer's Fleet
CF6-80C2B1F Engine powered B747-400 aircraft operated by Buyer.
B. Component
Parts joined together to form a subassembly or unit of the Equipment.
C. Delivery
The date on which Buyer's Equipment is Delivered Duties Paid ("DDP") ESI's
designated Repair facility (Incoterms 1990) for the purpose of Repair,
except for those instances referring to delivery of aircraft.
D. Engine Caused Failure
The failure of an Engine or an Engine Part which is the sole cause for
Engine Removal.
E. Engine Maintenance Unit ("EMU")
A major serialized portion of the Engine originally sold by ESI as a new
or used, serviceable assembly.
F. Equipment
Buyer's CF6-80C2B1F Engines, Engine Modules, Engine Maintenance Units, and
Engine Parts collectively referred to as "Equipment".
G. Foreign Object Damage ("FOD")
"Major FOD" ***
"Other FOD" ***
H. ESI
The term "ESI" shall include ESI, and its affiliated companies (as
presently and hereinafter constituted) and directors, officers, employees,
agents, vendors or suppliers of ESI and its affiliated companies.
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Appendix "A" (Continued)
I. Life Limited Part
A Part with an approved limitation on use in cumulative hours or cycles,
which either the original equipment manufacturer or the FAA establishes as
the maximum period of allowable operational time for all such Parts in
airline service, with periodic Repair and restoration. Also known as
"Ultimate Life Part".
J. Material
All items purchased, supplied, or fabricated and utilized during
maintenance of the Equipment or incorporated in and made a part of the
Equipment. Used collectively to describe all Parts, Components,
Expendables, Rotables and supplies required for the maintenance of the
Equipment.
K. Redelivery
After Repair, the date on which ESI offers for acceptance and ships Ex
Works, ESI's designated Repair facility (Incoterms 1990) Buyer's
Equipment.
L. Repair
The teardown or disassembly, inspection, Repair, maintenance, overhaul,
modification, Parts replacement, where necessary, and reassembly and test,
when applicable, of Buyer's Equipment.
M. Rotable Inventory
Serviceable Engine Module, EMU, or Component which is exchanged for like
hardware which requires Repair for which Turn Time exceeds the allotted
Repair flow time associated with same.
N. Serviceable
An item of Equipment which meets all ESI and FAA specified standards for
airworthiness following Repair and has no known defects which would render
it unfit for service, in accordance with the Engine Specification.
O. Turn Time
The number of calendar days between input of Buyer's Equipment into ESI's
facility for Repair and Redelivery to Buyer.
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00
XXXXXXXX "X"
ENGINE SERIAL NUMBERS AND AIRCRAFT DELIVERY SCHEDULE
Aircraft Quantity Scheduled Year of Delivery
----------------- --------------------------
4 1998
2 1999
3 2000
1 2001
Cumulative Spare Scheduled Year of Delivery
Engine Quantity * --------------------------
-----------------
1 2Q 1998
1 2Q 1999
1 2Q 2000
1 2Q 2001
1 2Q 2003
*Per Letter Agreement No. 1 to GTA No. 6-9810
Engine serial numbers to be added as Buyer purchases aircraft.
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APPENDIX "C"
***
Nomenclature ATA Ref GE Part Number OEM Part Number TAT
***
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Appendix "C" (Continued)
Nomenclature ATA Ref GE Part Number OEM Part Number TAT
***
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CF6-80C2
APPENDIX "D"
MCPH PRICE ADJUSTMENT
I. For the purpose of this Appendix D, the following definitions apply:
A. ***
During the first one hundred twenty (120) months of this Agreement,
and solely for those Engines covered by this Agreement during ***,
prices for any *** shall be adjusted in accordance with the
following formula:
***
B. ***
C. Cumulative Labor Index YO = ((Labor Index YO-1/Labor Index BY-1) -1)
D. ***
E. BY = Base Year , which shall be ***
F. ***
G. ***
H. ***
I. ***
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Appendix "D" (Continued)
J. ***
K. ***
L. ***
M. ***
II. To the extent the term of the Agreement is extended to cover Engines added
to this Agreement after 1998, and for any periods after the first one
hundred twenty (120) months of the Agreement, prices for any YO shall be
adjusted in accordance with the following formula:
***
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Appendix "D" (Continued)
III. ***
TABLE "D"
PRICE ADJUSTMENT EXAMPLE
***
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Appendix "D" (Continued)
***
MCPH March, 1998 ESI PROPRIETARY INFORMATION Page 3-D-4
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Appendix "D" (Continued)
***
MCPH March, 1998 ESI PROPRIETARY INFORMATION Page 3-D-5
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Appendix "D" (Continued)
***
MCPH March, 1998 ESI PROPRIETARY INFORMATION Page 3-D-6
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00
XXXXXXXX "X"
***
MCPH March, 1998 ESI PROPRIETARY INFORMATION Page 3-E-1
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27
APPENDIX "F"
SUPPLEMENTAL WORK DEFINITION AND PRICING
I. Supplemental Work shall be specifically excluded from application of
the MCPH Rate and shall be defined as follows:
a. All other services not specifically included in Section 2.,
Article I, Paragraph A.of this Agreement.
b. Further, Services described in Section 2., Article I,
Paragraph A. of this Agreement, shall be identified as
Supplemental Work (unless caused by an action of ESI) if it
has been determined to ESI's reasonable satisfaction that such
Engine or Module requires Repair for, or as a result of:
***
2. When services are performed during a non-Qualifying Shop Visit which
are not required as part of the Supplemental Work Repair or would
otherwise have been performed subsequently as MCPH Repair, the
parties will negotiate an appropriate allocation of the cost between
MCPH and Supplemental Work.
II. Supplemental Work shall be charged on a time and material basis as
follows:
A. Labor
1. Direct labor shall be charged in accordance with Appendix
"F-1".
MCPH March, 1998 ESI PROPRIETARY INFORMATION Page 3-F-1
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28
Appendix "F" (Continued)
2. All other direct labor performed by ESI at ESI's facility shall be
charged at *** per Man Hour.
3. For Services performed at a ESI or ESI affiliate On-Wing Support
facility or for Services performed, at the direction of Buyer, at a
location other than a ESI facility direct labor, including travel to
and from the employee's home or normal place of work as applicable,
until arrival at destination temporary living quarters or place of
work shall be charged as follows:
Straight Time ***
Straight Time is defined as the first eight (8) hours charged
Monday through Friday (except holidays) providing a minimum of
eight (8) hours break has occurred since the last time
charged.
Overtime ***
Overtime is defined as all time charged other than Straight
Time.
4. ***
B. Material
1. ESI furnished Material required for Repair of Buyer's Equipment
shall be charged as follows and is subject to the additional fee
denoted in Paragraph 2., below:
a. New piece Parts and any other ESI furnished new Material will
be priced in accordance with the then current CF6-80C2 Engine
Spare Parts Price Catalog, or applicable manufacturer's list
price.
b. Used Serviceable piece Parts and any other ESI furnished used
Serviceable Material will be priced at *** of the then current
CF6-80C2 Engine Spare Parts Price Catalog, or applicable
manufacturer's list price.
c Bench Stock will be priced in accordance with Appendix "G"
attached hereto.
d. Fuel and lube will be priced ***.
2. ESI furnished Material will be charged to Buyer at the prices
specified above *** fee with a maximum fee of ***. Maximum fees are
effective for 1998 and will be adjusted January 1 of each year at
the same rate as manufacturer/supplier escalation.
MCPH March, 1998 ESI PROPRIETARY INFORMATION Page 3-F-2
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Appendix "F" (Continued)
3. Rotable/Exchange Inventory
a. Rotable Inventory Usage
1) ESI-furnished Rotable piece Parts installed in Buyer's
Equipment during Repair shall be assessed a Rotable fee
equal ***. Maximum fees for Rotable Inventory are
effective for 1998 and will be adjusted January 1 of
each year at the same rate as manufacturer/supplier
escalation.
2) Buyer agrees to accept compatible Rotable piece Parts
that are updated to the then-current Service Bulletin
Baseline which is the configuration used by the majority
of ESI's customers operating the CF6-80C2B1F Engine.
3) Rotable Parts fee, if applicable, will be canceled and
Buyer will be charged for replenishment of ESI-furnished
Rotable Parts inventory if Buyer's trade-in Equipment is
determined to be non-repairable after ESI-furnished
Rotable Parts have been installed/shipped on Buyer's
Equipment as follows:
a) Replacement charge for used Serviceable Parts
other than Ultimate Life Parts will be invoiced at
the then-current CF6-80C2 Spare Parts Price
Catalog list price, if replacement is with a new
Part or at *** of the then current CF6-80C2 Engine
Spare Parts Price Catalog, or applicable
manufacturer's list price, if the replacement is
with a used Serviceable Part.
b) Replacement charge for new Parts will be invoiced
at the then-current CF6-80C2 Spare Parts Price
Catalog list price.
c) All replacement Parts will be assessed applicable
Material fees specified in Paragraph II.B.2.,
above.
b. Inventory Exchange
Charges and credits associated with the retirement or exchange
of Life-Limited Parts will be as follows:
1) When the remaining Flight Cycles of a repairable
Life-Limited Part removed from Buyer's Equipment are
less than the remaining Flight Cycles of ESI's
Life-Limited Part replacing Buyer's Part, Buyer will be
charged the difference.
2) Conversely, when the remaining Flight Cycles of a
repairable Life-Limited Part removed from Buyer's
Equipment are in excess of the remaining Flight Cycles
of ESI's Life-Limited Part replacing Buyer's part, ESI
shall credit Buyer the difference.
MCPH March, 1998 ESI PROPRIETARY INFORMATION Page 3-F-3
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30
Appendix "F" (Continued)
3) The charge or credit for such difference shall be
determined as follows:
a) ***
b) Multiply the resulting value per cycle by the
difference described in paragraphs 1) and 2),
above.
C. Subcontractor
Work subcontracted by ESI (excluding work subcontracted to another ESI
component) will be charged to Buyer at vendor charges plus a *** per
vendor invoice.
D. Engine Test
1. Test cell usage will be charged to Buyer at a fixed price *** per
Engine test, plus fuel, oil and other Material.
2. Test rejections resulting from: (1) non-compliance with agreed upon
Workscope; or, (2) ESI's workmanship shall be at ESI's expense.
3. Test cell charges incurred at Buyer's request for over and above the
agreed upon Workscope shall be invoiced to the Buyer.
4. Testing done on an overtime basis, at the direction of the Buyer,
***.
5. Engine test prices in subparagraphs 1. and 4., above, will be
subject to adjustment consistent with the provisions of Paragraph
A.4., above.
E. Specific Equipment Repair
Specific Equipment Repairs performed at ESI service shops shall be charged
in accordance with the then current Component Repair Directory.
F. On-Site Support
For Services performed at a site other than the designated Repair
facility, at the direction of Buyer, Buyer agrees to pay additional
applicable charges, including but not limited to, travel and living
expenses, shipping charges for tooling, materials, facility charges, etc.
MCPH March, 1998 ESI PROPRIETARY INFORMATION Page 3-F-4
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31
APPENDIX "F-1"
FIXED PRICE LABOR
***
Labor associated with routine Disassembly, Cleaning, Visual/Dimensional
Inspection, Non-destructive Testing, Grinding, Reassembly, Test, and Ship shall
be invoiced as follows. Serviceability inspections of Modules and EMU's are not
included below, except as stated. Serviceability inspections for all other items
will be accomplished at the Time and Material Rate specified in this proposal.
WORKSCOPE ITEM PRICE (US$)
-------------- -----------
BASIC ENGINE
Incoming Inspection (Basic) ***
Incoming Inspection with QEC ***
PTT and Incoming Diagnostic Test ***
Engine Final Assembly ***
Engine Final Assembly (with QEC) ***
PTT and Post Repair Performance Test ***
Prep To Ship ***
GEARBOX MODULE
Remove and Install Accessory Gearbox ***
Disassemble and Reassemble Module (No C&A Removal) ***
Remove and Install Transfer Gearbox ***
Remove and Install Horizontal Drive ***
Remove and Install Radial Drive ***
Remove and Install Inlet Gearbox ***
LPT MODULE
Remove and Install LPT Module ***
Disassemble and Reassemble LPT Module to EMU's ***
Disassemble and Reassemble LPT Rotor ***
Disassemble and Reassemble Turbine Rear Frame ***
HPT MODULE
Remove and Install HPT Module ***
Remove and Install HPT Rotor and Stage 2 Nozzle ***
Disassemble and Reassemble HPT Module to EMU's ***
Disassemble and Reassemble HPT Rotor ***
Disassemble and Reassemble HPT Stage 2 Nozzle EMU ***
Disassemble and Reassembly HPT Stage 1 Nozzle EMU ***
HPC MODULE
Remove and Install HPC Module ***
Disassemble and Reassemble HPC Module to EMU's ***
Disassemble and Reassemble HPC Rotor ***
Disassemble and Reassemble HPC Forward and Rear Cases ***
Disassemble and Reassemble Compressor Rear Frame ***
MCPH March, 1998 ESI PROPRIETARY INFORMATION Page 3-F-1-1
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32
CF6-80C (continued)
FIXED PRICE LABOR
WORKSCOPE ITEM PRICE (US$)
-------------- -----------
FAN MODULE
Remove and Install Stage 1 Fan Blades and Hardware ***
Recontour Stage 1 Fan Blades ***
Restore E12/13 Clearances ***
Remove and Install Stage 1 Fan Disk ***
Processing Stage 1 Fan Disk ***
Remove and Install External Hardware and C&A ***
Remove and Install Fan Booster Assembly ***
Disassemble and Reassemble Fan Booster Cases ***
Disassemble and Reassemble Fan Booster Rotor ***
Remove and Install Fan Mid-Shaft EMU ***
Remove and Install Fan Shaft ***
Remove and Install Control Adapter ***
Remove and Install OGV's ***
Remove and Install Fan Frame ***
Disassemble and Reassemble Fan Cases ***
OTHER COMMON WORKSCOPES
MODULE SERVICEABILITY INSPECTIONS
Fan Module ***
LPT Module ***
HPC Module ***
EMU SERVICEABILITY INSPECTIONS
LPT Cases ***
Turbine Rear Frame ***
OTHER SERVICEABILITY INSPECTIONS
HPC Cases ***
HPC Rotor ***
Compressor Rear Frame ***
AGB PARTIAL WORKSCOPES
Remove and Install Accessories from Gearbox ***
Replace AGB Carbon Seals ***
GEARBOX REPAIR WORKSCOPES
Disassemble, Repair, and Reassemble Transfer Gearbox ***
Disassemble, Repair, and Reassemble Inlet Gearbox ***
Disassemble, Repair, and Reassemble Accessory Gearbox ***
HPC PARTIAL WORKSCOPES
Top Case (Basic Engine) ***
Top Case ( with QEC) ***
Reblade and Regrind HPC Rotor Exposed ***
HPT PARTIAL WORKSCOPE
Reblade and Regrind HPT Rotor Exposed ***
MCPH March, 1998 ESI PROPRIETARY INFORMATION Page 3-F-1-2
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33
APPENDIX "G"
BENCH STOCK
(Prices are in 1998 dollars and shall be adjusted consistent with
year-to-year average pricing changes in the
CF6-80C2 Spare Parts Catalog)
Price ***
---------
Complete Engine ***
External Hardware ***
Core Module ***
HPC Rotor ***
HPC Case ***
HPC Rear Frame ***
HPC Module Build-UP ***
High Pressure Turbine Module ***
HPT Stage 1 Nozzle ***
HPT Rotor ***
HPT Stage 2 Nozzle ***
HPT Module Build-Up ***
Low Pressure Turbine Module ***
LPT Rotor and Stator ***
Turbine Rear Frame ***
LPT Module Build-Up ***
Fan Module ***
Fan Rotor ***
Fan Stator ***
Fan Frame and Case ***
Fan Mid-Shaft ***
Fan Module Build-Up ***
Inlet Gearbox ***
Gearbox Module ***
Transfer Gearbox ***
Accessory Gearbox ***
Module Build-Up ***
Bench Stock consists of the low value consumable/expendable Material ***
required for the assembly of the various "items" of Equipment. Bench Stock
Materials will not be listed in detail on the xxxx of materials supplied with
the invoice for the Equipment Repaired.
MCPH March, 1998 ESI PROPRIETARY INFORMATION Page 3-G-1
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34
Attachment "A" (Continued)
ATTACHMENT "A"
***
MCPH March, 1998 ESI PROPRIETARY INFORMATION Attachment "A" - 2
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Attachment "A" (Continued)
MCPH March, 1998 ESI PROPRIETARY INFORMATION Attachment "A" - 3
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ATTACHMENT "I"
TERMS AND CONDITIONS
I. TERMINATION
A. This Agreement may be terminated:
1. Buyer will terminate this Agreement in the event Buyer sells
or leases or ceases to lease, all or substantially all of
Buyer's Fleet of Equipment covered by this Agreement. In the
event Buyer terminates this Agreement for this reason, the
termination shall only be effective after one hundred and
eighty (180) days have elapsed after written notification to
ESI, but in no case prior to end of the calendar year in which
the termination notification has been issued.
2. In the event that the payments by Buyer to ESI provided for in
this Agreement are not made within the time periods specified
herein, ESI may, at its option, suspend performance hereunder
and any expenses incurred by ESI in connection with
performance hereunder in accordance with this Agreement prior
to such suspension shall be payable by Buyer promptly upon
notice thereof by ESI. If such non-payment is not rectified by
Buyer within five (5) days upon such notice thereof, ESI may
terminate this Agreement. Any delays by ESI as a result of
such suspension of performance shall be considered an
excusable delay under Paragraph IV., "Excusable Delay" below.
3. Upon the commencement of any bankruptcy or reorganization
proceeding by or against either party hereto (the "Defaulting
Party"), the other party may, upon written notice to the
Defaulting Party, cease to perform any or all of its
obligations under this Agreement (including, without
limitation, work in progress and deliveries) unless the
Defaulting Party shall provide adequate assurance, in the
opinion of the other party, that the Defaulting Party will
continue to perform all of its obligations under this
Agreement in accordance with the terms hereof, and will
promptly compensate the other party hereto for any actual loss
resulting from the Defaulting Party being unable to perform in
full its obligations hereunder.
4. By either party upon written notice to the other party in the
event of default of the other party of any of its obligations
under this Agreement, and in the event that such default is
not cured within sixty (60) days of the notice.
5. ***
B. In the event this Agreement is terminated: (a) ESI shall, upon
receipt of Buyer's written request, promptly deliver all Buyer's
Equipment, Parts and related documentation to Buyer; and, (b) ESI
shall, at ESI's option, (i) invoice Buyer, in accordance with the
Supplemental Work provisions, for all work performed by ESI on
Buyer's Equipment prior to the date of termination or (ii) consider
MCPH payments made or owing at the time of termination, including
any amounts due pursuant to Appendix "D", including interest
payments, to be payment in full. Should ESI exercise option (i),
above, the Invoice will show either an amount to be paid by Buyer
within thirty (30) days of the date of invoice or a credit due
Buyer, calculated from a comparison of MCPH payments received by ESI
and the Supplemental Work invoice amount.
C. All rights and obligations of the parties hereto created pursuant to
the provisions of this Agreement shall survive the expiration,
termination or cancellation of this Agreement by either party until
all such rights and obligations have been fully and satisfactorily
completed.
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II. TITLE, DELIVERY AND RISK OF LOSS
Parts, Material, labor and associated overhead incorporated into Buyer's
Equipment, as required in performing Services on Buyer's Equipment
hereunder, shall be deemed to have been sold to Buyer, and title to such
Parts and Services thereon shall pass to Buyer upon assignment of such
parts, materials, labor and associated overhead to Buyer's Equipment. Risk
of loss or damage to such parts and work thereon shall pass to Buyer upon
Redelivery to Buyer. Title to and risk of loss of or damage to any parts
removed from Buyer's Equipment, which are replaced by other parts, shall
pass to ESI upon removal of such parts from Buyer's Equipment. Risk of
loss of or damage to Buyer's Equipment shall rest with ESI while located
at ESI's facility after Delivery and prior to Redelivery. Final acceptance
of Redelivered Equipment shall be at ESI's facility.
III. LIMITATION OF LIABILITY AND INDEMNIFICATION
***
IV. EXCUSABLE DELAY
A. ESI and Buyer shall be excused from, and shall not be liable for,
any delays in its performance or failure to perform hereunder and
shall not be deemed to be in default for any failure of performance
hereunder due to causes beyond its control. Such causes shall be
conclusively deemed to include, but not be limited to, acts of God,
acts (or failure to act) of the Buyer or ESI, acts (or failure to
act) of civil or military authority, government priorities, fires,
strikes, labor disputes, work stoppage, floods, epidemics, war
(declared or undeclared), riot, delays in transportation or
inability to obtain on a timely basis necessary labor, materials, or
components. In the event of any such delay, the date of performance
shall be extended for a period equal to the time lost by reason of
the delay. This provision shall not, however, relieve ESI from using
commercially reasonable efforts to avoid or remove such causes and
continue performance with reasonable dispatch whenever such causes
are removed. ESI shall promptly notify Buyer when such delays occur
or impending delays are likely to occur and shall continue to advise
it of new performance schedules and changes relating thereto. If and
to the extent that ESI is prevented from performing under this
Agreement by any of the foregoing causes, Buyer shall be permitted
to obtain the Repair of the Equipment from other sources, but only
until ESI is again able to perform hereunder.
B. Notwithstanding the provisions of Paragraph A., above, if any delay
resulting from any of the foregoing causes extends for more than one
hundred eighty (180) days and the parties have not agreed upon a
revised basis for continuing the performance hereunder at the end of
the delay, including reimbursement of ESI costs resulting from such
delay, then either party, upon thirty (30) days written notice, may
terminate this Agreement.
MCPH March, 1998 ESI PROPRIETARY INFORMATION ATTACH.I-2
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V. TAXES
A. In addition to the price to be paid by Buyer hereunder, Buyer shall
pay to ESI, or furnish to ESI evidence of exemption therefrom, taxes
(including, without limitation, sales, use, excise, property,
turnover, or value added taxes), duties, fees, charges, or
assessments (but excluding taxes in the nature of income taxes),
legally assessed or levied by governmental authority against ESI, or
its employees, its subsidiaries, or their employees, as a result of
any sale, delivery, transfer, use, export, import, or possession of
repaired Equipment, under this Agreement. If claim is made against
ESI for such taxes, duties, fees, charges, or assessments, ESI shall
immediately notify Buyer; and if requested by Buyer, ESI shall not
pay except under protest, and if payment is made, shall use all
reasonable effort to obtain a refund thereof. If all, or any part,
of such taxes, duties, fees, charges, or assessments be refunded,
ESI shall repay to Buyer such part thereof as Buyer shall have paid.
Buyer shall pay to ESI, upon demand, all expenses (including
penalties and interest) incurred by ESI in protesting payment and in
endeavoring to obtain such refund. ***
***
VI. NOTICES
Any notice under this Agreement shall become effective upon receipt and
shall be in writing delivered or sent by mail or electronic transmission
to the respective parties at the following addresses, which may be changed
by written notice:
To Buyer: To ESI:
_________________________ GE Aircraft Engines
_________________________ GE Engine Services
_________________________ 0 Xxxxxxx Xxx, XX/X-00
_________________________ Xxxxxxxxxx, Xxxx 00000
Attention: _________________ Attention: MCPH Manager
with a copy to:
GE Aircraft Engines
GE Engine Services
Attn: General Manager
0 Xxxxxxx Xxx, XX/X-00
Xxxxxxxxxx, Xxxx 00000
MCPH March, 1998 ESI PROPRIETARY INFORMATION ATTACH.I-3
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39
VII. GOVERNMENTAL AUTHORIZATIONS
A. Buyer shall be importer and exporter of record and shall be
responsible for the timely application for, obtainment and
maintenance of any required governmental authorizations such as
import licenses, export licenses, exchange permits, or any other
required governmental authorization. ESI shall not be liable if any
authorization is delayed, denied, revoked, restricted, or not
renewed and Buyer shall not thereby be relieved of its obligation to
pay ESI for its work performed and any other charges which are the
obligation of Buyer hereunder.
B. All products (including technical data delivered hereunder) shall at
all times be subject to the Export Administration Regulations and or
International Traffic in Arms Regulations of the United States of
America and any amendments thereof. Buyer agrees that it shall not
make any unauthorized disposition of United States of America-origin
Equipment (including technical data) provided by ESI through
trans-shipment, re-export, diversion, or otherwise, other than in
and to the country of ultimate destination specified in Buyer's
order or declared as the country of ultimate destination on ESI's
invoices, except as United States laws and regulations may permit.
VIII. JURISDICTION
The validity, performance, and all matters relating to the interpretation
and effect of this Agreement and any amendment thereto shall be
interpreted in all respects in accordance with the laws of the State of
New York and, in the event of any unresolved dispute, Buyer agrees to
submit to the non-exclusive jurisdiction of the U.S. District Court for
the Southern District of New York. The United Nations Convention on
Contracts for the International Sale of Goods is not applicable to this
Agreement.
IX. ASSIGNMENT
Any assignment of this Agreement or any rights or obligations hereunder by
either party without the prior written consent of the other party shall be
void, except that Buyer's consent shall not be required for the
substitution of an affiliated company of ESI in place of ESI as the
contracting party to perform any work hereunder. In the event of such
substitution, Buyer shall be advised thereof in writing. In case of lease,
by Buyer, of Engines covered by this Agreement, the parties agree that
rights and obligations under this Agreement shall remain with the Buyer.
***
X. NO THIRD PARTY BENEFICIARIES
This Agreement is for the benefit of the parties hereto and is not for the
benefit of any third person, firm or corporation and nothing herein
contained shall be construed to create any rights in or obligations to any
third parties under, as a result of, or in connection with this Agreement.
XI. NON-WAIVER
Any failure by either party to enforce any of the provisions of this
Agreement or to require at any time performance by the other party of any
of the provisions hereof shall in no way affect the validity of this
Agreement or any part hereof, or in the right of the parties thereafter to
enforce each and every such provision, nor shall ESI actual performance,
whether or not under this Agreement, be deemed in any way indicative of
the scope of the obligations of ESI under this Agreement.
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XII. EXCLUSIVE TERMS
The terms and conditions of this Agreement shall apply to all written
authorizations issued by Buyer to ESI for work to be performed under this
Agreement in lieu of any printed terms thereon or therein and such written
authorizations shall form a part of this Agreement.
XIII. PARTIAL INVALIDITY
If any provision of this Agreement shall be held to be invalid, illegal,
or unenforceable, the validity, legality, and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
XIV. NON-DISCLOSURE
The parties agree that neither will disclose any of the terms of this
Agreement nor any information or data provided to either party as a result
of this Agreement to a third party, without prior written approval of the
other party except that:
1. To the extent required by government agencies and courts for
official purposes, disclosure may be made to such agencies and
courts. In such event, a suitable restrictive legend limiting
further disclosure shall be applied.
2. The existence of the Agreement and its general purpose only may be
stated to others by either of the parties without approval from the
other.
XV. CONTROLLING LANGUAGE
The English language shall be used in the interpretation and performance
of this Agreement.
XVI. HEADINGS
The headings contained in this Agreement are for reference purposes only
and shall not affect in any way the meaning and interpretation of this
Agreement.
XVII. WAIVER OF IMMUNITY
To the extent that Buyer or any of its property is or becomes entitled at
any time to any immunity on the grounds of sovereignty or otherwise from
any legal action, suit or proceeding, from set-off or counterclaim, from
the jurisdiction of any competent court, from service of process, from
attachment prior to judgement, from attachment in aid of execution, or
from execution prior to judgement, or other legal process in any
jurisdiction, Buyer, for itself and its property, does hereby regularly,
irrevocably and unconditionally waive, and agree not to plead or claim,
any such immunity with respect to its obligations, liabilities or any
other matter under or arising out of or in connection with this Agreement
or the subject matter hereof. Such agreement shall be irrevocable ,not
subject to withdrawal in any and all jurisdictions, and is made only for
the express benefit of ESI and its affiliated companies.
XVIII. REPAIR LOCATION
ESI may perform any work required by this Agreement at any of its FAA
approved Repair Facilities.
MCPH March, 1998 ESI PROPRIETARY INFORMATION ATTACH.I-5
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41
XIX. INFORMATION AND DATA
All information and data (including, but not limited to, designs,
drawings, blueprints, tracings, plans, models, layouts, specifications and
memoranda, but excluding shop visit record information and data) which may
be furnished or made available to one party hereto by the other party
hereto, directly or indirectly as the result of this Agreement shall
remain the property of the disclosing party. The information and data
shall neither be used by the receiving party, nor furnished to any other
person, firm or corporation, for the design or manufacture of any
equipment or part, nor permitted out of the receiving party's possession,
nor divulged to any other person, firm or corporation, except as herein
provided. Nothing in this Agreement shall preclude the receiving party
from using or furnishing to others information and data necessary to
effect any contract or arrangement under which this is to be performed for
the receiving party, by others, modification, overhaul, or maintenance
work on the Equipment, their parts or accessories. The instrument by which
the receiving party transfers any Equipment may permit the use of such
data by its transferee, subject to the same limitation set forth above,
and shall preserve to the disclosing party the right to enforce such
limitation.
XX. WARRANTY
***
XXI. PATENTS
A. Except as provided for in Article III., "Limitation of Liability"
above, ESI shall handle all claims and defend any suit or proceeding
brought against Buyer insofar as based on a claim that, without
further combination, any Equipment or any part thereof manufactured
by ESI and furnished hereunder constitutes an infringement of any
patent of the United States or of any other country that is
signatory to Article 27 of the Convention on International Civil
Aviation signed by the United States at Chicago on December 7, 1944,
if notified promptly in writing and given authority, information and
assistance (at ESI's expense) for the defense of same. In case such
Equipment, or any part thereof, is in such suit held to constitute
infringement and the use of said Equipment or part thereof is
enjoined, ESI shall, at its own expense, and at its option, either
procure for Buyer the right to continue using said Equipment or part
thereof; or replace same with non-infringing Equipment or modify it
so it becomes non-infringing; or remove said Equipment and refund
the purchase price (less reasonable depreciation) thereof. The
foregoing shall constitute the sole remedy of Buyer and the sole
liability of ESI for Patent infringement.
B. The preceding paragraph shall not apply to any Equipment, or any
part thereof, manufactured to Buyer's design. As to such Equipment,
or any part thereof, ESI assumes no liability whatsoever for patent
infringement.
C. With respect to any Equipment, or part thereof, furnished hereunder
which is not manufactured by ESI, only the patent indemnity of the
manufacturer, if any, shall apply.
MCPH March, 1998 ESI PROPRIETARY INFORMATION ATTACH.I-6
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