EXHIBIT 10.24
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY [***]. THE
CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION.
LETTER AGREEMENT
LA-Midway-FS-0103
between
Midway Airlines Corporation
and
Fokker Services, Inc.
relating to Aircraft Support Services for its Fokker 100 Aircraft
Dated as July 1, 1996
CONTENTS
GENERAL TERMS AND CONDITIONS
FOR AIRCRAFT SUPPORT SERVICES
ARTICLE Title Page
------- ----- ----
Contents
Preamble 1
1 Definitions 2
2 General 3
3 Ordering Procedure 3
4 Terms and Conditions of Payment 4
5 Taxes, Duties, Licenses and Special Documents 4
6 Delay 5
7 Indemnity 6
8 Assignment 6
9 Non-Disclosure 7
10 Applicable Law and Forum 7
11 Miscellaneous 8
LETTER AGREEMENT NO. LA-Midway-FS-0103 (hereinafter called the "Agreement")
dated as of July 1, 1996 between
Midway Airlines Corporation
a Delaware corporation,
(hereinafter referred to as "Buyer")
and
Fokker Services, Inc.
a Virginia corporation
(hereinafter referred to as "Seller").
WHEREAS Buyer desires to obtain Services (as hereinafter defined)
from Seller;
WHEREAS Seller desires to render Services to Buyer, subject to the
terms and conditions set forth in this Agreement.
NOW THEREFORE in consideration of the mutual covenants hereinafter
contained, the parties hereto agree as follows
ARTICLE I Definitions
For all purposes of this Agreement the following definitions shall apply (such
definitions to be equally applicable to both singular and plural forms of the
terms defined unless the context otherwise requires).
Aircraft shall mean all aircraft manufactured by Manufacturer or by
its predecessors or successors and owned or operated by
Buyer.
ATA shall mean the Air Transport Association of America.
Employee shall mean any person or persons in the employ of, or any
officer, director, subcontractor or agent of, Seller, Fokker
Services (including any of its subsidiary or affiliated
companies) or any of their assignees.
Ex-works shall mean 'ex-works' as defined in Incoterms 1990, or any
subsequent edition thereof; issued by the International
Chamber of Commerce, Paris, France.
FAA shall mean the Federal Aviation Administration of the U.S.A.
or any successor thereof.
Fokker Industries shall mean Fokker Elmo B.V. in Woensdrecht, Fokker
Aerostructures B.V. and Fokker Special Products B.V. or its
successors.
Fokker Services shall mean Fokker Aircraft Services B.V. in Woensdrecht, the
Netherlands and Fokker Product Support B.V. in Amsterdam, the
Netherlands.
Manufacturer shall mean Fokker Aircraft B.V., a Netherlands corporation
with its principal office in Amsterdam, The Netherlands.
Manufacturer's shall mean the detailed design and detailed specification
Design originated by Manufacturer; or by Shorts Brothers PLC,
Belfast, Northern Ireland; or by Daimler-Benz Aerospace
Airbus GmbH, Federal Republic of Germany.
RLD shall mean The Netherlands Department of Civil Aviation
(Rijksluchtvaartdienst) and any other Netherlands
Governmental authority or successor authority having like
jurisdiction.
Seller's Facility shall mean such plant or facility as may be designated by
Seller.
Seller Parts shall mean Aircraft components, systems, accessories,
equipment and parts, including ground support equipment and
special tools for the Aircraft, manufactured by or on behalf
of Fokker Services and/or Fokker Industries to Manufacturer's
Design and not incorporated in any Aircraft at the time of
delivery thereof.
2
Services shall mean Aircraft support services described in the
Attachments hereto rendered by Seller to Buyer and such other
services requested by Buyer that Seller agrees to provide.
Spare Parts shall mean both Seller Parts and Vendor Parts not
incorporated in any Aircraft at the time of delivery thereof.
Vendor shall mean any manufacturer or supplier (other than Seller)
of a Vendor Part.
Vendor Parts shall mean Aircraft components, systems, accessories,
equipment and parts including ground support equipment and
special tools for the Aircraft other than Seller Parts.
ARTICLE 2 General
This Agreement shall govern the provision of Services by Seller to Buyer. Any
Service shall also be subject to (a) the relevant standard conditions applicable
to such Service stated in the Attachment hereto related to such Service or (b)
if a Service is not covered by an Attachment, to such additional terms and
conditions as are agreed upon by Seller and Buyer in writing.
ARTICLE 3 Ordering Procedure
Upon Buyer's request, Seller shall make price and schedule quotations for
Services, which quotations shall be valid for a period of 90 (ninety) days after
date of issue, unless otherwise stated in the relevant quotation.
Unless otherwise agreed in writing, Services shall be rendered by or through
Seller only on the basis of an order in writing by Buyer and either accepted in
writing by Seller or by its provision of such Services to Buyer.
All quotations and agreements entered into by Seller with respect to Services
shall be governed exclusively by this Agreement, without regard to any purchase
orders, letters, general conditions and other documents issued by Buyer, unless
otherwise stated in such quotation or agreement, purchase orders, letters,
general conditions and other documents which have been accepted or otherwise
agreed to by Seller.
3
ARTICLE 4 Terms and Conditions of Payment
(a) Payment for Services in an amount not exceeding the credit limit fixed
by Seller (in its sole discretion) from time to time shall be due and
payable within thirty (30) days after the date of the relevant invoice,
which in no event will be earlier than the date any particular Service
is provided hereunder or the date any particular Seller part, Vendor
part, or repaired or overhauled component is delivered to Buyer by
Seller; all other amounts shall be due and payable in advance of
rendering the Service. The date of confirmation of credit by Seller's
bank shall be the date of payment.
(b) If Seller incurs any cost in connection with additional Services
rendered to Buyer upon Buyer's request and with Buyer's prior written
approval of such costs and additional Services, which costs were not
mentioned in any quotation or Order Acknowledgement of Seller, then
Buyer shall pay such costs within thirty (30) days after the date of
Seller's invoice. Notwithstanding the foregoing, in an AOG situation,
Seller may rely upon the verbal approval of Buyer's Vice President of
Maintenance or of its Director of Materials in undertaking additional
Services and incurring costs in connection therewith, in such a case
written confirmation by Buyer will follow.
(c) If any amount due Seller is not received on the date when due
hereunder, Buyer shall pay Seller interest on such overdue amount,
together with any reasonable expenses of collection (including
reasonable attorneys' fees) actually incurred by Seller in connection
with such overdue amount. Such interest shall be calculated on the
basis of the Prime Rate (U.S. $) as quoted by the Nations Bank in
effect at the time such payment is due, plus two percent (2%),
calculated on the basis of a 360-day year and actual days elapsed.
Claiming or refraining from claiming such compensation from Buyer shall
not prejudice any rights of Seller under this Agreement.
(d) Payments by Buyer shall be applied first to any charges or interest owed
pursuant to Article 4(c) and then to other amounts owed. If payments are
received while amounts owed hereunder are past due, Seller may apply such
payments to any amount then due, provided such application is made to
amounts Seller in good faith determines are due (of which Seller will give
notice to Buyer).
ARTICLE 5 Taxes, Duties, Licenses and Special Documents
(a) Any taxes, duties, imposts or other charges levied by any authority in The
Netherlands (including taxes, duties, imposts or other charges in the
nature of sales, use, rental or value added taxes) or imposed on or
measured by the net income, profits or capital of Seller on Services or on
payments to be made to Seller shall be for the account of Seller.
4
(b) Any taxes, duties, imposts or other charges which are not covered under
Article 5(a) above shall be for the account of Buyer. If, under the
provisions of any applicable law or regulation, such charges are to be
paid by Seller, Buyer shall reimburse Seller. If a claim for any such
charges is made against Seller, Seller shall, at Buyer's request and
expense, take such action as Buyer may reasonably direct to recover any
amount paid by Seller or permit Buyer to file a claim or prosecute an
action in Seller's name to recover such payment.
(c) Seller shall obtain and pay for any licenses or special documents required
by any authority in The Netherlands for Services to be rendered by or
through Seller.
(d) Buyer shall obtain and pay for any licenses or special documents not
covered in Article 5(c). Any licenses or special documents to be
obtained from the country of origin of any Service and required in
Buyer's country of residence shall be arranged, if possible, by Seller.
Any costs incurred in obtaining such licenses or special documents
shall be borne by Buyer and Buyer shall promptly reimburse Seller for
any such costs; provided, however Buyer shall not be responsible for
any costs incurred by Seller in performing engineering and related
services or providing data or other information in connection with
Buyer's receipt of licenses or special documents issued by the FAA
necessary to operate the Aircraft unless Buyer elects to obtain
licenses or special documents from the FAA in a manner different from
that recommended by Seller generally for the Aircraft and other
aircraft of the same type.
ARTICLE 6 Delay
Excusable Delay
Seller shall not be responsible for nor be in default under this Agreement on
account of any delay in delivery of any Service or other performance hereunder
due to any of the following causes: ACTS OF GOD; WAR, WARLIKE SITUATIONS,
INSURRECTIONS OR RIOTS, FIRES, ACCIDENTS, FLOODS, EARTHQUAKES, OR NATURAL
DISASTERS, EPIDEMICS OR QUARANTINE RESTRICTIONS; ANY GOVERNMENTAL ACT, PRIORITY
ALLOCATION REGULATION OR ORDER AFFECTING SERVICES, PRODUCTION, MATERIALS,
FACILITIES OR COMPLETED AIRCRAFT; STRIKES OR SIMILAR LABOR TROUBLES CAUSING
CESSATION, SLOW-DOWN OR INTERRUPTION OF WORK, WEATHER UNFAVORABLE FOR FLYING,
DELAY IN TRANSPORTATION; OR INABILITY AFTER DUE AND TIMELY DILIGENCE TO PROCURE
AIRCRAFT COMPONENTS, SYSTEMS, MATERIALS, ACCESSORIES, EQUIPMENT OR PARTS;
PREVENTIVE MEASURES TO AVOID DAMAGE TO MATERIALS, FACILITIES OR AIRCRAFT; OR DUE
TO ANY OTHER CAUSE BEYOND SELLER'S CONTROL OR NOT OCCASIONED BY SELLER'S FAULT
OR NEGLIGENCE.
5
Delays resulting from any of the foregoing causes are referred to as "Excusable
Delay(s)."
Promptly upon the occurrence of any such cause which may result in a delay in
the delivery of any Service or in the performance of any other obligation of
Seller hereunder, Seller shall give notice of such anticipated delay to Buyer,
which notice shall identify such occurrence and specify the period of delay
which may be reasonably expected to result therefrom.
ARTICLE 7 Indemnity
BUYER SHALL RELEASE AND DEFEND, HOLD HARMLESS AND INDEMNIFY SELLER, ITS
ASSIGNEES AND EACH EMPLOYEE THEREOF, FROM AND AGAINST ALL CLAIMS AND
LIABILITIES, DIRECT AND CONSEQUENTIAL DAMAGES, LOSSES AND JUDGMENTS, INCLUDING
COSTS AND EXPENSES INCIDENTAL THERETO, WHICH MAY BE SUFFERED BY, ACCRUED
AGAINST, BE CHARGED TO OR RECOVERABLE FROM SELLER, ITS ASSIGNEES OR ANY OF THEIR
EMPLOYEES, FOR A: DEATH OF OR INJURY TO A PERSON OR PERSONS, SAVE EMPLOYEES OF
SELLER OR ITS ASSIGNEES, OR FOR B: LOSS OF OR DAMAGE TO ANY PROPERTY, INCLUDING
ANY AIRCRAFT, SAVE PROPERTY OF SELLER, ITS ASSIGNEES OR THEIR EMPLOYEES, ARISING
OUT OF OR IN ANY WAY CONNECTED WITH THE PERFORMANCE BY SELLER, ITS ASSIGNEES OR
THEIR EMPLOYEES, OF SERVICES IN CONNECTION WITH ANY AIRCRAFT AND WHETHER OR NOT
ARISING IN TORT OR STRICT LIABILITY OR OCCASIONED IN WHOLE OR IN PART BY THE
FAULT OR NEGLIGENCE OF SELLER, ITS ASSIGNEES OR THEIR EMPLOYEES. THE FOREGOING
INDEMNITY SHALL NOT APPLY TO THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF
SELLER OR TO LIABILITY TO PERSONS OR PARTIES OTHER THEN BUYER ARISING OUT OF AN
ACCIDENT CAUSED SOLELY BY A PRODUCT DEFECT IN ANY SPARE PART OR OTHER THING
DELIVERED UNDER THIS AGREEMENT. ANY CLAIM RECEIVED BY OR SUIT INSTITUTED AGAINST
SELLER FOR WHICH INDEMNIFICATION BY BUYER IS SOUGHT UNDER THIS ARTICLE 7 SHALL
BE REPORTED TO BUYER PROMPTLY IN WRITING. UPON BUYER'S ACCEPTANCE OF SELLER'S
TENDER OF THE CLAIM OR SUIT TO BUYER HEREUNDER, BUYER SHALL HAVE THE OPTION AT
ANY TIME TO CONDUCT NEGOTIATIONS WITH RESPECT TO SETTLEMENT OF THE CLAIM OR
SUIT, TO INTERVENE IN ANY SUCH SUIT, AND TO ASSUME, CONDUCT OR CONTROL THE
DEFENSE THEREOF. FOR THE PURPOSE OF THIS ARTICLE, "SELLER" SHALL MEAN
MANUFACTURER, FOKKER SERVICES, FOKKER INDUSTRIES AS WELL AS SELLER.
ARTICLE 8 Assignment
This Agreement is for the benefit of and binding upon each of the parties hereto
and their respective successors and assigns. The rights and obligations
hereunder may not be assigned in whole or in part by either party without the
prior written consent of the other party, except that Seller may assign any of
its rights to receive money hereunder.
6
ARTICLE 9 Nondisclosure
Except as required by law, neither Buyer nor Seller shall disclose the contents
of this Agreement or data (including computer software) and documents furnished
under this Agreement to any third party without the prior written consent of the
other party. If any disclosure is required by law, then the disclosing party
shall use its best efforts to limit or prevent disclosure, including requesting
confidential treatment or implementing other means reasonably requested by the
non-disclosing party.
ARTICLE 10 Applicable Law and Forum
(a) THIS AGREEMENT SHALL BE GOVERNED BY, CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, EXCLUDING PRINCIPLES OF
CHOICE OF LAW AND THE UNITED NATIONS CONVENTION ON INTERNATIONAL SALES OF
GOODS.
(b) ALL DISPUTES ARISING IN CONNECTION WITH THIS AGREEMENT AND ITS
ATTACHMENT(S) WHICH CANNOT BE SOLVED BY AMICABLE NEGOTIATIONS, SHALL BE
FINALLY SETTLED THROUGH ARBITRATION IN ACCORDANCE WITH THE RULES OF THE
INTERNATIONAL CHAMBER OF COMMERCE BY ONE OR MORE ARBITRATORS APPOINTED IN
ACCORDANCE WITH SAID RULES. JUDGMENT UPON ANY AWARD MAY BE ENTERED IN ANY
COURT HAVING JURISDICTION THEREOF. THE PLACE OF ARBITRATION SHALL BE NEW
YORK, NEW YORK.
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ARTICLE 11 Miscellaneous
(a) Notices
All notices and requests in connection with this Agreement shall be given
in writing and may be given by airmail, facsimile, cable, telex, teletype
or any other customary means of communication addressed as follows:
Buyer: Midway Airlines Corporation
000 X. Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Xxxxxx Xxxxxx of America
Attn: Vice President-Maintenance and General Counsel
Telefax: +1.919-956 4801
Seller: Fokker Services Inc.
0000 Xxxxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxx, XX 00000
Xxxxxx Xxxxxx of America
Attn. The Secretary
Telefax +1.770-991 4608
or to such other addresses as may be specified elsewhere herein or as the
party to receive the notice or request shall designate by written notice
to the other reasonably in advance of any change. Any notice or request
given in connection with this Agreement shall be deemed received, in the
case of a facsimile transmission, at the time receipt is confirmed by the
addressee or upon the business day following dispatch thereof, in the case
of ordinary mail, five days after being deposited in the mail with first
class postage prepaid, and in the case of courier service, two days after
being sent.
(b) Headings
Article and paragraph headings used in this Agreement are for convenient
reference only and shall not affect the construction or the interpretation
of this Agreement.
(c) Fokker Services' and Manufacturer's Role
To the extent that Buyer has expressly waived any rights hereunder with
respect to Seller or has agreed to indemnify or otherwise protect Seller,
such waiver, indemnity or protection shall also apply to Manufacturer. To
the extent that Seller has disclaimed or is relieved of any liabilities
hereunder, such disclaimer or discharge shall apply in the same manner and
to the same extent to Fokker Services (or any of its subsidiary or
affiliated companies) and Manufacturer. To the extent that certain
obligations of Seller under this Agreement are to be performed by Fokker
Services (or any of its subsidiary or affiliated companies), Seller shall
cause the subject company to perform such obligations.
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(d) Amendments
This Agreement may be amended, waived or supplemented only by a writing
signed by the parties hereto.
Entire Agreement
This Agreement contains the entire agreement of the parties and there are
no promises, understandings or agreements pertaining to this Agreement
other than as stated herein.
(f) Attachments etc.
Any Attachments, Exhibits and Annexes hereto are part of this Agreement.
(g) Termination, etc.
(1) Seller may terminate this Agreement instantly upon a material breach
of this Agreement by Buyer, provided that Buyer has received
written notice of such breach from Seller and has been afforded at
least a ten (10) business day period to cure such breach. Prior
notice shall not be required, if Buyer is insolvent or if a
proceeding is commenced by or against Buyer seeking relief under the
laws relating to bankruptcy or insolvency.
(2) Seller reserves the right to suspend delivery of Spare Parts or the
performance of any other Service or obligation or to cancel any
outstanding order therefor in the event any amount due hereunder has
not been paid within ten (10) business days following notice from
Seller. Any costs incurred by Seller as a result of such suspension
or cancellation shall be paid promptly by Buyer. If Seller has
suspended performance, then Seller shall, after payment of all
amounts due and receipt of adequate assurance of future performance
by Buyer, resume the delivery of Spare Parts or the rendering of any
other Service pursuant to price and delivery conditions prevailing
at that time. The failure of Seller to enforce any of its remedies
or to require strict performance of any obligations of Buyer
hereunder shall not constitute a present or future waiver of such
remedy or obligation.
(3) Any obligation of a party hereto which accrued prior to such
termination, suspension or cancellation and remains unsatisfied as
of the date thereof shall survive the termination, suspension or
cancellation of this Agreement until satisfied.
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IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the
date first above written.
Midway Airlines Corporation
By: /s/ X X Xxxxxx
---------------------------
Title: SENIOR VICE PRESIDENT
GENERAL COUNSEL
Date: September 23, 1996
Place: Durham, N.C.
Midway Airlines Corporation
By:
---------------------------
Title:
Date:
Place:
Fokker Services Incorporated
By: [ILLEGIBLE]
---------------------------
Title: [ILLEGIBLE]
Date: [ILLEGIBLE]
Place: [ILLEGIBLE]
Fokker Services, Incorporated
By:
---------------------------
Title:
Date:
Place:
10
ATTACHMENT A
STANDARD CONDITIONS FOR SPARE PARTS
SUPPLY FOR THE AIRCRAFT
1
CONTENTS - ATTACHMENT A
ARTICLE Title Page
------- ----- ----
Contents
1 Procurement and Order Processing 3
2 Delivery 5
3 Pricing 6
4 Acceptance 7
5 Warranty 7
6 Vendor Warranties 12
2
ARTICLE 1 Procurement and Other Processing
(a) Ordering
Orders for Spare Parts shall be placed by Buyer by a written purchase
order ("Purchase Order"), or by telex, facsimile or any other written
instrument confirmed by Purchase Order, or electronic ordering as
specified in Spec 2000 unless the parties have agreed in writing to an
alternative ordering procedure.
Each Purchase Order shall include an order number or the specific contract
number, part number, quantity, nomenclature, required delivery schedule,
and detailed forwarding instructions, such as forwarding address,
accounting address and the marking required to be put on the packing, if
such instructions have not been agreed upon or differ from those agreed
upon.
(b) Order Acknowledgement
Seller shall accept Buyer's Purchase Order in writing by means of an order
acknowledgement ("Order Acknowledgement"), unless the parties have agreed
in writing to an alternative acknowledgement procedure. Seller's Order
Acknowledgement shall include Buyer's order number or specific contract
number and, for each part, the part number, applicable unit price,
extended value and the scheduled delivery date. An order is not binding
upon Seller unless accepted by Seller in accordance with this Article 1(b)
or by Sellers' provision of items requested in such Purchase Order.
Buyer shall inform Seller within thirty (30) days after the date of
Seller's Order Acknowledgement of any discrepancy between Seller's Order
Acknowledgement and Buyer's Purchase Order.
(c) Purchase Order Fulfillment
In filling Purchase Orders for Spare Parts, Seller reserves the right to
make any necessary corrections or changes in part number and nomenclature
or to substitute parts, provided that interchangeability between the Spare
Parts is not affected. Seller shall give Buyer prompt written notice of
any such correction, change or substitution and any effect on price
resulting therefrom. Promptly after the receipt of such notice, Buyer
shall advise Seller (in the same manner in which Buyer received notice
from Seller) whether or not such change of price is acceptable to Buyer.
3
(d) Cancellation of Orders
Buyer may cancel a Purchase Order for any Spare Part prior to delivery
thereof. Upon any such cancellation, Seller may recover any actual damages
arising therefrom in an amount not more than the purchase price of the
Spare Parts covered by the Purchase Order:
(1) If work accomplished on the Purchase Order has been limited to
Seller's Spare Parts department or the part has been identified as
"shelf stock" in the Seller Parts price list, no cancellation
charges shall be assessed;
(2) If production planning has been completed on the Purchase Order and
shop orders have been written, but no shop time or material charges
have been made against the Purchase Order, the cancellation charge
shall be ten percent (10%) of the purchase price; or
(3) If shop time or material charges have been incurred solely in
connection with the fulfillment of the Purchase Order, the
cancellation charge shall be based on the cost of such time,
materials and transportation costs, if any.
(e) Urgent Demand Service
Seller operates a twenty-four (24) hour-a-day, seven (7) day-a-week
emergency Spare Parts supply service in order to facilitate the prompt
supply to Buyer of spare Parts for AIRCRAFT ON GROUND ("A.O.G.") and
CRITICAL (imminent A.O.G. or work stoppage) purposes only.
If Seller receives an urgent order from Buyer for specific Spare Parts,
Seller shall promptly confirm receipt of the order and advise Buyer about
the action taken in the case of:
(1) an A.O.G. order, within four (4) hours after receipt of the relevant
order;
(2) a Critical order, within twenty-four (24) hours after receipt of the
relevant order;
(3) an Expedite (less than published or quoted leadtime) order, within
seven (7) days after receipt of the relevant order.
In the event of any inquiry from Buyer for delivery of Spare Parts under
this Article 1(e), Seller will respond within the same time periods stated
herein. Orders and inquiries for A.0.G. or Critical service shall state
"A.O.G. repeat A.O.G." or "Critical repeat Critical", respectively, and
the serial number of the affected Aircraft.
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ARTICLE 2 Delivery
(a) Delivery of Spare Parts
All deliveries of Spare Parts shall be made Ex-works Xxxxxxx X. Xxxxxxxxxx
Airport, Atlanta, Georgia, unless otherwise specified by Seller. A.O.G.
and/or Critical drop shipment out of Amsterdam, the Netherlands, or by any
supplier will be for the account of Buyer.
(b) Packing
All Spare Parts shall be packed in suitable export packing generally in
accordance with ATA Specification 300 Cat. II. If specifically requested
by Buyer, ATA Specification 300 Cat. containers or equivalents shall be
used and the extra costs involved shall be for Buyer's account.
(c) Shipment
(1) If Seller, pursuant to Buyer's request, arranges transportation of
Spare Parts to Buyer, all costs and expenses incurred by Seller in
connection therewith shall be for Buyer's account unless agreed
otherwise. To the extent practicable, all transportation of Spare
Parts shall be arranged by Seller by air-freight, freight payable at
destination by Buyer.
(2) All Spare Parts shipments shall be accompanied by packing documents
indicating Buyer's Purchase Order number, quantity shipped, part
number, key word and total value.
(3) Upon request, Seller shall inform Buyer as soon as practicable about
shipping arrangements made.
(d) Certification
All Spare Parts delivered by Seller to Buyer shall be accompanied by an
Authorized Release Certificate or a similar document issued by a duly
authorized person.
(e) Title and Risk
(1) Risk of loss of or damage to the Spare Parts supplied by Seller to
Buyer shall pass from Seller to Buyer at delivery of the Spare Parts
in accordance with Article 2(a). Risk of loss of or damage to Spare
Parts rejected by Buyer pursuant to Article 4 shall remain with
Buyer until such Spare Parts are redelivered to Seller in accordance
with Article 4.
(2) Seller will convey to Buyer good title to each Spare Part free and
clear of all liens, claims, charges and encumbrances upon the later
of (A) delivery of such Spare Part or (B) receipt of full payment
for such Spare Part.
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(3) Upon request of Seller and at Buyer's expense, Buyer shall cooperate
in vesting a perfected security interest or other first lien, valid
under applicable law, on Spare Parts supplied or to be supplied by
Seller to Buyer hereunder, to secure Seller's rights with respect to
Spare Parts for which Seller has not yet received full payment.
ARTICLE 3 Pricing
(a) Seller Parts
Seller shall issue price lists for Seller Parts and, except as otherwise
provided in this Article 3, such prices shall be firm for the period of
time stated in the price list. The prices charged will be those in effect
on the date of receipt of Buyer's Purchase Order. Seller reserves the
right to revise the prices quoted in Seller's price lists, but such price
revisions shall only be effective ninety (90) days after notifying Buyer
of such price revisions.
(b) Vendor Parts
Vendor Parts shall be priced in accordance with Seller's sales price for
such Vendor Parts prevailing on the date of receipt by Seller of Buyer's
Purchase Order, except that the price stated in any Seller quotation for a
Vendor Part shall be applicable if Buyer places its Purchase Order within
the validity period and otherwise complies with any other conditions of
said quotation.
(c) Price Revisions
Seller shall issue to Buyer price lists for Seller Parts and prices shall
be firm for the calendar year stated in the price list. The prices charged
will be those in effect on the date of receipt of Buyer's Purchase Order.
Seller reserves the right to revise the price for Spare Parts from the
date of quotation, and unless Buyer's Purchase Order has been accepted by
Seller pursuant to this Agreement, until delivery to Buyer in the
following cases:
- significant revision in the price charged to Seller by Vendors or
suppliers;
- significant revision due to variation in currency exchange rates; or
- significant error in estimation or expression of any price, which will
be effective immediately after notification of Buyer.
For the purpose of this Article 3(c), a significant price revision or
error shall mean a discrepancy in the extended orderline price published
or quoted by Seller of at least twenty percent (20%) or One Thousand
Dollars (U.S. $1,000.00).
Seller shall notify Buyer of any such revision or error and, upon request,
submit to Buyer reasonable proof of such significant revision or error.
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(d) General
Any services ancillary to the sale of Spare Parts that are requested by
Buyer and not covered under Article 3(a) or (b) above shall be charged
according to Seller's sales prices prevailing on the date on which such
ancillary services are rendered to Buyer.
Requests for urgent demand service pursuant to Article 1(e) will result in
a price increase to cover Seller's additional out-of-pocket-costs. Upon
request, Seller shall substantiate such costs to Buyer.
ARTICLE 4 Acceptance
(a) Within fourteen (14) days ("Inspection Period") after the receipt by Buyer
of any Spare Part, Buyer shall notify Seller in writing of any alleged
nonconformity of the Spare Part with Buyer's Purchase Order as
acknowledged by Seller, taking into account Seller's customer order status
information or other formal written information concerning such Purchase
Order and Order Acknowledgement. Such notice shall state the grounds for
Buyer's conclusion of nonconformity.
(1)) Upon receipt of such notice, Seller shall promptly notify Buyer whether
Seller agrees that such a nonconformity exists and any corrective
procedure which Seller will apply. Upon Seller's request, Buyer shall
return any such nonconforming Spare Part to Seller in accordance with
article 5(f) and Seller will reimburse Buyer for all freight charges
incurred in connection with such return.
(c) If Seller is not notified by Buyer of any nonconformity within the
Inspection Period, Buyer shall be deemed to have accepted the Spare Part
and to have waived all its claims in respect thereto, except the
contractual warranty provisions.
(d) Any damage or defect attributable to transportation or handling after
delivery to Buyer are for Buyer's account and shall be dealt with by Buyer
directly with the insurance company or carrier involved.
ARTICLE 5 Warranty
(a) Subject to the limitations and conditions hereinafter set forth, Seller
warrants that each Seller Part supplied hereunder shall at the time of
delivery by Seller be free from defects in material and workmanship
(hereinafter collectively referred to as "defects"). The warranty set
forth above shall apply to factory-new Seller Parts only.
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(b) Exceptions
(1) The warranties set forth in Article 5(a) shall not apply to Vendor
Parts.
(2) Seller shall be relieved from its warranty obligations under this
Article 5 with respect to the particular defect if the defect
results from:
(a) Buyer's failure to operate, maintain and repair the Seller
Part or the Aircraft in which the Seller Part was installed in
accordance with Buyer's maintenance and operating programs
approved by the airworthiness authority having jurisdiction
over Buyer and Seller's written instructions; or
(b) the Seller Part being used in combination with any part not
specifically approved by Seller, unless Buyer furnishes
reasonable evidence that use of such part was not a direct or
indirect cause of the defect.
(c) Warranty and Notice Periods
Buyer's remedy and Seller's obligation and liability under this Article 5,
with respect to each defect, are conditioned upon the defect having become
apparent to Buyer within the applicable warranty period and Seller's
warranty administrator at Seller's Facility having received prompt written
notice of the defect from Buyer not later than ninety (90) calendar days
after the defect becomes apparent to Buyer. The warranty period is
eighteen (18) months after delivery of each Seller Part, with a specific
serial number, and six (6) months after delivery of other Seller parts.
(d) Return and Notification
Buyer's remedy and Seller's obligation and liability under this Article 5,
with respect to each defect, are also conditioned upon:
(1) the prompt return by Buyer if requested by Seller of the Seller Part
claimed to be defective to Seller's Facility, provided that such
return shall not be required if Buyer elects to scrap nonrepairable
defective Seller Parts at Buyer's facilities in accordance with
Article 5(g);
(2) the submission by Buyer at Seller's Facility of a warranty claim
form relating to such defect that includes the following
information:
(a) identification of the Seller Part involved, including Seller's
part number, serial number (if such part has a serial number),
nomenclature, delivery date and the quantity claimed to be
defective;
(b) identification of the Aircraft (serial number) from which each
Seller Part was removed;
(c) the position of the Seller Part in the Aircraft;
(d) date the claimed defect became apparent to Buyer and, if
available, the total number of flight hours or cycles
accumulated by the Seller Part at that date; and
(e) description of the claimed defect and applicable circumstances
requiring removal.
8
(3) reasonable proof that the claimed defect is subject to the warranty
set forth in Article 5(a) and that such defect did not result from
any act or omission of Buyer described in Article 5(b)(2); and
(4) investigation by Seller of all warranty claims.
Seller shall notify Buyer in accordance with Article 5(i) of the
disposition of each such claim, including the remedy specified in Article
5(e) that Seller reasonably elects to apply.
(e) Remedies
(1) Buyer's remedy and Seller's obligation and liability under this
Article 5, with respect to each defect, are limited to the repair of
such defect in the Seller Part in which the defect appears, or, at
Seller's option, to the furnishing of a replacement Seller Part, and
(2) as to any Seller Part repaired or furnished as a replacement by
Seller pursuant to Article 5(e)(1), to the repair or replacement of
such Seller Part for any further defect in material or workmanship,
provided:
(i) such further defect becomes apparent to Buyer within any
unexpired remainder of the warranty period specified in
Article 5(c); and
(ii) Seller's warranty administrator at Seller's Facility receives
written notice of such further defect from Buyer within ninety
(90) calendar days after it first becomes apparent to Buyer.
(f) Returned Items
All repairs, replacements and corrections described in Article 5(e)
performed by Seller shall be at Seller's expense and at Seller's Facility
or at such other place as may be mutually agreeable and with reasonable
care and dispatch in order that the Seller Part involved will not be out
of service longer than necessary.
Buyer shall pay the cost of transportation (in accordance with common
industry practices) to Seller's Facility or such other place as may be
mutually agreeable of any Seller Part claimed to be defective. Seller
shall reimburse Buyer for all freight charges incurred by Buyer in
connection with such return of any Seller Part determined to be defective
under the terms of this Article 5. Seller will pay all freight charges (in
accordance with common industry practices) for the return to Buyer of any
Seller Part repaired or corrected or of any replacement Seller Part.
9
If Seller furnishes a replacement Seller Part for any Seller Part returned
by Buyer, title to the returned Seller Part shall pass to Seller
concurrently with delivery of such replacement to Buyer. Any such
replacement shall be delivered Ex-works Xxxxxxx X. Xxxxxxxxxx Airport,
Atlanta, Georgia.
Title to and risk of loss of or damage to any Seller Part returned by
Buyer to Seller, and for which no-replacement Seller Part is being
provided, shall at all times remain with Buyer, except as to loss or
damage chargeable to Seller according to applicable law, provided that, in
no event shall Seller be liable for loss of use or any other indirect or
consequential damages. Under this Article 5(f), the party that has the
risk of loss or damage with respect to any Seller Part shall have the
responsibility of providing adequate insurance for said Seller Part.
(g) Nonrepairable Seller Part
Buyer may scrap any defective nonrepairable Seller Part at Buyer's
Facility, provided that Seller's authorized representative has confirmed
in writing that such Seller Part is nonrepairable and is not required for
investigation by Seller.
(h) Wear and Tear
Normal wear and tear and the need for regular maintenance and overhaul in
accordance with Seller's provided instructions in whatever form, shall not
constitute a defect under this warranty. The warranty period set forth in
Article 5(c) shall not apply to items such as rubber parts, filters, shelf
life limited parts or similar items which Seller demonstrates are unable
to meet such standards because of their ultimate design life or function
(determined by the state of the art at the time of design).
(i) Seller's Nonresponse
If Buyer is not notified by Seller of the disposition of Buyer's warranty
claim within sixty (60) days after receipt by Seller of the claim
including all written information required by Article 5(d)(2) and the
defective Seller Part if so requested by Seller, the defect shall be
deemed covered by Seller's warranty.
(j) Applicability of Seller's Warranty
It is Seller's intention that replacement, repair or correction of Seller
Parts claimed by Buyer to be defective be implemented with the least
possible delay and to this end any action taken by Seller, prior to
completion of its review of Buyer's warranty claim, shall not prejudice
Seller's right thereafter to dispute the applicability of Seller's
warranty to any item so replaced, repaired or corrected and to recover its
reasonable costs and expenses with such replacement, repair or correction,
in the event that Seller's warranty is determined not to apply.
10
(k) THE WARRANTIES, OBLIGATIONS AND LIABILITIES OF SELLER AND REMEDIES OF
BUYER SET FORTH IN THIS ARTICLE AND ARTICLE 6 OF THIS ATTACHMENT A ARE
EXCLUSIVE AND IN SUBSTITUTION FOR, AND BUYER HEREBY WAIVES, RELEASES AND
RENOUNCES ALL OTHER WARRANTIES, OBLIGATIONS AND LIABILITIES OF SELLER, ITS
ASSIGNEES AND EACH EMPLOYEE THEREOF AND RIGHTS, CLAIMS AND REMEDIES OF
BUYER AGAINST SELLER, ITS ASSIGNEES OR ANY OF THEIR EMPLOYEES, EXPRESS OR
IMPLIED, ARISING BY LAW OR OTHERWISE, WITH RESPECT TO ANY NONCONFORMITY OR
DEFECT IN, OR DELAY IN DELIVERY OF, ANY SPARE PART DELIVERED OR SERVICE
RENDERED UNDER THIS AGREEMENT, INCLUDING BUT NOT LIMITED TO (1) ANY
IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS, (2) ANY IMPLIED WARRANTY
ARISING FROM COURSE OF PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE,
(3) ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY IN TORT, WHETHER OR
NOT ARISING FROM THE NEGLIGENCE OR STRICT LIABILITY OF SELLER, ITS
ASSIGNEES OR ANY OF THEIR EMPLOYEES, ACTUAL OR IMPUTED, AND (4) ANY
OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY FOR LOSS OF OR DAMAGE TO ANY
AIRCRAFT, SPARE PART OR OTHER THING, FOR LOSS OF USE, REVENUE OR PROFIT
WITH RESPECT TO ANY AIRCRAFT, SPARE PART OR OTHER THING OR FOR ANY OTHER
DIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES. FOR THE PURPOSE OF THIS
ARTICLE 5(k), "SELLER" SHALL MEAN MANUFACTURER, FOKKER SERVICES, FOKKER
INDUSTRIES AS WELL AS SELLER.
However this clause shall not in any way limit Buyer's right to recover
any amount according to Article 10 of the GTA, including those costs
covered under any judgment of the ICC.
(l) The warranty set forth herein is personal to Buyer and shall not be
assigned or transferred in whole or in part except with the prior written
consent of Seller.
(m) In the event that any part of the provisions of this Article is held
ineffective or unenforceable, Seller shall advise Buyer of the
implications thereof and the effect on the terms and conditions of this
Article.
11
ARTICLE 6 Vendor Warranties
(a) Vendor Parts purchased by Buyer from Seller shall be subject to the
warranty conditions of the particular Vendor of such Vendor Parts.
(b) If Vendor Parts are modified by Seller and due to such modification the
warranty conditions of the Vendor of such Vendor Parts are invalidated,
such warranty conditions shall be enforceable by Buyer against Seller. In
such case the provisions of Seller's warranty as set forth in Article 5(e)
through (m) shall be applicable.
(c) If Buyer has made a warranty claim under a Vendor warranty in accordance
with the conditions set forth in such warranty, and the Vendor defaults in
the performance of any material obligation contained in such warranty,
Buyer may request Seller for assistance in Buyer's actions against such
Vendor and shall provide Seller with (1) Buyer's official claim report and
any evidence supporting Buyer's claim against such Vendor and (2)
reasonable proof that such a default has occurred.
12
ATTACHMENT B
STANDARD CONDITIONS FOR
AIRCRAFT COMPONENT REPAIR AND OVERHAUL
1
CONTENTS - ATTACHMENT B
ARTICLE Title Page
------- ----- ----
1 Definitions 3
2 Arranging Component Repair and Xxxxxxxx 0
0 Xxxxxxxx 0
0 Xxxxxxxx 6
5 Repair Station Warranty 9
2
ARTICLE 1 Definitions
The following capitalized terms used in this Attachment without definition shall
have the following meanings:
Component means any self-contained part, combination of parts,
sub-assembly or unit, which performs a distinctive function
necessary to the operation of a system.
Investigation Report means a report which states the possible cause of a
malfunction or describes observed damage of a Component and
provides detailed findings with regard to rectification of
said malfunction or sampling requirements.
Overhaul means the restoration of a Component in accordance with the
instructions in the relevant manual therefor.
Repair means the restoration of a defective Component to a
serviceable condition only.
Repair Station means Fokker Services' repair facilities located at
Amsterdam, with FAA Repair Station Certificate No. CL5Y83M,
and at Woensdrecht, with FAA Repair Station Certificate No.
NQ1Y357K.
ARTICLE 2 Arranging Components Repair and Overhaul
(a) Ordering Procedure
Buyer shall place a written order ("Order"), if at all after receipt by
Buyer of a quotation from Seller stating an estimate of costs involved,
including all relevant costs and leadtimes, for each Component sent to
Seller to arrange Repair or Overhaul. Each Order shall contain an adequate
description of the Component, the reason for removal and the requested
action, including an order number, part number, quantity, nomenclature,
serial number, number of hours consumed since factory-new or last Repair
or Overhaul, number of landings, modifications carried out in the
Component, and any non-mandatory modifications Buyer wishes incorporated
in the Component at the time of Repair or Overhaul. Seller reserves the
right to return any Component to Buyer at Buyer's expense for which Seller
does not receive an Order.
(b) Order Acknowledgment
An Order is not binding upon Seller unless accepted by Seller in writing
("Order Acknowledgment") or repaired or overhauled by Seller.
3
(c) Modification Standard
Seller shall cause incorporation of all mandatory modifications as
indicated by the relevant airworthiness authority due at the time of
Repair or Overhaul. Seller shall cause Buyer to be informed of all such
modifications incorporated during Repair and/or Overhaul.
(d) Price
Seller shall charge Buyer the amount for the Repair, Overhaul or Service
related thereto, plus, if the Repair or Overhaul is not to be performed by
the Repair Station, Seller's then current handling fee for making such
arrangements as disclosed in the quotation.
(e) Beyond Economical Repair
if the cost of Repair or Overhaul of any Component will exceed sixty per
cent (60%) of Seller's latest factory-new sales price for such Component,
then the Component shall be deemed "beyond economical repair" and Seller
shall advise Buyer accordingly, provided Seller receives notice from the
Repair Station or the repair station not being Fokker Services Promptly
following any such advice, Buyer shall provide Seller with one of the
following instructions:
(1) Repair or Overhaul at Buyer's expense;
(2) Destroy without compensation to Buyer; or
(3) Return to Buyer at Buyer's expense without Repair or Overhaul.
Seller will dispose of the Component without compensation to Buyer, if
Buyer fails to provide the required instruction within two weeks after
Seller's advice.
Buyer shall pay Seller for any work performed on such a Component prior to
the determination that it is beyond economical repair. The failure of
Seller to give the advice described in this Section is not an undertaking
to limit the charges with respect to an Overhaul or Repair to an amount
less than 60% of the latest factory-new sales price of such Component.
(f) Shop-Finding Report
A Shop-Finding Report shall be provided by Seller at no additional charge
for any Component that Seller sends to the Repair Station for Repair or
Overhaul.
(g) Investigation Report
Seller is prepared, at Buyer's request and expense, to obtain
Investigation Reports of specific Components sent to the Repair Station
for Repair or Overhaul or sampling.
4
(h) Order Status Report
Seller shall issue Order Status Reports at least monthly listing
Components sent for Repair or Overhaul including information regarding the
status thereof and shipping information with respect to Components
Repaired or Overhauled in the monthly reporting period.
ARTICLE 3 DELIVERY
(a) Delivery to Seller
Buyer shall bear all costs and expenses and the risks of loss or damage in
the transportation of Components to Seller's Facility and during the
period the Components are being Repaired or Overhauled. All Components
sent to Seller's Facility shall be properly packed and labeled, and
freight shall be prepaid by Buyer.
(b) Delivery to Buyer
Components shall be re-delivered to Buyer Ex-works Seller's Facility.
Buyer expressly agrees that Seller may withhold from Buyer any Component
for which it has not been paid in accordance with this Agreement.
Packaging
Repaired or Overhauled Components shall be packed in suitable packaging.
(d) Shipment
(1) If Seller, pursuant to Buyer's request, arranges transportation of
any Repaired or Overhauled Components, all costs and expenses
incurred by Seller in connection therewith shall be for Buyer's
account. To the extent practicable, all shipments of Repaired or
Overhauled Components shall be arranged by Seller by air freight,
freight payable at destination by Buyer.
(2) All shipments of Repaired or Overhauled Components shall be
accompanied by packing documents indicating Buyer's Order number,
quantity shipped, part number, keyword and total value.
(3) Upon request, Seller shall inform Buyer, as soon as practicable,
about shipping arrangements made.
5
(e) Certification
Upon completion of Repair or Overhaul, Seller shall return the Component
to Buyer accompanied by an FAA Form 8130-3, if the Repair or Overhaul was
performed by the Repair Station or, in the event the Repair or Overhaul
was performed by a repair station not being Fokker Services, by the
airworthiness documentation supplied by such repair station.
ARTICLE 4 Warranty
(a) General
(1) Seller does not Repair or Overhaul Components, but arranges the
Repair or Overhaul by the Repair Station or a repair station not
being Fokker Services.
(2) Subject to the limitations and conditions hereinafter set forth,
Seller warrants that each Component Repaired or Overhauled by the
Repair Station shall at the time of delivery by Seller be free from
defects in material and workmanship involved in the Repair or
Overhaul (hereinafter collectively referred to as "defects").
(b) Exceptions
Seller shall be relieved from its warranty obligations under this Article
4 with respect to the particular defect if the defect results from:
(a) Buyer's failure to operate and maintain the Component or the
Aircraft in which the Component was installed in accordance
with Buyer's maintenance and operating programs approved by
the airworthiness authority having jurisdiction over Buyer and
Seller's written instructions; or
(b) the Component being used in combination with any part not
specifically approved by Seller, unless Buyer furnishes
reasonable evidence that use of such part was not a direct or
indirect cause of the defect.
(c) Warranty and Notice Periods
The warranty period is the later of (i) (6) months or five hundred flight
hours, whichever expires first, or (ii) (if) in the event Article 5
hereunder is applicable, the period of warranty given by the repair
station not being Fokker Services, after delivery of the Component to
Buyer.
(d) Return and Notification
Buyer's remedy and Seller's obligation and liability under this Article 4,
with respect to each defect, are also conditioned upon Buyer fulfilling to
as much as reasonably possible, with respect to each Component, the
requirements set forth in Article 5(d)(2) of Attachment A. Seller shall
notify Buyer in accordance with Article 4(i) of the disposition of each
such claim. However in the event Buyer does not fulfill any or all of the
requirements set forth in Article 5(d)(2) of Attachment A, Seller reserves
the right to reject subject warranty claim.
6
(e) Remedies
Buyer's remedy and Seller's obligation and liability under this Article 4,
with respect to each defect, are limited to the repair or correction of
such defect in the Repaired or Overhauled Component
(f) Returned Items
Every repair and correction described in Article 4(e) shall be performed
at Seller's expense with reasonable care and dispatch in order that the
Component involved will not be out of service longer than necessary.
Buyer shall pay the cost of transportation (in accordance with common
industry practices) to Seller's Facility or such other place as may be
mutually agreeable of any Component claimed to be defective. Seller shall
reimburse Buyer for all freight charges incurred by Buyer in connection
with such return of any Component determined to be defective under the
terms of this Article 4. Seller will pay all freight charges (in
accordance with common industry practices) for the return to Buyer of any
Component repaired or corrected or of any replacement Component.
Title to and risk of loss of or damage to any Component returned by Buyer
to Seller shall at all times remain with Buyer, except as to loss or
damage chargeable to Seller according to applicable law, provided that, in
no event shall Seller be liable for loss of use or any other indirect or
consequential damages. Under this Article 4(f), the party that has the
risk of loss or damage with respect to any Component shall have the
responsibility of providing adequate insurance for said Component.
(g) Wear and Tear
Normal wear and tear and the need for regular maintenance and overhaul
shall not constitute a defect under this warranty. The warranty period set
forth in Article 4(c) shall not apply to items such as rubber parts,
filters, shelf life limited parts or similar items which Seller
demonstrates are unable to meet such standards because of their ultimate
design life or function (determined by the state of the art at the time of
design).
7
(h) Seller's Nonresponse
If Buyer is not notified by Seller of the applicability of Buyer's
warranty claim within thirty (30) days after receipt by Seller of the
claim including all written information required by Article 4(d) and the
defective Component if so requested by Seller, the defect shall be deemed
covered by Seller's warranty.
(i) Applicability of Seller's Warranty
It is Seller's intention that replacement, repair or correction of
Components claimed by Buyer to be defective be implemented with the least
possible delay and to this end any action taken by Seller, prior to
completion of its review of Buyer's warranty claim, shall not prejudice
Seller's right thereafter to dispute the applicability of Seller's
warranty to any item so replaced, repaired or corrected and to recover its
reasonable costs and expenses in connection therewith in the event that
Seller's warranty is determined not to apply.
(j) THE WARRANTIES, OBLIGATIONS AND LIABILITIES OF SELLER AND REMEDIES OF
BUYER SET FORTH IN THIS ARTICLE AND ARTICLE 5 OF THIS ATTACHMENT d ARE
EXCLUSIVE AND IN SUBSTITUTION FOR, AND BUYER HEREBY WAIVES, RELEASES AND
RENOUNCES ALL OTHER WARRANTIES, OBLIGATIONS AND LIABILITIES OF SELLER, ITS
ASSIGNEES AND EACH EMPLOYEE THEREOF AND RIGHTS, CLAIMS AND REMEDIES OF
BUYER AGAINST SELLER, ITS ASSIGNEES OR ANY OF THEIR EMPLOYEES, EXPRESS OR
IMPLIED, ARISING BY LAW OR OTHERWISE, WITH RESPECT TO ANY NONCONFORMITY OR
DEFECT IN, OR DELAY IN DELIVERY OF, ANY COMPONENT OR SERVICE RENDERED BY
SELLER FOR THE REPAIR OR OVERHAUL OF SUCH COMPONENT, UNDER THIS AGREEMENT,
INCLUDING BUT NOT LIMITED TO (1) ANY IMPLIED WARRANTY OF MERCHANTABILITY
OR FITNESS, (2) ANY IMPLIED WARRANTY ARISING FROM COURSE OF PERFORMANCE,
COURSE OF DEALING OR USAGE OF TRADE, (3) ANY OBLIGATION, LIABILITY, RIGHT,
CLAIM OR REMEDY IN TORT, WHETHER OR NOT ARISING FROM THE NEGLIGENCE OR
STRICT LIABILITY OF SELLER, ITS ASSIGNEES OR ANY OF THEIR EMPLOYEES,
ACTUAL OR IMPUTED, AND (4) ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR
REMEDY FOR LOSS OF OR DAMAGE TO ANY AIRCRAFT, COMPONENT OR OTHER THING,
FOR LOSS OF USE, REVENUE OR PROFIT WITH RESPECT TO ANY AIRCRAFT, COMPONENT
OR OTHER THING OR FOR ANY OTHER DIRECT, INCIDENTAL OR CONSEQUENTIAL
DAMAGES. FOR THE PURPOSE OF THIS ARTICLE 4(j), "SELLER" SHALL MEAN
MANUFACTURER, FOKKER SERVICES, FOKKER INDUSTRIES AS WELL AS SELLER.
8
(k) The warranty set forth herein is personal to Buyer and shall not be
assigned or transferred in whole or in part except with the prior written
consent of Seller.
(l) In the event that any part of the provisions of this Article is held
ineffective or unenforceable, Seller shall advise Buyer of the
implications thereof and the effect on the terms and conditions of this
Article
ARTICLE 5 WARRANTY REPAIR STATION OTHER THEN FOKKER SERVICES
Seller shall use its best efforts to obtain from repair stations other then
Fokker Services performing Repairs or Overhauls arranged by Seller adequate
warranties enforceable by Buyer; provided that Seller does not guarantee that
such a warranty will be extended by the Repair Station with respect to any
particular Repair or Xxxxxxxx.
0
XXXXXXXXXX X
STANDARD CONDITIONS FOR TECHNICAL SUPPORT SERVICES
This text is deleted intentionally, as the technical support services will be
agreed by the Customized Service Package.
Until the finalization of the Customized Service Package between Midway Airlines
Co. and Fokker Services Inc., the terms in the General Terms Agreement
GTA-Midway-FS-0103, Attachment C dated May 10, 1996 will govern the technical
support services.
1
ATTACHMENT D
STANDARD CONDITIONS FOR DOCUMENTATION FOR THE AIRCRAFT
This text is deleted intentionally, as the documentation support services will
be agreed by the Customized Service Package.
Until the finalization of the Customized Service Package between Midway Airlines
Co. and Fokker Services Inc., the terms in the General Terms Agreement
GTA-Midway-FS-0103, Attachment D dated May 10, 1996 will govern the
documentation support.
1
[LETTERHEAD OF FOKKER SERVICES, INC.]
April 1, 0000
Xxxxxx Xxxxxxxx Corporation
0000 X Xxxxx Xxxxxx
Xxxxx 0000
Attention: Xxxxxxxx Xxxxxx
Subject: Customized Service Agreement
Dear Xx. Xxxxxx:
Enclosed please find your copy of the Customized Service Agreement with Fokker
Services, Inc. for your files. This agreement is in addition to your previously
signed Letter Agreement with our company.
As always, Fokker Services, Inc. looks forward to being of service to you and
your organization. If you have any questions, please feel free to call me.
Sincerely,
/s/ Henk Kleef
Henk Kleef
Managing Director
encl.
HK:cls
Customized Services Agreement
for
Midway Airlines Corporation
Customized Services Agreement
The attached services agreement offered by Fokker to Midway Airlines Corporation
consists of two major areas, being 1. Technical support and 2. Material supply.
--------------------------------------------------------------------------------
Continued Service Agreement - 1 - February 14, 1997
Midway Airlines Corp.
This Customized Services Agreement (hereinafter the "Agreement") is entered
into effective as of July 1,1996 by and between Midway Airlines Corporation
("Midway"), and Fokker Services, Inc., ("Fokker"), and in consideration of
the mutual covenants and agreements contained herein, the parties agree as
follows:
Fokker will provide Midway with the technical support services and material
supply as set forth herein.
The Letter Agreement LA-Midway-FS-0103 (herein after the "LA"), a copy of which
is attached hereto and incorporated herein by reference, shall apply to this
Agreement, unless specifically indicated otherwise herein. If there is a
conflict between the terms of this Agreement and the terms of the LA, this
Agreement shall control. All defined terms used in this Agreement shall have the
same meanings as the definitions set forth in the LA unless otherwise provided
herein.
Fokker has the right to have any or all of the services described herein
executed by Fokker Services B.V. at its facilities in The Netherlands. In such
event, Fokker shall remain primarily liable for such services as if it had
performed such services itself. This will not in any way mean that a contractual
relation shall exist between Midway and Fokker Services B.V.
1. Technical support
The products and services to be provided by Fokker in the area of
technical support are split into the following three categories:
1. Continued Airworthiness Services Agreement
2. Maintenance and Operational Documentation
3. Engineering and Operational Support
A more detailed description of the content of each of these categories is
given below.
1.1. Continued Airworthiness Services Agreement
ARTICLE 1. Subject matter and services to be provided.
In order to support Midway to maintain a continued airworthy operation of
any aircraft operated by Midway and manufactured by Fokker Aircraft B.V.
or its affiliates (principally including Fokker 100 or Fokker 70
aircraft), Fokker will support Midway in meeting the requirements
regarding the availability of up-to-date airworthiness data for Midway's
Aircraft by providing the following baseline documentation and services
package:
--------------------------------------------------------------------------------
Continued Service Agreement - 3 - February 14, 1997
Midway Airlines Corp.
1. All-Operator Messages (AOM's) intended to rapidly alert operators to
fleet airworthiness issues and resolution of these issues.
2. Technical or Operational Notices which address airworthiness issues
not requiring the same level of urgency as AOM's, but which
nevertheless may require certain measures at short notice.
3. All Service Bulletins (SB's) which are issued.
Note: For those SB's issued in the form of a pro-forma, only the
pro-forma section of the SB (i.e. the planning information) will be
covered by this service.
4. All Service Letters/Notices to Operators which are issued.
5. A document listing the disposition of Vendor Service Bulletins as
determined by Fokker Services in its capacity as the holder of the
type certificates of the Aircraft.
6. Updates to the Service Experience Digest which provides data and
background information on commonly experienced technical and
operational in-service issues. This information is of great value to
the operator in quickly and effectively resolving in-service
problems as they arise, thereby improving availability of the
Aircraft and lowering costs.
7. Manual Change Notifications for maintenance and operational manuals
which are recommended from an airworthiness standpoint, and/or which
result from the introduction of a modification mandated by the Dutch
Airworthiness Authorities (The RLD). This may be applicable (but is
not limited to) the following manuals:
- Aircraft Maintenance Manual (AMM),
- Structural Repair Manual (SRM),
- wiring Manual (WM),
- Troubleshooting and Schematics Manual (TSSM),
- Aeroplane Flight Manual (AFM).
Note: the actual documentation revisions are not part of the services of
this Article 1.
8. Utilization Data. This document is issued twice a year and contains
registration and utilization data for every Fokker commercial
aircraft delivered (all types).
9. Engineering, Maintenance, and Operational Support with a maximum of
man-hours per year (incl. AOG-service 24 hours a day) as set forth
in Article 1.3. below.
10. Maintenance Requirements documents, namely the Maintenance Review
Board (MRB) and Maintenance Planning Document (MPD) for the Fokker
70/100, including applicable revisions.
As a member of the Continued Airworthiness Service Agreement, Midway will
be invited to participate in the Maintenance Steering Committee,
Structures Working Group meetings, etc.
--------------------------------------------------------------------------------
Continued Service Agreement - 4 - February 14, 1997
Midway Airlines Corp.
1.2. Maintenance and Operational Documentation
Fokker will continue to support the complete maintenance and operational
documentation package as available to Midway before the bankruptcy of
Fokker N.V.
With this service Fokker ensures that the applicable aircraft
documentation is maintained to the latest revision status. It offers
Midway an integrated and fast response to relevant changes and enables
Midway to maintain its Aircraft safe and economically and includes:
Alterations of technical contents to reflect Fokker current
recommendations and procedures based on worldwide gained experiences, and
incorporation of;
o All outstanding Temporary Revisions;
o Mandatory Fokker Service Bulletins in the pre/post status;
o Optional Fokker Service Bulletins in the pre/post status after
notification by Midway;
o Publication Change Requests (correction of technical errors, major
omissions and efficiency improvements);
o All corrections to maintain a safe and airworthy aircraft as
dictated by Airworthiness Directives (AD) issued by the Netherlands
Department of Civil Aviation (RLD).
The above mentioned is applicable to all documentation listed in Midway
Documentation Revision Services Package. This package is specified later in this
paragraph. Temporary Revisions (TR's), Service Bulletins (SB's), Service Letters
(SL's) and Service Experience Digest (SED's) will be issued throughout the year
as necessary or reasonably required. The other documents will be revised with a
maximum of two revisions each year. All man-hours, expenses, production or other
costs related to the aforementioned updates and changes are included in the firm
and fixed price of the Customized Services Agreement for the duration of
contract.
Revision of manuals as result of Customer Originated Changes (COC's) will be
provided on an on-request basis. In each case will be preceded by a quotation
and delivery date.
Fokker has developed CD-ROM as a media for part of the documentation (Aircraft
Maintenance Manual (AMM) and Illustrated Parts Catalogue (IPC)).
In addition to the Continued Airworthiness Service Agreement the Midway
Documentation Revision Services Package includes:
1. The one-time integration of the Transwede- and Midway-microfilm manuals of
the Fokker 100 aircraft with serial numbers 11321, 11323, 11329 and 11330
for the following customized manuals: Aircraft Maintenance Manual (AMM),
Illustrated Parts Catalog (IPC), Wiring Manual (WM) and Troubleshooting
and Schematics Manual (TSSM). After this integration, each of these
manuals will reflect the status of all current 12 Midway Fokker 100
aircraft per manual.
2. A maximum of two revisions per year for the following maintenance and
operational manuals in the specified quantities per medium (hard-copy and
microfilm);
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Continued Service Agreement - 5 - February 14, 1997
Midway Airlines Corp.
Manual Qty Qty Qty
------ --- --- ---
Hard-copy M'film Silvernegative
--------- ------ --------------
- Aircraft Maintenance Manual (AMM) 1 1 1
- Illustrated Parts Catalog (IPC) 1 1 1
- Wiring Manual (WM) 1 1 1
- Troubleshooting and Schematics Manual
(TSSM) 4 1 1
- Aircraft Flight Manual (AFM) 12 - -
- Structural Repair Manual (SRM) 2 3 -
- Non-Destructive Testing Manual (NDT) 2 1 -
- Consumable Material List (CML) 2 1 -
- Component Maintenance Manual (CMM) 3 - -
- Illustrated Tool and Equipment Manual
(ITEM) 1 1 -
- Powerplant Build-up Manual (PBM) 2 - -
- Maintenance Planning Document (MPD) 2 - -
- Aircraft Operating Manual (AOM) 4 - -
- Weight and Balance Manual (WBM) 2 - -
- Quick Reference Handbook (QRH) 10 - -
- Master Minimum Equipment List (MMEL) 2 - -
The revisions will cover changes in the technical content due to;
- outstanding Temporary Revisions
- mandatory Service Bulletins and/or other airworthiness related changes
issued by the Dutch airworthiness authorities (RLD).
1.2.1. General
(a) Documentation furnished to Midway is solely for the purpose of
operation, repair and overhaul of the Aircraft or a part thereof,
including applicable support equipment. The use of any Documentation
shall be at Midway's sole risk provided, that Fokker has the
obligation to submit technical correct information. In case Midway
performed in full compliance with any instructions or Documentation
issued by Fokker or any subsequent amendments thereto and it can be
provided that Midway carrying out of such instructions resulted in
damage to any Aircraft, Fokker will be hold liable for the cost
necessary to rectify or replace such damage or part of the Aircraft.
(b) Nothing contained in the Documentation shall be deemed to convey to
Midway a right or license under patents or intellectual property
rights held or controlled by Fokker.
(c) Midway does not have the right to reproduce Documentation or have it
reproduced other than for Midway's own use.
(d) Documentation is delivered Ex-works Fokker's Facility in Xxxxxxx,
XX, XXX or another Fokker Facility in the USA.
(e) Midway shall not disclose the Documentation except as permitted by
Article 9 of the LA.
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Continued Service Agreement - 6 - February 14, 1997
Midway Airlines Corp.
1.3. Engineering and Operational Support
This service provides day-to-day support on technical and operational
issues in order to assist Midway in achieving high levels of availability
with their Fokker fleet. Aspects which will be covered by this service
include;
o Assistance in troubleshooting in-service defects and provision of
advice utilizing the fleetwide experience available to Fokker
Services;
o Development and written RLD-approval of deviations from approved
data when requested and technically feasible. This would include
assistance in the development of Alternate Means of Compliance
(AMOC's) to mandatory SB's, the provision of No Technical Objection
statements for alternative procedures, materials, and/or allowable
limits, and the design of repairs beyond the scope of those
published in the relevant manuals;
o Clarification of maintenance and operational procedures and
provision of advanced versions of such procedures when required to
safeguard operational availability;
o Investigating, in consultation with Midway, the feasibility of
possible product improvements required to improve the
cost/availability performance of the Fokker fleet;
Note : The actual development of a product improvement falls outside
the scope of this service and will be subject to a separate
agreement between Midway and Fokker on a case-by-case basis.
This service will be provided from the facilities of Fokker Services B.V. in the
Netherlands, although on-site assistance can also be arranged at Midway's
request.
For AOG-situations outside Amsterdam office hours, engineering and operational
support is still available via the Fokker Services Continuous Support Desk;
Phone: (international)x00.00.00.00000, Telefax: (international)x00.00.00.00000.
In addition to the [***] man-hours for the Continued Airworthiness Services
Agreement, Midway will receive [***] man-hours per Aircraft per year. With
the current fleet of 12 Aircraft, this results in a total of [***] man-hours
per year. Fokker will notify Midway in advance when support requested by
Midway hereunder is likely to exceed [***] man-hours of time and will obtain
Midway's specific authorization to proceed prior to commencing the services.
In case Midway does not use its yearly allotment for a specific year, Midway
is allowed to transfer all remaining man-hours to the following year up to a
maximum of [***] man-hours. Fokker will provide an overview of used man-hours
to Midway every two months.
However Midway will have for the period until June 30, 1997 a total of [***]
man-hours available as yearly allotment. All man-hours used by Midway before
December 19,1996 will be free of charge and are not considered to be part of
this remaining allotment.
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Continued Service Agreement - 7 - February 14, 1997
Midway Airlines Corp.
1.3.1. On-site assistance: If Midway requires to have Technical Support Services
or part thereof to be performed at a facility designated by Midway:
(1) all reasonable and customary additional costs and expenses connected with
assignment of Fokker's personnel such as reasonable and customary board
and lodging, daily subsistence, daily transportation and round trip air
transportation for Fokker's personnel in accordance with Fokker's company
regulations for staff travel shall be borne by Midway.
(2) Midway shall provide to Fokker's personnel suitable office facilities,
on-line communication (telephone, telex and facsimile) and other necessary
services (such as copying machine and nonexclusive secretarial
assistance), if required. The facilities and services as mentioned above,
and the use thereof, shall be made available at no cost to Fokker.
1.3.2, Field Service When requested by Midway, Fokker shall furnish field
service representative(s) to advise Midway on maintenance and operation of the
Aircraft. Such representative(s) shall act in an advisory capacity only and are
not employees or agents of Midway.
(1) Such assistance shall be provided at or near Midway's main maintenance
facility. The field service representative(s) will be assigned to Midway's
main base of operation or major designated line station for the period of
the contract on an exclusive basis. Further visits will take place on a
non-exclusive basis by Fokke's local residential representative. The costs
and period of the field service specialist(s) assistance period will be
mutually agreed upon between Midway and Fokker. The costs will be
separately invoiced from the flat fee per Aircraft.
(2) Midway shall furnish, at no additional charge to Fokker, suitable office
space, including office furniture, non-exclusive secretarial assistance,
provisions and assistance for installing computer systems and one (1)
telephone lines as well as one (1) telecopier line.
(3) In the event services are required from the representative away from
Midway's main maintenance or designated line station facilities, all
reasonable costs in connection therewith shall be borne by Midway.
(4) During each period of one (1) full year the field service
representative(s) is/are advising Midway hereunder, he/she together with
his/her direct family up to a total of four (4) family members, including
the representative will be permitted to make two (2) round flights between
Midway's main maintenance or designated line station facilities and
Xxxxxxxx Xxxxxxx, Xxxxxxxxx, Xxx Xxxxxxxxxxx. Airline tickets will be made
available by Midway at no additional costs to Fokker provided such field
representative gives Midway 45 days advance notice of his/her travel
dates, times and other reasonably necessary information.
All of the above provisions shall apply as appropriate for any location
where Midway determines field service representative(s) should be
stationed.
The cost for the use of communication equipment for (inter)national
transmissions shall be for the account of Midway.
1.3.3. Flight Operations Procedure Fokker will amend Midway's Aircraft Flight
Manual to incorporate a limitation change (reference F28 Mk0100 AFM subsection
2.08.01) from "Minimum height during non-precision approach: 500 Ft" to "Maximum
demonstrated height loss during non-precision approaches: 105 Ft."
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Continued Service Agreement - 8 - February 14, 1997
Midway Airlines Corp.
2. Material supply
Fokker will supply vendor as well as proprietary parts, tooling and other
ground support equipment, Fokker modifications kits, and Fokker structural
parts kits for damage repairs. Fokker's Component Repair & Overhaul
division offers complete repair and overhaul services for all structural
parts (e.g. ailerons, rudders, etc.), as well as Line Replaceable Units
(LRU's) for avionics, electronics, mechanical instruments and hydraulic
systems. A wide range of communications equipment, flight control
computers, flight augmentation systems, and fuel and hydraulic components
as well as flight data recorders and inertial navigation systems, can be
processed by this division.
Customized Material Support includes various other services such as:
- Material flighthour agreements;
- Lease service for insurance parts and loan tools.
2.1. Distribution Centers
Two key Spares Centers serve Fokker's material support and component
repair & overhaul services. Major Spares inventories for Fokker aircraft
are located at Schiphol Airport Amsterdam, the Netherlands and at
Xxxxxxxxxx Airport, Atlanta GA, USA for delivery within North America.
2.2. AOG/Critical orders
Fokker offers a 24-hours a day, seven days a week emergency spare parts
supply service to facilitate prompt delivery to AOG (Aircraft On Ground)
and Critical (imminent AOG or work stoppage) situations.
Customers are informed within four hours of action being taken on AOG's,
and within 24-hours on Critical Orders, in accordance with the World
Airline Suppliers Guide.
2.3. Communications
Please send all orders and inquiries for material support to:
Fokker Services Inc.
0000 Xxxxxxxxxx Xxxxxxx
Xxxxx 000,
Xxxxxxx, XX 00000
XXX
Phone x0.000.000.0000
Fax x0.000.000.0000
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Continued Service Agreement - 9 - February 14, 1997
Midway Airlines Corp.
2.4. Availability of major airframe Darts for damage repairs
During the term of this Agreement, Fokker will make available for Midway's
purchase suitable Spare Parts in quantities sufficient to meet Midway's
needs for normal repairs and spares inventory replacement for its Fokker
fleet.
Fuselage parts shall be covered in Fokker's stock. Fokker shall restock
skin-panels for the F100 Aircraft within 3 months following the execution
of this Agreement. Fokker's stock shall at all times contain the
structural insurance parts for continued worldwide coverage of damage
repairs.
Fokker will replenish the stock of insurance parts as required from time
to time, it being understood that nothing herein shall be construed in a
way as to restrict Fokker from selling insurance parts to other Fokker
operators so long as the stock of such parts is promptly replenished.
2.5. Sales
All sales of spare parts, component repair & overhaul services are subject
to the Letter Agreement LA-Midway-FS-0103.
3. Term
The term of this Agreement shall run for a period of 5 years, effective as
of July 1,1996, unless terminated by Midway upon ninety (90) day advance
written notice to Fokker.
4. Fees, Adjustments and Payments
4.1. Flat Fee Per Aircraft
The fee for technical support services, the provision of the maintenance and
operational documentation package, the provisioning of engineering and
operational support, the provision of material supply related services and
Midway's membership in the Continued Airworthiness Services Agreement shall
be [***] per year for each Fokker 100 aircraft (the "Flat Fee Per Aircraft")
operated by Midway during the term of this Agreement, subject to adjustment
and additional charges as provided in this Article 4. The Flat Fee Per
Aircraft is fixed without taking into account the yearly, hourly utilization
of the Aircraft. The Flat Fee per Aircraft shall be prorated for any Aircraft
by Midway for less than the yearly period July 1 -June 30 on the basis of
Midway's operation of such Aircraft during such period compared to 12 months.
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Continued Service Agreement - 10 - February 14, 1997
Midway Airlines Corp.
4.2. Adjustments to the Flat Fee Per Aircraft
4.2.1. Fleetsize adjustments The Flat Fee Per Aircraft is based upon Midway's
operation of a fleet of less than [***] Fokker 100 aircraft during
any year. Adjustments to the Flat Fee Per Aircraft shall thus be made as
follows:
(a) if Midway operators [***] or more Fokker 100 aircrafts
during the year, the Flat Fee Per Aircraft payable hereunder shall
be reduced to [***] for that year;
(b) If Midway operates [***] or more Fokker 100 aircraft
during the year, the Flat Fee Per Aircraft payable hereunder shall
be reduced to [***] for that year;
4.2.2 Yearly price escalation The above mentioned Flat Fee Per Aircraft
(1-1-1996 price level) is subject to a yearly escalation rate in an amount equal
to the yearly composite number for Metal- and electrical engineering as
published in `The Monthly Bulletin of Socioeconomic' from Statistics Netherlands
Voorburg/Heerlen and a maximum of three (3) percent per year. In November, the
Index rate to be used for the upcoming calendar year, will be specified. For
1997 the escalation rate will be 1.5%.
Engineering and documentation support above and beyond the yearly man-hour
allotment will be charged at a rate of [***].
4.3. Payments
Midway shall pay the Flat Fee Per Aircraft in arrears in monthly installments of
U$ 16,500 (sixteen thousand and five hundred dollars). All payments shall be
made in US Dollars. The payment schedule for the Customized Services Agreement
to Fokker Services Inc. will be as follows:
Before March l, 1997: [***]
(being the agreed upon fee for the first six
monthly payment of the Customized Services
Agreement: [***]
Per April 1, 1997, and
every Month thereafter
unto, January 1, 1998 [***]
and every Month thereafter
unto, including
July 1, 2001 [***] the yearly escalation
correction;
4.4. Reports
Midway shall report utilization data to Fokker every 3 (three) months period
during the term of this Agreement in a mutually agreed format and the same shall
be reported to Fokker within 30 days of the end of each preceding quarterly
period for such preceding quarterly period.
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Continued Service Agreement - 11 - February 14, 1997
Midway Airlines Corp.
IN WITNESS WHEREOF the parties have entered into this Agreement effective as of
the 1st day of July 1996 until June 30, 2001 unless otherwise agreed in writing.
Midway Airlines Corporation Fokker Services Inc.
By: /s/ X X Xxxxxx By: /s/ X. Xxxxxx
--------------------------- ---------------------------------
Title: SENIOR VICE PRESIDENT Title: President
GENERAL COUNSEL
Place: Durham, N.C. USA Place: Amsterdam
Date: February 18, 1997 Date: 25 March 1997
By: By: /s/ X.X. Xxxxx
--------------------------- ----------------------------------
Title: Title: Managing Director
-------------------------
Place: Place: Atlanta
-------------------------
Date: Date: March 14, 1997
--------------------------
---------------------------
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Continued Service Agreement - 12 - February 14, 1997
Midway Airlines Corp.
