Exhibit 10.5
* Confidential treatment has been requested for portions of this
exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as "*". A complete
version of this exhibit has been filed separately with the Securities and
Exchange Commission.
PW4168A ENGINE
MAINTENANCE SERVICE AGREEMENT
BETWEEN
TRANSPORTES AEREOS MERIDIONAIS S.A.
AND
UNITED TECHNOLOGIES INTERNATIONAL, INC.,
▇▇▇▇▇ & ▇▇▇▇▇▇▇ DIVISION
This document contains proprietary information of United Technologies
International, Inc., ▇▇▇▇▇ & Whitney Division ("▇▇▇▇▇ & ▇▇▇▇▇▇▇") and may not be
disclosed to other parties. The terms contained in this document are offered and
delivered on the express condition that this document not be disclosed or
reproduced in whole or in part without the express prior written consent of
▇▇▇▇▇ & Whitney. Neither receipt nor possession of this document alone, from any
source, constitutes such permission. Possession, use, copying or disclosure by
anyone without ▇▇▇▇▇ & Whitney's express prior written permission is not
authorized and may result in criminal and/or civil liability.
Table of Contents
PAGE
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TABLE OF CONTENTS
ARTICLE 1 - DEFINITIONS................................................. 2
ARTICLE 2 - DESCRIPTION OF SERVICES..................................... 4
ARTICLE 3 - REQUIREMENTS/SPECIFICATIONS................................. 4
ARTICLE 4 - MATERIAL SUPPORT............................................ 5
ARTICLE 5 - ENGINEERING SUPPORT/MAINTENANCE MANAGEMENT.................. 7
ARTICLE 6 - MAINTENANCE SERVICES........................................ 8
ARTICLE 7 - TURNAROUND TIMES............................................ 10
ARTICLE 8 - CHARGES FOR SERVICES........................................ 11
ARTICLE 9 - INVOICING AND PAYMENT....................................... 12
ARTICLE 10 - APPLICABLE TERMS AND CONDITIONS............................. 13
ARTICLE 11 - TITLE, DELIVERY, AND RISK OF LOSS........................... 13
ARTICLE 12 - INSPECTION.................................................. 14
ARTICLE 13 - WARRANTIES, REMEDIES, AND LIMITATIONS....................... 14
ARTICLE 14 - EXCUSABLE DELAYS............................................ 17
ARTICLE 15 - CHANGES/ASSIGNMENT.......................................... 18
ARTICLE 16 - TAXES....................................................... 19
ARTICLE 17 - COMPLIANCE WITH FAIR LABOR STANDARDS ACT.................... 19
ARTICLE 18 - MATERIAL DISPOSITION........................................ 19
ARTICLE 19 - LIABILITY LIMITATION........................................ 19
ARTICLE 20 - SELLER'S INSURANCE.......................................... 20
-i-
Table of Contents
(Continued)
PAGE
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ARTICLE 21 - TERM AND TERMINATION........................................ 20
ARTICLE 22 - APPLICABLE LAWS/CAPTIONS/ORDER OF PRECEDENCE................ 21
REFERENCES............................................................... II
LIST OF ATTACHMENTS
ATTACHMENT I - FIXED PRICES AND CHARGES FOR SERVICES
APPENDIX A - ▇▇▇▇▇ & WHITNEY MAINTENANCE WORK SPECIFICATIONS FOR TAM
APPENDIX B - PW4000 KIT AND BIN PARTS FIXED PRICE LISTING
ATTACHMENT II - ENGINE SHOP VISIT DATA REQUIREMENTS
REFERENCES
▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ STANDARD ENGINE WORKSCOPE
SPECIFICATION AND PREFACE - the then-current documents shall be on file at ▇▇▇▇▇
& Whitney and TAM for the period of this Agreement.
-ii-
September 14,2000
PW4168A ENGINE
MAINTENANCE SERVICE AGREEMENT
BETWEEN
TRANSPORTES AEREOS MERIDIONAIS S.A.
AND
UNITED TECHNOLOGIES INTERNATIONAL, INC.,
▇▇▇▇▇ & ▇▇▇▇▇▇▇ DIVISION
THIS AGREEMENT is made by and between TRANSPORTES AEREOS MERIDIONAIS S.A.
having an office and place of business at Sao Paulo, Brazil ("TAM"), and UNITED
TECHNOLOGIES INTERNATIONAL, INC., ▇▇▇▇▇ & ▇▇▇▇▇▇▇ Division, at Cheshire,
Connecticut ("▇▇▇▇▇ & Whitney"), a corporation organized and existing under the
laws of the Territory of Guam, having an office and place of business at East
Hartford, Connecticut, USA.
WITNESSETH:
WHEREAS, TAM desires to use ▇▇▇▇▇ & ▇▇▇▇▇▇▇ * to perform maintenance,
modification and/or overhaul of PW4168A engines, engine Modules, and the parts
and components thereof owned or operated by TAM; and
WHEREAS, ▇▇▇▇▇ & ▇▇▇▇▇▇▇ desires to perform required Maintenance Services
on such Equipment at its facilities or through qualified vendors or
Subcontractors of ▇▇▇▇▇ & Whitney, under the terms and conditions of this
Agreement.
NOW, THEREFORE, in consideration of these mutual covenants and the recitals
set forth above, the parties do hereby agree as follows.
▇▇▇▇▇ & ▇▇▇▇▇▇▇ Proprietary - Subject to the Restrictions on the Front Page
PW4168A Engine Maintenance Service Agreement between
Transportes Aereos Meridionais S.A. and
United Technologies International, Inc., (Continued) Page 2
ARTICLE 1 -- DEFINITIONS
1.1 "Delivered Duty Paid" or "DDP" shall have the meaning set forth in
Incoterms 2000. The party delivering goods hereunder shall have the
relevant obligations applicable under such term to a seller and the party
receiving goods hereunder shall have the relevant obligations applicable
under such term to a buyer.
1.2 "Engine Build-Up Unit" (("EBU") also referred to as Quick Engine Change
("QEC")) shall mean engine system related mounted hardware required to
interface the engine to a specific airframe. The following systems are
typically included in an EBU (also referred to as Quick Engine Change)
(QEC): Fuel, Hydraulic, Pneumatic, Fire Detection, Electrical, Integrated
Drive Generator System ("IDGS"), Cooling, Engine Control, Nacelle Drain and
Vent, Starter, Nacelle and Engine Instrumentation, Inlet Anti-Icing, Engine
Pressure Ratio, Engine Mounts and engine Vibration Monitoring.
1.3 "Equipment" shall mean PW4168A engines, and/or engine Modules, and/or parts
and/or components, and/or QEC/EBU thereof, owned or operated by TAM.
1.4 "Exchange Parts" shall mean TAM's parts or Modules which require repair
and/or modification in accordance with the applicable ▇▇▇▇▇ & ▇▇▇▇▇▇▇
Engine Manual and approved technical data, including the incorporation of
applicable Service Bulletins, and whose repair/modification turnaround time
is in excess of the allocated shop repair times and will be replaced with
Rotable Material Service ("RMS") Parts, at which time title for title
transfer shall occur, subject to certain exceptions explained in more
detail herein, such as Paragraph 4.1.2. If such TAM parts or Modules are
found unacceptable or declared scrap by ▇▇▇▇▇ & ▇▇▇▇▇▇▇, any replacement
parts or Modules supplied by TAM are also included under this definition.
1.5 "Ex Works" shall have the meaning set forth in Incoterms 2000. The party
delivering goods hereunder shall have the relevant obligations applicable
under such term to a seller and the party receiving goods hereunder shall
have the relevant obligations applicable under such term to a buyer.
1.6 "Focused Parts Repair Unit" shall mean an independent profit and loss
center within the United States operations of ▇▇▇▇▇ and ▇▇▇▇▇▇▇, exclusive
of foreign subsidiaries, responsible for the repair of designated groups of
engine parts.
1.7 "Maintenance Services" shall mean a workscope as applicable to the repair,
maintenance, modification, and/or overhaul of TAM's Equipment.
1.8 "Modules" shall mean the following major serialized portions of the
Equipment that, unless otherwise indicated herein, are originally sold by
▇▇▇▇▇ & ▇▇▇▇▇▇▇ as a data plated assembly:
▇▇▇▇▇ & Whitney Proprietary - Subject to the Restrictions on the Front Page
PW4168A Engine Maintenance Service Agreement between
Transportes Aereos Meridionais S.A. and
United Technologies International, Inc., (Continued) Page 3
Low Pressure Compressor ("LPC")
High Pressure Compressor ("HPC")
High Pressure Turbine ("HPT")
Low Pressure Turbine ("LPT")
Angle Gearbox ("AGB") (Not data plated for the PW4168A)
Main Gearbox ("MGB")
1.9 "Operating and Maintenance History" shall mean data relative to the
Equipment's modification level, total time, total cycles, time since
overhaul, time since shop repair, the date of removal and reason for
removal. (Reference Paragraph 3.3 and Attachment II).
1.10 "▇▇▇▇▇ & ▇▇▇▇▇▇▇" means the ▇▇▇▇▇ & Whitney Division of United Technologies
Corporation.
1.11 "Purchase Order" shall mean a document, issued by TAM pursuant to this
Agreement for Equipment sent to ▇▇▇▇▇ & ▇▇▇▇▇▇▇, that authorizes ▇▇▇▇▇ &
Whitney to perform Maintenance Services in accordance with this Agreement.
The Purchase Order shall state that it is subject to the terms of this
Agreement and shall be numbered, or otherwise identified, for purposes of
identification and billing. It may also contain a statement of, or
reference to, the applicable work specification, if not transmitted
separately, and should contain return delivery instructions.
1.12 "QEC" shall mean Quick Engine Change and similar engine mounted hardware
required to interface the engine to a specific airframe (also referred to
as EBU).
1.13 "RMS Parts" (Rotable Material Service Parts), shall mean those ▇▇▇▇▇ &
Whitney parts and Modules, which are compatible with TAM's Equipment and
are either new or serviceable in accordance with the applicable ▇▇▇▇▇ &
Whitney Engine Manual and/or approved technical data including the
incorporation of applicable Service Bulletins, which are exchanged for
TAM's Exchange Parts, at which time a title for title transfer shall occur,
subject to certain exceptions explained in more detail herein, such as
Paragraph 4.1.2.
1.14 "SMS Parts" shall mean used serviceable parts inventoried by ▇▇▇▇▇ &
Whitney for direct sale at less than new part price.
1.15 "Subcontractor" shall mean any entity which is approved by ▇▇▇▇▇ & ▇▇▇▇▇▇▇
to perform any work under this Agreement, including United Technologies
Corporation joint venture partners or subsidiaries and other ▇▇▇▇▇ &
Whitney entities outside of ▇▇▇▇▇ & ▇▇▇▇▇▇▇, but shall not include ▇▇▇▇▇ &
Whitney Focused Parts Repair Units.
1.16 "Type Certificate Holder" or "TCH" shall mean an entity holding a type
certificate issued under the authority of the United States Federal
Aviation Regulation, Part 21.
▇▇▇▇▇ & ▇▇▇▇▇▇▇ Proprietary - Subject to the Restrictions on the Front Page
PW4168A Engine Maintenance Service Agreement between
Transportes Aereos Meridionais S.A. and
United Technologies International, Inc., (Continued) Page 4
ARTICLE 2 - DESCRIPTION OF SERVICES
2.1 Except as otherwise stated herein, during the term hereof, TAM shall use
▇▇▇▇▇ & ▇▇▇▇▇▇▇, and only ▇▇▇▇▇ & Whitney, to perform Maintenance Services
for all Equipment owned or operated by TAM.
2.2 Upon receipt of TAM's Equipment and an acceptable Purchase Order issued
pursuant to this Agreement, ▇▇▇▇▇ & ▇▇▇▇▇▇▇ shall furnish required
Maintenance Services subject to the terms, conditions and charges set forth
herein.
2.3 TAM shall pay ▇▇▇▇▇ & ▇▇▇▇▇▇▇ for all Maintenance Services provided by
▇▇▇▇▇ & Whitney or its Subcontractors in accordance with the rates and
charges set forth in Attachment I.
ARTICLE 3 - REQUIREMENTS/SPECIFICATIONS
3.1 TAM shall maintain the Equipment in accordance with the requirements of the
applicable Airworthiness Regulatory Agency Production Approval Holders'
("PAH") instructions for continued airworthiness, engine and/or component
maintenance manuals, approved current technical data, service bulletins,
applicable Airworthiness Directives, and TAM's Continuous Airworthiness
Maintenance Plan ("Plan"). The Plan shall substantially conform to the PAH
data and include the ▇▇▇▇▇ & ▇▇▇▇▇▇▇ workscopes referenced herein. The Plan
shall be approved by all regulatory agencies with proper jurisdiction. In
addition, the Plan shall incorporate all Airworthiness Regulatory Agency
procedures/requirements then in effect and applicable to TAM. TAM shall
provide ▇▇▇▇▇ & ▇▇▇▇▇▇▇ with copies of its customized Powerplant Buildup
Manuals, Maintenance Manuals, wiring diagrams, and all revisions thereto to
assure that the Equipment's external configuration conforms to TAM's
requirements and specifications.
3.2 TAM shall provide to ▇▇▇▇▇ & ▇▇▇▇▇▇▇, before maintenance release and
shipment of the Equipment by ▇▇▇▇▇ & Whitney, written engineering authority
in accordance with governmental airworthiness regulations for continued use
of parts in TAM's engines, Modules and components that are found at
inspection or during repair to embody repairs or modifications authorized
previously under other than the Type Certificate Holder's ("TCH") technical
data. Parts containing such peculiar repair(s) will not be considered
candidates for exchange as provided in Article 4, Paragraph 4.1.2. TAM will
replace such parts with acceptable parts within thirty (30) days. In the
event TAM is unable to deliver an acceptable part within thirty (30) days,
▇▇▇▇▇ & ▇▇▇▇▇▇▇ will charge TAM for a replacement new or used serviceable
part in accordance with the pricing terms of this Agreement.
3.3 In order for ▇▇▇▇▇ & ▇▇▇▇▇▇▇ to process Equipment in accordance with the
time schedules set forth herein, TAM shall, within two (2) weeks prior to
shipping
▇▇▇▇▇ & ▇▇▇▇▇▇▇ Proprietary - Subject to the Restrictions on the Front Page
PW4168A Engine Maintenance Service Agreement between
Transportes Aereos Meridionais S.A. and
United Technologies International, Inc., (Continued) Page 5
Equipment for Maintenance Services hereunder, provide by facsimile, SITA or
other electronic communication, the applicable Operating and Maintenance
History in the format provided in Attachment II hereto. In addition, TAM
will provide to ▇▇▇▇▇ & ▇▇▇▇▇▇▇ a six (6) month nonbinding forecast of the
Equipment's scheduled maintenance and modification requirements and will
notify ▇▇▇▇▇ & Whitney monthly as to any known changes in the forecast.
3.4 TAM hereby warrants that, to the best of its knowledge and belief, unless
otherwise disclosed to ▇▇▇▇▇ & ▇▇▇▇▇▇▇ in writing, all Equipment delivered
for Maintenance Services, including Exchange Parts and TAM supplied parts:
(i) are of proper configuration, (ii) were produced in compliance with
applicable United States of America Federal Aviation Regulations ("FAR"),
including without limitation FAR 21.303, 21.305 and other applicable
production approval requirements, and (iii) have not been involved in an
accident, extreme environmental conditions, or other abnormal operating
conditions, exposed to abnormally high rotor speeds or turbine
temperatures, or otherwise operated outside the certification basis for the
type certificated product(s) on which they are eligible for installation as
prescribed in the TCH's Maintenance Manual or other approved technical
data. TAM further warrants that, to the best of its knowledge and belief,
there is no reason that such goods may not be repairable based upon the
TCH's approved technical data. With respect to goods delivered for
Maintenance Services, TAM warrants that, unless otherwise disclosed to
▇▇▇▇▇ & ▇▇▇▇▇▇▇ in writing, parts do not contain any prior repairs or
modifications not performed in full compliance with applicable regulatory
requirements. With respect to goods eligible for exchange, TAM warrants to
the best of its knowledge and belief, such goods do not contain any parts
not manufactured by the TCH or an authorized supplier thereof, nor any
repairs or modifications not based upon the TCH's approved technical data
and performed by a repair source approved by the United States Federal
Aviation Administration. TAM agrees to indemnify and save ▇▇▇▇▇ & ▇▇▇▇▇▇▇
harmless from any loss or damage but not any incidental or consequential
damage (including attorneys' fees) resulting to ▇▇▇▇▇ & Whitney from the
warranties made by TAM set forth herein being untrue in any respect.
ARTICLE 4 - MATERIAL SUPPORT
4.1 The material sources listed below shall be used to support Maintenance
Services for TAM's Equipment.
4.1.1 New Parts
New parts may be used to replace scrap, superseded and, in some
instances, long lead time repair/modification material subject to
charges specified in Attachment ▇.
▇▇▇▇▇ & ▇▇▇▇▇▇▇ Proprietary - Subject to the Restrictions on the Front Page
PW4168A Engine Maintenance Service Agreement between
Transportes Aereos Meridionais S.A. and
United Technologies International, Inc., (Continued) Page 6
4.1.2 ▇▇▇▇▇ & Whitney RMS Parts
When Rotable Material Service ("RMS") Parts are used, and Exchange
Parts are accepted by ▇▇▇▇▇ & ▇▇▇▇▇▇▇ as set forth below, title for
title exchanges result and TAM's repaired Equipment is returned to the
RMS inventory. TAM warrants that it will deliver good title to
Exchange Parts at time of Acceptance, as defined below.
If ▇▇▇▇▇ & ▇▇▇▇▇▇▇ determines (reasonably and in good faith) that
TAM's previously supplied Exchange Parts are unrepairable, it shall so
notify TAM and TAM shall, following TAM's receipt of such notice,
deliver Exchange Parts DDP ▇▇▇▇▇ & Whitney's facility, transportation
prepaid, not later than * after delivery by ▇▇▇▇▇ & Whitney of
corresponding RMS Parts. ▇▇▇▇▇ & ▇▇▇▇▇▇▇ reserves the right to impose
a service charge on Exchange Parts which are not delivered by TAM
within *. The service charge will be * of the current new part price
for each *, or portion thereof, beyond the * period allowed for
delivery of TAM supplied Exchange Parts. If there is no current new
part price for such Exchange Parts, ▇▇▇▇▇ & ▇▇▇▇▇▇▇ shall, in its sole
discretion, determine a price based on the current price of comparable
parts or the last listed price escalated to the current date.
Title to the Exchange Part vests, and risk of loss passes, only upon
Acceptance. Acceptance by ▇▇▇▇▇ & Whitney ("Acceptance") occurs at the
earlier of:
- notice by ▇▇▇▇▇ & ▇▇▇▇▇▇▇ to ▇▇▇ that it has approved the TAM
supplied or Exchange Part; or
- the expiration of the Inspection Period (the sixty (60) day
period following receipt of TAM's Exchange Parts), provided that
▇▇▇▇▇ & ▇▇▇▇▇▇▇ has not required a replacement part or scrapped
the part. Title to the Exchange Part vests, and risk of loss
passes, only upon Acceptance.
4.1.3 TAM Supplied Parts
▇▇▇▇▇ & Whitney's inventory will be the primary source for material
support; however, if TAM ships certain used serviceable parts to ▇▇▇▇▇
& Whitney for use in specific TAM Equipment or for retention in a
segregated support inventory, such parts must be accompanied by
appropriate serviceability documents (maintenance release as defined
by FAR 43) and in accordance with regulatory agency approved technical
data, or undergo ▇▇▇▇▇ & ▇▇▇▇▇▇▇ inspection at TAM's expense.
▇▇▇▇▇ & ▇▇▇▇▇▇▇ Proprietary - Subject to the Restrictions on the Front Page
PW4168A Engine Maintenance Service Agreement between
Transportes Aereos Meridionais S.A. and
United Technologies International, Inc., (Continued) Page 7
4.1.4 ▇▇▇▇▇ & Whitney SMS Parts
If available, SMS Parts will be used in the same manner as the new
parts described in Paragraph 4.1.1 above, unless TAM specifies in
writing to the contrary. SMS Parts are subject to the terms and
conditions hereof and charges set forth in Attachment I.
4.2 All TAM parts supplied to ▇▇▇▇▇ & ▇▇▇▇▇▇▇ under Paragraphs 4.1.2 or 4.1.3,
must be accompanied by (life limited) parts records, if applicable. In
addition, TAM shall provide maintenance records to ▇▇▇▇▇ & ▇▇▇▇▇▇▇ upon
request, confirming compliance with the requirements and specifications of
this Agreement.
4.3 Unless otherwise specified by TAM, ▇▇▇▇▇ & ▇▇▇▇▇▇▇ will install new or SMS
Parts to meet turnaround time when RMS or TAM parts are not available to
replace long lead-time repair/modification parts. TAM will pay the charges
associated with the installed parts and the charges for repair of the
original parts which shall, on completion, be placed in the TAM inventory
as described in Paragraph 4.1.3, above.
4.4 *
4.5 If TAM is unable to convey good title to Exchange Parts, or if Exchange
Parts or TAM supplied parts and records do not meet the requirements of
this Agreement, ▇▇▇▇▇ & ▇▇▇▇▇▇▇ shall, within sixty (60) days after receipt
thereof or notice of title defect, notify TAM of such condition. In the
event such notification and determination are made by ▇▇▇▇▇ & ▇▇▇▇▇▇▇, the
act of Acceptance, the passage of title and the transfer of risk of loss to
▇▇▇▇▇ & Whitney, as applicable, shall be deemed not to have occurred. In
such event, ▇▇▇▇▇ & ▇▇▇▇▇▇▇ shall have the right, at its option, to require
that TAM replace such Exchange Parts, with acceptable Exchange Parts, which
will be shipped by TAM within thirty (30) days of notification, or to
adjust the invoice as ▇▇▇▇▇ & ▇▇▇▇▇▇▇ determines necessary.
TAM will reimburse ▇▇▇▇▇ & ▇▇▇▇▇▇▇ for all labor costs associated with the
subject part, up until the date that ▇▇▇▇▇ & Whitney rejects the TAM
supplied or Exchange Part.
ARTICLE 5 - ENGINEERING SUPPORT/MAINTENANCE MANAGEMENT
5.1 As part of its engineering support and maintenance management services
under this Agreement, ▇▇▇▇▇ & ▇▇▇▇▇▇▇ shall:
5.1.1 Communicate with TAM regarding work in process or Equipment in
transit hereunder;
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PW4168A Engine Maintenance Service Agreement between
Transportes Aereos Meridionais S.A. and
United Technologies International, Inc., (Continued) Page 8
5.1.2 Provide specific operational/maintenance recommendations based on
data collected from Equipment received hereunder;
5.1.3 In coordination with TAM, determine applicable Service Bulletin
incorporation schedules with the objective of increasing Equipment
reliability, durability, and maintainability; and
5.1.4 Provide the documentation identified below:
5.1.4.1 A major damage or non-typical repair report including
technical conclusions as to the cause of such damage or repair
requirements;
5.1.4.2 A Major Repair and Alterations Form FAA-337;
5.1.4.3 Significant Historical Data (QEC and Component) Report;
5.1.4.4 A Major Parts Record Change List ("MARS") (engines and
Modules) within thirty (30) days of engine shipment;
5.1.4.5 Engine Test Logs (as applicable);
5.1.4.6 Airworthiness Directive Status;
5.1.4.7 Service Bulletin Compliance;
5.1.4.8 Status of Life Limited Parts; and
5.1.4.9 Maintenance Release, Form FAA 8130-3.
5.2 From time to time, upon request, ▇▇▇▇▇ & ▇▇▇▇▇▇▇ may, during the period of
the Agreement, dispatch to the site designated by TAM qualified personnel
to perform limited workscope maintenance, provided that material, tools,
and an appropriate work site are available. In certain instances, as shall
be established on a case-by-case basis, ▇▇▇▇▇ & ▇▇▇▇▇▇▇ will supply tools
and material. Services performed and/or ▇▇▇▇▇ & Whitney materials
incorporated on-site by ▇▇▇▇▇ & ▇▇▇▇▇▇▇ will be invoiced in accordance with
the rates and charges for on-site work appearing in Attachment I hereto.
ARTICLE 6 - MAINTENANCE SERVICES
6.1 When Equipment is shipped to ▇▇▇▇▇ & Whitney for maintenance hereunder, its
Operating and Maintenance History, as provided to ▇▇▇▇▇ & ▇▇▇▇▇▇▇ in
accordance
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PW4168A Engine Maintenance Service Agreement between
Transportes Aereos Meridionais S.A. and
United Technologies International, Inc., (Continued) Page 9
with Paragraph 3.3, will be considered in determining the Maintenance
Services to be performed subject to the specifications of Article 3.
6.2 ▇▇▇▇▇ & ▇▇▇▇▇▇▇ may, after reviewing the Equipment's actual condition and
history, seek TAM's written concurrence to modify the workscope. ▇▇▇▇▇ &
Whitney's review shall include, but not be limited to:
6.2.1 operating time since the last shop visit;
6.2.2 present parts condition;
6.2.3 the number of hours planned for the next shop visit interval or as
determined by life-limited parts;
6.2.4 any scheduled interval for engine Hot Section Inspection;
6.2.5 the review of recommended ▇▇▇▇▇ & ▇▇▇▇▇▇▇ Service Bulletins, as
defined in Article 5, Paragraph 5.1.3;
6.2.6 the instructions given on TAM's Purchase Orders and/or Work
Specifications;
6.2.7 the reason for an unscheduled removal or shop visit;
6.2.8 TAM supplied report of any accident/abnormal operational circumstance
involving the Equipment being inducted, (reference: ▇▇▇▇▇ & ▇▇▇▇▇▇▇
Overhaul Standard Practices Manual, P.N. 585005); and
6.2.9 Any regulatory requirements other than the United States FAA as
specified by TAM.
6.3 For the purpose of calculating the Basic Engine Labor man-hours described
in the PW4168A Engine Shop Visit Labor Guarantee Plan provided in the
PW4168A Propulsion System contract between ▇▇▇▇▇ & ▇▇▇▇▇▇▇ and ▇▇▇ dated
October 1, 1997 (the "PW4168A Contract"), ▇▇▇▇▇ &Whitney will provide the
number of Basic Engine Labor man-hours utilized to perform the Maintenance
Services on each of the final invoices.
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PW4168A Engine Maintenance Service Agreement between
Transportes Aereos Meridionais S.A. and
United Technologies International, Inc., (Continued) Page 10
ARTICLE 7 - TURNAROUND TIMES
7.1 Except as set forth in Article 14, ▇▇▇▇▇ & Whitney shall turnaround TAM's
Equipment within the following turnaround times:
Calendar Days
-------------
Hot Section Maintenance *
Gas Path Repair and Maintenance *
Heavy Maintenance *
The turnaround times for miscellaneous shop visits shall be established by
mutual agreement between TAM and ▇▇▇▇▇ & ▇▇▇▇▇▇▇.
7.2 Turnaround time shall commence on the date of induction, following receipt
by ▇▇▇▇▇ & Whitney of TAM's Equipment and a proper Purchase Order and/or
Work Specification which accurately defines the work to be accomplished.
Turnaround time shall end the day Equipment is ready for shipment Ex Works,
▇▇▇▇▇ & Whitney's designated facility. Turnaround times exclude published
▇▇▇▇▇ & Whitney holidays and scheduled plant shutdowns.
7.3 Turnaround times are based on ▇▇▇▇▇ & Whitney's discretionary use of the
inventories defined in Article 4 including a RMS High Pressure Compressor
("HPC") and Low Pressure Compressor ("LPC") Module and upon TAM's timely
compliance with ▇▇▇▇▇ & ▇▇▇▇▇▇▇ requests and recommendations. Any delays of
more than * due to TAM's response time or specific inventory requirements
will result in a commensurate extension to the turnaround time. In the
event of multiple, simultaneous receipts, ▇▇▇▇▇ & ▇▇▇▇▇▇▇ reserves the
right to stagger Equipment inductions by a maximum of * , in which case
turnaround time begins on the day of Equipment input into the shop.
7.4 In the event that (i) the engine turnaround times listed in Paragraph 7.1
are exceeded, and (ii) and such delay is solely attributable to ▇▇▇▇▇ &
Whitney, and (iii) all TAM's PW4168A engines are being overhauled at the
▇▇▇▇▇ & ▇▇▇▇▇▇▇ designated facility; then ▇▇▇▇▇ & Whitney shall provide a
remedy in accordance with the following provisions.
7.4.1 ▇▇▇▇▇ & ▇▇▇▇▇▇▇ shall (i) use commercially reasonable best efforts to
assist TAM in obtaining a ▇▇▇▇▇ & ▇▇▇▇▇▇▇ PW4168A lease engine; or
(ii) if no PW4168A lease engine is available from ▇▇▇▇▇ & Whitney,
then ▇▇▇▇▇ & ▇▇▇▇▇▇▇ will provide TAM with a credit that may only be
applied to invoices
▇▇▇▇▇ & ▇▇▇▇▇▇▇ Proprietary - Subject to the Restrictions on the Front Page
PW4168A Engine Maintenance Service Agreement between
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United Technologies International, Inc., (Continued) Page 11
issued by ▇▇▇▇▇ & Whitney to TAM under this Agreement in the amount of
* for each day the turnaround time is exceeded, provided that the
maximum amount credited hereunder for any shop visit shall be *
7.4.2 If ▇▇▇▇▇ & ▇▇▇▇▇▇▇ leases a PW4168A engine to TAM pursuant to Section
7.4.1, ▇▇▇▇▇ & ▇▇▇▇▇▇▇ will waive the daily lease fee for such engine.
Such waiver shall be deemed to be a credit subject to the caps
specified in Article 7.4.1. In this event, any hourly or cyclic usage
charges associated with such lease shall be the responsibility of, and
paid by, TAM. These usage charges will be competitive with the lease
market.
7.4.3 ▇▇▇▇▇ & Whitney's obligation to provide a ▇▇▇▇▇ & Whitney lease
engine is subject to the terms and conditions set forth in the General
Engine Lease Agreement dated February 10, 1999 by and between United
Technologies International and TAM. ▇▇▇▇▇ & Whitney's obligation to
provide a ▇▇▇▇▇ & Whitney lease engine shall commence on the date such
transaction is authorized by ▇▇▇▇▇ & ▇▇▇▇▇▇▇ and such lease engine is
delivered to TAM by ▇▇▇▇▇ & ▇▇▇▇▇▇▇ and shall terminate * following
the redelivery of a TAM PW4168A engine, Ex Works ▇▇▇▇▇ & Whitney's
Cheshire, Connecticut, facility. The maximum amount of daily lease
fees waived or credited by ▇▇▇▇▇ & Whitney pursuant to this Article 7
in respect of any shop visit shall be the same as the maximum amount
credited in respect of any shop visit pursuant to Section 7.4.1. [*
7.5 TAM's sole remedies, and ▇▇▇▇▇ & Whitney's maximum liability for the
inability of ▇▇▇▇▇ & Whitney to meet the specified turnaround times shall
be as stated in this Article 7.
ARTICLE 8 - CHARGES FOR SERVICES
8.1 ▇▇▇▇▇ & Whitney's prices for the term of this Agreement are set forth in
Attachment I hereto. These prices are subject to escalation as described in
Attachment I. For TAM's convenience of reference ▇▇▇▇▇ & ▇▇▇▇▇▇▇ will
provide TAM, on an annual basis, with a pricing letter indicating the
escalated price for the then-current calendar year.
8.2 Subject to the provisions of Articles 14 or 21 hereof, during the term of
this Agreement, should TAM obtain Maintenance Services from a facility
other than ▇▇▇▇▇ & ▇▇▇▇▇▇▇, without ▇▇▇▇▇ & Whitney's written consent, and
such action substantially contravenes the intent of Paragraphs 8.2.1 and
8.2.2 below, in addition to any other remedies available to ▇▇▇▇▇ &
Whitney, all work done during the term of this Agreement will be charged at
▇▇▇▇▇ & Whitney's standard rates and charges in effect at the time the
Maintenance Services were performed (including services previously billed
at the discounted rates and charges). TAM shall pay any required
adjustment.
▇▇▇▇▇ & ▇▇▇▇▇▇▇ Proprietary - Subject to the Restrictions on the Front Page
PW4168A Engine Maintenance Service Agreement between
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United Technologies International, Inc., (Continued) Page 12
▇▇▇▇▇ & Whitney, without ▇▇▇▇▇ & Whitney's prior written consent, and such
action substantially contravenes the intent of Paragraphs 8.2.1 and 8.2.2 below,
in addition to any other remedies available to ▇▇▇▇▇ & Whitney, all work done
during the term of this Agreement will be charged at ▇▇▇▇▇ & Whitney's standard
rates and charges in effect at the time the Maintenance Services were performed
(including services previously billed at the discounted rates and charges). TAM
shall pay any required adjustment.
8.2.1 Engines and Modules are the primary focus of this limited
exclusivity provision and must always be sent to ▇▇▇▇▇ & ▇▇▇▇▇▇▇
unless an exception is agreed to in writing by ▇▇▇▇▇ & Whitney or
the provisions of Articles 14 or 21 are applicable. Subject to the
provisions of Articles 14 and 21 hereof, sending an engine or
Module to another facility without ▇▇▇▇▇ & Whitney's express
written consent will invoke the pricing provisions of Paragraph
8.2. ▇▇▇▇▇ & Whitney Focused Repair Parts (those parts listed in
▇▇▇▇▇ & Whitney's then-current Part Repair Capability Index) are a
secondary focus and isolated instances of sending such parts to
another facility will not invoke the pricing adjustment provided
for in Paragraph 8.2; however, repeated actions will invoke the
pricing provisions of Paragraph 8.2. ▇▇▇▇▇ & Whitney reserves the
right to increase the number and type of Focused Repair Parts
during the term of this Agreement.
8.2.2 The parties acknowledge that this limited exclusivity is based on
performance substantially in accordance with this Agreement. For so
long as ▇▇▇▇▇ & Whitney's performance constitutes less than full
compliance, but not constituting material breach, and should TAM be
substantively and adversely impacted, the parties agree to meet and
discuss improvements which may result in specific work to be sent
to other sources provided that in the absence of such agreed upon
improvements, TAM may exercise the remedies available to it under
Article 14 hereof.
ARTICLE 9 - INVOICING AND PAYMENT
9.1 Invoices will usually be rendered within * following Equipment delivery
from ▇▇▇▇▇ & ▇▇▇▇▇▇▇. These invoices will normally be final for parts and
partial for engines and Modules.
Partial invoices will include the charges for work performed to date and
the estimated charges for residual work on Exchange Parts. *
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PW4168A Engine Maintenance Service Agreement between
Transportes Aereos Meridionais S.A. and
United Technologies International, Inc., (Continued) Page 13
9.2 In order to expedite the final invoice process, ▇▇▇▇▇ & ▇▇▇▇▇▇▇ shall have
the right to convert residual repair charges to a reasonable fixed price,
based upon historical experience or stated fixed prices. Such conversion of
residual repair charges shall be based upon the fixed price or the labor
rate in effect at the time of Equipment receipt and manufacturer's prices
in effect at the time of part assignment to the Equipment.
9.3 * All invoices shall be transmitted to TAM by facsimile or mutually agreed
means within * hours of invoice date. If payment is not received within *
days of invoice date, the invoice amount will be subject to interest at a
rate of * per month, accruing from the date of invoice until the date
payment is received. ▇▇▇▇▇ and ▇▇▇▇▇▇▇ may adjust this interest rate from
time to time based on customer's late payment practices, but shall not
charge more than the maximum rate of interest allowed by applicable law.
In the event TAM has a reasonable dispute on any portion of an invoice, TAM
will be required to pay the undisputed portion immediately, and interest on
the disputed portion only will be waived until the dispute is resolved.
9.4 Notwithstanding the payment terms set forth above, if ▇▇▇▇▇ & ▇▇▇▇▇▇▇
determines in good faith that TAM's financial condition has materially and
adversely deteriorated, ▇▇▇▇▇ & ▇▇▇▇▇▇▇ shall so notify TAM and shall have
the right to seek reasonable assurances from TAM with respect to payment
and, in the absence of ▇▇▇▇▇ & Whitney's receipt of such assurances as are
reasonably acceptable to ▇▇▇▇▇ & Whitney, ▇▇▇▇▇ & ▇▇▇▇▇▇▇ shall have the
right to specify reasonable alternative payment terms which shall, upon
▇▇▇▇▇ & Whitney giving written notice thereof to TAM, supersede the payment
terms herein specified while such adverse material financial condition
remains in effect with respect to TAM following which the original payment
terms shall be automatically reinstated.
ARTICLE 10 - APPLICABLE TERMS AND CONDITIONS
Only the terms and conditions of this Agreement shall apply. Printed terms or
conditions (other than those acknowledging or affirming application of this
Agreement) appearing on or attached to TAM Purchase Orders shall not apply.
ARTICLE 11 - TITLE, DELIVERY, AND RISK OF LOSS
11.1 TAM shall furnish proper and serviceable shipping stands or containers for
Equipment shipped to ▇▇▇▇▇ & ▇▇▇▇▇▇▇ for Maintenance Services under this
Agreement. ▇▇▇▇▇ & Whitney shall, upon completion of work, reinstall the
Equipment into TAM's stands or containers for reshipment. If any repairs
are necessary to make TAM's stands or containers useable for reshipment,
▇▇▇▇▇ & ▇▇▇▇▇▇▇ may perform them on a time and material basis.
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PW4168A Engine Maintenance Service Agreement between
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United Technologies International, Inc., (Continued) Page 14
11.2 The DDP point for Equipment shipped and delivered by TAM under this
Agreement shall be ▇▇▇▇▇ & Whitney's facilities or the facilities of ▇▇▇▇▇
& Whitney designated Subcontractors. Ex Works redelivery of Equipment by
▇▇▇▇▇ & ▇▇▇▇▇▇▇ shall be to an agent of TAM, including a common carrier,
flyaway, or warehouse as hereinafter provided. Thereafter, TAM shall have
all risk of loss for such Equipment, including parts incorporated therein
by ▇▇▇▇▇ & ▇▇▇▇▇▇▇. Wherever transportation rates and carrier's liability
for damage depend upon the value of the shipment as declared by shipper,
TAM shall specify in writing such value and pay the applicable
transportation rates. In the absence of such specifications, ▇▇▇▇▇ &
Whitney will declare such value as it determines as will entitle TAM to
have Equipment shipped at the lowest permissible transportation rates. TAM
will furnish written shipping instructions for all Equipment as promptly as
possible. In the absence of such instructions, ▇▇▇▇▇ & ▇▇▇▇▇▇▇ may, at any
time beginning ten (10) days after forwarding notice to TAM by mail or
otherwise that the Equipment is ready for shipment, do either of the
following for the account and at the expense and risk of TAM: arrange for
shipment of Equipment by a carrier of ▇▇▇▇▇ & Whitney's selection to TAM's
place of business or other destination reasonably believed to be suitable;
or warehouse the Equipment. TAM will not hold ▇▇▇▇▇ & ▇▇▇▇▇▇▇ liable for
loss or damage attributed to negligence, either in selection of the carrier
or the warehouse or in agreeing with either of them to contract terms on
TAM's behalf.
11.3 Equipment from TAM shall be shipped *. Equipment shipped by ▇▇▇▇▇ & ▇▇▇▇▇▇▇
to TAM shall be shipped *.
ARTICLE 12 - INSPECTION
If any Equipment appears to TAM not to have been serviced in accordance with
this Agreement, TAM shall, within * after receipt thereof, notify ▇▇▇▇▇ &
▇▇▇▇▇▇▇ of such condition and afford ▇▇▇▇▇ & Whitney a reasonable opportunity to
inspect the Equipment and make an appropriate adjustment or replacement which is
reasonably acceptable to TAM. The remedies afforded TAM under Article 13
entitled "Warranties, Remedies and Limitations" shall be exclusive for defects
discovered upon inspection. TAM shall not delay payment for repaired or Exchange
Parts pending such inspection.
ARTICLE 13 - WARRANTIES, REMEDIES, AND LIMITATIONS
13.1 Services
▇▇▇▇▇ & ▇▇▇▇▇▇▇ warrants to TAM that at the time of delivery of the
Equipment, the services hereunder will have been performed in a
▇▇▇▇▇▇▇-like manner. ▇▇▇▇▇ & Whitney's liability and TAM's remedy under
this warranty are limited to ▇▇▇▇▇ & ▇▇▇▇▇▇▇ correcting at its facility, or
at a facility of ▇▇▇▇▇ & Whitney's designation, such services as are shown
to ▇▇▇▇▇ & Whitney's reasonable satisfaction to have been defective,
provided that such Equipment has been preserved, protected and/or
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PW4168A Engine Maintenance Service Agreement between
Transportes Aereos Meridionais S.A. and
United Technologies International, Inc., (Continued) Page 15
operated in accordance with the applicable manuals and that TAM has
provided ▇▇▇▇▇ & ▇▇▇▇▇▇▇ with written notice of the defect:
(i) within * after first operation or use of the Equipment; or
(ii) within * after the date of delivery of such Equipment by ▇▇▇▇▇ &
Whitney, whichever shall first occur.
However, notwithstanding subparagraphs (i) and (ii) of this Article 13.1,
in the event TAM does not use or operate an item of Equipment within *
after the date of delivery of such Equipment by ▇▇▇▇▇ & ▇▇▇▇▇▇▇, and
provided such Equipment has been preserved and/or protected in accordance
with the applicable manuals, the provisions of this Article 13.1 shall
apply (subject to all the requirements and qualifications stated in this
Article 13.1) on the conditions that (a) TAM has provided ▇▇▇▇▇ & ▇▇▇▇▇▇▇
with written notice of the defect within * and (b) such Equipment is
operated or used no later than * ▇▇▇▇▇ & Whitney expressly disclaims
responsibility for the technical integrity/reliability of repairs and
modifications previously or subsequently performed to data other than the
TCH's technical data, or performed by a non-▇▇▇▇▇ & ▇▇▇▇▇▇▇ approved source
or for the special requirements related thereto. In addition, ▇▇▇▇▇ &
Whitney disclaims all responsibility for loss or damage related to such
repairs or modifications. This clause is not intended to disclaim
responsibility for work performed by ▇▇▇▇▇ & ▇▇▇▇▇▇▇ or one of its selected
vendors which are still under an applicable warranty.
13.2 Parts
The warranties and remedies for parts incorporated under this Agreement
shall be as set forth below:
13.2.1 Defects
▇▇▇▇▇ & Whitney warrants to TAM that at the time of delivery of the
overhauled or repaired Equipment, any ▇▇▇▇▇ & ▇▇▇▇▇▇▇ provided parts
(including parts provided to TAM under this Agreement by ▇▇▇▇▇ &
Whitney through a ▇▇▇▇▇ & ▇▇▇▇▇▇▇ vendor or subcontractor) will be
free from defects in material and manufacture and will conform
substantially to ▇▇▇▇▇ & Whitney's applicable specifications as
stipulated in Article 3. ▇▇▇▇▇ & Whitney's liability and TAM's remedy
under this warranty are limited to the repair or replacement, at ▇▇▇▇▇
& Whitney's election, of ▇▇▇▇▇ & ▇▇▇▇▇▇▇ provided parts or components
returned to ▇▇▇▇▇ & Whitney which are shown to ▇▇▇▇▇ & Whitney's
reasonable satisfaction to have been defective; provided
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PW4168A Engine Maintenance Service Agreement between
Transportes Aereos Meridionais S.A. and
United Technologies International, Inc., (Continued) Page 16
that such Equipment has been preserved, protected, and/or operated in
accordance with the applicable manuals and that TAM has provided ▇▇▇▇▇
& Whitney with written notice of the defect ▇▇▇▇▇ & ▇▇▇▇▇▇▇ within *
after first operation or use of the Equipment; or within * after the
date of delivery of such Equipment by ▇▇▇▇▇ & Whitney, whichever shall
first occur.
13.2.2 Title
▇▇▇▇▇ & ▇▇▇▇▇▇▇ warrants to TAM that it conveys good title to parts
sold hereunder. ▇▇▇▇▇ & Whitney's liability and TAM's remedy under
this warranty are limited to the removal of any title defect or, at
the election of ▇▇▇▇▇ & ▇▇▇▇▇▇▇, to the replacement of the parts or
components thereof which are defective in title; provided, however,
that the rights and remedies of the parties with respect to patent
infringement shall be limited to the provisions of Paragraph 13.2.3,
below.
13.2.3 Patent Infringement
▇▇▇▇▇ & Whitney represents and warrants to TAM that all parts
provided under or pursuant to this Agreement shall not infringe any
patent or patent right of any person or entity, provided that in the
event of any such infringement, or any breach of this representation
and warranty, TAM's exclusive remedy and ▇▇▇▇▇ & Whitney's sole
liability shall be that contained in this Section 13.2.3. ▇▇▇▇▇ &
Whitney shall defend, indemnify and hold TAM harmless from any and all
claims, suits or actions and all damages, losses, costs, expenses,
settlements or judgments from or relating to any assertion that any
parts provided pursuant to this Agreement infringes any patent or
patent claim of any person or entity, subject to the conditions stated
in this Section 13.2.3. ▇▇▇▇▇ & ▇▇▇▇▇▇▇ shall have the right to
conduct, at its own expense, the entire defense of any claim, suit or
action alleging that, without further combination, the use or resale
by TAM or any subsequent purchaser or user of the parts delivered
hereunder directly infringes any United States patent, but only on the
conditions that (1) ▇▇▇▇▇ & ▇▇▇▇▇▇▇ receives prompt written notice of
such claim, suit or action and full opportunity and authority to
assume the sole defense thereof, including settlement and appeals, and
all information available to TAM for such defense; (2) said parts are
made according to a specification or design furnished by ▇▇▇▇▇ &
Whitney or any other unit of United Technologies Corporation or, if a
process patent is involved, the process performed with such parts is
recommended in writing by ▇▇▇▇▇ & ▇▇▇▇▇▇▇; and (3) the claim, suit or
action is brought against TAM. Provided all of the foregoing
conditions have been met, ▇▇▇▇▇ & ▇▇▇▇▇▇▇ shall, at its own expense,
either settle said claim, suit or action or shall pay all damages,
excluding indirect, incidental or consequential damages, and costs
awarded by the court therein. If the use or resale of such parts by
TAM is temporarily or permanently enjoined, ▇▇▇▇▇ & ▇▇▇▇▇▇▇ shall, at
▇▇▇▇▇ & Whitney's option, (i) procure for defendant the right to use
or resell the parts, (ii) replace them
▇▇▇▇▇ & ▇▇▇▇▇▇▇ Proprietary - Subject to the Restrictions on the Front Page
PW4168A Engine Maintenance Service Agreement between
Transportes Aereos Meridionais S.A. and
United Technologies International, Inc., (Continued) Page 17
with equivalent noninfringing parts, or (iii) modify them so they
become noninfringing but equivalent. If a claim, suit or action is
based on a design or specification furnished by TAM or on the
performance of a process not recommended in writing by ▇▇▇▇▇ &
Whitney, or on the use or sale of the parts delivered hereunder in
combination with other parts not delivered to TAM by ▇▇▇▇▇ & ▇▇▇▇▇▇▇,
▇▇▇ shall defend, indemnify, and hold ▇▇▇▇▇ & Whitney and United
Technologies Corporation harmless from any and all claims, suits or
actions and all costs, expenses, damages, losses, settlements or
judgments arising from or relating thereto on the same terms and basis
and to the same extent that ▇▇▇▇▇ & ▇▇▇▇▇▇▇ would defend, indemnify
and hold TAM harmless from such claims, suits and actions involving
▇▇▇▇▇ & ▇▇▇▇▇▇▇ parts pursuant to the foregoing provisions of this
Section 13.2.3. Either party shall have the right to bring a legal
proceeding against the other to enforce its rights under this Section
13.2.3.
13.3 Transportation charges for the return of defectively serviced Equipment to
▇▇▇▇▇ & Whitney and its reshipment to TAM and risk of loss during
transportation will be borne by TAM. ▇▇▇▇▇ & ▇▇▇▇▇▇▇ shall reimburse TAM
for all reasonable round trip freight costs Ex Works ▇▇▇▇▇ & ▇▇▇▇▇▇▇ for
all parts or Equipment found by ▇▇▇▇▇ & Whitney to be defective.
13.4 EXCLUSIVE WARRANTIES AND REMEDIES- THE FOREGOING WARRANTIES ARE EXCLUSIVE
AND ARE GIVEN AND ACCEPTED IN LIEU OF (i) ANY AND ALL OTHER WARRANTIES,
EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, THE IMPLIED WARRANTIES
OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE; AND (ii) ANY
OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY IN CONTRACT, TORT OR STRICT
LIABILITY AGAINST ▇▇▇▇▇ & ▇▇▇▇▇▇▇ OR UNITED TECHNOLOGIES CORPORATION,
WHETHER OR NOT ARISING FROM THE NEGLIGENCE, ACTUAL OR IMPUTED, OF ▇▇▇▇▇ &
WHITNEY OR UNITED TECHNOLOGIES CORPORATION. ▇▇▇▇▇ & ▇▇▇▇▇▇▇ DOES NOT
WARRANT ANY PARTS, WHETHER SUPPLIED BY TAM OR NOT, THAT WERE NOT ORIGINALLY
SOLD BY ▇▇▇▇▇ & ▇▇▇▇▇▇▇. THE REMEDIES OF TAM SHALL BE LIMITED TO THOSE
PROVIDED HEREIN TO THE EXCLUSION OF ANY AND ALL OTHER REMEDIES INCLUDING,
WITHOUT LIMITATION, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES. NO
AGREEMENT VARYING OR EXTENDING THE FOREGOING WARRANTIES, REMEDIES OR THIS
LIMITATION WILL BE BINDING UPON ▇▇▇▇▇ & ▇▇▇▇▇▇▇ UNLESS IN WRITING, SIGNED
BY A DULY AUTHORIZED OFFICER OF ▇▇▇▇▇ & WHITNEY.
ARTICLE 14 - EXCUSABLE DELAYS
TAM acknowledges that the turnaround times set forth in Article 7 are provided
on the condition that there will be no delay due to causes beyond the reasonable
control of ▇▇▇▇▇ &
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PW4168A Engine Maintenance Service Agreement between
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United Technologies International, Inc., (Continued) Page 18
Whitney. ▇▇▇▇▇ & ▇▇▇▇▇▇▇ shall not be charged with any liability for delay or
nondelivery when due to delays of suppliers, acts of God or the public enemy,
compliance in good faith with any applicable foreign or domestic governmental
regulation or order, whether or not it proves to be invalid, fires, riots, labor
disputes, unusually severe weather or any other cause beyond the reasonable
control of ▇▇▇▇▇ & Whitney (delays resulting from the foregoing causes are
hereinafter referred to collectively as "Excusable Delays"). To the extent that
such Excusable Delays actually delay deliveries on the part of ▇▇▇▇▇ & ▇▇▇▇▇▇▇,
the time for the performance shall be extended for as many days beyond the
delivery date as is required to obtain removal of the causes of such Excusable
Delays,
*
ARTICLE 15 - CHANGES/ASSIGNMENT
15.1 No modification of this Agreement shall be binding unless agreed to in
writing and signed by authorized representatives of both TAM and ▇▇▇▇▇ &
Whitney. Unless TAM expressly provides to the contrary in writing ▇▇▇▇▇ &
Whitney may, within forty-eight (48) hours notice to TAM, proceed with all
work necessary to repair, overhaul or modify the Equipment furnished by
TAM, notwithstanding that TAM's Purchase Order(s) may, through error or
oversight, (1) erroneously identify the Equipment to be serviced, or (2)
fail to specify all service work necessary in ▇▇▇▇▇ & Whitney's opinion
which is required to put the Equipment in usable condition.
15.2 Neither party may assign or delegate this Agreement nor any interest herein
unless both Parties agree in writing to such assignment or delegation,
except that ▇▇▇▇▇ & Whitney may assign or delegate, without recourse to
▇▇▇▇▇ & ▇▇▇▇▇▇▇ or United Technologies Corporation, its interest, rights
and obligations in this Agreement to any subsidiary or affiliate succeeding
in interest to the commercial engine overhaul, component repair, leasing,
part supply or tool support business of United Technologies Corporation, or
in connection with the merger, consolidation, reorganization or voluntary
sale or transfer of its assets and except that TAM may assign its rights
hereunder to any affiliate or subsidiary of TAM (provided TAM remains
obligated hereunder) or in connection with any merger, consolidation,
reorganization or voluntary sale or transfer of TAM's assets (provided TAM
and the transferee remain or become obligated hereunder).
▇▇▇▇▇ & ▇▇▇▇▇▇▇ Proprietary - Subject to the Restrictions on the Front Page
PW4168A Engine Maintenance Service Agreement between
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United Technologies International, Inc., (Continued) Page 19
ARTICLE 16 - TAXES
In addition to the price for Equipment processed hereunder, TAM shall pay ▇▇▇▇▇
& ▇▇▇▇▇▇▇ for any and all taxes (not including any income or excess profit
taxes) which may be imposed by any taxing authority, arising from the sale,
delivery or use of ▇▇▇▇▇ & Whitney's products and for which ▇▇▇▇▇ & ▇▇▇▇▇▇▇ may
be held responsible for collection or payment, either on its own behalf or that
of TAM. TAM shall be responsible for any and all interest and penalties relating
to nonpayment or late payment of taxes due in any jurisdiction which interest
and penalties arise from TAM's failure to pay such taxes when due after
notification thereof by ▇▇▇▇▇ & ▇▇▇▇▇▇▇ to ▇▇▇.
ARTICLE 17 - COMPLIANCE WITH FAIR LABOR STANDARDS ACT
▇▇▇▇▇ & Whitney hereby certifies that all services performed and all parts
produced or manufactured in the United States of America and used in overhaul or
repair work hereunder are performed, produced or manufactured, as the case may
be, in compliance with the Fair Labor Standards Act of 1938, as amended (29
United States Code 201-219). All requirements as to the certificate contemplated
in the October 26, 1949, amendment to the Fair Labor Standards Act of 1938 shall
be considered satisfied by this certification.
ARTICLE 18 - MATERIAL DISPOSITION
18.1 Unless TAM has notified ▇▇▇▇▇ & ▇▇▇▇▇▇▇ to the contrary, Equipment or parts
thereof received from TAM, which in the opinion of ▇▇▇▇▇ & ▇▇▇▇▇▇▇ have no
value other than as scrap because they cannot be repaired to a serviceable
condition, will be disposed of by ▇▇▇▇▇ & Whitney, and no accountability or
liability for such parts will be imposed on ▇▇▇▇▇ & ▇▇▇▇▇▇▇ by ▇▇▇. ▇▇▇▇▇ &
Whitney agrees, however, to return to TAM, at TAM's expense, parts which
are either scrap, superseded or uneconomical to repair if so indicated on
the face of TAM's Purchase Order or supplement thereto.
18.2 Parts for which there are currently no repair procedures and which, in the
opinion of ▇▇▇▇▇ & ▇▇▇▇▇▇▇/Cheshire Engineering, have potential to be
repaired to a serviceable condition sometime in the future, will be
returned to TAM at TAM's expense.
ARTICLE 19 - LIABILITY LIMITATION
The price allocable under this Agreement to any product or service alleged to be
the cause, or in any way arising from or related to the cause, of any loss or
damage to TAM shall be the ceiling limit on ▇▇▇▇▇ & Whitney's liability to TAM
arising under this Agreement, whether
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PW4168A Engine Maintenance Service Agreement between
Transportes Aereos Meridionais S.A. and
United Technologies International, Inc., (Continued) Page 20
founded in contract, tort (including negligence) or strict liability, arising
out of or resulting from (i) this Agreement or the performance or breach
thereof, (ii) the design, manufacture, delivery, sale, overhaul, repair, or
replacement of any Equipment, or (iii) the use of any such product or the
furnishing of any such service. In no event shall ▇▇▇▇▇ & Whitney have any
liability to TAM for any indirect, incidental or consequential damages. The
foregoing provisions of this Article 19 limit ▇▇▇▇▇ and Whitney's liability to
TAM arising under this Agreement but shall not in any manner apply to or limit
▇▇▇▇▇ & Whitney's liability to TAM arising under any other agreement between TAM
and ▇▇▇▇▇ & ▇▇▇▇▇▇▇ and shall not in any manner apply to or limit ▇▇▇▇▇ &
Whitney's liability to any third party.
ARTICLE 20 - SELLER'S INSURANCE
Except as otherwise set forth herein, ▇▇▇▇▇ & ▇▇▇▇▇▇▇ agrees that TAM's
Equipment will, while in the care, custody and control of ▇▇▇▇▇ & ▇▇▇▇▇▇▇, be
adequately protected from loss, damage or destruction under the terms of ▇▇▇▇▇ &
Whitney's insurance. Such protection will commence upon Equipment receipt by
▇▇▇▇▇ & ▇▇▇▇▇▇▇ or by Subcontractors of ▇▇▇▇▇ & Whitney, DDP ▇▇▇▇▇ & Whitney's
Connecticut facilities or the facilities of ▇▇▇▇▇ & Whitney's Subcontractors,
and will remain until Equipment is redelivered to TAM, Ex Works ▇▇▇▇▇ &
Whitney's Connecticut facilities or the facilities of ▇▇▇▇▇ & Whitney's
Subcontractor.
ARTICLE 21 - TERM AND TERMINATION
21.1 This Agreement shall become effective on the date of its acceptance by TAM
and remain in effect for ten (10) consecutive years thereafter. Any
renewal, as may be requested by TAM, and agreed to by ▇▇▇▇▇ & ▇▇▇▇▇▇▇, will
be subject to the terms, conditions and price schedule then in effect at
▇▇▇▇▇ & Whitney.
21.2 If (A) either party fails to perform any of its material obligations under
this Agreement in any material respect and the non-defaulting party
notifies the defaulting party of such failure and the defaulting party
fails to cure the specified nonperformance under this Agreement within
ninety (90) days after the date of its receipt of such notice, or (B)
either party fails to pay the other party any amount due hereunder and the
non-defaulting party notifies the defaulting party of such failure and the
defaulting party fails to cure the specified nonperformance under this
Agreement within ninety (90) days after the date of its receipt of such
notice, or (C) a receiver or trustee is appointed for any of a party's
property, or a party is adjudicated as bankrupt under the United States
Bankruptcy Code or other applicable bankruptcy laws of any jurisdiction, or
an application for reorganization under the Bankruptcy Code or other
applicable bankruptcy laws of any jurisdiction is filed by or against a
party which shall not be dismissed within sixty (60) days, or if a party
becomes insolvent or makes an assignment for the benefit of creditors, or
takes or attempts to take the benefit of any insolvency acts, or an
execution is issued pursuant to a judgment rendered against such party, the
non-defaulting party may, at its option, in any of such events, immediately
terminate this Agreement by written notice to the
▇▇▇▇▇ & ▇▇▇▇▇▇▇ Proprietary - Subject to the Restrictions on the Front Page
PW4168A Engine Maintenance Service Agreement between
Transportes Aereos Meridionais S.A. and
United Technologies International, Inc., (Continued) Page 21
defaulting party, provided that the non-defaulting party delivers such
notice of termination before the defaulting party has cured the specified
nonperformance. The parties agree that continuous delays by TAM in making
the payments by TAM due under this Agreement to ▇▇▇▇▇ & ▇▇▇▇▇▇▇ within the
time specified in Paragraph 9.3 above shall be cause for termination of
this Agreement. In the event of any of the foregoing failures or act of
bankruptcy or similar act described in clauses (A), (B) or (C) of this
Section 21.2, the non-defaulting party shall have all remedies provided by
law in addition to the remedies provided hereunder. The defaulting party
shall reimburse the non-defaulting party for all costs and expenses in
connection with the non-defaulting party's exercise of any remedies under
or terminating this Agreement including any cost and expense of TAM, if TAM
is the non-defaulting party, of obtaining substitute performance for ▇▇▇▇▇
& Whitney's obligations hereunder. If permitted by applicable law, if ▇▇▇▇▇
& Whitney is the non-defaulting party, ▇▇▇▇▇ & ▇▇▇▇▇▇▇ shall, upon not less
than thirty (30) days prior written notice to TAM, be entitled to sell, in
a commercially reasonable manner, any Equipment in ▇▇▇▇▇ & Whitney's
possession or control to satisfy any obligation of TAM for services
rendered or parts provided by ▇▇▇▇▇ & ▇▇▇▇▇▇▇ to ▇▇▇ under this Agreement.
ARTICLE 22 - APPLICABLE LAWS/CAPTIONS/ORDER OF PRECEDENCE
22.1 This Agreement shall be interpreted in accordance with, and the
construction thereof shall be governed by, the laws of the State of
Connecticut, USA without reference to choice of laws provisions, excluding
the United Nations Convention on Contracts for the International Sale of
Goods. Captions as used in these terms and conditions are for convenience
of reference only and shall not be deemed or construed as in any way
limiting or extending the language of the provisions to which such captions
may refer.
22.2 TAM and ▇▇▇▇▇ & ▇▇▇▇▇▇▇ agree to the exclusive jurisdiction of the courts
of general jurisdiction of the State of Connecticut and the United States
District Court for the District of Connecticut for purposes of any suit or
other proceeding arising out of this Agreement and agree not to commence
any suit or proceeding relating hereto except in such courts. If TAM or
▇▇▇▇▇ & ▇▇▇▇▇▇▇ or any of its property is entitled to any immunity from
legal action on the grounds of sovereignty or otherwise, TAM and ▇▇▇▇▇ &
Whitney hereby waive and agree not to plead such immunity in any legal
action arising out of this Agreement or any purchase order hereunder.
22.3 In the event that any conflicts or inconsistencies exist between the
provisions of this Agreement, the applicable Engine and Engine Parts
Service Policy or the attachments hereto or any Purchase Order, the
provisions of this Agreement shall govern.
22.4 This Agreement does not change or modify any special programs or guarantees
which may be in effect between United Technologies Corporation, or its
subsidiaries, and TAM.
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PW4168A Engine Maintenance Service Agreement between
Transportes Aereos Meridionais S.A. and
United Technologies International, Inc., (Continued) Page 22
22.5 This Agreement and the Attachments referred to herein contain the entire
understanding between the parties with respect to the subject matter hereof
and shall supersede all previous communications, representations and
agreements, either oral or written, between the parties hereto with respect
to the subject matter hereof.
22.6 ▇▇▇▇▇ & Whitney shall notify TAM in the event that the pricing provided for
under Attachment I, Section 1.a. of this Agreement, as determined by ▇▇▇▇▇
& Whitney at three year intervals during the term of this Agreement, is [*]
or more of the then current pricing provided by ▇▇▇▇▇ & ▇▇▇▇▇▇▇ to its
customers (1) of substantially similar fleet size; (2) for substantially
similar products and services; and (3) under an exclusive agreement of
substantially similar size, scope and duration. For purposes of this
provision, customers shall not include foreign or domestic government
entities or entities in which United Technologies International, Inc.
and/or United Technologies Corporation have an ownership interest. After
notification, ▇▇▇▇▇ & Whitney and TAM will discuss such pricing under this
Agreement in good faith to reach a reasonable adjustment in such pricing
for the remaining term of this Agreement in order that such pricing shall
be competitive with ▇▇▇▇▇ & Whitney's pricing to its customers identified
above. ▇▇▇▇▇ & Whitney's records shall remain proprietary and confidential
to ▇▇▇▇▇ & ▇▇▇▇▇▇▇ and shall not be subject to access or review by TAM.
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PW4168A Engine Maintenance Service Agreement between
Transportes Aereos Meridionais S.A. and
United Technologies International, Inc., (Continued) Page 23
IN WITNESS WHEREOF, the parties hereto have hereunto caused their names to
be set hereto and to a duplicate this ________________ day of September 2000.
Witness: TRANSPORTES AEREOS MERIDIONAIS S.A.
By: /s/
------------------------------------- ------------------------------------
Typed Name:
Title:
------------------------------------- ---------------------------------
By: /s/
------------------------------------
Typed Name:
Title:
---------------------------------
UNITED TECHNOLOGIES INTERNATIONAL, INC.
Witness: ▇▇▇▇▇ & Whitney Division
By: /s/
------------------------------------
Typed Name:
Title:
---------------------------------
/s/ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------------- ------------------------------------
Typed Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Senior Vice President - The
Americas
/s/
-------------------------------------
(STAMP)
(SEAL)
OIVAN ODALVO BOARO JR
ESCREVENTE AUTORIZADO
(STAMP)
(SEAL)
OIVAN ODALVO BOARO JR
ESCREVENTE AUTORIZADO
▇▇▇▇▇ & ▇▇▇▇▇▇▇ Proprietary - Subject to the Restrictions on the Front Page
August 20, 2000
ATTACHMENT I
FIXED PRICES AND CHARGES FOR SERVICES
The following fixed prices for basic labor, fixed price workscopes, and engine
test will be charged for PW4168A engines (100 inch fan) engines received during
the term of the Agreement.
- The fixed prices listed for Hot Section Maintenance, Heavy
Maintenance, Gas Path Repair and Maintenance, and Test and other fixed
price workscopes will be escalated in accordance with the procedure
defined in Section 6 of this Attachment I.
- Kit and Bin prices are subject to escalation from January 1, 1999.
These fixed prices will be escalated the same percentage as the
increase in ▇▇▇▇▇ & Whitney spare parts prices over the same period.
Charges for nuts, bolts, washers, packings, gaskets, and similar parts that are
details of a part assembly are not included in the Kit & Bin fixed prices listed
below and will be invoiced as applicable. It should be noted that the part
number for such a part might be the same as a Kit & Bin part used in the final
assembly of engines, modules and major engine assemblies/build groups listed
below. However, the consumption of these parts used in the subassembly process
have not been included in the prices listed below.
1. Fixed Prices
a. Fixed Prices For Basic Labor and Kit & Bin Materials Associated with
Hot Section Maintenance, Heavy Maintenance, Gas Path Repair and
Maintenance, and Test
The fixed prices listed in Section 1 include all work as described,
which is necessary to accomplish the maintenance action required for
the Equipment in accordance with the terms of this Agreement, except
as otherwise stated, regardless of the condition of the Equipment,
excluding engines that have been involved in an accident, extreme
environmental conditions, or other abnormal operating conditions, and
those subjected to occurrences not associated with ordinary use, such
as, but not limited to, acts of war, rebellion, seizure, military,
paramilitary, or other belligerent acts. There are no other charges
for basic labor, except as stated. Kit items are replaced on a 100
percent basis while Bin items are replaced as necessary. There are no
other
▇▇▇▇▇ & ▇▇▇▇▇▇▇ Proprietary - Subject to the Restrictions on the Front Page
Attachment I Fixed Prices and Charges for Services (Continued) Page 2
charges for Kit and Bin parts in this Section 1, except for a Material
Handling Charge which will be applied to Kit and Bin parts per Section
2 of this Attachment.
(i) Hot Section Maintenance
Engine and QEC basic labor, material handling charges, RMS fees,
vendor fees, Kit and Bin, and engine test required to perform the
hot section maintenance workscope defined in attached Appendix A.
Year 1 - 5* Year 6 - 10*
----------- ------------
Fixed Price $304,100 $292,200
* Measured from the effective date of this Agreement.
(ii) Gas Path Repair And Maintenance Workscope
Engine and QEC basic labor, material handling charges, RMS fees,
vendor fees, Kit & Bin and engine test required to perform the
gas path repair and maintenance workscope defined in attached
Appendix A.
Year 1 - 5* Year 6 - 10*
----------- ------------
Fixed Price $659,800 $626,700
* Measured from the effective date of this Agreement.
(iii) Heavy Maintenance Workscope
Engine and QEC basic labor, material handling charges, RMS fees,
vendor fees, Kit & Bin and engine test required to perform the
heavy maintenance workscope defined in attached Appendix A.
Year 1 - 5* Year 6 - 10*
----------- ------------
Fixed Price $741,100 $693,700
* Measured from the effective date of this Agreement.
NOTE: Workscopes for engines will be defined at the time of induction,
and fixed price in accordance with Section 1., Paragraphs A(i),
A(ii), or A(iii). If it is determined, subsequent to teardown,
that
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Attachment I Fixed Prices and Charges for Services (Continued) Page 3
additional work is required, ▇▇▇▇▇ & ▇▇▇▇▇▇▇ will notify TAM)
accordingly, and then TAM will be invoiced for the appropriate
fixed price, plus incremental costs (for such additional work) in
accordance with the rates and charges listed in Section 2 of this
Attachment I.
(iv) Module Basic Labor Associated with Heavy Maintenance
Low Pressure Compressor
Labor required to disassemble the low pressure compressor, clean,
non-destructive test, visually and dimensionally inspect detail
parts and subassemblies as applicable, dimensionally inspect for
blade tip clearance, dynamic balance, reassemble the compressor,
and final inspect. Minor blending is included where required.
Labor $16,870.00 Kit & Bin $1,403.00
High Pressure Compressor
Labor required to disassemble the high pressure compressor,
clean, non-destructive test, visually and dimensionally inspect
removed details and subassemblies as applicable, dynamic balance,
dimensionally inspect for blade tip clearance, reassemble the
compressor module, and final inspect. Minor blending is included
where required.
Labor $38,506.00 Kit & Bin $23,399.00
High Pressure Turbine
Labor required to disassemble the high pressure turbine, clean,
non-destructive test, visually and dimensionally inspect removed
details and subassemblies as applicable, static balance each disk
and blade assembly, dynamic balance HPT rotor assembly,
disassemble case and duct assembly, inspect and reassemble,
reassemble the turbine module, and final inspect. Minor blending
is included where required.
Labor $14,928.00 Kit & Bin $8,335.00
Low Pressure Turbine
Labor required to disassemble the low pressure turbine to remove
disk and blade assemblies and nozzle guide vanes, clean,
non-destructive test, visually
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Attachment I Fixed Prices and Charges for Services (Continued) Page 4
and dimensionally inspect removed details and subassemblies as
applicable, balance rotating parts, reassemble and dynamic
balance LPT module, install shaft and airseal, dynamic balance
assembly, and final inspect. Minor blending is included where
required.
Labor $27,551.00 Kit & Bin $11,850.00
Turbine Exhaust Case
Labor required to disassemble the exhaust case assembly to remove
detail parts as necessary, clean (to include drain hole
reoperation and detail removal), non-destructive test, visually
and dimensionally inspect removed details, reassemble the case,
prepare for reinstallation, and final inspect.
Labor $3,277.00 Kit & Bin $992.00
Diffuser/Combustor
Labor required to disassemble the diffuser case section,
including the removal of the outer combustion chamber and fuel
nozzle and support assemblies, clean, non-destructive test,
visually and dimensionally inspect details, reassemble for
reinstallation on the engine. (Does not include fuel nozzle and
support assembly inspection/rework.)
Labor $12,257.00 Kit & Bin $5,786.00
1st Turbine Nozzle Group
Labor required to disassemble the first stage turbine nozzle
group including the inner combustion chamber, first stage turbine
NGV's, cooling duct (TOBI), plates and support, clean,
non-destructive test, visually and dimensionally inspect details
as applicable, reassemble, final inspect, and prepare for
reinstallation on the engine. Minor blending is included where
required.
Labor $6,189.00 Kit & Bin $629.00
Main Accessory Gearbox
Labor required to disassemble, clean, non-destructive test,
visually and dimensionally inspect details, reassemble, final
inspect, and prepare for engine reinstallation.
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Attachment I Fixed Prices and Charges for Services (Continued) Page 5
Labor $6,763.00 Kit & Bin $548.00
Angle Gearbox
Labor required to disassemble, clean, non-destructive test, visually and
dimensionally inspect details, reassemble, final inspect, and prepare for
engine reinstallation.
Labor $2,399.00 Kit & Bin $356.00
Fan Cases
Labor required to disassemble fan cases as necessary to visually and
dimensionally inspect, disassemble 2.5 bleed assembly, local NDT as
required, reassemble, and final inspect. Minor blending is included where
required.
Labor $8,070.00 Kit & Bin $1,322.00
Intermediate Case Assembly
Labor required to disassemble the intermediate case to remove detail parts
as necessary, clean, non-destructive test, visually and dimensionally
inspect removed details and subassemblies as applicable, reassemble for
reinstallation onto the engine, and final inspect. Minor blending is
included where required.
Labor $8,616.00 Kit & Bin $454.00
(v) Engine Test Applicable To Shop Visits Not Covered By Fixed Priced
Workscopes (Reference A(l) Through A(3)
Test Cell Charge
Includes labor for the test cell operator, fuel, and oil. Two (2) hours of
labor for troubleshooting and repair in conjunction with shop visit
services are also included.
Labor, Fuel and Oil.. $10,311.00
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Attachment I Fixed Prices and Charges for Services (Continued) Page 6
Preparation and Check After Test
Labor required to prepare and dress engine for test, strip and checks
after test, and prepare engine for shipment.
Labor................ $7,833.00
Any labor and/or testing expended for troubleshooting and
rectification of components or parts not normally repaired or checked
during the performance of a hot section inspection or engine repair
workscope will be over and above the test fixed price and will be
charged on a time and material basis.
(vi) QEC
Labor required to remove QEC as required for engine repair.
Clean, inspect, reinstall, and final inspect QEC on the engine.
Minor blending is included as required.
Labor $23,515.00 Kit & Bin See Appendix B
b. Fixed Prices For Repair Of Parts
(i) Fixed prices for Focused Repair Parts will be charged for certain
parts repaired by ▇▇▇▇▇ & ▇▇▇▇▇▇▇ and ▇▇▇▇▇ & ▇▇▇▇▇▇▇ may
increase the number of such fixed price repairs during this
Agreement. When ▇▇▇▇▇ & Whitney has established a fixed price for
parts listed in its then-current Part Repair Capability Index,
that will be deemed to be the fixed price except when ▇▇▇▇▇ &
Whitney's Cheshire facility has negotiated a lower price with a
Focused Parts Repair Unit.
(ii) ▇▇▇▇▇ & Whitney's Cheshire facility has determined that the fixed
prices charged by ▇▇▇▇▇ & Whitney's Focused Parts Repair Units
are competitive within the industry and, on the whole, the use of
these fixed prices provide an advantage to TAM. Unlike vendor
repairs, no subcontractor fees shall be applied to these charges.
(iii) If after receipt and payment of an invoice, TAM believes that
one or more such fixed prices are not competitive, TAM may take
the following actions for subsequent engines, Modules, or parts,
where the applicable part is not already in the repair cycle.
TAM will provide to ▇▇▇▇▇ & ▇▇▇▇▇▇▇ a valid quotation for the
repair, which quotation shall be addressed to ▇▇▇▇▇ & Whitney for
the part or parts to be repaired. The quoted workscope must be
the same as the
▇▇▇▇▇ & ▇▇▇▇▇▇▇ Proprietary - Subject to the Restrictions on the Front Page
Attachment I Fixed Prices and Charges for Services (Continued) Page 7
▇▇▇▇▇ & Whitney workscope. The quote must be from an FAA approved
source which is a ▇▇▇▇▇ & ▇▇▇▇▇▇▇ qualified source, if required
for the particular repair process, and the source must be
approved by ▇▇▇▇▇ & Whitney. If the source is not approved by
▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇▇ or the repair source must agree to pay for
all ▇▇▇▇▇ & Whitney charges to qualify the shop, if ▇▇▇▇▇ &
Whitney determines that it is willing to qualify the shop; ▇▇▇▇▇
& Whitney shall have no affirmative obligation to qualify any
shop. ▇▇▇▇▇ & ▇▇▇▇▇▇▇ will evaluate the quotation, including
turnaround time and quality requirements. If the turnaround time
and quality are substantially equivalent to ▇▇▇▇▇ & Whitney's and
the net price (repair price plus subcontractor fee) is lower than
the ▇▇▇▇▇ & ▇▇▇▇▇▇▇ fixed price, ▇▇▇▇▇ & Whitney shall either
match the net price or subcontract the work. TAM shall not refuse
to pay any invoice for work accomplished while TAM seeks any
competitive quotations described herein.
Charges for work over and above the fixed price work statements set forth
in this Attachment I, Section 1 will be invoiced in accordance with the
rates and charges appearing in Section 2 hereof.
2. Standard Pricing Schedule
Except as provided in Section 1 above, the pricing schedule is presented
below.
The labor rate in Paragraph a below will be adjusted annually as described
in Section 6 below.
▇. ▇▇▇▇▇ & ▇▇▇▇▇▇▇ Labor Rate
For all labor performed and not covered
by fixed prices.......................... $69.00 Per Hour
The labor rate for work not covered by fixed prices will be applied to
"hands on" labor hours performed by personnel actually engaged in the
direct performance of work required. "Hands on" labor shall not
include any labor performed by support or supervisory type personnel,
such as, but not limited to: timekeepers, payroll clerks, purchasing,
material handling, storing and issuing personnel and truck drivers.
b. Material Prices - New Parts
New parts, except Kit and Bin for engines and Modules, will be charged
at the then-current manufacturer's list price. Kit and Bin parts for
complete engine and Module reconditioning will be charged on a fixed
price basis in accordance with Section 1 to this Attachment I. Kit and
Bin parts for
▇▇▇▇▇ & Whitney Proprietary - Subject to the Restrictions on the Front Page
Attachment I Fixed Prices and Charges for Services (Continued) Page 8
miscellaneous workscopes will be charged on a fixed price basis in
accordance with Appendix B to this Attachment I.
c. Material Prices - Used Serviceable Parts
Used serviceable material sold under the Serviceable Material Sales
(SMS) Program shall be priced as follows:
(i) Life limited parts will be provided on a pro rata cycle remaining
basis.
Example:
SMS Part Remaining Life Then - Current
------------------------------ X
P & W Engine Manual Life Limit Manufacturer's List Price
(ii) All other parts will be provided at eighty percent (80%) of the
then- current manufacturer's new part list price.
d. Material Handling Charges
Material handling charges will be applied to ▇▇▇▇▇ & ▇▇▇▇▇▇▇ furnished
new or serviceable parts, including Kit and Bin fixed prices, and
customer furnished parts required to accomplish maintenance hereunder.
These charges are expressed below as a percentage of the applicable
part price up to the maximum part or extended line item prices.
(i) ▇▇▇▇▇ & Whitney furnished
Any part with an extended line item
value of $74,078.00 and under...... 15.0 Percent
Any part with an extended line item
value of $74,078.01 and over....... $ 11,112.00
(ii) Customer furnished
Any part with an extended line item
value of $74,078.00 and under...... 10.0 Percent
Any part with an extended line item
value of $74,078.01 and over....... $ 7,408.00
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Attachment I Fixed Prices and Charges for Services (Continued) Page 9
These extended line item values will be adjusted annually relative to
the & ▇▇▇▇▇ & Whitney Commercial Parts Support (CPS) prices. The
adjustment will be based on the percent change in the announced ▇▇▇▇▇
& Whitney spare parts prices for the effective year of the adjustment.
3. Exchange Material
Material exchanged under the RMS Parts (Rotable Material Service) program
will be charged a fee equal to seven percent (7%) of the then-current
manufacturer's list price of a new part or its superseding equivalent and
either the actual repair charge or, at the discretion of ▇▇▇▇▇ & ▇▇▇▇▇▇▇,
an estimated repair price based on returning the part to a condition and
configuration equivalent to that provided by ▇▇▇▇▇ & Whitney.
Adjustments for warranty benefits and any differential residual value for
life limited parts as designated by the manufacturer will also be provided.
Example:
( Removed Part ) (Installed Part)
Credit (Remaining Life) - (Remaining Life) Then-Current
= ----------------------------------- X
or Debit P & W Engine Manual Life Limit Manufacturer's List Price
4. Subcontract Charges
For any individual part subcontracted to a vendor, the charge shall be the
actual vendor submitted invoice plus a fifteen percent (15%) fee, which
includes transportation and packaging costs.
5. Rates And Charges For On-Site Work
The daily and hourly rates for each ▇▇▇▇▇ & ▇▇▇▇▇▇▇ employee engaged in the
performance of on-site work will be escalated in accordance with the
procedure defined in Section 6 of this Attachment I and are as follows:
Each
Minimum Rate Additional Hour
------------ ---------------
Regular Workday (8 Hours) $742.00 $107.00
Saturdays (4-Hour Minimum) $428.00 $107.00
Sundays (4-Hour Minimum) S483.00 $121.00
▇▇▇▇▇ & Whitney Proprietary - Subject to the Restrictions on the Front Page
Attachment I Fixed Prices and Charges for Services (Continued) Page 10
The above rates are predicated upon a portal-to-portal basis and apply to
days or portions of days spent in transit. Subsistence costs (meals, hotel
and ground transportation when applicable), as well as air fare charges,
shall be in addition to the on-site rates presented above and charged to
TAM at ▇▇▇▇▇ & Whitney's actual cost.
Tools, when available, shall, upon request, be provided by ▇▇▇▇▇ & Whitney
for ▇▇▇▇▇ & Whitney's use in the performance of on-site work. Charges to
TAM for tools, when used by ▇▇▇▇▇ & ▇▇▇▇▇▇▇ personnel, shall be limited to
transportation, insurance, packaging costs and any customs fees.
RMS Parts which may be required by TAM at its maintenance facility shall,
pending prior commitments, be delivered by ▇▇▇▇▇ & ▇▇▇▇▇▇▇ upon request,
subject to the terms and conditions of the Agreement and the charges for
such exchange set forth in this Attachment I.
6. Escalation Of The Fixed Price Workscopes, Basic Labor Fixed Prices, Labor
Rate, Test Charges and On-Site Charges
The charges described above will be adjusted annually for periods after
December 31, 1999.
- Fixed prices for basic labor for heavy maintenance, heavy
maintenance, hot section maintenance, gas path repair and
maintenance, engine test, Module maintenance, and QEC maintenance
- ▇▇▇▇▇ & Whitney Labor Rate
- On-Site
These rates and charges will be escalated as described in Section 7 below
to reflect changes in the ▇▇▇▇▇ & ▇▇▇▇▇▇▇ Composite Price Index described
below.
a. Composite Price Index Description
The Composite Price Index (CPI) is the sum of 60 percent of the Labor
Ratio, 30 percent of the Material Ratio and 10 percent of the Energy
Ratio, with that sum rounded to the nearest ten-thousandth.
CPI = 0.60(L) + 0.30(M) + 0.10(E)
Where:
L = Labor Ratio defined below
M = Material Ratio defined below
▇▇▇▇▇ & Whitney Proprietary - Subject to the Restrictions on the Front Page
Attachment I Fixed Prices and Charges for Services (Continued) Page 11
E = Energy Ratio defined below
The Labor Ratio is the "Hourly Earnings of Aircraft Engines and Engine
Parts Production Workers, Standard Industrial Code (SIC) 3724",
published by the Bureau of Labor Statistics, United States Department
of Labor (for the applicable period of calculation) divided by the
value of Standard Industrial Code (SIC) 3724 for the base month of
December 1991, which is set at Sixteen Dollars and Four Cents
($16.04), rounded to the nearest ten-thousandth.
The Material Ratio is the "Producer Price Indexes Code 10, Metals and
Metal Products", published by the Bureau of Labor Statistics, United
States Department of Labor (for the applicable period of calculation),
divided by the value for Metals and Metal Products for the base month
of December 1991, which is set at 118.7, rounded to the nearest
ten-thousandth.
The Energy Ratio is the "Producer Price Indexes Code 05, Fuels and
Related Products and Power", published by the Bureau of Labor
Statistics, United States Department of Labor (for the applicable
period of calculation) divided by the value for Fuels and Related
Products and Power for the base month of December 1991, which is set
at 79.1, rounded to the nearest ten-thousandth.
7. Rates and Charges Escalation
For each annual period beginning January 1, 2000 the escalation factor to
be applied to the rates and charges (RC) listed in Attachment I will be the
ratio of the CPI for each annual calculation period to the CPI for the base
month.
The CPI for the annual calculation period is the arithmetical average of
the CPI values published for each of the calendar months. The CPI for the
base month is the value of CPI for January 1999. The rates and charges will
be escalated using the escalation formula provided below for the annual
period in which the plan begins and for each applicable annual period
thereafter.
( CPI(a) )
RC(e) = RC ( ------ )
( CPI(b) )
Where:
RC(e) = Escalated 1999 rates and charges listed in
Attachment I (January 1999 dollars)
CPI(a) = CPI for the Calculation Period
▇▇▇▇▇ & ▇▇▇▇▇▇▇ Proprietary - Subject to the Restrictions on the Front Page
Attachment I Fixed Prices and Charges for Services (Continued) Page 12
CPI(b) = CPI for Base Month
In no event shall the applicable escalation rates and charges
escalation process result in a reduction of the rates and charges
expressed in Attachment I, as updated annually.
The final monthly indexes reported by the United States Department of
Labor are published five (5) months after the applicable month's end,
therefore, the actual average index for each annual period cannot be
calculated until five (5) months subsequent to the end of each period.
An estimated calculation will be utilized to escalate the base period
RC for invoicing purposes. As soon as the final published indexes are
available, a final calculation will be performed for each annual
period of the Agreement, and an invoice will be issued to adjust the
invoices which utilized the estimated rates.
ALL RATES, CHARGES, AND PRICES ARE EXPRESSED IN UNITED STATES DOLLARS
▇▇▇▇▇ & ▇▇▇▇▇▇▇ Proprietary - Subject to the Restrictions on the Front Page
August 20, 2000
ATTACHMENT I, APPENDIX A
MAINTENANCE WORKSCOPES FOR TAM
Reference: ▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Standard Engine
Workscope Specification
HEAVY HOT
SECTION GAS PATH MAINT SECTION
----------------------------------- -------- ------- ---------
1.0 ENGINE GENERAL L/H(l.l) L/H(l.l) L/H(l.l)
2.0 LOW PRESSURE COMPRESSOR (LPC) GRP L(2.1.2) H(2.2) L/H(2.1.1)
3.0 TURBINE COUPLING GROUP L(3.1.2) H(3.2) L(3.1.1)
4.0 FAN CASE GROUP L(4.1.1) H(4.2) L(4.1.1)
5.0 INTERMEDIATE CASE GROUP L(5.1.2) H(5.2) L(5.1.1)
6.0 HIGH PRESSURE COMPRESSOR (HPC) GRP GP(6.1.3) H(6.2) L(6.1.1)
7.0 DIFFUSER AND COMBUSTOR GROUP L(7.1.3) H(7.2) L(7.1.2)
8.0 TURBINE NOZZLE GROUP L(8.1.2) H(8.2) H(8.2)
9.0 HIGH PRESSURE TURBINE (HPT) GROUP H(9.2) H(9.2) H(9.2)
10.0 LOW PRESSURE TURBINE (LPT) GROUP L(10.1.2) H(10.2) L(10.1.2)
11.0 TURBINE EXHAUST CASE (TEC) GROUP L(ll.l.l) H(11.2) L(ll.l.l)
12.0 MAIN GEARBOX ASSEMBLY L(12.1.1) H(12.2) L(12.1.1)
13.0 ANGLE GEARBOX ASSEMBLY L(13.1) H(13.2) L(13.1)
L = Light Maintenance
H = Heavy Maintenance
GP = Gas Path Repair and Maintenance
Abbreviations listed above are included in the referenced paragraphs of the then
current referenced workscope specification documents, which shall be on file at
▇▇▇▇▇ & Whitney and TAM for the period of this Agreement.
▇▇▇▇▇ & ▇▇▇▇▇▇▇ Proprietary - Subject to the Restrictions on the Front Page
August 20, 2000
ATTACHMENT I, APPENDIX B
PW4000
KIT AND BIN PARTS
FIXED PRICE LISTING
With the exception of engine model conversions, the following fixed prices will
be charged for Kit & Bin parts used to reassemble PW4168A engines (100 Inch Fan)
and modules effective January 1, 1999. These fixed prices will be escalated the
same percent as the increase in ▇▇▇▇▇ & Whitney spare parts prices when the
Commercial Parts Support Price List price increases occur. For the purpose of
this Appendix 1, Kit & Bin parts shall mean those parts such as O'rings,
gaskets, packings, seals, nuts, bolts, washers and external clips and clamps
required for reassembly. Prices are based on average consumption and include
minor modifications. Engine model conversions will be charged on a part by part
basis.
Charges for nuts, bolts, washers, packings, gaskets, and similar parts that are
details of a part assembly are not included in the Kit & Bin fixed prices listed
below and will be invoiced as applicable. It should be noted that the part
number for such a part might be the same as a Kit & Bin part used in the final
assembly of engines, modules and major engine assemblies/build groups listed
below. However, the consumption of these parts used in the subassembly process
have not been included in the prices listed below.
Modules Kit & Bin Parts Fixed Price
------- ---------------------------
Low Pressure Compressor (LPC) $ 1,403.00
High Pressure Compressor (HPC) $23,399.00
High Pressure Turbine (HPT) $ 8,335.00
Low Pressure Turbine (LPT) $11,850.00
Gearboxes (Main) $ 548.00
Gearboxes (Angle) $ 356.00
Non-Modular Subassembly
Assemble Intermediate Case package $ 454.00
Assemble Diffuser/Burner. Assemble and
install Fuel Nozzle and Support Assemblies.
Install ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇. ▇ Bearing
and No. 3 Bearing Front Seal Assembly $ 5,786.00
▇▇▇▇▇ & ▇▇▇▇▇▇▇ Proprietary - Subject to the Restrictions on the Front Page
Attachment I, Appendix B PW4000
Kit and Bin Parts Fixed Price Listing(Continued) Page 2
Assemble First Stage Turbine Nozzle Guide Vanes
and Support Assembly $ 629.00
Assemble Fan Case Package $ 1,322.00
Assemble Turbine Exhaust Case and install
Number 4 Bearing $ 992.00
Assemble Intermediate Case to Fan Case pkg. $ 1,549.00
Assemble Intermediate Case and Fourth Stage
Stator to HPC $ 1,362.00
Assemble HPC, and Number 3 Rear Seal Assembly
to the Diffuser Case. Install Bellcrank $ 2,984.00
Assemble First Stage Turbine Nozzle Guide
Vane package to Diffuser Case $ 46.00
Assemble HPT to First Stage Turbine Nozzle
Guide Vane package $ 467.00
Assemble Turbine Exhaust Case to LPT $ 246.00
Assemble LPT to LPC Shaft $ 1,142.00
Engine Final Assembly
Install LPC, Number 1, 1.5 and 2 Main Bearings
and Fan Blades. Install external plumbing, hardware
and oil tank. Assemble and install accessories.
Replace Kit & Bin, as required, after engine test. $ 7,769.00
Total Kit & Bin for Complete Engine Overhaul $70,639.00
OEC Installation
During Cold Section visit requiring removal
of the HPC $ 7,114.00
During Hot Section Maintenance $ 910.00
ALL PRICES ARE EXPRESSED IN UNITED STATES DOLLARS
▇▇▇▇▇ & Whitney Proprietary - Subject to the Restrictions on the Front Page
August 20, 2000
ATTACHMENT II
PW4168A ENGINE MAINTENANCE SERVICE AGREEMENT
ENGINE SHOP VISIT DATA REQUIREMENTS
A. BASIC ENGINE DATA
1. Serial Number ________________________________________________________
2. Model ________________________________________________________________
3. TAM/Owner ____________________________________________________________
4. Installation Arrangement No. _________________________________________
5. Shipped Configuration _________________________ Bare/
_________________________ QEC/ _________________________ Partial QEC
B. REMOVAL DATA
1. Reason for Removal ___________________________________________________
______________________________________________________________________
2. Removal Date _________________________________________________________
3. Troubleshooting/Maintenance Actions Performed, (If
available/Applicable): _______________________________________________
______________________________________________________________________
______________________________________________________________________
4. Inflight Trend Data (If available/Applicable): _______________________
______________________________________________________________________
______________________________________________________________________
▇▇▇▇▇ & ▇▇▇▇▇▇▇ Proprietary - Subject to the Restrictions on the Front Page
Attachment II PW4168A Engine Maintenance Service
Agreement Engine Shop Visit Data Requirements (Continued) Page 2
C. TIME/CYCLE DATA
TT/▇▇ ▇▇▇/CSO TSLV/CSLV
----- ------- ---------
1. Engine _____ _____ _____
2. LPC _____ _____ _____
3. HPC _____ _____ _____
4. HPT _____ _____ _____
5. LPT _____ _____ _____
6. AGB _____ _____ _____
7. MGB _____ _____ _____
KEY TO ABBREVIATIONS
LPC = Low Pressure Compressor LPT = Low Pressure Turbine
HPC = High Pressure Compressor AGB = Angle Gearbox
HPT = High Pressure Turbine MGB = Main Gearbox
TT/TC = Total Time (Hours)/Total Cycles
TSO/CSO = Time Since Overhaul/Cycles Since Overhaul
TSLV/CSLV = Time Since Last Visit/Cycles Since Last Visit
D. MAINTENANCE DATA/MODIFICATION STATUS
1. Date/Location of Last Shop Visit _____________________________________
2. Last Shop Visit Workscope Summary ____________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
▇▇▇▇▇ & ▇▇▇▇▇▇▇ Proprietary - Subject to the Restrictions on the Front Page
Attachment II PW4168A Engine Maintenance Service
Agreement Engine Shop Visit Data Requirements (Continued) Page 3
3. Current Airworthiness Directive (AD)/Alert Service Bulletin Compliance
Status:
____________________ ____________________ ____________________
____________________ ____________________ ____________________
4. Known Disk Changeout Requirements: ___________________________________
______________________________________________________________________
______________________________________________________________________
5. Life Limited Parts and/or Industry Item List (Attached)
6. List of Modifications Previously Incorporated (Attached)
E. SHOP VISIT REQUIREMENTS
1. Basic Workscope ______________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
2. Modification Requirements to include Mandatory Modifications _________
______________________________________________________________________
3. Special Checks/Inspections/Test Requirements _________________________
______________________________________________________________________
______________________________________________________________________
4. Engine Oil Requirement _______________________________________________
5. Minimum Module Life Remaining Requirements
(Disk & Airseal Minimum Hour and Cycle Remaining):
HOURS CYCLES
----- ------
LPC _______________ _______________
HPC
▇▇▇▇▇ & Whitney Proprietary - Subject to the Restrictions on the Front Page
Attachment II PW4168A Engine Maintenance Service
Agreement Engine Shop Visit Data Requirements (Continued) Page 4
HOURS CYCLES
----- ------
HPT _______________ _______________
LPT
6. TAM anticipated operating time before next scheduled shop visit.
____________________________ Hours ____________________________ Cycles
7. Type of next scheduled shop visit ____________________________________
F. MISCELLANEOUS DATA
1. Known LRU/QEC shortages at time of shipment:
____________________ ____________________ ____________________
____________________ ____________________ ____________________
____________________ ____________________ ____________________
2. Report of any accident/abnormal operational circumstance involving the
Equipment as referenced by the ▇▇▇▇▇ & ▇▇▇▇▇▇▇ Overhaul Standard
Practices Manual, P.N. 585005.
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
▇. ▇▇▇ CONTACT
Name ______________________________
Position __________________________
Telephone _________________________
Fax _______________________________ SITA ________________________________
IBM E-Mail ID _______________________
▇▇▇▇▇ & ▇▇▇▇▇▇▇ Proprietary - Subject to the Restrictions on the Front Page
