As filed with the Securities and Exchange Commission on September 23, 2013.

Registration No. 333-191258

 

 

 

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

Amendment No. 1

to

FORM F-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

 

 

AVIANCA HOLDINGS S.A.

(Exact name of registrant as specified in its charter)

 

 

 

Republic of Panama   4512   Not Applicable
(State or other jurisdiction of
incorporation or organization)
  (Primary standard industrial
classification code number)
  (I.R.S. employer
identification number)

Aquilino de la Guardia Calle No. 8, Panama City,

Republic of Panama

(+507) 205-600

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

 

 

Avianca Inc.

122 East 42nd Street, Suite 2525

New York, NY 10168

+1 (212) 399-0831

(Name, address, including zip code, and telephone number, including area code, of agent for service)

 

 

with copies to:

 

David L. Williams
Simpson Thacher & Bartlett LLP
425 Lexington Avenue

New York, New York 10017

 

John R. Vetterli
White & Case LLP
1155 Avenue of the Americas

New York, New York 10036

 

 

Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act, please check the following box.   ¨

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.   ¨

If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.   ¨

 

 

CALCULATION OF REGISTRATION FEE

 

 

 

Title of each class of
securities to be registered
  Amount to  be
registered (1)
  Proposed maximum
aggregate offering
price (1)(2)
  Amount of
registration fee (4)

Preferred shares, par value $0.125 (3)

 

                 shares

  $100,000,000   $13,640

 

 

(1) Includes preferred shares that the underwriters may purchase solely to cover over-allotments, if any, and preferred shares that are to be offered outside the United States that may be resold in the United States in transactions requiring registration under the Securities Act. All or part of these preferred shares may be represented by American Depositary Shares, each of which represents                 of our preferred shares.
(2) Estimated solely for purposes of calculating the amount of the registration fee pursuant to Rule 457(o) under the Securities Act.
(3) American Depositary Shares evidenced by American Depositary Receipts issuable upon deposit of the preferred shares registered hereby will be registered under a separate registration statement on Form F-6. Each American Depositary Share represents                 preferred shares.
(4) Previously paid.

 

 

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment, which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act, or until this Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

 

 

 


EXPLANATORY NOTE

This Amendment No. 1 to the Registration Statement on Form F-1 of Avianca Holdings S.A. is being filed solely to include exhibits to the Registration Statement. These exhibits were previously confidentially submitted to the Securities and Exchange Commission and have been revised in connection with a request for confidential treatment. Accordingly, Part I, the form of prospectus, has been omitted from this filing.


PART II

INFORMATION NOT REQUIRED IN THE PROSPECTUS

I TEM  6. I NDEMNIFICATION OF D IRECTORS AND O FFICERS

According to the Registrant’s articles of incorporation and so far as may be permitted by the law, every director or officer of the Registrant involved in a claim, process, lawsuit or procedure related to his current or former position as director or officer, shall be entitled to be indemnified by the Registrant against all reasonable expenses, losses, fines and costs, including attorney fees, effectively and necessarily incurred by him, as a result of his actions and duties as a director or officer of the Registrant; except in case of losses or responsibility derived from willful misconduct or gross negligence.

I TEM  7. R ECENT S ALES OF U NREGISTERED S ECURITIES

On May 10, 2011, the Registrant completed a public offering of 100 million shares of preferred stock, with a par value of $0.125 per share, in an offering led by Correvores Associados and exempt from registration under Regulation S under the Securities Act in an offering occurring outside the United States, for a total amount of COP 500,000 million (approximately $277 million), representing a price of COP 5,000 per share, In May 2011, Synergy and Kingsland converted 15,000,000 and 42,600,000 common shares, respectively, into preferred shares in connection with the initial public offering of our preferred shares in Colombia

On May 10, 2013, the Registrant issued and sold $300,000,000 aggregate principal amount of senior notes due 2020 in an offering underwritten by Citigroup Global Markets Inc. and J.P. Morgan Securities LLC and exempt from registration under Rule 144A and Regulation S under the Securities Act. The price to the public was 98.706% of par and the aggregate underwriting discount was $1,500,000. The proceeds from the offering were used to finance the purchase of aircraft and general corporate purposes.

I TEM  8. E XHIBITS

(a) The following documents are filed as part of this Registration Statement:

 

  1.1*   Underwriting Agreement, dated as of                     , 2013 between the Registrant and J.P. Morgan Securities LLC and Citigroup Global Markets Inc.
  3.1*   English translation of Certificate of Incorporation.
  3.2*   English translation of Pacto Social .
  4.1*   Deposit Agreement between the Registrant and The Bank of New York Mellon, dated                 .
  4.2*   Specimen of certificate of American Depositary Receipt (included in Exhibit 4.1).
  4.3**   Joint Action Agreement, dated as of September 11, 2013, among the Registrant, Synergy Aerospace Corp. and Kingsland Holding Limited.
  4.4*   English Translation of Commercial Pledge Contract, dated September 6, 2012, among Citibank, N.A., Citibank, N.A., Sucursal Panama and Synergy Shipyard Inc.
  4.5**  

Amended and Restated Registration Rights Agreement, dated as of September 11, 2013, among the Registrant, Synergy Aerospace Corp. and Kingsland Holdings Limited.

  5.1*   Opinion of Icaza, González-Ruiz & Alemán, Panamanian legal counsel of the Registrant, as to the legality of the preferred shares.
10.1*   English translation of Irrevocable Administration Mercantile Trust Agreement, dated as of March 23, 2012, by and between Fiduciaria Bogotá S.A. and Avianca Holdings S.A. (formerly AviancaTaca Holding S.A.).
10.1.1*   English translation of Temporary Bonus Plan adopted on March 6, 2012.

 

II-1


10.2*   

English translation of Lease Agreement No. OP-DC-CA-T2-0060-12, dated October 7, 2012, between Sociedad Concesionaria Operadora Aeroportuaria Internacional S.A. – Opain S.A. and Aerovias del Continente Americano S.A. Avianca.

10.2.1*   

English translation of Lease Agreement No. OP-DC-CA-T1-0028-12, dated October 29, 2012, between Sociedad Concesionaria Operadora Aeroportuaria Internacional S.A. – Opain S.A. and Aerovias del Continente Americano S.A. Avianca.

10.2.2*    English translation of Lease Agreement No. OP-DC-CA-T2-0061-12, dated October 29, 2012, between Sociedad Concesionaria Operadora Aeroportuaria Internacional S.A. – Opain S.A. and Aerovias del Continente Americano S.A. Avianca.
10.3*    English translation of Lease Agreement, dated as of July 30, 2004, between U.A.E. Aeronautica Civil and Aerovias Nacionales de Colombia S.A. Avianca.
10.3.1*    English translation of Amendment No. 1 to Lease Agreement, dated as of December 12, 2005.
10.3.2*    English translation of Amendment No. 2 to Lease Agreement, dated as of January 5, 2009.
10.3.3*    English translation of Amendment No. 3 to Lease Agreement, dated as of November 7, 2012.
10.3.4*    English translation of Amendment No. 4 to Lease Agreement, dated as of March 1, 2013.
10.4*    English translation of Fuel Supply Contract, dated as of December 1, 2010, between Terpel S.A. and Aerovías del Continente Americano S.A. Avianca.
10.5†    A320 Purchase Agreement, dated March 19, 1998, between Atlantic Aircraft Holding Limited and Airbus Industry relating to Airbus A320-Family.
10.5.1†*    Amendment No. 1 dated as of September 9, 1998 to the A320 Purchase Agreement dated as of March 19, 1998, as amended and restated, between the Company and Airbus S.A.S. (as successor to Airbus Industry).
10.5.2†*    Amendment No. 2 dated as of December 28, 1999, to the A320 Purchase Agreement dated as of March 19, 1998, as amended and restated, between the Company and Airbus S.A.S.
10.5.3†*    Amendment No. 3 dated as of December 29, 1999, to the A320 Purchase Agreement dated as of March 19, 1998, as amended and restated, between the Company and Airbus S.A.S.
10.5.4†*    Amendment No. 4 dated as of February 15, 2000, to the A320 Purchase Agreement dated as of March 19, 1998, as amended and restated, between the Company and Airbus S.A.S.
10.5.5†*    Amendment No. 5 dated as of April 6, 2001, to the A320 Purchase Agreement dated as of March 19, 1998, as amended and restated, between the Company and Airbus S.A.S.
10.5.6†*    Amendment No. 6 dated as of April 9, 2001, to the A320 Purchase Agreement dated as of March 19, 1998, as amended and restated, between the Company and Airbus S.A.S.
10.5.7†*    Amendment No. 7 dated as of September 6, 2001, to the A320 Purchase Agreement dated as of March 19, 1998, as amended and restated, between the Company and Airbus S.A.S.
10.5.8†*    Amendment No. 8 dated as of August 29, 2002, to the A320 Purchase Agreement dated as of March 19, 1998, as amended and restated, between the Company and Airbus S.A.S.
10.5.9†*    Amendment No. 9 dated as of December 6, 2002, to the A320 Purchase Agreement dated as of March 19, 1998, as amended and restated, between the Company and Airbus S.A.S.
10.5.10†*    Amendment No. 10 dated as of October 30, 2003, to the A320 Purchase Agreement dated as of March 19, 1998, as amended and restated, between the Company and Airbus S.A.S.
10.5.11†*    Amendment No. 11 dated as of November 18, 2004, to the A320 Purchase Agreement dated as of March 19, 1998, as amended and restated, between the Company and Airbus S.A.S.

 

II-2


10.5.12†*    Amendment No. 12 dated as of November 18, 2004, to the A320 Purchase Agreement dated as of March 19, 1998, as amended and restated, between the Company and Airbus S.A.S.
10.5.13†*    Amendment No. 13 dated as of November 18, 2004, to the A320 Purchase Agreement dated as of March 19, 1998, as amended and restated, between the Company and Airbus S.A.S
10.5.14†*    Amendment No. 14 dated as of February 18, 2006, to the A320 Purchase Agreement dated as of March 19, 1998, as amended and restated, between the Company and Airbus S.A.S.
10.5.15†*    Amendment No. 15 dated as of June 22, 2007, to the A320 Purchase Agreement dated as of March 19, 1998, as amended and restated, between the Company and Airbus S.A.S.
10.5.16†*    Amendment No. 16 dated as of November 22, 2007, to the A320 Purchase Agreement dated as of March 19, 1998, as amended and restated, between the Company and Airbus S.A.S.
10.5.17†*    Amendment No. 17 dated as of April 14, 2008, to the A320 Purchase Agreement dated as of March 19, 1998, as amended and restated, between the Company and Airbus S.A.S.
10.5.18†*    Amendment No. 18 dated as of January 30, 2009, to the A320 Purchase Agreement dated as of March 19, 1998, as amended and restated, between the Company and Airbus S.A.S.
10.5.19†*    Amendment No. 19 dated as of April 28, 2009, to the A320 Purchase Agreement dated as of March 19, 1998, as amended and restated, between the Company and Airbus S.A.S.
10.5.20†*    Amendment No. 20 dated as of February 10, 2010, to the A320 Purchase Agreement dated as of March 19, 1998, as amended and restated, between the Company and Airbus S.A.S.
10.5.21†*    Amendment No. 21 dated as of April 29, 2011, to the A320 Purchase Agreement dated as of March 19, 1998, as amended and restated, between the Company and Airbus S.A.S.
10.5.22†*    Amendment No. 22 dated as of August 26, 2011, to the A320 Purchase Agreement dated as of March 19, 1998, as amended and restated, between the Company and Airbus S.A.S.
10.5.23†*    Amendment No. 23 dated as of October 25, 2011, to the A320 Purchase Agreement dated as of March 19, 1998, as amended and restated, between the Company and Airbus S.A.S.
10.5.24†*    Amendment No. 24 dated as of March 29, 2012, to the A320 Purchase Agreement dated as of March 19, 1998, as amended and restated, between the Company and Airbus S.A.S.
10.5.25†*    Amendment No. 25 dated as of March 29, 2012, to the A320 Purchase Agreement dated as of March 19, 1998, as amended and restated, between the Company and Airbus S.A.S.
10.5.26†*    Amendment No. 26 dated as of March 29, 2012, to the A320 Purchase Agreement dated as of March 19, 1998, as amended and restated, between the Company and Airbus S.A.S.
10.5.27†*    Amendment No. 27 dated as of November 30, 2012, to the A320 Purchase Agreement dated as of March 19, 1998, as amended and restated, between the Company and Airbus S.A.S.
10.6†    A320 Purchase Agreement, dated April 16, 2007, between Aerovías del Continente Americano S.A. Avianca and Airbus S.A.S. relating to Airbus A320-Family.
10.6.1†*    Amendment No. 1 dated as of June 16, 2007, to the A320 Family Purchase Agreement dated as of April 16, 2007, as amended and restated, between the Company and Airbus S.A.S.
10.6.2†*    Amendment No. 2 dated as of September 10, 2007, to the A320 Family Purchase Agreement dated as of April 16, 2007, as amended and restated, between the Company and Airbus S.A.S.
10.6.3†*    Amendment No. 3 dated as of November 27, 2007, to the A320 Family Purchase Agreement dated as of April 16, 2007, as amended and restated, between the Company and Airbus S.A.S.
10.6.4†*    Amendment No. 4 dated as of January 31, 2008, to the A320 Family Purchase Agreement dated as of April 16, 2007, as amended and restated, between the Company and Airbus S.A.S.

 

II-3


10.6.5†*    Amendment No. 5 dated as of July 16, 2008, to the A320 Family Purchase Agreement dated as April 16, 2007, as amended and restated, between the Company and Airbus S.A.S.
10.6.6†*    Amendment No. 6 dated as of December 5, 2008, to the A320 Family Purchase Agreement dated as of April 16, 2007, as amended and restated, between the Company and Airbus S.A.S.
10.6.7†*    Amendment No. 7 dated as of July 6, 2009, to the A320 Family Purchase Agreement dated as of April 16, 2007, as amended and restated, between the Company and Airbus S.A.S.
10.6.8†*    Amendment No. 8 dated as of October 10, 2009, to the A320 Family Purchase Agreement dated as of April 16, 2007, as amended and restated, between the Company and Airbus S.A.S.
10.6.9†*    Amendment No. 9 dated as of March 12, 2010, to the A320 Family Purchase Agreement dated as of April 16, 2007, as amended and restated, between the Company and Airbus S.A.S.
10.6.10†*    Amendment No. 10 dated as of November 22, 2010, to the A320 Family Purchase Agreement dated as of April 16, 2007, as amended and restated, between the Company and Airbus S.A.S.
10.6.11†*    Amendment No. 11 dated as of August 26, 2011, to the A320 Family Purchase Agreement dated as of April 16, 2007, as amended and restated, between the Company and Airbus S.A.S.
10.6.12†*    Amendment No. 12 dated as of October 10, 2011, to the A320 Family Purchase Agreement dated as of April 16, 2007, as amended and restated, between the Company and Airbus S.A.S.
10.6.13†*    Amendment No. 13 dated as of June 13, 2012, to the A320 Family Purchase Agreement dated as of April 16, 2007, as amended and restated, between the Company and Airbus S.A.S.
10.7†*    Assignment, Assumption and Amendment Agreement dated as of May 18, 2012, entered into among Aerovías del Continente Americano S.A. Avianca, Synergy Aerospace Corp. and Airbus S.A.S. in respect of four (4) A330-200F of the thirteen (13) A330-200 and A330-200F under the Purchase Agreement dated September 5, 2011 (the A330-200F Purchase Agreement).
10.7.1†*    Amendment No. 1, dated as of August 16, 2012, to the A330-200F Purchase Agreement dated as of May 18, 2012, as amended and restated, between the Company and Airbus S.A.S.
10.8†    A320 Family and A320 NEO Family Purchase Agreement dated as of December 27, 2011 between Avianca Holdings S.A. (formerly known as AviancaTaca Holding S.A.) and Airbus S.A.S. relating to Airbus A320-Family and A320 NEO Family.
10.8.1†    Amendment No. 1, dated as of February 28, 2013, to the A320 Family and A320 NEO Family Purchase Agreement dated as of December 27, 2011, between Avianca Holdings S.A. and Airbus S.A.S.
10.8.2†    Assignment, Assumption and Amendment Agreement dated as of February 28, 2013, entered into among Aerovías del Continente Americano S.A. Avianca, Avianca Holdings S.A. and Airbus S.A.S. in respect of twenty six (26) A320 Family Aircraft and A320 NEO Family under the A320 Family and A320 NEO Family Purchase Agreement dated December 27, 2011.
10.8.3†    Assignment, Assumption and Amendment Agreement dated as of February 28, 2013, entered into among Grupo Taca Holdings Limited, Avianca Holdings S.A. and Airbus S.A.S. in respect of twenty five (25) A320 Family and A320 NEO Family Aircraft under the A320 Family and A320 NEO Family Purchase Agreement dated December 27, 2011.
10.9†*    Purchase Agreement No. 3075, dated October 3, 2006, as amended and supplemented, between Aerovías del Continente Americano S.A. Avianca (The Company) and The Boeing Company, relating to the purchase and sale of ten (10) Boeing Model 787-859 aircraft.
10.9.1†*    Supplemental Agreement No. 1 dated as of March 28, 2007, to the Purchase Agreement No. 3075, dated October 3, 2006, as amended and supplemented, between the Company and The Boeing Company

 

II-4


10.9.2†*    Supplemental Agreement No. 2 dated as of March 28, 2007, to the Purchase Agreement No. 3075, dated November 21, 2007, as amended and supplemented, between the Company and The Boeing Company
10.9.3†*    Supplemental Agreement No. 3 dated as of September 26, 2012, to the Purchase Agreement No. 3075, dated November 21, 2007, as amended and supplemented, between the Company and The Boeing Company
10.9.4†*    Supplemental Agreement No. 4 dated as of January 11, 2013, to the Purchase Agreement No. 3075, dated November 21, 2007, as amended and supplemented, between the Company and The Boeing Company
10.10†*    Sale and Purchase Contract dated as of January 18, 2013, between Avianca Holdings S.A. (formerly known as AviancaTaca Holding S.A.) and Avions de Transport Regional G.I.E. as amended and restated, relating to ATR 72-600 Aircraft.
10.11†    Trent 700 General Terms Agreement, dated June 15, 2007, among Rolls Royce PLC, Rolls Royce Total Care Services Limited and Aerovías del Continente Americano S.A. Avianca.
10.11.1†    Amendment No. 1 to General Terms Agreement, dated February 28, 2008.
10.11.2†    Amendment No. 2 to General Terms Agreement, dated February 28, 2009.
10.11.3†    Amendment No. 3 to General Terms Agreement, dated September 1, 2009.
10.11.4†    Amendment No. 4 to General Terms Agreement, dated March 18, 2011.
10.12†    General Terms Agreement 700 DEG 7308, dated June 1, 2012, between Rolls-Royce PLC, Rolls-Royce Total Care Services Limited and Aerovías del Continente Americano S.A. Avianca and Tampa Cargo S.A.
10.13†    General Terms Agreement No. CFM-03-2007, dated as of March 29, 2007, between CFM International, Inc. and Aerovías del Continente Americano S.A. Avianca.
10.13.1†*    Amendment No. 1 to General Terms Agreement.
10.14†    General Terms Agreement No. GE-1-1090789943, dated as of December 18, 2007, between General Electric Corporation, GE Engine Services and Atlantic Aircraft Holding, Ltd.
10.15†    OnPoint Solutions Rate per Engine Flight Hour Engine Services Agreement, dated as of January 18, 2008, between GE Engine Services, Inc. and Aerovías del Continente Americano S.A. Avianca.
10.16†*   

Rate Per Flight Hour Agreement for CFM56-5B Engine Shop Maintenance Services, dated as of February 6, 2013, between CFM International, Inc. and Avianca Holdings S.A. (formerly known as AviancaTaca Holding S.A.).

10.17†    General Terms Agreement No. CFM-1-2887169891, dated as of February 6, 2013, between CFM International, Inc. and Avianca Holdings S.A. (formerly known as AviancaTaca Holding S.A.)
10.18†    Rate Per Flight Hour Agreement for LEAP 1-A Engine Shop Maintenance Services, dated as of February 6, 2013, between CFM International, Inc. and Avianca Holdings S.A. (formerly known as AviancaTaca Holding S.A.).
10.19†    Amended and Restated V2500 ® General Terms of Sale, dated as of December 18, 2008, between IAE International Aero Engines AG and Atlantic Aircraft Holdings Limited.
10.19.1†*    Amendment No. 1 to Amended and Restated V2500 ® General Terms of Sale, dated December 17, 2010.
10.19.2†    Second Amended and Restated Side Letter, dated as of December 17, 2010.
10.20†    Amended and Restated V2500-A5 Fleet Hour Agreement, dated as of December 18, 2008, between IAE International Aero Engines AG and Atlantic Aircraft Holdings Limited.

 

II-5


12.1*   Computation of ratios of earnings.
21.1*   Subsidiaries of the Registrant.
23.1**   Consent of Ernst & Young Audit S.A.S.
23.2*   Consent of Icaza, González-Ruiz & Alemán, Panamanian legal counsel of the Registrant (included in Exhibit 5.1).
23.3*   Consent of Simpson Thacher & Bartlett LLP, legal counsel to the Registrant (included in Exhibit 5.2).
24.1**   Powers of Attorney (included in the signature pages in a previous filing of this registration statement).

 

* To be filed by amendment.
** Previously filed.
Portions of the exhibit omitted pursuant to a request for confidential treatment.

(b) Financial Statement Schedules

Schedules not listed above have been omitted because the information required to be set forth therein is not applicable or is shown in our consolidated financial statements or notes thereto.

I TEM  9. U NDERTAKINGS

The undersigned Registrant hereby undertakes to provide to the underwriter at the closing specified in the underwriting agreements, certificates in such denominations and registered in such names as required by the underwriter to permit prompt delivery to each purchaser.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the provisions described in Item 6 of this Registration Statement, or otherwise, the Registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted against the Registrant by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

The undersigned Registrant hereby also undertakes that:

 

1. For purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this Registration Statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this Registration Statement at the time it was declared effective.

 

2. For the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

 

II-6


SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form F-1 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Bogotá, Colombia, on September 23, 2013.

 

Avianca Holdings S.A.
By:   /s/ Fabio Villegas Ramírez
  Name: Fabio Villegas Ramírez
  Title:   Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons on September 23, 2013 in the capacities indicated:

 

Name    Title

/s/ Fabio Villegas Ramírez

Fabio Villegas Ramírez

  

Chief Executive Officer

(Principal Executive Officer)

  

/s/ Gerardo Grajales López

Gerardo Grajales López

  

Executive Vice President and Chief Financial Officer

(Principal Financial Officer)

/s/ Milton Solano Barahona

Milton Solano Barahona

   Accounting Shared Services Vice President (Principal Accounting Officer)

*

Germán Efromovich

   Chairman of the Board of Directors

*

Roberto Kriete

   Director

*

José Efromovich

   Director

*

Alexander Bialer

   Director

*

Marco Baldocchi

   Director

*

Isaac Yanovich

   Director

*

Alvaro Jaramillo

   Director

 

II-7


Name    Title

*

Juan Guillermo Serna

   Director

*

Ramiro Valencia

   Director

*

Monica Aparicio

   Director

*

Oscar Darío Morales

   Director

 

*By:   /s/ Gerardo Grajales López
 

Gerardo Grajales López

Attorney-in-Fact

SIGNATURE OF AUTHORIZED REPRESENTATIVE IN THE UNITED STATES

Pursuant to the Securities Act of 1933, the undersigned, the duly authorized representative in the United States of Avianca Holdings S.A., has signed this Registration Statement in New York, New York, on September 23, 2013.

 

Avianca Inc.

By:   /s/ Gerardo Grajales López
 

Gerardo Grajales López

Authorized Signatory

 

II-8


Exhibit Index

 

10.5†    A320 Purchase Agreement, dated March 19, 1998, between Atlantic Aircraft Holding Limited and Airbus Industry relating to Airbus A320-Family.
10.6†    A320 Purchase Agreement, dated April 16, 2007, between Aerovías del Continente Americano S.A. Avianca and Airbus S.A.S. relating to Airbus A320-Family.
10.8†    A320 Family and A320 NEO Family Purchase Agreement dated as of December 27, 2011 between Avianca Holdings S.A. (formerly known as AviancaTaca Holding S.A.) and Airbus S.A.S. relating to Airbus A320-Family and A320 NEO Family.
10.8.1†    Amendment No. 1, dated as of February 28, 2013, to the A320 Family and A320 NEO Family Purchase Agreement dated as of December 27, 2011, between Avianca Holdings S.A. and Airbus S.A.S.
10.8.2†    Assignment, Assumption and Amendment Agreement dated as of February 28, 2013, entered into among Aerovías del Continente Americano S.A. Avianca, Avianca Holdings S.A. and Airbus S.A.S. in respect of twenty six (26) A320 Family Aircraft and A320 NEO Family under the A320 Family and A320 NEO Family Purchase Agreement dated December 27, 2011.
10.8.3†    Assignment, Assumption and Amendment Agreement dated as of February 28, 2013, entered into among Grupo Taca Holdings Limited, Avianca Holdings S.A. and Airbus S.A.S. in respect of twenty five (25) A320 Family and A320 NEO Family Aircraft under the A320 Family and A320 NEO Family Purchase Agreement dated December 27, 2011.
10.11†    Trent 700 General Terms Agreement, dated June 15, 2007, among Rolls Royce PLC, Rolls Royce Total Care Services Limited and Aerovías del Continente Americano S.A. Avianca.
10.11.1†    Amendment No. 1 to General Terms Agreement, dated February 28, 2008.
10.11.2†    Amendment No. 2 to General Terms Agreement, dated February 28, 2009.
10.11.3†    Amendment No. 3 to General Terms Agreement, dated September 1, 2009.
10.11.4†    Amendment No. 4 to General Terms Agreement, dated March 18, 2011.
10.12†    General Terms Agreement 700 DEG 7308, dated June 1, 2012, between Rolls-Royce PLC, Rolls-Royce Total Care Services Limited and Aerovías del Continente Americano S.A. Avianca and Tampa Cargo S.A.
10.13†    General Terms Agreement No. CFM-03-2007, dated as of March 29, 2007, between CFM International, Inc. and Aerovías del Continente Americano S.A. Avianca.
10.14†    General Terms Agreement No. GE-1-1090789943, dated as of December 18, 2007, between General Electric Corporation, GE Engine Services and Atlantic Aircraft Holding, Ltd.
10.15†    OnPoint Solutions Rate per Engine Flight Hour Engine Services Agreement, dated as of January 18, 2008, between GE Engine Services, Inc. and Aerovías del Continente Americano S.A. Avianca.
10.17†    General Terms Agreement No. CFM-1-2887169891, dated as of February 6, 2013, between CFM International, Inc. and Avianca Holdings S.A. (formerly known as AviancaTaca Holding S.A.)
10.18†    Rate Per Flight Hour Agreement for LEAP 1-A Engine Shop Maintenance Services, dated as of February 6, 2013, between CFM International, Inc. and Avianca Holdings S.A. (formerly known as AviancaTaca Holding S.A.).
10.19†    Amended and Restated V2500 ® General Terms of Sale, dated as of December 18, 2008, between IAE International Aero Engines AG and Atlantic Aircraft Holdings Limited.
10.19.2†    Second Amended and Restated Side Letter, dated as of December 17, 2010.
10.20†    Amended and Restated V2500-A5 Fleet Hour Agreement, dated as of December 18, 2008, between IAE International Aero Engines AG and Atlantic Aircraft Holdings Limited.

Exhibit 10.5

Note: Certain portions have been omitted from this Agreement in accordance with a request for confidential treatment submitted to the Securities and Exchange Commission. Omitted information has been replaced with an asterisk. Omitted information has been filed separately with the Securities and Exchange Commission.

A320 FAMILY

PURCHASE AGREEMENT

BETWEEN

AIRBUS INDUSTRIE

AND

ATLANTIC AIRCRAFT HOLDING LIMITED

 

0 -1/5


C O N T E N T S

 

CLAUSES    TITLES
0    PURCHASE AGREEMENT
1    SALE AND PURCHASE
2    SPECIFICATION CHANGES
3    PRICES AND TAXES
4    PRICE REVISION FORMULAE
5    PAYMENT TERMS
6    PLANT REPRESENTATIVES - INSPECTION
7    CERTIFICATION
8    BUYER’S ACCEPTANCE
9    DELIVERY
10    EXCUSABLE DELAY
11    NON EXCUSABLE DELAY
12    WARRANTIES AND SERVICE LIFE POLICY
13    PATENT - INDEMNITY
14    TECHNICAL PUBLICATIONS
15    SELLER REPRESENTATIVES
16    TRAINING AND TRAINING AIDS
17    VENDOR PRODUCT SUPPORT
18    BUYER FURNISHED EQUIPMENT AND DATA
19    DATA RETRIEVAL
20    TERMINATION
21    ASSIGNMENT
22    MISCELLANEOUS PROVISIONS

 

A320 Family - TAI - 03/1998

0 - 2/5


C O N T E N T S

 

EXHIBITS    TITLES
Exhibit “ A    SPECIFICATION
Exhibit “ B    S.C.N. FORM
Exhibit “ C    SERVICE LIFE POLICY - ITEMS OF PRIMARY STRUCTURE
Exhibit “ D    MANUALS
Exhibit “ E    SPARE PARTS PROCUREMENT

 

A320 Family - TAI - 03/1998

0 - 3/5


A320 PURCHASE AGREEMENT

This Agreement is made as of the 19th day of March 1998

BETWEEN

AIRBUS INDUSTRIE, having its principal office at :

1 Rond-Point Maurice Bellonte

3 1 7 0 7    B L A G N A C - C E D E X

F R A N C E

(hereinafter referred to as the “Seller”) of the one part

AND

ATLANTIC AIRCRAFT HOLDING LIMITED , having its principal office at:

Bolam House

King and George Streets

N A S S A U

B A H A M A S

(hereinafter referred to as the “Buyer”) of the other part.

 

A320 Family - TAI - 03/1998

0 - 4/5


WHEREAS

 

A - The Seller is a “Groupement d’Intérêt Economique” created and existing under French Law and established under Ordonnance No 67-821 dated September 23, 1967 of the Republic of FRANCE.

 

B - The Members of the Seller are :

(1) AEROSPATIALE, SOCIETE NATIONALE INDUSTRIELLE,

whose principal office is at :

37, Boulevard Montmorency

75016 PARIS

FRANCE,

(2) DAIMLER-BENZ AEROSPACE AIRBUS GmbH,

whose principal office is at :

Kreetslag 10

Postfach 95 01 09

21111 - HAMBURG

FEDERAL REPUBLIC OF GERMANY,

(3) CONSTRUCCIONES AERONAUTICAS S.A.,

whose principal office is at :

Avenida de Aragon, 404

28022 MADRID

SPAIN

and

(4) BRITISH AEROSPACE (OPERATIONS) LTD,

whose principal office is at :

Warwick House

P.O. Box 87

Farnborough Aerospace Centre

Farnborough

Hants GU14 6YU

GREAT BRITAIN.

 

C - Each of the Members of the Seller is (after service on the Seller by “huissier”, of notice to perform) jointly and severally liable with the other Members (but not with the Seller) for all due and unperformed liabilities and obligations of the Seller (subject to any defences which may be available to the Seller or to that Member personally or to all the Members together).

 

D - The Buyer wishes to purchase and the Seller is willing to sell thirty two (32) A320 Family Aircraft each with a set of two (2) Propulsion Systems installed thereon (hereinafter individually or collectively referred to as the “Aircraft”) together with certain other spare parts, equipment and services more particularly described herein.

NOW THEREFORE IT IS AGREED AS FOLLOWS :

 

A320 Family - TAI - 03/1998

0 - 5/5


C O N T E N T S

 

CLAUSE

  

TITLE

1 -    SALE AND PURCHASE
1.1    Scope
1.2    Aircraft Specification
1.3    Propulsion Systems

 

- 1-1/3 -


1 - SALE AND PURCHASE

 

1.1 Scope

The Seller shall sell and supply and the Buyer shall buy and take delivery of thirty two (32) Aircraft of the A319-100 and A320-200 type and also spare parts (pursuant to Exhibit “E”) upon the terms and conditions contained in this Agreement, together with the Exhibits “A” thru “E” attached hereto which shall constitute an integral part of the Agreement.

 

1.2 Aircraft Specification

 

1.2.1 The Aircraft shall be manufactured in accordance with:

 

- For the A319-100 , the Standard Specification Document No “[*]” with the following design weights: [*] a copy of which has been initialed on its effective pages for the purpose of identification by or on behalf of the parties and is annexed hereto as Exhibit “A”.

 

- For the A320-200 , the Standard Specification Document No [*] with the following design weights: [*] which has been initialed on its effective pages for the purpose of identification by or on behalf of the parties and is annexed hereto as Exhibit “A”.

Said Standard Specification as modified by the Specification Change Notices (SCNs) to be selected after signature of this Agreement, as amended from time to time, shall constitute the Buyer’s customized Specification (the “Customized Specification”) and is hereinafter referred to as the “Specification”.

Said SCNs are listed in Appendix 1 to Exhibit “A” for the A319-100 and Appendix 2 to Exhibit “A” for the A320-200.

 

     The SCN form is annexed hereto as Exhibit “B”.

 

1.2.2 The Specification may be modified or varied pursuant to the provisions of Clauses 2 , 7 and 18.

 

1.2.3 In the event of any inconsistency between the Specification and any other part of this Agreement, the latter shall prevail to the extent of such inconsistency.

 

- 1-2/3 -


1.3.1 Propulsion Systems

The Aircraft can be equipped with a set of two (2) Propulsion Systems :

- For the A319-100 :

CFM INTERNATIONAL 56-[*]

or

INTERNATIONAL AERO ENGINE V2524-A5

- For the A320-200 :

CFM INTERNATIONAL 56-[*]    or

INTERNATIONAL AERO ENGINE V2527-A5    or

INTERNATIONAL AERO ENGINE V2527E-A5

 

1.3.2 Propulsion System manufacturer change

The following Propulsion System has been selected by the Buyer :

- For the A319-100 : -INTERNATIONAL AERO ENGINE V2524-A5

   For the A320-200 : -INTERNATIONAL AERO ENGINE V2527-A5

The Buyer shall have the right to select the alternate Propulsion System manufacturer or Propulsion System model number, in each case as mentioned in the above sub-Clause 1.3.1. for all or any of the Aircraft at any time, provided that such selection is notified in writing to the Seller not less than [*] prior to the delivery of the relevant Aircraft.

 

- 1-3/3 -


C O N T E N T S

 

CLAUSE

  

TITLE

2 -    SPECIFICATION CHANGES
2.1    Specification Change Notice
2.2    Effect on Aircraft Price
2.3    Development Changes
2.4    Customization Milestones Chart

 

2 - 1/2


2 - SPECIFICATION CHANGES

 

2.1 Specification Change Notice

The Specification may be amended by written agreement between the parties in a Specification Change Notice (hereinafter referred to as a “SCN”) which shall set forth in detail the particular change to be made therein and the effect, if any, of such change on design, performance, weight, time of delivery, price of the Aircraft, and on the text of the Specification.

A specimen copy of a SCN form is attached hereto as Exhibit “B”.

 

2.2 Effect on Aircraft Price

The possible effect of changes on the price of the Aircraft shall be agreed before signature of the relevant SCN form. [*]

 

2.3 Development Changes

The Specification may also be revised by the Seller without Buyer’s consent in order to incorporate development changes if such changes do not adversely affect price, delivery, , weight or performance of the Aircraft, interchangeability or replaceability requirements under the Specification. Development changes are changes deemed necessary to correct defects, improve the Aircraft, prevent substantial delay or ensure compliance with this Agreement.

 

2.4 Customization Milestones Chart

Attached in Appendix 1 to this Clause 2 is a Customization Milestones Chart reflecting, in terms of minimum lead times prior to the delivery of the Aircraft, the dates when a mutual agreement must be reached (execution of a SCN) to integrate the Buyer’s specific features into the industrial process.

* [Four pages have been omitted in accordance with a request for confidential treatment.]

 

2 - 2/2


C O N T E N T S

 

CLAUSE

  

TITLE

3 -    PRICES AND TAXES
3.1    Basic Price of the Aircraft
3.2    Final Price of the Aircraft
3.3    Taxes

 

- 3-1/5 -


3 - PRICES AND TAXES

 

3.1 Basic Price of the Aircraft

The Basic Price of the Aircraft is the sum of :

 

- the Basic Price of the Airframe as defined in sub-Clause 3.1.1 and

 

- the Basic Price of the Propulsion Systems as defined in sub-Clause 3.1.2 ;

and is exclusive of any variation resulting from price revision provisions and, if any, other applicable provisions of this Agreement.

 

3.1.1 Basic Price of the Airframe

The Basic Price of the Airframe is the sum of:

 

(i) the basic price of the airframe as defined in the Standard Specification described in sub-Clause 1.2.1, which is:

- For the A319-100 Aircraft

  USD [*]

(US Dollars [*])

- For the A320-200 Aircraft

  USD [*]

(US Dollars [*])

(ii) a provision on the basic price of the SCNs to be selected in the list set forth in:

- Appendix 1 to Exhibit “A” for the A319-100 Aircraft

  USD [*]

  (US Dollars [*])

- Appendix 2 to Exhibit “A” for the A320-200 Aircraft

  USD [*]

(US Dollars [*])

The basic prices have been established in accordance with the [*] and are subject to adjustment in accordance with the Seller’s Price Revision Formula set forth in sub-Clause 4.1

 

- 3-2/5 -


3.1.2 Basic Prices of the Propulsion Systems

The basic prices of a set of two (2) Propulsion Systems including standard equipment, nacelles and thrust reversers are :

- For the A319-100 Aircraft

With CFM INTERNATIONAL the sum of:

 

  (i) the Engines - CFM56-[*]

to be provided by CFM International

    and

 

(ii) the Nacelles and thrust reversers
         USD [*]

(US Dollars [*])

or

With INTERNATIONAL AERO ENGINES IAE V2524-A5

    USD [*]

(US Dollars [*])

 

- For the A320-200 Aircraft

With CFM INTERNATIONAL the sum of:

 

  (i) the Engines - CFM56-[*]

to be provided by CFM International

and

 

  (ii) the Nacelles and thrust reversers

USD [*]

(US Dollars [*])

or

With INTERNATIONAL AERO ENGINES IAE V2527-A5

    USD “[*]

(US Dollars [*])

or

With INTERNATIONAL AERO ENGINES IAE V2527-EA5

    USD [*]

(US Dollars [*])

 

- 3-3/5 -


Said CFM INTERNATIONAL Engines Basic Prices and INTERNATIONAL AERO ENGINES Propulsion Systems Basic Prices, in accordance with [*] are the same as the Reference Price of the Propulsion Systems indicated in sub-Clause 4.2.1. and 4.3.1.

Said Propulsion Systems Reference Prices are subject to adjustment in accordance with the Propulsion Systems Manufacturers’ Price Revision Formulas set forth in sub-Clause 4.2. or 4.3 (as the case may be).

For CFM INTERNATIONAL, the Nacelles and thrust reversers Price referred above shall be adjusted in accordance with the Seller’s Price Revision Formula set forth in sub-Clause 4.1.

 

3.1.3 Validity of Propulsion Systems Price

It is understood that the above-mentioned quotation as well as Price Revision Formula concerning the Propulsion Systems and related equipment are valid for Aircraft deliveries up to December 31st, 2005 or a such longer period confirmed to the Seller by the Propulsion Systems Manufacturer.

 

3.2 Final Price of the Aircraft

The Final Price of each Aircraft shall be the sum of :

 

- the Basic Price of the Airframe as adjusted at the time of Aircraft delivery in accordance with the Seller’s Price Revision Formula set forth in sub-Clause 4.1;

 

- the basic prices of any and all SCNs mutually agreed upon after signature of this Agreement as adjusted at the time of Aircraft delivery in accordance with the Seller’s Price Revision Formula set forth in sub-Clause 4.1 or as otherwise agreed upon;

 

- the installed Propulsion Systems Reference Price as adjusted at the time of Aircraft delivery in accordance with the Price Revision Formula set forth in sub-Clause 4.2 or 4.3 (as the case may be);

 

- any further amount provided for or resulting from any other provisions of this Agreement (including but not limited to Clauses 7 and 18) and / or any other written agreement between the Buyer and the Seller.

 

- 3-4/5 -


3.3 [*]

 

- 3-5/5 -


C O N T E N T S

 

CLAUSE

  

TITLE

4 -    PRICE REVISION FORMULAE
4.1    Seller’s Price Revision Formula
4.2    CFM INTERNATIONAL Propulsion Systems Manufacturer’s Price Revision Formula
4.3    INTERNATIONAL AERO ENGINES Propulsion Systems Manufacturer’s Price Revision Formula

 

4-1/7


4 - PRICE REVISION FORMULAE

 

4.1 Seller’s Price Revision Formula

 

4.1.1 * [Three pages have been omitted in accordance with a request for confidential treatment.]

 

4-2/7


 

4.2 CFM INTERNATIONAL Propulsion System Manufacturer’s Price Revision Formula

[*]

 

4.3 INTERNATIONAL AERO ENGINES Propulsion System Manufacturer’s Price Revision Formula

 

4.3.1 Reference Price of the Propulsion Systems

 

     - For the A319-100 Aircraft

The Reference Price of a set of two (2) INTERNATIONAL AERO ENGINES IAE V2524-A5 Propulsion Systems is :

 

     USD[*]

(US Dollars[*])

 

     - For the A320-200 Aircraft

The Reference Price of a set of two (2) INTERNATIONAL AERO ENGINES IAE V2527-A5 Propulsion Systems is:

 

     USD[*]

(US Dollars[*])

The Reference Price of a set two (2) INTERNATIONAL AERO ENGINES IAE V2527-EA5 Propulsion Systems is :

 

     USD[*]

(US Dollars[*])

* [Three pages have been omitted in accordance with a request for confidential treatment.]

 

4-3/7


C O N T E N T S

 

CLAUSE

  

TITLE

5 -    PAYMENT TERMS
5.1    Seller’s Account
5.2    Payment of the Aircraft
5.3    Other Charges
5.4    General

 

5-1/4


5 - PAYMENT TERMS

 

5.1 Seller’s Account

The Buyer shall pay the final price of each Aircraft or any invoice to the Seller’s account No [*]:

[*]

or to such other account as may be designated by the Seller.

 

5.2 Payment of the Aircraft

The Final Price of each Aircraft as defined in sub-Clause 3.2 shall be paid in accordance with the following terms and conditions:

 

5.2.1 Predelivery Payments

[*]

 

5-2/4


5.2.1.2 [*]

 

5.2.2 Balance of the Final Price of the Aircraft

Concurrently with the Aircraft delivery and on receipt of the Seller’s invoice, the Buyer shall pay to the Seller the Final Price of the Aircraft as defined in sub-Clause 3.2 less the total amount of the predelivery payments received by the Seller and set forth in sub-Clause 5.2.1.

 

5.3 Other Charges

If not expressly stipulated otherwise any other charges due under this Agreement other than those mentioned in sub-Clause 5.2 shall be paid by the Buyer concurrently with the Aircraft delivery or, if invoiced after delivery, within [*] days after receipt of the invoice by the Buyer.

 

5-3/4


5.4 General

 

5.4.1 All payments provided for in this Agreement shall be made in United States Dollars (USD) in immediately available funds if not otherwise agreed upon.

 

5.4.2 All payments due to the Seller hereunder shall be made in full, without set-off, counterclaim, deduction or withholding of any kind. Consequently, the Buyer shall procure that the sums received by the Seller under this Agreement shall be equal to the full amounts expressed to be due to the Seller hereunder, without deduction or withholding on account of and free from any and all taxes, levies, imposts, dues or charges of whatever nature (except those for which the Buyer is not responsible as per sub-Clause 3.3 hereunder) except that If the Buyer is compelled by law to make any such deduction or withholding the Buyer shall pay such additional amounts as may be necessary in order that the net amount received by the Seller after such deduction or withholding shall equal the amounts which would have been received in the absence of such deduction or withholding.

 

5.4.3 If any payment due to the Seller is not made on the due date, without prejudice to the Seller’s other rights under this Agreement, the Seller shall be entitled to interest for late payment calculated on the amount due from and including the due date of payment up to and including the date when the payment is received by the Seller at a rate equal to the [*]

 

5.4.4 If any predelivery payment is not received on the date(s) as specified in this Clause or as may be subsequently agreed upon in writing between the parties, then the Seller will advise the Buyer in writing and in addition to any other rights and remedies available, the Seller shall have the right to set back the delivery date of the affected Aircraft by a period of [*]

Furthermore, if such delay is greater than [*], the Seller shall have no obligation to deliver the affected Aircraft at the date quoted in sub-Clause 9.1 as modified as per the above Paragraph of this sub-Clause 5.4.4. Upon receipt of the full due payment of the delayed predelivery payment, the Seller shall indicate the new delivery date of the affected Aircraft consistent with the Seller’s other commitments and production capabilities.

 

5-4/4


C O N T E N T S

 

CLAUSE

  

TITLE

6 -    PLANT REPRESENTATIVES - INSPECTION
6.1    Aircraft Inspection
6.2    Seller’s Service
6.3    Inspection Requirements
6.4    Indemnities

 

6-1/3


6 - PLANT REPRESENTATIVES - INSPECTION

 

6.1 Aircraft Inspection

 

6.1.1 The manufacture of the Aircraft by the Seller and all materials and parts obtained by it therefor shall at all reasonable times during business hours be open to inspection by duly authorized representatives of the Buyer at the Members’ works and if possible at the facilities of Seller’s sub-contractors.

The representatives shall in order to carry out the aforesaid inspection have access to such relevant technical data as is reasonably necessary for this purpose (except that if access to any part of the works where construction is in progress or materials or parts are stored is restricted for security reasons, the Seller shall be allowed a reasonable time to make the items available for inspection elsewhere).

The actual detailed inspection of the Aircraft, materials and parts thereof shall only take place in the presence of the respective inspection department personnel of the Seller.

This inspection shall be made according to a procedure [*]

All inspections, examinations and discussions with the Seller and other personnel by the Buyer and its said representatives shall be performed in such manner as not unduly to delay or hinder the manufacture or assembly of the Aircraft or the proper performance of this Agreement by the Seller or its sub-contractors or any other work in progress in the respective works.

 

6.2 Seller’s Service

For this purpose and commencing with the date of this Agreement until the delivery of the last Aircraft, the Seller shall furnish without additional charge suitable space and office equipment in or conveniently located with respect to the Aircraft final assembly line for the use of a reasonable number of Buyer’s representatives.

 

6.3 Inspection Requirements

The Aircraft shall be manufactured in accordance with the relevant requirements of the Governments of the Members of the Seller as enforced by their respective Aviation Authorities and shall only be inspected under the Seller’s own systems of inspection as approved by and under the supervision of the above Aviation Authorities.

 

6-2/3


6.4 Indemnities

 

6.4.1 THE SELLER SHALL BE SOLELY LIABLE FOR, AND HEREBY INDEMNIFIES AND HOLDS HARMLESS THE BUYER, ITS OFFICERS, AGENTS AND EMPLOYEES FROM AND AGAINST ALL LIABILITIES, DAMAGES, LOSSES, COSTS AND EXPENSES (INCLUDING ALL REASONABLE ATTORNEYS’ FEES AND COSTS, DAMAGES OR FEES NECESSARY FOR THE ESTABLISHMENT OF A RIGHT TO INDEMNIFICATION IF SUCH RIGHT IS SUCCESSFULLY ESTABLISHED FOR ALL INJURIES TO AND DEATHS OF PERSONS (EXCEPTING INJURIES TO AND DEATH OF THE BUYER’S REPRESENTATIVES PARTICIPATING IN ANY TESTS, CHECK OUT AND CONTROLS UNDER THIS CLAUSE) AND FOR LOSS OF OR DAMAGE TO PROPERTY, ARISING OUT OF OR IN CONNECTION WITH ANY TESTS, CHECK OR CONTROLS UNDER THIS CLAUSE EXCEPT WHEN DUE TO GROSS NEGLIGENCE OR WILFUL MISCONDUCT OF THE BUYER, ITS DIRECTORS, AGENTS OR EMPLOYEES.

 

6.4.2 THE BUYER HEREBY INDEMNIFIES AND HOLDS HARMLESS THE SELLER, ITS OFFICERS, AGENTS AND EMPLOYEES FROM AND AGAINST ALL LIABILITIES, DAMAGES, LOSSES, COSTS AND EXPENSES (INCLUDING ALL REASONABLE ATTORNEYS’ FEES AND COSTS, DAMAGES OR FEES NECESSARY FOR THE ESTABLISHMENT OF A RIGHT TO INDEMNIFICATION IF SUCH RIGHT IS SUCCESSFULLY ESTABLISHED FOR ALL INJURIES TO OR DEATHS OF THE BUYER’S SAID REPRESENTATIVES DURING ANY TESTS, CHECK AND CONTROLS UNDER THIS CLAUSE EXCEPT WHEN DUE TO GROSS NEGLIGENCE OR WILFUL MISCONDUCT OF THE SELLER, ITS DIRECTORS, AGENTS OR EMPLOYEES.

 

6.4.3 IN THE EVENT ANY CLAIM IS MADE OR SUIT IS BROUGHT AGAINST EITHER PARTY FOR DAMAGES FOR DEATH, INJURY, LOSS OR DAMAGE, THE LIABILITY FOR WHICH HAS BEEN ASSUMED BY THE OTHER PARTY IN ACCORDANCE WITH THE PROVISIONS OF SUB-CLAUSES 6.4.1 OR 6.4.2 HEREOF, SAID PARTY SHALL PROMPTLY GIVE NOTICE TO THE OTHER PARTY, AND THE LATTER SHALL HAVE THE RIGHT TO ASSUME AND CONDUCT THE DEFENCE THEREOF, OR TO EFFECT ANY SETTLEMENT WHICH IT, IN ITS OPINION, DEEMS PROPER.

 

6-3/3


C O N T E N T S

 

CLAUSE

  

TITLE

7 -    CERTIFICATION
7.1    Type Certification
7.2    Certificate of Airworthiness for Export

 

7-1/2


7 - CERTIFICATION

 

7.1 Type Certification

The Aircraft has been type certificated under Joint Aviation Authorities (JAA) procedures for joint certification in the transport category.

The Seller has obtained the relevant Type Certificates (or equivalent) to allow the issuance of the Certificate of Airworthiness for Export.

 

7.2 Certificate of Airworthiness for Export

 

7.2.1 The Aircraft final assembly line is located either in FRANCE or in FEDERAL REPUBLIC OF GERMANY, the Aircraft shall therefore be delivered to the Buyer with a [*]

 

7.2.2 If any law or regulation becomes effective or an interpretation of any law or regulation is issued before an Aircraft purchased under this Agreement is “ready for delivery” to the Buyer (as that expression is defined in sub-Clause 9.3 hereof) and which law, regulation or interpretation requires any change to the Specification as it may be modified pursuant to Clause 2 hereof in order to obtain the Certificate of Airworthiness as hereinabove provided for such Aircraft, the Seller shall make the requisite variation or modification [*].

In the event of such a change (other than a change attributable to a defect) being made pursuant to this sub-Clause, the parties hereto shall sign a SCN, in which the effects, if any, upon guaranteed performances, weights, interchangeability and delivery shall be specified.

 

7.2.3 Notwithstanding the provisions of sub-Clause 7.2.2, if any such change is applicable to Propulsion Systems and in particular to Engines, engine accessories, quick engine change units or thrust reversers, the costs shall be borne in accordance with such arrangements as may be made separately between the Buyer and the Propulsion System Manufacturer.

 

7.2.4 The Seller shall as far as practicable take into account the information available to it concerning any proposed regulations of DGAC/LBA and / or FAA and / or the Buyer’s Airworthiness Authority in order to minimize the costs of changes which may appear necessary to obtain Airworthiness Certification from the applicable Aviation Authority after such proposed regulations have become mandatory.

 

7-2/2


C O N T E N T S

 

CLAUSE

  

TITLE

8 -    BUYER’S TECHNICAL ACCEPTANCE
8.1    Time, Place and Scheduling
8.2    Technical Acceptance
8.3    Certificate of Acceptance
8.4    Aircraft Utilization
8.5    Indemnities

 

8-1/4


8 - BUYER’S TECHNICAL ACCEPTANCE

 

8.1 Time, Place and Scheduling

The Seller shall give to the Buyer not less than [*] days notice in writing of the proposed time when the Buyer’s acceptance tests shall be conducted and in the event of the Buyer electing to attend the said tests, the Buyer shall co-operate in complying with the reasonable requirements of the Seller with the intention of completing all tests within [*] working days after commencement.

The tests shall take place at the Aircraft final assembly line and shall be carried out by the personnel of the Seller (accompanied, if the Buyer so wishes, by representatives of the Buyer up to a total of [*] acting as observers, not more than three (3) to have access to the cockpit at any one time). During flight tests, these representatives shall comply with the instructions of the Seller’s representatives.

Failure to attend the acceptance tests or failure so to co-operate shall entitle the Seller in good faith to complete them in the absence of the Buyer who shall be deemed to have accepted the tests as satisfactory in all respects [*] The Seller shall not normally be required in the course of such acceptance tests to fly any of the Aircraft for an aggregate period of time in excess of three (3) hours.

 

8.2 Technical Acceptance

The Acceptance Procedure [*] tests shall demonstrate the satisfactory functioning of each of the Aircraft [*] with regard to the Customised Specification, [*]. Should it be established from the tests that an Aircraft does not comply with the said Acceptance Procedure, the Seller shall without hindrance from the Buyer be entitled to carry out any necessary changes and as soon as practicable thereafter resubmit the Aircraft to such tests as to demonstrate the elimination of the non-compliance.

The [*] compliance with Seller’s Aircraft Acceptance Procedure shall be deemed to demonstrate compliance with the Specification.

 

8-2/4


8.3 Certificate of Acceptance

Upon [*] completion of the said technical Acceptance Procedure tests the Buyer shall forthwith give to the Seller a signed Certificate of Acceptance in respect of the relevant Aircraft. Should the Buyer fail to deliver the said Certificate of Acceptance then the Buyer shall be deemed to be in default as though it had without warrant rejected delivery of the Aircraft when duly tendered to it hereunder and shall thereafter bear all [*] costs and consequences resulting from such delay in delivery including, but not limited to costs of storage, parking and insurance.

 

8.4 Aircraft Utilization

The Seller shall,[*] not counting any flights requested by the Buyer’s Airworthiness Authorities as per sub-Clause 7.2.1 above, and such use shall not prejudice the Buyer’s obligation to accept delivery of the Aircraft hereunder.

 

8.5 Indemnities

 

8.5.1 THE SELLER SHALL BE SOLELY LIABLE FOR, AND HEREBY INDEMNIFIES AND HOLDS HARMLESS THE BUYER, ITS OFFICERS, AGENTS AND EMPLOYEES FROM AND AGAINST ALL LIABILITIES, DAMAGES, LOSSES, COSTS AND EXPENSES (INCLUDING ALL REASONABLE ATTORNEYS’ FEES AND COSTS, DAMAGES OR FEES NECESSARY FOR THE ESTABLISHMENT OF A RIGHT TO INDEMNIFICATION IF SUCH RIGHT IS SUCCESSFULLY ESTABLISHED) FOR ALL INJURIES TO AND DEATH OF PERSONS (EXCEPTING INJURIES TO AND DEATH OF THE BUYER’S REPRESENTATIVES PARTICIPATING IN ANY GROUND OR FLIGHT TESTS UNDER THIS CLAUSE) AND FOR LOSS OF OR DAMAGE TO PROPERTY, ARISING OUT OF OR IN CONNECTION WITH THE OPERATION OF THE AIRCRAFT DURING ANY GROUND OR FLIGHT TESTS UNDER THIS CLAUSE EXCEPT WHEN DUE TO GROSS NEGLIGENCE OR WILFUL MISCONDUCT OF THE BUYER, ITS DIRECTORS AGENTS OR EMPLOYEES.

 

8.5.2 THE BUYER HEREBY INDEMNIFIES AND HOLDS HARMLESS THE SELLER, ITS OFFICERS, AGENTS AND EMPLOYEES FROM AND AGAINST ALL LIABILITIES, DAMAGES, LOSSES, COSTS AND EXPENSES (INCLUDING ALL REASONABLE ATTORNEYS’ FEES AND COSTS, DAMAGES OR FEES NECESSARY FOR THE ESTABLISHMENT OF A RIGHT TO INDEMNIFICATION IF SUCH RIGHT IS SUCCESSFULLY ESTABLISHED) FOR ALL INJURIES TO OR DEATHS OF THE BUYER’S SAID REPRESENTATIVES DURING ANY GROUND OR FLIGHT TESTS UNDER THIS CLAUSE EXCEPT WHEN DUE TO GROSS NEGLIGENCE OR WILFUL MISCONDUCT OF THE SELLER, ITS DIRECTORS, AGENTS OR EMPLOYEES.

 

8-3/4


8.5.3 IN THE EVENT ANY CLAIM IS MADE OR SUIT IS BROUGHT AGAINST EITHER PARTY FOR DAMAGES FOR DEATH OR INJURY, THE LIABILITY FOR WHICH HAS BEEN ASSUMED BY THE OTHER PARTY IN ACCORDANCE WITH THE PROVISIONS OF SUB-CLAUSES 8.5.1 OR 8.5.2, SAID PARTY SHALL PROMPTLY GIVE NOTICE TO THE OTHER PARTY, AND THE LATTER SHALL HAVE THE RIGHT TO ASSUME AND CONDUCT THE DEFENCE THEREOF, OR TO EFFECT ANY SETTLEMENT WHICH IT, IN ITS OPINION, DEEMS PROPER.

 

8-4/4


C O N T E N T S

 

CLAUSE

  

TITLE

9 -    DELIVERY
9.1    Delivery Schedule
9.2    Seller’s Notification
9.3    Aircraft Ready for Delivery
9.4    Delivery
9.5    Fly Away

 

9-1/3


9 - DELIVERY

 

9.1 Delivery Schedule

Subject to the provisions of Clauses 2, 7, 8, 10 and 18 the Seller shall have the Aircraft ready for delivery at the Aircraft final assembly line in the following months:

 

     Delivery Date    Aircraft Type  

- Aircraft No 1

   August 1999      A319-100   

- Aircraft No 2

   November 1999      A319-100   

- Aircraft No 3

   November 2000      A320-200   

- Aircraft No 4

   November 2000      A320-200   

- Aircraft No 5

   December 2001      A320-200   

- Aircraft No 6

   December 2000      A320-200   

- Aircraft No 7

   January 2001      A320-200   

- Aircraft No 8

   February 2001      A320-200   

- Aircraft No 9

   July 2001      A320-200   

- Aircraft No 10

   November 2001      A319-100   

- Aircraft No 11

   December 2001      A320-200   

- Aircraft No 12

   December 2001      A319-100   

- Aircraft No 13

   March 2002      A319-100   

- Aircraft No 14

   June 2002      A319-100   

- Aircraft No 15

   July 2002      A320-200   

- Aircraft No 16

   August 2002      A319-100   

- Aircraft No 17

   September 2002      A319-100   

- Aircraft No 18

   November 2002      A319-100   

- Aircraft No 19

   December 2002      A319-100   

- Aircraft No 20

   February 2003      A320-200   

- Aircraft No 21

   February 2003      A319-100   

- Aircraft No 22

   March 2003      A319-200   

- Aircraft No 23

   June 2003      A319-100   

- Aircraft No 24

   July 2003      A319-100   

- Aircraft No 25

   November 2003      A319-100   

- Aircraft No 26

   March 2004      A319-100   

- Aircraft No 27

   May 2004      A319-100   

- Aircraft No 28

   June 2004      A319-100   

- Aircraft No 29

   November 2004      A319-100   

- Aircraft No 30

   December 2004      A319-100   

- Aircraft No 31

   February 2005      A319-100   

- Aircraft No 32

   July 2005      A319-100   

 

9.2 Seller’s Notification

[*]

 

9-2/3


9.3 Aircraft Ready for Delivery

The Aircraft shall for the purpose of this Agreement be deemed to be “ready for delivery” upon the [*] completion of Flight tests in accordance with Clause 8 hereof and the issue of the Certificate of Airworthiness for Export pursuant to sub-Clause 7.1.2.

 

9.4 Delivery

 

9.4.1 The Buyer shall send representatives to said Aircraft final assembly line to take delivery of and collect each Aircraft within [*] after the Aircraft is ready for delivery. An unreasonable refusal by the Buyer to take delivery of and collect the Aircraft will be considered as late payment pursuant to sub-Clause 5.4.3 hereto. Should the Buyer fail to collect the Aircraft within the aforesaid period, the Buyer shall nevertheless thereafter bear and reimburse Seller for all [*] costs including but not limited to any parking, storage, and insurance costs resulting from such failure, it being understood that the Seller shall be under no duty to store, park, insure, or otherwise protect the uncollected Aircraft.

 

9.4.2 Each of the Aircraft shall be deemed to be delivered to the Buyer upon the issue of the Certificate of Acceptance in accordance with Clause 8.3 and full payment of the Final Price of the Aircraft in accordance with the provisions of Clause 5.

 

9.4.3 Title to, property in and risk of loss of or damage to, the Aircraft shall be transferred to the Buyer upon delivery of the Aircraft. The Seller shall provide the Buyer with such receipt and a document confirming transfer of title as may reasonably be requested by the Buyer.

 

9.5 Fly Away

 

9.5.1 In the event that licenses are required by the French or German authorities for the purpose of exporting the Aircraft, the Buyer and the Seller shall cooperate to obtain any licenses. In that case, the Buyer will be obligated to take delivery of the Aircraft only after such licenses have been obtained.

 

9.5.2 All expenses of, or connected with, fly away shall be borne by the Buyer. The Buyer shall make direct arrangements with the supplying companies for the fuel and oil required for all post-delivery flights.

 

9-3/3


C O N T E N T S

 

CLAUSE

  

TITLE

10 -    EXCUSABLE DELAY
10.1    General
10.2    Anticipated or Actual Delay
10.3    Loss, Destruction or Damage
10.4    Termination Rights Exclusive

 

10-1/4


10 - EXCUSABLE DELAY

 

10.1 General

The Seller shall not be responsible, nor be deemed to be in default on account of delays or interruptions in the performance of its obligations hereunder, due to causes beyond its control or not occasioned by its fault or negligence, including (but without limiting the foregoing) acts of God or public enemy, war, civil war, warlike operations, terrorism, insurrections or riots, fires, floods, explosions, earthquakes, natural disasters or serious accidents, epidemics or quarantine restrictions, any act of government, governmental priorities, allocation regulations or orders affecting materials, facilities or completed aircraft, strikes or labour troubles causing cessation, slowdown or interruption of work [*] inability after due and timely diligence to procure materials, accessories, equipment or parts, general hindrance in transportation, failure of a subcontractor or Vendor to furnish materials, accessories, equipment or parts due to the above mentioned causes or of the Buyer to perform under this Agreement.

The Seller shall as soon as practicable after becoming aware of any delay falling within the provisions of this sub-Clause notify the Buyer of such delay and of the probable extent thereof and shall as soon as practicable after the removal of the cause of the delay resume its performance under this Agreement.

[*]

 

10.2 Anticipated or Actual Delay

 

10.2.1 In the event that the delivery of any Aircraft is delayed or interrupted by reason of any one or more of the causes described in sub-Clause 10.1 for a period of[*] after the end of the calendar month in which delivery is otherwise required hereunder [*] shall be entitled to terminate this Agreement with respect to the Aircraft so affected upon notice given to the [*] , provided, however, that the Buyer shall not be entitled to terminate this Agreement pursuant to the provisions of this sub-Clause where the cause of such delay is within its control.

 

10-2/4


10.2.2 If the Seller concludes that the delivery of any Aircraft shall be delayed for[*] due to one or more of the causes described in sub-Clause 10.1 and as a result thereof in good faith reschedules, in a [*] delivery of such Aircraft to a date reflecting such delay, then the Seller shall promptly notify the Buyer in writing to this effect and shall include in such notification the rescheduled delivery date. [*]

If at the expiry of the said [*] this Agreement shall not have been terminated with respect to the delayed Aircraft pursuant to the terms of this sub-Clause, then the rescheduled delivery date as notified to the Buyer shall be deemed to be incorporated into Clause 9 hereof as the date of delivery of the delayed Aircraft, any further delay will be subject to the provisions of this Clause 10.

 

10.3 Loss, Destruction or Damage

If prior to its delivery, any Aircraft is lost, destroyed or damaged beyond repair, the Seller shall notify the Buyer as soon as reasonably practicable but in no event later than [*] of such occurrence. [*], the Seller shall include in said notification (or as soon after the issue of the notice as such information becomes available to the Seller) [*] may be delivered to the Buyer and the date of delivery of the Aircraft shall be extended as specified in the Seller’s notice to accommodate the delivery of the replacement aircraft : provided, however, that in the event the specified extension of the delivery date shall [*] after the date relating to the lost, destroyed or damaged Aircraft contained in sub-Clause 9.1 then this Agreement shall terminate as to such lost, destroyed or damaged Aircraft unless:

 

(i) the Buyer notifies the Seller within [*] of the date of receipt of the Seller’s notice that it desires the Seller to provide a replacement aircraft on the delivery date quoted therein

and

 

(ii) the parties execute an amendment to this Agreement recording the variation in the aircraft delivery date provided, however, that nothing herein shall require the Seller to manufacture and deliver a replacement aircraft if such manufacture would require the reactivation of its production line for the model or series of Aircraft purchased hereunder.

 

10/3-4


10.4 Termination Rights Exclusive

IN THE EVENT THAT THIS AGREEMENT SHALL BE TERMINATED AS PROVIDED FOR UNDER THE TERMS OF SUB-CLAUSES 10.2 OR 10.3 ABOVE, SUCH TERMINATION SHALL DISCHARGE ALL OBLIGATIONS AND LIABILITIES OF THE PARTIES HEREUNDER WITH RESPECT TO SUCH AFFECTED AIRCRAFT AND UNDELIVERED MATERIAL, SERVICES, DATA, OR OTHER ITEMS APPLICABLE THERETO AND TO BE FURNISHED HEREUNDER [*]

 

10-4/4


C O N T E N T S

 

CLAUSE

  

TITLE

11 -    NON-EXCUSABLE DELAY
11.1    Liquidated Damages
11.2    Renegotiation
11.3    Termination
11.4    Waiver

 

11-1/3


11 - NON-EXCUSABLE DELAY

 

11.1 Liquidated Damages

Should any of the Aircraft not be ready for delivery to the Buyer within [*] after the delivery date pursuant to Clause 9 (as varied by virtue of Clauses 2, 7, 10 and 18) and such delay is not excusable under sub-Clause 10.1, the Buyer shall have the right to claim, and the Seller shall pay [*] to the Buyer in respect of any such subsequent delay [*] per Aircraft by way of damages for each day of delay in the delivery starting from the [*].

The amount of Seller’s liquidated damages shall in no event exceed the total of [*] in respect of any one Aircraft.

The Buyer’s right to recover said damages in respect of the Aircraft is conditional upon a claim therefor being submitted in writing to the Seller by the Buyer not later than [*]

 

11.2 Renegotiation

Should a delay in delivery for non excusable reasons exceed [*] after the [*] the Buyer shall have the right exercisable by written notice to the Seller given not less than [*] days nor more than [*] after the expiration of the said [*] to require from the Seller a renegotiation of the delivery date of the Aircraft which is the subject of such delay. Unless otherwise agreed between the Seller and the Buyer during such renegotiation, the said renegotiation shall not prejudice the Buyer’s right to receive liquidated damages in accordance with the preceding sub-Clause during the period of non-excusable delay.

 

11-2/3


11.3 Termination

Should a delay in delivery for non excusable reasons exceed [*] after the [*] period the Buyer [*] and the Seller in the [*] shall have the right exercisable by written notice to the other party, given not less than [*] nor more than [*] after expiration of such [*] to terminate this Agreement in respect only of the said Aircraft which is the subject of such delay [*]

The Seller, [*]

 

11.4 Waiver

The Seller shall not under any circumstances have any liability whatsoever in respect of delay or failure in the delivery of any Aircraft other than and beyond the liabilities set forth in this Clause and in Clause 10.

 

11-3/3


C O N T E N T S

 

CLAUSE

  

TITLE

12 -    WARRANTIES AND SERVICE LIFE POLICY
12.1    Standard Warranty
12.2    Seller Service Life Policy
12.3    Vendor Product Support Agreements
12.4    Interface Commitment
12.5    Waiver, Release and Renunciation
12.6    Duplicate Remedies
12.7    Negotiated Agreement

 

12-1/17


12 - WARRANTIES AND SERVICE LIFE POLICY

 

12.1 Standard Warranty

 

12.1.1 Nature of Warranty

Subject to the conditions and limitations as hereinafter provided for and except as provided for in sub-Clause 12.1.2, the Seller warrants to the Buyer that each Aircraft and all Warranted Parts as defined hereinafter shall at the time of delivery to the Buyer:

 

(i) be new and free from defects in material;

 

(ii) be free from defects in workmanship, including without limitation processes of manufacture;

 

(iii) be free from defects in design (including without limitation the selection of materials) having regard to the state of the art at the date of such design; and

 

(iv) be free from defects arising from failure to conform to the Specification, except to those portions of the Specification relating to performance or where it is expressly stated that they are estimates, approximations or design aims;

 

(v) conform to the Customized Specifications as the same may be amended pursuant hereto.

For the purpose of this Agreement: the term “Warranted Part” shall mean any Seller proprietary component, equipment, accessory, systems or part as installed on an Aircraft at the time of delivery of such Aircraft and system

 

(a) which is manufactured to the detailed design of the Seller or a subcontractor of the Seller and

 

(b) which bears a part number of the Seller at the time of such delivery.

 

12.1.2 Exclusions

The warranties set forth in sub-Clause 12.1.1 shall not apply to Buyer Furnished Equipment, nor to the Propulsion Systems, nor to any component, equipment, accessory or part purchased by the Seller that is not a Warranted Part except that:

 

(i) any defect in the Seller’s workmanship incorporated in the installation of such items in the Aircraft, including any failure by the Seller to conform to the installation instructions of the manufacturer of such item that invalidates any applicable warranty from such manufacturer, shall constitute a defect in workmanship for the purpose of this sub-Clause and be covered by the warranty set forth in sub-Clause 12.1.1 (ii); and

 

12-2/17


(ii) defect inherent in the Seller’s design of the installation, in view of the state of the art at the date of such design, which impair the use of such item shall constitute a defect in design for the purpose of this sub-Clause and be covered by the warranty set forth in sub-Clause 12.1.1 (iii).

 

12.1.3 [*]

 

12.1.4 Buyer’s Remedy and Seller’s Obligation

 

12.1.4.1 The Buyer’s remedy and the Seller’s obligation and liability under sub-Clauses 12.1.1 and 12.1.2 are limited to the repair, replacement or correction, at the Seller’s expense and option excercised in a reasonable good faith basis of any Warranted Part which is defective. Any replacement part shall not have less cycles, calendar time and flight hours (as the case may be) remaining, than the Warranted Part which it replaced. [*]

 

12.1.4.2 In the event of a defect covered by sub-Clauses 12.1.1 (iii), 12.1.1 (iv) and 12.1.2 (ii) becoming apparent within the applicable period set forth in sub-Clause 12.1.3 and the Seller being obliged to correct such defect, the Seller shall also, if so requested by the Buyer, make such correction in any Aircraft which has not yet been delivered to the Buyer provided, however, that the Seller shall not be responsible nor deemed to be in default on account of any reasonable delay (the Seller shall use its reasonable efforts to minimise such delay) in delivery of any Aircraft or otherwise, in respect of the performance of this Agreement due to the Seller’s undertaking to make such correction and provided further that, rather than accept a delay in the delivery of any such Aircraft, the Buyer and the Seller may agree to deliver such Aircraft with subsequent correction of the defect by the Buyer at the Seller’s expense, or the Buyer may elect to accept delivery and thereafter file a warranty claim as though the defect had become apparent immediately after delivery of such Aircraft.

 

12.1.5 Warranty Claim Requirements

The Buyer’s warranty claims shall be considered by the Seller only if the following conditions are first fulfilled:

 

(i) the defect having become apparent within the applicable warranty period as set forth in sub-Clause 12.1.3;

 

(ii) the Buyer having submitted to the Seller proof reasonably satisfactory to the Seller that the claimed defect is due to a matter embraced within this sub-Clause 12.1, and that such defect has not resulted from any act or omission of the Buyer, including but not limited to, any failure to operate and maintain the affected Aircraft or part thereof in accordance with the standards set forth or any matter covered in sub-Clause 12.1.10 ;

 

12-3/17


(iii) the Buyer having returned as soon as practicable the Warranted Part claimed to be defective to repair facilities as may be reasonably designated by the Seller, except when the Buyer elects to repair a defective Warranted Part in accordance with the provisions of sub-Clause 12.1.7;

 

(iv) the Seller having received a warranty claim as set forth in sub-Clause 12.1.6 hereafter.

 

12.1.6 Warranty Administration

The warranties set forth in sub-Clause 12.1 shall be administered as hereinafter provided for.

 

  (i) Claim Determination

Warranty claim determination by the Seller shall be reasonably based upon the claim details, reports from the Seller’s local representative, historical data logs, inspection, tests, findings during repair, defect analysis and other suitable documents.

 

  (ii) Transportation Costs

Transportation costs for sending a defective Warranted Part to the facilities designated by the Seller and for the return therefrom of a repaired or replaced Warranted Part shall be borne by the Buyer to [*].

 

  (iii) Return of an Aircraft

In the event of the Buyer desiring to return an Aircraft to the Seller for consideration of a warranty claim, the Buyer shall notify the Seller of its intention to do so and the Seller shall, prior to such return, have the right to inspect such Aircraft and thereafter, without prejudice to its rights hereunder, to repair such Aircraft, at its sole option, either at the Buyer’s facilities or at another place reasonably acceptable to the Seller. The sharing of the cost of the return of any Aircraft by the Buyer to the Seller and return of such Aircraft to the Buyer’s facilities shall be [*].

 

  (iv) On-Aircraft Work by the Seller

In the event that the Buyer and the Seller agree that a defect necessitates the dispatch by the Seller of a working team to repair or correct such defect at the Buyer’s facilities, or in the event of the Seller accepting the return of an Aircraft to perform or have performed such repair or correction, then all related expenses [*]

 

12-4/17


  (v) Warranty Claim Substantiation

In connection with each claim by the Buyer made under this sub-Clause 12.1, the Buyer shall file a warranty claim on the Buyer’s form within [*] after a defect became apparent. Such form must contain at least the following data:

a) description of defect and action taken, if any,

b) date of incident and/or of removal date,

c) description of the defective part,

d) part number,

e) serial number (if applicable),

f) position on Aircraft,

g) total flying hours or calendar time, as applicable at the date of defect appearance,

h) time since last shop visit at the date of defect appearance,

i) Manufacturer’s Serial Number of the Aircraft and/or its registration,

j) Aircraft total flying hours and/or number of landings at the date of defect appearance,

k) claim number,

l) date of claim,

m) delivery date of Aircraft or part to the Buyer,

Claims are to be addressed as follows:

AIRBUS INDUSTRIE

CUSTOMER SERVICES DIRECTORATE

WARRANTY ADMINISTRATION

1, Rond-Point Maurice Bellonte

B.P. 33

F-31707 BLAGNAC CEDEX

FRANCE

 

12-5/17


  (vi) Replacements

Replaced components, equipment, accessories or parts shall become the Seller’s property.

 

  (vii) Seller’s Rejection

The Seller shall provide reasonable written substantiation in case of rejection of a warranty claim.

 

  (viii) Seller’s Inspection

The Seller shall have the right to inspect the affected Aircraft and documents and other records relating thereto in the event of any warranty claim under this sub-Clause 12.1.

 

  (ix) Survival of the Warranty

With respect to each Aircraft (including all Warranted Parts), the warranties set forth above shall survive the execution of this Agreement and delivery of the Aircraft.

 

12-6/17


12.1.7 Inhouse Warranty

 

  (i) Seller’s Authorization

The Seller hereby authorizes the Buyer to perform the repair of Warranted Parts subject to the terms of this sub-Clause 12.1.7.

The Buyer shall notify the Seller’s representative of its intention to perform Inhouse Warranty repairs before such repairs are started, unless it is not practicable.

 

  (ii) Conditions for Seller’s Authorization

The Buyer shall be entitled to repair such Warranted Parts only:

 

   

if adequate facilities and qualified personnel are available to the Buyer;

 

   

in accordance with the Seller’s written instructions set forth in the applicable Seller’s technical documentation;

 

   

to the extent specified by the Seller, or, in the absence of such specification, to the extent reasonably necessary to correct the defect, in accordance with the standards set forth in sub-Clause 12.1.10.

 

  (iii) Seller’s Rights

The Seller shall have the right to have any Warranted Part, or any part removed therefrom, claimed to be defective, returned to the Seller, as set forth in sub-Clause 12.1.6 (ii) if, in the judgement of the Seller, the nature of the defect requires technical investigation. The Seller shall further have the right to have a representative present during the disassembly, inspection and testing of any Warranted Part claimed to be defective.

 

12-7/17


  (iv) Inhouse Warranty Claim Substantiation

Claims for Inhouse Warranty credit shall contain the same information as that required for warranty claims under sub-Clause 12.1.6 (v) and in addition shall include:

a) a report of technical findings with respect to the defect,

b) for parts required to remedy the defect:

 

   

part numbers,

 

   

serial numbers (if applicable),

 

   

parts description,

 

   

quantity of parts,

 

   

unit price of parts,

 

   

related Seller’s or third party’s invoices (if applicable),

 

   

total price of parts,

c) detailed number of labour hours,

d) agreed Inhouse Warranty labour rate,

e) total claim value.

 

  (v) Credit

The credit to the Buyer’s account shall be [*]

 

  (vi) Limitation

The Buyer shall in no event be credited for repair costs (including labour and material) in excess of sixty-five percent (65%) of the current catalog price for a replacement of the defective Warranted Part or in excess of those costs which would have resulted if repairs had been carried out at the Seller’s facilities. Such costs shall be substantiated in writing by the Seller upon reasonable request by the Buyer.

 

12-8/17


  (vii) Scrapped Material

The Buyer shall retain any defective Warranted Part beyond economic repair and any defective part removed from a Warranted Part during repair for a period of [*] after submission of a claim for Inhouse Warranty credit relating thereto, [*]. Such parts shall be returned to the Seller [*] of receipt of the Seller’s request to that effect.

Notwithstanding the foregoing, the Buyer may scrap any such defective parts which are beyond economic repair and not required for technical evaluation locally with the agreement of the Seller’s local representative. Scrapped Warranted Parts shall be evidenced by a record of scrapped material certified by an authorized representative of the Buyer.

 

12.1.8 Standard Warranty Transferability

The warranties provided for in this sub-Clause 12.1 for any Warranted Part shall accrue to the benefit of any airline in revenue service, other than the Buyer, if the Warranted Part enters into the possession of any such airline as a result of a pooling or leasing or similar agreement between such airlines and the Buyer, in accordance with the terms and subject to the limitations and exclusions of the foregoing warranties.

 

12.1.9 Warranty for Corrected, Replaced or Repaired Warranted Parts

Whenever any Warranted Part which contains a defect for which the Seller is liable under sub-Clause 12.1 has been corrected, replaced or repaired pursuant to the terms of this sub-Clause 12.1, the period of the Seller’s warranty with respect to such corrected, replaced or repaired Warranted Part whichever may be the case, shall be the remaining portion of the original warranty.

 

12.1.10 Good Airline Operation - Normal Wear and Tear

The Buyer’s rights under this sub-Clause 12.1 are subject to the Aircraft and each component, equipment, accessory and part thereof being maintained, overhauled, repaired, and operated in accordance with good commercial airline practice, all technical documentation and any other instructions issued by the Seller and the Vendors and the Manufacturer of the Propulsion Systems and all applicable rules, regulations and directives of relevant Aviation Authorities.

The Seller’s liability under this sub-Clause 12.1 shall not extend to normal wear and tear nor to:

 

(i) any Aircraft or component, equipment, accessory or part thereof which has been repaired, altered or modified after delivery except by the Seller or in a manner approved by the Seller;

 

(ii) any Aircraft or component, equipment, accessory or part thereof which has been operated in a known damaged state;

 

12-9/17


(iii) any component, equipment, accessory and part from which the trade mark, name, part or serial number or other identification marks have been removed;

unless in any such case (except in the case of (iii) above) the Buyer submits reasonable evidence to the Seller that the defect did not arise from or was not contributed to by any one or more of the said causes.

 

12.2 Seller Service Life Policy

In addition to the warranties set forth in sub-Clause 12.1, the Seller further agrees that should a Failure as defined in sub-Clause 12.2.1.2 occur in any Item as defined in sub-Clause 12.2.1.1, and subject to the general conditions and limitations set forth in sub-Clause 12.2.4, then the provisions of this sub-Clause 12.2 shall apply.

 

12.2.1 Definitions

For the purpose of this sub-Clause 12.2 the following conditions shall apply:

 

12.2.1.1 “Item” means any of the Seller components, equipment, accessories and parts listed in Exhibit “C”, Seller Service Life Policy.

 

12.2.1.2 “Failure” means any defect in, an Item which has occurred and which materially impairs the utility of the Item.

 

12.2.2 Periods and Seller’s Undertakings

The Seller agrees that if a Failure occurs in an Item [*] after the delivery of said Aircraft to the Buyer, the Seller shall at its reasonable discretion and as promptly as practicable and with the Seller’s financial participation as hereinafter provided either:

 

12.2.2.1 design and furnish to the Buyer a correction for such Item with a Failure and provide any parts required for such correction (including Seller designed standard parts but excluding industry standard parts), or,

 

12.2.2.2 replace such Item.

 

12-10/17


12.2.3 Seller’s Participation in the Costs

Any part or Item which the Seller is required to furnish to the Buyer under this Service Life Policy in connection with the correction or replacement of an Item shall be furnished to the Buyer with the Seller’s financial participation determined in accordance with the following formula:

[*]

 

 

12-11/17


12.2.4 General Conditions and Limitations

 

1.2.4.1 The undertakings given in this sub-Clause 12.2 shall be valid after the period of the Seller’s warranty applicable to an Item under sub-Clause 12.1.

 

12.2.4.2 The Buyer’s remedy and the Seller’s obligation and liability under this Service Life Policy are subject to the prior compliance by the Buyer with the following conditions:

 

(i) the Buyer shall maintain log books and other historical records with respect to each Item adequate to enable determination of whether the alleged Failure is covered by this Service Life Policy and if so to define the costs to be borne by the Seller in accordance with sub-Clause 12.2.3;

 

(ii) the Buyer shall keep the Seller informed of any significant incidents relating to an Aircraft howsoever occurring or recorded;

 

(iii) the Buyer shall comply with the conditions of sub-Clause 12.1.10;

 

(iv) the Buyer shall carry out specific structural inspection programs for monitoring purposes as may be established from time to time by the Seller. Such programs shall be as compatible as possible with the Buyer’s operational requirements and shall be carried out at the Buyer’s expense. Reports relating thereto shall be regularly furnished to the Seller;

 

(v) in the case of any breakage or defect, the Buyer must have reported the same in writing to the Seller within sixty (60) days after any breakage or defect in an Item becomes apparent whether or not said breakage or defect can reasonably be expected to occur in any other aircraft, and the Buyer shall have informed the Seller of the breakage or defect in sufficient detail to enable the Seller to determine whether said breakage or defect is subject to this Service Life Policy.

 

12.2.4.3 Except as otherwise provided for in this sub-Clause 12.2, any claim under this Service Life Policy shall be administered as provided for in and shall be subject to the terms and conditions of sub-Clause 12.1.6.

 

12.2.4.4 In the event that the Seller shall have issued a modification applicable to an Aircraft, the purpose of which is to avoid a Failure, the Seller may elect to supply the necessary modification kit free of charge or under a pro rata formula. If such a kit is so offered to the Buyer, then, to the extent of such Failure and any Failures that could ensue therefrom, the validity of the Seller’s commitment under this sub-Clause 12.2 shall be subject to the Buyer’s incorporating such modification in the relevant Aircraft, as promulgated by the Seller and in accordance with the Seller’s instructions, within a reasonable time.

 

12-12/17


12.2.4.5 This Service Life Policy is neither a warranty, performance guarantee, nor an agreement to modify any Aircraft or airframe components to conform to new developments occurring in the state of airframe design and manufacturing art.

The Seller’s obligation herein is to furnish only those corrections to the Items or provide replacement therefor as provided for in sub-Clause 12.2.3.

The Buyer’s sole remedy and relief for the non-performance of any obligation or liability of the Seller arising under or by virtue of this Service Life Policy shall be in monetary damages, limited to the amount the Buyer reasonably expends in procuring a correction or replacement for any Item which is the subject of a Failure covered by this Service Life Policy and to which such non-performance is related.

The Buyer hereby waives, releases and renounces all claims to any further damages, direct, incidental or consequential, including loss of profits and all other rights, claims and remedies, arising under or by virtue of this Service Life Policy.

 

12.2.5 Transferability

The Buyer’s rights under this sub-Clause 12.2 shall not be assigned, sold, leased, transferred or otherwise alienated by operation of law or otherwise, without the Seller’s prior written consent thereto,( which shall not be unreasonably withheld ) according to sub-Clause 21 of this Agreement.

Any unauthorized assignment, sale, lease, transfer or other alienation of the Buyer’s rights under this Service Life Policy shall, as to the particular Aircraft involved, immediately void this Service Life Policy in its entirety.

 

12-13/17


12.3 Vendor Product Support Agreements

 

12.3.1 Seller’s Support

Prior to the delivery of the first Aircraft, the Seller shall obtain from all Vendors listed in the “Vendor Product Support Agreements” enforceable and transferable warranties for each of their components, equipment, accessories or parts installed in an Aircraft at the time of delivery thereof (“Vendor Parts”) except for the Propulsion Systems, Buyer Furnished Equipment and other equipment selected by the Buyer to be supplied by Vendors with whom the Seller has no existing enforceable warranty agreements.

The Seller shall also obtain enforceable and transferable Vendor Service Life Policies from landing gear Vendors for selected structural landing gear elements.

The Seller undertakes to assign to the Buyer such Vendor warranties and Vendor Service Life Policies in the form of “Vendor Product Support Agreements”.

 

12.3.2 Vendor’s Default

 

12.3.2.1 In the event that a Vendor, under any standard warranty obtained by the Seller pursuant to sub-Clause 12.3.1 above, defaults in the performance of any material obligation with respect to such warranties and the Buyer submits in reasonable time to the Seller reasonable proof that such default has occurred, then the provisions of sub-Clause 12.1 of this Agreement shall apply to the extent the same would have been applicable had such Vendor Part been a Warranted Part except that the shorter of either the Vendor’s warranty period as indicated in the “Vendor Product Support Agreement” or the Seller’s warranty period as indicated in sub-Clause 12.1.3 of the Agreement shall be applicable.

 

12.3.2.2 In the event that a Vendor, under any Vendor Service Life Policy obtained by the Seller pursuant to sub-Clause 12.3.1 above, defaults in the performance of any material obligation with respect to such warranties and the Buyer submits in reasonable time to the Seller reasonable proof that such default has occurred, then sub-Clause 12.2 of this Agreement shall apply to the extent the same would have been applicable had such Vendor Item been listed in Exhibit “C”, Seller Service Life Policy of the Agreement.

 

12.3.2.3 At the Seller’s request, the Buyer shall assign to the Seller, and the Seller shall be subrogated to, all of the Buyer’s rights against the relevant Vendor with respect to and arising by reason of such default and shall provide reasonable assistance to enable the Seller to enforce the rights so assigned.

 

12-14/17


12.4 Interface Commitment

 

12.4.1 Interface Problem

If the Buyer experiences any technical problem in the operation of an Aircraft or its systems due to a malfunction, the cause of which, after due and reasonable investigation, is not readily identifiable by the Buyer, but which the Buyer reasonably believes to be attributable to the design characteristics of one or more components of the Aircraft (an “Interface Problem”), the Seller shall, if so requested by the Buyer, and without additional charge to the Buyer except for reasonable cost of transportation of the Seller’s personnel free of charge on the Buyer’s route system (on confirmed business class), to the Buyer’s facilities, promptly conduct or have conducted an investigation and analysis of such problem to determine, if possible, the cause or causes of the problem and to recommend such corrective action as may be feasible. The Buyer shall furnish to the Seller all data and information in the Buyer’s possession relevant to the Interface Problem, and shall cooperate with the Seller in the conduct of the Seller’s investigations and such tests as may be reasonably required.

At the conclusion of such investigation the Seller shall promptly advise the Buyer in writing of the Seller’s opinion as to the cause or causes of the Interface Problem and the Seller’s recommendations as to corrective action.

 

12.4.2 Seller’s Responsibility

If the Seller determines in the exercise of good faith and diligence, that the Interface Problem is primarily attributable to the design of a Warranted Part, the Seller shall, if so requested by the Buyer and pursuant to the terms and conditions of sub-Clause 12.1, correct the design of such Warranted Part in accordance with the Seller’s obligation as defined in sub-Clause 12.1.

 

12.4.3 Vendor’s Responsibility

If the Seller determines in the exercise of good faith and diligence, that the Interface Problem is primarily attributable to the design of any Vendor Part, the Seller shall, if so requested by the Buyer, reasonably assist the Buyer in processing any warranty claim the Buyer may have against the Vendor.

 

12.4.4 Joint Responsibility

If the Seller determines in the exercise of good faith and diligence, that the Interface Problem is attributable partially to the design of a Warranted Part and partially to the design of any Vendor Part, the Seller shall, if so requested by the Buyer, seek a solution to the Interface Problem through cooperative efforts of the Seller and any Vendor involved.

The Seller shall promptly advise the Buyer of such corrective action as may be proposed by the Seller and any such Vendor. Such proposal shall be consistent with any then existing obligations of the Seller hereunder and of any such Vendor to the Buyer. Such corrective action when duly accepted by the Buyer shall constitute full satisfaction of any claim the Buyer may have against either the Seller or any such Vendor with respect to such Interface Problem.

 

12/15/17


12.4.5 General

 

12.4.5.1 All requests under this sub-Clause 12.4 shall be directed to both the Seller and the Vendors.

 

12.4.5.2 Except as specifically set forth in this sub-Clause 12.4, this sub-Clause shall not be deemed to impose on the Seller any obligations not expressly set forth elsewhere in this Clause 12.

 

12.4.5.3 All reports, recommendations, data and other documents furnished by the Seller to the Buyer pursuant to this sub-Clause 12.4 shall be deemed to be delivered under this Agreement and shall be subject to the terms, covenants and conditions set forth in this Clause 12.

 

12.5 Waiver, Release and Renunciation

THE WARRANTIES, OBLIGATIONS AND LIABILITIES OF THE SELLER AND REMEDIES OF THE BUYER SET FORTH IN THIS CLAUSE 12 ARE EXCLUSIVE AND IN SUBSTITUTION FOR, AND THE BUYER HEREBY WAIVES, RELEASES AND RENOUNCES ALL OTHER WARRANTIES, OBLIGATIONS AND LIABILITIES OF THE SELLER AND RIGHTS, CLAIMS AND REMEDIES OF THE BUYER AGAINST THE SELLER, EXPRESS OR IMPLIED, ARISING BY LAW OR OTHERWISE, WITH RESPECT TO ANY NONCONFORMITY OR DEFECT IN ANY AIRCRAFT, COMPONENT, EQUIPMENT, ACCESSORY OR PART THEREOF DELIVERED UNDER THIS AGREEMENT, INCLUDING BUT NOT LIMITED TO ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS, ANY IMPLIED WARRANTY ARISING FROM COURSE OF PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE, ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY IN CONTRACT OR IN TORT, WHETHER OR NOT ARISING FROM THE SELLER’S NEGLIGENCE, (EXCEPT FOR SELLER’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT) ACTUAL OR IMPUTED, AND ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY FOR LOSS OR DAMAGE TO ANY AIRCRAFT, COMPONENT, EQUIPMENT, ACCESSORY OR PART THEREOF, FOR LOSS OF USE, REVENUE OR PROFIT WITH RESPECT TO ANY AIRCRAFT, COMPONENT, EQUIPMENT, ACCESSORY OR PART THEREOF, OR FOR ANY OTHER DIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES, PROVIDED THAT IN THE EVENT THAT ANY OF THE AFORESAID PROVISIONS SHOULD FOR ANY REASON BE HELD UNLAWFUL OR OTHERWISE INEFFECTIVE THE REMAINDER OF THIS SUB-CLAUSE 12.5 SHALL REMAIN IN FULL FORCE AND EFFECT.

 

12-16/17


12.6 Duplicate Remedies

The Seller shall not be obliged to provide any remedy which is duplicate of any other remedy provided to the Buyer under any part of this Clause 12 as may be amended, complemented or supplemented by other contractual agreements or Clauses of this Agreement.

 

12.7 Negotiated Agreement

The Buyer and the Seller agree that this Clause 12 has been the subject of discussion and negotiation and is fully understood by the parties, and that the price of the Aircraft and the other mutual agreements of the parties set forth in this Agreement were arrived at in consideration of, inter alia, the provisions of this Clause 12, specifically including the waiver, release and renunciation by the Buyer set forth in sub-Clause 12.5.

 

12-17/17


C O N T E N T S

 

CLAUSE

  

TITLE

13 -    PATENT - INDEMNITY
13.1    Seller’s Obligation and Buyer’s Remedy
13.2    Claim Administration
13.3    Buyer’s Exclusive Rights
13.4    Copyright Indemnity

 

13-1/4


13 - PATENT - INDEMNITY

 

13.1 Seller’s Obligation and Buyer’s Remedy

 

13.1.1 Subject to the provisions of sub-Clause 13.2.2, the Seller shall indemnify and hold harmless the Buyer from and against any damages, costs or expenses including legal costs (excluding damages, costs, expenses, loss of profits and other liabilities in respect of or resulting from loss of use of the Aircraft or any of them) resulting from any infringement or claim of infringement of:

 

(i) any British, French, German, Spanish or U.S. patent;

and:

 

(ii) any patent issued under the laws of any other country in which the Buyer may lawfully operate the Aircraft, provided that:

 

(1) from the time of design of such Aircraft, accessory, equipment or part and until infringement claims are resolved, such country and the flag country of the Aircraft are legally bound by and recognize their obligations and duties under the Chicago Convention on International Civil Aviation of December 7, 1944 and the flag country is fully entitled to all benefits of Article 27 thereof

or in the alternative,

 

(2) from such time of design and until infringement claims are resolved such country shall either be a party to the International Convention for the Protection of Industrial Property, or have in full force and effect patent laws which recognize and give adequate protection to patents issued under the laws of other countries.

 

13.1.2 The sub-Clause 13.1.1 shall not apply to Buyer Furnished Equipment nor to parts which the Buyer has requested the Seller to install on the Aircraft where such parts are to be supplied by Vendors with whom the Seller has no existing enforceable warranty agreements.

[*]

 

13-2/4


13.1.3 In the event that the Buyer is prevented from using a unit or a part of the Aircraft (whether by a valid judgment of a court of competent jurisdiction or by a settlement arrived at between claimant, Seller and Buyer), the Seller shall at its expense either:

 

(i) procure for the Buyer the right to use the same free of charge to the Buyer; or

 

(ii) replace the same as soon as possible with a non infringing substitute complying in all other respects with the requirements of this Agreement.

 

13.2 Claim Administration

 

13.2.1 If the Buyer receives a written claim or a suit is threatened or commenced against the Buyer for infringement, the Buyer shall:

 

(i) forthwith notify the Seller giving particulars thereof;

 

(ii) furnish to the Seller all data papers and records within the Buyer’s knowledge control or possession;

 

(iii) refrain from admitting any liability or making any payment or assuming any expenses, damages, costs or royalties or otherwise acting in a manner prejudicial to the defence or denial of such suit or claim;

 

(iv) fully cooperate with, and render all such assistance to, the Seller as may be pertinent to the defence or denial of the suit or claim;

 

(v) act in such a way as to mitigate damages and / or to reduce the amount of royalties which may be payable as well as to minimize costs and expenses.

 

13.2.2 The Seller shall be entitled either in its own name or on behalf of the Buyer to conduct negotiations with the party or parties alleging infringement and shall assume and conduct the defence or settlement of any suit or claim in the manner which it, in its opinion, deems proper and does not prejudice the Buyer.

 

13.3 Buyer’s Exclusive Rights

The Seller’s liability hereunder shall be conditional upon the strict and timely compliance by the Buyer with the terms of this Clause and is in lieu of any other liability to the Buyer express or implied which the Seller might incur at law as a result of any infringement or claim of infringement of any patent. [*]

 

13-3/4


13.4 Copyright Indemnity

The Seller shall indemnify and hold harmless the Buyer (such indemnity to include, without limitation, all reasonable legal fees and expenses incurred by the Buyer) against any claim that the normal Seller’s software infringes the intellectual property rights of any third party, provided that the Buyer:

 

(I) immediately upon acquiring knowledge of any such claim, notifies the Seller;

 

(ii) makes no admission or settlement of any claim;

 

(iii) allows the Seller to have sole control of all negotiations for its settlement, provided that same does not prejudice the Buyer;

 

(iv) gives the Seller all reasonable assistance in connection therewith.

The above indemnity shall only apply to software created by the Seller and shall only apply in respect of copyright infringement (which presently includes United Kingdom, France, Germany, Spain and United States of America) in countries which, at the time of infringement, are members of the Berne Union and recognise computer software as ‘’work’’ under the Berne Convention or any successor international agreement or treaties concerning the protection of copyrighted works.

 

13-4/4


C O N T E N T S

 

CLAUSE

  

TITLE

14    TECHNICAL PUBLICATIONS
14.1    General
14.2    Scope
14.3    Delivery
14.4    Revision Service
14.5    Vendor Equipment
14.6    Aircraft Identification for Technical Publications
14.7    Performance Engineer’s Programs
14.8    CD-ROM
14.9    Future Developments
14.10    Warranties
14.11    Proprietary Rights
Appendix A    Licence for use of the Performance Engineer’s Programs (PEP)
Appendix B    Licence for use of CD-ROM

 

14-1/11


14 - TECHNICAL PUBLICATIONS

 

14.1 General

This Clause covers the terms and conditions for the supply of technical publications (hereinafter “the Technical Publications”) to support the Aircraft operation.

The Technical Publications shall be supplied in the English language using the aeronautical terminology in common use.

 

14.2 Scope

Range, form, type, format, ATA/Non ATA compliance, revision, quantity and delivery schedule of the Technical Publications are covered in Exhibit “D”.

 

14.3 Delivery

 

14.3.1 The Technical Publications and corresponding revisions to be supplied by the Seller shall be sent to [*] only as advised by the Buyer.

Documentation already in the Buyer’s possession through a previous agreement shall not be included in the Technical Publications package subject of the present Agreement, except as quantities may be increased in accordance with the provisions of Exhibit “D”.

Packing and shipment of the Technical Publications and their revisions shall be carried out in consideration of the [*]. The shipment shall be [*]

The delivery schedule of the Technical Publications shall be phased as mutually agreed to correspond with Aircraft deliveries. The Buyer agrees to provide [*] notice when requesting a change to the delivery schedule.

 

14.3.2 It shall be the responsibility of the Buyer to coordinate and satisfy local Aviation Authorities needs for Seller’s Technical Publications. Such Technical Publications shall be supplied by the Seller at no charge to the Buyer [*]

 

14-2/11


14.4 Revision Service

 

14.4.1 General

Revision Service shall be offered [*] covered under this Agreement.

[*]

 

14.4.2 Service Bulletins (SB)

Seller’s Service Bulletin information shall be incorporated into the Technical Publications for the Buyer’s Aircraft after formal notification by the Buyer of its intention to accomplish a Service Bulletin. The split effectivity for the corresponding Service Bulletin shall remain in the Technical Publications until notification from the Buyer that embodiment has been completed on all the Buyer’s Aircraft.

The request for incorporation has to be made [*]

 

14.4.3 Customer Originated Changes (COC)

 

14.4.3.1 Buyer originated data documented in the Buyer’s own Airline Engineering Bulletin may be introduced into the following Seller’s customized manuals:

 

   

Aircraft Maintenance Manual,

 

   

Illustrated Parts Catalog,

 

   

Trouble Shooting Manual,

 

   

Wiring Manual (Schematics, Wirings, Lists).

COC data shall be established by the Buyer according to the “Guidelines for Customer Originated Changes” as issued by the Seller.

The data shall be labelled with COC as being Buyer originated.

The Seller shall endeavour to incorporate such Buyer originated data within the [*] revisions following the receipt of complete and accurate data for processing.

COC data shall be incorporated by the Seller in all affected customized manuals unless the Buyer specifies in writing the documents of its choice into which the COC data shall be incorporated. The customized manuals into which the COC data are incorporated shall only show the Aircraft configuration reflecting the COC data and not the configuration before such COC data’s incorporation.

 

14.4.3.2   The Buyer shall ensure that any such data have received prior agreement from its local Aviation Authorities.

 

14-3/11


14.4.3.3 The Buyer hereby acknowledges and accepts that the incorporation of any COC into the Technical Publications issued by [*]

The Seller shall not be required to check any COC data submitted for incorporation as aforesaid.

Further, the Buyer acknowledges full liability for the effects, including all related costs, which any COC may have on all subsequent Service Bulletins/modifications. The Seller shall undertake to incorporate in good faith the data related to such COC provided by the Buyer.

 

14.4.3.4 In the event of the Seller being required under any court order or settlement to indemnify any third party for injury, loss or damage incurred directly or indirectly as a result of incorporation of any COC into the Technical Publications issued by the Seller, the Buyer agrees to reimburse the Seller for all payments or settlements made in respect of such injury, loss or damage including any expenses incurred by the Seller in defending such claims.

The Seller’s liability shall in no event be affected by any communication written or oral which the Seller may make to the Buyer with respect to such documentation.

 

14.4.3.5 The Seller’s costs with respect to the incorporation of any COC as aforesaid shall be invoiced to the Buyer under conditions specified in the Seller’s then current Support Services Price List.

 

14.5 Vendor Equipment

Information relating to Vendor equipment which is installed on the Aircraft by the Seller shall be introduced into the Seller’s Technical Publications to the extent necessary for the comprehension of the systems concerned, [*] to the Buyer for the Technical Publications’ basic issue.

The Buyer shall supply the data related to Buyer Furnished Equipment (BFE) and Seller Furnished Equipment (SFE) (if not covered in the Seller’s Standard SFE definition) to the Seller [*] before the scheduled delivery of the Seller’s customized Technical Publications. The BFE and SFE data (if not covered in the Seller’s standard SFE definition) supplied by the Buyer to the Seller shall be in English language.

The Seller shall introduce BFE and SFE data into the Seller’s Technical Publications [*] to the Buyer for the Technical Publications basic issue. The transportation costs related to BFE and SFE data shipment shall be the Buyer’s responsibility.

 

14-4/11


14.6 Aircraft Identification for Technical Publications

For the customized Technical Publications the Buyer agrees to the allocation of Fleet Serial Numbers (FSN) in the form of block of numbers selected in the range from 001 to 999.

The sequence shall be interrupted only if two (2) different Propulsion Systems or different Aircraft models are selected.

The Buyer shall indicate to the Seller the Fleet Serial Number allocated to the Aircraft Manufacturer’s Serial Number (MSN) [*] The allocation of Fleet Serial Numbers to Manufacturer’s Serial Numbers shall not constitute any property, insurable or other interest of the Buyer whatsoever in any Aircraft prior to the delivery of and payment for such Aircraft as provided for in this Agreement.

The affected customized Technical Publications are:

 

   

Aircraft Maintenance Manual,

 

   

Illustrated Parts Catalog,

 

   

Trouble Shooting Manual,

 

   

Wiring Manual (Schematics, Wirings, Lists).

 

14.7 Performance Engineer’s Programs

[*] to the standard Operational Manuals, covered in Exhibit “D”, the Seller shall provide to the Buyer Performance Engineer’s Programs (PEP) under licence conditions as defined in Appendix A to this Clause.

 

14.8 CD-ROM

CD-ROM, in replacement for manuals/data provided by the Seller in other media, can be provided under licence conditions as defined in Appendix B to this Clause.

The affected Technical Publications are the following:

 

   

Trouble Shooting Manual,

 

   

Aircraft Maintenance Manual,

 

   

Illustrated Parts Catalog.

 

14.9 Future Developments

The Seller shall continuously monitor technological developments and apply them to document production and method of transmission where beneficial and economical.

 

14-5/11


14.10 Warranties

The Seller warrants that the Technical Publications are prepared in accordance with the state of the art at the date of their conception. Should a Technical Publication prepared by the Seller contain error or omission, the sole and exclusive liability of the Seller shall be to take all reasonable and proper steps to correct or replace at its option such Technical Publication. [*]. The provisions of sub-Clause 12.5, 12.6 and 12.7 shall apply to all Technical Publications as if references therein to Clause 12 were references to Clause 14.

 

14.11 Proprietary Rights

 

14.11.1 All proprietary rights, including but not limited to patent, design and copyrights, relating to Technical Publications and data supplied under this Agreement shall remain with the Seller. The Seller hereby grants the licence to Buyer to use Technical Publications and all informations contained therein. All such Technical Publications and data are supplied to the Buyer for the sole use of the Buyer who undertakes not to divulge the contents thereof to any third party save as permitted therein or otherwise pursuant to any Government or legal requirement imposed upon the Buyer or if any such information falls into the public domain other than by any unauthorised disclosure of Buyer.

These proprietary rights shall also apply to any translation into a language or languages or media that may have been performed or caused to be performed by the Buyer.

 

14.11.2 Whenever this Agreement provides for manufacturing by the Buyer, the consent given by the Seller shall not be construed as express or implicit approval howsoever of the manufactured products. The supply of the Technical Publications and data shall not be construed as any further right for the Buyer to design or manufacture any Aircraft or part thereof or spare part.

 

14.11.3 In the case of the Seller having authorized the disclosure to third parties either under this Agreement or by an express prior written authorization, the Buyer shall undertake that such third party agree to be bound by the same conditions and restrictions as the Buyer with respect to the disclosed Technical Publications.

 

14-6/11


LICENCE FOR USE OF THE PERFORMANCE ENGINEER’S PROGRAMS (PEP)

 

1. Grant

The Seller grants the Buyer the right to use the PEP in machine readable form during the term of this licence on a single computer.

Use of the PEP in readable form shall be limited to [*] other than the copies contained in the single computer and copies produced for checkpoint and restart purposes or additional copies made with the consent of the Seller for a specific need.

 

2. Merging

The PEP may be used and adapted in machine readable form for the purpose of merging it into other program material of the Buyer but, on termination of this Agreement, the PEP shall be removed from the other program material with which it has been merged.

The Buyer agrees to reproduce the copyright and other notices as they appear on or within the original media on any copies which the Buyer makes of the PEP.

 

3. Personal Licence

The above described licence is personal to the Buyer and, subject to prior written notice to the Seller by the Buyer of the name, address and identity thereof, Buyer’s affiliates, and is otherwise non-transferable and non-exclusive.

The transfer of the PEP Licence shall be subject to prior written consent from the Seller, such consent shall not be unreasonably withheld.

 

4. Installation

It is the Buyer’s responsibility to install the PEP and to perform any mergings and checks. The Seller shall however assist the Buyer’s operations engineers in the initial phase following the delivery of the PEP until such personnel reach the familiarization level required to make inputs and correlate outputs.

 

14-7/11


5. Proprietary Rights and Non-Disclosure

 

5.1 The PEP and the copyright and other proprietary rights of whatever nature in the PEP are and shall remain with the Seller. The PEP and its contents are designated as confidential.

 

5.2 The Buyer undertakes not to disclose the PEP or parts thereof and its contents to any third party without the prior written consent of the Seller, such consent shall not be unreasonably withheld. In so far as it is necessary to disclose aspects of the PEP to employees, such disclosure is permitted only for the purpose for which the PEP is supplied and only to the employee who needs to know the same.

 

6. Conditions of Use

 

6.1 The Seller does not warrant that the PEP shall not contain errors. However, should the PEP be found to contain any error at delivery, the Buyer shall notify the Seller promptly thereof and the Seller shall take all proper steps to correct the same at his own expense.

 

6.2 The Buyer shall ensure that the PEP is correctly used in appropriate machines as indicated in the Performance Programs Manual (PPM) and that staff are properly trained to use the same, to trace and correct running faults, to restart and recover after fault and to operate suitable checks for accuracy of input and output.

 

6.3 It is understood that the PPM is the user’s guide of the PEP and the Buyer shall undertake to use the PEP in accordance with the PPM.

 

6.4 The PEP are supplied under the express condition that the Seller shall have no liability in contract or in tort arising from or in connection with the use of or inability to use the PEP. However, Seller shall use its reasonable efforts to remedy any problem or error arising thereof and provide Buyer with any corrected versions thereof.

 

7. Duration

The rights under this licence shall be granted to the Buyer [*] the Buyer shall return the PEP and any copies thereof to the Seller, accompanied by a notice certifying that the Buyer has returned all existing copies.

 

14-8/11


LICENCE FOR USE OF CD-ROM

 

1. Grant

The Seller grants the Buyer the right to use the Aircraft Documentation Retrieval System (ADRES) and/or the Computer Assisted Aircraft Trouble Shooting (CAATS) on CD-ROM for the term of this Licence. Use of ADRES and/or CAATS shall be limited to the number of copies defined between the parties.

For clarification, it is hereby stated that the Power Plant IPC is not part of the electronic IPC and is only available on other media (paper or film).

 

2. Term

The rights under the Licence shall be granted [*] The grant shall be [*], the Buyer shall return ADRES and/or CAATS and all copies thereof to the Seller.

 

3. Revision Service

the Seller shall provide revision service for ADRES and/or CAATS during the term. The revision service shall be based on the revision service which the Seller provides for the documentation in paper or film format.

ADRES and/or CAATS CD-ROM shall be revised concurrently with the paper and film deliveries. However, temporary revisions are not currently provided in digital data format and are only available in paper format.

 

4 Personal Licence

The Licence is personal to the Buyer and, subject to prior written notice to the Seller by the Buyer of the name, address and identity thereof, Buyer’s affiliates, and is otherwise non-transferable and non-exclusive. The Buyer shall not permit any third party to use ADRES and/or CAATS, nor shall it transfer or sub-licence ADRES and/or CAATS to any third party, without prior written consent from the Seller, such consent shall not be unreasonably withheld.

 

14-9/11


5. Installation

The Seller shall provide the list of hardware on which ADRES and/or CAATS shall be installed. The Buyer shall be responsible for procuring such hardware and installing ADRES and/or CAATS.

 

6. Proprietary Rights

ADRES and/or CAATS are proprietary to the Seller and the copyright and all other proprietary rights in ADRES and/or CAATS are and shall remain the property of the Seller.

 

7. Copyright Indemnity

The Seller shall defend and indemnify the Buyer (such indemnity to include, without limitation, all reasonable legal fees and expenses incurred by the Buyer) against any claim that the normal use of ADRES and/or CAATS infringes the intellectual property rights of any third party, provided that the Buyer:

 

7.1 immediately upon acquiring knowledge of any such claim, notifies the Seller;

 

7.2 makes no admission or settlement of any claim;

 

7.3 allows the Seller to have sole control of all negotiations for its settlement, provided that same does not prejudice the Buyer ;

 

7.4 gives the Seller all reasonable assistance in connection therewith.

The above indemnity shall only apply to software created by the Seller and shall only apply in respect of copyright infringement in countries (which presently includes United Kingdom, France, Germany, Spain and United States of America) which, at the time of infringement, are members of the Berne Union and recognise computer software as “work” under the Berne Convention or any successor international agreement or treaties concerning the protection of copyright works.

 

8. Confidentiality

ADRES and/or CAATS and their contents are designated as confidential. The Buyer undertakes not to disclose ADRES and/or CAATS or parts thereof to any third party without the prior written consent of the Seller except (i) as required by applicable court orders or governmental regulations (in which case it shall give the Seller prior written notice of such disclosure and use its best efforts to limit such disclosure to the greatest extent possible) or (ii) for information which is in the public domain at the time of disclosure otherwise than through a breach of this Agreement (but compilations of information which are not public shall not be treated as being public by reason of them containing information which is). In so far as it is necessary to disclose aspects of ADRES and/or CAATS to the employees, such disclosure is permitted solely for the purpose for which ADRES and/or CAATS are supplied and only to those employees who need to know the same.

 

14-10/11


9. Conditions of Use

 

9.1 The Buyer shall not make any copies of ADRES and/or CAATS, except for installation purposes.

 

9.2 The Seller does not warrant that the operation of ADRES and/or CAATS shall be error free. In the event of an error occurring [*] of delivery, the sole and exclusive liability of the Seller shall be, at its expense, to correct ADRES and/or CAATS in the following revision. However a Temporary Revision in paper form shall be provided by the Seller in order to keep the Buyer documentation current.

 

9.3 THE WARRANTIES, OBLIGATIONS AND LIABILITIES OF THE SELLER AND REMEDIES OF THE BUYER SET FORTH IN THIS LICENCE ARE EXCLUSIVE AND IN SUBSTITUTION FOR, AND THE BUYER HEREBY WAIVES, RELEASES AND RENOUNCES ALL OTHER WARRANTIES, OBLIGATIONS AND LIABILITIES OF THE SELLER AND THE RIGHTS, CLAIMS OR REMEDIES OF THE BUYER AGAINST THE SELLER, EXPRESS OR IMPLIED, ARISING BY LAW OR OTHERWISE, WITH RESPECT TO ANY NON CONFORMITY OR DEFECT IN THE ADRES AND/OR CAATS DELIVERED UNDER THIS LICENCE.

 

10. Training

In addition to the user guide supplied with ADRES and/or CAATS, training and other assistance may be provided upon the Buyer’s request at conditions to be mutually agreed.

 

11. Replacement of Product

For clarification purposes it is hereby expressly stated that ADRES and/or CAATS shall be offered for a limited time period, not exceeding the term of this Licence. In the event that the Seller should offer a replacement product, the conditions for using such product shall be subject to a separate agreement which will be consistent to the terms hereof.

 

14-11/11


C O N T E N T S

 

CLAUSE

  

TITLE

15 -    SELLER REPRESENTATIVES
15.1    Seller’s Service
15.2    Customer Support Manager
15.3    Buyer’s Service
15.4    Withdrawal of Seller’s Representatives
15.5    Seller’s Representatives’ Status
15.6    Indemnity

 

15-1/4


15 - SELLER REPRESENTATIVES

 

15.1 Seller’s Service

 

15.1.1 The Seller shall provide [*] the services of a Technical Representative acting in an advisory capacity at the Buyer’s main base for a period [*]

In addition to the above assistance, the Seller shall provide to the Buyer with an allocation of [*]

 

15.1.2 The Seller has set up a global Technical Services network available for the [*] use by each of the Seller’s aircraft operators.

The Buyer shall [*] to this global network at any time in the course of the Aircraft operation, and in particular to the regional Technical Representatives closest to the Buyer’s main base after the end of the mission of the Technical Representatives referred to in sub-Clause 15.1.1, or to cover for their temporary absence in the course of their mission. A list of the contacts for the global Technical Services network including the regional Technical Representatives shall be provided to the Buyer.

 

15.1.3 The Seller shall cause similar services to be provided by competent Representatives of the Propulsion Systems Manufacturer and by Vendor Representatives when necessary and applicable.

 

15.2 Customer Support Manager

The Seller shall provide [*] Customer Support Manager to liaise on product support matters between the Seller’s main office and the Buyer after signature of this Agreement [*].

 

15.3 Buyer’s Service

 

15.3.1. From the date of arrival of the first of the Seller’s Representatives specified in sub-Clause 15.1.1 above the Buyer shall [*], a suitable office, conveniently located with respect to the Buyer’s maintenance facilities, with complete office furniture and equipment including telephone, telefax and SITA connection for the use of the Seller’s Representatives. [*]

 

15-2/4


15.3.2 For the Representatives mentioned in sub-Clause 15.1.1 [*]

 

15.3.3 The Buyer shall [*]

 

15.3.4 The Buyer shall assist the Seller to obtain from the civil authorities of the Buyer’s country those documents which are necessary to permit the Seller’s Representatives to live and work in the Buyer’s country. Failure of the Seller to obtain the necessary documents shall relieve the Seller of any obligation to the Buyer under the provisions of sub-Clauses 15.1.1 and 15.1.2.

 

15.3.5 The Buyer shall [*]

The Buyer shall not be responsible for the salaries and other benefits of Seller’s representatives. Seller’s representatives shall not be considered as employees of the Buyer.

 

15.4 Withdrawal of Seller’s Representatives

The Seller shall have the right to withdraw its assigned personnel as it sees fit if conditions arise which are in the Seller’s opinion dangerous to their safety or health or prevent them from fulfilling their contractual tasks.

 

15.5 Seller’s Representatives’ Status

In providing the above technical services, the Seller’s employees and other Representatives are deemed to be acting in an advisory capacity only and at no time shall they be deemed to act as Buyer’s employees or agents either directly or indirectly.

 

15-3/4


15.6 Indemnity

THE BUYER SHALL BE SOLELY LIABLE FOR, AND SHALL INDEMNIFY AND HOLD HARMLESS THE SELLER, ITS OFFICERS, AGENTS, SUBCONTRACTORS AND EMPLOYEES FROM AND AGAINST ALL LIABILITIES, DAMAGES, LOSSES, COSTS AND EXPENSES (INCLUDING ALL REASONABLE ATTORNEYS’ FEES AND COSTS, DAMAGES OR FEES NECESSARY FOR THE ESTABLISHMENT OF A RIGHT TO INDEMNIFICATION IF SUCH RIGHT IS SUCCESSFULLY ESTABLISHED) FOR ALL INJURIES TO AND DEATH OF PERSONS EXCEPTING INJURIES TO AND DEATH OF THE SELLER’S REPRESENTATIVES PROVIDING THE SERVICES UNDER THIS CLAUSE 15, AND FOR LOSS OF OR DAMAGE TO PROPERTY HOWSOEVER ARISING OUT OF OR IN CONNECTION WITH PERFORMANCE OF THE SERVICES UNDER THIS CLAUSE 15, [*]

THE SELLER HEREBY INDEMNIFIES AND HOLDS HARMLESS THE BUYER, ITS OFFICERS, AGENTS, SUBCONTRACTORS AND EMPLOYEES FROM AND AGAINST ALL LIABILITIES, DAMAGES, LOSSES, COSTS AND EXPENSES (INCLUDING ALL REASONABLE ATTORNEYS’ FEES AND COSTS, DAMAGES OR FEES NECESSARY FOR THE ESTABLISHMENT OF A RIGHT TO INDEMNIFICATION IF SUCH RIGHT IS SUCCESSFULLY ESTABLISHED) FOR INJURIES TO OR DEATH OF SELLER’S SAID REPRESENTATIVES DURING THE PERFORMANCE OF SERVICES UNDER THIS CLAUSE 15, [*]

FOR THE PURPOSE OF THIS SUB-CLAUSE 15.6, SELLER’S REPRESENTATIVES SHALL BE DEEMED TO INCLUDE THE REPRESENTATIVES REFERRED TO IN SUB-CLAUSE 15.1.1, 15.1.2 AND 15.2 ABOVE.

 

15-4/4


C O N T E N T S

 

CLAUSE

  

TITLE

16 -    TRAINING AND TRAINING AIDS
16.1    General
16.2    Logistics
16.3    Training Courses Execution
16.4    Training Aids and Materials
16.5    Training Engineering Support
16.6    Indemnities and Insurance

Appendix “A” Recommended Pilot Qualification in Relation to Training Requirements

Appendix “B” List of A319 and A320 Maintenance Courses

Appendix “C” List of A319 and A320 Operations/Performance Courses

 

16-1/14


16. TRAINING AND TRAINING AIDS

 

16.1. General

 

16.1.1. Training Organization

The Seller shall supply training and training aids for the Buyer’s personnel in accordance with the provisions set forth in this Clause 16.

Such training and training aids shall be provided by the Seller at its training center in BLAGNAC, FRANCE, or by Airbus Service Company (ASCO), a US affiliate of the Seller having its training center in MIAMI, FLORIDA, USA. For the purposes of this Clause 16, the term Seller shall include ASCO.

In as much as possible and subject to availability, the Training location shall be MIAMI, FLORIDA, USA. The Seller shall also make available its training center in BLAGNAC, FRANCE.

Certain training may also be provided by the Seller at one of the Buyer’s bases, if and when practicable for the Seller, under terms and conditions to be mutually agreed upon. In this event, all additional charges listed in sub-Clause 16.2.1.2 shall be borne by the Buyer.

Training courses provided for the Buyer shall be the Seller’s standard courses. The Seller shall be responsible for all training course syllabi, training aids and training equipment necessary for the organization of the training courses.

The Seller will comply with the Buyer’s Aviation Authority requirements with regard to approval the Seller’s courses by Buyer’s Aviation Authority.

The training curricula and the training equipment may not be fully customized. However, academic curricula may be modified to include the most significant of the Buyer’s Aircraft Specification (to the exclusion of Buyer Furnished Equipment (BFE)) as known at the latest six (6) months prior to the date of the first training course planned for the Buyer. The equipment used for flight and maintenance personnel shall not be fully customized; however, this equipment shall be configured in order to obtain the relevant approval and to support the Seller’s teaching programs.

In fulfillment of its obligation to provide training courses, the Seller shall deliver to the trainees a certificate of completion at the end of any such training course. The Seller’s certificate does not represent authority or qualification by any official Civil Aviation Authorities but may be presented to such officials in order to obtain relevant formal qualification.

Training courses provided for the Buyer’s personnel shall be scheduled according to plans mutually agreed upon during a Training Conferences.

The contractual training courses shall be provided up [*] In the event that the Buyer should use none or only part of the training or training aids to be provided pursuant to this Clause, no compensation or credit of any sort shall be allowed to the Buyer.

 

16-2/14


16.1.2. Prerequisites

The Buyer warrants that trainees have the prerequisite jet transport category experience as defined in Appendix “A” to this Clause 16 and are able to fully understand, write and speak English in order to attend the Seller’s courses.

It is clearly understood that said training courses are “Transition Training Courses” and not “Initial Training Courses”.

Furthermore, the Buyer shall be responsible for the selection of the trainees and for any liability with respect to the entry knowledge level of the trainees.

The Buyer shall provide the Seller with an attendance list of the trainees for each course with the validated qualification of each trainee. The Seller reserves the right to check the trainees’ proficiency and previous professional experience. The Seller shall in no case warrant or otherwise be held liable for the trainee’s performance as a result of any training services thus provided.

Upon the Buyer’s request, the Seller may be consulted to orientate the above mentioned trainee(s) through a relevant entry level training program, which shall be at the Buyer’s costs, and, if necessary, to coordinate with competent outside organizations for this purpose. Such consultation should be held during the Training Conference.

In the event the Seller should determine that a trainee lacks such entry level, such trainee shall, following consultation with the Buyer, be withdrawn from the program and shall then be considered to be at the Buyer’s disposal.

 

16.2. Logistics

 

16.2.1 Trainees

 

16.2.1.1 The Seller shall provide [*] local transportation by bus for the Buyer’s trainees to and from designated pick up points and the training center. Should the training take place in MIAMI, a rented car shall be provided for each group of [*] maintenance trainees.

The Seller shall provide [*] flight crew [*] or transportation by taxi at the beginning of the fixed base simulator phase of the course specifically used to enable the crew to attend either simulator or flight sessions at any time.

 

16.2.1.2 However, the Buyer shall indemnify and hold the Seller harmless from and against all liabilities, claims, damages, costs and expenses for any injury to or death of any of the Buyer’s trainees occasioned during the course of such transportation except if injury or death is due to Seller’s gross negligence and willfull misconduct.

 

16.2.1.3 Living expenses for the Buyer’s trainees are to be borne by the Buyer.

 

16-3/14


16.2.2 Seller’s Instructors

In the event that, at the Buyer’s request, training is provided by the Seller’s instructors at any location other than the Seller’s training centers, the Buyer shall reimburse the Seller for all the reasonable and necessary expenses related to the assignment of such instructors and their performance of the duties as aforesaid.

 

16.2.2.1 Living Expenses

Such expenses, covering the entire period from day of secondment to day of return to the Seller’s base, shall include but shall not be limited to lodging, food and local transportation to and from the place of lodging and the training course location. The Buyer shall reimburse the Seller for such expenses on the basis of a per diem rate which shall be fixed during the Training Conferences.

 

16.2.2.2 Air Travel

Airline reservation(s) shall be guaranteed and confirmed to the Seller’s instructors in business class [*] on the Buyer’s route network. When the use of the Buyer’s route network is not feasible or practical, the Buyer shall reimburse the Seller for business class travel on other airlines.

It is understood that transportation for the Seller’s instructors includes air travel to and from the Seller’s training centers and the place of assignment.

The Buyer shall be solely liable for and hereby indemnify and hold harmless, the Seller for any and all delay in the performance of the training outside of the Seller’s training centers associated with the transportation services described above and/or consequences of such delays.

 

16.2.3 Training Equipment Availability

Training equipment necessary for course performance at any course location other than Seller’s training centers shall be provided by the Buyer in accordance with the Seller’s specifications.

 

16-4/14


16.3. Training Courses Execution

 

16.3.1. Flight Crew Transition Course

The Seller shall train in a Flight Crew Transition course program (or a Cross Crew Qualification program when applicable) up to the CAT three level, [*] of the Buyer’s flight crews, each of which shall consist of one Captain (1) and one (1) First Officer, per firmly ordered Aircraft. The training manual shall be the Airbus Industrie Flight Crew Operating Manual.

In addition, the Seller shall provide [*] Flight Crew Instructor Familiarization Training Course for [*] Captains out of the Buyer’s flights crews receiving the Flight Crew Transition Course as referred above per each [*] Aircraft.

Whenever base flight training is required, the Buyer shall use its delivered Aircraft for said base flight training, which shall not exceed [*] per pilot. When such base flight crew training is performed in BLAGNAC, FRANCE, the Seller shall provide [*] line maintenance, including servicing, preflight checks and changing of minor components, subject to conditions agreed in the present agreement).

The Buyer shall provide mutually agreed spare parts as required to support said Aircraft in-flight training and shall provide liability insurance in line with sub-Clause 16.6.

In all cases, the Buyer shall bear all expenses such as fuel, oil and landing fees.

 

16.3.2. Flight Crew Line Initial Operating Experience

In order to assist the Buyer with initial operating experience after delivery of the first Aircraft, or at any other time agreed to by the parties, the Seller shall provide the Buyer [*] pilot instructor man-months (number of pilot present at the same time to be mutually agreed). The Buyer shall reimburse the expenses for each such instructor according to sub-Clause 16.2.2. Additional pilot instructors can be provided at the Buyer’s expense and upon conditions to be mutually agreed upon.

 

16-5/14


16.3.3. Maintenance Training

 

16.3.3.1 The available courses are listed in Appendix “B” to this Clause 16.

 

16.3.3.2 The Seller shall train [*] the Buyer’s ground personnel for a training period equivalent to [*] trainee days of instruction in the courses listed in Appendix “B” to this Clause 16 per each [*] Aircraft. However, the number of Engine Run-up courses shall be limited to [*] for [*] trainees per firmly ordered Aircraft [*]

 

16.3.3.3 Courses shall only be scheduled for a given minimum number of participants as agreed to at the Training Conference.

Trainee days are counted as follows:

 

   - for instruction at the Seller’s training centers : one (1) day of instruction for one (1) trainee equals one (1) trainee day. The number of trainees at the beginning of the course shall be counted as the number of trainees considered to have taken the course.

 

   - for instruction outside of the Seller’s training centers: [*] day of secondment of [*] Seller instructor equals the actual number of trainees attending the course or a minimum of [*] trainee days.

 

16.3.4. Line Maintenance Initial Operating Training

In order to assist the Buyer during the entry into service of the Aircraft, the Seller shall provide to the Buyer [*] maintenance instructor at the Buyer’s base for a period of [*]. This line maintenance training shall cover training in handling and servicing of Aircraft, flight crew / maintenance coordination, use of manuals and any other activities which might be deemed necessary for this training after delivery of the first Aircraft.

The Buyer shall reimburse the expenses for said instructor according to sub-Clause 16.2.2. Additional maintenance instructors can be provided at the Buyer’s expense.

 

16.3.5 Cabin Attendant Familiarization Course

The Seller shall offer up to [*] utilization of its mock-up for the training by the Buyer of [*] cabin attendants [*] Aircraft.

 

16-6/14


16.3.6. Performance / Operations Course

The available courses are listed in Appendix “C” to this Clause 16.

The Seller shall provide [*] trainee days of Performance/Operations training for the Buyer’s personnel. Courses shall only be scheduled for a given minimum number of participants as agreed upon at the Training Conference.

 

16.3.7. Vendors and Engine Manufacturer Training

The Seller shall ensure that major Vendors and the applicable Propulsion Systems Manufacturer provide maintenance and overhaul training on their products at appropriate times.

A list of the Vendors concerned may be supplied to the Buyer upon request.

 

16-7/14


16.4. Training Aids and Materials

 

16.4.1. Training Aids for Trainees at the Training Centers

Paper documentation for trainees receiving the instruction referred to above in sub-Clause 16.3 at the Seller’s training centers shall be free-of-charge.

Training aids shall be “FOR TRAINING ONLY” and as such are supplied for the sole and express purpose of training.

 

16.4.2. Training Aids and Materials for Buyer’s Training Organization

The Seller shall provide [*] of the Seller’s VACBI courseware related to each Aircraft type as covered by this Agreement, including the relating utilization rights. The courseware shall be the Seller VACBI courseware as used by the Seller in its official training centers.

The Seller will also provide the hardware for [*] stand alone working stations.

The Seller shall train [*] Buyer’s instructors (already trained on the Aircraft type) at the Seller’s facility, in order to allow such instructors to be able to train the Buyer’s personnel.

The items delivered to the Buyer under the terms of this sub-Clause 16.4.2 shall be for the training of the Buyer’s personnel only.

Supply of sets of additional courseware supports, as well as any extension to the right of utilization of such courseware, shall be subject to terms and conditions to be mutually agreed. VACBI supply general conditions shall apply and shall be detailed during the Training Conference.

The Buyer shall agree not to disclose the content of the courseware or any information or documentation provided by the Seller in relation to training in whole or in part, to any third party without prior written consent of the Seller.

 

16.5. [*]

 

16-8/14


16.6. Indemnities and Insurance

 

16.6.1. Indemnity and Insurance Relating to Ground Training

 

16.6.1.1 THE SELLER SHALL BE SOLELY LIABLE AND SHALL INDEMNIFY AND HOLD HARMLESS THE BUYER, ITS DIRECTORS, AGENTS AND EMPLOYEES FROM AND AGAINST ALL LIABILITIES, DAMAGES, COSTS AND EXPENSES (INCLUDING ALL REASONABLE ATTORNEYS’ FEES AND COSTS, DAMAGES OR FEES NECESSARY FOR THE ESTABLISHMENT OF A RIGHT TO INDEMNIFICATION IF SUCH RIGHT IS SUCCESSFULLY ESTABLISHED) FOR LOSSES OR DAMAGES TO THE SELLER’S PROPERTY AND/OR FOR INJURY TO OR DEATH OF SELLER’S DIRECTORS, AGENTS OR EMPLOYEES AND/OR FOR ANY DAMAGES CAUSED BY THE SELLER TO THIRD PARTIES CAUSED BY OR BY ANY WAY CONNECTED WITH THE PERFORMANCE OF THE GROUND TRAINING SERVICES SUBJECT TO THIS AGREEMENT, [*] THE BUYER SHALL BE SOLELY LIABLE AND SHALL INDEMNIFY AND HOLD HARMLESS THE SELLER, ITS DIRECTORS, AGENTS AND EMPLOYEES FROM AND AGAINST ALL LIABILITIES, DAMAGES, COSTS AND EXPENSES (INCLUDING ALL REASONABLE ATTORNEYS’ FEES AND COSTS, DAMAGES OR FEES NECESSARY FOR THE ESTABLISHMENT OF A RIGHT TO INDEMNIFICATION IF SUCH RIGHT IS SUCCESSFULLY ESTABLISHED) FOR LOSSES OR DAMAGES TO THE BUYER’S PROPERTY AND/OR FOR INJURY TO OR DEATH OF BUYER’S DIRECTORS, AGENTS OR EMPLOYEES, AND/OR FOR ANY DAMAGES CAUSED BY THE BUYER TO THIRD PARTIES, CAUSED BY OR BY ANY WAY CONNECTED WITH THE PERFORMANCE OF THE GROUND TRAINING SERVICES SUBJECT OF THIS AGREEMENT, [*]

 

16.6.1.2. For the purposes of this sub-Clause 16.6.1 “ground training services” include but are not limited to all training courses performed in classroom (classical or VACBI CBT courses), full flight simulator sessions, fixed base simulator sessions, field trips, provided under or in connection with the provisions of this Agreement.

 

16.6.2. Indemnity and Insurance relating to Training on Aircraft

 

16.6.2.1. THE BUYER SHALL BE SOLELY LIABLE FOR, AND SHALL INDEMNIFY AND HOLD HARMLESS THE SELLER AND ITS INSURERS, FROM AND AGAINST ALL LIABILITIES, CLAIMS, DAMAGES, COSTS AND EXPENSES (INCLUDING COURT COSTS AND REASONABLE ATTORNEY FEES) INCIDENT THERETO OR INCIDENT TO SUCCESSFULLY ESTABLISHING THE RIGHT TO INDEMNIFICATION, FOR INJURY TO OR DEATH OF ANY PERSON (INCLUDING ANY OF THE BUYER’S OFFICERS, AGENTS AND EMPLOYEES UTILIZING SUCH TRAINING SERVICES BUT NOT OFFICERS, EMPLOYEES OR AGENTS OF THE SELLER), AND/OR FOR LOSSES OF OR DAMAGES TO ANY PROPERTY, AND/OR FOR LOSS OF USE THEREOF ARISING (INCLUDING THE AIRCRAFT ON WHICH THE TRAINING SERVICES SHALL BE PERFORMED), CAUSED BY OR BY ANY WAY CONNECTED WITH THE PERFORMANCE OF ANY TRAINING SERVICES DEFINED IN THIS AGREEMENT [*].

THE FOREGOING INDEMNITY SHALL NOT APPLY TO LEGAL LIABILITY TO ANY PERSON OTHER THAN THE BUYER, ITS DIRECTORS, OFFICERS, AGENTS OR EMPLOYEES ARISING OUT OF AN ACCIDENT CAUSED SOLELY BY A PRODUCT DEFECT IN THE AIRCRAFT DELIVERED TO AND ACCEPTED BY THE BUYER HEREUNDER.

 

16-9/14


16.6.2.2. For the purposes of this sub-Clause 16.6.2. “training services” include but are not limited to all training courses, base flight training, line training, line assistance, flight, ferry flight, maintenance support, maintenance training (including On the Job Training and Hot Run-Up) or training support performed on aircraft, provided under or in connection with the provisions of this Agreement.

 

16.6.2.3. For all training period on the Buyer’s Aircraft, the Buyer shall cause the Seller to be named as additional insured under the Buyer’s passenger, third party, and cargo legal liability insurance policies to the extent of the Buyer’s undertaking set forth in sub-Clause 16.6.2.1. With respect to the Buyer’s hull all risks and hull war risks insurances, the Buyer shall cause the underwriters of the Buyer’s hull insurance policies to waive all rights of subrogation against the Seller and its insurers to the extent of the Buyer’s undertaking set forth in sub-Clause 16.6.2.1.

Any applicable deductible shall be borne by the Buyer.

With respect to the above policies, the Buyer shall furnish to the Seller, not less than seven (7) working days prior to the start of any such training period, certificates of insurance, in English language, evidencing the limits of liability cover and period of insurance in a form reasonably acceptable to the Seller in accordance with the industry standards from the Buyer’s insurance brokers certifying that such policies have been endorsed as follows:

 

(I) That each of the Seller, its subsidiaries, the associated contractors, and sub-contractors and the assignees of each of the foregoing in each case as notified by the Seller to the Buyer and their respective officers, employees and agents have been named as an additional insured under all liability policies to the extent of the Buyer’s undertaking set forth in sub-Clause 16.6.2.1 and in this sub-Clause 16.6.2.3.

 

(II) The Buyer’s policies shall be primary and non-contributory to any insurance maintained by the Seller.

 

(III) Such insurance shall not become ineffective, cancelled, or coverage decreased or materially changed except on thirty (30) days’ prior written notice (or lesser period in case of war risk coverage) thereof to the Seller; and

 

(IV) Under any such cover, all rights of subrogation against the Seller, its subsidiaries, each of the associated contractors and subcontractors, the assignees of each of the foregoing and their representative officers, employees and agents, have been waived to the extent of the Buyer’s undertaking and specifically referring to sub-Clause 16.6.2.1 and to this sub-Clause 16.6.2.3.

 

16.6.3. For the purposes of this sub-Clause 16.6, “the Seller and its subsidiaries” includes the Seller, Airbus Service Company and such other subsidiaries as are notified by the Seller to the Buyer from time to time.

 

16-10/14


16.6.4. If any claim is made or suit is brought against either party (or its respective officers, employees or agents) for damages pursuant to the sub-Clauses 16, the responsibility for which has been assumed by the other party pursuant to sub-Clause 16.6.1 or 16.6.2, the party against which a claim is so made or suit is so brought shall promptly give notice to the other party, and the party shall (unless otherwise requested by the former party against which a claim is so made or suit is so brought, in which case the other party nevertheless shall have the right to) assume and conduct the defence thereof, or effect any settlement which it, in its opinion, deems reasonable proper and does not prejudice the other party.

 

16-11/14


CLAUSE 16 - APPENDIX “A”

RECOMMENDED PILOT QUALIFICATION

IN RELATION TO TRAINING REQUIREMENTS

(transition courses)

The prerequisites listed below are the minimum requirements specified for Airbus training. If the appropriate regulatory agency or the specific airline policy of the trainee demand greater or additional requirements, they shall apply as prerequisites.

- FIRST OFFICER prerequisites

 

   

Fluency in English

 

   

500 hours minimum flying experience as pilot

 

   

300 hours experience on FAR/JAR 25 Transport Category aircraft

 

   

200 hours flying experience as airline pilot or a corporate pilot or military pilot

- CAPTAIN prerequisites

 

   

Fluency in English

 

   

1500 hours minimum flying experience as pilot

 

   

1000 hours experience on FAR/JAR 25 Transport Category aircraft

 

   

200 hours experience as airline or corporate pilot

For both FIRST OFFICER and CAPTAIN, if one or several of the above criteria are not met, the trainee must follow:

 

 

an adapted course (example : if not fluent in English, an adapted course with a translator)

 

 

or an ELT (Entry Level Training) program before entering the regular or the adapted course.

 

16-12/14


CLAUSE 16 - APPENDIX “B”

LIST OF A320 MAINTENANCE COURSES

Nota: List of A319 Maintenance Courses will be provided [*].

 

EM01 GENERAL FAMILIARIZATION

 

EM02 RAMP SERVICING

 

EM35 LINE MECHANICS

 

EM42 BASE MECHANICS / ELECTRICS / AVIONICS, LEVEL 3

 

EM45 BASE MECHANICS / ELECTRICS

 

EM52 BASE ELECTRICS / AVIONICS, LEVEL 3

 

EM07 ENGINE RUN-UP

 

EM09 MECHANICAL CONTROL RIGGING

 

EM10 CABIN INTERIOR / EMERGENCY EQUIPMENT

 

EM11 STRUCTURE REPAIR TECHNIQUE

 

EM12 ON-THE-JOB PRACTICAL TRAINING (If feasible)

 

EM13 MAINTENANCE LINE TRAINING

 

EM16 NON-DESTRUCTIVE TESTING

 

EM17 COMPOSITE STRUCTURE REPAIR

 

XM15 BASIC DIGITAL AND MICROPROCESSOR

 

EM 20 AIDS MAINTENANCE

 

EM 21 STRUCTURAL REPAIR FOR ENGINEERS

 

EM 23 MATERIAL AND PROCESS FOR ENGINEERS

 

Note : This list of courses is provided for information only and may be modified by the Training Organization.

 

16-13/14


CLAUSE 16 - APPENDIX “C”

LIST OF A320 OPERATIONS/PERFORMANCE COURSES

Nota: List of A319 Maintenance Courses will be provided [*].

 

EG01 MANAGEMENT SURVEY COURSE

 

EG02 PERFORMANCE ENGINEER COURSE

 

EG03 DISPATCHER COURSE

 

EG38 DISPATCHER TRANSITION AND ETOPS QUALIFICATION COURSE

 

EG04 CARGO LOADING / HANDLING

 

EG06 WEIGHT AND BALANCE COURSE

 

EG07 LOAD MASTER TRANSITION COURSE

 

EG67 BALANCE CHART DESIGN AND LOAD MASTER TRANSITION COURSE

 

EG68 ETOPS QUALIFICATION DISPATCHER COURSE

 

Note : This list of courses is provided for information only and may be modified by the Training Organization.

 

16-14/14


C O N T E N T S

 

CLAUSE

  

TITLE

17 -    VENDOR PRODUCT SUPPORT
17.1    Vendor Product Support Agreements
17.2    Vendor Compliance

A320 Family - TAI - 03/1998

 

17-1/2


17 - VENDOR PRODUCT SUPPORT

 

17.1 Vendor Product Support Agreements

 

17.1.1 The Seller has obtained product support agreements transferable to the Buyer from Vendors of Seller Furnished Equipment listed in the Specification. Such agreements shall be transferred to the Buyer at time of delivery of each Aircraft.

 

17.1.2 These agreements are based on the “World Airlines Suppliers Guide” and include Vendor commitments as contained in the “Vendor Product Support Agreements” which include the following provisions:

 

17.1.2.1 Technical data and manuals required to operate, maintain, service and overhaul the Vendor items. Such technical data and manuals shall be prepared in accordance with the applicable provisions of ATA Specification 100 and 101 in accordance with Clause 14 including revision service and be published in the English language. The Seller shall recommend that software data, supplied in the form of an Appendix to the Component Maintenance Manual, be provided in compliance with ATA Specification 102 up to level 3 to protect Vendor’s proprietary interest.

 

17.1.2.2 Warranties and guarantees including standard warranties. In addition, landing gear Vendor shall provide Service Life Policies for landing gear structure.

 

17.1.2.3 Training to ensure efficient operation, maintenance and overhaul of the Vendor’s items for the Buyer’s instructors, shop and line service personnel.

 

17.1.2.4 Spares data in compliance with ATA 200/2000 Specification, Initial Provisioning Recommendations, spare parts and logistic service including routine and emergency deliveries.

 

17.1.2.5 Technical service to assist the Buyer with maintenance, overhaul, repair, operation and inspection of Vendor items as well as required tooling and Spares provisioning.

 

17.2 Vendor Compliance

The Seller shall monitor Vendor compliance with support commitments defined in the “Vendor Product Support Agreements” and shall take remedial action together with the Buyer if necessary.

 

A320 Family - TAI - 03/1998

17-2/2


C O N T E N T S

 

CLAUSE

  

TITLE

18 -    BUYER FURNISHED EQUIPMENT AND DATA
18.1    Administration
18.2    Aviation Authorities’ Requirements
18.3    Buyer’s Obligation and Seller’s Remedies
18.4    Title and Risk of Loss

 

18-1/4


18 - BUYER FURNISHED EQUIPMENT AND DATA

 

18.1 Administration

 

18.1.1 [*], the Seller shall provide for the installation of those items of equipment which are identified in the Specification as being furnished by the Buyer (“Buyer Furnished Equipment” or “BFE”).

The Seller shall advise the Buyer of the dates by which, in the planned release of engineering for the Aircraft, the Seller requires a written detailed engineering definition including the description of the dimensions and weight of BFE, the information related to its certification and information necessary for the installation and operation thereof. The Buyer shall furnish such detailed description and information by the dates so specified. Such information, dimensions and weights shall not thereafter be revised unless authorized by a SCN.

The Seller shall also furnish in due time to the Buyer a schedule of dates and indication of shipping addresses for delivery of Buyer Furnished Equipment and, where requested by the Seller, additional Spare Buyer Furnished Equipment to the Seller to permit installation in the Aircraft and delivery of the Aircraft in accordance with the delivery schedule and the Buyer shall provide such equipment, when requested by the Seller by such dates.

The Buyer shall also provide, when requested by the Seller, at AEROSPATIALE Works in TOULOUSE (FRANCE) and / or at DAIMLER-BENZ AEROSPACE AIRBUS GmbH, Division Hamburger Flugzeugbau Works in HAMBURG (FEDERAL REPUBLIC OF GERMANY) adequate field service including support from BFE suppliers to act in a technical advisory capacity to the Seller in the installation, calibration of any BFE.

 

18.1.2 The Seller shall be entitled to refuse any item of BFE which it reasonably considers incompatible with the Specification. The Seller shall advise the Buyer of the reasons for such refusal.

 

18.1.3 The BFE shall be imported into FRANCE or into the FEDERAL REPUBLIC OF GERMANY by the Buyer under a suspensive customs system (“Régime de l’entrepôt industriel pour fabrication coordonnée” or “Zollverschluss”) without application of any French or German tax or customs duty, and shall be Delivered Duty Unpaid (DDU) according to the Incoterms definition.

Shipping Addresses :

AEROSPATIALE, Société Nationale Industrielle

316 Route de Bayonne

31300 TOULOUSE

F R A N C E

 

18-2/4


   or :

DAIMLER-BENZ AEROSPACE AIRBUS GmbH

Division Hamburger Flugzeugbau

Kreetslag 10

21129 HAMBURG

FEDERAL REPUBLIC OF GERMANY

as provided for in sub-Clause 18.1.

 

18.1.4 [*]

 

18.2 Aviation Authorities’ Requirements

The Buyer warrants that Buyer Furnished Equipment shall meet the requirements of the applicable Specification, shall comply with applicable DGAC/LBA Regulations, and be approved by the DGAC/LBA or/and the Buyer’s Airworthiness Authorities for installation and use on the Aircraft at the time of delivery of such Aircraft. The Buyer shall, at its expense, be responsible for adjusting and calibrating Buyer Furnished Equipment to the extent necessary to obtain the DGAC/LBA and the Buyer’s Airworthiness Authorities approvals. The Seller will assist the Buyer to obtain the approval from the DGAC/LBA, if necessary.

 

18-3/4


18.3 Buyer’s Obligation and Seller’s Remedies

 

18.3.1 Any delay or failure in complying with the foregoing warranty or in providing the descriptive information or service representatives mentioned in sub-Clause 18.1 hereof or in furnishing the Buyer Furnished Equipment or in obtaining any required approval for such equipment under the DGAC/LBA or any other Buyer’s Airworthiness Authorities Regulations shall, to the extent that such delay or failure in turn delays the performance of any act to be performed by the Seller, cause the Final Price of the Aircraft to be increased by the amount of the Seller’s documented additional costs, if any, directly attributable to such delay or failure including without limitation storage, taxes, insurance and reasonable costs of out-of sequence installation.

 

18.3.2 [*]

 

18.4 Title and Risk of Loss

Title to and risk of loss of any BFE shall at all times remain with the Buyer, except that risk of loss (excluding however loss of use) shall be with the Seller for as long as such BFE will be under the care, custody and control of the Seller.

 

18-4/4


C O N T E N T S

 

CLAUSE

  

TITLE

19 -    DATA RETRIEVAL

 

19-1/2


19 - DATA RETRIEVAL

The Buyer shall provide the Seller, as the Seller may reasonably request, with all the necessary data pertaining to the operation of the Aircraft for an efficient and coordinated survey of all reliability, maintainability, operational and cost data with a view to improving the safety, availability and operational costs of the Aircraft.

 

19-2/2


C O N T E N T S

 

CLAUSE

  

TITLE

20 -    TERMINATION
20.1    Termination for Insolvency
20.2    Termination for Non-Payment of Predelivery Payments
20.3    Termination for Failure to Take Delivery
20.4    General

 

20-1/3


20 - TERMINATION

 

20.1 Termination for Insolvency

In the event that either the Seller or the Buyer (including for the purpose of such Clause the Buyer’s indemnifying party or credit support provider, if any):

 

(a) makes a general assignment for the benefit of creditors or becomes insolvent;

 

(b) files a voluntary petition in bankruptcy;

 

(c) petitions for or acquiesces in the appointment of any receiver, trustee or similar officer to liquidate or conserve its business or any substantial part of its assets;

 

(d) commences under the laws of any competent jurisdiction any proceeding involving its insolvency, bankruptcy, reorganisation, readjustment of debt, dissolution, liquidation or any other similar proceeding for the relief of financially distressed debtors;

 

(e) becomes the object of any proceeding or action of the type described in (c) or (d) above and such proceeding or action remains undismissed or unstayed for a period of [*] days; or

 

(f) is divested of a substantial part of its assets for a period of [*] days,

then the other party may, to the full extent permitted by law, by written notice, terminate all or part of this Agreement.

 

20.2 Termination for Non-Payment of Predelivery Payments

If for any Aircraft the Buyer fails to make any predelivery payments [*] due date of payment, in the manner and in the amount specified in sub-Clause 5.2.1 the Buyer and the Seller shall meet to review the situation and in good faith attempt to resolve the issue. Should no resolution be reached and such payment not be forthcoming, the Seller may, upon written notice given [*] the due date, terminate all or part of this Agreement with respect to undelivered Aircraft on [*] the [*] and (ii) [*]

 

20-2/3


20.3 Termination for Failure to Take Delivery

If the Buyer fails to comply with its obligations as set forth under Clause 8.3 and/or Clause 9.4, or fails to pay the Final Price of the Aircraft when required to do so, the Seller shall have the right to put the Buyer on notice to do so [*]

If the Buyer has not cured such default within such period, the Seller may, by written notice, terminate all or part of this Agreement with respect to undelivered Aircraft.

All costs referred to in sub-Clause 9.4.1 and relating to the period between the delivery date and the date of termination of all or part of this Agreement shall be borne by the Buyer.

 

20.4 General

 

20.4.1 To the full extent permitted by law, the termination of all or part of this Agreement, pursuant to sub-Clauses 20.1, 20.2 and 20.3 shall become effective immediately upon receipt by the relevant party of the written notice of termination sent by the other party without it being necessary for either party to take any further action or to seek any consent from the other party or any court having jurisdiction.

 

20.4.2 The right for either party under sub-Clause 20.1 and for the Seller under sub-Clauses 20.2 and 20.3 to terminate all or part of this Agreement shall be without prejudice to any other rights and remedies available to such party to seek termination of all or part of this Agreement before any court having jurisdiction pursuant to any failure by the other party to perform its obligations under this Agreement.

 

20.4.3 If the party taking the initiative of terminating this Agreement decides to terminate part of it only, the notice sent to the other party shall specify the number of Aircraft, services, data and other items undelivered or unfurnished on the date of such termination for which such partial termination shall be effective.

 

20.4.4 In the event of termination of this Agreement following a default from the Buyer, including but not limited to a default under sub-Clauses 20.1, 20.2 and 20.3, the Seller, without prejudice to any other rights and remedies available under this Agreement or by law, shall be entitled to [*]

 

20-3/3


C O N T E N T S

 

CLAUSE

  

TITLE

21 -    ASSIGNMENT
21.1    Assignment
21.2    Transfer Prior to Delivery
21.3    Post-delivery Sale or Lease of Aircraft
21.4    Transfer to Facilitate financing
21.5    Exculpatory or Indemnity Clause in Post-delivery Sale or Lease
21.6    Common conditions to assignment
21.7    Buyer’s rights

 

21-1/4


21 - ASSIGNMENT

 

21.1 Assignment

This Agreement is personal as to the parties hereto and, except as specified in Sub-Clause 21.2, shall not be assigned by either party hereto without the express written consent of the other party hereto. Any assignment made without such consent shall be of no effect whatsoever as between the parties hereto.

 

21.2 Transfer Prior to Delivery

Prior to delivery the Buyer shall not resell, lease or transfer the Aircraft or contract to do so, except in a case of contract having an effect after Aircraft delivery (in which such case the provisions of Sub-Clause 21.3 shall apply), without the Seller’s written consent such consent not unreasonably withheld. [*], provided, that the Buyer shall remain responsible hereunder for any obligations with respect to such Aircraft in accordance with Sub-Clause 21.6 of this Agreement and any guarantee or other security provided to the Seller hereunder shall remain in place. No action taken by the Buyer or the Seller under this sub-Clause 21.2 shall require the Seller to divest itself of title to or possession of such Aircraft until delivery and payment therefore as provided in this Agreement. All reasonable expenses (including but not limited to all legal expenses) in connection with such sale, lease or transfer will be borne by the Buyer.

 

21.3 Post-delivery Sale or Lease of Aircraft

In the event that the Buyer at any time following delivery of any Aircraft sells or leases such Aircraft (including any sale for financing purposes), all of Buyer’s rights with respect to such Aircraft under this Agreement shall inure to the benefit of the purchaser or lessee of such Aircraft effective upon the Seller’s receipt of such purchaser’s express written agreement, in a form reasonably satisfactory to the Seller, to be bound by and comply with all applicable terms, conditions and limitations of this Agreement.

 

21-2/4


   In particular:

 

(a) This Agreement or any part thereof shall not be assigned, sold or transferred by the Buyer in favour of a party to whom the Seller is prohibited by law or any governmental regulation of any of the French Republic, the Federal Republic of Germany, Spain, the United Kingdom or the United States of America from selling the Aircraft or from carrying out its obligations hereunder.

 

(b) The Agreement or any part thereof shall not be assigned, sold or transferred by the Buyer if such transfer would result in the Seller being subject to any greater liabilities, costs or expenses (including fees of professional advisers) than that to which it would have been subject if no such assignment were entered into.
(c) The Seller also reserves the right to refuse its consent, at its own discretion therefor, to an assignment, novation, delegation, sale or transfer to an Aircraft manufacturer or its affiliates.

 

(d) The Seller reserves the right within [*] of receipt of Buyer’s request to reasonably refuse its consent to an assignment, movation, delegation, sale or transfer of this Agreement to an operating lessor.

 

21.4 [*]

 

21-3/4


21.5 [*]

 

21.6 Common conditions to assignment

Any assignment under this Clause 21 shall be subject to all of the following conditions:

 

(1) That the assignee agrees, in a form satisfactory to the Seller, to be bound by all relevant terms, conditions and limitations of this Agreement, and

 

(2) That the assignor shall nonetheless remain liable to Seller in respect of all the rights and obligations under this Agreement and shall guarantee the performance by the assignee of all duties and obligations related with the assigned rights as well as with the assignment itself including but not limited to conditions under this sub-Clause 21.6, provided however, that in the case of an assignment of rights in respect of the warranties provided herein arising in connection with the sale of an Aircraft, Buyer shall be relieved of all such liability provided that the purchaser of such aircraft shall have agreed in writing to perform all obligations of the Buyer in respect of such warranties such writing to be in a form satisfactory to Seller, to be reviewed by Seller within [*] of receipt thereof, and

 

(3) That the assignor shall indemnify and hold harmless the Seller against any increased risks, liabilities, costs and expenses resulting from the assignment.

 

21-4/4


C O N T E N T S

 

CLAUSE

  

TITLE

22 -    MISCELLANEOUS PROVISIONS
22.1    Notices
22.2    Waiver
22.3    Interpretation and Law
22.4    Alteration to Contract
22.5    Language
22.6    Confidentiality
22.7    General

 

22 - 1/4


22 - MISCELLANEOUS PROVISIONS

 

22.1 Notices

All notices and requests required or authorized hereunder shall be given in writing either by personal delivery to an authorized representative of the party to whom the same is given or by registered mail (return receipt requested) or by telegraph or cable and the date upon which any such notice or request is so personally delivered or if such notice or request is given by registered mail, telegraph or cable, the date upon which it is received by the addressee shall be deemed to be the effective date of such notice or request.

Seller’s address for notices is:

AIRBUS INDUSTRIE

Attention to V.P. Contracts

1 Rond-Point Maurice Bellonte

31707 BLAGNAC CEDEX

FRANCE

Buyer’s address for notice is :

ATLANTIC AIRCRAFT HOLDING LIMITED

Attention to Managing Director

Bolam House

King and George Streets

N A S S A U

B A H A M A S

or such other address or such other person as the party receiving the notice or request may reasonably designate from time to time.

 

22 - 2/4


22.2 Waiver

The failure of either party to enforce at any time any of the provisions of this Agreement, or to exercise any option herein provided, or to require at any time performance by the other party of any of the provisions hereof, shall in no way be construed to be a present or future waiver of such provisions nor in any way to affect the validity of this Agreement or any part thereof or the right of the other party thereafter to enforce each and every such provision. The express waiver (whether one (1) or several times) by either party of any provision, condition or requirement of this Agreement shall not constitute a waiver of any future obligation to comply with such provision, condition or requirement.

 

22.3 Interpretation and Law

This Agreement shall be governed by and construed and performance thereof shall be determined in accordance with the laws of France.

In the event of a dispute arising from the interpretation performance or breach of this Agreement, said dispute shall fall within the exclusive jurisdiction of the French Courts and only the laws of France shall be applicable.

In the event that any provision of this Agreement should for any reason be held ineffective, the remainder of this Agreement shall remain in full force and effect.

Clause and sub-Clause headings used in this Agreement are for convenient reference only and shall not affect the Agreement’s interpretation.

 

22.4 Alterations to Contract

This Agreement contains the entire agreement between the parties and supersedes any previous understandings, commitments or representations whatsoever oral or written. This Agreement shall not be varied except by an instrument in writing of date even herewith or subsequent hereto executed by both parties or by their duly authorized representatives.

 

22.5 Language

All correspondence, documents and any other written matters in connection with this Agreement shall be in English.

This Agreement has been executed in two (2) original copies which are in English.

 

22 - 3/4


22.6 Confidentiality

This Agreement including any Exhibits, or other documents related hereto shall be treated by both parties as confidential and shall not be released in whole or in part to any third party except as may be required by law, or to professional advisors for the purpose of implementation hereof. In particular, each party agrees not to make any press release concerning the whole or any part of the contents and/or subject matter hereof or of any future addendum hereto without the prior consent of the other party hereto which consent shall not be unreasonably withheld or delayed.

IN WITNESS WHEREOF this Agreement was entered into the day and year first above written.

 

For and on behalf of

 

ATLANTIC AIRCRAFT HOLDING LIMITED

 

By: /s/ Federico Bloch

 

Its: Attorney-in-Fact

 

Date: March, 1998

 

Witness:

  

For and on behalf of

 

AIRBUS INDUSTRIE

 

By: /s/ Jean Pierson

 

Its: Managing Director

 

Date: March, 1998

 

Witness:

 

By:   /s/ Roberto Kriete     By:   /s/ Rafael Alonso
Its:   Attorney-in-Fact     Its:   Vice-President Sales
        Latin America and Caribbean

 

22 - 4/4


EXHIBIT “A”

The A319-100 and A320-200 Standard Specification are contained in a separate folder.

 

* [Eleven pages have been omitted in accordance with a request for confidential treatment.]

 

Exh. A


EXHIBIT “B”

S.C.N. FORM

 

Exh. B


 

 

 

 

SPECIFICATION CHANGE

NOTICE

 

(SCN)

  

For

 

SCN Number

Issue

Dated

Page

Title:

Description

        Effect on weight

                    Manufacturer’s Weight Empty Change:

                    Operational Weight Empty Change….:

                    Allowable Payload Change………….:

Specification changed by this SCN

This SCN requires prior or concurrent acceptance of the following SCN (s) :

Price per aircraft

US DOLLARS :

AT DELIVERY CONDITIONS :

 

This change will be effective on

                   AIRCRAFT N°    and subsequent.

Provided approval is received by

     

Buyer approval

   Seller approval   

By :

   By :   


 

 

 

 

SPECIFICATION CHANGE

NOTICE

 

(SCN)

  

For

 

SCN Number

Issue

Dated

Page

Specification repercussion :

After contractual agreement with respect to weight, performance, delivery, etc, the indicated part of the specification wording will read as follows :


 

 

 

 

SPECIFICATION CHANGE

NOTICE

 

(SCN)

  

For

 

SCN Number

Issue

Dated

Page

Scope of change (FOR INFORMATION ONLY)


EXHIBIT “C”

SERVICE LIFE POLICY

ITEMS OF PRIMARY STRUCTURE

 

Exh. C-1/4


SELLER SERVICE LIFE POLICY

 

1. The Items covered by the Service Life Policy pursuant to sub-Clause 12.2 are those Seller Items of primary and auxiliary structure described hereunder.

* [Three pages have been omitted in accordance with a request for confidential treatment.]

 

Exh. C-2/4


EXHIBIT “D”

MANUALS

 

Exh. D1/9


LIST OF DOCUMENTS

The following identifies the Technical Publications provided in support of the Aircraft. The explanation of the table is as follows:

 

MANUAL DESIGNATION    Self explanatory.
ABBREVIATED DESIGNATION (Abbr)    Self explanatory.

FORM

 

AC APERTURE CARD. Refers to 35mm film contained on punched aperture cards.

 

F MICROFILM. Refers to 16mm roll film in 3M type cartridges.

 

MF MASTER FILM. Refers to thick diazo film suitable for further reproduction.

 

MP MASTER PAPER. Refers to manuals in paper with print on one (1) side of the sheet, no folded pages. No punching, highly contrasted, suitable for further reproduction or filming.

 

P1 PRINTED ONE SIDE. Refers to manuals in paper with print on one (1) side of the sheets only.

 

P2 PRINTED BOTH SIDES. Refers to manuals with print on both sides of the sheets.

 

DD DIGITAL DATA. Data format of deliverables depends on Aircraft model and data, for more details please refer to the document “Digital Deliverable Status”.

 

CD Compact Disc

 

MCF Micro Fiches

 

Exh. D2/9


TYPE

 

C CUSTOMIZED. Refers to manuals which are applicable to an individual Airbus customer/operator fleet or aircraft.

 

G GENERIC. Refers to manuals which are applicable to a whole group of Airbus customers for all aircraft types/models/series.

 

E ENVELOPE. Refers to manuals which are applicable to a whole group of Airbus customers for a specific aircraft type/model/series.

 

P PRELIMINARY. Refers to preliminary data or manuals which may consist of either:

 

one-time issue not maintained by revision service, or

 

preliminary issues maintained by revision service until final manual or data delivery, or

 

supply of best available data under final format with progressive completion through revision service.

ATA Reference to manuals established with reference to ATA Specification No 100:

The manuals responding to ATA Specification No 100 shall be essentially in accordance with revision 23 for Aircraft Model A319, A320, A321.

 

QUANTITY (Qty) Self explanatory.

 

DELIVERY (Deliv) Manual delivery refers to scheduled delivery dates and is expressed in either the number of corresponding days prior to first Aircraft delivery, or nil (0) corresponding to the first delivery day.

The number of days indicated shall be rounded up to the next regular revision release date.

 

Exh. D3/9


MANUAL DESIGNATION    Abbr    Form    Type    ATA    Qty    Deliv

* [Six pages have been omitted in accordance with a request for confidential treatment.]

 

Exh. D4/9


EXHIBIT “E”

SPARE PARTS PROCUREMENT

 

Exh. E1/31


SPARE PARTS PROCUREMENT

C O N T E N T S

 

CLAUSE

  

TITLE

1    GENERAL
2    INITIAL PROVISIONING
3    CENTRAL STORE
4    DELIVERY
5    PRICE
6    PAYMENT PROCEDURES AND CONDITIONS
7    TITLE
8    PACKAGING
9    DATA RETRIEVAL
10    BUY-BACK
11    WARRANTIES
12    SELLER PARTS LEASING
13    TERMINATION OF THE SPARES PROCUREMENT COMMITMENTS

 

Exh. E2/31


1. GENERAL

 

1.1 This Exhibit covers the terms and conditions for the material support offered by the Seller to the Buyer with respect to material (hereinafter referred to as “Material”) specified within the following categories:

 

a. Seller Parts (Seller’s Proprietary Material bearing an official part number of the Seller or Material for which the Seller has the exclusive sales rights) ;

 

b. Vendor Parts classified as Rotable Line Replacement Units;

 

c. Vendor Parts classified as Expendable Line Maintenance Parts;

 

d. Ground Support Equipment (GSE) and Special (To Type) Tools;

 

e. Hardware and standard material;

Rotable Line Replacement Units as specified in sub-Clauses 1.1.a and 1.1.b above having less than fifty (50) flight-hours are considered as new.

Material covered under sub-Clause 1.1.e above when being part of Initial Provisioning shall only be supplied as a packaged kit.

In addition, this Exhibit “E” establishes the general terms and conditions under which the Buyer may lease certain Seller Parts as defined in Appendix A to Clause 12 of this Exhibit “E” for the Buyer’s use on its Aircraft in commercial air transport service.

 

1.2 Scope of Material Support

The Material support to be provided hereunder by the Seller covers all items classified as Material in sub-Clause 1.1 for Initial Provisioning and sub-Clauses 1.1.a thru 1.1.d for replenishment under the conditions detailed in this Exhibit “E”.

 

1.2.1 Engine, nacelles, quick engine change unit and thrust reverser accessories and parts, including associated parts, are not covered under this Exhibit “E” and shall be subject to direct agreements between the Buyer and the relevant Propulsion Systems Manufacturer. The Seller shall use its reasonable efforts to assist the Buyer in case of any difficulties with availability of Propulsion Systems and associated spare parts.

 

Exh. E3/31


1.2.2 [*]

 

1.3 Agreements of the Buyer

 

1.3.1 The Buyer agrees to purchase from the Seller the Seller Parts required for the Buyer’s own needs during the Term, provided that the provisions of this sub-Clause 1.3 shall not in any way prevent the Buyer from resorting to the Seller Parts stocks of other airlines operating the same Aircraft or from purchasing Seller Parts from said airlines, or from distributors or dealers, provided said Seller Parts have been designed and manufactured by, or obtained from, the Seller.

 

1.3.2 The Buyer may manufacture or have manufactured for its own use without paying any licence fee to the Seller, or may purchase from any other source whatsoever, parts equivalent to Seller Parts :

 

1.3.2.1 after expiration of the Term if at such time the Seller Parts are out of stock,

 

1.3.2.2 at any time, to the extent Seller Parts are needed to effect AOG repairs upon any Aircraft delivered under the Agreement and are not available from the Seller within a lead time shorter than or equal to the time in which the Buyer can provide such Seller Parts, and provided the Buyer shall not sell such Seller Parts,

 

1.3.2.3 in the event that the Seller fails to fulfil its obligations with respect to any Seller Parts pursuant to sub-Clause 1.2 of this Exhibit “E” within a reasonable time after written notice thereof from the Buyer,

 

1.3.2.4 in those instances where a Seller Part is identified as “Local Manufacture” in the Illustrated Parts Catalog (IPC).

 

1.3.3 The rights granted to the Buyer in sub-Clause 1.3.2 of this Exhibit “E” shall not in any way be construed as a licence, nor shall they in any way obligate the Buyer to the payment of any licence fee or royalty, nor shall they in any way be construed to affect the rights of third parties.

 

1.4 Meanings

Words and expressions shall have the same meanings when used in this Exhibit “E” as when used in the rest of the Agreement except where the contrary is stated herein.

 

Exh. E4/31


2. INITIAL PROVISIONING

The Initial Provisioning Period referred to in this Exhibit “E” shall mean the period up to and expiring on the ninetieth (90th) day after delivery of the last Aircraft subject to firm order under the Agreement.

 

2.1 Seller - Supplied Data

The Seller shall prepare and supply to the Buyer the following documents.

 

2.1.1 Initial Provisioning Data

Initial Provisioning Data provided for the A319, A320 and A321 in Specification 2000, Chapter 1, fixed or variable format (“the Initial Provisioning Data”) shall be supplied by the Seller to the Buyer in form, format and a time-scale to be mutually agreed upon during the Pre-Provisioning Meeting as described in sub-Clause 2.3 of this Exhibit “E”.

Revision Service shall be assured [*], up to the end of the Initial Provisioning Period, or until the configuration of the Buyer’s delivered Aircraft is included.

In any event, the Seller shall ensure that Initial Provisioning Data are released to the Buyer in due time to allow the necessary Buyer’s evaluation time and the on-time delivery of ordered Material.

 

2.1.2 Supplementary Data

The Seller shall provide the Buyer with Local Manufacture Tables (X-File), as part of the IPC (Additional Cross Reference Tables) which shall be a part of the Initial Provisioning Data Package.

 

2.1.3 Initial Provisioning Data for Exercised Options

 

2.1.3.1 All Aircraft for which the Buyer [*] shall be included into the revision of the provisioning data that is issued after execution of the relevant amendment to the Agreement if such revision is not scheduled to be issued within four (4) weeks from the date of execution. If the execution date does not allow four (4) weeks preparation time for the Seller, the concerned Aircraft shall be included in the subsequent revision as may be mutually agreed upon.

 

Exh. E5/31


2.1.3.2 The Seller shall, from the date of execution of the relevant amendment to the Agreement until three (3) months after delivery of each Aircraft, submit to the Buyer details of particular Vendor components being installed on each Aircraft, with recommendation of order quantity. A list of such components shall be supplied at the time of the provisioning data revision as specified above.

 

2.1.3.3 The Seller shall deliver to the Buyer T-files for particular components as applicable and in due time to allow the Buyer’s planning of repair and overhaul tasks.

 

2.1.3.4 The data with respect to Material at the time of each Aircraft delivery shall at least cover such Aircraft’s technical configuration as it existed six (6) months prior to Aircraft delivery and shall be updated to reflect the final build status of the concerned Aircraft. Such update shall be included in the data revisions issued three (3) months after delivery of such Aircraft.

 

2.2 Vendor-Supplied Data

 

2.2.1 General

The Seller shall obtain from Vendors agreements to prepare and issue for their own products T-files in the English language, for those components for which the Buyer has elected to receive data.

Said data (initial issue and revisions) shall be transmitted to the Buyer through the Seller. The Seller shall review the compliance of such data with the relevant ATA requirements but shall not be responsible for the substance of such data. Such data should be adequate to enable the Buyer to undertake in-house repair/overhaul of such components.

In any event, the Seller shall exert its reasonable efforts to supply Initial Provisioning Data to the Buyer in due time to allow the necessary Buyer’s evaluation time and on-time deliveries.

 

2.2.2 Initial Provisioning Data

Initial Provisioning Data for Vendor Parts as per sub-Clause 1.1.b of this Exhibit “E” described in Specification 2000, Chapter 1, fixed or variable format, shall be furnished as mutually agreed upon during a Pre-Provisioning Meeting with revision service assured up to the end of the Initial Provisioning period, or until it reflects the configuration of the Buyer’s delivered Aircraft.

 

Exh. E6/31


2.3 Pre-Provisioning Meeting

 

2.3.1 The Seller shall organize a Pre-Provisioning Meeting at its materiel support centre in HAMBURG, FEDERAL REPUBLIC OF GERMANY (hereinafter referred to as “the Materiel Support Centre”) for the purpose of formulating an acceptable schedule and working procedure to accomplish the initial provisioning of Material.

 

2.3.2 The date of the meeting shall be mutually agreed upon, but it shall take place [*].

 

2.4 Initial Provisioning Training

An Initial Provisioning Training can be provided by the Seller for the Buyer’s provisioning and purchasing staff. The following areas shall be covered:

 

2.4.1 The Buyer shall be familiarized with the provisioning documents by the Seller during the Pre-Provisioning Meeting.

 

2.4.2 The technical function as well as the necessary technical and commercial Initial Provisioning Data shall be explained during the Initial Provisioning Conference.

 

2.4.3 A familiarization with the Seller’s purchase order administration system shall be conducted during a separate session within the Initial Provisioning Conference.

 

2.5 Initial Provisioning Conference

The Seller shall organize an Initial Provisioning Conference at the Materiel Support Centre including Vendor participation as agreed upon during the Pre-Provisioning Meeting.

 

Exh. E7/31


2.6 Initial Provisioning Data Compliance

 

2.6.1 Initial Provisioning Data generated by the Seller and supplied to the Buyer shall comply with the latest configuration of the Aircraft to which such data relate as known [*] before the date of issue. Said data shall enable the Buyer to order Material conforming to its Aircraft as required for maintenance and overhaul.

 

   This provision shall not cover:

 

parts embodying Buyer’s modifications not known to the Seller,

 

parts embodying modifications not agreed to by the Seller.

 

2.6.2 During the Initial Provisioning Period the Seller shall supply Material as defined in sub-Clause 1.1 of this Exhibit “E” ordered from the Seller which shall be in conformity with the configuration standard of the affected Aircraft and with the Initial Provisioning Data transmitted by the Seller. Should the Seller default in this obligation, it shall immediately replace such parts and/or authorize return shipment at no transportation cost to the Buyer. The Buyer shall make reasonable efforts to minimize such costs, particularly by using its own airfreight system for transportation at no charge to the Seller.

 

2.6.3 The Seller in addition, shall use its reasonable efforts to cause Vendors to provide a similar service for their items.

 

Exh. E8/31


2.7 Delivery of Initial Provisioning Material

 

2.7.1 In order to support the operation of the Aircraft, the Seller shall use its reasonable efforts to deliver Material ordered during the Initial Provisioning Period (the “Initial Provisioning Material”) against the Buyer’s orders and according to the following schedule, provided the Buyer’s orders have been placed within thirty (30) days after receipt of the Seller’s provisioning data, and not later than twelve (12) months before delivery of the corresponding Aircraft,

 

2.7.1.1 at least [*] of the ordered quantity of each Rotable Line Replacement Unit or Expendable Line Maintenance Part [*] before delivery of the corresponding Aircraft,

 

2.7.1.2 at least [*] of the ordered quantity of each Rotable Line Replacement Unit or Expendable Line Maintenance Part [*] (for items identified as line station items [*]) before delivery of corresponding Aircraft,

 

2.7.1.3 [*] of the ordered quantity of each item except as specified in sub-Clauses 2.7.1.1 and 2.7.1.2 of this Exhibit “E”, at delivery of the first Aircraft.

 

2.7.1.4 [*] of the ordered quantity of each item, including line station items, three (3) months after delivery of the last Aircraft. If said [*] cannot be accomplished, the Seller shall endeavour to have such items available at its facilities for Seller Parts as per sub-Clause 1.1.a of this Exhibit “E” or its Vendors’ facilities for parts as per sub-Clauses 1.1.b through 1.1.e of this Exhibit “E” for immediate supply in case of an AOG,

 

2.7.1.5 The above percentages apply only to that portion of the quantity ordered that is recommended for the number of Aircraft operated [*]

 

2.7.2 The Buyer may, subject to the Seller’s agreement, cancel or modify Initial Provisioning orders placed with the Seller with no cancellation charge,

 

for “Long Lead Time Material” (leadtime exceeding [*] not later than six (6) months before scheduled delivery of said Material,

 

for normal lead time Material not later than [*] before scheduled delivery of said Material,

 

for Buyer’s specific Material and Material as per sub-Clauses 1.1.b thru 1.1.e of this Exhibit “E” not later than the quoted leadtime before scheduled delivery of said Material.

 

2.7.3 In the event of the Buyer cancelling or modifying (without any liability of the Seller for the cancellation or modification) any orders for Material outside the time limits defined in sub-Clause 2.7.2 of this Exhibit “E”, the Buyer shall reimburse the Seller for any costs incurred in connection therewith.

 

Exh. E9/31


2.7.4 All transportation costs for the return of Material under this Clause 2, including any insurance, customs and duties applicable or other related expenditures, shall be borne by the Buyer.

 

2.8 Commercial Offer

The prices of Initial Provisioning Material are in general those mentioned in Clause 5 of this Exhibit “E”.

At the end of the Initial Provisioning Conference, the Seller shall, at the Buyer’s request, submit a Commercial Offer for all Material mutually agreed as being Initial Provisioning based on the Seller’s sales prices valid at the time of finalization of the Initial Provisioning Conference. This Commercial Offer shall be valid for a period to be mutually agreed upon, [*]

 

Exh. E10/31


3. CENTRAL STORE

 

3.1 Central Store

The Seller has set up at HAMBURG, FEDERAL REPUBLIC OF GERMANY and shall maintain or cause to be maintained during the Term a central store of Seller Parts at its Materiel Support Centre.

 

3.2 Operation of Central Store

The Materiel Support Centre is operated twenty-four (24) hours/day and seven (7) days/week.

 

3.3 Alternative Delivery Places

The Seller reserves the right to effect deliveries from distribution centres other than the Materiel Support Centre or from any designated production or Vendors’ facilities.

 

Exh. E11/31


4. DELIVERY

 

4.1 General

Buyer purchase orders are administered in accordance with ATA Specification 2000 Chapter 3.

Should the Seller develop an Electronic Data Interchange capability, the seller shall make available to the Buyer such capability when it is generally available to customers.

For the sake of clarification it is expressly stated that the provisions of sub-Clause 4.2 do not apply to Initial Provisioning Data and Material as described in Clause 2 of this Exhibit “E”.

 

4.2 Lead times

In general the lead times are in accordance with the provisions of the “World Airline Suppliers’ Guide” (Edition 1988).

 

4.2.1 Seller Parts as per sub-Clause 1.1.a of this Exhibit “E” listed in the Seller’s Spare Parts Price List can be dispatched within the lead times defined in the Spare Parts Price List.

Lead times for Seller Parts which are not published in the Seller’s Spare Parts Price List are quoted upon request.

 

4.2.2 Material of sub-Clauses 1.1.b through 1.1.d of this Exhibit “E” can be dispatched within the Vendor’s/Supplier’s lead time augmented by the Seller’s own order and delivery processing time.

Material of sub-Clause 1.1.e of this Exhibit “E” when on stock and subject to prior sale can be dispatched within ten (10) days from receipt of a Buyer purchase order.

 

4.2.3 Expedite Service

The Seller shall provide a twenty-four (24) hours-a-day, seven (7) days-a-week Expedite Service to provide for the supply of the relevant Seller Parts available in the Seller’s stock, workshops and assembly line including long lead time spare parts, to the international airport nearest to the location of such part (“the Expedite Service”).

The Expedite Service is operated in accordance with the “World Airline Supplier’s Guide”, and the Seller shall notify the Buyer of the action taken to satisfy the expedite within :

 

four (4) hours after receipt of an AOG Order,

 

twenty-four (24) hours after receipt of a Critical Order (imminent AOG or work stoppage),

 

seven (7) days after receipt of an Expedite Order from the Buyer.

 

Exh. 12/31


The Seller shall deliver Seller Parts requested on an Expedite basis against normal orders placed by the Buyer, or upon telephone or telex requests by the Buyer’s representatives. Such telephone or telex requests shall be confirmed by subsequent Buyer’s orders for such Seller Parts within a reasonable time.

 

4.3 Delivery Status

The Seller agrees to report to the Buyer the status of supplies against orders on a monthly basis.

 

4.4 Excusable Delay

Sub-Clause 10.1 of the Agreement shall apply for the material support.

 

4.5 Shortages, Overshipments, Non-Conformance in Orders

 

4.5.1 The Buyer shall immediately and not later than thirty (30) days after receipt of Material delivered pursuant to a purchase order advise the Seller:

 

a) of any alleged shortages or overshipments with respect to such order,

 

b) of all non-conformance to specification of parts in such order subjected to inspections by the Buyer.

In the event of the Buyer not having advised the Seller of any such alleged shortages, overshipments or non-conformance within the above defined period, the Buyer shall be deemed to have accepted the deliveries.

 

4.5.2 In the event of the Buyer reporting overshipments or non-conformance to the specifications within the period defined in sub-Clause 4.5.1 of this Exhibit “E” the Seller shall, if accepted, either replace the concerned Material or credit the Buyer for the returned Material. In such case, transportation costs shall be borne by the Seller.

The Buyer shall endeavour to minimize such costs, particularly through the use of its own airfreight system for transportation at no charge to the Seller.

 

4.6 Cessation of Deliveries

The Seller reserves the right to stop or otherwise suspend deliveries if the Buyer fails to meet its obligations defined in Clauses 6 and 7 of this Exhibit “E”.

 

Exh. E13/31


5. PRICE

 

5.1 The Material prices shall be:

 

5.1.1 Free Carrier (FCA) the Materiel Support Centre for deliveries from the Materiel Support Centre.

 

5.1.2 Free Carrier (FCA) place specified by the Seller for deliveries from other Seller or Vendor facilities as the term Free Carrier (FCA) is defined by the publication No 460 of the International Chamber of Commerce published in April 1990.

 

5.2 The prices shall be the Seller’s sales prices in effect on the date of receipt of the order (subject to reasonable quantities and delivery time) and shall be expressed in US-Dollars.

 

5.2.1 Prices of Seller Parts shall be in accordance with the current Seller’s Spare Parts Price List. Prices shall be firm for each calendar year. The Seller, however, reserves the right to revise the prices of said parts during the course of the calendar year in the following cases:

 

significant revision in manufacturing costs,

 

significant revision in manufacturer’s purchase price of parts or materials (including significant variation of exchange rates),

 

significant error in estimation or expression of any price.

 

5.2.2 Prices of Material as defined in sub-Clauses 1.1.b thru 1.1.d of this Exhibit “E” shall be the valid list prices of the supplier augmented by the Seller’s handling charge. The percentage of the handling charge shall vary with the Material’s value and shall be determined item by item.

Should a Vendor fail to provide the Buyer with a part, the Seller shall use its best reasonable efforts to act on the concerned Vendor and will review, on cas by cas basis the situation with the Buyer.

 

5.2.3 The Seller warrants that, should the Buyer purchase [*] of the recommended Initial Provisioning Package of the Material as defined in sub-Clauses 1.1.b thru 1.1.d through the Seller, the average handling charge on the total package shall not exceed [*] according to the MARK UP curve in appendix 1 to this Clause 5.

This average handling charge shall apply when all orders are received by the Seller not later than [*] before first Aircraft delivery.

When these orders are received by the Seller less than [*] before first Aircraft delivery, the average handling charge shall be increased to [*]

 

5.2.4 Prices of Material as defined in sub-Clause 1.1.e of this Exhibit “E” shall be the Seller’s purchase prices augmented by a variable percentage of handling charge.

 

Exh. E14/31


6. PAYMENT PROCEDURES AND CONDITIONS

 

6.1 [*]

 

6.6 Credit Assurance

The Seller and the Buyer agree that the Seller has the right to request and the Buyer shall upon such request provide the Seller with sufficient financial means in due time in order to assure the Seller of full payment of the Buyers’ current and/or expected payment obligations.

 

6.6.1 The Sellers’ right to request credit assurance from the Buyer shall be limited to the following cases:

 

Exh. E15/31


6.6.1.1 The Seller has received purchase orders from the Buyer for Initial Provisioning Material.

 

6.6.1.2 The Seller has received purchase and/or service orders exceeding the Buyer’s average two (2) months turnover with the Seller.

 

6.6.1.3 The Buyer is indebted to the Seller for overdue invoices.

 

6.6.2 The Seller shall accept the following financial means as credit assurance:

 

6.6.2.1 Irrevocable and confirmed letter of credit, raised by banks of international standing and reputation. The conditions of such letter of credit shall be pertinent to Aircraft support activities and shall be set forth by the Seller.

 

6.6.2.2 Bank guarantee raised by banks of international standing and reputation. The conditions of such bank guarantee shall be mutually agreed upon prior to acceptance by the Seller.

 

6.6.2.3 Stand-by letter of credit raised by banks of international standing and reputation. The conditions of such letter of credit shall be mutually agreed upon prior to acceptance by the Seller.

 

Exh. E16/31


7. TITLE

Title to any Material purchased under this Exhibit “E” remains with the Seller until full payment of the invoices and any interest thereon have been received by the Seller.

The Buyer shall undertake that Material, title to which has not passed to the Buyer, shall be kept free from any debenture or mortgage or any similar charge or claim in favour of any third party.

 

Exh. E17/31


8. PACKAGING

All Material shall be packaged in accordance with ATA 300 Specification, Category III for consumable/expendable material and Category II for rotables. Category I containers shall be used if requested by the Buyer and the difference between Category I and Category II packaging costs shall be paid by the Buyer together with payment for the respective Material.

 

Exh. E18/31


9. DATA RETRIEVAL

The Buyer undertakes to provide periodically to the Seller, as the Seller may request during the Term, a quantitative list of the parts used for maintenance and overhaul of the Aircraft. The range and contents of this list shall be established by mutual agreement between the Seller and the Buyer.

 

Exh. E19/31


10. BUY-BACK

 

10.1 Buy-Back of Obsolete Material

The Seller agrees to buy back unused Seller Parts which may become obsolete [*] to the Buyer as a result of mandatory modifications required by the Buyer’s or Seller’s Aviation Authorities, subject to the following:

 

10.1.1 The Seller Parts involved shall be those which the Buyer is directed by the Seller to scrap or dispose of and which cannot be reworked or repaired to satisfy the revised standard.

 

10.1.2 The Seller shall credit to the Buyer the purchase price paid by the Buyer for any such obsolete parts, provided that the Seller’s liability in this respect does not extend to quantities in excess of the Seller’s Initial Provisioning recommendation.

 

10.1.3 The Seller shall use its reasonable efforts to obtain for the Buyer the same protection from Vendors.

 

10.2 Buy-Back of Surplus Material

 

10.2.1 The Seller agrees that at any time after [*], the Buyer shall have the right to return to the Seller, at a credit of [*] of the original purchase price paid by the Buyer, unused and undamaged Material as per sub-Clause 1.1.a of this Exhibit “E” and at a credit of [*] of the original Vendor list price, unused and undamaged Material as per sub-Clause 1.1.b of this Exhibit “E” originally purchased from the Seller under the terms hereof, provided that the selected protection level does not exceed [*] and said Material was recommended for the Buyer’s purchase in the Seller’s Initial Provisioning recommendations to the Buyer and does not exceed the provisioning quantities recommended by the Seller, and is not shelflife limited, or does not contain any shelflife limited components with less than [*] shelflife remaining when returned to the Seller and provided that the Material is returned with the Seller’s original documentation (tag, certificates).

 

10.2.2 In the event of the Buyer electing to procure Material in excess of the Seller’s recommendation, the Buyer shall so notify the Seller in writing, with due reference to the present Clause. The Seller’s agreement in writing is necessary before any Material in excess of the Seller’s recommendation shall be considered for buy-back.

 

10.2.3 It is expressly understood and agreed that the rights granted to the Buyer under this sub-Clause 10.2 shall not apply to Material which may become surplus to requirements due to obsolescence at any time or for any reason other than those set forth in sub-Clause 10.1 above.

 

10.2.4 Further, it is expressly understood and agreed that all credits described in this sub-Clause 10.2 shall be provided by the Seller to the Buyer exclusively by means of credit notes to be entered into the Buyer’s spares account with the Seller.

 

Exh. E20/31


10.3 All transportation costs for the return of obsolete or surplus Material under this Clause 10, including any insurance and customs duties applicable or other related expenditures, shall be borne by the Buyer.

 

10.4 The Seller’s obligation to buy back surplus Material is conditioned upon the Buyer reasonably demonstrating that items proposed for buy-back were in excess of the Buyer’s requirements after the initial purchase of such items.

The Seller shall accept as a reasonable demonstration of such excess initial purchase by the Buyer if the data submitted to the Seller in compliance with the provisions of Clause 9 of this Exhibit “E” indicate that the items proposed for buy-back are surplus to the Buyer’s requirements.

 

Exh. E21/31


11. WARRANTIES

 

11.1 Seller Parts

Subject to the limitations and conditions as hereinafter provided, the Seller warrants to the Buyer that all Seller Parts in sub-Clause 1.1.a of this Exhibit “E” shall at the time of delivery to the Buyer :

(i) be free from defects in material,

(ii) be free from defects in workmanship, including without limitation processes of manufacture,

(iii) be free from defects arising from failure to conform to the applicable specification for such part.

 

11.2 Warranty Period

The Standard Warranty period for Seller Parts is [*] of such parts to the Buyer.

 

11.3 Buyer’s Remedy and Seller’s Obligation

The Buyer’s remedy and Seller’s obligation and liability under this Clause 11 are limited to the repair, replacement or correction, at the Seller’s expense and option, of any Seller Parts which is defective.

The Seller may equally at its option furnish a credit to the Buyer for the future purchase of Seller Parts equal to the price at which the Buyer is then entitled to acquire a replacement for the defective Seller Parts.

The provisions of sub-Clauses 12.1.5 thru 12.1.10 of the Agreement shall apply to this Clause 11 of this Exhibit E.

 

Exh. E22/31


11.4 WAIVER, RELEASE AND RENUNCIATION

THE WARRANTIES, OBLIGATIONS AND LIABILITIES OF THE SELLER AND REMEDIES OF THE BUYER SET FORTH IN THIS CLAUSE 11 ARE EXCLUSIVE AND IN SUBSTITUTION FOR, AND THE BUYER HEREBY WAIVES, RELEASES AND RENOUNCES ALL OTHER WARRANTIES, OBLIGATIONS AND LIABILITIES OF THE SELLER AND RIGHTS, CLAIMS AND REMEDIES OF THE BUYER AGAINST THE SELLER, EXPRESS OR IMPLIED, ARISING BY LAW OR OTHERWISE, WITH RESPECT TO ANY NONCONFORMITY OR DEFECT IN ANY COMPONENT, EQUIPMENT, ACCESSORY OR PART THEREOF DELIVERED UNDER THIS AGREEMENT, INCLUDING BUT NOT LIMITED TO ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS, ANY IMPLIED WARRANTY ARISING FROM COURSE OF PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE, ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY IN CONTRACT OR IN TORT, WHETHER OR NOT ARISING FROM THE SELLER’S NEGLIGENCE (EXCEPT FOR SELLER’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT), ACTUAL OR IMPUTED, AND ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY FOR LOSS OR DAMAGE TO ANY AIRCRAFT, COMPONENT, EQUIPMENT, ACCESSORY OR PART THEREOF, FOR LOSS OF USE, REVENUE OR PROFIT WITH RESPECT TO ANY AIRCRAFT, COMPONENT, EQUIPMENT, ACCESSORY OR PART THEREOF, OR FOR ANY OTHER DIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES, PROVIDED THAT IN THE EVENT THAT ANY OF THE AFORESAID PROVISIONS SHOULD FOR ANY REASON BE HELD UNLAWFUL OR OTHERWISE INEFFECTIVE THE REMAINDER OF THIS SUB-CLAUSE 11.4 SHALL REMAIN IN FULL FORCE AND EFFECT.

 

Exh. E23/31


12. SELLER PARTS LEASING

 

12.1 Applicable Terms

The terms and conditions of this Clause 12 shall apply to the list of Seller Parts in Appendix A to this Clause 12 entitled:

“Seller Parts Available for Leasing”,

hereinafter, “Leased Parts” or a “Leased Part” and shall form a part of each lease of Seller Parts by the Buyer from the Seller after the date hereof. Except for the identification of:

 

the Leased Part,

 

the Leased Part return location,

 

the Lease Term,

 

the Lease Charges,

all other terms and conditions appearing on any order form or other document pertaining to Leased Parts shall be deemed inapplicable, and in lieu thereof the terms and conditions of this Clause 12 shall prevail. For the purposes of this Clause 12, the term “Lessor” refers to the Seller and the term “Lessee” refers to the Buyer.

Parts not included in Appendix A to this Clause 12 shall be the subject of a separate lease agreement supplied by the Seller at the Buyer’s request.

 

12.2 Leasing Procedure

At the Lessee’s request by telephone (to be confirmed promptly in writing), telegram, letter or other written instrument, the Lessor shall lease such Leased Parts, which shall be made available in accordance with sub-Clause 4.2.3 of this Exhibit “E”, to the Lessee for the purpose of being substituted for a part withdrawn from an Aircraft for repair or overhaul. Each lease of Leased Parts shall be evidenced by a lease document (hereinafter the “Lease”) issued by the Lessor to the Lessee no later than seven (7) days after delivery of the Leased Part.

 

Exh. E24/31


12.3 Lease Term

[*]

 

12.4 Lease Charges and Taxes

Lessee shall pay Lessor:

 

   [*]

 

12.5 Title

Title to each Leased Part shall remain with the Lessor at all times unless the Lessee [*] in accordance with sub-Clause 12.8 of this Exhibit “E” [*]

 

Exh. E25/31


12.6 Risk of Loss

Except for normal wear and tear, each Leased Part shall be returned to the Lessor in the same condition as when delivered to the Lessee. However, the Lessee shall not without the Lessor’s prior written consent repair, modify or alter any Leased Part. Risk of loss or damage to each Leased Part shall remain with the Lessee until such Leased Part is redelivered to the Lessor at the return location specified in the applicable Lease. If a Leased Part is lost or damaged beyond repair, the Lessee shall be deemed to have exercised its option to purchase the part in accordance with sub-Clause 12.8 of this Exhibit “E” as of the date of such loss or damage.

 

12.7 Record of Flight Hours

All flight hours accumulated by the Lessee on each Leased Part during the Lease Term shall be documented by the Lessee. Records shall be delivered to the Lessor upon return of such Leased Part to the Lessor. In addition, all documentation pertinent to inspection, maintenance and/or rework of the Leased Part as maintained serviceable in accordance with the standards of the Lessor shall be delivered to the Lessor upon return of the Leased Part to the Lessor on termination of the Lease.

Such documentation shall include but not be limited to evidence of incidents such as hard landings, abnormalities of operation and corrective action taken by the Lessee as a result of such incidents.

 

12.8 [*]

 

12.8.3 [*]

 

12.9 Warranties

 

12.9.1 The Lessor warrants that each Leased Part shall at the time of delivery thereof:

 

a) conform to the applicable specification for such part,

 

b) be free from defects in material and,

 

c) be free from defects in workmanship, including without limitation processes of manufacture.

 

12.9.2 Survival of Warranties

With respect to each Leased Part:

 

   (i) the warranty set forth in sub-Clause 12.9.1.a of this Exhibit “E” shall not survive delivery and

 

   (ii) the warranties set forth in sub-Clauses 12.9.1.b and 12.9.1.c of this Exhibit “E” shall survive delivery only upon the conditions and subject to the limitations set forth in sub-Clauses 12.9.3 thru 12.9.8 of this Exhibit “E”.

 

12.9.3 Warranty and Notice Periods

The Lessee’s remedy and the Lessor’s obligation and liability under this sub-Clause 12.9, with respect to each defect, are conditioned upon:

 

Exh. E26/31


   (i) the defect having become apparent to the Lessee within the Lease Term and

 

   (ii) the Lessor’s Warranty Administrator having received written notice of the defect from the Lessee within [*] after the defect becomes apparent to the Lessee.

 

Exh. E27/31


12.9.4 Return and Proof

The Lessee’s remedy and the Lessor’s obligation and liability under this sub-Clause 12.9, with respect to each defect, are also conditioned upon:

 

a) the return by the Lessee as soon as practicable to the return location specified in the applicable Lease, or such other place as may be mutually agreed upon, of the Leased Part claimed to be defective and

 

b) the submission by the Lessee to the Lessor’s warranty administrator of reasonable proof that the claimed defect is due to a matter embraced within the Lessor’s warranty under this sub-Clause 12.9 and that such defect did not result from any act or omission of the Lessee, including but not limited to any failure to operate or maintain the Leased Part claimed to be defective or the Aircraft in which it was installed in accordance with applicable governmental regulations and the Lessor’s applicable written instructions.

 

12.9.5 Remedies

The Lessee’s remedy and the Lessor’s obligation and liability under this sub-Clause 12.9 with respect to each defect are limited to the repair of such defect in the Leased Part in which the defect appears, or, as mutually agreed, to timely the replacement of such Leased Part with a similar part free from defect.

Any replacement part furnished under this sub-Clause 12.9.5 shall for the purpose of this Exhibit “E” be deemed to be the Leased Part so replaced.

 

12.9.6 Suspension and Transportation Costs

 

12.9.6.1 If a Leased Part is found to be defective and covered by this warranty, the Lease Term and the Lessee’s obligation to pay rental charges as provided for in sub-Clause 12.4.a of this Exhibit “E” shall be suspended from the date on which the Lessee notifies the Lessor of such defect until the date on which the Lessor has repaired, corrected or replaced the defective Leased Part, provided, however, that the Lessee has, promptly after giving such notice to the Lessor, withdrawn such defective Leased Part from use. If the defective Leased Part is replaced, such replaced part shall be deemed to no longer be a Leased Part under the Lease as of the date on which such part was received by the Lessor at the return location specified in the applicable Lease.

If a Leased Part is found to be defective on first use by the Lessee and is covered by this Warranty, no rental charges as provided in sub-Clause 12.4.a of this Exhibit “E” shall accrue and be payable by the Lessee until the date on which the Lessor has repaired, corrected or replaced the defective Leased Part.

 

12.9.6.2 All transportation and insurance costs of returning the defective Leased Part and returning the repaired, corrected or replacement part to the Lessee shall be borne by the Lessor.

 

Exh. E28/31


12.9.7 Wear and Tear

Normal wear and tear and the need for regular maintenance and overhaul shall not constitute a defect or non-conformance under this sub-Clause 12.9.

 

12.9.8 Waiver, Release and Renunciation

THE WARRANTIES, OBLIGATIONS AND LIABILITIES OF THE LESSOR AND REMEDIES OF THE LESSEE SET FORTH IN THIS SUB-CLAUSE 12.9 ARE EXCLUSIVE AND IN SUBSTITUTION FOR, AND THE LESSEE HEREBY WAIVES, RELEASES AND RENOUNCES ALL OTHER WARRANTIES, OBLIGATIONS AND LIABILITIES OF THE LESSOR AND RIGHTS, CLAIMS AND REMEDIES OF THE LESSEE AGAINST THE LESSOR, EXPRESS OR IMPLIED, ARISING BY LAW OR OTHERWISE, WITH RESPECT TO ANY NON CONFORMANCE OR DEFECT IN ANY LEASED PART DELIVERED UNDER THESE LEASING CONDITIONS OR ANY LEASE, INCLUDING BUT NOT LIMITED TO ANY IMPLIED WARRANTY OF MERCHANTABILITY OF FITNESS, ANY IMPLIED WARRANTY ARISING FROM COURSE OF PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE, ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY IN CONTRACT OR IN TORT, WHETHER OR NOT ARISING FROM THE LESSOR’S NEGLIGENCE (EXCEPT FOR SELLER’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT), ACTUAL OR IMPUTED, AND ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY FOR LOSS OF OR DAMAGE TO ANY AIRCRAFT OR LEASED PART, FOR LOSS OF USE, REVENUE OR PROFIT WITH RESPECT TO ANY AIRCRAFT OR LEASED PART, OR ANY LIABILITY OF THE BUYER TO ANY THIRD PARTY OR FOR ANY OTHER DIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES PROVIDED THAT IN THE EVENT THAT ANY OF THE AFORESAID PROVISIONS SHOULD FOR ANY REASON BE HELD UNLAWFUL OR OTHERWISE INEFFECTIVE THE REMAINDER OF THIS SUB-CLAUSE 12.9.8 SHALL REMAIN IN FULL FORCE AND EFFECT.

 

Exh. E29/31


APPENDIX “A” TO CLAUSE 12 OF EXHIBIT “E”

SELLER PARTS AVAILABLE FOR LEASING

 

   [*]

 

13 TERMINATION OF SPARES PROCUREMENT COMMITMENTS

 

13.1 In the event of the Agreement being terminated with respect to any Aircraft due to causes provided for in Clauses 10, 11 or 20 of the Agreement, such termination may also affect the terms of this Exhibit “E” to the extent set forth in sub-Clause 13.2 below.

 

13.2 Any termination under Clauses 10, 11 or 20 of the Agreement shall discharge all obligations and liabilities of the parties hereunder with respect to such undelivered spare parts, services, data or other items to be purchased hereunder which are applicable to those Aircraft for which the Purchase Agreement has been terminated. Unused spare parts in excess of the Buyer’s requirements due to such Aircraft cancellation shall be repurchased by the Seller as provided for in sub-Clause 10.2 of this Exhibit “E”

 

Exh. E30/31


C O N T E N T S

LETTERS AGREEMENTS

 

 

 

Letter Agreement No 1:    [*]
Letter Agreement No 2:    [*]
Letter Agreement No 3:    [*]
Letter Agreement No 4:    [*]
Letter Agreement No 5:    [*]
Letter Agreement No 6:    [*]
Letter Agreement No 7:    PRODUCT SUPPORT SERVICES
Letter Agreement No 8A:    [*]
Letter Agreement No 8B:    [*]
Letter Agreement No 8C:    [*]
Letter Agreement No 9:    YEAR 2000 COMPLIANCE
Letter Agreement No 10 :    MISCELLANEOUS

A320 Family - TAI - 03/1998


LETTER AGREEMENT No 1

ATLANTIC AIRCRAFT HOLDING LIMITED

Bolam House

King and George Streets

N A S S A U

B A H A M A S

Subject: [*]

ATLANTIC AIRCRAFT HOLDING LIMITED (“the Buyer”) and AIRBUS INDUSTRIE (“the Seller”) have entered into a Purchase Agreement (“the Agreement”) dated as of even date herewith which covers the manufacture and the sale by the Seller and the purchase by the Buyer of the A320 Family Aircraft as described in the Agreement.

Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement.

Both parties agree that this Letter Agreement, upon execution thereof, shall constitute an integral, nonseverable part of said Agreement and shall be governed by all its provisions, as such provisions have been specifically amended pursuant to this Letter Agreement.

 

A320 Family - TAI - 03/1998

LA1 - 1/4 -


LETTER AGREEMENT No 1

* [Two pages have been omitted in accordance with a request for confidential treatment.]

 

LA1 - 2/4 -


LETTER AGREEMENT No 1

If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

 

Agreed and Accepted    Agreed and Accepted
For and on behalf of    For and on behalf of
ATLANTIC AIRCRAFT HOLDING LIMITED    AIRBUS INDUSTRIE
By: /s/ Federico Bloch    By: /s/ Jean Pierson
Its: Attorney-in-Fact    Its: Managing Director
Date: March, 1998    Date: March, 1998
Witness:    Witness:

 

By: /s/ Roberto Kriete    By: /s/ Rafael Alonso
Its: Attorney-in-Fact    Its: Vice-President Sales
          Latin America and Caribbean

 

A320 Family - TAI - 03/1998

LA1 - 3/4 -


LETTER AGREEMENT No 2

TACA INTERNATIONAL AIRLINES S.A.

Edificio Caribe 2° Piso

SAN SALVADOR

EL SALVADOR

Subject: A319/A320/A321 [*]

TACA INTERNATIONAL AIRLINES S.A. (“the Buyer”) and AIRBUS INDUSTRIE (the “Seller”) have entered into a Purchase Agreement (“the Agreement”) dated as of event date herewith which covers that manufacture and the sale by the Seller and the purchase by the Buyer of certain A320 Family Aircraft as described in the Agreement.

Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement. [*].

Both parties agree that this Letter Agreement, upon execution thereof, shall constitute an integral, nonseverable part of said Agreement and shall be governed by all its provisions, as such provisions have been specifically amended pursuant to this Letter Agreement.

 

A320 Family - TAI - 03/1998

LA2 - 1/15


LETTER AGREEMENT No 2

* [Five pages have been omitted in accordance with a request for confidential treatment.]

 

A320 Family - TAI - 03/1998

LA2 - 2/15


LETTER AGREEMENT No 2

If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

 

Agreed and accepted,    Agreed and accepted,
For and on behalf of    For and on behalf of
TACA INTERNATIONAL AIRLINES, S.A.    AIRBUS INDUSTRIE
By: [illegible]    By: /s/ Francis Robillard
Its:    Its:
Date:    Date: 19.03.98

 

A320 Family - TAI - 03/1998

LA2 - 7/15


LETTER AGREEMENT No 2

APPENDIX A

* [Nineteen pages have been omitted in accordance with a request for confidential treatment.]

 

A320 Family - TAI - 03/1998

LA2 - 8/15


LETTER AGREEMENT No 3

ATLANTIC AIRCRAFT HOLDING LIMITED

Bolam House

King and George Streets

N A S S A U

B A H A M A S

Subject: [*]

ATLANTIC AIRCRAFT HOLDING LIMITED (“the Buyer”) and AIRBUS INDUSTRIE (“the Seller”) have entered into a Purchase Agreement (“the Agreement”) dated as of even date herewith which covers the manufacture and the sale by the Seller and the purchase by the Buyer of the A320 Family Aircraft as described in the Agreement.

Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement.

Both parties agree that this Letter Agreement, upon execution thereof, shall constitute an integral, nonseverable part of said Agreement and shall be governed by all its provisions, as such provisions have been specifically amended pursuant to this Letter Agreement.


LETTER AGREEMENT No 3

*[One page has been omitted in accordance with a request for confidential treatment.]

 

4. DELIVERY OF [*] AIRCRAFT

[*] the [*] Aircraft will be ready for delivery at the following date :

 

[*] Aircraft N°

  

Delivery Date

  

Type

- Aircraft N° 1    November 2000    A320-200
- Aircraft N° 2    June 2001    A320-200
- Aircraft N° 3    January 2001    A320-200
- Aircraft N° 4    February 2001    A320-200
- Aircraft N° 5    June 2001    A320-200
- Aircraft N° 6    July 2001    A320-200
- Aircraft N° 7    November 2001    A320-200
- Aircraft N° 8    December 2001    A320-200
- Aircraft N° 9    February 2002    A320-200
- Aircraft N° 10    March 2002    A320-200
- Aircraft N° 11    May 2002    A320-200
- Aircraft N° 12    June 2002    A320-200
- Aircraft N° 13    August 2002    A320-200
- Aircraft N° 14    March 2003    A319-100
- Aircraft N° 15    June 2003    A319-100
- Aircraft N° 16    July 2003    A319-100
- Aircraft N° 17    December 2003    A319-100
- Aircraft N° 18    December 2003    A320-200
- Aircraft N° 19    December 2003    A319-100
- Aircraft N° 20    February 2003    A320-200
- Aircraft N° 21    March 2004    A319-100
- Aircraft N° 22    June 2004    A319-100
- Aircraft N° 23    July 2004    A319-100
- Aircraft N° 24    August 2004    A319-100
- Aircraft N° 25    November 2004    A319-100
- Aircraft N° 26    March 2005    A319-100
- Aircraft N° 27    May 2005    A319-100
- Aircraft N° 28    June 2005    A319-100
- Aircraft N° 29    June 2005    A319-100
- Aircraft N° 30    August 2005    A319-100
- Aircraft N° 31    November 2005    A319-100
- Aircraft N° 32    December 2005    A319-100

*[One page has been omitted in accordance with a request for confidential treatment.]

 

A320 Family - TAI - 03/1998

LA3 - 2/6 -


LETTER AGREEMENT No 3

If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

 

Agreed and Accepted    Agreed and Accepted
For and on behalf of    For and on behalf of
ATLANTIC AIRCRAFT HOLDING LIMITED    AIRBUS INDUSTRIE
By: /s/ Federico Bloch   

By: /s/ Rafael Alonso

Its: Attorney-in-Fact   

Its: Vice-President Sales

      Latin America and Caribbean

Date: March, 1998   

Date: March, 1998

 

A320 Family - TAI - 03/1998

LA3 - 6/6 -


LETTER AGREEMENT No 4

ATLANTIC AIRCRAFT HOLDING LIMITED

Bolam House

King and George Streets

N A S S A U

B A H A M A S

Subject: [*]

ATLANTIC AIRCRAFT HOLDING LIMITED (“the Buyer”) and AIRBUS INDUSTRIE (“the Seller”) have entered into a Purchase Agreement (“the Agreement”) dated as of even date herewith which covers the manufacture and the sale by the Seller and the purchase by the Buyer of the A320 Family Aircraft as described in the Agreement.

Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement.

Both parties agree that this Letter Agreement, upon execution thereof, shall constitute an integral, nonseverable part of said Agreement and shall be governed by all its provisions, as such provisions have been specifically amended pursuant to this Letter Agreement.

 

A320 Family - TAI - 03/1998

LA4 - 1/3 -


LETTER AGREEMENT No 4

*[One page has been omitted in accordance with a request for confidential treatment.]

 

A320 Family - TAI - 03/1998

LA4 - 2/3 -


LETTER AGREEMENT No 4

If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

 

Agreed and Accepted    Agreed and Accepted
For and on behalf of    For and on behalf of
ATLANTIC AIRCRAFT HOLDING LIMITED    AIRBUS INDUSTRIE
By: /s/ Federico Bloch   

By: /s/ Rafael Alonso

Its: Attorney-in-Fact   

Its: Vice-President Sales

      Latin America and Caribbean

Date: March, 1998   

Date: March, 1998

 

A320 Family - TAI - 03/1998

LA4 - 3/3 -


LETTER AGREEMENT No 5

ATLANTIC AIRCRAFT HOLDING LIMITED

Bolam House

King and George Streets

N A S S A U

B A H A M A S

Subject: [*]

ATLANTIC AIRCRAFT HOLDING LIMITED (“the Buyer”) and AIRBUS INDUSTRIE (“the Seller”) have entered into a Purchase Agreement (“the Agreement”) dated as of even date herewith which covers the manufacture and the sale by the Seller and the purchase by the Buyer of the A320 Family Aircraft as described in the Agreement.

Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement.

Both parties agree that this Letter Agreement, upon execution thereof, shall constitute an integral, nonseverable part of said Agreement and shall be governed by all its provisions, as such provisions have been specifically amended pursuant to this Letter Agreement.


LETTER AGREEMENT No 5

* [Two pages have been omitted in accordance with a request for confidential treatment.]

 

A320 Family - TAI - 03/1998

LA5 - 2/4 -


LETTER AGREEMENT No 5

If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

 

Agreed and Accepted    Agreed and Accepted
For and on behalf of    For and on behalf of
ATLANTIC AIRCRAFT HOLDING LIMITED    AIRBUS INDUSTRIE
By: Federico Bloch    By: Rafael Alonso
Its: Attorney-in-Fact    Its: Vice-President Sales
         Latin America and Caribbean
Date: March, 1998    Date: March, 1998

 

A320 Family - TAI - 03/1998

LA5 - 4/4 -


APPENDIX 1 TO LETTER AGREEMENT No 5

[*]

 

A320 Family - TAI - 03/1998

LA5 - 5/5 -


LETTER AGREEMENT No 6

ATLANTIC AIRCRAFT HOLDING LIMITED

Bolam House

King and George Streets

NASSAU, BAHAMAS

Subject: [*]

ATLANTIC AIRCRAFT HOLDING LIMITED (“the Buyer”) and AIRBUS INDUSTRIE (“the Seller”) have entered into a Purchase Agreement (“the Agreement”) dated as of even date herewith which covers the manufacture and the sale by the Seller and the purchase by the Buyer of the A320 Family Aircraft as described in the Agreement.

Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement.

Both parties agree that this Letter Agreement, upon execution thereof, shall constitute an integral, nonseverable part of said Agreement and shall be governed by all its provisions, as such provisions have been specifically amended pursuant to this Letter Agreement.

 

A320 Family - TAI - 03/1998

LA6 - 1/9


LETTER AGREEMENT No 6

*[Seven pages have been omitted in accordance with a request for confidential treatment.]

 

A320 Family - TAI - 03/1998

LA6 - 2/9


LETTER AGREEMENT No 6

If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

 

Agreed and Accepted    Agreed and Accepted
For and on behalf of    For and on behalf of
ATLANTIC AIRCRAFT HOLDING LIMITED    AIRBUS INDUSTRIE
By: /s/ Federico Bloch    By: /s/ Rafael Alonso
Its: Attorney-in-Fact    Its: Vice-President Sales
         Latin America and Caribbean
Date: March, 1998    Date: March, 1998

* [Seven pages have been omitted in accordance with a request for confidential treatment.]

 

A320 Family - TAI - 03/1998

LA6 - 9/9


LETTER AGREEMENT No 7

ATLANTIC AIRCRAFT HOLDING LIMITED

Bolam House

King and George Streets

NASSAU, BAHAMAS

Subject: Product Support Services

ATLANTIC AIRCRAFT HOLDING LIMITED (“the Buyer”) and AIRBUS INDUSTRIE (“the Seller”) have entered into a Purchase Agreement (“the Agreement”) dated as of even date herewith which covers the manufacture and the sale by the Seller and the purchase by the Buyer of the A320 Family Aircraft as described in the Agreement.

Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement.

Both parties agree that this Letter Agreement, upon execution thereof, shall constitute an integral, nonseverable part of said Agreement and shall be governed by all its provisions, as such provisions have been specifically amended pursuant to this Letter Agreement.

 

A320 Family - TAI - 03/1998

LA7 - 1/5 -


LETTER AGREEMENT No 7

 

1. Maintenance Cost Control

The Seller will undertake to assist the Buyer to achieve savings in the maintenance of the A320 Aircraft family, should this prove necessary, in the following manner:

 

1) After having jointly examined with the Buyer its operational parameters, the Seller will provide the Buyer with target levels of global material and parts consumption for the Aircraft subject of the present Agreement. These targets will cover A320 family airframe systems and structures including components with the exception of the cabin and passenger entertainment system, as well as the APU and wheels and brakes for which the Seller will cause the manufacturers to directly provide to the Buyer for highly competitive guarantees. In accordance with a detailed procedure to be mutually agreed upon, the Buyer and the Seller will then meet on a regular basis in order to compare the Buyer’s actual material and parts consumption with the agreed targets. In case significant differences between the target values and the actually achieved figures [*] are observed, the Buyer and the Seller will work together to identify the causes of these differences, and the Seller will as soon as reasonably practicable make recommendations which will be applied by the Buyer at its own discretion. Should the Buyer strictly applies the Seller’s recommendations, and target is not met, the Seller will work with the Buyer until reaching satisfactory level according to Buyer.

Analysis and recommendations will be provided [*] to the Buyer.

For information purposes, the current Seller’s calculation for airframe and components material expenditures (excluding cabin, passenger entertainment system, APU, wheels and brakes) on a typical Buyer’s A320 is [*]. This estimate was made [*], based on the operational parameters indicated by the Buyer at that date (average sector in flight hours [*]. For the A319 the estimate is [*].

 

2) In addition to paragraph 1 above the Seller is [*] to define with the Buyer a list of significant equipment cost drivers. The Seller undertakes on these mutually agreed cost drivers, to establish target cost levels improving the maintenance cost expenditure of the Buyer, and then to assist the Buyer in reaching the said target.

 

A320 Family - TAI - 03/1998

LA7 - 2/5 -


LETTER AGREEMENT No 7

 

3) The Seller is also prepared to provide a [*] consulting service to address the labour expended in maintaining the Airframe. This service would provide the Buyer with details of operations of the A320 family aircraft worldwide and the corresponding labour expenditures on maintenance (A checks and above as defined in the Seller’s maintenance documentation).

The above Paragraphs (1), (2) and (3) do not include the powerplants.

 

2. Spare part cost guarantee

At the individual Seller’s spare part price level, the Seller confirms that, should the Buyer demonstrate that the price of a significant part [*] on his A319/A320/A321 Aircraft fleet is higher than that of an equivalent (in form, fit, function, performance, material and technology) new spare part of an Aircraft equivalent in performance, range and capacity, then the Seller shall :

 

(i) promptly reimburse or procure that the parts Vendor promptly reimburses the price difference to the Buyer in respect of the number of such parts purchased by the Buyer from the Seller (or Vendors as the case may be) and,

 

(ii) commit or cause the part’s vendor to commit that from then on, such price shall be adjusted to the competition level.

 

A320 Family - TAI - 03/1998

LA7 - 3/5 -


LETTER AGREEMENT No 7

 

3. Component Support Pool

In order for the Seller to assist the Buyer in reducing provisioning and repair cost for the Line Replaceable Units (LRU’s), the Seller will cause a third party to organize a pool in Miami that will take care, on a chargeable “fly by the hour” or other basis to be mutually determined, of the following:

 

   

Establishment of an optimized inventory at each Buyer(s) main base;

 

   

Replenishment of aforementioned main base under guaranteed availability and lead-time conditions;

 

   

Access to third party pool.

Repair including technical, airworthiness and administrative (warranty) follow-up of the material.

 

4. [*]

 

A320 Family - TAI - 03/1998

LA7 - 4/5 -


LETTER AGREEMENT No 7

If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

 

Agreed and Accepted    Agreed and Accepted
For and on behalf of    For and on behalf of
ATLANTIC AIRCRAFT HOLDING LIMITED    AIRBUS INDUSTRIE
By: Federico Bloch    By: Rafael Alonso
Its: Attorney-in-Fact    Its: Vice-President Sales
         Latin America and Caribbean
Date: March, 1998    Date: March, 1998

 

A320 Family - TAI - 03/1998

LA7 - 5/5 -


LETTER AGREEMENT No 8A

ATLANTIC AIRCRAFT HOLDING LIMITED

Bolam House

King and George Streets

N A S S A U

B A H A M A S

Subject: [*]

ATLANTIC AIRCRAFT HOLDING LIMITED (“the Buyer”) and AIRBUS INDUSTRIE (“the Seller”) have entered into a Purchase Agreement (“the Agreement”) dated as of even date herewith which covers the manufacture and the sale by the Seller and the purchase by the Buyer of the A320 Family Aircraft as described in the Agreement.

Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement.

Both parties agree that this Letter Agreement, upon execution thereof, shall constitute an integral, nonseverable part of said Agreement and shall be governed by all its provisions, as such provisions have been specifically amended pursuant to this Letter Agreement.

 

A320 - TAI - 03/98

LA 8A 1/10


LETTER AGREEMENT No 8A

* [Seven pages have been omitted in accordance with a request for confidential treatment.]

 

A320 - TAI - 03/98

LA 8A 2/10


LETTER AGREEMENT No 8A

If the foregoing correctly sets forth our understanding please execute the original and one copy thereof in the space provided and return the copy to the Seller.

 

Agreed and accepted    Agreed and accepted
ATLANTIC AIRCRAFT HOLDING LIMITED    AIRBUS INDUSTRIE
By: Federico Bloch    By: Rafael Alonso
Its: Attorney-in-Fact    Its: Vice-President Sales
         Latin America and Caribbean
Date: March, 1998    Date: March, 1998

 

A320 - TAI - 03/98

LA 8A 8/10


LETTER AGREEMENT No 8A

APPENDIX No A to LETTER AGREEMENT No 8A

* [One page has been omitted in accordance with a request for confidential treatment.]

 

A320 - TAI - 03/98

LA 8A 9/10


LETTER AGREEMENT No 8B

ATLANTIC AIRCRAFT HOLDING LIMITED

Bolam House

King and George Streets

N A S S A U

B A H A M A S

Subject: [*]

ATLANTIC AIRCRAFT HOLDING LIMITED (“the Buyer”) and AIRBUS INDUSTRIE (“the Seller”) have entered into a Purchase Agreement (“the Agreement”) dated as of even date herewith which covers the manufacture and the sale by the Seller and the purchase by the Buyer of the A320 Family Aircraft as described in the Agreement.

Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement.

Both parties agree that this Letter Agreement, upon execution thereof, shall constitute an integral, nonseverable part of said Agreement and shall be governed by all its provisions, as such provisions have been specifically amended pursuant to this Letter Agreement.

 

A319 - TAI - 03/98

LA8B 1/10


LETTER AGREEMENT No 8B

* [Seven pages have been omitted in accordance with a request for confidential treatment.]

 

A319 - TAI - 03/98

LA8B 2/10


LETTER AGREEMENT No 8B

If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

 

Agreed and Accepted    Agreed and Accepted
For and on behalf of    For and on behalf of
ATLANTIC AIRCRAFT HOLDING LIMITED    AIRBUS INDUSTRIE
By: /s/ Federico Bloch   

By: /s/ Rafael Alonso

Its: Attorney-in-Fact   

Its: Vice-President Sales

      Latin America and Caribbean

Date: March, 1998   

Date: March, 1998

 

A319 - TAI - 03/98

LA8B 8/10


LETTER AGREEMENT No 8B

APPENDIX No A to LETTER AGREEMENT No 8B

* [One page has been omitted in accordance with a request for confidential treatment.]

 

A319 - TAI - 03/98

LA8B 9/10


LETTER AGREEMENT No 8C

ATLANTIC AIRCRAFT HOLDING LIMITED

Bolam House

King and George Streets

N A S S A U

B A H A M A S

Subject: [*]

ATLANTIC AIRCRAFT HOLDING LIMITED (“the Buyer”) and AIRBUS INDUSTRIE (“the Seller”) have entered into a Purchase Agreement (“the Agreement”) dated as of even date herewith which covers the manufacture and the sale by the Seller and the purchase by the Buyer of the A320 Family Aircraft as described in the Agreement.

Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement.

Both parties agree that this Letter Agreement, upon execution thereof, shall constitute an integral, nonseverable part of said Agreement and shall be governed by all its provisions, as such provisions have been specifically amended pursuant to this Letter Agreement.

 

A321 - TAI - 03/98

LA 8C 1/10


LETTER AGREEMENT No 8C

* [Seven pages have been omitted in accordance with a request for confidential treatment.]

 

A321 - TAI - 03/98

LA 8C 2/10


LETTER AGREEMENT No 8C

If the foregoing correctly sets forth our understanding please execute the original and one copy thereof in the space provided and return the copy to the Seller.

 

Agreed and accepted    Agreed and accepted
ATLANTIC AIRCRAFT HOLDING LIMITED    AIRBUS INDUSTRIE
By: Federico Bloch    By: Rafael Alonso
Its: Attorney-in-Fact    Its: Vice-President Sales
         Latin America and Caribbean
Date: March, 1998    Date: March, 1998

 

A321 - TAI - 03/98

LA 8C 8/10


LETTER AGREEMENT No 8C

APPENDIX No A to LETTER AGREEMENT No 5C

* [One page has been omitted in accordance with a request for confidential treatment.]

 

A321 - TAI - 03/98

LA 8C 9/10


LETTER AGREEMENT No 9

ATLANTIC AIRCRAFT HOLDING LIMITED

Bolam House

King and George Streets

NASSAU, BAHAMAS

Subject: Year 2000 compliance

ATLANTIC AIRCRAFT HOLDING LIMITED (“the Buyer”) and AIRBUS INDUSTRIE (“the Seller”) have entered into a Purchase Agreement (“the Agreement”) dated as of even date herewith which covers the manufacture and the sale by the Seller and the purchase by the Buyer of certain A320 Family Aircraft as described in the Agreement.

Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement.

Both parties agree that this Letter Agreement, upon execution thereof, shall constitute an integral, nonseverable part of said Agreement and shall be governed by all its provisions, as such provisions have been specifically amended pursuant to this Letter Agreement.

In case of inconsistency between the provisions of the Agreement and the provisions of this Letter Agreement, the latter shall prevail.

 

A320 Family - TAI - 03/1998

LA9 - 1/4 -


LETTER AGREEMENT No 9

 

1. The Seller represents and warrants to the Buyer that the Airframe supplied pursuant to this Agreement will be Year 2000 Compliant.

“Year 2000 Compliant” means that any Airbus proprietary software including, but not limited to CAATS, ADRES and PEP and/or Seller furnished equipment and/or software provided by Vendors listed in the Vendor Product Support Agreement referred to in sub-Clause 12.3.1 of the Agreement and attached to the Airframe and/or supplied pursuant to the Agreement (the “Equipment”) will suffer no failure or deterioration in functionality as a result of the commencement of the end of the year 1999 and will have the ability to manage and manipulate data involving dates occurring in both the twentieth and twenty first centuries, without causing any abnormalities, or resulting in incorrect values/information being generated, each as a direct result thereof.

The liability of the Seller under this warranty shall be limited to the cost of replacing any parts and/or sofware which do not comply with the above paragraph in accordance with the provisions of sub-Clause 12.1.4 of the Agreement and the Seller shall have no other liability whatsoever under this Letter Agreement No 9 other than in respect of the Seller’s gross negligence or willful misconductt.

 

2. THE WARRANTIES, OBLIGATIONS AND LIABILITIES OF THE SELLER AND REMEDIES OF THE BUYER SET FORTH IN THIS LETTER AGREEMENT No 9 ARE EXCLUSIVE AND IN SUBSTITUTION FOR, AND THE BUYER HEREBY WAIVES, RELEASES AND RENOUNCES ALL OTHER WARRANTIES, OBLIGATIONS AND LIABILITIES OF THE SELLER AND RIGHTS, CLAIMS AND REMEDIES OF THE BUYER AGAINST THE SELLER, EXPRESS OR IMPLIED, ARISING BY LAW OR OTHERWISE, WITH RESPECT TO ANY NONCONFORMITY OR DEFECT IN THE EQUIPMENT, OR ANY PART THEREOF DELIVERED UNDER THIS AGREEMENT, INCLUDING BUT NOT LIMITED TO ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS, ANY IMPLIED WARRANTY ARISING FROM COURSE OF PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE, ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY IN CONTRACT OR IN TORT, WHETHER OR NOT ARISING FROM THE SELLER’S NEGLIGENCE, ACTUAL OR IMPUTED, AND ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY FOR LOSS OR DAMAGE TO ANY AIRCRAFT, COMPONENT, EQUIPMENT, ACCESSORY OR PART THEREOF, FOR LOSS OF USE, REVENUE OR PROFIT WITH RESPECT TO ANY AIRCRAFT, COMPONENT, EQUIPMENT, ACCESSORY OR PART THEREOF, OR FOR ANY OTHER DIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES, PROVIDED THAT IN THE EVENT THAT ANY OF THE AFORESAID PROVISIONS SHOULD FOR ANY REASON BE HELD UNLAWFUL OR OTHERWISE INEFFECTIVE THE REMAINDER OF THIS LETTER AGREEMENT SHALL REMAIN IN FULL FORCE AND EFFECT.

 

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LA9 - 2/4 -


LETTER AGREEMENT No 9

 

3. The Seller shall not be obliged to provide any remedy which is duplicate of any other remedy provided to the Buyer under any part of this Letter Agreement No 9 as may be amended, complemented or supplemented by other contractual agreements or Clauses of the Agreement.

 

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LETTER AGREEMENT No 9

If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

 

Agreed and Accepted    Agreed and Accepted
For and on behalf of    For and on behalf of
ATLANTIC AIRCRAFT HOLDING LIMITED    AIRBUS INDUSTRIE
By: Federico Bloch    By: Rafael Alonso
Its: Attorney-in-Fact    Its: Vice-President Sales
         Latin America and Caribbean
Date: March, 1998    Date: March, 1998

 

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LETTER AGREEMENT No 10

ATLANTIC AIRCRAFT HOLDING LIMITED

Bolam House

King and George Streets

N A S S A U

B A H A M A S

Subject : Miscellaneous

ATLANTIC AIRCRAFT HOLDING LIMITED (“the Buyer”) and AIRBUS INDUSTRIE (“the Seller”) have entered into a Purchase Agreement (“the Agreement”) dated as of even date herewith which covers the manufacture and the sale by the Seller and the purchase by the Buyer of certain A320 Family Aircraft as described in the Agreement.

Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement.

Both parties agree that this Letter Agreement, upon execution thereof, shall constitute an integral, nonseverable part of said Agreement and shall be governed by all its provisions, as such provisions have been specifically amended pursuant to this Letter Agreement.

In case of inconsistency between the provisions of the Agreement and the provisions of this Letter Agreement, the latter shall prevail.

 

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LETTER AGREEMENT No 10

* [Three pages have been omitted in accordance with a request for confidential treatment.]

 

A320 Family - TAI - 03/1998

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LETTER AGREEMENT No 10

If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

 

Agreed and Accepted    Agreed and Accepted
For and on behalf of    For and on behalf of
ATLANTIC AIRCRAFT HOLDING LIMITED    AIRBUS INDUSTRIE
By: Federico Bloch    By: Rafael Alonso
Its: Attorney-in-Fact    Its: Vice-President Sales
           Latin American and Caribbean
Date: March, 1998    Date: March, 1998

 

A320 Family - TAI - 03/1998

LA10 - 5/5 -

Exhibit 10.6

Note: Certain portions have been omitted from this Agreement in accordance with a request for confidential treatment submitted to the Securities and Exchange Commission. Omitted information has been replaced with an asterisk. Omitted information has been filed separately with the Securities and Exchange Commission.

A320 Family

PURCHASE AGREEMENT

BETWEEN

AIRBUS S.A.S.

as Seller

AND

AVIANCA S.A.

as Buyer

Reference : 337.008/07

 

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CONTENTS

 

CLAUSES

  

TITLES

0    DEFINITIONS AND INTERPRETATION
1    SALE AND PURCHASE
2    SPECIFICATION
3    PRICES
4    PRICE REVISION
5    PAYMENTS
6    MANUFACTURE PROCEDURE—INSPECTION
7    CERTIFICATION
8    BUYER’S TECHNICAL ACCEPTANCE
9    DELIVERY
10    EXCUSABLE DELAY
11    NON-EXCUSABLE DELAY
12    WARRANTIES AND SERVICE LIFE POLICY
13    PATENT AND COPYRIGHT INDEMNITY
14    TECHNICAL DATA AND SOFTWARE SERVICES
15    SELLER REPRESENTATIVES
16    TRAINING AND TRAINING AIDS
17    EQUIPMENT SUPPLIER PRODUCT SUPPORT
18    BUYER FURNISHED EQUIPMENT
19    INDEMNIFICATION AND INSURANCE
20    TERMINATION
21    ASSIGNMENTS AND TRANSFERS
22    MISCELLANEOUS PROVISIONS

 

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CONTENTS

 

EXHIBITS

  

TITLES

Exhibit  A

   SPECIFICATION

Exhibit  B

   FORM OF SPECIFICATION CHANGE NOTICE

Exhibit  C

  

PART 1 AIRFRAME PRICE REVISION FORMULA

PART 2 PROPULSION SYSTEMS PRICE REVISION FORMULA

Exhibit  D

   FORM OF CERTIFICATE OF ACCEPTANCE

Exhibit  E

   FORM OF BILL OF SALE

Exhibit  F

   SERVICE LIFE POLICY—ITEMS OF PRIMARY STRUCTURE

Exhibit  G

   TECHNICAL DATA INDEX

Exhibit  H

   MATERIAL SUPPLY AND SERVICES

Exhibit  I

   LICENSES AND ON LINE SERVICES

 

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A320 Family PURCHASE AGREEMENT

This A320 Family Purchase Agreement (the “ Agreement ”) is made as of the 16 day of April 2007.

BETWEEN:

AIRBUS S.A.S., a société par actions simplifiée, legal successor of Airbus S.N.C., formerly known as Airbus G.I.E. and Airbus Industrie G.I.E. created and existing under French law having its registered office at 1 Rond-Point Maurice Bellonte, 31707 Blagnac-Cedex, France and registered with the Toulouse Registre du Commerce under number RCS Toulouse 383 474 814 (the “ Seller ”),

and

Aerovias del Continente Americano S.A. Avianca, a Colombian sociedad anonima created and existing under Colombian law having its registered office at administrative Avenida Calle 26 No. 92-30 Bogota, Colombia (the “ Buyer ”).

WHEREAS subject to the terms and conditions of this Agreement, the Seller desires to sell the Aircraft to the Buyer and the Buyer desires to purchase the Aircraft from the Seller.

NOW THEREFORE IT IS AGREED AS FOLLOWS:

 

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0. DEFINITIONS AND INTERPRETATION

 

0.1 In addition to words and terms elsewhere defined in this Agreement, the initially capitalized words and terms used in this Agreement shall have the meaning set out below.

 

  Affiliate    means with respect to any person or entity, any other person or entity directly or indirectly controlling, controlled by or under common control with such person or entity.
  Agreement    this A320 Purchase Agreement, including all exhibits and appendixes attached hereto and any letter agreements hereto, as the same may be amended or modified and in effect from time to time.
  Airbus|World    has the meaning set forth in Clause 14A.10.1 Part 2 of Exhibit I.
  Aircraft    means individually or collectively an Airbus A319-100 Aircraft or an A320-200 Aircraft purchased under this Agreement.
  A319 Aircraft    means, and is sometimes referred to herein as, an Airbus A319-100 aircraft delivered under this Agreement, including the Airframe, the Propulsion Systems, and any part, component, furnishing or equipment installed on the Aircraft on Delivery.
  A320 Aircraft    means, and is sometimes referred to herein as, an Airbus A320-200 aircraft delivered under this Agreement, including the Airframe, the Propulsion Systems, and any part, component, furnishing or equipment installed on the Aircraft on Delivery.
  Aircraft Training Services    means all training courses, flight training, line training, flight assistance, line assistance, maintenance support, maintenance training (including Practical Training) or training support performed on Aircraft and provided to the Buyer pursuant to this Agreement.
  Airbus CBT    has the meaning set forth in Clause 16.10.1.
  Airbus CBT Administrator Course    has the meanings set forth in Clause 16.10.3.1.1.
  Airbus CBT Technical Specification    has the meaning set forth in Clause 16.10.3.1.1.
  Airframe    means the Aircraft excluding the Propulsion Systems.


  Airframe Basic Price    has the meaning set out in Clause 3.1 or 3.2.
  Airframe Price Revision Formula    is set out in Part 1 of Exhibit C.
  AirN@v Services    has the meaning set forth in Clause 14A.9.1.
  ANACS    Airbus North America Customer Services, Inc., a corporation organized and existing under the laws of Delaware, having its registered office located at 198 Van Buren Street, Suite 300, Herndon, VA 20170, or any successor thereto.
  AOG    has the meaning set forth in Clause 15.2.6.
  AOT    has the meaning set forth in Clause 12.1.4.3.
  Authorized Officer    has the meaning set forth in Clause 20.6.
  Aviation Authority    means when used in respect of any jurisdiction the government entity, which under the laws of such jurisdiction has control over civil aviation or the registration, airworthiness or operation of civil aircraft in such jurisdiction.
  Balance of Final Price    has the meaning set out in Clause 5.4.1.
  Basic Issue    has the meaning set forth in Clause 14A.3.1.
  Basic Price    means the sum of the Airframe Basic Price and the Propulsion Systems Basic Price. as set forth in Clause 3.
  BFE Data    has the meaning set forth in Clause 14A.3.2.1.
  Bill of Sale    has the meaning set out in Clause 9.2.2.
  [*]    [*]
  Buyer    means Aerovias del Continente Americano S.A. Avianca or its successors and permitted assigns.
  Buyer Furnished Equipment    has the meaning set out in Clause 18.1.1.
  Buyer’s Inspectors    has the meaning set forth in Clause 6.2.1.
  CAA    means the Colombian Civil Aviation Authority (Unidad Administrative Especial de Aeronautica Civil)
  Certificate    has the meaning set forth in Clause 16.4.4.
  Certificate of Acceptance    has the meaning set out in Clause 8.3.
  Change in Law    has the meaning set forth in Clause 7.2.2.


  Clause 5 Indemnitee    as defined in Clause 5.8.3.
  Clause 5 Indemnitor    as defined in Clause 5.8.3.
  Clause 19 Indemnitee    as defined in Clause 19.3.
  Clause 19 Indemnitor    as defined in Clause 19.3.
  COC Data    has the meaning set forth in Clause 14A.8.
  Commitment Fee    means the commitment fee of [*] paid for the Aircraft as referenced in Clause 5.2
  Customer Support Director    has the meaning set forth in Clause 15.1.
  Customer Support Representative    has the meaning set forth in Clause 15.2.1.
  Default Interest    has the meaning set forth in Clause 5.7.
  Default Rate    means the rate of Default Interests as defined in Clause 5.7.
  Delivery    means the transfer of title to the Aircraft from the Seller to the Buyer in accordance with Clause 9.
  Delivery Date    means the date on which Delivery shall occur.
  [*]    [*]
  Delivery Period    has the meaning set forth in Clause 11.1.
  Development Changes    has the meaning set forth in Clause 2.1.3.
  DGAC    the Direction Générale de l’Aviation Civile of France or any successor thereto.
  EASA    European Aviation Safety Agency or any successor agency thereto.


  Engines    has the meaning set forth in Clause 2.2.
  [*] BFE    has the meaning set forth in [*]
  Excusable Delay    has the meaning set out in Clause 10.1.
  Export Airworthiness Certificate    means an export certificate of airworthiness issued by the Aviation Authority of the Delivery Location pursuant to Clause 7.2.1.
  FAA    the U.S. Federal Aviation Administration, or any successor thereto.
  Failure    has the meaning set forth in Clause 12.2.1.
  Final Price    has the meaning set out in Clause 3.3
  Fleet Serial Numbers    has the meaning set forth in Clause 14A.2.1.
  General Terms and Conditions or GTC    means the General Terms and Conditions of Access to and Use of the Secure Area of Airbus|World set forth in Clause 14A.10.3 and Part 4 to Exhibit I.
  Goods and Services    means any goods and services that may be purchased by the Buyer from the Seller, excluding Aircraft.
  Ground Training Services    means all training courses performed in classrooms (classical or Airbus CBT courses), full flight simulator sessions, fixed base simulator sessions and any other services provided to the Buyer on the ground pursuant to this Agreement and which are not Aircraft Training Services.
  In house Warranty    as referred to in Clause 12.1.7.1.
  In house Warranty Labor Rate    as defined in Clause 12.1.7.5(b) of this Agreement.
  Interface Problem    as defined in Clause 12.4.1 of this Agreement.
  Item    has the meaning set forth in Clause 12.2.1.
  License    has the meaning set forth in Clause 16.10.4.1.
  Losses    has the meaning set forth in Clause 19.1.
  Manufacture Facilities    means the various manufacture facilities of the Seller, its Affiliates or any sub-contractor, where the Airframe or its parts are manufactured or assembled.


  Manufacturer’s Specification Change Notice (MSCN)    as defined in Clause 2.1.4.
  Material    has the meaning given such term in Article 1.2.1 of Exhibit H.
  MSCN    see Manufacturer’s Specification Change Notice.
  NFF    has the meaning set forth in Clause 12.1.6.7.
  Non-Excusable Delay    has the meaning set out in Clause 11.1.
  Other Item    as defined in Clause 13.1.3
  Paying Party    as defined in Clause 5.7.
  Paris Convention    has the meaning set forth in Clause 13.1.1(ii)(2).
  PEP    has the meaning set forth in Clause 14B.1.1.
  Practical Training    has the meaning set forth in Clause 16.8.2.
  Predelivery Payment    means the payment(s) determined in accordance with Clauses 5.2 and 5.3.
  Propulsion Systems    has the meaning set out in Clause 2.2.
  Propulsion Systems Basic Price    means the price of a set of Propulsion Systems as set out in Clauses 3.1.2 and 3.2.2.
  Propulsion Systems Reference Price    means the reference price of a set of Propulsion Systems as set out in Part 2 of Exhibit C.
  Propulsion Systems Manufacturer    means the manufacturer of the Propulsion Systems as set out in Clause 2.2.
  Propulsion Systems Price    is set out in Part 2 of Exhibit C.
  PDP [*]    has the meaning set forth in [*].
  [*]    [*]


  Receiving Party    as defined in Clause 5.7.
  Revision Service Period    has the meaning set forth in Clause 14A.5.
  Scheduled Delivery Month    has the meaning set out in Clause 9.1.1.
  Scheduled Delivery Quarter    has the meaning set forth in Clause 9.1.1.
  Secure Area    has the meaning set forth in Part 2 of Exhibit I.
  Seller    means Airbus S.A.S. or its successors and permitted assigns.
  Seller Representatives    means the representatives of the Seller referred to in Clause 15.2.
  Seller Representatives Services    means the services provided by the Seller to the Buyer and from the Buyer to the Seller pursuant to Clause 15.
  Seller Service Life Policy    has the meaning set out in Clause 12.2.
  Seller’s Training Center    has the meaning set forth in Clause 16.3.1.
  Service Life Policy    has the meaning set forth in Clause 12.2.1.
  Spare Parts    means the items of equipment and material that may be provided pursuant to Exhibit H.
  Spare Parts Representative    has the meaning set forth in Clause 15.2.2.
 

Specification Change

Notice or SCN

   means an agreement in writing between the parties to amend the Specification pursuant to Clause 2.
  Specification    means either (a) the Standard Specification if no SCNs are applicable or (b) if SCNs and/or MSCNs are agreed, the Standard Specification as amended by all applicable SCNs and/or MSCNs.
  Standard Specification    means respectively :
     (a) the A319-100 standard specification document number [*], with the following design weights: [*]
     (b) the A320-200 standard specification document number [*], with the following design weights: [*]


  Subsidiary    means an entity of which another owns directly or indirectly more than 50% of the voting share capital.
  Successor    has the meaning set forth in Clause 21.2.2.
  Supplier    has the meaning set out in Clause 12.3.1.1 and Article 1.1.3 of Exhibit H.
  Supplier Part    has the meaning set out in Clause 12.3.1.2 and Article 1.1.3 of Exhibit H.
  Supplier Product Support Agreement    has the meaning set out in Clauses 12.3.1.3 and 17.1.2.
  Suspension    has the meaning set forth in Clause 15.3.6.
  Technical Acceptance Process    as defined in Clause 8.1.1.
  Technical Acceptance Flight    has the meaning set forth in Clause 8.1.2.
  Technical Data    has the meaning set out in Clause 14A.1.
  Termination    has the meaning set forth in Clause 20.2.
  Termination Event    has the meaning set forth in Clause 20.1.
  Third Party Entity    has the meaning set forth in Clause 12.8.
  Total Loss    has the meaning set out in Clause 10.4.
  Training Conference    has the meaning set forth in Clause 16.4.1.
  Training Course Catalog    has the meaning set forth in Clause 16.4.1.
  Type Certificate    has the meaning set out in Clause 7.1.
  Undelivered BFE    has the meaning set forth [*].
  Warranty Claim    has the meaning set forth in Clause 12.1.5.
  Warranted Part    has the meaning set out in Clause 12.1.1.
  Warranty Period    has the meaning set forth in Clause 12.1.3.


0.2 Headings

All headings in this Agreement are for convenience of reference only and do not constitute a part of this Agreement.

 

0.3 In this Agreement unless the context otherwise requires:

 

  (a) references in this Agreement to an exhibit, clause or appendix refer, unless otherwise indicated, to the appropriate exhibit, clause or appendix in this Agreement;

 

  (b) words importing the plural shall include the singular and vice versa;

 

  (c) each agreement defined in this Clause 0 will include all exhibits and appendices thereto. If the prior written consent of any person is required hereunder for an amendment, restatement, supplement or other modification to any such agreement and the consent of each such person is obtained, references in this Agreement to such agreement will be to such agreement as so amended, restated, supplemented or modified. References in this Agreement to any statute will be to such statute as amended or modified and in effect at the time any such reference is operative;

 

  (d) references to a person shall be construed as including, without limitation, references to an individual, firm, company, corporation, unincorporated body of persons and any state or agency of a state;

 

  (e) the term “including” when used in this Agreement means “including without limitation” except when used in the computation of time periods;

 

  (f) the terms “herein,” “hereof” and “hereunder” and other words of similar import refer to this Agreement, and not a particular Clause thereof. The definition of a singular in this Agreement will apply to plurals of the same words and vice versa;

 

  (g) technical and trade terms not otherwise defined herein will have the meanings assigned to them as generally accepted in the aircraft manufacturing industry; and

 

  (h) terms defined in any Letter Agreement shall have such meaning for all purposes of this Agreement.


1 SALE AND PURCHASE

The Seller shall sell and deliver and the Buyer shall buy and take delivery of nine (9) A319-100 Aircraft and twenty four (24) A320-200 Aircraft on the applicable Delivery Date at the Delivery Location upon the terms and conditions contained in this Agreement.

 

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2 SPECIFICATION

 

2.1 Airframe Specification

 

2.1.1 Specification

The Airframe shall be manufactured in accordance with the Standard Specification, as may be modified in accordance with Clauses 2.1.2, 2.1.3 or 2.1.4.

 

2.1.2 Specification Change Notice (SCN)

The Specification may be amended by written agreement between the parties in a Specification Change Notice. Each Specification Change Notice shall be substantially in the form set out in Exhibit B and shall set out such SCN’s scope of implementation and will also set forth in detail the particular change to be made to the Specification [*]. Such SCN may result in an adjustment of the Basic Price. SCNs will not be binding until signed by persons duly authorized to execute the same on behalf of the Seller and the Buyer.

 

2.1.3 Development Changes

Development changes (“ Development Changes ”) are changes deemed necessary by the Seller to improve the Aircraft, prevent delay or ensure compliance with this Agreement. The Specification may be revised by the Seller without the Buyer’s consent in order to incorporate Development Changes if such changes do not adversely affect price, time of Delivery of the Aircraft, weight or performance of the Aircraft, maintainability, operation, balance or interchangeability or replaceability of parts under the Specification. In any other case the Seller shall issue to the Buyer a Manufacturer Specification Change Notice (MSCN). [*]


2.1.4 Manufacturer Specification Change Notice

A proposed Development Change will require an amendment to the Specification by way of a Manufacturer’s Specification Change Notice (“ MSCN ”) when such Development Change requires Buyer’s approval pursuant to Clause 2.1.3. MSCNs will be provided to the Buyer, will be substantially in the form set out in Exhibit B-3 hereto and will set out such MSCN’s scope of implementation as well as, in detail, the effects thereof and the particular change to be made to the Specification.

The Buyer’s written consent shall be required for each MSCN except in respect of an MSCN necessitated by an Aviation Authority [*] directive or equipment obsolescence. [*]

If an MSCN requires Buyers written approval, then the Seller will deliver to the Buyer the contemplated MSCN and notify the Buyer of a reasonable period of time following the Buyer’s receipt of such notice in which the Buyer must accept or reject such MSCN.

 

2.1.5 Specification Change Notices for Certification

The provisions relating to Specification Change Notices for certification are set out in Clauses 7.2. and 7.3.

 

2.1.6 Buyer Import Requirements

The provisions relating to Specification Change Notices for Buyer import requirements are set out in Clause 7.4.

 

2.1.7 Inconsistency

In the event of any inconsistency between the Specification and any other part of this Agreement, this Agreement shall prevail to the extent of such inconsistency.

 

2.2 Propulsion Systems

The Airframe shall be equipped with a set of two (2) engines manufactured by either CFM INTERNATIONAL Engines or INTERNATIONAL AERO ENGINES (“ Engines ”).


In addition, the Aircraft shall be equipped with two (2) nacelles and thrust reversers. The Engines together with the nacelles and thrust reversers are hereinafter referred to as the “ Propulsion Systems ”.

If the Buyer has not selected the Propulsion Systems as of the date of this Agreement, such choice shall be made and notified to Seller no later than [*] prior to the first day of the Scheduled Delivery Month of the first Aircraft as set forth in Clause 9.1.1.

 

2.3 Customization Milestones Chart

Within a reasonable period, [*] following signature of the Agreement, the Seller shall provide the Buyer with a Customization Milestones Chart. The chart will set out the minimum lead times prior to the Scheduled Delivery Month of the Aircraft when a mutual agreement shall be reached (execution of a SCN) in order to integrate into the Specification any items requested by the Buyer from the Specification Changes Catalogues made available by the Seller.

 

2.4 Engine Selection

For each Aircraft, the Buyer shall select between CFM INTERNATIONAL Engines (CFM) and INTERNATIONAL AERO ENGINES (IAE) one of the following Engine types:

 

Aircraft Type

  

CFM

  

IAE

A319-100

  

CFM56-[*]

or

CFM56-[*]

  

IAE V2524-[*]

or

IAE V2527M-[*]

A320-200

   CFM56-[*]    IAE V2527E-[*]

 

2.5 [*]

Seller will provide Buyer the new AIRBUS family [*]for each Aircraft.

 

2.6 Propulsion Systems/Engines and BFE Concessions

The concessions provided by the Engine Manufacturers shall be negotiated directly between Buyer and the selected Manufacturer. The concessions provided by the BFE suppliers shall be negotiated directly between Buyer and the BFE Suppliers.


3 PRICES

 

3.1 A319-100 Basic Price

 

  3.1.1   The basic price of the airframe (the “ Airframe Basic Price ”) is the sum of:

(i) the basic price of the Airframe as defined in the A319-100 Standard Specification (excluding Buyer Furnished Equipment), specifically including the price of the nacelles and thrust reversers, which is :

USD [*]

(US Dollars [*])

(ii) the sum of the basic prices of all SCNs set forth in Appendix 1.1 to Exhibit “A”, which is :

USD [*]

(US Dollars [*])

The Airframe Basic Price of the A319-100 corresponds to a theoretical delivery in [*]—(the “ Base Period ”).

 

  3.1.2   A319-100 Propulsion Systems Basic Price

 

  3.1.2.1 The basic prices of a set of CFM INTERNATIONAL Propulsion Systems are respectively :

For CFM56 [*]              USD [*]

(US Dollars [*])

For CFM56 [*]              USD [*]

(US Dollars [*])

 

  3.1.2.2 The basic prices of a set of INTERNATIONAL AERO ENGINES Engines, excluding specifically nacelles and thrust reversers, are respectively:

For IAE V2524 [*]        USD [*]

(US Dollars [****])

For IAE V2527M [*]    USD [*]

(US Dollars [*])

 

  3.1.2.3 The above Propulsion System Basic Prices have been calculated from the Propulsion System Reference Prices set forth in Exhibit C in accordance with the delivery conditions prevailing in [*].

 

3.2 A320-200 Basic Price

 

  3.2.1 The Airframe Basic Price of the A320-200 is the sum of:

(i) the basic price of the Airframe as defined in the A320-200 Standard Specification (excluding Buyer Furnished Equipment), including specifically nacelles and thrust reversers, which is :

USD [*]

(US Dollars [*])

 

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  (ii) the sum of the basic prices of all SCNs set forth in Appendix 1.2 to Exhibit “A”, which is :

USD [*]

(US Dollars [*])

The Airframe Basic Price of the A320-200 corresponds to a theoretical delivery in [*] (the “ Base Period ”).

 

  3.2.2   A320-200 Propulsion Systems Basic Price

 

  3.2.2.1 The basic price of a CFM INTERNATIONAL Propulsion Systems is:

For CFM56 [*]            USD [*]

(US Dollars [*])

 

  3.2.2.2 The basic prices of an INTERNATIONAL AERO ENGINES Engines, excluding specifically nacelles and thrust reversers is:

For IAE V2527E[*]    USD [*]

(US Dollars [*]

 

  3.2.2.3 The above Propulsion System Basic Prices have been calculated from the Propulsion System Reference Prices set forth in Exhibit C in accordance with the delivery conditions prevailing [*].

 

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3.3 Final Price

The Final Price of each Aircraft shall be the sum of:

 

  (i) the Airframe Basic Price as revised as of the Delivery Date in accordance with Clause 4.1; plus

 

  (ii) the aggregate of all increases or decreases to the Airframe Basic Price as agreed in any Specification Change Notice or part thereof applicable to the Airframe subsequent to the date of this Agreement as revised as of the Delivery Date in accordance with Clause 4.1; plus

 

  (iii) the Propulsion Systems Reference Price as revised as of the Delivery Date in accordance with Clause 4.2; plus

 

  (iv) the aggregate of all increases or decreases to the Propulsion Systems Reference Price as agreed in any Specification Change Notice or part thereof applicable to the Propulsion Systems subsequent to the date of this Agreement as revised as of the Delivery Date in accordance with Clause 4.2; plus

 

  (v) any other amount resulting from any other provisions of this Agreement and/or any other written agreement between the Buyer and the Seller relating to the Aircraft and specifically stating that such amount is to be included in or deducted from the Final Price of an Aircraft.

 

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4. PRICE REVISION

 

4.1 Revision of Airframe Basic Price

The Airframe Basic Price is subject to revision in accordance with the Airframe Price Revision Formula up to and including the Delivery Date as set forth in Part 1 of Exhibit C.

 

4.2 Revision of Propulsion Systems Reference Price

 

4.2.1. The Propulsion Systems Reference Price is subject to revision in accordance with the Propulsion Systems Price Revision Formula up to and including the Delivery Date, as set forth in Parts 2 and 3 of Exhibit C.

 

4.2.2 Modification of Propulsion Systems Reference Price and Propulsion Systems Price Revision Formula

The Propulsion Systems Reference Price, the prices of the related equipment and the Propulsion Systems Price Revision Formula are based on information received from the Propulsions Systems Manufacturer and are subject to amendment by the Propulsion Systems Manufacturer at any time prior to the Delivery Date. If the Propulsion Systems Manufacturer makes any such amendment, the amendment shall be automatically incorporated into this Agreement and the Propulsion Systems Reference Price, the prices of the related equipment and the Propulsion Systems Price Revision Formula shall be adjusted accordingly. The Seller agrees to notify the Buyer as soon as it receives notice of any such amendment from the Propulsion Systems Manufacturer.

 

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5 PAYMENTS

 

5.1 Seller’s Account

The Buyer shall pay the Predelivery Payments, the Balance of Final Price and/or any other amount due by the Buyer to the Seller, to the Seller’s account:

 

 

 

Beneficiary Name: AIRBUS

 

account identification:

 

with:

 

[*]

 

Buyer’s Account

The Seller shall pay any amount due by the Seller to the Buyer hereunder, to the Buyer’s account:

 

 

 

Beneficiary Name: AEROVIAS DEL CONTINENTE AMERICANO

 

Account Identification: [****]

 

with:

 

[*]

 

 

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5.2 Commitment Fee

The Seller acknowledges that it has received from the Buyer the sum of US $ (U.S. Dollars [****]), which represents a non-refundable commitment fee for the Aircraft (the “ Commitment Fee ”). The Commitment Fee prorated equally for each particular Aircraft will be credited without interest against the first Predelivery Payment due for each Aircraft upon signature of the Agreement.

 

5.3 Predelivery Payments

* [Two pages have been omitted in accordance with a request for confidential treatment.]

 

5.4 Balance of Final Price

 

5.4.1 The Balance of Final Price payable by the Buyer to the Seller on the Delivery Date of an Aircraft shall be the Final Price less the amount of Predelivery Payments received by the Seller on or before the Delivery Date with respect to such Aircraft.

 

5.4.2 Concurrent with each Delivery, the Buyer will pay to the Seller the Balance of the Final Price for the applicable Aircraft. Upon Seller’s receipt of the full amount of the Balance of the Final Price, including any amounts due under Clause 5.5, Seller shall transfer title to such Aircraft to the Buyer at Delivery.

 

5.5 Other Charges

Unless expressly stipulated otherwise, any other charges due under this Agreement other than those set out in Clauses 5.2, 5.3 and 5.4 shall be paid by the Buyer at the same time as payment of the Balance of Final Price or, if invoiced after the Delivery Date, within thirty (30) days after the invoice date.

 

5.6 Method of Payment

 

5.6.1 All payments provided for in this Agreement shall be made in United States Dollars (USD) in immediately available funds.

 

5.6.2 All payments due to the Seller hereunder shall be made in full, without set-off, counterclaim, deduction or withholding of any kind. Consequently, the Buyer shall assure that the sums received by the Seller under this Agreement shall be equal to the full amounts expressed to be due to the Seller hereunder, without deduction or withholding on account of and free from any and all taxes, levies, imposts, dues or charges of whatever [*]. If the Buyer is compelled by law to make any such deduction or withholding [*] the Buyer shall pay such additional amounts as may be necessary in order that the net amount received by the Seller after such deduction or withholding shall be equal to the amounts which would have been received in the absence of such deduction or withholding and pay to the relevant taxation or other authorities within the period for payment permitted by applicable law, the full amount of the deduction or withholding.

 

5.7 Default Interest

If any payment or credit due from the Seller or the Buyer (“ Paying Party ”) under this Agreement including but not limited to any Predelivery Payment, Commitment Fee, Option Fee for the Aircraft as well as any payment or credit due to either party

 

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(the “ Receiving Party ”) for any spare parts, data, documents, training and services or otherwise under this Agreement, is not received on the due date, without prejudice to the Receiving Party’s other rights under this Agreement and at law, the Receiving Party shall be entitled to interest (“ Default Interest ”) for late payment or credit calculated on the amount due from and including the due date of payment up to and including the date when the payment or credit is received by the Receiving Party at a rate equal to [*] (the “ Default Rate ”).

[*]

 

5.8 [*]

[*]

 

5.9 Proprietary Interest

The Buyer shall not, by virtue of anything contained in this Agreement (including, without limitation, any Commitment Fee or Predelivery Payments hereunder, or any designation or identification by the Seller of a particular aircraft as an Aircraft to which any of the provisions of this Agreement refers) acquire any proprietary, insurable or other interest whatsoever in any Aircraft before Delivery of and payment for such Aircraft, as provided in this Agreement.

 

5.10 Set-Off

The Seller may set-off any matured and undisputed obligation owed by the Buyer to the Seller and/or its Affiliates against any obligation (whether or not matured) owed by the Seller to the Buyer (it being understood that if this obligation is unascertainable it may be estimated reasonably and in good faith and the set-off made in respect of such estimate), regardless of the place of payment or currency provided that the Buyer must be provided prior written notice of Seller’s intentions to do the same. [*]

 

5.11 [*]

* [Two pages have been omitted in accordance with a request for confidential treatment.]

 

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6 MANUFACTURE PROCEDURE – INSPECTION

 

6.1. Manufacture Procedure

The Airframe shall be manufactured in accordance with the relevant requirements of the laws of the jurisdiction of incorporation of the Seller or of its relevant Affiliate as enforced by the Aviation Authority of such jurisdiction.

[*]

 

6.2 Inspection

 

6.2.1 Subject to providing the Seller with certificates evidencing compliance with the insurance requirements set forth in Clause 19, the Buyer or its duly authorised representatives (the “ Buyer’s Inspector(s) ”) shall be entitled to inspect the manufacture of the Airframe and all materials and parts obtained by the Seller for the manufacture of the Airframe on the following terms and conditions;

 

  (i) any inspection shall be made according to a procedure to be agreed upon with the Buyer and in accordance with the Seller’s own system of inspection as developed under the supervision of the relevant Aviation Authority;

 

  (ii) the Buyer’s Inspector(s) shall have access to such relevant technical data as is reasonably necessary for the purpose of the inspection;

 

  (iii) any inspection and any related discussions with the Seller and other relevant personnel by the Buyer’s Inspector(s) shall be at reasonable times during business hours and any inspection shall take place in the presence of relevant inspection department personnel of the Seller which personnel shall be available for this purpose upon reasonable notice;

 

  (iv) the inspections shall be performed in a manner not to unduly delay or hinder the manufacture or assembly of the Aircraft or the performance of this Agreement by the Seller or any other work in progress at the Manufacture Facilities.

 

6.2.2 Location of Inspections

The Buyer’s Inspector(s) shall be entitled to conduct any such inspection at the relevant Manufacture Facility of the Seller or the Affiliates and where possible at the Manufacture Facilities of the sub-contractors provided that if access to any part of the Manufacture Facilities where the Airframe manufacture is in progress or materials or parts are stored are restricted for security or confidentiality reasons, the Seller shall be allowed reasonable time to make the relevant items available for inspection elsewhere.

 

6.3 Seller’s Service for Buyer’s Inspector(s)

For the purpose of the inspections, and commencing with the date of this Agreement until the Delivery Date, the Seller shall furnish without additional charge suitable space and office equipment including access, for business purposes, to electronic mail, facsimile and telephones in or conveniently located with respect to the Delivery Location [*]

 

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CERTIFICATION

 

7.1 Type Certification

The Aircraft has been type certificated under EASA and by the FAA in the transport category. The Seller has obtained the relevant type certificate (the “ Type Certificate ”) to allow the issuance of the Export Airworthiness Certificate. [*]

 

7.2 Export Airworthiness Certificate

 

7.2.1 The Aircraft shall be delivered to the Buyer with [*] an Export Airworthiness Certificate issued by the French DGAC for delivery in Toulouse or by the German LBA for Delivery in Hamburg, and in a condition enabling the Buyer (or an eligible person under then applicable law) to obtain at the time of Delivery a Standard Airworthiness Certificate issued by the applicable Aviation Authority in the jurisdiction where Buyer has elected to register the Aircraft. If the use of any certificate required to be obtained herein is discontinued by the issuing authority, reference to such certificate will be deemed to refer to any successor certificate or instrument issued by such authority.

[*]

 

7.2.2 If, any time before the date on which any Aircraft is Ready for Delivery, any law or regulation is enacted, promulgated, becomes effective and/or an interpretation of any law, rule or regulation is issued which requires any change to the Specification for the purposes of obtaining the Export Airworthiness Certificate (a “ Change in Law ”), the Seller shall make the required variation or modification to such Aircraft and the parties hereto shall sign a Specification Change Notice in connection with such modification.

 

7.2.3 The Seller shall as far as practicable (but at its sole discretion and without prejudice to Clause 7.3.1 (ii)) take into account the information available to it concerning any proposed law, rule or regulation or interpretation which could become a Change in Law in order to minimise the costs of changes to the Specification as a result of such proposed law, regulation or interpretation becoming effective prior to the Aircraft being Ready for Delivery.


7.3 Costs of SCNs for Certification

 

7.3.1 The costs of implementing the variation or modification referred to in Clause 7.2.2 above shall be

(i) [*]

(ii) [*]

 

7.3.2. Notwithstanding the provisions of sub-Clauses 7.3.1 (i) and (ii), if the Change in Law relates to the Propulsion Systems, the costs shall be borne in accordance with such arrangements as may be made separately between the Buyer and the Propulsion Systems Manufacturer.

 

7.4 Validation of the Export Airworthiness Certificate

Where the Buyer’s Aviation Authority requires a modification to the Aircraft that is not also required by EASA or FAA to comply with additional import aviation requirements prior to the issuance of the Export Airworthiness Certificate, the Seller shall incorporate such modification in the Aircraft [*]. The parties shall sign a Specification Change Notice in connection with such modification.


8 TECHNICAL ACCEPTANCE

 

8.1 Technical Acceptance Process

 

8.1.1 Prior to Delivery the Aircraft shall undergo a standard technical acceptance process that is applicable to deliveries of all aircraft of the same type as the Aircraft (the “ Technical Acceptance Process ”). [*] completion of the Technical Acceptance Process shall demonstrate the proper functioning and condition of the Aircraft and shall be deemed to demonstrate compliance with the Specification. Should the Aircraft fail to [*] complete the Technical Acceptance Process requirements, the Seller shall without hindrance from the Buyer be entitled to carry out any necessary changes to the Aircraft and, as soon as practicable thereafter, resubmit the Aircraft to such further Technical Acceptance Process as is necessary to demonstrate the proper functioning of the Aircraft, which will include an additional Technical Acceptance Flight (defined below) of the Aircraft if reasonably required to verify correction of the failure. Each successive failure of an Aircraft to [*] complete the Technical Acceptance Process will be governed by the preceding sentence. [*]

 

8.1.2 The Technical Acceptance Process shall:

 

  (i) commence on a date notified by the Seller to the Buyer as per clause 9.1.2 and in any case will commence no fewer than ten (10) days following the Buyer’s receipt of such notice;

 

  (ii) take place at the Delivery Location;

 

  (iii) be carried out by the personnel of the Seller;

 

  (iv) include a technical acceptance flight (the “ Technical Acceptance Flight ”) that will (a) not exceed three (3) hours, (b) have the purpose of demonstrating to the Buyer the function of the Aircraft and its equipment pursuant to the Technical Acceptance Process [*].

 

  (v) be conducted at the sole cost and expense of the Seller, excluding costs of travel, food and lodging of the Buyer’s representatives participating in such process.

 

8.2 Buyer’s Attendance

 

8.2.1 The Buyer shall be entitled to attend the Technical Acceptance Process.

 

8.2.2 If the Buyer attends the Technical Acceptance Process, the Buyer;

 

  (i) shall co-operate in complying with the reasonable requirements of the Seller with the intention of completing the Technical Acceptance Process within five (5) Business Days after its commencement;

 

  (ii) may have a maximum of [*] of the Buyer’s representatives (with no more than three (3) such representatives having access to the cockpit at any one time) accompany the Seller’s representatives on the Technical Acceptance flight and during such flight the Buyer’s representatives shall comply with the instructions of the Seller’s representatives.

 

8.2.3

If, following the Buyer’s receipt of notice pursuant to Clause 9.1.2, the Buyer does not attend [*] and/or fails to reasonably cooperate in the Technical Acceptance Process in respect of an Aircraft, the Seller acting as a reasonable buyer, will be entitled to commence the Technical Acceptance Process and, if Buyer or its designee does not thereafter join the Technical Acceptance Process, complete

 

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the Technical Acceptance Process in compliance with Clause 8.1 without the Buyer’s participation. Upon [*] completion of the Technical Acceptance Process for such Aircraft [*] the Buyer will be deemed to have accepted that the Technical Acceptance Process has been completed in all respects.

 

8.3 Certificate of Acceptance

Upon [*] completion of the Technical Acceptance Process, the Buyer shall, on or before the Delivery Date, sign and deliver to the Seller a certificate of acceptance in respect of the Aircraft in the form of Exhibit D (the “ Certificate of Acceptance ”).

 

8.4 Finality of Acceptance

The Buyer’s signature of the Certificate of Acceptance for the Aircraft shall constitute waiver by the Buyer of any right it may have under the Uniform Commercial Code as adopted by the State of New York or otherwise to revoke acceptance of the Aircraft for any reason, whether known or unknown to the Buyer at the time of acceptance.

 

8.5 Aircraft Utilisation

The Seller shall, without payment or other liability, be entitled to use the Aircraft prior to Delivery as may be necessary to obtain the certificates required under Clause 7, and such use shall not prejudice the Buyer’s obligation to accept Delivery of the Aircraft hereunder.

[*]

 

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9 DELIVERY

 

9.1 Delivery Schedule

 

9.1.1 Subject to Clauses 2, 7, 8, 10, 11 and 18, the Seller shall have the Aircraft Ready for Delivery at the Delivery Location within the following months or quarters:

A319 Aircraft n° 1        September 2008

A319 Aircraft n° 2        November 2008

A319 Aircraft n° 3        1st Quarter 2010

A319 Aircraft n° 4        1st Quarter 2010

A319 Aircraft n° 5        2nd Quarter 2010

A319 Aircraft n° 6        2nd Quarter 2010

A319 Aircraft n° 7        1st Quarter 2011

A319 Aircraft n° 8        1st Quarter 2011

A319 Aircraft n° 9        2nd Quarter 2011

A320 Aircraft n° 10      2nd Quarter 2009

A320 Aircraft n° 11      2nd Quarter 2009

A320 Aircraft n° 12      3rd Quarter 2009

A320 Aircraft n° 13      3rd Quarter 2009

A320 Aircraft n° 14      1st Quarter 2010

A320 Aircraft n° 15      1st Quarter 2010

A320 Aircraft n° 16      2nd Quarter 2010

A320 Aircraft n° 17      2nd Quarter 2010

A320 Aircraft n° 18      2nd Quarter 2010

A320 Aircraft n° 19      3rd Quarter 2010

A320 Aircraft n° 20      3rd Quarter 2010

A320 Aircraft n° 21      4th Quarter 2010

A320 Aircraft n° 22      4th Quarter 2010

A320 Aircraft n° 23      1st Quarter 2011

A320 Aircraft n° 24      1st Quarter 2011

A320 Aircraft n° 25      1st Quarter 2011

A320 Aircraft n° 26      2nd Quarter 2011

A320 Aircraft n° 27      2nd Quarter 2011

A320 Aircraft n° 28      3rd Quarter 2011

A320 Aircraft n° 29      3rd Quarter 2011

A320 Aircraft n° 30      3rd Quarter 2011

A320 Aircraft n° 31      3rd Quarter 2011

A320 Aircraft n° 32      4th Quarter 2011

A320 Aircraft n° 33      4th Quarter 2011

The Seller shall notify the Buyer, no later than [*] prior to the first month of the concerned delivery quarter (the “ Scheduled Delivery Quarter ”), of the delivery month in respect of each such Aircraft. Each of such delivery months shall be, with respect to the corresponding Aircraft, the “ Scheduled Delivery Month

 

9.1.2 The Seller shall give the Buyer at least thirty (30) days prior written notice of the date on which the Aircraft shall be Ready for Delivery. Thereafter the Seller shall notify the Buyer of any change in such date necessitated by the conditions of manufacture or flight.

 

9.2 Delivery

 

9.2.1 The Buyer shall send its representatives to the Delivery Location to take Delivery of, and collect, the Aircraft within five (5) Business Days after the date on which the Aircraft is Ready for Delivery and shall pay the Balance of the Final Price on or before the Delivery Date.


9.2.2 The Seller shall deliver and transfer title to the Aircraft to the Buyer free and clear of all liens, claims, charges, security interests and all encumbrances of any kind whatsoever provided that the Balance of the Final Price has been paid by the Buyer pursuant to Clause 5.4 and that the Certificate of Acceptance has been signed and delivered to the Seller pursuant to Clause 8.3. The Seller shall provide the Buyer with a bill of sale in the form of Exhibit E (the “ Bill of Sale ”) and/or such other documentation confirming transfer of title and receipt of the Final Price as may reasonably be requested by the Buyer. Possession and risk of loss of or damage to the Aircraft shall be transferred to the Buyer on the date and at the time set forth in the executed Certificate of Acceptance.

[*]

 

9.2.3 [*] should the Buyer fail to deliver the signed Certificate of Acceptance to the Seller within the delivery period and accept Delivery of and pay the Balance of the Final Price for an Aircraft that is Ready for Delivery and in respect of which the Buyer has or is obligated to deliver a Certificate of Acceptance, then the Buyer shall be deemed to have rejected Delivery of the Aircraft without warrant when duly tendered to it hereunder. In addition to Clause 5.7 and the Seller’s other rights under this Agreement, the Seller shall retain title to the Aircraft and the Buyer shall indemnify and hold the Seller harmless against any and all costs (including but not limited to any parking, storage, and insurance costs) actually incurred by the Seller resulting from any delay or failure to timely effect such payment [*].

 

9.3 Fly Away

 

9.3.1 The Buyer and the Seller shall co-operate to obtain any licenses, permits and approvals which may be required by the Aviation Authority of the Delivery Location for the purpose of exporting the Aircraft.

 

9.3.2 Except as provided below, all expenses of, or connected with, flying the Aircraft from the Delivery Location after Delivery shall be borne by the Buyer [*] and the Buyer will make direct arrangements with the supplying companies for its requirements. [*] Seller will also assist Buyer, at no out-of-pocket cost to Seller, to obtain the necessary authorizations from the Aviation Authority having jurisdiction over the Delivery Location to permit Buyer to remove the Aircraft from the Delivery Location immediately following Delivery.


10 EXCUSABLE DELAY

 

10.1 The Buyer acknowledges that the Aircraft are to be manufactured by Seller in performance of this Agreement and that the Scheduled Delivery Months are based on the assumption that there shall be no delay due to causes beyond the control of the Seller. Accordingly, Seller shall not be responsible for any delay in the Delivery of the Aircraft or delay or interruption in the performance of the other obligations of the Seller hereunder due to causes beyond its control, and not occasioned by its fault or negligence including (but without limitation) acts of God or the public enemy, war, civil war, warlike operations, terrorism, insurrections or riots, fires, explosions, natural disasters, compliance with any applicable foreign or domestic governmental regulation or order, labour disputes causing cessation, slowdown or interruption of work, inability after due and timely diligence to procure materials, equipment or parts, general hindrance in transportation or failure of a sub-contractor or supplier to furnish materials, equipment or parts, any delay caused directly or indirectly by the action or inaction of the Buyer; and any delay in delivery or otherwise in the performance of this Agreement by the Seller due in whole or in part to any delay in or failure of the delivery of, or any other event or circumstance relating to, the Propulsion Systems or Buyer Furnished Equipment. Any delay or interruption resulting from any of the foregoing causes is referred to as an “ Excusable Delay ”.

 

10.2 If an Excusable Delay occurs:

 

  (i) the Seller shall notify the Buyer of such Excusable Delay as soon as practicable after becoming aware of the same;

 

  (ii) the Seller shall not be responsible for any damages arising from or in connection with such Excusable Delay suffered or incurred by the Buyer;

 

  (iii) the Seller shall not be deemed to be in default in the performance of its obligations hereunder as a result of such Excusable Delay; and

 

  (iv) the Seller shall as soon as practicable after the removal of the cause of the delay resume performance of its obligations under this Agreement and in particular shall notify to the Buyer the revised Scheduled Delivery Month.

 

10.3 Termination on Excusable Delay

 

10.3.1 If the Delivery of any Aircraft is delayed as a result of an Excusable Delay for a period of more than [*] after the last day of the Scheduled Delivery Month then either party may terminate this Agreement with respect to the Aircraft so affected by giving written notice to the other party [*] period provided that the Buyer shall not be entitled to terminate this Agreement pursuant to this Clause if the Excusable Delay results from a cause within its control.

 

10.3.2 If the Seller concludes that the Delivery of any Aircraft shall be delayed for more than [*] after the last day of the Scheduled Delivery Month due to an Excusable Delay and as a result thereof reschedules Delivery of such Aircraft to a date or month reflecting such delay then the Seller shall promptly notify the Buyer in writing to this effect and shall include in such notification the new Scheduled Delivery Month. [*].

 

10.3.3 If this Agreement shall not have been terminated with respect to the delayed Aircraft during the [*] period referred to in either Clause 10.3.1 or 10.3.2 above, then the Seller shall be entitled to reschedule Delivery and the new Scheduled Delivery Month shall be notified to the Buyer and shall be binding on the parties.

 

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10.4 Total Loss, Destruction or Damage

If prior to Delivery, any Aircraft is lost, destroyed or in the reasonable opinion of the Seller is damaged beyond repair (“ Total Loss ”), the Seller shall notify the Buyer to this effect within [*] of such occurrence. The Seller shall include in said notification (or as soon after the issue of the notice as such information becomes available to the Seller) [*] may be delivered to the Buyer and the Scheduled Delivery Month shall be extended as specified in the Seller’s notice to accommodate the delivery of the replacement aircraft; provided, however, that in the event the specified extension of the Scheduled Delivery Month to a month is [*] after the last day of the original Scheduled Delivery Month then this Agreement shall terminate with respect to said Aircraft unless:

 

  (i) the Buyer notifies the Seller [*] of the date of receipt of the Seller’s notice that it desires the Seller to provide a replacement aircraft during the month quoted in the Seller’s notice; and

 

  (ii) the parties execute an amendment to this Agreement recording the variation in the Scheduled Delivery Month;

provided, however, that nothing herein shall require the Seller to manufacture and deliver a replacement aircraft if such manufacture would require the reactivation of its production line for the model or series of aircraft which includes the Aircraft purchased hereunder.

 

10.5 Termination Rights Exclusive

In the event that this Agreement shall be terminated as provided for under the terms of Clauses 10.3 or 10.4, such termination shall discharge all obligations and liabilities of the parties hereunder with respect to such affected Aircraft and undelivered material, services, data or other items applicable thereto and to be furnished hereunder and neither party shall have any claim against the other for any loss resulting from such non-delivery. The Seller shall in no circumstances have any liability whatsoever for Excusable Delay other than as set forth in this Clause 10.

 

10.6 REMEDIES

THIS CLAUSE 10 SETS FORTH THE SOLE AND EXCLUSIVE REMEDY OF THE BUYER FOR DELAYS IN DELIVERY OR FAILURE TO DELIVER, OTHER THAN SUCH DELAYS AS ARE COVERED BY CLAUSE 11, AND THE BUYER HEREBY WAIVES ALL RIGHTS TO WHICH IT WOULD OTHERWISE BE ENTITLED IN RESPECT THEREOF, INCLUDING, WITHOUT LIMITATION, ANY RIGHTS TO INCIDENTAL AND CONSEQUENTIAL DAMAGES OR SPECIFIC PERFORMANCE. [*]

 

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11 NON-EXCUSABLE DELAY

 

11.1 Liquidated Damages

Should any of the Aircraft not be Ready for Delivery to the Buyer within [*] after the last day of the Scheduled Delivery Month (as varied by virtue of Clauses 2, 7 and 10) (the “ Delivery Period ”) and such delay is not as a result of an Excusable Delay or Total Loss (a “ Non-Excusable Delay ”), then the Buyer shall have the right to claim, and the Seller shall pay by way of liquidated damages to the Buyer [*] of delay in the Delivery commencing on the date [*] after the last day of the Scheduled Delivery Month.

The amount of such liquidated damages shall in no event exceed the total of [*] in respect of any one Aircraft.

The Buyer’s right to be paid damages in respect of the Aircraft is conditional upon the Buyer submitting a claim in respect of such liquidated damages in writing to the Seller not later than [*] after the last day of the Scheduled Delivery Month.

 

11.2 Re-negotiation

If, as a result of Non-Excusable Delay, Delivery does not occur in the period falling [*] after the Delivery Period, the Buyer shall have the right exercisable by written notice to the Seller given not less than [*] nor more than [*] after the expiration of the [*] falling after the Delivery Period to require from the Seller a re-negotiation of the Scheduled Delivery Month for the affected Aircraft. Unless otherwise agreed between the Seller and the Buyer during such re-negotiation, the said re-negotiation shall not prejudice the Buyer’s right to receive liquidated damages in accordance with Clause 11.1 during the period of Non-Excusable Delay.

 

11.3 Termination

If, as a result of Non-Excusable Delay, Delivery does not occur in the period falling [*] after the Delivery Period and the parties have not renegotiated the Delivery Date pursuant to Clause 11.2, either party shall have the right exercisable by written notice to the other party, given not less than [*] nor more than [*] after expiration of such [*] to terminate this Agreement in respect of the affected Aircraft and neither party shall have any claim against the other in respect of such nondelivery [*].

 

11.4 Remedies

THIS CLAUSE 11 SETS FORTH THE SOLE AND EXCLUSIVE REMEDY OF THE BUYER FOR DELAYS IN DELIVERY OR FAILURE TO DELIVER, OTHER THAN SUCH DELAYS AS ARE COVERED BY CLAUSE 10, AND THE BUYER HEREBY WAIVES ALL RIGHTS TO WHICH IT WOULD OTHERWISE BE ENTITLED IN RESPECT THEREOF, INCLUDING WITHOUT LIMITATION ANY RIGHTS TO INCIDENTAL AND CONSEQUENTIAL DAMAGES OR SPECIFIC PERFORMANCE. [*].

 

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12 WARRANTIES AND SERVICE LIFE POLICY

This Clause covers the terms and conditions of the warranty and service life policy.

 

12.1 Standard Warranty

 

12.1.1 Nature of Warranty

For the purpose of this Agreement the term “Warranted Part” shall mean any component, equipment, proprietary software, accessory or part, which is installed on an Aircraft at Delivery thereof and

 

  (a) which is manufactured to the detailed design of the Seller or a subcontractor of the Seller and

 

  (b) which bears a part number of the Seller at the time of such Delivery.

Subject to the conditions and limitations as hereinafter provided for and except as provided for in Clause 12.1.2, the Seller warrants to the Buyer that each Aircraft and each Warranted Part shall at Delivery to the Buyer be free from defects:

 

  (i) in material;

 

  (ii) in workmanship, including without limitation processes of manufacture;

 

  (iii) in design (including without limitation the selection of materials) having regard to the state of the art at the date of such design; and

 

  (iv) arising from failure to conform to the Specification, except to those portions of the Specification relating to performance or where it is expressly stated in the Specification that they are estimates, approximations or design aims.

 

12.1.2 Exclusions

The warranties set forth in Clause 12.1.1 shall not apply to Buyer Furnished Equipment, nor to the Propulsion Systems, nor to any component, equipment, accessory or part installed on the Aircraft at Delivery that is not a Warranted Part except that:

 

  (i) any defect in the Seller’s workmanship in respect of the installation of such excluded items in the Aircraft, including any failure by the Seller to conform to the installation instructions of the manufacturers of such items, that invalidates any applicable warranty from such manufacturers, shall constitute a defect in workmanship for the purpose of this Clause 12.1 and be covered by the warranty set forth in Clause 12.1.1 (ii); and

 

  (ii) any defect inherent in the Seller’s design of the installation, in consideration of the state of the art at the date of such design, which impairs the use of such items, shall constitute a defect in design for the purpose of this Clause 12.1 and be covered by the warranty set forth in Clause 12.1.1 (iii).

 

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12.1.3 [*]

[*]

 

12.1.4 Buyer’s Remedy and Seller’s Obligation

 

12.1.4.1 The Buyer’s remedy and the Seller’s obligation and liability under Clauses 12.1.1 and 12.1.2 are limited to, at the Seller’s expense and option, the repair, replacement or correction of any Warranted Part which is defective (or to the supply of modification kits rectifying the defect), together with a credit to the Buyer’s account with the Seller of an amount equal to the mutually agreed direct labor costs expended in performing the removal and the reinstallation thereof on the Aircraft at the labor rate defined in Clause 12.1.7.5.

The Seller may alternatively, at Buyer’s request, furnish to the Buyer’s account with the Seller a credit equal to (a) the price at which the Buyer is entitled to purchase a replacement for the defective Warranted Part and (b) the mutually agreed direct labor costs expended in performing the removal and the reinstallation thereof on the Aircraft at the labor rate defined in Clause 12.1.7.5.

 

12.1.4.2 In the event of a defect covered by Clauses 12.1.1 (iii), 12.1.1 (iv) and 12.1.2 (ii) becoming apparent within the Warranty Period, the Seller shall also, correct such defect in any Aircraft which has not yet been delivered to the Buyer, provided, however,

 

  (i) that the Seller shall not be deemed to be in default on account of any delay in Delivery of any Aircraft or otherwise in respect of the performance of this Agreement, due to the Seller’s undertaking to make such correction to the extent any such delay could not be avoided using commercially reasonable efforts,

 

  (ii) that, rather than accept a delay in the Delivery of any such Aircraft, the Buyer and the Seller may agree to deliver such Aircraft with subsequent correction of the defect by the Buyer at the Seller’s expense, or the Buyer may elect to accept Delivery and thereafter file a Warranty Claim as though the defect had become apparent immediately after Delivery of such Aircraft,

 

  (iii) [*]

[*]

 

12.1.4.3 Cost of inspection

In addition to the remedies set forth in Clauses 12.1.4.1 and 12.1.4.2, the Seller [*] incurred by the Buyer in performing inspections of the Aircraft that are conducted to determine whether a defect exists in any Warranted Part within the Warranty Period subject to the following conditions:

 

  (i) such inspections are recommended by a Seller Service Bulletin or an all operator telex (“ AOT ”) to be performed within the Warranty Period;

 

  (ii) the [*] shall not apply for any inspections performed as an alternative to accomplishing corrective action as recommended by the Seller when such corrective action, including but not limited to instructions and materials, has been made available to the Buyer and such corrective action could have reasonably been accomplished by the Buyer in light of Buyer’s operational requirements, at the time such inspections are performed or earlier,

 

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  (iii) the labor rate for the [*] shall be the Inhouse Warranty Labor Rate defined in Clause 12.1.7.5, and be equal to the Seller’s estimate of the manhours required for such inspections as set forth in the communication by the Seller to the Buyer or in the related Seller Service Bulletin or AOT, whichever is applicable.

 

12.1.5 Warranty Claim Requirements

The Buyer’s remedy and the Seller’s obligation and liability under this Clause 12.1, with respect to any warranty claim submitted by the Buyer (each a “ Warranty Claim ”) are subject to the following conditions:

 

  (c) the defect giving rise to such Warranty Claim having become known to Buyer or Buyer’s maintenance performer within the Warranty Period;

 

  (d) the Buyer having filed a Warranty Claim within [*] of a defect becoming known to Buyer or Buyer’s maintenance performer, except where the Seller has issued a Service Bulletin or AOT intended to provide a remedy for such a defect, in which case the Warranty Claim must be [*] following embodiment of the Seller Service Bulletin or AOT in the Aircraft;

 

  (iii) the Buyer has operated and maintained the affected Aircraft or part thereof in accordance with the standards set forth in Clause 12.1.10;

 

  (iv) the claimed defect did not result from any act or omission of any third party;

 

  (v) the Seller having received a Warranty Claim complying with the provisions of Clause 12.1.6.5 below.

 

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12.1.6 Warranty Administration

The warranties set forth in this Clause 12.1 shall be administered as hereinafter provided for in this Clause 12.1.6.

 

12.1.6.1 Claim Determination

The determination of the validity of any Warranty Claim by the Seller shall be made [*], based upon the claim details, reports from the Seller’s Representatives, historical data logs, inspection, tests, findings during repair, defect analysis and other relevant documents.

 

12.1.6.2 Transportation Costs

The cost of transporting a Warranted Part claimed to be defective to the facilities designated by the Seller will be borne by the Buyer. [*]

 

12.1.6.3 Return of an Aircraft

If the Buyer and the Seller mutually agree, prior to such return, that it is necessary to return an Aircraft to the Seller for accomplishment of a warranty correction, the Seller shall bear the direct costs of fuel, [*] and landing fees to and from the Seller’s facilities for such return of the Aircraft. [*] The Buyer shall make its reasonable efforts to minimize the duration of the corresponding flights.

 

12.1.6.4 On-Aircraft Work by the Seller

If the Parties determine that work to accomplish a repair or correction of a defect subject to this Clause 12.1 justifies the dispatch by the Seller of a working team to repair or correct such defect at the Buyer’s facilities or the facilities of a third party, then the labor and material costs [*]

The condition which has to be fulfilled for on-Aircraft work by the Seller is that the work necessitates the technical expertise of the Seller as manufacturer of the Aircraft.

If said condition is fulfilled the Seller and the Buyer shall agree on a schedule and place for the work to be performed.

 

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12.1.6.5 Warranty Claim Substantiation

Each Warranty Claim submitted by the Buyer under this Clause 12.1 shall contain at least the following data:

 

  a) description of defect and action taken, if any,

 

  b) date of incident and/or removal date,

 

  c) description of Warranted Part claimed to be defective,

 

  d) part number,

 

  e) serial number (if applicable),

 

  f) position on Aircraft,

 

  g) total flying hours or calendar time, as applicable, at the date the defect became known to the Buyer or Buyer’s maintenance performer,

 

  h) time since last shop visit at the date the defect became known to the Buyer or Buyer’s maintenance performer,

 

  i) Manufacturer Serial Number of the Aircraft and/or its registration,

 

  j) Aircraft total flying hours and/or number of landings at the date the defect became known to the Buyer or Buyer’s maintenance performer,

 

  k) Warranty Claim number,

 

  l) date of Warranty Claim, and

 

  m) Delivery Date of Aircraft or Warranted Part to the Buyer.

Warranty Claims are to be addressed as follows:

AIRBUS

CUSTOMER SERVICES DIRECTORATE

WARRANTY ADMINISTRATION

Rond-Point Maurice Bellonte

B.P. 33

F-31707 BLAGNAC CEDEX

FRANCE

 

12.1.6.6 Replacements

Title to and risk of loss of any Aircraft, component, accessory, equipment or part returned by the Buyer to the Seller shall at all times remain with the Buyer, except that:

 

  (i) risk of loss (limited to cost of replacement and excluding in particular loss of use) shall be with the Seller for as long as such Aircraft, component, accessory, equipment or part shall be under the care, custody and control of the Seller and;

 

  (ii) title to and risk of loss of a returned component, accessory, equipment or part shall pass to the Seller upon shipment by the Seller to the Buyer of any item furnished by the Seller to the Buyer as a replacement therefor.

 

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Upon the Seller’s shipment to the Buyer of any replacement component, accessory, equipment or part provided by the Seller pursuant to this Clause 12.1, title to and risk of loss of such replacement component, accessory, equipment or part shall pass to the Buyer.

 

12.1.6.7 Rejection

The Seller shall provide reasonable written substantiation in case of rejection of a Warranty Claim. [*]

[*]

 

12.1.6.8 Inspection

The Seller shall have the right to inspect the affected Aircraft, documents and other records relating thereto in the event of any Warranty Claim under this Clause 12.1. Such inspections will be made on Business Days, during reasonable times during the Buyer’s normal business hours and will not interfere with the Buyer’s operations or maintenance.

 

12.1.7 Inhouse Warranty

 

12.1.7.1 Seller’s Authorization

The Seller hereby authorizes the Buyer to repair Warranted Parts (“ Inhouse Warranty ”) subject to the terms of this Clause 12.1.7.

 

12.1.7.2 Conditions for Seller’s Authorization

The Buyer shall be entitled to repair such Warranted Parts:

provided the Buyer notifies the Seller Representative of its intention to perform Inhouse Warranty repairs having an estimated cost of repair in [*] before any such repairs are started, unless it is not reasonably practicable to do so, in which case the Buyer will notify the Seller of the Inhouse Warranty Repair as soon as reasonably practicable. The Buyer’s notification shall include reasonable detail regarding the defect, estimated labor hours and material used by the Buyer to determine its estimate of the cost of such repair to allow the Seller to ascertain the reasonableness of the estimate. The Seller agrees to use all reasonable efforts to ensure a prompt response and shall not unreasonably withhold, delay or condition its authorization of the Buyer’s performance of any Inhouse Warranty Repair;

 

   

provided adequate facilities and qualified personnel are available to the Buyer; and

 

   

provided repairs are performed in accordance with the Seller’s Technical Data or written instructions; and

 

   

only to the extent reasonably necessary to correct the defect.

 

12.1.7.3 Seller’s Rights

The Seller shall have the right to require the return of any Warranted Part, or any part removed therefrom, which is claimed to be defective if, in the reasonable judgment of the Seller, the nature of the claimed defect requires technical investigation. Such return shall be subject to the provisions of Clause 12.1.6.2. Furthermore, the Seller and the Buyer will each have the right to have a representative present during the disassembly, inspection and testing of any Warranted Part claimed to be defective.

 

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12.1.7.4 Inhouse Warranty Claim Substantiation

Claims for Inhouse Warranty credit shall be filed within the time period set forth in 12.1.5 (ii) and shall contain the same information as that required for Warranty Claims under Clause 12.1.6.5 and in addition shall include:

 

  a) a report of technical findings with respect to the defect,

 

  b) for parts required to remedy the defect:

 

   

part numbers,

 

   

serial numbers (if applicable),

 

   

parts description,

 

   

quantity of parts,

 

   

unit price of parts,

 

   

related Seller’s or third party’s invoices (if applicable),

 

   

total price of parts,

 

  c) detailed number of labor hours,

 

  d) Inhouse Warranty Labor Rate,

 

  e) total claim value.

 

12.1.7.5 Credit

The Buyer’s sole remedy and the Seller’s sole obligation and liability with respect to Inhouse Warranty Claims shall be the credit to the Buyer’s account of an amount [*]

[*]

 

12.1.7.6 Limitation

Except in any situation in which a replacement for any defective Warranted Part is unavailable for purchase by Buyer or is available for purchase by Buyer but cannot be timely delivered to Buyer in light of Buyer’s operational requirements (including without limitation, AOG), if the Buyer elects to repair or have repaired any Warranted Part, the Buyer will not be credited for repair costs (including labor and material) for any Warranted Part that exceed in the aggregate sixty-five per cent (65%) of the Seller’s then current catalogue price for a replacement of such defective Warranted Part. [*]

 

12.1.7.7 Scrapped Material

The Buyer shall retain any defective Warranted Part and any defective part removed from a Warranted Part during repair for a period of either [*] after submission of a claim for Inhouse Warranty credit relating thereto, whichever is longer. Such parts shall be returned to the Seller, [*] of receipt of the Seller’s request therefor, provided that the Buyer receives such request within such above described retention periods and prior to the Buyer’s receipt of written notice, if any, from the Seller that the requested Warranty Part may or should be scrapped.

Notwithstanding the foregoing, the Buyer may scrap any such defective parts, which are beyond economic repair and not required for technical evaluation locally, with the agreement of the Seller Representative(s).

 

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Scrapped Warranted Parts shall be evidenced by a record of scrapped material certified by an authorized representative of the Buyer and shall be kept in the Buyer’s file for a least the duration of the applicable Warranty Period.

 

12.1.8 Standard Warranty in case of Pooling or Leasing Arrangements

Notwithstanding Clause 21.1, the warranties provided for in this Clause 12.1 for any Warranted Part shall accrue to the benefit of any airline in revenue service, other than the Buyer, if the Warranted Part enters into the possession of any such airline as a result of a pooling or leasing agreement between such airline and the Buyer (or any successor or assignee of the Buyer), in accordance with the terms and subject to the limitations and exclusions of the foregoing warranties and to the extent permitted by any applicable law or regulations.

 

12.1.9 Warranty for Corrected, Replaced or Repaired Warranted Parts

Whenever any Warranted Part, which contains a defect for which the Seller is liable under Clause 12.1, has been corrected, replaced or repaired pursuant to the terms of this Clause 12.1, the period of the Seller’s warranty with respect to such corrected, repaired or replacement Warranted Part, whichever the case may be, shall be the remaining portion of the original warranty [*]

If a defect is attributable to a improper repair or improper installation by the Buyer, a Warranty Claim with respect to such defect will not be accepted, notwithstanding any subsequent correction or repair, and shall immediately terminate the remaining warranties under this Clause 12.1 in respect of the affected Warranted Part. In such event, Seller shall reasonably justify to the Buyer its findings and conclusions.

 

12.1.10 Accepted Industry Standard Practices—Normal Wear and Tear

The Buyer’s rights under this Clause 12.1 are subject to the Aircraft and each component, equipment, accessory and part thereof being maintained, overhauled, repaired and operated in accordance with the Buyer’s Aviation Authority approved maintenance program and maintenance procedures and requirements and any other mandatory requirements issued by the Seller generally to all owners and operators of the Warranted part at issue, the Suppliers and the Propulsion Systems Manufacturer and all applicable rules, regulations and directives of the relevant Aviation Authorities.

The Seller’s liability under this Clause 12.1 shall not extend to normal wear and tear or to:

 

  (i) any Aircraft or component, equipment, accessory or part thereof, which has been repaired, altered or modified after Delivery, (except for any repair, alteration or modification made by the Seller or in a manner approved by the Seller);

 

  (ii) any Aircraft or component, equipment, accessory or part thereof, which Buyer has knowingly operated in a damaged state (other than in the case of operational necessity); or

 

  (iii) any component, equipment, accessory or part from which the trademark, part or serial number or other identification marks have been removed.

 

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12.1.11 LIMITATION OF LIABILITY

THE SELLER SHALL NOT BE LIABLE FOR, AND THE BUYER SHALL INDEMNIFY THE SELLER AGAINST, ANY CLAIMS FROM ANY THIRD PARTIES FOR LOSSES DUE TO ANY DEFECT OR NONCONFORMITY OR PROBLEM OF ANY KIND, ARISING OUT OF OR IN CONNECTION WITH ANY REPAIR OF ANY WARRANTED PART UNDERTAKEN BY THE BUYER UNDER THIS CLAUSE 12.1.7 OR ANY OTHER ACTIONS UNDERTAKEN BY THE BUYER UNDER THIS CLAUSE 12, WHETHER SUCH CLAIM IS ASSERTED IN CONTRACT OR IN TORT, OR IS PREMISED ON ALLEGED, ACTUAL, IMPUTED, ORDINARY OR INTENTIONAL ACTS OR OMISSIONS OF THE BUYER.

 

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12.2 Seller Service Life Policy

 

12.2.1 In addition to the warranties set forth in Clause 12.1, the Seller further agrees that should a Failure occur in any Item (as these terms are defined below) that did not result from an extrinsic force, then, subject to the general conditions and limitations set forth in Clause 12.2.4, the provisions of this Clause 12.2 shall apply.

For the purposes of this Clause 12.2:

 

  (i) Item ” means any item listed in Exhibit “F”;

 

  (ii) Failure ” means a breakage or defect that can reasonably be expected to occur on a fleetwide basis and which materially impairs the utility of the Item.

The Seller’s obligations under this Clause 12.2.1 are referred to as the “Service Life Policy”.

 

12.2.2 Periods and Seller’s Undertakings

The Seller agrees that if a Failure occurs in an Item prior to the [*] anniversary of the Delivery Date of the Aircraft on which such Item was originally installed, the Seller shall, at its discretion and as promptly as practicable and with the Seller’s financial participation as hereinafter provided, either :

 

   

design and furnish to the Buyer a correction for such Item having the Failure and provide any parts required for such correction (including Seller designed standard parts but excluding industry standard parts that are not integrated into the Item), or

 

   

replace such Item.

 

12.2.3 Seller’s Participation in the Costs

[*]

 

12.2.4 General Conditions and Limitations

 

12.2.4.1 The undertakings set forth in this Clause 12.2 shall be valid after the period of the Seller’s warranty applicable to an Item under Clause 12.1. During the Warranty Period, all Items will be covered by the provisions of Clause 12.1.

 

12.2.4.2 The Buyer’s remedies and the Seller’s obligations and liabilities under this Service Life Policy are subject to the following conditions:

 

  (i) the Buyer shall maintain log books and other historical records with respect to each Aircraft or Item, as applicable, reasonably adequate to enable the Seller to determine whether the alleged Failure is covered by this Service Life Policy and, if so, to define the portion of the costs to be borne by the Seller in accordance with Clause 12.2.3;

 

  (ii) the Buyer shall keep the Seller reasonably informed of any significant incidents relating to an Aircraft, howsoever occurring or recorded;

 

  (iii) the Buyer shall comply with the conditions of Clause 12.1.10;

 

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  (iv) the Buyer shall report any breakage or defect in a Item in writing to the Seller within sixty (60) days after such breakage or defect becomes apparent, if breakage or defect can reasonably be expected to occur in any other aircraft, and the Buyer shall have provided to the Seller with reasonably sufficient detail about the breakage or defect to enable the Seller to determine whether said breakage or defect is subject to this Service Life Policy.

 

12.2.4.3 Except as otherwise provided for in this Clause 12.2, any claim under this Service Life Policy shall be administered as provided for in, and shall be subject to the terms and conditions of, Clause 12.1.6.

 

12.2.4.4 In the event of the Seller having issued a service bulletin applicable to an Aircraft, the purpose of which is to avoid a Failure, the Seller may elect to supply the necessary modification kit to the Buyer free of charge or under a pro rata formula. If such a kit is so offered to the Buyer free of charge, then, to the extent of such Failure and any Failures that could ensue therefrom, the validity of the Seller’s commitment under this Clause 12.2 shall be subject to the Buyer incorporating such modification in the relevant Aircraft, as promulgated by the Seller and in accordance with the Seller’s instructions, within a reasonable time.

 

12.2.4.5 THIS SERVICE LIFE POLICY IS NOT A WARRANTY, PERFORMANCE GUARANTEE, OR AN AGREEMENT TO MODIFY ANY AIRCRAFT OR AIRFRAME COMPONENTS TO CONFORM TO NEW DEVELOPMENTS OCCURRING IN THE STATE OF AIRFRAME DESIGN AND MANUFACTURING ART.

THE SELLER’S OBLIGATION HEREUNDER IS TO FURNISH ONLY THOSE CORRECTIONS TO THE ITEMS OR PROVIDE REPLACEMENTS THEREFOR AS PROVIDED FOR IN THIS CLAUSE 12.2.

THE BUYER’S SOLE REMEDY AND RELIEF FOR THE NON-PERFORMANCE OF ANY OBLIGATION OR LIABILITY OF THE SELLER ARISING UNDER OR BY VIRTUE OF THIS SERVICE LIFE POLICY SHALL BE IN THE FORM OF A CREDIT, LIMITED TO THE AMOUNT THE BUYER REASONABLY EXPENDS IN PROCURING A CORRECTION OR REPLACEMENT FOR ANY ITEM THAT IS THE SUBJECT OF A FAILURE COVERED BY THIS SERVICE LIFE POLICY AND TO WHICH SUCH NON-PERFORMANCE IS RELATED.

 

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12.3 Supplier Warranties and Service Life Policies

Prior to the Delivery of the first Aircraft, the Seller shall provide the Buyer with such warranties and service life policies that the Seller has obtained pursuant to the Supplier Product Support Agreements.

 

12.3.1 Definitions

 

12.3.1.1 “Supplier” means any supplier of Supplier Parts.

 

12.3.1.2 “Supplier Part” means any component, equipment, accessory or part installed in an Aircraft at the time of Delivery thereof and for which there exists a Supplier Product Support Agreement. However, the Propulsion Systems and Buyer Furnished Equipment and other equipment selected by the Buyer to be supplied by suppliers with whom the Seller has no existing enforceable warranty agreements are not Supplier Parts.

 

12.3.1.3 “Supplier Product Support Agreement” means an agreement between the Seller and a Supplier containing, among other things, enforceable and transferable warranties and, in the case of landing gear suppliers, service life policies for selected structural landing gear elements.

 

12.3.2 Supplier’s Default

 

12.3.2.1 In the event any Supplier, under any warranty obtained by the Seller and transferred to the Buyer pursuant to the Supplier Product Support Agreement, defaults in the performance of any material obligation with respect thereto and the Buyer submits in reasonable time to the Seller reasonable evidence that such default has occurred, then Clause 12.1 shall apply to the extent the same would have been applicable had such Supplier Part been a Warranted Part, except that the Supplier’s warranty period as indicated in the Supplier Product Support Agreement shall apply.

 

12.3.2.2 In the event any Supplier, under any Supplier service life policy obtained by the Seller and transferred to the Buyer pursuant to the Supplier Product Support Agreement, defaults in the performance of any material obligation with respect thereto and the Buyer submits in reasonable time to the Seller reasonable evidence that such default has occurred, then Clause 12.2 shall apply to the extent the same would have been applicable had such Supplier Item been listed in Exhibit F, Seller Service Life Policy, except that the Supplier’s service life policy period as indicated in the Supplier Product Support Agreement shall apply.

 

12.3.2.3 If pursuant to Clause 12.3.2.1 or 12.3.2.2, a defect in a Supplier Part is corrected by the Seller, then at the Seller’s request, the Buyer shall assign to the Seller, and the Seller shall be subrogated to, all of the Buyer’s rights against the relevant Supplier with respect to and arising by reason of such default and shall provide reasonable assistance, provided the same is at not more than deminimus out of pocket cost to the Buyer, to enable the Seller to enforce the rights so assigned.

 

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12.4 Interface Commitment

 

12.4.1 Interface Problem

If the Buyer experiences any technical problem in the operation of an Aircraft or its systems due to a malfunction, the cause of which, after due and reasonable investigation, is not readily identifiable by the Buyer but which the Buyer reasonably believes to be attributable to the design characteristics of one or more components of the Aircraft (“ Interface Problem ”), the Seller shall, if so requested by the Buyer, and without charge to the Buyer, promptly conduct or have conducted an investigation and analysis of such problem to determine, if possible, the cause or causes of the problem and to recommend corrective action. The Buyer shall furnish to the Seller all data and information in the Buyer’s possession relevant to the Interface Problem and shall cooperate with the Seller in the conduct of the Seller’s investigations and such tests as may be required.

At the conclusion of such investigation, the Seller shall promptly advise the Buyer in writing of the Seller’s opinion as to the cause or causes of the Interface Problem and the Seller’s recommendations as to corrective action, including materials, if applicable.

 

12.4.2 Seller’s Responsibility

If the Interface Problem is primarily attributable to the design of a Warranted Part and Buyer has notified Seller of the problem within the Warranty Period for such Warranted Part, the Seller shall correct the design of such Warranted Part and either repair or replace the same in accordance with Clause 12.1 to the extent of the Seller’s obligation as defined in Clause 12.1.

 

12.4.3 Supplier’s Responsibility

If the Interface Problem is primarily attributable to the design of any Supplier Part, the Seller shall, if so requested by the Buyer, reasonably assist the Buyer in pursuing any warranty claim the Buyer may have against the Supplier of such Supplier Part.

 

12.4.4 Joint Responsibility

If the Interface Problem is attributable partially to the design of a Warranted Part and partially to the design of any Supplier Part, the Seller shall, if so requested by the Buyer and without charge to the Buyer, use reasonable commercial efforts to provide a solution to the Interface Problem through cooperative efforts of the Seller and any Supplier involved.

The Seller shall promptly advise the Buyer of such corrective action as may be proposed by the Seller and any such Supplier. Such proposal shall be consistent with any then existing obligations of the Seller hereunder and of any such Supplier towards the Buyer. Such corrective action shall constitute full satisfaction of any claim the Buyer may have against either the Seller or any such Supplier with respect to such Interface Problem unless (i) reasonably rejected by the Buyer in which case Seller will use its commercially reasonable efforts to determine an alternative corrective action taking into consideration the reasons for Buyer’s rejection or (ii) such corrective action fails to resolve the Interface Problem.

 

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12.4.5 [*]

[*]

 

12.4.6 General

 

12.4.6.1 All requests under this Clause 12.4 shall be directed to the Seller.

 

12.4.6.2 Except as specifically set forth in this Clause 12.4, this Clause 12.4 shall not be deemed to impose on the Seller any obligations not expressly set forth elsewhere in this Clause 12.

 

12.4.6.3 All reports, recommendations, data and other documents furnished by the Seller to the Buyer pursuant to this Clause 12.4 shall be deemed to be delivered under this Agreement and shall be subject to the terms, covenants and conditions set forth in this Clause 12.

 

12.5 EXCLUSIVITY OF WARRANTIES

AS BETWEEN THE BUYER AND THE SELLER, THIS CLAUSE 12 (INCLUDING ITS SUBPROVISIONS) SETS FORTH THE EXCLUSIVE WARRANTIES, EXCLUSIVE LIABILITIES AND EXCLUSIVE OBLIGATIONS OF THE SELLER, AND THE EXCLUSIVE REMEDIES AVAILABLE TO THE BUYER, WHETHER UNDER THIS AGREEMENT OR OTHERWISE, ARISING FROM ANY DEFECT OR NONCONFORMITY OR PROBLEM OF ANY KIND IN ANY AIRCRAFT, COMPONENT, EQUIPMENT, ACCESSORY, PART, SOFTWARE, DATA OR SERVICE DELIVERED BY THE SELLER UNDER THIS AGREEMENT.

THE BUYER RECOGNIZES THAT THE RIGHTS, WARRANTIES AND REMEDIES IN THIS CLAUSE 12 ARE ADEQUATE AND SUFFICIENT TO PROTECT THE BUYER FROM ANY DEFECT OR NONCONFORMITY OR PROBLEM OF ANY KIND IN THE GOODS AND SERVICES SUPPLIED UNDER THIS AGREEMENT. THE BUYER HEREBY WAIVES, RELEASES AND RENOUNCES ALL OTHER WARRANTIES, OBLIGATIONS, GUARANTEES AND LIABILITIES OF THE SELLER AND ALL OTHER RIGHTS, CLAIMS AND REMEDIES OF THE BUYER AGAINST THE SELLER, WHETHER EXPRESS OR IMPLIED BY CONTRACT, TORT, OR STATUTORY LAW OR OTHERWISE, WITH RESPECT TO ANY NONCONFORMITY OR DEFECT OR PROBLEM OF ANY KIND IN ANY AIRCRAFT, COMPONENT, EQUIPMENT, ACCESSORY, PART, SOFTWARE, DATA OR SERVICE DELIVERED BY THE SELLER UNDER THIS AGREEMENT, INCLUDING BUT NOT LIMITED TO:

 

  (1) ANY IMPLIED WARRANTY OF MERCHANTABILITY AND/OR FITNESS FOR ANY GENERAL OR PARTICULAR PURPOSE;

 

  (2) ANY IMPLIED OR EXPRESS WARRANTY ARISING FROM COURSE OF PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE;

 

  (3) ANY RIGHT, CLAIM OR REMEDY FOR BREACH OF CONTRACT;

 

  (4) ANY RIGHT, CLAIM OR REMEDY FOR TORT, UNDER ANY THEORY OF LIABILITY, HOWEVER ALLEGED, INCLUDING, BUT NOT LIMITED TO, ACTIONS AND/OR CLAIMS FOR NEGLIGENCE, GROSS NEGLIGENCE, INTENTIONAL ACTS, WILLFUL DISREGARD, IMPLIED WARRANTY, PRODUCT LIABILITY, STRICT LIABILITY OR FAILURE TO WARN;

 

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  (5) ANY RIGHT, CLAIM OR REMEDY ARISING UNDER THE UNIFORM COMMERCIAL CODE OR ANY OTHER STATE OR FEDERAL STATUTE;

 

  (6) ANY RIGHT, CLAIM OR REMEDY ARISING UNDER ANY REGULATIONS OR STANDARDS IMPOSED BY ANY INTERNATIONAL, NATIONAL, STATE OR LOCAL STATUTE OR AGENCY;

 

  (7) ANY RIGHT, CLAIM OR REMEDY TO RECOVER OR BE COMPENSATED FOR:

 

  (a) LOSS OF USE OR REPLACEMENT OF ANY AIRCRAFT, COMPONENT, EQUIPMENT, ACCESSORY OR PART PROVIDED UNDER THIS AGREEMENT;

 

  (b) LOSS OF, OR DAMAGE OF ANY KIND TO, ANY AIRCRAFT, COMPONENT, EQUIPMENT, ACCESSORY OR PART PROVIDED UNDER THIS AGREEMENT;

 

  (c) LOSS OF PROFITS AND/OR REVENUES;

 

  (d) ANY OTHER INCIDENTAL OR CONSEQUENTIAL DAMAGE.

THE WARRANTIES AND SERVICE LIFE POLICY PROVIDED BY THIS AGREEMENT SHALL NOT BE EXTENDED, ALTERED OR VARIED EXCEPT BY A WRITTEN INSTRUMENT SIGNED BY THE SELLER AND THE BUYER. IN THE EVENT THAT ANY PROVISION OF THIS CLAUSE 12 SHOULD FOR ANY REASON BE HELD UNLAWFUL, OR OTHERWISE UNENFORCEABLE, THE REMAINDER OF THIS CLAUSE 12 SHALL REMAIN IN FULL FORCE AND EFFECT.

THE ABOVE LIMITATION WILL NOT BE INTERPRETED TO IMPAIR THE EXPRESS CONTRACTUAL WARRANTIES OR GUARANTEES GRANTED TO THE BUYER ELSEWHERE UNDER THIS AGREEMENT OR TO RELIEVE THE SELLER OF ANY OF ITS EXPRESS CONTRACTUAL OBLIGATIONS UNDER THIS AGREEMENT. THIS CLAUE 12.5 SHALL NOT BE INTERPRETED TO IMPAIR ANY SELLER AFFILIATE OR ANY SUPPLIER.

FOR THE PURPOSE OF THIS CLAUSE 12.5, “SELLER” SHALL BE UNDERSTOOD TO INCLUDE THE SELLER AND ITS AFFILIATES EXCEPT FOR ANY AFFILIATE THAT IS A SUPPLIER AND IS PROVIDING A SEPARATE WARRANTY TO THE BUYER.

 

12.6 Duplicate Remedies

The remedies provided to the Buyer under Clause 12.1 and Clause 12.2 as to any defect in respect of the Aircraft or any part thereof are mutually exclusive and not cumulative. The Buyer shall be entitled to the remedy that provides the maximum benefit to it, as the Buyer may elect, pursuant to the terms and conditions of this Clause 12 for any particular defect for which remedies are provided under this Clause 12; provided, however, that the Buyer shall not be entitled to elect a remedy under both Clause 12.1 and Clause 12.2 for the same defect. The Buyer’s rights and remedies herein for the non performance of any obligations or liabilities of the Seller arising under these warranties shall be in

 

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monetary damages limited to the amount the Buyer expends in procuring a correction or replacement for any covered part subject to a defect or non performance covered by this Clause 12, and the Buyer shall not have any right to require specific performance by the Seller.

 

12.7 Negotiated Agreement

The Buyer specifically recognizes that:

 

  (i) the Specification has been agreed upon after careful consideration by the Buyer using its judgment as a professional operator of aircraft used in public transportation and as such is a professional within the same industry as the Seller;

 

  (ii) this Agreement, and in particular this Clause 12, has been the subject of discussion and negotiation and is fully understood by the Buyer; and

 

  (iii) the price of the Aircraft and the other mutual agreements of the Buyer set forth in this Agreement were arrived at in consideration of, inter alia, the provisions of this Clause 12, specifically including the Exclusivity of Warranties by the Buyer set forth in Clause 12.5.

 

12.8 Disclosure to Third Party Entity

In the event of the Buyer intending to designate a third party entity (a “ Third Party Entity ”) to administer this Clause 12, the Buyer shall notify the Seller of such intention prior to any disclosure of this Clause to the selected Third Party Entity and shall cause such Third Party Entity to enter into a confidentiality agreement and or any other relevant documentation with the Seller solely for the purpose of administrating this Clause 12.

 

12.9 Transferability

Notwithstanding the provisions of Clause 12.1.8 hereof and without prejudice to Clause 21.1, the Buyer’s rights under this Clause 12 shall not be assigned, sold, transferred, novated or otherwise alienated by operation of law or otherwise, without the Seller’s prior written consent thereto, which shall not be unreasonably withheld, conditioned or delayed.

Any unauthorized assignment, sale, transfer, novation or other alienation of the Buyer’s rights under this Clause 12 shall be void and of no force and effect.

 

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13 PATENT AND COPYRIGHT INDEMNITY

 

13.1 Indemnity

 

13.1.1 Subject to the provisions of Clause 13.2.3, the Seller shall indemnify the Buyer from and against any damages, costs and expenses including legal costs (excluding damages, costs, expenses, loss of profits and other liabilities in respect of or resulting from loss of use of the Aircraft) resulting from any infringement or claim of infringement by (a) the Airframe or any part or software installed therein at Delivery or (b) any documentation, manuals, materials or training aids or software that are provided to the Buyer under this Agreement, of:

 

  (i) any British, French, German, Spanish or U.S. patent;

and

 

  (ii) any patent issued under the laws of any other country in which the Buyer may lawfully operate the Aircraft, provided that :

 

  (1) from the time of design of such Airframe, accessory, equipment or part and until infringement claims are resolved, such country and the flag country of the Aircraft are each a party to the Chicago Convention on International Civil Aviation of December 7, 1944, and are each fully entitled to all benefits of Article 27 thereof,

or in the alternative,

 

  (2) from such time of design and until infringement claims are resolved, such country and the flag country of the Aircraft are each a party to the International Convention for the Protection of Industrial Property of March 20, 1883 (“ Paris Convention ”);

and

 

  (iii) with respect to any claim of copyright infringement in respect of any documentation, manuals, materials, or training aids or associated software that are provided to the Buyer under this Agreement or any computer software installed on the Aircraft will be limited to infringements in countries which, at the time of infringement, are members of The Berne Union and, with respect to such software, recognise computer software as a “work” under the Berne Convention.

 

13.1.2 Clause 13.1.1 shall not apply to

 

  (i) Buyer Furnished Equipment or Propulsion Systems; or

 

  (ii) Supplier Parts; or

 

  (iii) software unless such software bears the copyright of the Seller.

 

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13.1.3 In the event that the Buyer is prevented from using the Aircraft or any other item described in Clause 13.1.1 (“ Other Item ”) or is required to pay any royalty or other amount to lawfully continue such use (whether by a valid judgement of a court of competent jurisdiction or by a settlement arrived at among the claimant, Seller and Buyer), the Seller shall at its expense either :

 

  (i) procure for the Buyer the right to use the same free of charge to the Buyer; or

 

  (ii) replace the infringing part, software or Other Item as soon as possible with a non-infringing substitute complying in all other respects with the requirements of this Agreement. [*]

 

13.2 Administration of Patent and Copyright Indemnity Claims

 

13.2.1 If the Buyer receives a written claim or a suit is threatened or commenced against the Buyer for infringement of a patent or copyright referred to in Clause 13.1, the Buyer shall:

 

  (i) promptly notify the Seller following the Buyer receiving notice of the same, giving particulars thereof to the extent known by the Buyer;

 

  (ii) upon the Seller’s request, furnish to the Seller all data, papers and records within the Buyer’s control or possession relating to the defense of such claim or suit;

 

  (iii) refrain from admitting any liability or making any payment or assuming any expenses, damages, costs or royalties or otherwise acting in a manner prejudicial to the defense or denial of such suit or claim provided always that nothing in this sub-Clause (iii) shall prevent the Buyer from paying such sums as may be required in order to obtain the right to use the Aircraft or the allegedly infringing part, software or Other Item, provided such payment is accompanied by a denial of liability and is made without prejudice;

 

  (iv) co-operate with, and render all such assistance to, the Seller as may be pertinent to the defense or denial of the suit or claim provided the same is at no out-of-pocket cost to Buyer; and

 

  (v) act in such a way as to mitigate damages and / or to reduce the amount of royalties which may be payable as well as to minimise costs and expenses, but in each case only to the extent that doing so would not materially adversely affect the Buyer’s operations or result in any out-of-pocket costs to Buyer not indemnified by Seller.

 

13.2.2 The Seller may, upon commitment to the Buyer in writing that it will indemnify the Buyer as provided herein, assume and conduct the defense or settlement of any claim or suit in the manner that, in the Seller’s opinion, the Seller deems proper. In that event, the Seller shall be entitled either in its own name or on behalf of the Buyer to conduct such defense with the party or parties alleging infringement.

 

13.2.3 The Seller’s liability hereunder shall be conditional upon the full and timely compliance by the Buyer with the terms of this Clause 13 and is in lieu of any other liability to the Buyer express or implied which the Seller might incur at law as a result of any infringement or claim of infringement of any patent or copyright.

 

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THE INDEMNITY PROVIDED IN THIS CLAUSE 13 AND THE OBLIGATIONS AND LIABILITIES OF THE SELLER UNDER THIS CLAUSE 13 ARE EXCLUSIVE AND IN SUBSTITUTION FOR, AND THE BUYER HEREBY WAIVES, RELEASES AND RENOUNCES ALL OTHER INDEMNITIES, WARRANTIES, OBLIGATIONS, GUARANTEES AND LIABILITIES ON THE PART OF THE SELLER AND RIGHTS, CLAIMS AND REMEDIES OF THE BUYER AGAINST THE SELLER, EXPRESS OR IMPLIED, ARISING BY LAW OR OTHERWISE (INCLUDING WITHOUT LIMITATION ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY ARISING FROM OR WITH RESPECT TO LOSS OF USE OR REVENUE OR CONSEQUENTIAL DAMAGES), WITH RESPECT TO ANY ACTUAL OR ALLEGED PATENT INFRINGEMENT OR THE LIKE BY ANY AIRFRAME, PART OR SOFTWARE INSTALLED THEREIN AT DELIVERY, OR THE USE OR SALE THEREOF, PROVIDED THAT, IN THE EVENT THAT ANY OF THE AFORESAID PROVISIONS SHOULD FOR ANY REASON BE HELD UNLAWFUL OR OTHERWISE INEFFECTIVE, THE REMAINDER OF THIS CLAUSE WILL REMAIN IN FULL FORCE AND EFFECT. THIS INDEMNITY AGAINST PATENT AND COPYRIGHT INFRINGEMENTS WILL NOT BE EXTENDED, ALTERED OR VARIED EXCEPT BY A WRITTEN INSTRUMENT SIGNED BY THE SELLER AND THE BUYER.

 

13.3 Survivability

The provisions of this Clause 13 will, with respect to all delivered Aircraft and Other Items described in Clause 13.1.1, survive any termination of this Agreement.

 

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TECHNICAL DATA

 

14A.1 Scope

This Clause covers the terms and conditions for the supply of technical data (hereinafter “ Technical Data ”) to support the Aircraft operation.

 

14A.1.1 The Technical Data shall be supplied in the English language using the aeronautical terminology in common use.

 

14A.1.2 Range, form, type, format, quantity and delivery schedule of the Technical Data to be provided under this Agreement are outlined in Exhibit G hereto.

 

14A.2 Aircraft Identification for Technical Data

 

14A.2.1 For those Technical Data that are customized to the Buyer’s Aircraft, the Buyer agrees to the allocation of fleet serial numbers (“ Fleet Serial Numbers ”) in the form of a block of numbers selected in the range from 001 to 999.

 

14A.2.2 The sequence shall not be interrupted unless two (2) different Propulsion Systems or two (2) different Aircraft models are selected.

 

14A.2.3 The Buyer shall indicate to the Seller the Fleet Serial Number allocated to each Aircraft corresponding to the delivery schedule set forth in Clause 9.1.1 [*]. Neither such Fleet Serial Numbers nor the subsequent allocation of the Fleet Serial Numbers to Manufacturer Serial Numbers for the purpose of producing customized Technical Data shall constitute any property, insurable or other interest of the Buyer in any Aircraft prior to the Delivery of such Aircraft as provided under this Agreement.

The customized Technical Data that are affected by this Clause 14A.2.3 are:

 

  (i) Aircraft Maintenance Manual,

 

  (ii) Illustrated Parts Catalog,

 

  (iii) Trouble Shooting Manual,

 

  (iv) Aircraft Wiring Manual,

 

  (v) Aircraft Schematics Manual,

 

  (vi) Aircraft Wiring Lists.

 

14A.3 Integration of Equipment Data

 

14A.3.1 Supplier Equipment

Information relating to Supplier equipment that is installed on the Aircraft by the Seller shall be introduced [*] into the initial issue of the customized Technical Data delivered for each Aircraft (the “ Basic Issue ”) to the extent necessary to understand the affected systems. Changes to Supplier equipment after issuance of each Basic Issue, except for changes to the Technical Data due to Seller’s Service Bulletins, will be for the responsibility of the Buyer.

 

14A.3.2 Buyer Furnished Equipment


14A.3.2.1 The Seller shall introduce data relative to Buyer Furnished Equipment or Supported Buyer Furnished Equipment, for equipment that is installed on the Aircraft by the Seller on or prior to the Delivery (hereinafter “ BFE Data ”), into the customized Technical Data [*] for the Technical Data for each Basic Issue, provided such BFE Data is provided in accordance with the conditions set forth in Clauses 14A.3.2.2 through 14A.3.2.5.

 

14A.3.2.2 The Buyer shall supply the BFE Data related to Buyer Furnished Equipment to the Seller at least [*] before the scheduled delivery of the customized Technical Data.

 

14A.3.2.3 The BFE Data shall be supplied in English and shall be established in compliance with the then applicable revision of ATA i Specification 2200 (iSpec 2200), Information Standards for Aviation Maintenance.

 

14A.3.2.4 The BFE Data shall be delivered in digital format (SGML) and/or in Portable Document Format (PDF), as agreed between the Buyer and the Seller.

 

14A.3.2.5 All costs related to the delivery to the Seller of the applicable BFE Data shall be borne by the Buyer.

 

14A.4 Supply

 

14A.4.1 Technical Data shall be supplied on-line and/or off-line, as set forth in Exhibit G hereto.

 

14A.4.2 The Buyer shall not receive any credit or compensation for any unused or only partially used Technical Data supplied pursuant to this Clause.

 

14A.4.3 Delivery

 

14A.4.3.1 For Technical Data provided off-line, such Technical Data and corresponding revisions shall be sent to [*] as indicated by the Buyer.

 

14A.4.3.2 In such case, the Seller shall deliver the Technical Data to the Buyer’s named place of destination [*]

 

14A.4.3.3 The Technical Data shall be delivered according to a mutually agreed schedule to correspond with Aircraft Deliveries. The Buyer shall provide no [*] notice when requesting a change to such delivery schedule.

 

14A.4.4 It shall be the responsibility of the Buyer to coordinate and satisfy local Aviation Authorities’ needs for Technical Data. In addition to the quantities defined in Exhibit G, reasonable quantities of such Technical Data shall be supplied by the Seller at no charge to the Buyer at the Buyer’s named place of destination.

 

14A.5 Revision Service

Unless otherwise specifically stated, revision service for the Technical Data shall be provided [*] (the “ Revision Service Period ”). [*]


14A.6 Service Bulletins (SB) Incorporation

During the Revision Service Period and upon the Buyer’s request for incorporation of Seller Service Bulletin information into the Technical Data, such information shall be incorporated into the Technical Data for the Buyer’s Aircraft after formal notification by the Buyer of its intention to accomplish a Service Bulletin. The split effectivity for the corresponding Service Bulletin shall remain in the Technical Data until notification from the Buyer that embodiment has been completed on all of the Buyer’s Aircraft. The foregoing is applicable for Technical Data relating to maintenance only. For operational Technical Data either the pre or post Service Bulletin status shall be shown.

 

14A.7 Technical Data Familiarization

The Seller will provide, [*] to the Buyer, [*] of Technical Data familiarization training [*] at the Seller’s Training Center or, at the Buyer’s request, at the Buyer’s facility. If such familiarization is conducted at the Buyer’s facility, [*]

 

14A.8 Customer Originated Changes (COC)

If the Buyer elects to include Buyer originated data (hereinafter “ COC Data ”) into any of the customized Technical Data that are identified as eligible for such incorporation in the Seller’s then current Customer Services Catalog, the Buyer shall notify the Seller of such election.

The incorporation of any COC Data shall be perfomed under the methods and tools for achieving such introduction and the conditions specified in the then current ANACS Customer Services Catalog.

COC Data will be developed by the Buyer according to the methods and tools for achieving such introduction issued by the Seller. The Buyer will ensure that any COC Data is in compliance with the requirements of the Buyer’s Aviation Authorities.

Except for any Seller induced errors to the COC Data during its incorporation into the Technical Data, any COC Data will be at the Buyer’s sole risk, and [*]

 

14A.9 AirN@v Services

 

14A.9.1 The Technical Data listed below shall be provided through an advanced consultation tool (hereinafter referred to as “AirN@v Services”). The applicable Technical Data are the following:

 

   

AirN@v/Maintenance :

 

   

Aircraft Maintenance Manual,

 

   

Illustrated Parts Catalog (Airframe/ Powerplant),

 

   

Trouble Shooting Manual,

 

   

Aircraft Schematics Manual,

 

   

Aircraft Wiring Lists,

 

   

Aircraft Wiring Manual,

 

   

Electrical Standard Practices Manual.

 

   

AirN@v/Associated Data :

 

   

Consumable Material List,


   

Standards Manual,

 

   

Electrical Standard Practices Manual.

 

   

AirN@v/Engineering

 

14A.9.2 The licensing conditions for the use of AirN@v Services shall be as set forth in Part 1 of Exhibit I to the Agreement, “Licence for Use of Software”.

 

14A.9.3 The license to use AirN@v Services as described above shall be granted [*] for the Aircraft [*] the revisions of the affected Technical Data are [*] in accordance with Clause 14A.5.

 

14A.10 On-Line Technical Data

 

14A.10.1 The Technical Data defined in Exhibit “G” as being provided on-line shall be made available to the Buyer through the Secure Area of the Airbus customer portal Airbus|World (“ Airbus|World ”), as further described in Part 2 of Exhibit I to the Agreement.

 

14A.10.2 Such provision shall be [*] the Buyer for the duration of the Revision Service Period.

 

14A.10.3 Access to the Secure Area shall be subject to the “General Terms and Conditions of Access to and Use of the Secure Area of Airbus|World” (hereinafter the “ GTC ”), as set forth in Part 4 of Exhibit I to this Agreement.

 

14A.10.4 The list of the Technical Data provided on-line may be extended from time to time.

For any Technical Data which is or becomes available on-line, the Seller and Buyer will decide together whether to suppress other formats for the concerned Technical Data.

 

14A.10.5 Access to the Secure Area shall be granted [*] the Buyer’s users (including one Buyer Administrator) for the Technical Data related to the Aircraft which shall be operated by the Buyer.

 

14A.10.6 For the sake of clarification, it is hereby specified that Technical Data accessed through the Secure Area—which access shall be covered by the terms and conditions set forth in the GTC – shall remain subject to the conditions of this Clause 14A.

In addition, should the Secure Area provide access to Technical Data in software format, the use of such software shall be further subject to the conditions of Part 1 of Exhibit I to the Agreement.

 

14A.11 Exclusivity of Warranties

The Seller warrants that the Technical Data are prepared in accordance with the state of art at the date of their conception. Should any Technical Data prepared by the Seller contain non-conformity or defect, the sole and exclusive liability of the Seller shall be to take all reasonable and proper steps to correct such Technical Data. [*] The provisions of Clause 12.5 shall apply in their entirety to Technical Data.


14A.12 Proprietary Rights

 

14A.12.1 All proprietary rights, including but not limited to patent, design and copyrights, relating to Technical Data shall remain with the Seller and/or its Affiliates as the case may be.

These proprietary rights shall also apply to any translation into a language or languages or media that may have been performed or caused to be performed by the Buyer.

 

14A.12.2 Whenever this Agreement and/or any Technical Data provides for manufacturing by the Buyer, the consent given by the Seller shall not be construed as express or implicit approval howsoever of either the Buyer or the manufactured products. In and of itself, the supply of the Technical Data shall not be construed as any further right for the Buyer to design or manufacture any Aircraft or part thereof or spare part.


14B SOFTWARE SERVICES

 

14B.1 Performance Engineer’s Program

 

14B.1.1 In addition to the standard operational Technical Data provided under Clause 14A, the Seller shall provide to the Buyer the Performance Engineer’s Programs (“ PEP ”) for the Aircraft type covered under this Agreement. Such PEP is composed of software components and databases and its use is subject to the licence conditions set forth in Part 1 of Exhibit I to the Agreement, “Licence for Use of Software”.

 

14B.1.2 Use of the PEP shall be limited to [*] copies to be used on such number of the Buyer’s computers as determined by Buyer for the purpose of computing performance engineering data. The PEP is intended for use on ground only and shall not be embarked on board the Aircraft. The Seller will provide [*] in respect of the PEP.

 

14B.1.3 The licence to use the PEP and the revision service [*].

At the end of such PEP Revision Service Period, the above shall be provided to the Buyer at the standard commercial conditions set forth in the Seller’s then current Customer Services ANACS Catalog.


14.C GENERAL PROVISIONS

 

14C.1 Future Developments

The Seller continuously monitors technological developments and applies them to data, document and information systems’ production and methods of transmission.

The Seller shall inform the Buyer in due time of such new developments and their application and of the date by which the same shall be implemented by the Seller. The Buyer agrees to consider in good faith any such new development and whether Buyer desires to utilize the same in light of the implementation costs, systems capabilities and other circumstances unique to Buyer’s environment.

 

14C.2 Confidentiality

 

14C.2.1 The Technical Data, the Software Services and their content are designated as confidential. All such Technical Data and Software Services are provided to the Buyer for the sole use of the Buyer who undertakes not to disclose the contents thereof to any third party without the prior written consent of the Seller save as permitted therein or otherwise pursuant to any government or legal requirement imposed upon the Buyer.

 

14C.2.2 In the event the Seller authorizes, upon Buyer’s request, the disclosure of any Technical Data or Software Services to third parties either under this Agreement or by an express prior written authorization, the Buyer will undertake to cause such third party to agree to be bound by the same conditions and restrictions as apply to the Buyer with respect to the confidentiality of the disclosed Technical Data or Software Services.

 

14C.2.3 Specifically, in the event the Buyer designates a maintenance and repair organization (MRO) to perform the maintenance of the Aircraft, the Buyer shall notify the Seller of such designation prior to any disclosure of this Clause and/or the Technical Data and/or the Software Services to the selected MRO and shall cause such MRO to (i) enter into a confidentiality agreement with the Seller in form and substance reasonably satisfactory to the Seller and the MRO and, in the case of Software Services, appropriate licensing conditions reasonably satisfactory to the Seller and the MRO, and (ii) commit to use such Technical Data and Software Services solely for the purpose of maintaining the Buyer’s Aircraft.

 

14C.3 Transferability

Without prejudice to Buyer’s rights to assign this Agreement under Clause 21.1, the Buyer’s rights under this Clause 14 shall not be assigned, sold, transferred, novated or otherwise alienated by operation of law or otherwise, without the Seller’s prior written consent thereto, which shall not be unreasonably withheld, conditioned or delayed.

Any unauthorized assignment, sale, transfer, novation or other alienation of the Buyer’s rights under this Clause 14 shall be null and void.


15 SELLER REPRESENTATIVES

The Seller shall [*] to the Buyer the services described in this Clause 15, at the Buyer’s main base or at other locations to be mutually agreed.

 

15.1 Customer Support Director

The Seller shall provide the services of [*] customer support [*] (each a “ Customer Support Director ”) based at one of the Seller’s offices (in Toulouse, France, Herndon, or Virginia, U.S.A., as applicable) to coordinate customer support matters between the Seller and the Buyer after signature of this Agreement, for as long as at least [*] operated by the Buyer.

 

15.2 Customer Support Representative(s)

 

15.2.1 The Seller shall provide [*] to the Buyer the services of Seller customer support representative(s), as defined in Appendix A to this Clause 15 (each a “ Customer Support Representative ”), at the Buyer’s main base or such other locations as the parties may agree. The services of Customer Support Representative(s) will commence at or about the delivery of the first Aircraft.

 

15.2.2 Spare Parts Representative

The Seller shall provide [*] to the Buyer the services of [*] Seller spare parts representative, for the duration specified in Appendix B to this Clause 15, to assist the Buyer with the planning, receipt and follow-up of its initial provisioning orders as well as to generally liaise between the Buyer and the Seller in any matters related to Material (the “ Spare Parts Representative ”).

 

15.2.3 For the purposes of this Clause 15, the Customer Support Representatives and the Spare Parts Representative(s) as defined above are individually and collectively referred to as “ Seller Representatives ”.

 

15.2.4 In providing the services as described hereabove, any Seller’s employees, including specifically Seller Representatives, are deemed to be acting in an advisory capacity only and at no time shall they be deemed to be acting or have the authority to act as Buyer’s employees or agents, either directly or indirectly, and shall not hold themselves out as having any such authority. The Seller shall ensure that each Seller Representative agrees, for the Buyer’s benefit, to maintain as confidential and proprietary such information to which such Seller Representative has access during the course of providing services to Buyer under this Agreement.

 

15.2.5 The Seller shall provide to the Buyer an annual written accounting of the consumed man-months and any remaining man-month balance from the allowance defined in Appendices A and B, respectively in this Clause 15. Such accounting shall be deemed final and accepted by the Buyer unless the Seller receives written objection from the Buyer within [*] of Buyer’s receipt of such accounting.

 

15.2.6 In the event of a need for non-routine or Aircraft On Ground (“ AOG ”) technical assistance after the end of the assignment referred to in Appendices A and B, respectively to this Clause 15 or at any time during such assignment when any of Seller Representatives assigned to Buyer is unavailable, the Buyer shall [*]

 

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  a) AIRTAC (Airbus Technical AOG Center);

 

  b) The Seller Representative network. A list of contacts of the Seller Representatives shall be provided to the Buyer.

As a matter of reciprocity, the Seller Representative shall, during his assignment to the Buyer, be permitted to provide similar assistance to another airline, provided however that the Buyer’s requirements shall receive priority. Seller shall ensure that each Seller Representative is obligated to, for the Buyer’s benefit, maintain as confidential the Buyer’s confidential and proprietary information to which such Seller Representative has access during the course of providing services to the Buyer under this Agreement.

15.2.7 Should the Buyer request Seller Representative services exceeding the allocation specified in Appendices A and B, respectively to this Clause 15, the Seller may provide such additional services subject to terms and conditions to be mutually agreed.

 

15.2.8 The Seller shall cause similar services to be provided by representatives of the Propulsion Systems Manufacturer and Suppliers, when requested by Buyer and necessary for Buyer’s operations, as determined at Buyer’s discretion.

 

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15.3 Buyer’s Support

 

15.3.1 From the date of arrival of the first Seller Representative and for the duration of the assignment, the Buyer shall provide [*] a suitable lockable office, conveniently located with respect to the Buyer’s maintenance facilities, with office furniture including telephone, internet, email and facsimile connections for the sole use of the Seller Representative(s) for business purposes relating to the performance of his/her obligations under this Agreement. All related communication costs [*]

 

15.3.2 [*]

 

15.3.3 [*]

 

15.3.4 Should the Buyer request any Seller Representative referred to in Clause 15.2 above to travel on business to a city other than his usual place of assignment, the Buyer shall be responsible for all related transportation costs and expenses.

 

15.3.5 Buyer shall have free of charge access to the Seller Representative network to cover the period [*]

 

15.3.6 If the Seller has taken all reasonable actions to fulfil the requirements of the applicable civil authorities of Buyer’s country necessary to permit the Seller Representative to work and live in Buyer’s country and is nonetheless unable to obtain such permission for reasons that are not personal and specific to such Seller Representative, the Seller’s obligation to provide a Seller Representative to the Buyer in Buyer’s country under Clause 15.2.1 shall be suspended (the “ Suspension ”). In the event that such permission is denied to such Seller Representative for reasons personal and specific to such Seller Representative, the Seller shall provide a substitute Seller Representative without such disqualifying attributes. The Suspension shall terminate upon any change in laws, rules or regulations that would allow a Seller Representative to enter into Buyer’s country.

If it is required by the civil authorities in Buyer’s country that the Buyer provide any documentation or take other action to obtain the permits or authorizations necessary for the Seller’s Representative to work and live in the Buyer’s country, then Buyer shall provide the same so long as it is at no out-of-pocket cost to the Buyer. If Buyer fails to provide the assistance required under this paragraph, then (i) Seller’s obligation to provide a Seller Representative to Buyer shall be suspended during any period that the Seller Representative is denied the right to work and live in the Buyer’s country as a result of such failure and (ii) [*]

 

15.4 Withdrawal of the Seller Representative

The Seller shall have the right upon written notice to and consultation with the Buyer to withdraw its assigned Seller Representatives as it sees fit if conditions arise, which are, in the Seller’s reasonable opinion, dangerous to their safety or health or prevent them from fulfilling their contractual tasks. In the event that the Seller withdraws its assigned Seller Representative under this Clause 15.4, Seller shall provide Buyer free of charge access to the Seller Representative network. Seller shall restore the withdrawn Seller Representatives to their previous locations within Buyer’s country promptly following cessation of the conditions leading to their withdrawal.

 

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If a Seller Representative is withdrawn from Buyer’s country under this Clause 15.4, the Buyer and Seller will agree on an alternative support solution to cover for the absence of the on-site Seller Representative and on the manner on which the man-months allocated for Seller Representative services will be adjusted and applied to the period during which such alternative support solution is provided.

 

15.5 Indemnities

INDEMNIFICATION PROVISIONS APPLICABLE TO THIS CLAUSE 15 ARE SET FORTH IN CLAUSE 19.

 

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APPENDIX A TO CLAUSE 15

CUSTOMER SUPPORT REPRESENTATIVE ALLOCATION

The Customer Support Representative allocation provided to the Buyer pursuant to Clause 15.2 is defined hereunder.

 

1 The Seller shall provide to the Buyer [*] Customer Support Representative services at the Buyer’s main base or at other locations to be mutually agreed.

 

2 For the sake of clarification, such Customer Support Representatives’ services shall include initial Aircraft Entry Into Service ( EIS ) assistance and sustaining support services.

 

3 The number of the Customer Support Representatives assigned to the Buyer at any one time shall be mutually agreed, [*] Customer Support Representatives present at Buyer’s site at any one time.

 

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APPENDIX B TO CLAUSE 15

SPARE PARTS REPRESENTATIVE ALLOCATION

Pursuant to Clause 15.2.2 of the Agreement, the Seller shall provide to the Buyer [*] Spare Parts Representative services at the Buyer’s main base or at other locations to be mutually agreed.

 

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TRAINING AND TRAINING AIDS

 

16.1 General

 

16.1.1. This Clause 16 covers the terms and conditions for the supply of training and training aids for the Buyer’s personnel to support the Aircraft operation.

 

16.2 Scope

 

16.2.1 The range and quantity of training and training aids to be provided under this Agreement are covered in Appendix A to this Clause 16. The Seller will arrange availability of such training and training aids in relation to the delivery schedule for the Aircraft set forth in Clause 9.1.1.

 

16.2.2 The training courses, defined in Appendix A to this Clause 16, will be provided [****] to Buyer [*]

 

16.2.3 In the event that the Buyer should use none or only part of the training or training aids to be provided pursuant to this Clause, no compensation or credit of any sort will be provided.

 

16.3 Training Organization / Location

 

16.3.1 The Seller will provide the training at the Airbus Training Center in Miami, Florida (the “ Seller’s Training Center ”) unless the particular training is not offered at the Seller’s Training Center in which case the training will be provided at an affiliated training center in the Americas or western Europe.

 

16.3.2 If unavailability of facilities or scheduling difficulties make training by the Seller impractical at the training centers referenced in Clause 16.3.1, the Seller will ensure that the Buyer is provided the training support described in this Clause 16 at locations other than those named in Clause 16.3.1.

 

16.3.3 Upon the Buyer’s request the Seller may also provide certain training at a location other than the Seller’s Training Centers, including one of the Buyer’s bases, if and when practicable for the Seller, under terms and conditions to be mutually agreed upon. In this event, all additional charges listed in Clause 16.6.2 will be borne by the Buyer.

 

16.3.4 If the Buyer requests a Seller approved course at a location as indicated in Clause 16.3.3, the Buyer shall, as necessary and in due time prior to the performance of such training, provide access to the training facilities set forth in Clause 16.3.3 to the Seller’s and the Aviation Authority’s representatives for approval of such facilities. Seller will not be required to provide training at any training facility not reasonably satisfactory to Seller.

 

16.4 Training Courses

 

16.4.1 Training courses, as well as the minimum and maximum numbers of trainees per course provided for the Buyer’s personnel, are defined in the applicable training course catalog published by ANACS (the “ Training Course Catalog ”) and will be scheduled as mutually agreed upon during a training conference (the “ Training Conference ”) that will be held as soon as practicable after signature of this Agreement and no later than May 31, 2007.

 

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16.4.2 The following terms will apply when training is performed ANACS:

 

  (i) Subject to 16.4.2(ii) below, training courses will be standard Airbus courses as described in ANACS applicable Training Course Catalog valid at the time of execution of the course. ANACS will be responsible for all training course syllabi, training aids and training equipment (not to include aircraft) necessary for the organization of the training courses.

 

  (ii) Where ANACS agrees to perform training using Buyer’s standard courses, Buyer will be responsible for taking all steps necessary to assure approval by applicable Aviation Authorities of such training (including any needed approvals of specific ANACS instructors).

 

  (iii) The training curricula and the training equipment used for flight crew, cabin crew and maintenance training will not be fully customized but will be configured in order to obtain the relevant Aviation Authority’s approval and to support the Seller’s training programs. Notwithstanding the foregoing, the training curricula used for training performed under such circumstances shall enumerate any differences that exist between the non-customized material and Buyer’s detailed specification.

 

  (iv) Training data and documentation necessary for training detailed in Appendix A to this Clause 16 will be and will not be revised. Training data and documentation will be marked “FOR TRAINING ONLY” and as such will be supplied for the sole and express purpose of training.

 

  (v) Upon the request of the Buyer [*], the Seller will collect and pack for consolidated shipment to the Buyer’s facility, all training data and documentation of the Buyer’s trainees attending training at the Seller’s Training Center. This training data and documentation will be delivered [*]. It is understood that title to and risk of loss of the training data and documentation will pass to the Buyer [*].

 

16.4.3.1 If the Buyer decides to cancel fully or partially or reschedule, a training course, a minimum advance notification of at least [*] calendar days prior to the relevant training course start date is required.

 

16.4.3.2 If such notification is received by the Seller or ANACS less than [*] but more than [*] calendar days prior to such training, a cancellation fee corresponding to [*] of such training will be deducted from the training allowance defined in Appendix A to the extent sufficient allowance then remains, with any balance invoiced at the price corresponding to such training in the then current ANACS Customer Services Catalog.

 

16.4.3.3 If such notification is received by the Seller less than [*] calendar days prior [*] of such training will be deducted from the training allowance defined in Appendix A to the extent sufficient allowance then remains, with any balance invoiced at the price corresponding to such training in the then current ANACS Customer Services Catalog.

 

16.4.3.4 [*]

 

16.4.4 In fulfillment of its obligation to provide training courses, when ANACS performs the training courses, it will deliver to the trainees a certificate of completion (each a “ Certificate ”) at the end of any such training course. A Certificate does not represent authority or qualification by any official Aviation Authorities but may be presented to such officials in order to obtain relevant formal qualification.

 

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If training is provided by a training provider other than ANACS that is selected by the Seller, the Seller will cause such training provider to deliver a Certificate at the end of any such training course. Such Certificate will not represent authority or qualification by any official Aviation Authority but may be presented to such officials in order to obtain relevant formal qualification.

 

16.5 Prerequisites and Conditions

 

16.5.1 Training will be conducted in English and all training aids are written in English using common aeronautical terminology. Trainees must have the prerequisite experience as defined in Appendix B to this Clause 16.

All training courses conducted pursuant to this Clause 16 are “ Standard Transition Training Courses ” and not “ Ab Initio Training Courses . “

The Buyer will be responsible for the selection of the trainees and for any liability with respect to the entry knowledge level of the trainees.

 

16.5.2.1 The Buyer will provide the Seller with an attendance list of the trainees for each course with the validated qualification of each trainee. The Seller reserves the right to verify the trainees’ proficiency and previous professional experience. The Seller will in no case warrant or otherwise be held liable for any trainee’s performance as a result of any training services provided.

 

16.5.2.2 The Buyer will also complete and provide to the Seller the “Airbus Pre-Training Survey” detailing the trainees’ associated background at the time of reservation of the training course and in no event any later than [*] calendar days prior to the start of the training course. If the Buyer makes a change to the attendance list pursuant to Clause 16.5.2.1 the Buyer will immediately inform the Seller thereof and send to the Seller an updated Airbus Pre-Training Survey reflecting such change. No such changes will be accepted less than [*] days prior to the beginning of the Training Course

 

16.5.3 Upon the Buyer’s request, the Seller may be consulted to direct trainee(s) not having the required prerequisites through a relevant entry level training program, which will be at the Buyer’s charge, and, if necessary, to coordinate with competent outside organizations for this purpose. Such consultation will be held during the Training Conference.

If the Seller should determine that a trainee lacks the required entry level training, such trainee will, following consultation with the Buyer, be withdrawn from the program or, at the Buyer’s request, be directed to a relevant entry level training program, which shall be at the Buyer’s expense. Buyer shall be entitled to provide a substitute trainee (satisfying the requisite entry level training) for the trainee so withdrawn provided such substitution occurs prior to the commencement of the applicable training course. In such event, the Buyer shall not be required to pay any cancellation fee pursuant to Clause 16.4.3.2 or Clause 16.4.3.3 in respect of such withdrawal. In all other cases, upon such withdrawal, the Seller will deduct the corresponding allowance from the total allowance for the applicable training in accordance with the provisions set forth in Clause 16.4.3.2 or Clause 16.4.3.3.

 

16.5.4 The Seller will in no case, warrant or otherwise be held liable for any trainee’s performance as a result of any training provided.

 

16.6 Logistics

 

16.6.1 Trainees

 

16.6.1.1 When training is done at the Airbus Training Center in Miami, Florida, the Seller will provide a [*] rental car for all of the Buyer’s trainees for the duration of the training course on the basis of [*] rental car per [*] maintenance, operations and cabin attendant trainees and [*] rental car per [*] flight crew.

 

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The Seller will provide rental cars with unlimited mileage, and the Buyer will pay for gas, and fines, if any. However, the Buyer will indemnify and hold the Seller harmless from and against all liabilities, claims, damages, costs and expenses for any injury to or death of any of the Buyer’s trainees occasioned during the course of such transportation.

 

16.6.1.2 When training is done at the Airbus Training Center in Blagnac, France, the Seller will provide [*] local transportation by bus for the Buyer’s trainees to and from designated pick—up points and the training center.

 

16.6.1.3 Living expenses for the Buyer’s trainees will be borne by the Buyer. Seller shall cooperate in good faith with Buyer to find suitable accommodations for Buyer’s trainees and, when applicable and possible, shall pass to Buyer any volume discounts the Seller may obtain from local lodging facilities.

 

16.6.2 Training at External Location

 

16.6.2.1 Seller’s Instructors

If at the Buyer’s request pursuant to Clause 16.3.3, training is provided by the Seller’s instructors at any location other than the Seller’s Training Centers, the Buyer will, subject to Clause 16.6.2.5, reimburse the Seller for all the expenses, as provided below in Clauses 16.6.2.2, 16.6.2.3 and 16.6.2.4 related to the assignment of such instructors and their performance of the duties as aforesaid.

 

16.6.2.2 Living Expenses for the Seller’s Instructors

Such expenses, covering the entire period from day of assignment to day of return to the Seller’s base, will include but will not be limited to lodging, food and local transportation to and from the place of lodging and the training course location. The Buyer will reimburse the Seller for such actual expenses.

 

16.6.2.3 Air Travel

The Buyer will, at Buyer’s election, either provide or reimburse the Seller for the transportation costs of the Seller’s instructors performing such training in confirmed business class (for international travel) or in confirmed coach class (for domestic travel), to and from the Buyer’s designated training site and the Seller’s Training Center. When the training date is known to Seller at [*] days in advance, Seller shall cause any air transportation tickets for travel relating to such training that are not being provided by the Buyer to be purchased not less than [*] days in advance of the travel date. Seller will cause its instructors to fly on Buyer’s aircraft whenever possible.

 

16.6.2.4 Training Material

The Buyer will reimburse the Seller for the cost of shipping the training material needed to conduct such courses.

 

16.6.2.5 Transportation Failure

If there is a delay in or failure of transportation of Seller’s instructors or the training materials that results in the delay or cancellation of any training, then neither Buyer nor Seller shall be liable to the other for, and each party waives and releases any claims against the other with respect to, any costs or expenses associated with such delayed or cancelled training including, without limitation, any amounts pursuant to Clause 16.4.3.2, or Clause 16.4.3.3.

 

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16.6.2.6 Training Equipment Availability

Training equipment necessary for course performance (i.e., video projectors, printers, etc.) at any course location other than the Seller’s Training Centers or the facilities of a training provider selected by the Seller will be made available by the Buyer in accordance with the Seller’s specifications.

 

16.7 Flight Operations Training

 

16.7.1 Flight Crew Training Course

 

16.7.1.1 The Seller will perform a flight crew training course program, as defined in Appendix A to this Clause 16, for the Buyer’s flight crews. A flight crew will consist of two (2) crew members who shall be either captains or first officers. Except for in-flight training, for which the Buyer’s customized Flight Crew Operating Manual will be used, the training manual used for all flight crew training courses will be the Seller’s Flight Crew Operating Manual. If the Seller agrees to use the Buyer’s Flight Crew Operating Manual for other flight crew training, the Buyer will be responsible for obtaining any necessary approvals required by applicable Aviation Authorities and for any costs associated therewith, including time spent by any ANACS instructor to achieve such approvals.

 

16.7.1.2 The Buyer will use its delivered Aircraft, or any other aircraft of the same type that Buyer operates, for any required in-flight training and will pay all costs associated with such use. [*]

 

16.7.1.3 In all cases, the Buyer will bear the expenses of fuel, oil and landing fees.

 

16.7.2 Flight Crew Line Initial Operating Experience

 

16.7.2.1 In order to assist the Buyer with initial operating experience after Delivery of the first Aircraft, the Seller will provide to the Buyer pilot instructor(s) as defined in Appendix A to this Clause 16.

 

16.7.2.2 In addition to the number of pilots specified in Appendix A attached hereto, the Seller may provide pilot instructors, at the Buyer’s expense and upon conditions to be mutually agreed.

 

16.7.2.3 Prior to any flight training to be performed by the Seller on the Buyer’s Aircraft, the Buyer will provide to the Seller a copy of the certificate of insurance as requested in Clause 19.

 

16.7.3 Instructor Cabin Attendants’ Familiarization Course

The Seller will provide cabin attendants training in accordance with Appendix A to this Clause 16. The instructor cabin attendants’ course when incorporating the features of the Aircraft, will be given no earlier than [*] Aircraft.

 

16.7.4.1 Performance / Operations Course

The Seller will provide the performance/operations training defined in Appendix A to this Clause 16 for the Buyer’s personnel.

The available courses are listed in the Seller’s applicable ANACS Training Courses Catalog.

 

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16.7.5 Transition Type Rating Instructor (TRI) Course

The Seller shall provide transition type rating instructor (TRI) training for the Buyer’s flight crew instructors, as defined in Appendix A to this Clause 16.

This course provides the Buyer’s pilots and/or instructors with the training in both flight-instruction and synthetic-instruction required in order to enable them to instruct on Airbus aircraft.

 

16.8 Maintenance Training

 

16.8.1.1 The Seller will provide maintenance training for the Buyer’s ground personnel as defined in Appendix A to this Clause 16.

The available courses are listed in the Seller’s applicable Training Course Catalog.

 

16.8.1.2 Practical Training on Aircraft

In the event of practical trainingon aircraft (“ Practical Training ”) being requested by the Buyer, the Seller will assist in organizing such Practical Training at a third party’s facilities or on Buyer’s aircraft, without however guaranteeing the availability of any other airline’s facilities.

If the Buyer wishes to perform Practical Training at a third party facility without requiring a formal FAR – Part 147 (or equivalent or other applicable Aviation Authority) certificate, the Seller may assist the Buyer in organizing such Practical Training as set forth above.

In the event of the Buyer requiring a full FAR – Part 147 (or equivalent or other applicable Aviation Authority) certificate from the Seller, the Practical Training shall be conducted by the Seller in an FAR – Part 147 facility approved and selected by the Seller.

In the event of the Buyer requiring such Practical Training to be conducted at the Buyer’s FAR – Part 145 (or equivalent or other applicable Aviation Authority) approved facilities, such training shall be subject to prior approval by the Seller of the facilities at which the Practical Training is to be conducted.

The provision of a Seller Instructor for the Practical Training shall be deducted from the trainee days allowance defined in Appendix A to this Clause 16, subject to the conditions detailed in Paragraph 3.2 thereof.

The Buyer shall reimburse to the Seller the expenses for said Seller Instructor(s) in accordance with Clause 16.5.2.

 

16.8.2 Line Maintenance Initial Operating Experience Training

In order to assist the Buyer during the entry into service of the Aircraft, the Seller will provide to the Buyer maintenance instructor(s) at the Buyer’s base as defined in Appendix A to this Clause 16. The maximum number of instructors to be assigned to Buyer’s base at one time will be [*].

 

16.8.2.1 This line maintenance initial operating experience training will cover training in handling and servicing of Aircraft, flight crew and maintenance coordination, use of Technical Data and/or any other activities that may be deemed necessary after Delivery of the first Aircraft.

 

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16.8.2.2 The Buyer will reimburse the expenses for Seller’s maintenance instructor(s) providing services to Buyer hereunder, including without limitation, those specified in Appendix A attached hereto, in accordance with Clause 16.6.2.

 

16.9 Supplier and Propulsion System Manufacturer Training

Upon the Buyer’s request, the Seller will provide [*] to the Buyer a list of the maintenance and overhaul training courses provided by major Suppliers and the applicable Propulsion Systems Manufacturer on their products.

Seller will assist the Buyer to obtain from the Suppliers and the Propulsion System Manufacturer maintenance and overhaul training on their products at appropriate times.

 

16.10 Training Aids for the Buyer’s Training Organization

 

16.10.1 The Seller will provide [*] to the Buyer the Airbus Computer Based Training (the “ Airbus CBT ”), training aids, as used in the Seller’s Training Centers together with the Virtual Aircraft walk around component, subject to Buyer’s execution of appropriate agreements for the license and use of such Airbus CBTand Virtual Aircraft. The Seller will Deliver the Airbus CBT, training aids and Virtual Aircraft, at a date to be mutually agreed during the Training Conference

The items supplied to the Buyer pursuant to Clause 16.10.1 shall be delivered DDU Buyer’s facilities in Bogota, Colombia. Title to and risk of loss of said items will pass to the Buyer upon receipt thereof.

 

16.10.2 Intentionally left blank

 

16.10.3 Installation of the Airbus CBT and the Virtual Aircraft

 

16.10.3.1.1 Before the initial delivery of the Airbus CBT System and of the Virtual Aircraft, the Seller will provide, [*] for up to [****] trainees of the Buyer, at the Buyer’s facilities, a training course enabling the Buyer to load and use the Airbus CBT System and the Virtual Aircraft either on stand-alone workstations or in a “Server” mode (the “ Airbus CBT Administrator Course ”).

To conduct the course, the workstations and/or Servers, as applicable, will be ready for use and will comply with the latest “Airbus CBT Workstation Technical Specification” or “Airbus CBT Server Technical Specification”, as applicable (collectively, the “ Airbus CBT Technical Specification ”).

 

16.10.3.1.2 The Airbus CBT System and the Virtual Aircraft will be installed by the Buyer’s personnel, who shall have completed the Airbus CBT Administrator Course, provided that the Seller will provide, at its cost and expense, technical support requested by the Buyer’s personnel in connection with such installation. The Seller will be held harmless from any injury to person and/or damage to property caused by or in any way connected with the handling and/or installation of the Airbus CBT and the Virtual Aircraft by the Buyer’s personnel.

 

16.10.3.2 Upon the Buyer’s request and subject to conditions to be quoted by the Seller, the Seller will cause sufficient personnel of Seller to travel to the Buyer’s facilities to assist the Buyer with the initial installation of the Airbus CBT System and the Virtual Aircraft at the Buyer’s facilities. Such assistance shall follow notification in writing that the various components, which shall be in accordance with the specifications defined in the Airbus CBT Technical Specification, are ready for installation and available at the Buyer’s facilities.

 

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16.10.4 Airbus CBT and Virtual Aircraft License

 

16.10.4.1 The use of the Airbus CBT System and of the Virtual Aircraft shall be subject to license conditions defined in Appendix C to this Clause 16 (License For Use Of Airbus Computer Based Training (“ Airbus CBT ”)), hereinafter the “ License ”. [*]

For the purpose of the Virtual Aircraft, the term “Airbus CBT System” as used in such License shall mean “Airbus CBT including the Virtual Aircraft”.

 

16.10.4.2 Supply of sets of CBT Courseware or sets of Virtual Aircraft Software, as defined in Appendix C and additional to those indicated in Appendix A, as well as any extension to the License shall be subject to terms and conditions to be mutually agreed.

 

16.10.5 The Seller shall not be responsible for and hereby disclaims any and all liabilities resulting from or in connection with the use by the Buyer of the Airbus CBT System, the Virtual Aircraft and any other training aids provided under this Clause 16.10.

 

16.10.6 Proprietary Rights

The Seller’s training data and documentation, including the Airbus CBT System, the Virtual Aircraft and other training aids are proprietary to Seller and/or its Affiliates and the Buyer agrees not to disclose the content of any courseware, documentation or other information relating thereto, in whole or in part, to any third party without the prior written consent of the Seller.

 

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APPENDIX “A” TO CLAUSE 16

TRAINING ALLOWANCE

For the avoidance of doubt, all quantities indicated below are the total quantities granted for the whole of the Buyer’s fleet of firmly ordered [*] Aircraft, unless otherwise specified.

The contractual training courses defined in this Appendix A shall be provided up to [*] under this Agreement.

 

1. FLIGHT OPERATIONS TRAINING

 

1.1 Flight Crew Training (standard transition course or cross crew qualification (CCQ) as applicable)

The Seller shall provide flight crew training (standard transition course or CCQ as applicable) [*] for [*] of the Buyer’s flight crews per firmly ordered Aircraft.

 

1.2 Flight Crew Line Initial Operating Experience

The Seller shall provide to the Buyer pilot Instructor(s) [*] for a period of [*] pilot Instructor months.

 

1.2.1 The maximum number of pilot Instructors present at any one time at Buyer’s facilities shall be limited to [*] pilot Instructors; except that with respect to pilot training relating to the first Aircraft the number of pilot instructors present at one time at Buyer’s facilities shall be limited to [*].

 

1.3 Instructor Cabin Attendants’ Familiarization Course

The Seller shall provide to the Buyer instructor cabin attendants’ training [*] for [*] of the Buyer’s instructor cabin attendants.

 

1.4 Performance / Operations Course(s)

 

1.4.1 The Seller shall provide to the Buyer [*] trainee days of performance / operations / dispatch training [*] for the Buyer’s personnel.

 

1.4.2 The above trainee days shall be used solely for the performance/operations training courses as defined in the Seller’s applicable Training Course Catalog.

 

1.5 Transition Type Rating Instructor (TRI) course

The Seller shall provide to the Buyer transition type rating instructor training (transition or CCQ, as applicable) [*] for [*] of the Buyer’s flight instructors, such that the Buyer’s flight instructors will be authorized to provide training on the A320 family aircraft and the A330 aircraft subject to local Aviation Authority approval.

 

2 MAINTENANCE TRAINING

 

2.1 Maintenance Training Courses

 

2.1.1 The Seller shall provide to the Buyer [*] trainee days of maintenance training [*] for the Buyer’s personnel.

 

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2.1.2 The above trainee days shall be used solely for the maintenance training courses as defined in the Seller’s applicable Training Courses Catalog.

 

2.1.3 Within the trainee days allowance in Paragraph 2.1.1 above, the number of Engine Run-up courses shall be limited to [*] course for [*] trainees per firmly ordered Aircraft and to a maximum of [*] courses in total.

 

2.2 Line Maintenance Initial Operating Experience Training

The Seller shall provide to the Buyer [*] maintenance Instructor(s) weeks (1 week corresponding to 7 calendar days) at the Buyer’s base [*] in either Airframe, Electronics/Avionics or Powerplants, up to the “A” check.

 

2.3 TRAINEE DAYS ACCOUNTING

Trainee days are counted as follows:

 

3.1 For instruction at the Seller’s Training Centers or affiliated training centers: [*] of instruction for One (1) trainee equals One (1) trainee day. The number of trainees originally registered at the beginning of the course shall be counted as the number of trainees to have taken the course.

 

3.2 For instruction outside of the Seller’s Training Centers: one (1) day of instruction for one (1) trainee equals One (1) training day.

For maintenance training courses, the Buyer will be charged for a minimum of [****] training days notwithstanding that fewer than [****] trainees are actually in attendance.

 

3.3 For structure training courses, the Buyer will be charged for a minimum of [****] trainee days (notwithstanding that fewer than [*] are actually in attendance) and a maximum of [****] trainee days (notwithstanding that fewer than [*] trainees are actually in attendance).

For the avoidance of doubt, Buyer will not be charged for any training provided by Seller to any Aviation Authority personnel.

In the event of training being provided outside of the Seller’s Training Centers specifically at the Seller’s request, Paragraph 3.1 hereabove shall be applicable to the trainee days accounting for such training.

 

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4 TRAINING AIDS FOR BUYER’S TRAINING ORGANISATION

 

4.1 Delivery

The Seller shall provide to the Buyer [*]

 

   

[****] customized Airbus CBT (flight and/or maintenance) related to the Aircraft type(s) as covered by this Agreement (including [*] of CBT Courseware and [*] of CBT Software for flight and [*] of CBT Courseware and [*] of CBT Software for maintenance, [*] of CBT Courseware and [*] of CBT Software for In Flight and [*] of CBT Courseware and [*] of CBT Software for Dispatch as applicable). A standard CBT site license permitting installation thereof on multiple terminals at Buyer’s premises must be provided. The detailed description of the Airbus CBT shall be provided to the Buyer at the Training Conference;

 

   

[****] Virtual Aircraft (Walk around and Component Location) related to the Aircraft type (s) as covered in this Agreement.

 

   

[*] of training documentation on CD-ROM;

 

   

[****] CD-ROM of cockpit panels for training;.

 

4.2 Revision service

The Airbus CBT and Virtual Aircraft in use at the Seller’s Training Centers are revised on a regular basis and such revision shall be provided [*].

 

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APPENDIX B TO CLAUSE 16

APPENDIX “B” TO CLAUSE 16

MINIMUM RECOMMENDED QUALIFICATION

IN RELATION TO TRAINING REQUIREMENTS

The prerequisites listed below are the minimum recommended requirements specified for Airbus training. If the appropriate Aviation Authority or the specific airline policy of the trainee demand greater or additional requirements, they shall apply as prerequisites.

FLIGHT CREW Standard Transition Courses

Captain prerequisites:

 

   

Previously qualified on FAR or EASA orCS 25 aircraft and commercial operations

 

   

Valid and Current Airline Transport Pilot License (ATPL)

 

   

Previous command experience

 

   

Fluency in English (able to write, read and communicate at an adequately understandable level in English language)

 

   

Jet experience

 

   

Flight time :

 

   

1 500 hours as pilot

 

   

1 000 hours on FAR or EASA or CS 25 aircraft

 

   

200 hours experience as airline, corporate or military transport pilot

First Officer prerequisites:

 

   

Previously qualified on FAR or EASA or CS 25 aircraft and commercial operations

 

   

Aircraft and commercial operations valid and current CPL (Commercial pilot license) with Instrument rating,

 

   

Fluency in English (able to write, read and communicate at an adequately understandable level in English language)

 

   

Jet experience

 

   

Flight time :

 

   

500 hours as pilot

 

   

300 hours on FAR/EASA/CS 25 aircraft

 

   

200 hours experience as airline, corporate or military transport pilot

If the Trainee does not speak English or is not fluent enough to follow the Standard Transition course, he shall follow the Adapted language transition and provide a translator as indicated by the Seller.

If no Jet experience, both CAPTAIN and/or FIRST OFFICER must follow, before entering the transition course, a dedicated “Jet Familiarization entry level course”. Such course(s), if required, shall be at the Buyer’s expense.

 

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First type rating course

This course is designed for Ab initio pilots who do not hold an aircraft type rating on their pilot license

Pilot prerequisites

 

   

Valid and current CPL (commercial pilot license)

 

   

Valid and current Instrument Rating on multi engine aircraft.

 

   

ATPL written examination

 

   

Fluency in English (able to write, read and communicate at an adequately understandable level in English language) (minimum :ICAO level 4)

 

   

Flight experience:

 

   

220 hours as pilot

 

   

100 hours as pilot in command (PIC)

 

   

25 hours on multi engine aircraft (up to 10 hours can be completed in a simulator)

In addition to the above conditions and in accordance with the JAR Flight Crew Licensing (FCL) and the Airbus Training Policy, a pilot applying for a first type rating must have followed either an approved JAR Multi Crew Cooperation (MCC) program or regulatory equivalent or the “Airbus Entry Level Training (ELT) program” (combined MCC and Jet familiarization course). Such course, if required, shall be at the Buyer’s expense.

CCQ additional prerequisites

In addition to the prerequisites set forth for the Flight Crew Standard Transition Course, both CAPTAIN and FIRST OFFICER must:

 

   

be qualified and current on the base aircraft type

 

   

have 150 hours minimum and 3 months minimum of operations on the base aircraft type.

TRI course additional prerequisites

In addition to the prerequisites set forth for the Flight Crew Standard Transition Course, it is the responsibility of the Buyer to:

 

   

select instructor candidate(s) with airmanship and behavior corresponding to the role and responsibility of an airline instructor

 

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Performance and Operations personnel prerequisites

The Buyer’s performance and operations personnel shall be fluent in English (able to write, read and communicate at an adequately understandable level in English language).

All further detailed prerequisites shall be provided by the Seller to the Buyer during the Training Conference, depending on the type of training course(s) selected by the Buyer.

Maintenance Personnel prerequisites

 

   

Fluency in English (understanding of English (able to write, read and communicate at an adequately understandable level in English language) adequate to be able to follow the training (If this is not the case, the Buyer shall assign a minimum of one (1) translator for [****] trainees).

 

   

Technical experience in the line or/and base maintenance activity of commercial jet aircraft

Additional prerequisites for Aircraft Rigging Course

Qualification on the related systems Airbus aircraft family as aviation maintenance technician (AMT) or holder of a basis“B1” license or equivalent.

Additional prerequisites for Maintenance Initial Operating Experience

Personnel attending this training course must have successfully completed the theoretical training element of the related Aircraft type course

Maintenance Training Difference Courses additional prerequisites

In addition to the prerequisites set forth for Maintenance Personnel, the personnel shall be currently qualified and operating on the base aircraft

 

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APPENDIX C TO CLAUSE 16

LICENSE FOR USE OF AIRBUS COMPUTER BASED TRAINING

LICENSE FOR USE OF AIRBUS COMPUTER BASED TRAINING (AIRBUS CBT)

 

1 DEFINITIONS

 

1.1 For the purpose of this Appendix C to Clause 16, the following definitions shall apply:

 

1.1.1 Airbus CBT ” means the combination of the Airbus CBT Software and the Airbus CBT Courseware.

 

1.1.2 Airbus CBT Courseware ” means the programmed instructions that provide flight crew and maintenance training.

 

1.1.3 Airbus CBT Software ” means the system software that permits the use of the Airbus CBT Courseware.

 

1.1.4 Student / Instructor Mode ” means the mode that allows the Buyer to run the Airbus CBT Courseware.

 

1.1.5 Network ” means the group of the Buyer’s computers connected to each other through cables and allowing the transmission of data and instructions, which can be used by all of the Buyer’s computers so linked.

 

1.1.6 Server” means the computer dedicated to the administration of a Network and on which the Airbus CBT is installed and can be reached through the Network.

 

1.1.7 Technical Specification ” means either the “Airbus CBT Workstation Technical Specification” or the “Airbus CBT Server Technical Specification”, as applicable.

 

1.1.8 Intranet” means the Buyer’s private and local Network using the same technical protocols as internet but which is not open to public connection.

 

1.1.9 Extranet” means the network constituted of an external Intranet, allowing communication between the Buyer and certain defined external entities.

 

1.1.10 “User Guide ” means the documentation, which may be in electronic format, designed to assist the Buyer to use the Airbus CBT.

 

1.2 Capitalized terms used herein and not otherwise defined in this Airbus CBT License shall have the meaning assigned thereto in the Agreement.

 

1.3 Any and all hardware required for the operation of the Airbus CBT is not part of the Airbus CBT and shall be procured under the sole responsibility of the Buyer. The Seller shall specify hardware systems compatible with the Airbus CBT.

 

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2 GRANT

 

   The Seller grants the Buyer the right, pursuant to the terms and conditions herein, to use the Airbus CBT for the Term of this license (“ Airbus CBT License ”).

 

3 COPIES

 

   Use of the Airbus CBT is limited to the number of copies delivered by the Seller to the Buyer and to the medium on which the Airbus CBT is delivered. No reproduction shall be made without the prior written consent of the Seller. Notwithstanding the above, specific rights as detailed hereafter shall be granted for, respectively, the Airbus CBT Software and the Airbus CBT Courseware.

 

3.1 Airbus CBT Software

 

   The Buyer shall be permitted to copy the Airbus CBT Software for back-up and archiving purposes and for loading of the Airbus CBT Software exclusively on the Buyer’s workstations or Server, as applicable. In such cases, the Buyer shall advise the Seller in writing of the number of any copies made. Any other copying for any other purpose is strictly prohibited.

 

3.2 Airbus CBT Courseware

 

   The Buyer shall be permitted to copy the Airbus CBT Courseware for the sole purpose of internal training of the Buyer’s employees, or for third party personnel contracted to operate or support the Aircraft on behalf of the Buyer, explicitly such copies shall be used by such persons only on their laptops and desktops for training purposes.

 

   In such cases, the Buyer shall advise the Seller in writing of the number of copies made and shall cause its employees, or for third party personnel contracted to operate or support the Aircraft on behalf of the Buyer, to strictly comply with the conditions of use and the confidentiality provisions of this Airbus CBT License. In particular, the persons shall agree to use such copy for training purposes only and to make no additional copy. The Buyer shall further ensure that any copy provided to any such persons is returned to the Buyer either upon request by the Buyer or upon termination of the employment or other relationship with such person. Any other copying for any other purpose is strictly prohibited.

 

3.3 Any copy made by the Buyer shall be performed under the sole responsibility of the Buyer. The Buyer agrees to reproduce the copyright and other notices as they appear on or within the original media on any copies that the Buyer makes of the Airbus CBT Software or the Airbus CBT Courseware. The Seller shall not provide revision service for any copies made.

 

4 TERM

 

   The rights under this Airbus CBT License shall be granted to the Buyer [*] to which the Airbus CBT Software and the Airbus CBT Courseware apply (the “ Term ”). At the end of the Term, the Buyer shall return the Airbus CBT and return or destroy any copies thereof to the Seller, accompanied by a note certifying that the Buyer has returned or destroyed all existing copies.

 

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5 PERSONAL ON-SITE LICENSE

 

   The sole right granted to the Buyer under this Airbus CBT License is the right to use the Airbus CBT and make certain copies thereof all on the terms and conditions set forth herein. The Airbus CBT License is (i) personal to the Buyer, for its own internal use and for training of Buyer’s employees and those of its Subsidiaries or Affiliates, or for the training of third party personnel contracted to operate or support the Aircraft on behalf of the Buyer, (ii) non-transferable, except to Buyer’s successors and assignees as permitted under Clause 21 of the Agreement, and (iii) non-exclusive.

 

6 CONDITIONS OF USE

 

6.1 The Buyer shall:

 

   

maintain the Airbus CBT and the relating documentation in good working condition, in order to ensure the correct operation thereof;

 

   

use the Airbus CBT in accordance with such documentation and the User Guide, and ensure that the staff using the Airbus CBT has received the appropriate training;

 

   

use the Airbus CBT exclusively in the technical environment defined in the Technical Specification, except as otherwise agreed in writing between the parties;

 

   

use the Airbus CBT for its own internal needs as permitted by this License, on its Network and when technically possible, only and exclusively on the machines referenced and the site declared by the Buyer;

 

   

not transmit the Airbus CBT electronically by any means;

 

   

not use the Airbus CBT on either the internet, Intranet or Extranet unless the same is subject to such limitations on access as are reasonably satisfactory to Seller to protect the security of the CBT;

 

   

not alter, reverse engineer, modify or adapt the Airbus CBT, or integrate all or part of the Airbus CBT in any manner whatsoever into another software product;

 

   

not correct the Airbus CBT, except that such correction right may exceptionally be granted to the Buyer by the Seller in writing;

 

   

not translate, disassemble or decompile the Airbus CBT Software or create a software product derived from the Airbus CBT Software;

 

  (vii) not attempt to or authorize a third party to discover or re-write the Airbus CBT source codes in any manner whatsoever;

 

  (viii) not delete any identification or declaration relative to the intellectual property rights, trademarks or any other information related to ownership or intellectual property rights provided in the Airbus CBT by the Seller;

 

   

not pledge, sell, distribute, grant, sub-license, lease, lend, whether on a free-of-charge basis or against payment, or permit access on a time-sharing basis or any other utilization of the Airbus CBT, whether in whole or in part, for the benefit of a third party;

 

   

not permit any third party to use the Airbus CBT in any manner, including but not limited to, any outsourcing, loan, commercialization of the Airbus CBT or commercialization by merging the Airbus CBT into another software or adapting the Airbus CBT, without prior written consent from the Seller.

 

   The Seller shall be entitled, subject to providing reasonable prior written notice thereof to the Buyer, to come and verify in the Buyer’s facilities whether the conditions specified in this Airbus CBT License are respected. This shall not however commit the responsibility of the Seller in any way whatsoever.

 

6.2 Use of the Airbus CBT Software

 

   Notwithstanding Clause 6.1 above, the Buyer shall use the Airbus CBT Software for the exclusive purpose of, for the Student/Instructor Mode:

 

  (i) rostering students for one or several courses syllabi in order to follow students’ progression, and/or

 

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  (ii) rearranging courses syllabi or creating new ones using available courseware modules.

 

   However, the Seller disclaims any responsibility regarding any course(s) that may be modified or rearranged by the Buyer.

 

6.3 Use of the Airbus CBT Courseware

 

   The Buyer shall use the Airbus CBT Courseware for the exclusive purpose of performing training of its personnel, or of third party personnel contracted to operate or support the Aircraft on behalf of the Buyer. Such training shall be performed exclusively at the Buyer’s facility or, to the extent Buyer has in place security measures reasonably satisfactory to the Seller, over the Internet.

 

   Upon signature of a separate agreement and subject to compliance by the Buyer with network security requirements as specified by the Seller, the Seller shall authorize the Buyer to use the Airbus CBT with the Learning Management System on the Buyer’s intranet with external access.

 

7 PROPRIETARY RIGHTS AND NON DISCLOSURE

 

   The Airbus CBT Software and Airbus CBT Courseware, the copyrights and any and all other author rights, intellectual, commercial or industrial proprietary rights of whatever nature in the Airbus CBT Software and Airbus CBT Courseware are and shall remain with the Seller and/or its Affiliates or suppliers, as the case may be. The Airbus CBT Software and Airbus CBT Courseware and their contents are designated as confidential. The Buyer shall not take any commercial advantage by copy or presentation to third parties of the Airbus CBT Software, the documentation, the Airbus CBT Courseware, and/or any rearrangement, modification or copy thereof.

 

   The Buyer acknowledges the Seller’s proprietary rights in the Airbus CBT and undertakes not to disclose the Airbus CBT Software or Airbus CBT Courseware or parts thereof or their contents to any third party in contravention of this Airbus CBT License without the prior written consent of the Seller. Insofar as it is necessary to disclose aspects of the Airbus CBT Software and Airbus CBT Courseware to the Buyer’s personnel, such disclosure is permitted only for the purpose for which the Airbus CBT Software and Airbus CBT Courseware are supplied to the Buyer under the present Airbus CBT License.

 

8 WARRANTY

 

8.1 The Seller warrants that the Airbus CBT is prepared to reflect the Aircraft configuration in accordance with the state of art at the date of its conception. Should the Airbus CBT be found to contain any non-conformity or defect, the Buyer shall promptly notify the Seller thereof and the sole and exclusive liability of the Seller under this Clause 8.1 shall be to correct the same at its own expense.

 

8.2

THE WARRANTIES, OBLIGATIONS AND LIABILITIES OF THE SELLER (AS DEFINED BELOW FOR THE PURPOSES OF THIS CLAUSE) AND REMEDIES OF THE BUYER SET FORTH IN THIS AIRBUS CBT LICENSE AND IN THE PATENT AND COPYRIGHT INDEMNITY SET FORTH IN CLAUSE 13 OF THIS AGREEMENT (WHICH PATENT AND COPYRIGHT INDEMNITY IS ACKNOWLEDGED TO APPLY TO THE AIRBUS CBT SYSTEM AND ANY DOCUMENTATION DELIVERED UNDER THIS LICENSE THAT BEARS THE COPYRIGHT OF THE SELLER OR ANY OF ITS AFFILIATES) ARE

 

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  EXCLUSIVE AND IN SUBSTITUTION FOR, AND THE BUYER HEREBY WAIVES, RELEASES AND RENOUNCES ALL OTHER WARRANTIES, OBLIGATIONS AND LIABILITIES OF THE SELLER AND RIGHTS, CLAIMS AND REMEDIES OF THE BUYER AGAINST THE SELLER, EXPRESS OR IMPLIED, ARISING BY LAW, CONTRACT OR OTHERWISE, WITH RESPECT TO ANY NON-CONFORMITY OR DEFECT OF ANY KIND IN THE AIRBUS CBT DELIVERED UNDER THIS AIRBUS CBT LICENSE, INCLUDING BUT NOT LIMITED TO:

 

  A. ANY WARRANTY AGAINST HIDDEN DEFECTS;

 

  B. ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS;

 

  C. ANY IMPLIED WARRANTY ARISING FROM COURSE OF PERFORMANCE, COURSE OF DEALING OR USAGE OR TRADE;

 

  D. ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY, WHETHER IN CONTRACT OR IN TORT, WHETHER OR NOT ARISING FROM THE SELLER’S NEGLIGENCE, ACTUAL OR IMPUTED; AND

 

  E. ANY OBLIGATION, LIABILITY, RIGHT, CLAIM, OR REMEDY FOR LOSS OF OR DAMAGE TO ANY AIRCRAFT, COMPONENT, EQUIPMENT, ACCESSORY, PART, SOFTWARE, DATA, AIRBUS CBT OR SERVICES DELIVERED UNDER THIS AGREEMENT, FOR LOSS OF USE, REVENUE OR PROFIT, OR FOR ANY OTHER DIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES WITH RESPECT TO ANY NONCONFORMITY OR DEFECT IN THE AIRBUS CBT SYSTEM DELIVERED UNDER THIS AIRBUS CBT LICENSE;

 

   PROVIDED THAT, IN THE EVENT THAT ANY OF THE AFORESAID PROVISIONS SHOULD FOR ANY REASON BE HELD UNLAWFUL OR OTHERWISE INEFFECTIVE, THE REMAINDER OF THIS AIRBUS CBT LICENSE SHALL REMAIN IN FULL FORCE AND EFFECT.

 

   FOR THE PURPOSES OF THIS CLAUSE 8.2, THE “SELLER” SHALL BE UNDERSTOOD TO INCLUDE THE SELLER, ANY OF ITS SUPPLIERS AND SUBCONTRACTORS, ITS AFFILIATES AND ANY OF THEIR RESPECTIVE INSURERS.

 

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17 EQUIPMENT SUPPLIER PRODUCT SUPPORT

 

17.1 Equipment Supplier Product Support Agreements

 

17.1.1 [*] Supplier Product Support Agreements from Suppliers of seller furnished equipment listed in the Specification and will transfer such support agreements to Buyer.

 

17.1.2 These agreements are based on the “World Airlines Suppliers Guide” and include Supplier commitments as contained in the “ Supplier Product Support Agreements ” which include the following provisions:

 

17.1.2.1 Technical data and manuals required to operate, maintain, service and overhaul the Supplier Parts will (a) be prepared in accordance with the provisions of the applicable ATA Specification, (b) include revision service [*], and (c) be published in the English language. The Seller shall recommend that any software userguide provided by a Supplier be supplied in the form of an appendix to the Component Maintenance Manual and be provided in compliance with the applicable ATA Specification.

 

17.1.2.2 [*] of warranties and guarantees including Suppliers’ standard warranties. In addition, Seller will ensure that landing gear Suppliers provide service life policies for selected structural landed gear elements.

 

17.1.2.3 [*] of training to ensure efficient operation, maintenance and overhaul of the Supplier Parts for the Buyer’s instructors, shop and line service personnel.

 

17.1.2.4 [*] of spares data in compliance with ATA 200/2000 Specification, initial provisioning recommendations, spare parts and logistic service including routine and expedited deliveries.

 

17.1.2.5 [*] of technical service to assist the Buyer with maintenance, overhaul, repair, operation and inspection of Supplier Parts as well as required tooling and spares provisioning.

 

17.2 Supplier Compliance

 

   The Seller shall, [*] monitor Supplier compliance with support commitments defined in the Supplier Product Support Agreements and shall take action together with the Buyer if the Seller becomes aware of a Supplier’s noncompliance with the goal of correcting Supplier’s noncompliance [*].

 

   The Seller’s obligations under this Clause 17.2 shall, with respect to all Delivered Aircraft, survive any termination of this Agreement.

 

17.3 Supplier Part Repair Stations

 

   The Seller has developed with the Suppliers a comprehensive network of repair stations in the United States of America and Canada for those Supplier Parts originating from outside these countries. As a result, most Supplier Parts are repairable in the United States and Canada. The repair stations in the network are listed in the AOG and Repair Guide.

 

   Seller will ensure that Supplier Parts that have to be forwarded to a network repair station for repair shall be sent back to the Buyer with proper tagging as required by the FAA/EASA.

 

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18 BUYER FURNISHED EQUIPMENT

 

18.1 Administration

 

18.1.1 [*] Seller shall provide for the installation of those items of equipment which are identified in the Specification as being furnished by the Buyer (“ Buyer Furnished Equipment ” or “ BFE ”), provided that they are referred to in the Airbus BFE Catalog of Approved Suppliers by Products valid at time of ordering of the concerned BFE.

 

   The Seller shall advise the Buyer reasonably in advance of the dates by which, in the planned release of engineering for the Aircraft, the Seller requires a written detailed engineering definition including the description of the dimensions and weight of BFE, the information related to its certification and information necessary for the installation and operation thereof. The Buyer shall furnish such detailed description and information by the dates so specified. Such information, dimensions and weights shall not thereafter be revised unless authorised by a Specification Change Notice.

 

   The Seller shall also furnish in due time to the Buyer reasonably in advance of the dates on which BFE are required to be delivered to Seller a schedule of dates and indication of shipping addresses for delivery of BFE and, where requested by the Seller, additional spare BFE to permit installation in the Aircraft and delivery of the Aircraft in accordance with the delivery schedule. The Seller will use reasonable efforts to minimize any requirements for spare BFE. The Buyer shall provide such equipment by such dates in a serviceable condition, in order to allow performance of any assembly, test, or acceptance process in accordance with the industrial schedule.

 

   The Buyer shall use reasonable commercial efforts to cause BFE Suppliers to provide, when requested by the Seller, at AIRBUS FRANCE S.A.S. works in TOULOUSE (FRANCE) and/or at AIRBUS DEUTSCHLAND GmbH, Division Hamburger Flugzeugbau Works in HAMBURG (FEDERAL REPUBLIC OF GERMANY), field service including support from BFE Suppliers to act in a technical advisory capacity to the Seller in the installation, calibration and possible repair of any BFE.

 

18.1.2 The Seller shall be entitled to refuse any item of BFE not selected by Buyer from the A320 Family Standard Specification & Configuration Guide in effect at the time of Buyer’s selection which Seller determines to be incompatible with the Specification, the above mentioned engineering definition or the certification requirements.

 

18.1.3 The BFE shall be imported into FRANCE or into the FEDERAL REPUBLIC OF GERMANY by the Buyer under a suspensive customs system (“Régime de l’entrepôt industriel pour fabrication coordonnée” or “Zollverschluss”) without application of any French or German tax or customs duty, and shall be Delivered Duty Unpaid (DDU) according to the Incoterms definition. At Buyer’s request, Seller will provide reasonable guidance to the Buyer regarding such customs system, so long as the same is at no out-of-pocket cost to the Seller.

 

   Shipping Addresses:

 

   AIRBUS FRANCE S.A.S.
   316 Route de Bayonne
   31300 TOULOUSE
   FRANCE

 

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   or

 

   AIRBUS DEUTSCHLAND GmbH
   Division Hamburger Flugzeugbau
   Kreetslag 10
   21129 HAMBURG
   FEDERAL REPUBLIC OF GERMANY

 

   as provided in Clause 18.1.

 

18.1.4 [*]

 

18.2 Aviation Authorities’ Requirements

It shall be Buyer’s responsibility if any BFE does not have adequate documentation to satisfy or does not otherwise satisfy, at the time of Delivery of the applicable Aircraft, the requirements of the Aviation Authority delivering the Export Certificate of Airworthiness or the requirements of the Buyer’s Aviation Authority for installation and use on the Aircraft. The Seller will promptly notify Buyer upon becoming aware that any BFE does not have such documentation or does not satisfy such Aviation Authority requirements. As part of the Fly Away Package process the Seller will confirm that the selected BFE suppliers are properly qualified by the applicable Aviation Authorities.

 

18.3 Buyer’s Obligation and Seller’s Remedies

 

18.3.1 Any delay or failure in complying with the foregoing Clause 18.2 or in providing the descriptive information or service representatives mentioned in Clause 18.1 or in furnishing the BFE in serviceable condition at the requested delivery date or in obtaining any required approval for such equipment under the above mentioned Aviation Authorities regulations may delay the performance of any act to be performed by the Seller, and cause the Final Price of the Aircraft to be adjusted in accordance with the updated delivery schedule and to include in particular the amount of the Seller’s additional costs, attributable to such delay or failure such as storage, taxes, insurance and costs of out-of sequence installation.

 

18.3.2 Further, in any such event, the Seller may:

 

  (i) select, purchase and install equipment substantially similar [*], in which event the Final Price of the affected Aircraft shall also be adjusted by the purchase price of such equipment, and the Buyer will be responsible for the reasonable costs and expenses incurred by the Seller for handling charges, transportation, insurance, packaging and if so required and not already provided for in the price of the Aircraft for adjustment and calibration; or

 

  (ii) if the BFE is delayed by more than [*] days beyond, or unapproved within [*] days of, the date specified in Clause 18.1.1, then the Seller may deliver or the Buyer may elect to have the Aircraft delivered without the installation of such equipment [*].

 

18.4 Title and Risk of Loss

 

   Title to and risk of loss of any BFE shall at all times remain with the Buyer except that risk of loss (limited to cost of replacement of said BFE and excluding in particular loss of use) shall be with the Seller for as long as such BFE shall be under the care, custody and control of the Seller.

 

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18.5 Disposition of BFE Following Termination

 

   If a termination of this Agreement pursuant to the provisions of Clause 20 occurs with respect to an Aircraft in which all or any part of the BFE has been installed prior to the date of such termination, then:

 

  (i) in the case of a termination by Seller, [*]

 

  (ii) in the case of a termination by Buyer, the provisions of Clause 11.3 shall apply.

 

18.6 Return of BFE

BFE not installed in an Aircraft will be returned to the Buyer in accordance with, and to the location specified in, the Buyer’s instructions upon or promptly after delivery of the last Aircraft to be delivered hereunder, in as good condition as when delivered by the Buyer to the Seller. Buyer will be responsible for all such transportation costs and expenses.

 

18.7 Survival Clause of 18.4 and 18.5

 

   Clauses 18.4 and 18.5 of this Agreement shall survive any termination of this Agreement.

 

18.8 SFE and BFE are defined in the Standard Specification as updated from time to time.

 

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19 INDEMNITIES AND INSURANCE

 

   The Seller and the Buyer shall each be liable for Losses (as defined below) arising from the acts or omissions of their respective directors, officers, agents or employees occurring during or incidental to such party’s exercise of its rights and performance of its obligations under this Agreement, except as provided in Clauses 19.1 and 19.2.

 

19.1 Seller’s Indemnities

 

   The Seller shall, except in the case of gross negligence or willful misconduct of the Buyer or Buyer’s directors, officers, agents and/or employees, be solely liable for and shall indemnify and hold the Buyer, its Affiliates and each of their respective directors, officers, agents, employees and insurers harmless against all losses, liabilities, claims, damages, costs and expenses, including court costs and reasonable attorneys’ fees (“ Losses ”), arising from:

 

  (a) claims for injuries to, or death of, the directors, officers, agents or employees of the Seller or its Subsidiaries, or loss of, or damage to, property of the Seller or its Subsidiaries or their respective employees when such Losses occur during or are incidental to either party’s exercise of any right or performance of any obligation under this Agreement, and

 

  (b) claims for injuries to, or death of, third parties, or loss of, or damage to, property of third parties, occurring during or incidental to the inspection provided in Clause 6 or the Technical Acceptance Flights provided in Clause 8.

 

19.2 Buyer’s Indemnities

 

   The Buyer shall, except in the case of gross negligence or willful misconduct of the Seller or Seller’s directors, officers, agents and/or employees, be solely liable for and shall indemnify and hold the Seller, its Affiliates, its subcontractors (not including any Supplier), and each of their respective directors, officers, agents, employees and insurers, harmless against all Losses arising from:

 

  (a) claims for injuries to, or death of, the Buyer’s directors, officers, agents or employees of the Buyer or its Subsidiaries, or loss of, or damage to, property of the Buyer or its Subsidiaries or their respective employees, when such Losses occur during or are incidental to either party’s exercise of any right or performance of any obligation under this Agreement, and

 

  (b) claims for injuries to, or death of, third parties, or loss of, or damage to, property of third parties, occurring during or incidental to (i) the provision of Seller Representatives Services under Clause 15.2 or (ii) the provision of Aircraft Training Services to the Buyer where the injury, death, loss or damage has been caused directly or indirectly by the Buyer.

 

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19.3 Notice and Defense of Claims

 

   If any claim is made or suit is brought against a party or entity entitled to indemnification under this Clause 19 (the “ Clause 19 Indemnitee ”) for damages for which liability has been assumed by the other party under this Clause 19 (the “ Clause 19 Indemnitor ”), the Clause 19 Indemnitee shall promptly give notice to the Clause 19 Indemnitor and the Clause 19 Indemnitor (unless otherwise requested by the Clause 19 Indemnitee) shall assume and conduct the defense, or settlement, of such claim or suit, as the Clause 19 Indemnitor shall deem prudent. Notice of the claim or suit shall be accompanied by all information pertinent to the matter as is reasonably available to the Clause 19 Indemnitee and shall be followed by such cooperation by the Clause 19 Indemnitee as the Clause 19 Indemnitor or its counsel may reasonably request, at the expense of the Clause 19 Indemnitor.

 

   If the Clause 19 Indemnitor fails or refuses to assume the defense of any claim or suit notified to it under this Clause 19, the Clause 19 Indemnitee shall have the right to proceed with the defense or settlement of the claim or suit as it deems prudent and shall have a claim against the Clause 19 Indemnitor for any judgments, settlements, costs or expenses, including reasonable attorneys’ fees. Further, in such event, the Clause 19 Indemnitor shall be deemed to have waived any objection or defense to the Clause 19 Indemnitee’s claim based on the reasonableness of any settlement.

 

19.4 Insurance

 

   To the extent of the Buyer’s undertaking set forth in Clause 19.2, the Buyer shall:

 

  (a) cause the Seller, its Affiliates, its subcontractors and each of their respective directors, officers, agents and employees to be named as additional insureds under the Buyer’s Comprehensive Aviation Legal Liability insurance policies, including War Risks and Allied Perils (such insurance to include the AVN 52E Extended Coverage Endorsement or any further Endorsement replacing AVN 52E as may be available as well as any excess coverage in respect of War and Allied Perils Third Parties Legal Liabilities Insurance), and

 

  (b) with respect to the Buyer’s Hull All Risks and Hull War Risks insurances and Allied Perils, cause the insurers of the Buyer’s hull insurance policies to waive all rights of subrogation against the Seller, its Affiliates, its subcontractors and each of their respective directors, officers, agents, employees and insurers.

 

   Any applicable deductible shall be borne by the Buyer. The Buyer shall furnish to the Seller, not less than seven (7) Business Days prior to the start of any Aircraft Training Services, certificates of insurance, in English, evidencing the limits of liability cover and period of insurance coverage in a form acceptable to the Seller from the Buyer’s insurance broker(s), certifying that such policies have been endorsed as follows:

 

  (i) under the Comprehensive Aviation Legal Liability Insurances, the Buyer’s policies are primary and non-contributory to any insurance maintained by the Seller,

 

  (ii) such insurance can only be cancelled or materially altered by the giving of not less than thirty (30) days (but seven (7) days or such lesser period as may be customarily available in respect of War Risks and Allied Perils) prior written notice thereof to the Seller, and

 

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  (iii) under any such cover, all rights of subrogation against the Seller, its Affiliates, its subcontractors and each of their respective directors, officers, agents, employees and insurers have been waived.

 

19.5 Survivability

 

   The provisions of this Clause19 will survive termination of this Agreement but only with respect to acts occurring prior to such termination.

 

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20 TERMINATION

 

20.1 Termination Events

Each of the following shall constitute a “ Termination Event ”:

 

  (1) The Buyer or any of its Affiliates commences in any jurisdiction any case, proceeding or other action with respect to the Buyer or any of its Affiliates or their properties relating to bankruptcy, insolvency, reorganization, winding-up, liquidation, dissolution or other relief from, or with respect to, or readjustment of, its debts or obligations.

 

  (2) An action is commenced in any jurisdiction seeking the appointment of a receiver, trustee, custodian or other similar official for the Buyer or any of its Affiliates or for all or any substantial part of their respective assets, and such action remains unstayed, undismissed or undischarged for [*] days, or the Buyer or any of its Affiliates makes a general assignment for the benefit of its creditors.

 

  (3) An action is commenced in any jurisdiction against the Buyer or any of its Affiliates seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of their respective assets, and such action remains unstayed, undismissed or undischarged for [*] days.

 

  (4) The Buyer or any of its Affiliates becomes the object, in any jurisdiction, of a case, proceeding or action similar or analogous to any of the events mentioned in Clause 21.1. (1), (2) or (3).

 

  (5) The Buyer or any of its Affiliates is generally not able, or is expected to be unable to, or shall admits in writing its inability to, pay its debts as they become due.

 

  (6) The Buyer or any of its Affiliates commences negotiations with significant creditors, existing or potential, either with the intention of restructuring all or a substantial part of all of its outstanding obligations or in preparation for a bankruptcy filing under the U.S. Bankruptcy Code.

 

  (7) The Buyer or any of its Affiliates fails to make payment of (i) any payment required to be made under this Agreement or any other material agreement between the Buyer or any of its Affiliates and the Seller or any of its Affiliates when such payment is due, (ii) any Predelivery Payment required to be made under this Agreement when such payment is due, or (iii) payment of all or part of the Final Contract Price of any Aircraft required to be made under this Agreement.

 

  (8) The Buyer repudiates, cancels or terminates this Agreement in whole or in part.

 

  (9) The Buyer defaults in its obligation to take delivery of an Aircraft as provided in Clause 9.2.

 

  (10) The Buyer or any of its Affiliates defaults in the observance or performance of any other covenant, undertaking or obligation contained in this Agreement or any other material agreement between the Buyer or its Affiliates, on the one hand, and the Seller or its Affiliates on the other hand, provided that, if such breach or default is capable of being cured and such breach or default is not cured within any specified cure period, [*].

 

  (11) Any other event that the parties shall agree in writing constitutes Termination Event hereunder.

 

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20.2 If a Termination Event occurs, the Buyer shall be in material breach of this Agreement, and the Seller shall have the right to resort to any remedy under applicable law, and may, without limitation, by written notice to the Buyer, immediately:

 

  (1) Elect to: (i) suspend its performance under this Agreement with respect to any or all Aircraft, (ii) reschedule the Scheduled Delivery Month of any or all Aircraft remaining to be delivered under this Agreement, (iii) reschedule the date for performance under this Agreement with respect to any or all equipment, services, data and other items, and/or (iv) cancel or terminate this Agreement (a “Termination”) with respect to any or all Aircraft, and/or equipment, services, data and/or other items related thereto;

 

  (2) claim and receive payment from the Buyer of a sum equal to the Seller’s actual damages resulting from Seller’s exercise of the remedies set forth in the foregoing 20.2 (1) (i), (ii) or (iii) and, in the case of a Termination under the foregoing 20.2 (iv) only, the Seller shall in lieu of actual damage be entitled to receive payment from the Buyer, as liquidated damages and not as a penalty[*].

 

  (3) Liquidated damages shall be payable by Buyer promptly, and in any event within [*] days of the date of written notice and demand therefor from the Seller, such demand to set forth in reasonable detail the calculation of such liquidated damages and to identify the Termination Event upon which the Seller is relying. The parties agree that the remedy of liquidated damages is not to be denied to the Seller due to the inability of the Seller to deliver a notice and demand for payment thereof due to the operation of law following a bankruptcy or other Termination Event under Clause 20.1(1) thru (4). The parties further agree that in circumstances where a Termination Event has occurred and the Seller does not cancel this Agreement as to any or all Aircraft, but instead seeks to recover its actual damages resulting therefrom, the amount of actual damages payable by the Buyer shall not exceed the amount of liquidated damages that could have been claimed by Seller pursuant to Clause 20.2 (2) had the Seller elected to claim, as a result of such Termination Event, liquidated damages pursuant to Clause 20.2 (2).

 

  (4) The parties to this Agreement are commercially sophisticated parties represented by competent counsel. The parties expressly agree and declare that damages for material breach of this Agreement by the Buyer resulting in a Termination of this Agreement as to any or all Aircraft have been liquidated at amounts which are reasonable in light of the anticipated or actual harm caused by the Buyer’s breach, the difficulties of proof of loss and the nonfeasibility of otherwise obtaining an adequate remedy. It is understood and agreed by the parties that the amount of liquidated damages set forth herein is the total amount of monetary damages, no more and no less, to which the Seller shall be entitled for and with respect to any Aircraft as recovery for material breach of this Agreement by the Buyer resulting in a Termination by the Seller of this Agreement as to such Aircraft.

 

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20.3 For purposes of this Clause 20, the terms “Affected Aircraft”, “Applicable Date” and [*] are defined as follows:

 

  (i) “Affected Aircraft”: any or all Aircraft with respect to which the Seller has cancelled or terminated this Agreement pursuant to Clause 20. 2 (1) (iv),

 

  (ii) “Applicable Date”: for any Affected Aircraft the date of the Termination Event, which the Seller specifies in its notice and demand for payment of liquidated damages delivered under Clause 20.2 (3).

 

  (iii) [*]

 

20.4. [*] becoming aware of the occurrence of a Termination Event by the Buyer, the Buyer shall notify the Seller of such occurrence in writing, provided, that any failure by the Buyer to notify the Seller shall not prejudice the Seller’s rights or remedies hereunder.

 

20.5 If at any time prior to Scheduled Delivery Date of an Aircraft, the Seller has reasonable grounds for insecurity as to the ability of the Buyer to perform its obligation to take Delivery of such Aircraft, then the Seller shall send the Buyer a written demand for adequate assurance of performance. If adequate assurance acceptable to the Seller is not received within [*] days following the date of such written demand, then the Seller shall have the right to either (a) exercise the remedies provided under Section 2-609 of the Uniform Commercial Code or (b) exercise any of its remedies under Clause 20.2.

 

20.6 Information Covenants

The Buyer hereby covenants and agrees that, from the date of this Agreement until no further Aircraft are to be delivered hereunder, the Buyer shall furnish or cause to be furnished to the Seller the following:

 

  (a) Annual Financial Statements. As soon as available and in any event no later than the date that the Buyer furnishes such annual statements to the Securities and Exchange Commission or successor thereto (the “SEC”) (i) a copy of the SEC Form 10-K filed by the Buyer with the SEC for such fiscal year, or, if no such Form 10-K was filed by the Buyer for such a fiscal year, the consolidated balance sheet of the Buyer and its Subsidiaries, as defined hereunder, as at the end of such fiscal year and the related consolidated statements of operations, of common stockholders’ equity (deficit) (in the case of the Buyer and its Subsidiaries) and of cash flows for such fiscal year, setting forth comparative consolidated figures as of the end of and for the preceding fiscal year, and examined by any firm of independent public accountants of recognized standing selected by the Buyer and reasonably acceptable to the Seller, whose opinion shall not be qualified as to the scope of audit or as to the status of the Buyer as a going concern, and (ii) a certificate of such accounting firm stating that its audit of the business of the Buyer was conducted in accordance with generally accepted auditing standards.

 

  (b)

Quarterly Financial Statements . As soon as available and in any event no later than the date that the Buyer furnishes such quarterly statements to the Securities and Exchange Commission or successor thereto, a copy of the SEC Form 10-Q filed by the Buyer with the SEC for such quarterly period, or, if no such Form 10-Q was filed by the Buyer with respect to any such quarterly period, the consolidated balance sheet of the Buyer and its Subsidiaries, as at the end of such quarterly period and the related

 

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  consolidated statements of operations for such quarterly period and for the elapsed portion of the fiscal year ended with the last day of such quarterly period and in each case setting forth comparative consolidated figures as of the end of and for the related periods in the prior fiscal year, all of which shall be certified by an Authorized Officer of the Buyer, subject to changes resulting from audit and normal year-end audit adjustments.

 

  (c) Debt Rescheduling. (i) Promptly upon the Buyer commencing negotiations with one or more of its significant creditors with a view to general readjustment or rescheduling of all or any material part of its indebtedness under circumstances in which a reasonable business person, in the exercise of prudent business judgment, would conclude that the Buyer would otherwise not be able to pay such indebtedness as it falls due, notice of commencement of such negotiations, and (ii) thereafter timely advice of the progress of such negotiations until such negotiations are terminated or completed.

 

  (d) Acceleration of other indebtedness . Immediately upon knowledge by the Buyer that the holder of any bond, debenture, promissory note or any similar evidence of indebtedness of the Buyer or Affiliates thereof (“Other Indebtedness”) has demanded payment, given notice or exercised its right to a remedy having the effect of acceleration with respect to a claimed event of default under any Other Indebtedness, where the impact of the acceleration is likely to have a material adverse effect on the Buyer’s ability to perform its obligations under or in connection with the transactions contemplated by this Agreement, notice of the demand made, notice given or action taken by such holder and the nature and status of the claimed event of default and what the action the Buyer is taking with respect thereto.

 

  (e) Other Information . Promptly upon transmission thereof, copies of any filings and registrations with, and reports to, the SEC by the Buyer or any of its Affiliates, and, with reasonable promptness, such other information or documents (financial or otherwise) as the Seller may reasonably request from time to time.

For the purposes of this Clause 20, (x) an “ Authorized Officer ” of the Buyer shall mean the Chief Executive Officer, the Chief Financial Officer or any Vice President and above who reports directly or indirectly to the Chief Financial Officer and (y) “ Subsidiaries ” shall mean, as of any date of determination, those companies owned by the Buyer whose financial results the Buyer is required to include in its statements of consolidated operations and consolidated balance sheets.

 

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21 ASSIGNMENTS AND TRANSFERS

 

21.1 Assignments

Except as hereinafter provided [*], neither party may sell, assign or transfer its rights or obligations (in whole or in part) under this Agreement to any person without the prior written consent of the other party.

 

21.2 Assignments on Sale, Merger or Consolidation

 

21.2.1 Assignment by the Buyer

The Buyer will be entitled to assign its rights under this Agreement at any time to an entity that results from any merger, consolidation, or acquisition of the Buyer or acquires substantially all the assets of the Buyer if the following conditions are met:

 

  (i) the surviving or acquiring entity has executed an assumption agreement, in form and substance reasonably acceptable to the Seller, agreeing to assume all of the Buyer’s obligations and comply with all applicable terms and conditions under this Agreement;

 

  (ii) at the time and immediately following the consummation of the merger, consolidation or sale, there exists with respect to the surviving or acquiring entity no basis for a Termination Event or a termination event;

 

  (iii) immediately following the consummation of such sale, merger or consolidation, the surviving or acquiring entity holds an Operating Certificate or Operations Specifications issued by the FAA;

 

  (iv) the surviving entity intends to operate the Buyer’s assets for the purpose of providing passenger air transport; and

 

  (v) following the sale, merger or consolidation, the surviving or acquiring entity is in a financial condition at least equal to that of the Buyer immediately prior to the closing of the sale, merger or consolidation.

 

21.2.2    Assignment by the Seller

The Seller will be entitled to assign its rights under this Agreement at any time to an entity that results from any merger, consolidation, or acquisition of the Seller or acquires substantially all the assets of the Seller provided the following conditions are met:

 

  (i) the surviving or acquiring entity has executed an assumption agreement, in form and substance reasonably acceptable to the Buyer, agreeing to assume all of the Seller’s obligations and comply with all applicable terms and conditions under this Agreement;

 

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  (ii) at the time, and immediately following the consummation, of the merger, consolidation or sale, no event of default exists or will have occurred and be continuing;

 

  (iii) [*]

 

  (iv) following the sale, merger or consolidation, the surviving or acquiring entity is in a financial condition at least equal to that of the Seller immediately prior to the closing of the sale, merger or consolidation.

 

21.3    Assignments to Subsidiaries

 

21.3.1 The Seller may assign its rights and obligations under this agreement to a wholly owned Subsidiary of the Seller, provided, that

 

  (v) such assignment will be effective in accordance with its terms as to each such Aircraft or other thing to be delivered under this Agreement, and

 

  (vi) if the Seller assigns its rights and obligations under this Agreement (or assigns title) to such Subsidiary,

 

  (a) such Subsidiary will perform such obligations and sell and deliver the Aircraft or other thing to the Buyer pursuant and subject to all the terms and conditions of this Agreement and

 

  (b) the Seller will remain fully liable to Buyer to perform all such obligations under this Agreement, as if the assignment had not been effected and will remain fully responsible to the Buyer in accordance with the terms of this Agreement for all obligations and liabilities of the Seller with respect to the Aircraft or other things to be delivered hereunder.

 

21.3.2 [*]

 

21.4 [*]

 

21.5 Post-Delivery Sale or Lease

The Seller agrees that, upon the post-Delivery sale or lease of an Aircraft (including a sale or lease for financing purposes) all of the Buyer’s rights and obligations remaining at the time of such sale or lease under Clauses 12, 13, and 17 of this Agreement and this Clause 21.5 with respect to the affected Aircraft will inure to the benefit of the transferee upon delivery to the Seller of notice of such sale or lease and written agreement by the transferee, in form and substance satisfactory to the Seller, to be bound by the terms thereof.

 

21.6 Designations by Seller

The Seller may at any time by notice to the Buyer designate facilities or personnel of ANACS or any Affiliate of the Seller at which or by whom the services to be performed under this Agreement will be performed. Notwithstanding such designation, the Seller will remain ultimately responsible for fulfillment of all obligations undertaken by the Seller in this Agreement.

 

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21.7 Transfer of Rights and Obligations upon Reorganization

In the event that the Seller is subject to a corporate restructuring having as its object the transfer of, or succession by operation of law in, all or a substantial part of its assets and liabilities, rights and obligations, including those existing under this Agreement, to a person (the “Successor”) that is an Affiliate of the Seller at the time of that restructuring, for the purpose of the Successor’s carrying on the business carried on by the Seller at the time of the restructuring, such restructuring will be completed without consent of the Buyer following notification by the Seller to the Buyer in writing. The Buyer recognizes that succession of the Successor to the Agreement by operation of law, which is valid under the law pursuant to which that succession occurs, will be binding upon the Buyer. The Seller will ensure that the Successor agrees in writing in a form enforceable by the Buyer to be bound by and comply with all applicable terms, conditions and limitations of this Agreement to the same extent as if the successor had been the Seller originally under this Agreement.

 

21.8 No Increase in Liability

No action taken under this Clause 21 by either party or by an assignee of either party to whom rights under this Agreement inure pursuant to this Clause 21 will subject the other party to any liability to which it would not otherwise be subject under this Agreement, or modify in any way the other party’s contract rights under this Agreement. Neither party will be obliged to recognize any assignment or transfer for which its consent is required but to which it has not consented. Any attempted assignment in violation of the provisions of this agreement will be null and void.

 

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22 MISCELLANEOUS PROVISIONS

 

22.1 Data Retrieval

The Buyer shall provide the Seller, as the Seller may reasonably request, with all the necessary data as customarily compiled by the Buyer and pertaining to the operation of the Aircraft to assist the Seller in making efficient and coordinated survey of all reliability, maintainability, operational and cost data with a view to improving the safety, availability and operational costs of the Aircraft.

 

22.2 Notices

All notices and requests required or authorized hereunder shall be given in writing either by personal delivery to an authorized representative of the party to whom the same is given or by registered mail (return receipt requested), express mail (tracking receipt requested) or by facsimile, to be confirmed by subsequent registered mail, and the date upon which any such notice or request is so personally delivered or if such notice or request is given by registered mail, the date upon which it is received by the addressee or, if given by facsimile, the date upon which it is sent with a correct confirmation printout, provided that if such date of receipt is not a Business Day notice shall be deemed to have been received on the first following Business Day, shall be deemed to be the effective date of such notice or request.

Seller’s address for notices is:

AIRBUS

Attn. To V. P. Contracts

1 Rond-Point Maurice Bellonte

31707 Blagnac Cedex

France

Buyer’s address for notices is:

Aerovías del Continente Americano S.A. – Avianca

Attn. To Secretary General

Avenida El Dorado No. 92-30 Piso 5to – Torre 1

Bogotá – Colombia

or such other address or such other person as the party receiving the notice or request may reasonably designate in writing from time to time.

 

22.3 Waiver

The failure of either party to enforce at any time any of the provisions of this Agreement, or to exercise any right herein provided, or to require at any time performance by the other party of any of the provisions hereof, shall in no way be construed to be a present or future waiver of such provisions nor in any way to affect the validity of this Agreement or any part thereof or the right of the other party thereafter to enforce each and every such provision. The express waiver (whether made one (1) or several times) by either party of any provision, condition or requirement of this Agreement shall not constitute a waiver of any future obligation to comply with such provision, condition or requirement except to the extent provided in such express waiver.

 

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22.4 INTERPRETATION AND LAW

 

   THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND THE PERFORMANCE THEREOF SHALL BE DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ITS CONFLICTS OF LAWS PROVISIONS THAT WOULD RESULT IN THE APPLICATION OF THE LAW OF ANY OTHER JURISDICTION.

 

   Each of the Seller and the Buyer (i) hereby irrevocably submits itself to the nonexclusive jurisdiction of the courts of the state of New York, New York County, and of the United States District Court for the Southern District of New York, located in the borough of Manhattan for the purposes of any suit, action or other proceeding arising out of this Agreement, the subject matter hereof or any of the transactions contemplated hereby brought by any party or parties hereto, and (ii) hereby waives, and agrees not to assert, by way of motion, as a defense or otherwise, in any such suit, action or proceeding, to the extent permitted by applicable law, any defense based on sovereign or other immunity or that the suit, action or proceeding which is referred to in clause (i) above is brought in an inconvenient forum, that the venue of such suit, action or proceeding is improper, or that this Agreement or the subject matter hereof or any of the transactions contemplated hereby may not be enforced in or by these courts.

 

22.4.1 The appointment in Clause 22.4.1 made for the purpose of effecting the service of process shall not affect any assertion of diversity by either party hereto initiating a proceeding in the New York Federal Courts or seeking transfer to the New York Federal Courts on the basis of diversity.

 

22.4.2 Service of process in any suit, action or proceeding in respect of any matter as to which the Seller or the Buyer has submitted to jurisdiction under Clause 22.4 may be made (i) on the Seller by (a) delivery of the same personally or by dispatching the same via Federal Express, UPS, or similar international air courier service prepaid to: CT Corporation, 111 Eighth Avenue, New York, New York 10011, as agent for the Seller, it being agreed that service upon CT Corporation shall constitute valid service upon the Seller or (b) any other method authorized by the laws of the State of New York, and (ii) on the Buyer by (a) delivery of the same personally or by dispatching the same by Federal Express, UPS, or similar international air courier service prepaid, return receipt requested to: CT Corporation, 111 Eighth Avenue, New York, New York 10011, as agent for the Buyer, it being agreed that service upon CT Corporation shall constitute valid service upon the Buyer, with a copy to Howard Turner, Smith, Gambrell & Russell, LLP, Suite 3100, Promenade II, 1230 Peachtree St., NE, Atlanta, GA 30309-3592, or (b) any other method authorized by the laws of the State of New York; provided in each case that failure to deliver or mail such copy shall not affect the validity or effectiveness of the service of process.

 

22.5 Waiver of Jury Trial

 

   EACH OF THE PARTIES HERETO WAIVES ITS RIGHT TO TRIAL BY JURY IN ANY LITIGATION ARISING OUT OF OR RELATING TO THIS AGREEMENT AND FOR ANY COUNTERCLAIM OR CROSS-CLAIM THEREIN.

 

22.6 No Representations outside of this Agreement

 

   The parties declare that, prior to the execution of this Agreement, they, with the advice of their respective counsel, apprised themselves of sufficient relevant data in order that they might intelligently exercise their own judgments in deciding whether to execute this Agreement and in deciding on the contents of this Agreement. Each party further declares that its decision to execute this Agreement is not predicated on or influenced by any declarations or representations by any other person, party, or any predecessors in interest, successors, assigns, officers, directors, employees, agents or attorneys of any said person or party, except as set forth in this Agreement. This Agreement resulted from negotiation involving counsel for all of the parties hereto and no term herein shall be construed or interpreted against any party under the contra proferentum or any related doctrine.

 

22.7 International Supply Contract

 

   The Buyer and the Seller recognise that this Agreement is an international supply contract which has been the subject of discussion and negotiation, that all its terms and conditions are fully understood by the parties, and that the Specification and price of the Aircraft and the other mutual agreements of the parties set forth herein were arrived at in consideration of, inter alia, all the provisions hereof specifically including all waivers, releases and renunciations by the Buyer set out herein.

 

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   THE BUYER AND THE SELLER HEREBY ALSO AGREE THAT THE UNITED NATIONS CONVENTION ON CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS SHALL NOT APPLY TO THIS TRANSACTION.

 

22.8 Severability

In the event that any provision of this Agreement should for any reason be held ineffective, the remainder of this Agreement shall remain in full force and effect. To the extent permitted by applicable law, each party hereto hereby waives any provision of law which renders any provision of this Agreement prohibited or unenforceable in any respect.

 

22.9 Alterations to Contract

This Agreement contains the entire agreement between the parties with respect to the subject matter hereof and supersedes any previous understandings, commitments or representations whatsoever, whether oral or written, in respect thereto. This Agreement shall not be varied except by an instrument in writing of date even herewith or subsequent hereto executed by both parties or by their duly authorized representatives.

 

22.10 Language

All correspondence, documents and any other written matters in connection with this Agreement shall be in English.

 

22.11 Counterparts

This Agreement has been executed in two (2) original copies.

Notwithstanding the above, this Agreement may be executed by the parties in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute one and the same Agreement.

 

22.12 Confidentiality

Subject to any legal or governmental requirements of disclosure, the parties (which for this purpose shall include their employees, consultants, advisors and legal counsel) shall maintain the terms and conditions of this Agreement and any reports, information or other data furnished hereunder strictly confidential, including but not limited to, the Aircraft pricing and other concessions and any data furnished under Clause 22.1 (the “ Confidential Information ”). Without limiting the generality of the foregoing, the Buyer and Seller will each use its best efforts to limit the disclosure of the contents of this Agreement to the extent legally permissible in any filing required to be made with any governmental agency and shall make such applications as shall be necessary to protect the confidentiality of the Confidential Information. With respect to any public disclosure or filing by the Buyer (including any filing by Buyer with the US Securities and Exchange Commission or any similar body in connection with registration and/or offering of the Buyer’s securities), the disclosing party agrees to submit to the other party a copy of the proposed document to be filed or disclosed and shall give the Seller a reasonable period of time (at least five (5) Business Days) in which to review and comment on said document and any redactions thereof. The Buyer and the Seller shall consult with each other prior to the making of any public disclosure or filing of this Agreement permitted hereunder or the terms and conditions hereof as well as any press release concerning the whole or any part of the contents and/or subject matter hereof or of any future amendment hereof.

The provisions of this Clause 22.12 shall survive any termination of this Agreement.

 

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IN WITNESS WHEREOF this Agreement was entered into the day and year first above written.

 

Aerovias del Continente     AIRBUS S.A.S.
Americano S.A. Avianca    
By:   /s/ Juan Carlos Sarabia     By:   /s/ Christophe Mourey
Its:   Attorney In Fact     Its:   Senior Vice President Contacts
Date:         Date:    

 

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EXHIBIT A

SPECIFICATION

 

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A319 CONFIGURATION SPECIFICATION

*[Twelve pages have been omitted in accordance with a request for confidential treatment]

 

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EXHIBIT B

FORM OF

SPECIFICATION CHANGE NOTICE

 

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SPECIFICATION CHANGE

NOTICE

 

(SCN)

  

For

 

SCN Number

Issue

Dated

Page

Title:

Description

Remarks / References

Specification changed by this SCN

This SCN requires prior or concurrent acceptance of the following SCN (s) :

Price per aircraft

US DOLLARS :

AT DELIVERY CONDITIONS :

 

This change will be effective on

                   AIRCRAFT N°    and subsequent.

Provided approval is received by

     

Buyer approval

   Seller approval   

By :

   By :   


 

 

 

 

SPECIFICATION CHANGE

NOTICE

 

(SCN)

  

For

 

SCN Number

Issue

Dated

Page

Specification repercussion :

After contractual agreement with respect to weight, performance, delivery, etc, the indicated part of the specification wording will read as follows :


EXHIBIT C

PART 1 AIRFRAME PRICE REVISION FORMULA

*[Three pages have been omitted in accordance with a request for confidential treatment.]

 

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PART 2 PROPULSION SYSTEMS PRICE REVISION FORMULA CFM INTERNATIONAL

*[Four pages have been omitted in accordance with a request for confidential treatment.]

 

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PART 2 PROPULSION SYSTEMS PRICE REVISION FORMULA INTERNATIONAL AERO ENGINES

*[Four pages have been omitted in accordance with a request for confidential treatment.]

 

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EXHIBIT D

CERTIFICATE OF ACCEPTANCE

In accordance with the terms of the A[     ] purchase agreement dated [             ] and made between Aerovias del Continente Americano S.A. Avianca (“ Avianca ”), and AIRBUS S.A.S., (together with the Exhibits and Appendices attached thereto and any letter agreement entered into in connection therewith, collectively the “ Purchase Agreement ”), the acceptance tests relating to the A[     ] aircraft, Manufacturer’s Serial Number: [             ], Registration Marks: [             ] (the “ Aircraft ”), have taken place at Blagnac or Hamburg Works on the [ ] day of [             ] at              a.m./p.m. local time.

In view of said tests having been carried out with satisfactory results, Avianca hereby approves the Aircraft as being in conformity with the provisions of the Purchase Agreement and accepts the Aircraft at the place set forth herein above.

Said acceptance does not impair the rights that may be derived from the warranties relating to the Aircraft set forth in the Purchase Agreement.

Any right at law or otherwise to revoke this acceptance of the Aircraft is hereby waived.

This Certificate of Acceptance is delivered and the Aircraft accepted on this [     ] day of [       ] at             a.m./p.m local time.

Aerovias del Continente

Americano S.A. Avianca

By:

Its:

 

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EXHIBIT E

BILL OF SALE

Know all men by these presents that Airbus S.A.S. (the “ Seller ”), “société par actions simplifiée” existing under French law and whose address is 1 rond-point Maurice Bellonte, 31707 Blagnac Cedex, FRANCE, is, this      day of              ,              , the owner of the full legal and beneficial title to the following airframe (the “ Airframe ”), the engines as specified (the “ Engines ”) and all appliances, components, parts, instruments, accessories, furnishings, modules and other equipment of any nature, excluding Buyer Furnished Equipment, incorporated therein, installed thereon or attached thereto on the date hereof (the “ Parts ”):

 

AIRFRAME:    ENGINES:
AIRBUS Model A3[    ]    [EM’s name] Model [            ]
MANUFACTURER’S SERIAL NUMBER : [            ]    ENGINE SERIAL NUMBERS :
   LH: [            ]
   RH: [            ]

REGISTRATION MARKS : [            ]

The Airframe, Engines and Parts are hereafter together referred to as the Aircraft (the “ Aircraft ”).

The Seller confirms that it did this [    ] day of [            ] sell, transfer and deliver all of its above described rights, title and interest to the Aircraft to the following company and to its successors and assigns forever, said Aircraft to be the property thereof:

[Name of Buyer]

The Seller hereby warrants to the Buyer and its successors and assigns that Seller has on the date hereof good and lawful right to sell, deliver and transfer title to the Aircraft to the Buyer and that there is hereby conveyed to the Buyer good, legal and valid title to the Aircraft, free and clear of all liens, claims, charges, encumbrances and rights of others and that the Seller will warrant and defend such title forever against all claims and demands whatsoever.

This Bill of Sale shall be governed by and construed in accordance with the laws of the state of New York, U.S.A.

IN WITNESS WHEREOF, the undersigned has caused this instrument to be executed by its duly authorized representative this              day of [                ]

AIRBUS S.A.S.

By:

Title:

Signature:

 

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   Exhibit C – Page 1/1   


EXHIBIT F

EXHIBIT F

SERVICE LIFE POLICY

ITEMS OF PRIMARY STRUCTURE

 

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   Exhibit F – Page 1/4   


SELLER SERVICE LIFE POLICY

 

1 The Items covered by the Service Life Policy pursuant to Clause 12.2 are those Seller Items of primary and auxiliary structure described hereunder.

*[Three pages have been ommitted in accordance with a request for confidential treatment.]

 

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   Exhibit F – Page 2/4   


EXHIBIT G

EXHIBIT G

TECHNICAL DATA INDEX

 

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   Exhibit G – Page 1/15   


TECHNICAL DATA INDEX

Where applicable data will be established in general compliance with ATA Specification 2200 (iSpec2200), Information Standards for Aviation Maintenance (Revision 2005).

The following index identifies the Technical Data provided in support of the Aircraft.

The explanation of the table is as follows:

 

NOMENCLATURE    Self-explanatory.
ABBREVIATED DESIGNATION (Abbr)    Self-explanatory.

AVAILABILITY (Avail)

Technical Data can be made available :

 

 

ON-LINE (ON) through the relevant service on Airbus|World,

and / or

 

 

OFF-LINE (OFF) through the most suitable means applicable to the size of the concerned document (e.g CD or DVD).

FORMAT (Form)

Following Technical Data formats may be used:

 

 

SGML—Standard Generalized Mark-up Language, which allows further data processing by the Buyer.

 

 

XML—Evolution of the SGML format to cope with WEB technology requirements.

 

 

PDF (PDF)—Portable Document Format allowing data consultation.

 

 

Advanced Consultation Tool— refers to Technical Data Consultation application that offers advanced consultation & navigation functionality compared to PDF. Both browser software & Technical Data are packaged together.

 

 

P1 / P2—refers to manuals printed on one side or both sides of the sheet.

 

 

CD-P— refers to CD-Rom including Portable Document Format (PDF) Data.

 

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TYPE    C            CUSTOMIZED. Refers to manuals that are applicable to an individual Airbus customer/operator fleet or aircraft.
   G    GENERIC. Refers to manuals that are applicable for all Airbus aircraft types/models/series.
   E    ENVELOPE. Refers to manuals that are applicable to a whole group of Airbus customers for a specific aircraft type/model/series.

 

QUANTITY (Qty)    Self-explanatory for physical media.
DELIVERY (Deliv)    Delivery refers to scheduled delivery dates and is expressed in either the number of corresponding days prior to first Aircraft delivery, or nil (0) corresponding to the Delivery Date of each Aircraft.
   The number of days indicated shall be rounded up to the next regular revision release date.

 

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   Exhibit G – Page 3/15   


*[Thirteen pages have been omitted in accordance with a request for confidential treatment.]

 

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   Exhibit G – Page 4/15   


EXHIBIT H

EXHIBIT “ H ”

MATERIAL

SUPPLY AND SERVICES

 

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   Exhibit H – Page 1   


1. GENERAL

 

1.1 Scope of Material Support

 

1.1.1 This Exhibit “H” defines the terms and conditions for the support services to be offered by the Seller to the Buyer in the following areas:

 

   

Initial provisioning data and Material,

 

   

Replenishment of Material,

 

   

Lease of certain Seller Parts,

 

   

Loan of Ground Support Equipment and Specific (To Type) Tools,

 

   

Repair of certain Seller Parts,

 

1.1.2 References made to Articles shall refer to articles of this Exhibit “H” unless otherwise specified.

 

1.1.3 Notwithstanding the definition set forth in Clause 12.3.1 of the Agreement and for the exclusive purpose of this Exhibit “H”, the term “ Supplier ” shall mean any supplier providing any of the Material listed in Article 1.2.1 hereunder (each a “ Supplier Part ”). Subject to the preceding sentence, capitalized terms used and not defined herein have the meanings given in the Agreement.

 

1.2 Material Categories

 

1.2.1 Material covered by this Exhibit “H” is classified into the following categories (hereinafter individually and collectively referred to as “ Material ”):

 

  (i) Seller Parts (Seller’s proprietary Material bearing a part number of the Seller or Material for which the Seller has the exclusive manufacturing rights);

 

  (ii) Supplier Parts classified as Repairable Line Maintenance Parts (in accordance with SPEC 2000);

 

  (iii) Supplier Parts classified as Expendable Line Maintenance Parts (in accordance with SPEC 2000);

 

  (iv) Ground Support Equipment and Specific (To Type) Tools;

 

  (v) Hardware and standard material, when provided as a package;

 

  (vi) Consumables and raw material, when provided as a package.

 

   All of the parts, materials, hardware, consumables and other items recommended by the Seller for purchase by the Buyer as part of the Initial Provisioning shall fall within one of the categories under the definition of Material.

 

   It is expressly understood that Seller Parts shall not include parts manufactured pursuant to a parts manufacturing authority.

 

   Material covered under Articles 1.2.1 (v) and 1.2.1 (vi) is available only when supplied as a package as part of the initial provisioning of Material.

 

1.2.2 Propulsion Systems, engine exchange kits, their accessories and parts, including associated parts that are not Seller Parts, are not covered under this Exhibit “H” and shall be subject to direct agreements between the Buyer and the relevant Propulsion System Manufacturer and/or, if any such item is provided by a Supplier and not the Propulsion System Manufacturer, the support shall be as described in Clause 17.

 

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   Exhibit H – Page 2   


1.3 Term

 

   [*]

 

   The Seller shall use its reasonable efforts to obtain buy back and other similar type of service to that being provided under this Exhibit from all Suppliers of parts which are originally installed on any Aircraft at Delivery.

 

1.4 Airbus Spares Support and Services

 

1.4.1 The Seller has established its spares headquarters in Hamburg, Germany (the “ Airbus Spares Center ”) as well as a US store known as the ANACS Spares Center located in the United States of America (“ ANACS Spares Center ”) and shall, during the Term, maintain, or have maintained on its behalf, a central store of Seller Parts.

 

1.4.2 The Airbus Spares Center and the ANACS Spares Center are operated twenty-four (24) hours per day, seven (7) days per week.

 

1.4.3 For efficient and rapid deliveries, the Seller and its Affiliates operate a global network of regional satellite stores (“ Regional Satellite Stores ”), a list of which will be communicated to the Buyer.

 

   The Seller reserves the right to effect deliveries from the Airbus Spares Center, from the ANACS Spares Center, from any of the Regional Satellite Stores or from any other production or Suppliers’ facilities. Seller will endeavour to deliver from the location that will have the shortest delivery time.

 

1.4.4 Purchase by the Buyer of spare parts from the Seller’s designee, Airbus North America Customer Services, shall be subject to the signature of a Materials Agreement between the Buyer and ANACS, a copy of which is attached hereto as Attachment 1 to this Exhibit H.

 

1.5 Customer Order Desk

 

   The Seller has set up a dedicated material support team, the main functions of which are:

 

   

Management of order entries for all priorities, including AOG;

 

   

Management of order changes and cancellations;

 

   

Administration of Buyer’s routing and shipping instructions;

 

   

Administration of Material returns;

 

   

Clarification of delivery discrepancies;

 

   

Issuance of credit and debit Notes.

 

   The Buyer may communicate with the Customer Order Desk by means of telephone, fax, SITA message, SPEC 2000, e-mail or via the Internet.

 

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   Exhibit H – Page 3   


1.6 Customer Spares Support Representative

 

   The Seller shall assign one (1) customer spares support representative based at the Airbus Spares Center or ANACS Spares Center, as applicable, to assist with, and coordinate, spares support matters between the Seller and the Buyer after signature of the Agreement for as long as one Aircraft covered under the Agreement is operated by the Buyer.

 

1.7 Agreements of the Buyer

 

1.7.1 The Buyer agrees to purchase from the Seller, the Seller’s designee ANACS Spares Center or it’s the Seller’s licensee(s) (“ Licensees ”) the Seller Parts required for the Buyer’s own needs during the Term, provided that the provisions of this Article 1.7 shall not in any way prevent the Buyer from resorting to the Seller Parts stocks of other operators of the same aircraft type or model or from purchasing Seller Parts from said operators or from distributors or from other available sources, provided said Seller Parts have been originally designed by the Seller and manufactured by the Seller or its Licensee(s).

 

   Notwithstanding anything to the contrary in this Exhibit H, (i) Buyer shall not be precluded from purchasing any part, material, consumable, hardware or other item manufactured by any manufacturer not licensed by Seller, (ii) Seller shall not have any liability in respect of any such part, material, consumable, hardware or other item and (iii) the limitation on liability and indemnity set forth in Article 1.7.3 shall apply thereto to the same extent as if Buyer had manufactured the same.

 

1.7.2 The Buyer may manufacture, or have manufactured, for its own use and without paying any license fee to the Seller, parts equivalent to Seller Parts only:

 

1.7.2.1 after expiration of the Term, if at such time the Seller Parts are out of stock,

 

1.7.2.2 at any time, to the extent that Seller Parts are needed to perform aircraft on ground (“ AOG ”) repairs upon any Aircraft and are not available from the Seller, its Licensees or other approved sources within a lead time shorter than or equal to the time in which the Buyer can manufacture or have manufactured such Seller Parts, and provided the Buyer shall not sell such Seller Parts,

 

1.7.2.3 in the event that the Seller fails to fulfil its obligations with respect to any Seller Parts pursuant to Clause 1.2 within a reasonable time after written notice thereof from the Buyer,

 

1.7.2.4 in those instances when a Seller Part is identified as “Local Manufacture” in the Illustrated Parts Catalog (IPC).

 

1.7.3 The rights granted to the Buyer in Article 1.7.2 shall not in any way be construed as a license, nor shall they in any way obligate the Buyer to the payment of any license fee or royalty, nor shall they in any way be construed to affect the rights of third parties.

 

1.7.4 Furthermore, in the event of the Buyer manufacturing or having manufactured any parts, subject to the conditions of Article 1.7.2, such manufacturing and any use made of the manufactured parts shall be under the sole liability of the Buyer and the consent given by the Seller shall not be construed as express or implicit approval howsoever either of the Buyer or of the manufactured parts.

 

   It shall further be the Buyer’s sole responsibility to ensure that such manufacturing is performed in accordance with the relevant procedures and Aviation Authority requirements.

 

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   Exhibit H – Page 4   


   THE SELLER SHALL NOT BE LIABLE FOR, AND THE BUYER SHALL INDEMNIFY THE SELLER AGAINST, ANY CLAIMS FROM ANY THIRD PARTIES FOR LOSSES DUE TO ANY MANUFACTURING OR MATERIALS DEFECT OR ANY DESIGN DEFECT (TO THE EXTENT ANY PART WAS NOT MANUFACTURED STRICTLY IN ACCORDANCE WITH THE DETAILED DESIGN OF SELLER OR ITS AFFILIATES) OR NONCONFORMITY, ARISING OUT OF OR IN CONNECTION WITH ANY MANUFACTURING OF ANY PART UNDERTAKEN BY THE BUYER, OR CAUSED TO BE UNDERTAKEN BY THE BUYER, UNDER ARTICLE 1.7.2, WHETHER SUCH CLAIM IS ASSERTED IN CONTRACT OR IN TORT, OR IS PREMISED ON ALLEGED, ACTUAL, IMPUTED, ORDINARY OR INTENTIONAL ACTS OR OMISSIONS OF THE BUYER.

 

1.7.5 The Buyer shall allocate, or cause to be allocated, its own part number to any part manufactured, or caused to be manufactured, in accordance with Article 1.7.2 above. The Buyer shall under no circumstances be allowed to use, or cause to be used, the Airbus part number of the Seller Part to which such manufactured part is equivalent.

 

1.7.6 Notwithstanding any right provided to the Buyer under Article 1.7.2, the Buyer shall not be entitled to sell or loan any part manufactured under the provisions of Article 1.7.2 to any third party except to any Subsidiary or Affiliate of the Buyer.

 

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   Exhibit H – Page 5   


2. INITIAL PROVISIONING AND REPLENISHMENT

 

2.1 Initial Provisioning

 

2.1.1 Period

 

   The Initial Provisioning Period is defined as the period up to and expiring on the ninetieth (90th) day after Delivery of the last Aircraft firmly ordered under the Agreement.

 

2.1.2 Pre-Provisioning Meeting

 

2.1.2.1 The Seller shall organize a pre-provisioning meeting (“ Pre-Provisioning Meeting ”) at the ANACS Spares Center or any other location as may be mutually agreed, for the purpose of defining an acceptable schedule and working procedure to accomplish the initial provisioning (hereinafter “ Initial Provisioning ”) of Material (the “ Initial Provisioning Material ”).

 

   During the Pre-Provisioning Meeting, the Seller shall familiarize the Buyer with the provisioning process, methods and formulae of calculation and documentation.

 

2.1.2.2 The date of the meeting shall be mutually agreed upon, allowing a minimum preparation time of eight (8) weeks for the Initial Provisioning Conference referred to in Article 2.1.3 below.

 

2.1.3 Initial Provisioning Conference

 

   The Seller shall organize an Initial Provisioning conference (“ Initial Provisioning Conference ”) at the ANACS Spares Center or any other location as may be mutually agreed.

 

   At the request of the Buyer, the Seller shall invite major Suppliers, as mutually agreed upon during the Pre-Provisioning Meeting, to participate in the conference.

 

   Such conference shall take place at the earliest [*] after Manufacturer Serial Number allocation, Buyer Furnished Equipment selection or Contractual Definition Freeze, whichever occurs last.

 

2.1.4 Initial Provisioning Data

 

2.1.4.1 Initial Provisioning data elements generally in accordance with SPEC 2000, Chapter 1, (“ Initial Provisioning Data ”) for Material defined in Articles 1.2.1 (i) thru 1.2.1 (iii) shall be supplied by the Seller to the Buyer in English language, in a form, format and timeframe to be mutually agreed upon during the Pre-Provisioning Meeting.

 

     The Seller shall have obtained from Suppliers agreements to prepare and issue for their own products such Initial Provisioning Data as provided above.

 

2.1.4.1.1 The Initial Provisioning Data shall be revised [*], up to the end of the Initial Provisioning Period.

 

2.1.4.1.2 The Seller shall ensure that Initial Provisioning Data is provided to the Buyer in due time to give the Buyer sufficient time to perform any necessary evaluation and allow the on-time delivery of any ordered Material.

 

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   Exhibit H – Page 6   


2.1.4.1.3 Initial Provisioning Data generated by the Seller and supplied to the Buyer shall comply with the configuration of the Aircraft as documented [*] before the date of issue.

 

   This provision shall not cover:

 

   

Buyer modifications not known to the Seller,

 

   

other modifications not approved by the Seller’s Aviation Authority.

 

2.1.4.2 Supplier-Supplied Data

 

   Initial Provisioning Data corresponding to Supplier Parts (both initial issue and revisions) shall be transmitted to the Buyer through the Seller and/or the corresponding Supplier, it is however agreed and understood by the Buyer that the Seller shall not be responsible for the substance, accuracy and quality of such data.

 

2.1.4.3 Supplementary Data

 

   The Seller shall provide the Buyer with supplementary data to the Initial Provisioning Data. This shall include Local Manufacture Tables (X-File), Ground Support Equipment, Specific-to-type Tools (W-File) and a Pool Item Candidate List (Y-File).

 

2.1.4.4 In preparation for the Initial Spares Provisioning, Seller will provide a customized Recommended Spare Parts List taking into consideration (i) fleet size including anticipated leased aircraft, Buyer’s desired protection level and other Initial Provisioning parameters of the Buyer, and (ii) fleet size including anticipated leased aircraft, with a protection level of [*] and a maximum transit time of thirty (30) days and other Initial Provisioning parameters of the Buyer, in each case to be available eight (8) weeks after Manufacturer Serial Number allocation, Buyer Furnished Equipment selection or Contractual Definition Freeze. The Recommended Spare Parts List referenced in 2.1.4.4 (ii) above shall only address the Initial Provisioning Data and will be the items and quantities serving as the basis for Seller’s Buy Back commitment under, and subject to the terms and conditions of, Clause 2.1.8.2. Three (3) months prior to delivery of any leased aircraft, the Seller will provide provisioning data to the Buyer based on information and data available to the Seller at that time.

 

2.1.5 Commercial Offer

 

   Upon the Buyer’s request, the Seller shall submit a commercial offer for Material as defined in Articles 1.2.1 (i) thru 1.2.1 (vi) mutually agreed as being Initial Provisioning Material.

 

2.1.6 Delivery of Initial Provisioning Material

 

2.1.6.1 During the Initial Provisioning Period, Initial Provisioning Material shall conform to the latest known configuration standard of the Aircraft for which such Initial Provisioning Material is intended and to the Initial Provisioning Data transmitted by the Seller.

 

2.1.6.2 Provided such orders are received by the Seller in accordance with the leadtime published in the applicable Spare Parts Price Catalog, the Seller shall use commercially reasonable efforts to deliver Initial Provisioning Material as per Article 1.2.1 (i) of this Exhibit “H” against the Buyer’s orders and according to the following schedule:

 

  (a) at least [*] of the ordered quantity of each item for which the Buyer has placed Initial Provisioning orders for Material defined in Article 1.2.1 (i) above [*] before Delivery of the first Aircraft;

 

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   Exhibit H – Page 7   


  (b) [*] of the ordered quantity of each item for which the Buyer has placed Initial Provisioning orders for Material, as defined in Article 1.2.1 (i) above, three (3) months after Delivery of the first Aircraft. If said [*] cannot be accomplished, the Seller shall endeavor to have such items available at its facilities for immediate supply, in case of an AOG.

 

2.1.6.3 The Buyer may cancel or modify Initial Provisioning orders placed with the Seller, with no cancellation charge, provided such modification or cancellation occurs no later than the published lead-time before the scheduled delivery of said Material. If such cancellation or modification (resulting on a decrease of the order size) occurs within the published leadtime of any Materials Seller may charge a fee for such cancelled Material to cover Seller’s cost in connection with such cancellation.

 

   The cancellation fee payable by Buyer in connection with the cancellation or modification of Inintial Provisioning orders placed with the Seller shall be agreed by the parties in the Commercial Offer as per 2.1.5.

 

2.1.6.4 The delivery of Material described in Articles 1.2.1 (ii) thru (vi) shall take place as set forth in Article 2.2 hereof.

 

2.1.7 Initial Provisioning Data for Exercised Options

 

   If the Seller has granted the Buyer the right to purchase option aircraft under the Agreement, any aircraft for which the Buyer exercises its option right shall be included into the next revision of the Initial Provisioning Data, provided that four (4) weeks preparation time has elapsed between the execution of the option exercise documentation and the production of the revision. If the execution date does not provide for four (4) weeks preparation time, the exercised option Aircraft shall be included in the following revision.

 

2.1.8 Buy-Back

 

2.1.8.1 Buy-Back of Obsolete Parts

 

   The Seller agrees to buy back unused Seller Parts as per Article 1.2.1 (i) (“ Buy Back ”) which become obsolete prior to the end of Buy-Back Period as a result of mandatory modifications required by the Buyer’s or Seller’s Aviation Authorities, subject to the following:

 

  a) The Seller Parts involved shall be those, which the Buyer is directed by the Seller to scrap or dispose because they cannot be reworked, modified or repaired to satisfy the revised standard;

 

  b) The Seller shall pay to the Buyer, by means of credit for the purchase of Goods and Services, the purchase price paid by the Buyer for any such obsolete parts, provided that the Seller’s liability in this respect does not extend to quantities in excess of the Seller’s Initial Provisioning recommendation.

 

  c) The Seller shall use its reasonable efforts to obtain for the Buyer the same buy back protection from Suppliers for Supplier Parts.

 

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2.1.8.2 Buy-Back Period and Buy-Back of Initial Provisioning Surplus Material

 

  a) The Buy-Back Period is defined as the period starting [*] after Delivery of the first Aircraft to the Buyer

 

  b) At any time during the Buy-Back Period, the Buyer shall have the right to return to the Seller any Seller Parts as per Article 1.2.1 (i) or Supplier Parts as per Article 1.2.1 (ii) or (iii) (together, the “Buy Back Material”), subject to the conditions defined hereunder.

 

  c) A part as set forth in Article b) above shall be eligible for Buy-Back if:

 

  i) The Buy Back Material is unused and undamaged and is accompanied by the Seller’s original documentation (tag, certificates);

 

  ii) The Seller originally provided the Buyer with a recommendation to purchase the Buy Back Material as part of the Initial Provisioning as provided in Article 2.1.4.4 (ii) which is based upon a maximum protection level of [*]

 

  iii) The Buy Back Material was purchased for Initial Provisioning purposes by the Buyer directly from the Seller;

 

  iv) The Buy Back Material is returned to the Seller by the Buyer so the Buy Back Material has been received by the Seller before the end of the Buy-Back Period.

 

  d) If any Buy Back Material satisfies the requirement for Buy-Back, the Seller shall pay to the Buyer by means of a credit for the purchase of Goods and Services or by application to reduce the amount owed by Buyer under its Spares accounts with Seller or ANACS, the amount paid by the Buyer for such Buy Back Material.

 

  e) In the event of the Buyer electing to procure Material in excess of the Seller’s recommendation, the Buyer shall notify the Seller thereof in writing, with due reference to the present Article. The Seller’s acknowledgement and agreement in writing shall be necessary before any Material in excess of the Seller’s Initial Provisioning recommendation shall be subject to Buy-Back.

 

  f) Transportation costs for the agreed return of Material under this Article 2.1.8.2 shall be borne by the Seller, provided that the Buyer shall use its reasonable efforts to minimize the cost of transportation.

 

2.1.8.3 Handling charge cap for Initial Provisioning package:

 

   The Seller warrants that, should the Buyer purchase from the Seller Material having a value equal to at least [*] of the total value of the recommended Initial Provisioning of Material identified in Paragraphs 1.2.1 (ii) through 1.2.1 (iv) above (or such other percentage as the parties shall agree), the average handling charge on the total package will not exceed [*] This average handling charge will be increased to [*] in the event that all orders have not been placed [*] prior to delivery of the first Aircraft. Seller agrees not to charge any handling charges for Seller Parts purchased as part of the Initial Provisioning Material.

 

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2.2 REPLENISHMENT AND DELIVERY

 

2.2.1 General

 

   For the purpose of clarification, it is expressly stated that the provisions of Article 2.2.2 do not apply to Initial Provisioning Data and Material as described in Article 2.1. Delivery conditions shall be as set forth in Article 4.1.1.

 

2.2.2 Lead times

 

   In general, lead times shall be in accordance with the provisions of the latest edition of the “World Airlines and Suppliers’ Guide”.

 

2.2.2.1 Seller Parts as per Article 1.2.1 (i) listed in the applicable Spare Parts Price Catalog or on Airbus|Spares can be dispatched within the lead times published in the aforementioned Spare Parts Price Catalog.

 

   Lead times for Seller Parts as per Article 1.2.1 (i), which are not published in the Spare Parts Price Catalog or on Airbus|Spares, shall be quoted upon request.

 

2.2.2.2 Material defined in Articles 1.2.1 (ii) thru 1.2.1 (vi) can be dispatched within the Supplier’s lead time augmented by the Seller’s own order and delivery administration time.

 

2.2.2.3 Expedite Service

 

   The Seller shall provide a twenty-four (24) hours a day / seven (7) days a week expedite service to provide for the supply of critically required parts (the “ Expedite Service ”).

 

2.2.2.3.1 The Expedite Service is operated in accordance with the “World Airlines and Suppliers Guide” and the Seller shall take action (and notify the Buyer of the same) to satisfy an expedite order received from the Buyer within:

 

   

four (4) hours after receipt of an AOG (Aircraft On Ground) Order,

 

   

twenty-four (24) hours after receipt of a Critical Order (imminent AOG or work stoppage),

 

   

seven (7) days after receipt of an Expedite Order (urgent stock replenishment).

 

2.2.2.3.2 The Seller shall deliver Material requested by the Buyer by telephone on an AOG basis only if such request is confirmed by a subsequent order in writing from the Buyer by the end of the next Business Day.

 

2.2.3 Delivery Status

 

   The Seller shall make available to the Buyer on the Airbus|Spares a “Delivery Status Report”.

 

2.2.4 Shortages, Overshipments, Non-Conformity in Orders

 

2.2.4.1 The Buyer shall, within thirty (30) days after receipt of Material at Buyer’s facilities pursuant to a purchase order, advise the Seller:

 

  a) of any alleged shortages or overshipments,

 

  b) of any non-conformities of delivered Material.

 

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   In the event of the Buyer not having advised the Seller of any such alleged shortages, overshipments or non-conformity within the above-defined period, the Buyer shall be deemed to have accepted the delivery.

 

2.2.4.2 In the event of the Buyer reporting shortage overshipments or non-conformity to the specification and/or the purchase order within the period defined in Article 2.2.4.1 the Seller shall, upon verification, (i) at Buyer’s election either ship the Material constituting the shortage or credit Buyer for such undelivered Material, or (ii) replace the non conforming Material or credit the Buyer for the returned Material, if the Buyer chooses to return the Material subject of an overshipment or non-conformity. In such case, transportation costs shall be borne by the Seller.

 

   The Buyer shall endeavor to minimize such transportation costs.

 

2.2.5 Packaging

 

   All Material shall be packaged in accordance with ATA 300 Specification and shall comply with all environmental customs regulations applicable to the Buyer.

 

2.2.6 Cessation of Deliveries

 

   The Seller reserves the right to restrict, stop or otherwise suspend deliveries if the Buyer fails to meet its obligations defined in Articles 4.2 thru 4.4.

 

2.2.7 Material Consumption Data

 

   The Buyer shall use its reasonable efforts to provide periodically to the Seller a quantitative list of the Material used for maintenance and overhaul of the Aircraft. Such list shall cover Material used for both scheduled and unscheduled maintenance. The format and frequency of this list shall be as mutually agreed between the Seller and the Buyer during the Initial Provisioning Conference.

 

2.3 Warranties

 

2.3.1 Seller Parts

Subject to the limitations and conditions as hereinafter provided, the Seller warrants to the Buyer that all Seller Parts as per Article 1.2.1 (i) shall at delivery to the Buyer:

 

  (i) be free from defects in material,

 

  (ii) be free from defects in workmanship, including without limitation processes of manufacture,

 

  (iii) be free from defects arising from failure to conform to the applicable specification for such part.

 

2.3.2 Warranty Period

 

2.3.2.1 The warranty period for Seller Parts is [*] for new Seller Parts and [*] for used Seller Parts from delivery of such parts to the Buyer.

 

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2.3.2.2 Whenever any Seller Part, which contains a defect for which the Seller is liable under Clause 2.3, has been corrected, replaced or repaired pursuant to the terms of this Clause 2.3, the period of the Seller’s warranty with respect to such corrected, repaired or replacement Seller Part, whichever the case may be, shall be the remaining portion of the original warranty [*], whichever is longer.

 

2.3.3 Buyer’s Remedy and Seller’s Obligation

 

   The Buyer’s remedy and Seller’s obligation and liability under this Article 2.3 are limited to the repair, replacement or correction, at the Seller’s expense and option, of any Seller Part that is defective.

 

   The Seller may alternatively furnish to the Buyer’s account with the Seller a credit equal to the price at which the Buyer is entitled to purchase a replacement for the defective Seller Part.

 

   The provisions of Clauses 12.1.5 thru 12.1.11 of the Agreement shall apply to this Article 2.3 of this Exhibit “H”.

 

2.3.4 Supplier Parts

 

   With respect to Supplier Parts to be delivered to the Buyer under this Exhibit H, the Seller agrees to transfer to the Buyer any warranties, which the Seller may have obtained from the corresponding Suppliers.

 

2.3.5 EXCLUSIVITY OF WARRANTIES

 

   THIS ARTICLE 2.3 (INCLUDING ITS SUBPROVISIONS) SETS FORTH THE EXCLUSIVE WARRANTIES, EXCLUSIVE LIABILITIES AND EXCLUSIVE OBLIGATIONS OF THE SELLER, AND THE EXCLUSIVE REMEDIES AVAILABLE TO THE BUYER, WHETHER UNDER THIS AGREEMENT OR OTHERWISE, ARISING FROM ANY DEFECT OR NONCONFORMITY OR PROBLEM OF ANY KIND IN ANY SELLER PART DELIVERED BY THE SELLER UNDER THIS EXHIBIT H.

 

   THE BUYER RECOGNIZES THAT THE RIGHTS, WARRANTIES AND REMEDIES IN THIS ARTICLE 2.3 ARE ADEQUATE AND SUFFICIENT TO PROTECT THE BUYER FROM ANY DEFECT OR NONCONFORMITY OR PROBLEM OF ANY KIND IN SELLER PART SUPPLIED UNDER THIS EXHIBIT H. THE BUYER HEREBY WAIVES, RELEASES AND RENOUNCES ALL OTHER WARRANTIES, OBLIGATIONS, GUARANTEES AND LIABILITIES OF THE SELLER AND ALL OTHER RIGHTS, CLAIMS AND REMEDIES OF THE BUYER AGAINST THE SELLER, WHETHER EXPRESS OR IMPLIED BY CONTRACT, TORT, OR STATUTORY LAW OR OTHERWISE, WITH RESPECT TO ANY NONCONFORMITY OR DEFECT OR PROBLEM OF ANY KIND IN ANY MATERIAL OR SERVICE DELIVERED BY THE SELLER UNDER THIS EXHIBIT H, INCLUDING BUT NOT LIMITED TO:

 

  (8) ANY IMPLIED WARRANTY OF MERCHANTABILITY AND/OR FITNESS FOR ANY GENERAL OR PARTICULAR PURPOSE;

 

  (9) ANY IMPLIED OR EXPRESS WARRANTY ARISING FROM COURSE OF PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE;

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Exhibit H – Page 12   


  (10) ANY RIGHT, CLAIM OR REMEDY FOR BREACH OF CONTRACT;

 

  (11) ANY RIGHT, CLAIM OR REMEDY FOR TORT, UNDER ANY THEORY OF LIABILITY, HOWEVER ALLEGED, INCLUDING, BUT NOT LIMITED TO, ACTIONS AND/OR CLAIMS FOR NEGLIGENCE, GROSS NEGLIGENCE, INTENTIONAL ACTS, WILLFUL DISREGARD, IMPLIED WARRANTY, PRODUCT LIABILITY, STRICT LIABILITY OR FAILURE TO WARN;

 

  (12) ANY RIGHT, CLAIM OR REMEDY ARISING UNDER THE UNIFORM COMMERCIAL CODE OR ANY OTHER STATE OR FEDERAL STATUTE;

 

  (13) ANY RIGHT, CLAIM OR REMEDY ARISING UNDER ANY REGULATIONS OR STANDARDS IMPOSED BY ANY INTERNATIONAL, NATIONAL, STATE OR LOCAL STATUTE OR AGENCY;

 

  (14) ANY RIGHT, CLAIM OR REMEDY TO RECOVER OR BE COMPENSATED FOR:

 

  (e) LOSS OF USE OR REPLACEMENT OF ANY AIRCRAFT, OR PART PROVIDED UNDER THE AGREEMENT DUE TO A DEFECT, NON CONFORMITY OR OTHER PROBLEM IN ANY SELLER PART;

 

  (f) LOSS OF, OR DAMAGE OF ANY KIND TO, ANY AIRCRAFT, COMPONENT, EQUIPMENT, ACCESSORY, OR PART PROVIDED UNDER THE AGREEMENT DUE TO A DEFECT, NON CONFORMITY OR OTHER PROBLEM IN ANY SELLER PART;

 

  (g) LOSS OF PROFITS AND/OR REVENUES;

 

  (h) ANY OTHER INCIDENTAL OR CONSEQUENTIAL DAMAGE.

 

   THE WARRANTIES PROVIDED BY THIS EXHIBIT H SHALL NOT BE EXTENDED, ALTERED OR VARIED EXCEPT BY A WRITTEN INSTRUMENT SIGNED BY THE SELLER AND THE BUYER. IN THE EVENT THAT ANY PROVISION OF THIS ARTICLE 2.3 SHOULD FOR ANY REASON BE HELD UNLAWFUL, OR OTHERWISE UNENFORCEABLE, THE REMAINDER OF THIS EXHIBIT H SHALL REMAIN IN FULL FORCE AND EFFECT.

 

   FOR THE PURPOSE OF THIS ARTICLE 2.3.5, “SELLER” SHALL BE UNDERSTOOD TO INCLUDE THE SELLER, ITS AFFILIATES AND SUPPLIERS.

 

2.3.6 Duplicate Remedies

 

   The remedies provided to the Buyer under this Article 2.3 as to any part thereof are mutually exclusive and not cumulative. The Buyer shall be entitled to the remedy that provides the maximum benefit to it, as the Buyer may elect, pursuant to the terms and conditions of this Article 2.3 for any such particular defect for which remedies are provided under this Article 2.3; provided, however, that the Buyer shall not be entitled to elect a remedy under one part of this Article 2.3 that constitutes a duplication of any remedy elected by it under any other part hereof for the same defect. The Buyer’s rights and remedies herein for the nonperformance of any obligations or liabilities of the Seller arising under these warranties shall be in monetary damages limited to the amount the Buyer expends in procuring a correction or replacement for any covered part subject to a defect or nonperformance covered by this Article 2.3, and the Buyer shall not have any right to require specific performance by the Seller.

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Exhibit H – Page 13   


2.3.7 Negotiated Agreement

 

   The Buyer and Seller agree that this Article 2.3 has been the subject of discussion and negotiation and is fully understood by the parties, and that the price of the Aircraft and the other mutual agreements of the parties set forth in the Agreement were arrived at in consideration of, inter alia, the Exclusivity of Warranties and General Limitations of Liability provisions and Duplicate Remedies provisions set forth in this Article 2.3.

 

3. OTHER MATERIAL SUPPORT

 

3.1 Seller Parts Leasing

 

3.1.1 General

 

   The Seller offers the Buyer the option to lease Seller Parts as listed in Appendix A to this Exhibit “H” (hereinafter collectively “ Leased Parts ” or individually a “ Leased Part ”).

 

   For the purposes of this Article 3.1, the term “ Lessor ” refers to the Seller and the term “ Lessee ” refers to the Buyer.

 

3.1.1.1 The terms and conditions of the lease of Leased Parts as set forth in this Article 3.1 shall be supplemented by the conditions as published annually by the Lessor in the “ Airbus Proprietary Parts Repair Guide ”.

 

3.1.1.2 The Lessor shall provide the Lessee with copies of the current version of such Airbus Proprietary Parts Repair Guide on an annual basis.

 

3.1.1.3 The terms and conditions set out in said document shall prevail over all other terms and conditions appearing on any order form or other document pertaining to Leased Parts, with the exception of this Article 3.1, which, for the avoidance of doubt, shall prevail in the event of any inconsistency between this Article and the Airbus Proprietary Parts Repair Guide.

 

3.1.1.4 Additional Seller Parts not listed in Appendix A to this Exhibit “H” may be available for lease by the Lessor to the Lessee under terms and conditions as described in the latest version of the Airbus Proprietary Parts Repair Guide.

 

3.1.1.5 Capitalized terms used in this Article 3.1 and not otherwise defined in this Exhibit “H” shall have the meanings assigned thereto in the Airbus Proprietary Parts Repair Guide.

 

3.1.2 Title

 

   Title to each Leased Part shall remain with the Lessor at all times unless the Lessee exercises its option to purchase, in which case title shall pass to the Lessee upon receipt by the Lessor of the payment for the purchased Leased Part. The terms and conditions of the purchasing of said Leased Parts shall be as published by the Lessor in the then current version of the Airbus Proprietary Parts Repair Guide .

 

3.1.3 Warranties

 

3.1.3.1 The Lessor warrants that each Leased Part shall at the time of delivery be free from defects in material and workmanship that could materially impair the utility of the Leased Part.

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Exhibit H – Page 14   


3.1.3.2 Warranty and Notice Periods

 

   The Lessee’s remedy and the Lessor’s obligation and liability under this Article 3.1.3, with respect to each defect, are conditional upon:

 

  (i) the defect having become apparent to the Lessee within the Lease Period; and

 

  (ii) the Lessee returning as soon as practicable to the return location specified in the applicable Lease, or such other place as may be mutually agreed upon, the Leased Part claimed to be defective; and

 

  (iii) the Lessor having received written notice of the defect from the Lessee within [*] after the defect became apparent to the Lessee, with reasonable proof that the claimed defect is due to a matter embraced within the Lessor’s warranty under this Article 3.1.3 and that such defect did not result from any act or omission of the Lessee, including but not limited to any failure to operate or maintain the Leased Part claimed to be defective or the Aircraft in which it was installed in accordance with applicable Aviation Authority requirements and the Lessor’s applicable written instructions.

 

3.1.3.3 Lessee’s Remedy and Lessor’s Obligation

 

   The Lessee’s remedy and the Lessor’s obligation and liability under this Article 3.1.3 are limited to the repair or correction of any Leased Part in which a defect appears, or, as may be mutually agreed, the replacement of such Leased Part with a similar part free from defect.

 

   Any replacement part furnished under this Article 3.1.3.3 shall be deemed to be the Leased Part so replaced.

 

3.1.3.4 Suspension and Transportation Costs

 

3.1.3.4.1 If a Leased Part covered by this Article 3.1.3 is found to be defective, the Lease period as defined under the Airbus Proprietary Parts Repair Guide (the “ Lease Period ”) and the Lessee’s obligation to pay rental charges shall be suspended from the date upon which the Lessee notifies the Lessor of such defect until the date upon which the Lessor has repaired, corrected or replaced the defective Leased Part, provided however that the Lessee has, promptly after giving such notice to the Lessor, withdrawn such defective Leased Part from use. If the defective Leased Part is replaced, such replaced part shall be deemed to no longer be a Leased Part under the Lease as of the date upon which such part was received by the Lessor at the return location specified in the applicable Lease.

 

3.1.3.4.2 All transportation and insurance costs of returning the defective Leased Part and returning the repaired, corrected or replacement part to the Lessee shall be borne by the Lessor.

 

3.1.3.5 Wear and Tear

 

   Normal wear and tear and the need for regular maintenance and overhaul shall not constitute a defect or non-conformity under this Article 3.1.3.

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Exhibit H – Page 15   


3.1.3.6 Waiver, Release and Renunciation

 

   It is agreed that Article 2.3.5 hereof “Exclusivity of Warranties” shall apply to the Material support to be provided under the present Article 3.1.

 

3.2 Tools and Ground Support Equipment

 

   The Seller shall provide the Buyer with a range of Ground Support Equipment and Tools, as defined in 1.2.1 (iv), support services including:

 

   

Sale of single tools;

 

   

Sale of tool packages;

 

   

Loan of tooling for Airbus Aircraft.

 

   The terms and conditions applicable to such services shall be as published by the Seller on an annual basis in its “Tools for Loan Catalog” The Seller shall provide the Buyer with copies of this publication on an annual basis.

 

3.3 Seller Parts Repair

 

   The Seller may offer the Buyer a service whereby the Seller shall manage the repair of Seller Parts as defined in Article 1.2.1 (i) above.

 

   The full terms, conditions and guarantees for the repair of said Seller Parts shall be as published annually by the Seller in its “ Airbus Proprietary Parts Repair Guide ”.

 

4. COMMERCIAL CONDITIONS

 

4.1 Price

 

4.1.1 All quoted Material prices shall be:

 

   

Free Carrier (FCA) Airbus Spares Center;

 

   

Free Carrier (FCA) ANACS Spares Center;

 

   

Free Carrier (FCA) Seller’s Regional Satellite Stores;

 

   

Ex Works (EXW) Seller’s or Supplier’s facility for deliveries from any other Seller or Supplier facilities.

 

   At the request of the Buyer, the Seller can arrange and manage the delivery of Material to the Buyer’s facilities on a Delivered Duty Unpaid (DDU) basis. The terms and conditions of such a service shall be subject to a separate agreement to be made between the Buyer and Seller.

 

   The terms Free Carrier (FCA), Ex Works (EXW) and Delivered Duty Unpaid (DDU) are as defined by publication n° 560 of the International Chamber of Commerce, published in January 2000.

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Exhibit H – Page 16   


4.1.2 Notwithstanding the provisions of Article 2.1.5 above for Initial Provisioning, all prices shall be the Seller’s sales prices valid on the date of receipt of the order (subject to reasonable quantities and delivery time) and shall be expressed in US Dollars.

 

4.1.3 The prices of Seller Parts shall be as set forth in the then current Seller’s or ANACS Spare Parts Price Catalog, as applicable and shall be firm for each calendar year. The Seller however reserves the right to revise the prices of said Seller Parts during the course of the calendar year in case of any of the following:

 

   

significant revision in the manufacturing costs and purchase price of materials,

 

   

significant variation of exchange rates,

 

   

significant error in the estimation or expression of any price.

 

   Airbus commits that the average annual increase rate in the price of Seller Parts shall be capped at a maximum annual rate calculated as follows:

 

4.1.3.1 [*]

 

   [*]

 

4.1.3.2 [*]

 

4.1.4 [*]

 

4.1.5 [*]

 

4.2 Payment Procedures and Conditions

 

4.2.1 All payment under this Exhibit “H” shall be made in accordance with the terms and conditions set forth in the then current Seller Parts Price Catalog and Repair Guide.

 

4.2.2 [*]

 

4.2.3 [*]

 

4.2.4 [*]

 

4.2.5 [*]

 

4.3 Credit Assurance

 

   The parties agree that the provisions of Article 2-609 shall apply to this Exhibit H.

 

4.4 Title

 

   With the exception of Material to be supplied under Article 3 above, title to any Material purchased under this Exhibit “H” shall remain with the Seller until the earlier of installation on an aircraft and full payment of the invoices therefor and interest thereon, if any, has been received by the Seller.

 

   The Buyer hereby undertakes that Material, title to which has not passed to the Buyer, shall be kept free from any debenture or mortgage or any similar charge or claim in favour of any third party.

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Exhibit H – Page 17   


4.5 Return Authorization procedure for Seller Parts replenishment:

 

   The return authorization for the replenishment of Seller parts stated as in the then applicable Seller Parts Price Catalog will be as follows:
  (a) A Return Authorization Number (RAN) will be provided to the Buyer on request after dispatch of the part by the Seller

 

  (b) [*]

 

  (c) [*]

 

5. EXCUSABLE DELAY

 

   Clause 10.1 of the Agreement shall apply to all Material support provided under this Exhibit “H”.

 

6. TERMINATION OF SPARES PROCUREMENT COMMITMENTS

 

6.1 In the event of the Agreement being terminated with respect to any Aircraft due to causes provided for in Clauses 10, 11 or 20 of the Agreement, such termination may also affect the terms of this Exhibit “H” to the extent set forth in Article 6.2 below.

 

6.2 Any termination under Clauses 10, 11 or 20 of the Agreement shall discharge the parties of all obligations and liabilities hereunder with respect to undelivered spare parts, services, data or other items to be purchased hereunder and which are applicable to those Aircraft for which the Agreement has been terminated. Unused Material in excess of the Buyer’s requirements due to such Aircraft cancellation may be repurchased by the Seller at the Seller’s option as provided for in Article 2.1.8.2.

 

7. INCONSISTENCY

 

   In the event of any inconsistency between this Exhibit “H” and the “Spare Parts Price Catalog” or the “Airbus Proprietary Parts Repair Guide” or the “Tools for Loan Catalog” or any order placed by the Buyer, this Exhibit “H” shall prevail to the extent of such inconsistency.

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Exhibit H – Page 18   


APPENDIX “A” TO ARTICLE 3.1 OF EXHIBIT “H”

SELLER PARTS AVAILABLE FOR LEASING

[*]

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Exhibit H – Page 19   


EXHIBIT I

LICENSES AND ON LINE SERVICES

 

Part 1    License for Use of Software   
Part 2    Airbus Customer Portal : Airbus|World   
Part 3    Airbus|World Basic Services   
Part 4    General Terms and Conditions of Access to and Use of the Secure Area of Airbus|World   

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Exhibit I – Page 1/20   


Part 1. LICENSE FOR USE OF SOFTWARE

 

1. Definitions

For the purposes of this Software License the following definitions shall apply:

“Licensor” means the Seller.

“Licensee” means the Buyer.

“Software” means the set of programs, configurations, processes, rules and, if applicable, documentation related to the operation of the data processing.

“Freeware” means the Software furnished free of charge to the Licensee.

“Composite Work” means the work composed of various elements, such as database, software or data, and which necessitates the use of the Software

“User Guide” means the documentation, which may be in electronic format, designed to assist the Licensee to use the Software, Freeware or Composite Work, as applicable.

Capitalized terms used herein and not otherwise defined in this Software License shall have the meaning assigned thereto in the Agreement.

 

2. Grant

The Licensor grants the Licensee the right to use the Software under the conditions set forth below (the “ Software License ”). The Software License shall also apply to any Freeware and/or Composite Work delivered by the Licensor.

 

3. Personal License

The sole right granted to the Licensee under this Software License is the right to use the Software. The Software License is personal to the Licensee, for its own internal use, and is non-transferable and non-exclusive.

 

4. Copies

Use of the Software is limited to the number of copies delivered by the Licensor to the Licensee and to the medium on which the Software is delivered. No reproduction shall be made without the written consent of the Licensor. It is however agreed that the Licensee is authorized to copy the Software for back-up and archiving purposes. Any copy authorized by the Licensor to be made by the Licensee shall be performed under the sole responsibility of the Licensee. The Licensee agrees to reproduce the copyright and other notices as they appear on or within the original media on any copies that the Licensee makes of the Software.

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Exhibit I – Page 2/20   


5. Term

Subject to the Licensee having complied with the terms of this Software License, the rights under the Software License shall be granted from the date of first delivery of the Software to December 31st of the year of delivery. For the following years, the rights under this Software License shall be automatically granted to the Licensee from January 1st to December 31st, subject to compliance by the Licensee with its obligations. This Software License shall be granted for so long as one Aircraft is operated by Buyer.

The Licensee may terminate the Software License by notifying in writing to the Licensor its desire not to renew the service for the following year. Such notification shall be received by the Licensor not later than November 30th of the current year.

For clarification purposes, it is hereby expressly stated that the Software may be offered for a limited period. In the event that the Licensor should offer a replacement product, the conditions for using such product shall be subject to a separate agreement.

 

6. Conditions of Use

Under the present Software License, the Licensee shall:

 

   

maintain the Software and the relating documentation in good working condition, in order to ensure the correct operation thereof;

 

   

use the Software in accordance with such documentation and the User Guide, and ensure that the staff using the Software has received the appropriate training;

 

   

use the Software exclusively in the technical environment defined in the applicable User Guide, except as otherwise agreed in writing between the parties (subject to said agreement, decompilation may be exceptionally agreed to by the Licensor in order for the Licensee to obtain the necessary information to enable the Software to function in another technical environment);

 

   

use the Software for its own internal needs and on its network only, when technically possible, and exclusively on the machine referenced and the site declared;

 

   

not alter, reverse engineer, modify or adapt the Software, nor integrate all or part of the Software in any manner whatsoever into another software product;

 

   

when the source code is provided to the Licensee, the Licensee shall have the right to study and test the Software, under conditions to be expressly specified by the Licensor, but in no event shall the Licensee have the right to correct, modify or translate the Software;

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Exhibit I – Page 3/20   


   

not correct the Software, except that such correction right may exceptionally be granted to the Licensee by the Licensor in writing

 

   

not translate, disassemble or decompile the Software, nor create a software product derived from the Software;

 

   

not attempt to or authorize a third party to discover or re-write the Software source codes in any manner whatsoever;

 

   

not delete any identification or declaration relative to the intellectual property rights, trademarks or any other information related to ownership or intellectual property rights provided in the Software by the Licensor;

 

   

not pledge, sell, distribute, grant, sub-license, lease, lend, whether on a free-of-charge basis or against payment, or permit access on a time-sharing basis or any other utilization of the Software, whether in whole or in part, for the benefit of a third party;

 

   

not permit any third party to use the Software in any manner, including but not limited to, any outsourcing, loan, commercialization of the Software or commercialization by merging the Software into another software or adapting the Software, without prior written consent from the Licensor.

The Licensor shall be entitled, subject to providing reasonable prior written notice thereof to the Licensee, to come and verify in the Licensee’s facilities whether the conditions specified in the present Software License are respected. This shall not however engage the responsibility of the Licensor in any way whatsoever.

 

7. Training

In addition to the User Guide provided with the Software, training and other assistance shall be provided upon the Licensee’s request on a chargeable basis.

 

8. Proprietary Rights

The Software is proprietary to the Licensor or the Licensor has acquired the intellectual property rights necessary to grant this Software License. The copyright and all other proprietary rights in the Software are and shall remain the property of the Licensor.

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Exhibit I – Page 4/20   


The Licensor reserves the right to modify any Software at its sole discretion without prior notice to the Licensee.

 

9. Intellectual Property Indemnity

The Licensor shall defend and indemnify the Licensee against any claim that the normal use of the Software infringes the intellectual property rights of any third party, provided that the Licensee:

 

   

Immediately notifies the Licensor of any such claim;

 

   

Makes no decision or settlement of any claim;

 

   

Allows the Licensor to have sole control over all negotiations for its settlement;

 

   

Gives the Licensor all reasonable assistance in connection therewith.

Should the Licensee be prevented from using the Software by any enforceable court decision, the Licensor shall at its own costs and at its choice either modify the Software to avoid infringement or obtain for the Licensee the right to use the Software.

 

10. Confidentiality

The Software and its contents are designated as confidential. The Licensee undertakes not to disclose the Software or parts thereof to any third party without the prior written consent of the Licensor. In so far as it is necessary to disclose aspects of the Software to the employees, such disclosure is permitted solely for the purpose for which the Software is supplied and only to those employees who need to know the same.

The obligations of the Licensee to maintain confidentiality shall survive the termination of the Software License grant for a period of ten (10) years, unless terminated sooner by the public disclosure of the software or parts thereof by Licensor or public disclosure by a third party (having no affiliation with Licensee) without breaching any confidentiality obligation to the Licensor.

 

11. Warranty

The Licensor warrants that the Software is prepared in accordance with the state of art at the date of its conception and shall perform substantially in accordance with its functional and technical specification at the time of delivery. Should the Software be found to contain any non-conformity or defect, the Licensee shall notify the Licensor promptly thereof and the sole and exclusive liability of the Licensor under this Software License shall be to correct the same.

THE WARRANTIES, OBLIGATIONS AND LIABILITIES OF THE SELLER (AS DEFINED BELOW FOR THE PURPOSES OF THIS CLAUSE) AND REMEDIES OF THE LICENSEE SET FORTH IN THIS CLAUSE 11 ARE EXCLUSIVE AND IN SUBSTITUTION FOR, AND THE LICENSEE HEREBY WAIVES, RELEASES AND RENOUNCES ALL OTHER WARRANTIES, OBLIGATIONS

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Exhibit I – Page 5/20   


AND LIABILITIES OF THE LICENSOR AND RIGHTS, CLAIMS AND REMEDIES OF THE LICENSEE AGAINST THE LICENSOR, EXPRESS OR IMPLIED, ARISING BY LAW, CONTRACT OR OTHERWISE, WITH RESPECT TO ANY NON-CONFORMITY OR DEFECT OF ANY KIND, IN ANY SOFTWARE OR SERVICES DELIVERED UNDER THIS SOFTWARE LICENCE, INCLUDING BUT NOT LIMITED TO:

 

  A. ANY WARRANTY AGAINST HIDDEN DEFECTS;

 

  B. ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS;

 

  C. ANY IMPLIED WARRANTY ARISING FROM COURSE OF PERFORMANCE, COURSE OF DEALING OR USAGE OR TRADE;

 

  D. ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY, WHETHER IN CONTRACT OR IN TORT, WHETHER OR NOT ARISING FROM THE LICENSOR’S NEGLIGENCE, ACTUAL OR IMPUTED; AND

 

  E. ANY OBLIGATION, LIABILITY, RIGHT, CLAIM, OR REMEDY FOR LOSS OF OR DAMAGE TO ANY AIRCRAFT, COMPONENT, EQUIPMENT, ACCESSORY, PART, SOFTWARE, DATA OR SERVICES DELIVERED UNDER THIS SOFTWARE LICENSE, FOR LOSS OF USE, REVENUE OR PROFIT, OR FOR ANY OTHER DIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES;

PROVIDED THAT, IN THE EVENT THAT ANY OF THE AFORESAID PROVISIONS SHOULD FOR ANY REASON BE HELD UNLAWFUL OR OTHERWISE INEFFECTIVE, THE REMAINDER OF THIS SOFTWARE LICENSE SHALL REMAIN IN FULL FORCE AND EFFECT.

                         2.

FOR THE PURPOSES OF THIS CLAUSE 11, THE “LICENSOR” SHALL BE UNDERSTOOD TO INCLUDE THE LICENSOR, ANY OF ITS SUPPLIERS AND SUBCONTRACTORS, ITS AFFILIATES AND ANY OF THEIR RESPECTIVE INSURERS.

The Licensor shall have no liability for data that is entered into the Software by the Licensee and/or used for computation purposes.

 

12. Liability and Indemnity

The Software is supplied under the express condition that the Licensor shall have no liability in contract or in tort arising from or in connection with the use or possession by the Licensee of the Software and that the Licensee shall indemnify and hold the Licensor harmless from and against any liabilities and claims resulting from such use or possession. Nothing in this clause or clause 11 shall be construed to limit or negate the Licensor’s liability under clause 9.

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Exhibit I – Page 6/20   


13. Excusable Delays

 

13.1 The Licensor shall not be responsible nor be deemed to be in default on account of delays in delivery or otherwise in the performance of this Software License or any part thereof due to causes reasonably beyond Licensor’s or its subcontractors’ control including but not limited to: natural disasters, fires, floods, explosions or earthquakes, epidemics or quarantine restrictions, serious accidents, total or constructive total loss, any act of the government of the country of the Licensee or the governments of the countries of Licensor or its subcontractors, war, insurrections or riots, failure of transportation, communications or services, strikes or labor troubles causing cessation, slow down or interruption of services, inability after due and timely diligence to procure materials, accessories, equipment or parts, failure of a subcontractor or vendor to furnish materials, accessories, equipment or parts due to causes reasonably beyond such subcontractor’s or vendor’s control or failure of the Licensee to comply with its obligations arising out of the present Software License.

 

13.2 The Licensor shall, as soon as practicable after becoming aware of any delay falling within the provisions of this Clause, notify the Licensee of such delay and of the probable extent thereof and shall, subject to the conditions as hereinafter provided and as soon as practicable after the removal of the cause or causes for delay, resume performance under the Software License.

 

14. Termination

In the event of breach of an obligation set forth in this Software License by either the Licensor or the Licensee, which is not cured within 30 days from the date of receipt of a written notice notifying the breach, the non-breaching party shall be entitled to terminate this Software License.

In the event of termination for any cause, the Licensee shall no longer have any right to use the Software and shall return to the Licensor all copies of the Software and any relating documentation together with an affidavit to that effect. In case of breach by the Licensee, the Licensor shall be entitled to retain any amount paid for the ongoing year.

 

15. General Provisions

 

15.1 This Software License or part thereof shall not be assigned to a third party without the prior written consent of the other party except that the Licensor may assign this License to any of the Licensor’s Affiliates .

 

15.2 This Software License shall be governed by the laws of France. All disputes arising in connection with this Software License shall be submitted to the competent courts of Toulouse, France.

 

15.3 In the event that any provision of this Software License should for any reason be held ineffective, the remainder of this Software License shall remain in full force and effect.

The invalid provision shall be replaced by such valid one as the parties would have chosen had they been aware of such invalidity.

 

15.4 All notices and requests required or authorized hereunder shall be given in writing either by registered mail (return receipt requested) or by telefax. In the case of any such notice or request being given by registered mail, the date upon which the answerback is recorded by the addressee or, in case of a telefax, the date upon which the answerback is recorded by the sender’s telefax machine, shall be deemed to be the effective date of such notice or request.

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Exhibit I – Page 7/20   


PART 2

AIRBUS CUSTOMER PORTAL : AIRBUS|WORLD

The Buyer shall be entitled to obtain access to a wide range of information and services, including Technical Data, available in the secure area of the Seller’s customer portal or Airbus|World (“ Airbus|World ”).

Access to the secure area of Airbus|World, which is reserved to Airbus aircraft owners and operators (the “ Secure Area ”), shall be subject to the “general terms and conditions of access to and use of the secure area of the airbus world/online services” (hereinafter the “ GTC .”) as set forth in Part 4 of this Exhibit I, which form an integral part of this Agreement.

A description of the basic services, which are available to the Buyer in the Secure Area and are provided to the Buyer free of charge after signature of the GTC for as long as the Buyer operates the Aircraft, are set forth Part 3 of this Exhibit I (“the Basic Services”).

Furthermore, although part of the data available on Airbus|World is neither sensitive nor confidential and is also available to the general internet public in the public area of the portal (the “ Public Area ”), it is however recommended that for simplicity of access the Buyer find this information in the Secure Area.

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Exhibit I – Page 8/20   


PART 3

AIRBUS|WORLD BASIC SERVICES

Airbus|World is an Internet portal providing to the Buyer a comprehensive range of information, documents and services through a single access point.

Airbus|World is split into business areas. Each business area provides access to dedicated information as well as to a set of tailored on-line services logically grouped together for a given type of activity, including the following:

 

   

Customization and Delivery,

 

   

Flight Operations,

 

   

Maintenance and Engineering,

 

   

Supply,

 

   

Training,

 

   

Warranty.

Airbus|World offers a single access point to generic information and services including the following:

 

   

On-line Service Map : A complete mapping of all the services available through Airbus|World;

 

   

Airbus Offering : Complete information on all of the Seller’s products, services or contacts including all of the Seller’s catalogues (BFE, Optional Modifications, Customer Services, etc..), briefings on the Seller’s aircraft families and a description of the Seller’s aircraft delivery process;

 

   

News & events : Breaking news and forthcoming events, general awareness of Seller events;

 

   

About Airbus|World : Frequently asked questions (FAQ), user guides, support contacts;

 

   

eRooms : On-line collaboration tools to better interact with counterparts within the Seller’s teams;

 

   

File Transfer Site : Quick access to download documents and data;

 

   

What’s new in Airbus|World : Information on new information and services available on-line within a specific date range. An e-mail notification function is also proposed.

In addition, the Seller shall provide to the Buyer a Delegated Administration Tool enabling the User Entity Administrator to manage user accounts and user access rights.

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Exhibit I – Page 9/20   


Through the dedicated interface, the administrators shall be able to:

 

   

manage user authentication mode,

 

   

provide required support to their users on a daily basis,

 

   

grant Airbus|World services access rights to required users.

Airbus|World also offers targeted and easy to use information and services covering the Buyer’s activity, including the following:

 

1. Customisation and Delivery

 

1.1 Aircraft Comparison List (ACCL)

Provides delivery standard modification comparison lists for every Aircraft.

 

1.2 C USTOMIZATION AND D ELIVERY I NFORMATION (CDIS)

 

3. Follow up of Seller’s Aircraft to be delivered. CDIS covers the following areas:
4.

 

   

General information about Airbus delivery and activities and related data,

 

   

Customization & definition activities,

 

   

Acceptance & delivery activities,

 

   

Industrial & planning data,

   

Details about Seller’s key people.

 

2. Maintenance and Engineering

E NGINEERING T ECHNICAL D ATA S ERVICES (ETDS)

ETDS is a multi-document consultation tool. The tool offers data search and filtering facilities for easy information retrieval. In addition, links between these documents have also been implemented to allow an easier reference consultation. All documents can be downloaded and printed.

ETDS provides access, via a document index, to the contents of:

 

   

Service Bulletins in PDF format (SB’s issued after July 1997 are also available in SGML format),

 

   

Modification Information Document (MID),

 

   

All Operators Telex (AOT),

 

   

Flight Operations Telex (FOT),

 

   

Service Information Letter (SIL),

 

   

Consignes de Navigabilité (CN),

 

   

Airworthiness Directives (AD),

 

   

Technical Follow-Up (TFU),

   

Operators Information Telex (OIT).

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Exhibit I – Page 10/20   


3. S UPPLY

 

3.1 V ENDOR I NFORMATION M ANUAL (VIM) PLUS AOG R EPAIR G UIDE

Provides information on the Seller’s suppliers’ authorized repair stations and AOG stock locations. ‘VIM plus AOG/RG’ is the combined Vendor Information Manual and Aircraft On Ground & Repair Guide pioneered in North America. This new application provides valuable information on supplier support locations, repair stations, stock locations and distributors around the world for the Seller’s customers.

 

3.2 S UPPLIER P RODUCT S UPPORT A GREEMENT (SPSA)

This application contains all the GCP 2000 Issue 04 Agreements ratified by the Seller’s SFE Suppliers.

The GCP 2000 is an agreement signed between the Seller and its Suppliers for the benefit of the Seller’s customers. It specifies:

 

   

The Seller’s support standards,

   

The individual Supplier’s contractual support commitments.

 

3.3 A IRBUS |S PARES

This service provides:

 

   

Part number information such as price, lead-time,

 

   

Manufacturer code, stock status and location,

 

   

Part number interchangeability,

 

   

Single purchase order status,

 

   

Useful information such as contact details, help,

 

   

Function and e-mail,

 

   

Internet parts ordering,

 

   

Information link to selected in-house forwarders,

 

   

Support guide and excess inventory list.

 

4. W ARRANTY

C ONTRACTS AND W ARRANTY A DMINISTRATION (CAWA)

The warranty administration on-line service offers four (4) main functions:

 

   

Warranty claims booking,

 

   

Consultation of the warranty claims’ status,

 

   

Consultation of statistics on response time regarding closed/open files,

 

   

Consultation of warranty guide.

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Exhibit I – Page 11/20   


PART 4

GENERAL TERMS AND CONDITIONS OF ACCESS TO AND USE OF

THE SECURE AREA OF THE AIRBUS WORLD/ONLINE SERVICES

These GENERAL TERMS AND CONDITIONS OF ACCESS TO AND USE OF THE SECURE AREA OF THE AIRBUS WORLD/ONLINE SERVICES are entered into between the Company (as identified below) and Airbus North America Customer Services, Inc, (“ ANACS ”) on the date indicated below.

WHEREAS Airbus S.A.S. has developed and owns Secure Airbus/World, described below, by which authorized users may access a variety of products and services on line and

WHEREAS Airbus S.A.S. has entered into an agreement with ANACS that grants ANACS the right to access and use the Secure Airbus/World and allows ANACS to enter into agreements with third parties (such as the Company) for the provision of the same rights to such third parties, and

WHEREAS ANACS and the Company wish to enter into such an agreement under the terms and conditions set forth in this GTC,

NOW THEREFORE, the parties, wishing to be mutually bound, hereby agree as follows:

ARTICLE 1: DEFINITIONS

 

Administrator(s):    Company’s employee(s) designated by the Company as responsible to assure compliance by the Company and its employees (including Designated Users) with the Agreement.
Agreement    The agreement between the Parties (the “ Agreement ”) shall be comprised, in the following order of precedence, of (i) any specific written terms and conditions (“ Specific Terms and Conditions ”) agreed by the Parties to be applicable to specific Services, (ii) these General Terms and Conditions, and (iii) any all other technical documents agreed between the Parties to relate to specific Services (the “ Technical Documents ”).
Affiliate    With respect to any person or entity, any other person or entity directly or indirectly controlling, controlled by or under common control with such person or entity.
ANACS    Airbus North America Customer Services, Inc., a corporation organized under the laws of the State of Delaware, USA, with its registered place of business at 198 Van Buren Street, Herndon, VA 20170, USA

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Exhibit I – Page 12/20   


Airbus    Airbus S.A.S, a French Société par Actions Simplifiée, whose registered office is located 1 Rond Point Maurice Bellonte, 31700 Blagnac, France.
Airbus Data    Any and all data, information and material made accessible and available by Airbus or ANACS to the Company through Secure Airbus/World.
Business Agreements    Any and all present and future contracts, agreements or letters, the terms of which imply a commitment of the Company and/or Airbus or an Affiliate of Airbus, related to or affecting the Services, including, but not limited to: confidentiality agreements, exchanges in the course of a call for tender, contracts for the supply of services, procurement agreements, sale agreements, repair agreements, product support agreements, co-operation agreements, research contracts, maintenance contracts
Company    The company identified on the last page hereof as executing this GTC.
Company Data    Any and all data, information and other material made accessible and available by the Company to Airbus or ANACS through Secure Airbus/World.
Data    Collectively the Airbus Data and the Company Data.
Databases    Any and all collection of independent works, information or other materials arranged in a systematic or methodical way and individually accessible by electronic or other means through Secure Airbus/World.
Designated Users    Employees of the Company designated by the Company’s Administrator and authorized by ANACS, in its sole discretion, to access and use Secure Airbus/World.
Identification Codes    Confidential and personal identification codes assigned to each Designated User, which formally identify each Designated User as authorized to access and use Secure Airbus/World.
Parties    ANACS and the Company
Secure Airbus/World    Secure area of Airbus/World, access to any part of which may be given by Airbus or ANACS to Designated Users under the terms of this Agreement.
Services    Any and all on line services accessible through Secure Airbus/World under the terms and conditions of the Agreement.

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Exhibit I – Page 13/20   


Specific Terms and Conditions    Terms and conditions that supplement or modify this GTC with respect to specific Services.
System    Equipment, including hardware, software and connections used by Airbus S.A.S. and/or ANACS to provide the Services on Secure Airbus/World through the internet.
User Documentation    Documentation, as may be modified from time to time, that either describes the technical means for connecting to the System and accessing to Secure Airbus/World, or provides information related to the use of Secure Airbus/World and/or the Services.

ARTICLE 2: PURPOSE / CONTRACTUAL DOCUMENTS

 

2.1 The purpose of this GTC is to define the terms and conditions under which Airbus has authorized ANACS to permit, and ANACS is willing to permit the Company to access and use Secure Airbus/World and to benefit from the Services offered through Secure Airbus/World.

 

2.2 Access to and use of specific Services also may be subject to Specific Terms and Conditions.

 

2.3 Unless otherwise agreed in the Specific Terms and Conditions, the Secure Airbus/World may be used by the Company (i) to cooperate and communicate with ANACS or an Affiliate of ANACS, and (ii) to exercise its rights, and to perform as required, under any Business Agreements (the “ Permitted Purpose ”). The Agreement shall not be construed so as to interfere with the terms and conditions of any such Business Agreements. In any case, terms and conditions of the Business Agreements shall prevail over any term of the Agreement inconsistent with the terms or purpose of such Business Agreement.

 

2.4 Notwithstanding the foregoing, if the Company requests that access to Secure Airbus/World be available to third parties with which the Company has entered into one or more Business Agreements for the provision of maintenance, repair or training services to the Company, such access will be permitted, provided such third party expressly agrees to be bound by the terms and conditions of this GTC.

 

2.5 Secure Airbus/World shall be used for the Permitted Purpose only and the Parties shall exchange Data through Secure Airbus/World only for such Permitted Purpose. Activities directly or indirectly related to spamming are specifically prohibited on Secure Airbus/World.

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Exhibit I – Page 14/20   


ARTICLE 3: EXTENT OF ACCESS TO AND USE OF THE SECURE AIRBUS/WORLD

 

3.1 Airbus has granted to has granted to ANACS authority to grant access to Secure Airbus/World, and ANACS hereby does grant to the Company a worldwide, personal, non-exclusive and non-transferable right to access and use Secure Airbus/World and the Services for the Permitted Purpose, pursuant to the terms and conditions, and for the duration, of the Agreement. The Company shall not fully or partially assign, sublicense nor subcontract any of its rights and/or obligations under the Agreement, unless expressly authorized beforehand in writing by ANACS.

 

3.2 No right other than that set forth in article 3.1 above is granted to the Company under this GTC, and the Company shall not, directly or indirectly, extract, reproduce, display, adapt, modify and/or translate, all or part of Secure Airbus/World, the System and/or the Databases, nor create any derivative work therefrom, nor use any and all of the aforesaid elements for any other purposes than the Permitted Purpose.

 

3.3 Secure Airbus/World, the System, the Databases and Airbus Data are and shall remain the exclusive property of ANACS, Airbus and/or their respective licensors, as applicable.

ARTICLE 4: ADMINISTRATORS AND DESIGNATED USERS

 

4.1 The Company shall be responsible for compliance with the Agreement by its employees, including the Administrator(s) and the Designated Users. Both standard on line training for Administrators and necessary documentation for Designated Users will be available on line from Airbus, but it will remain the obligation of the Company to ensure, at its own expense, that the Administrator(s) and the Designated Users are qualified and properly trained to perform under the Agreement.

 

4.2 The Company shall appoint one Administrator only, unless the company demonstrates, to ANACS’ reasonable satisfaction, that additional Administrators are needed for non-overlapping areas of the Company’s operations, such as for different branches or sites of the Company. The Company will be solely responsible for any adverse consequences attributable to inconsistent instructions or communications received by ANACS or Airbus from the Company’s Administrators.

 

4.3 The Administrator(s) shall have the capacity to bind the Company in the execution of any contractual document and the performance of any obligation related to the access, use and operation of the Secure Airbus/World.

 

4.4 The Administrator(s) shall appoint Designated Users among the employees of the Company. Each designated User will be provided with an Identification Code. Such Identification Code may be provided by the Administrator, by Airbus or by an independent entity designated by Airbus, as Airbus may elect from time to time.

 

4.5 Any and all access, use and operation of Secure Airbus/World by use of an Identification Code will be deemed to have been made by the Designated User to whom such Identification Code has been assigned.

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Exhibit I – Page 15/20   


4.6 The Company shall ensure that:

 

  (i) each Identification Code is assigned to one Designated User only and is used by the appropriate Designated User only.

 

  (ii) each personal Identification Code is communicated only to the Designated User to whom it is assigned.

 

  (iii) each Designated User accesses and uses Secure Airbus/World in strict compliance with the Agreement;

 

  (iv) no third party acquires access to the Identification Codes or to Secure Airbus/World.

 

4.7 Should the Company become aware that a risk exists that an Identification Code may be or may have been disclosed to anyone other than the Designated User to whom such code is assigned, the Administrator(s) shall immediately cancel the access to Secure Airbus/World in respect of such Identification Codes and notify ANACS in writing (1) that the Identification Code has been cancelled and (2) the scope of the perceived risk leading to such cancellation. The Administrator shall be obligated to take the foregoing immediate action, notwithstanding any right of ANACS or Airbus to cancel such access.

 

4.8 In order to assure that access to Secure Airbus/World is limited to Designated Users with a legitimate need for access in order to accomplish the Permitted Purpose, the Company shall inform ANACS without delay, of (i) any change in the employment status of the Administrator(s) and/or Designated Users, including without limitation, extended leave, reassignment or resignation from the Company, and (ii) the termination/expiration of any and all Business Agreements, for performance of which the Company uses Secure Airbus/World.

 

4.9 The Company shall inform ANACS immediately of (i) any relevant change in the professional status, including resignation, reassignment or termination of the Administrator(s) or Designated Users; (ii) the termination or expiration of any Business Agreement between the Company and any third party with access to Secure Airbus/World when such terminated or expired Business Agreement is the basis for such access.

 

4.10 ANACS shall be entitled, without prejudice to its other rights and without prior notice, to restrict or suspend access in whole or in part to Secure Airbus/World, to any or all Designated Users and/or Administrators if (1) any one Designated User or Administrator fails to comply with any material provision of the Agreement, or with any applicable laws and regulations, or (2) ANACS determines, in its sole discretion, that continued access by such Designated User(s) or Administrator(s) presents a risk of harm to the interests of ANACS or an Affiliate of ANACS, or may violate the confidentiality and/or security provisions of the Agreement.

ARTICLE 5: ACCESS REQUIREMENTS

 

5.1 The Company shall, at its own cost and under its sole responsibility and liability, procure, install and maintain the information technology equipment necessary to access the System and Secure Airbus/World. During the effective period of the Agreement, the Company shall use due care and diligence, employing state of the art means, to prevent intrusions into the System or Secure Airbus/World of third parties, viruses, logic bombs and worms.

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Exhibit I – Page 16/20   


5.2 The Company is responsible for complying with laws or regulations, if any, governing the Company’s rights to access and use Secure Airbus/World as contemplated by the Agreement.

 

5.3 For security purposes, ANACS shall be entitled to modify or require the Company to modify any Identification Codes. The Company shall be informed by ANACS of any modification of such Identification Codes, as soon as practicable.

ARTICLE 6: AVAILABILITY OF SECURE AIRBUS/WORLD

 

6.1 Airbus will make reasonable efforts to maintain Secure Airbus/World available to the Company on a 24 hour a day, 7 day a week basis. In the event of an interruption in such availability of Secure Airbus/World, Airbus will take all reasonable and appropriate steps to restore the Company’s access to Secure Airbus/World.

 

6.2 Notwithstanding the provisions of Article 6.1 above, Airbus shall be entitled, at any time, to suspend or discontinue access to all or part of Secure Airbus/World if and to the extent such suspension or termination is required:

 

  (a) to update or conduct maintenance on the System, the Databases, the Data or Secure Airbus/World;

 

  (b) for security reasons;

 

  (c) to comply with any regulatory or judicially restraints.

 

6.3 If Airbus anticipates that Secure Airbus/World will be unavailable, in whole or in part, for twenty four (24) consecutive hours or more, Airbus will use all reasonable means to inform the Company in advance of such expected unavailability.

 

6.4. If Secure Airbus/World is unavailable to the Company for more than twenty four (24) consecutive hours or where the Company demonstrates to ANACS or Airbus that a specific period of unavailability will result in the Company’s failure to perform as required under a Business Agreement, the Parties will consider alternative means for delivering data as needed by the Company.

ARTICLE 7: CONFIDENTIALITY

Unless otherwise agreed in writing in the Agreement and/or the Business Agreements, all information made available by the Parties to each other through Secure Airbus/World shall be deemed confidential information and shall not be disclosed by the receiving party to any third party and shall not be used for any purposes than the Permitted Purpose. The Company acknowledges that any breach of this provision could cause material damage to ANACS or Airbus and it is agreed that an action for damages may not be an adequate remedy for a breach by the Company of this provision, and that

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Exhibit I – Page 17/20   


ANACS may bring an action for equitable relief, including an action for an injunction on its own behalf or on behalf of any of its Affiliates damaged by the Company’s breach of this provision.

The foregoing provisions shall not apply to information that may be accessed in the public zone of the Portal.

ARTICLE 8: EXCHANGE OF DATA

 

8.1 The Company shall have access to and use of Airbus Data, and ANACS and its Affiliates shall have access to and use of the Company Data, to the extent, and pursuant to the terms and conditions of, the Agreement and/or Business Agreements.

 

Except as otherwise provided in the Agreement and/or Business Agreements, either Party may, during the term of the Agreement and for internal use only, adapt, translate, make hard copies and/or numeric reproductions of the Data received from the other Party, for the Permitted Purpose. The Data, whether in hard copy or digital form, may be processed by and circulated worldwide only to the employees of the receiving Party having a need to know and for the Permitted Purpose.

 

8.2 The Parties shall ensure that all proprietary rights and confidentiality legends set forth on the original document appear on any reproduction, translation and/or adaptation thereof. The Parties shall refrain from removing and/or altering any such legend.

 

8.3 The Company represents and warrants to ANACS that the Company Data, and the disclosure and use of the Data as contemplated in the Agreement, do not infringe third parties’ rights and do not violate any applicable laws.

 

8.4 The Company shall exercise due care and employ state of the art means to assure that the Company’s Data does not permanently or temporarily disturb the operation and/or the use of the System, Secure Airbus/World and/or the Database.

 

8.5 The Company shall immediately notify ANACS of any claim by a third party of infringement by Company Data or of the occurrence or possible occurrence of any disturbance as referred to in Article 7.4. In the event that ANACS is informed of either circumstance, ANACS shall be entitled, without notice and without prejudice to its other rights, to cause the relevant Company Data to be deleted from the System.

 

8.6 Communications and notices exchanged by the Parties under the Agreement shall be deemed to be valid notices, and accorded the same recognition and effectiveness as if transmitted by registered mail, return receipt requested.

ARTICLE 9: WARRANTY / LIABILITY

 

9.1 Secure Airbus World, including any and all of its supporting elements and content, the System, the Database and Airbus Data, are provided “as is” and “as available”.

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Exhibit I – Page 18/20   


9.2 ANACS HAS RECEIVED NO WARRANTY OF ANY KIND FROM AIRBUS AND ANACS MAKES NO WARRANTY OF ANY KIND TO THE COMPANY WITH RESPECT TO THE SECURE AIRBUS/WORLD, THE AIRBUS DATA, THE DATABASE OR THE SYSTEM. THE COMPANY HEREBY WAIVES, RELEASES AND RENOUNCES ALL WARRANTIES, OBLIGATIONS, GUARANTEES AND LIABILITIES OF ANACS OR AIRBUS AND ALL RIGHTS, CLAIMS OR REMEDIES OF THE COMPANY AGAINST ANACS OR AIRBUS, WHETHER EXPRESS OR IMPLIED BY CONTRACT, TORT OR STATUTORY LAW OR OTHERWISE, WITH RESPECT TO ANY NONCONFORMIITY OR DEFECT OR PROBLEM OF ANY KIND IN THE SECURE AIRBUS/WORLD (INCLUDING BUT NOT LIMITED TO FAILURE, INTERRUPTION OR UNAVAILABILITY OF THE SECURE AIRBUS/WORLD FOR ANY PERIOD OF TIME), THE AIRBUS DATA, THE DATABASE OR THE SYSTEM ACCESSED OR USED PURSUANT TO THE AGREEMENT, INCLUDING BUT NOT LIMITED TO:

 

  (A) ANY IMPLIED OR EXPRESS WARRANTY ARISING FROM THE COURSEOF PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE;

 

  (B) ANY EXPRESS OR IMPLIED WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE;

 

  (C) ANY EXPRESS OR IMPLIED WARRANTY OF MERCHANTABILITY.

 

9.3 Access to and use of Secure Airbus/World are at the Company’s sole risk and responsibility and neither ANACS nor Airbus shall be liable to the Company for damages based on of claims by third parties arising out of or in connection with access or use of Secure Airbus/World, including claims for computer intrusions, security failures, or unavailability of the Services. In no event will ANACS or Airbus or the successors and assigns of any of them be liable to the Company for losses sustained by the Company, whether direct or indirect, including, without limitation, loss of data or programs, loss of use, financial loss, any deterioration or infection by viruses of the Company’s information technology equipment (including but not limited to software, hardware, connections and any system or network).

 

9.4 Without prejudice to the immediately preceding provision, in the event of a claim by a third party that Secure airbus World or its contents, infringes on such third party’s intellectual property rights, ANACS will, and will cause Airbus to, assist the Company in the defense of such claims by promptly responding to any reasonable request of the Company for information related to such claim, provided the Company notifies ANACS in writing of any such claim within fifteen (15) days as from the date it has knowledge of the latter.

ARTICLE 10: DURATION / TERMINATION

 

10.1 This GTC enters into force on the date on which they are executed as provided herein.

 

10.2 This GTC may be terminated:

 

  (a) by either Party, at any time and without liability to the other Party, upon one-month’s prior written notice to the other Party, sent by registered mail;

 

  (b) by ANACS, immediately and without prior notice, in the event the Company breaches any of its obligations under the Agreement or a related Business Agreement,

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Exhibit I – Page 19/20   


  (c) by either Party, following the continuation of a force majeure event for more than one (1) month,

 

10.3 Upon termination of the GTC, for whatever reason, the Company shall immediately (i) cease to access to the Secure Airbus/World and/or the corresponding Service and (ii) return or destroy (at ANACS’ option), the Identification Codes as well as all Airbus Data.

 

10.4 Termination of this GTC shall operate, automatically and notwithstanding any other provision in the Agreement, to terminate any other document included in the Agreement.

ARTICLE 11: MISCELLANEOUS

 

11.1 The Agreement is personal to the Parties and neither Party may assign the Agreement to a third party without the express consent of the other Party, except that ANACS may assign all or part of its rights and/or obligations under the Agreement to any Affiliate.

 

11.2 The Agreement represents the entire agreement between the Parties with respect to access to the Secure Airbus/World and use of Secure airbus/World for the Services, and renders all other previous written and oral agreements null and void. The Agreement may not be modified except by written amendment signed by both Parties.

 

11.3 Any provision of the Agreement determined to be unlawful or unenforceable under applicable law applied by any court of competent jurisdiction shall, to the extent required by such law, be deemed severed from the Agreement and rendered ineffective so far as is possible without modifying the remaining provisions. Where, however, the provisions of any such applicable law may be waived, they are hereby waived by the Parties hereto to the fullest extent permitted by such law, with the result that the provisions of the Agreement shall be a valid and binding and enforceable in accordance with their terms. The Parties agree to replace, so far as practicable, any provision which is prohibited, unlawful or unenforceable with another provision having substantially the same effect (in its legal and commercial content) as the replaced provision, but which is not prohibited, unlawful or unenforceable. The invalidity in whole or in part of any provisions of the Agreement shall not void or affect the validity of any other provision.

 

11.4 The Agreement is entered into and shall be governed by the law of the State of New York, without application of any conflict of laws principles that could result in the application of the law of any other jurisdiction.

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Exhibit I – Page 20/20   


LETTER AGREEMENT N°1

Note: Certain portions have been omitted from this Letter Agreement in accordance with a request for confidential treatment submitted to the Securities and Exchange Commission. Omitted information has been replaced with an asterisk. Omitted information has been filed separately with the Securities and Exchange Commission.

Aerovias del Continente Americano S.A. Avianca

Avenida Calle 26 No. 92-30

Bogota, Colombia

Subject : [*]

Aerovias del Continente Americano S.A. Avianca (the “ Buyer ”) and AIRBUS S.A.S. (the “ Seller ”) have entered into a Purchase Agreement (the “ Agreement ”) dated as of even date herewith, which covers, among other things, the manufacture and the sale by the Seller and the purchase by the Buyer of the Aircraft, under the terms and conditions in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement N°1 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.

Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement.

Both parties agree that this Letter Agreement, upon execution hereof, shall constitute an integral, nonseverable part of said Agreement and shall be governed by all the provisions of the Agreement, as such provisions have been specifically amended pursuant to this Letter Agreement. If there is any inconsistency between the provisions of the Agreement and the provisions of this Letter Agreement then the provisions of this Letter Agreement will govern.

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Letter Agreement N°1 - Page 1/4   


LETTER AGREEMENT N°1

 

*[Two pages have been omitted in accordance with a request for confidential treatment.]

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Letter Agreement N°1 - Page 2/4   


LETTER AGREEMENT N°1

 

6. Assignment

Except as provided in Clause 21 of the Agreement, this Letter Agreement is not transferable, and the Buyer’s rights under this Letter Agreement shall not be assigned, sold, transferred or otherwise alienated by operation of law or otherwise to any person other than the Buyer. Any unauthorised assignment, sale, transfer or other alienation of the Buyer’s rights under this Letter Agreement with respect to any Aircraft will be void and without effect.

 

7. Confidentiality

This Letter Agreement (and its existence) shall be treated by both parties as confidential in accordance with Clause 22.12 of the Agreement.

 

8. Counterparts

This Letter Agreement may be signed in any number of separate counterparts. Each counterpart, when signed and delivered (including counterparts delivered by facsimile transmission) shall be an original, and the counterparts together shall constitute one and the same instrument.

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Letter Agreement N°1 - Page 3/4   


LETTER AGREEMENT N°1

 

If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

 

Agreed and Accepted     Agreed and Accepted
For and on behalf of     For and on behalf of
Aerovias del Continente     AIRBUS S.A.S.
Americano S.A. Avianca      
By:  

 

    By:  

 

Its:  

 

    Its:  

 

Date:  

 

    Date:  

 

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Letter Agreement N°1 - Page 4/4   


LETTER AGREEMENT N°2

Note: Certain portions have been omitted from this Letter Agreement in accordance with a request for confidential treatment submitted to the Securities and Exchange Commission. Omitted information has been replaced with an asterisk. Omitted information has been filed separately with the Securities and Exchange Commission.

Aerovias del Continente Americano S.A. Avianca

Avenida Calle 26 No. 92-30

Bogota, Colombia

Subject : [*]

Aerovias del Continente Americano S.A. Avianca (the “ Buyer ”) and AIRBUS S.A.S. (the “ Seller ”) have entered into a Purchase Agreement (the “ Agreement ”) dated as of even date herewith, which covers, among other things, the manufacture and the sale by the Seller and the purchase by the Buyer of the Aircraft, under the terms and conditions in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement N°2 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.

Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement.

Both parties agree that this Letter Agreement, upon execution hereof, shall constitute an integral, nonseverable part of said Agreement and shall be governed by all the provisions of the Agreement, as such provisions have been specifically amended pursuant to this Letter Agreement. If there is any inconsistency between the provisions of the Agreement and the provisions of this Letter Agreement then the provisions of this Letter Agreement will govern.

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Letter Agreement N°2 - Page 1/3   


LETTER AGREEMENT N°2

 

1. The Seller agrees to delete [*] of the Agreement in its entirety and replace it with the following quoted text:

[*]

2. Assignment

Except as provided in Clause 21 of the Agreement, this Letter Agreement is not transferable, and the Buyer’s rights under this Letter Agreement shall not be assigned, sold, transferred or otherwise alienated by operation of law or otherwise to any person other than the Buyer. Any unauthorised assignment, sale, transfer or other alienation of the Buyer’s rights under this Letter Agreement with respect to any Aircraft will be void and without effect.

3. Confidentiality

This Letter Agreement (and its existence) shall be treated by both parties as confidential in accordance with Clause 22.12 of the Agreement.

4. Counterparts

This Letter Agreement may be signed in any number of separate counterparts. Each counterpart, when signed and delivered (including counterparts delivered by facsimile transmission) shall be an original, and the counterparts together shall constitute one and the same instrument.

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Letter Agreement N°2 - Page 2/3   


LETTER AGREEMENT N°2

 

If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

 

Agreed and Accepted     Agreed and Accepted
For and on behalf of     For and on behalf of
Aerovias del Continente     AIRBUS S.A.S.
Americano S.A. Avianca      
By:  

 

    By:  

 

Its:  

 

    Its:  

 

Date:  

 

    Date:  

 

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Letter Agreement N°2 - Page 3/3   


LETTER AGREEMENT N°3

Note: Certain portions have been omitted from this Letter Agreement in accordance with a request for confidential treatment submitted to the Securities and Exchange Commission. Omitted information has been replaced with an asterisk. Omitted information has been filed separately with the Securities and Exchange Commission.

Aerovias del Continente Americano S.A. Avianca

Avenida Calle 26 No. 92-30

Bogota, Colombia

Subject : [*]

Aerovias del Continente Americano S.A. Avianca (the “ Buyer ”) and AIRBUS S.A.S. (the “ Seller ”) have entered into a Purchase Agreement (the “ Agreement ”) dated as of even date herewith, which covers, among other things, the manufacture and the sale by the Seller and the purchase by the Buyer of the Aircraft, under the terms and conditions in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement N°3 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.

Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement.

Both parties agree that this Letter Agreement, upon execution hereof, shall constitute an integral, nonseverable part of said Agreement and shall be governed by all the provisions of the Agreement, as such provisions have been specifically amended pursuant to this Letter Agreement. If there is any inconsistency between the provisions of the Agreement and the provisions of this Letter Agreement then the provisions of this Letter Agreement will govern.

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Letter Agreement N°3 - Page 1/2   


LETTER AGREEMENT N°3

 

[*]

 

3. Assignment

Except as provided in Clause 21 of the Agreement, this Letter Agreement is not transferable, and the Buyer’s rights under this Letter Agreement shall not be assigned, sold, transferred or otherwise alienated by operation of law or otherwise to any person other than the Buyer. Any unauthorised assignment, sale, transfer or other alienation of the Buyer’s rights under this Letter Agreement with respect to any Aircraft will be void and without effect.

 

4. Confidentiality

This Letter Agreement (and its existence) shall be treated by both parties as confidential in accordance with Clause 22.12 of the Agreement.

 

5. Counterparts

This Letter Agreement may be signed in any number of separate counterparts. Each counterpart, when signed and delivered (including counterparts delivered by facsimile transmission) shall be an original, and the counterparts together shall constitute one and the same instrument.

If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

 

Agreed and Accepted     Agreed and Accepted
For and on behalf of     For and on behalf of
Aerovias del Continente     AIRBUS S.A.S.
Americano S.A. Avianca      
By:  

 

    By:  

 

Its:  

 

    Its:  

 

Date:  

 

    Date:  

 

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Letter Agreement N°3 - Page 2/2   


LETTER AGREEMENT N°4

Note: Certain portions have been omitted from this Letter Agreement in accordance with a request for confidential treatment submitted to the Securities and Exchange Commission. Omitted information has been replaced with an asterisk. Omitted information has been filed separately with the Securities and Exchange Commission.

Aerovias del Continente Americano S.A. Avianca

Avenida Calle 26 No. 92-30

Bogota, Colombia

Subject [*]

Aerovias del Continente Americano S.A. Avianca (the “ Buyer ”) and AIRBUS S.A.S. (the “ Seller ”) have entered into a Purchase Agreement (the “ Agreement ”) dated as of even date herewith, which covers, among other things, the manufacture and the sale by the Seller and the purchase by the Buyer of the Aircraft, under the terms and conditions in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement N°4 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.

Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement.

Both parties agree that this Letter Agreement, upon execution hereof, shall constitute an integral, nonseverable part of said Agreement and shall be governed by all the provisions of the Agreement, as such provisions have been specifically amended pursuant to this Letter Agreement. If there is any inconsistency between the provisions of the Agreement and the provisions of this Letter Agreement then the provisions of this Letter Agreement will govern.

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Letter Agreement N°4 - Page 1/3   


LETTER AGREEMENT N°4

 

[*]

 

4. Assignment

Except as provided in Clause 21 of the Agreement, this Letter Agreement is not transferable, and the Buyer’s rights under this Letter Agreement shall not be assigned, sold, transferred or otherwise alienated by operation of law or otherwise to any person other than the Buyer. Any unauthorised assignment, sale, transfer or other alienation of the Buyer’s rights under this Letter Agreement with respect to any Aircraft will be void and without effect.

 

5. Confidentiality

This Letter Agreement (and its existence) shall be treated by both parties as confidential in accordance with Clause 22.12 of the Agreement.

 

6. Counterparts

This Letter Agreement may be signed in any number of separate counterparts. Each counterpart, when signed and delivered (including counterparts delivered by facsimile transmission) shall be an original, and the counterparts together shall constitute one and the same instrument.

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Letter Agreement N°4 - Page 2/3   


LETTER AGREEMENT N°4

 

If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

 

Agreed and Accepted     Agreed and Accepted
For and on behalf of     For and on behalf of
Aerovias del Continente     AIRBUS S.A.S.
Americano S.A. Avianca      
By:  

 

    By:  

 

Its:  

 

    Its:  

 

Date:  

 

    Date:  

 

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Letter Agreement N°4 - Page 3/3   


LETTER AGREEMENT N°5

Note: Certain portions have been omitted from this Letter Agreement in accordance with a request for confidential treatment submitted to the Securities and Exchange Commission. Omitted information has been replaced with an asterisk. Omitted information has been filed separately with the Securities and Exchange Commission.

Aerovias del Continente Americano S.A. Avianca

Avenida Calle 26 No. 92-30

Bogota, Colombia

Subject : [*]

Aerovias del Continente Americano S.A. Avianca (the “ Buyer ”) and AIRBUS S.A.S. (the “ Seller ”) have entered into a Purchase Agreement (the “ Agreement ”) dated as of even date herewith, which covers, among other things, the manufacture and the sale by the Seller and the purchase by the Buyer of the Aircraft, under the terms and conditions in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement N°5 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.

Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement.

Both parties agree that this Letter Agreement, upon execution hereof, shall constitute an integral, nonseverable part of said Agreement and shall be governed by all the provisions of the Agreement, as such provisions have been specifically amended pursuant to this Letter Agreement. If there is any inconsistency between the provisions of the Agreement and the provisions of this Letter Agreement then the provisions of this Letter Agreement will govern.

 

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   Letter Agreement N°5 - Page 1/3   


LETTER AGREEMENT N°5

 

[*]

 

3. Assignment

Except as provided in Clause 21 of the Agreement, this Letter Agreement is not transferable, and the Buyer’s rights under this Letter Agreement shall not be assigned, sold, transferred or otherwise alienated by operation of law or otherwise to any person other than the Buyer. Any unauthorised assignment, sale, transfer or other alienation of the Buyer’s rights under this Letter Agreement with respect to any Aircraft will be void and without effect.

 

4. Confidentiality

This Letter Agreement (and its existence) shall be treated by both parties as confidential in accordance with Clause 22.12 of the Agreement.

 

5. Counterparts

This Letter Agreement may be signed in any number of separate counterparts. Each counterpart, when signed and delivered (including counterparts delivered by facsimile transmission) shall be an original, and the counterparts together shall constitute one and the same instrument.

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Letter Agreement N°5 - Page 2/3   


LETTER AGREEMENT N°5

 

If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

 

Agreed and Accepted     Agreed and Accepted
For and on behalf of     For and on behalf of
Aerovias del Continente     AIRBUS S.A.S.
Americano S.A. Avianca      
By:  

 

    By:  

 

Its:  

 

    Its:  

 

Date:  

 

    Date:  

 

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Letter Agreement N°5 - Page 3/3   


LETTER AGREEMENT N°6

Note: Certain portions have been omitted from this Letter Agreement in accordance with a request for confidential treatment submitted to the Securities and Exchange Commission. Omitted information has been replaced with an asterisk. Omitted information has been filed separately with the Securities and Exchange Commission.

Aerovias del Continente Americano S.A. Avianca

Avenida Calle 26 No. 92-30

Bogota, Colombia

Subject : [*]

Aerovias del Continente Americano S.A. Avianca (the “ Buyer ”) and AIRBUS S.A.S. (the “ Seller ”) have entered into a Purchase Agreement (the “ Agreement ”) dated as of even date herewith, which covers, among other things, the manufacture and the sale by the Seller and the purchase by the Buyer of the Aircraft, under the terms and conditions in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement N°6 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.

Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement.

Both parties agree that this Letter Agreement, upon execution hereof, shall constitute an integral, nonseverable part of said Agreement and shall be governed by all the provisions of the Agreement, as such provisions have been specifically amended pursuant to this Letter Agreement. If there is any inconsistency between the provisions of the Agreement and the provisions of this Letter Agreement then the provisions of this Letter Agreement will govern.

 

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   Letter Agreement N°6 - Page 1/3   


LETTER AGREEMENT N°6

 

*[Three pages have been omitted in accordance with a request for confidential treatment.]

 

4. Assignment

Except as provided in Clause 21 of the Agreement, this Letter Agreement is not transferable, and the Buyer’s rights under this Letter Agreement shall not be assigned, sold, transferred or otherwise alienated by operation of law or otherwise to any person other than the Buyer. Any unauthorised assignment, sale, transfer or other alienation of the Buyer’s rights under this Letter Agreement with respect to any Aircraft will be void and without effect.

 

5. Confidentiality

This Letter Agreement (and its existence) shall be treated by both parties as confidential in accordance with Clause 22.12 of the Agreement.

 

6. Counterparts

This Letter Agreement may be signed in any number of separate counterparts. Each counterpart, when signed and delivered (including counterparts delivered by facsimile transmission) shall be an original, and the counterparts together shall constitute one and the same instrument.

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Letter Agreement N°6 - Page 2/3   


LETTER AGREEMENT N°6

 

If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

 

Agreed and Accepted     Agreed and Accepted
For and on behalf of     For and on behalf of

 

Aerovias del Continente     AIRBUS S.A.S.
Americano S.A. Avianca      
By:  

 

    By:  

 

Its:  

 

    Its:  

 

Date:  

 

    Date:  

 

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Letter Agreement N°6 - Page 3/3   


LETTER AGREEMENT N°7

Note: Certain portions have been omitted from this Letter Agreement in accordance with a request for confidential treatment submitted to the Securities and Exchange Commission. Omitted information has been replaced with an asterisk. Omitted information has been filed separately with the Securities and Exchange Commission.

Aerovias del Continente Americano S.A. Avianca

Avenida Calle 26 No. 92-30

Bogota, Colombia

Subject : PRODUCT SUPPORT

Aerovias del Continente Americano S.A. Avianca (the “ Buyer ”) and AIRBUS S.A.S. (the “ Seller ”) have entered into a Purchase Agreement (the “ Agreement ”) dated as of even date herewith, which covers, among other things, the manufacture and the sale by the Seller and the purchase by the Buyer of the Aircraft, under the terms and conditions in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement N°7 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.

Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement.

Both parties agree that this Letter Agreement, upon execution hereof, shall constitute an integral, nonseverable part of said Agreement and shall be governed by all the provisions of the Agreement, as such provisions have been specifically amended pursuant to this Letter Agreement. If there is any inconsistency between the provisions of the Agreement and the provisions of this Letter Agreement then the provisions of this Letter Agreement will govern.

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Letter Agreement N°7 - Page 1/6   


LETTER AGREEMENT N°7

 

1. In addition to Clause 16 of the Agreement and in order to facilitate the entry into service and the operation of the Aircraft, the Seller will provide the Buyer with following services on a [*] basis:

 

   

[*] ground instructors training.

[*]

 

   

The Seller shall [*].

[*]

 

   

Seller will provide general guidance and support to Buyer in connection with Buyer’s acquisition of training equipment such as simulators (Full Flight-, Fixed Base-, Maintenance-), system trainers, cabin mock-ups, etc., from simulator manufacturers and other third parties.

For the avoidance of doubt, all the services and quantities indicated above are the total services and quantities granted for the whole of the Buyer’s fleet of [*] Aircraft, unless otherwise specified herein.

 

2. [*]

 

3. [*]

 

3. Assignment

Except as provided in Clause 21 of the Agreement, this Letter Agreement is not transferable, and the Buyer’s rights under this Letter Agreement shall not be assigned, sold, transferred or otherwise alienated by operation of law or otherwise to any person other than the Buyer. Any unauthorised assignment, sale, transfer or other alienation of the Buyer’s rights under this Letter Agreement with respect to any Aircraft will be void and without effect.

 

4. Confidentiality

This Letter Agreement (and its existence) shall be treated by both parties as confidential in accordance with Clause 22.12 of the Agreement.

 

5. Counterparts

This Letter Agreement may be signed in any number of separate counterparts. Each counterpart, when signed and delivered (including counterparts delivered by facsimile transmission) shall be an original, and the counterparts together shall constitute one and the same instrument.

 

 

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Letter Agreement N°7 - Page 2/6   


LETTER AGREEMENT N°7

 

If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

 

Agreed and Accepted     Agreed and Accepted
For and on behalf of     For and on behalf of
Aerovias del Continente     AIRBUS S.A.S.
Americano S.A. Avianca      
By:  

 

    By:  

 

Its:  

 

    Its:  

 

Date:  

 

    Date:  

 

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Letter Agreement N°7 - Page 3/6   


LETTER AGREEMENT N°8

Note: Certain portions have been omitted from this Letter Agreement in accordance with a request for confidential treatment submitted to the Securities and Exchange Commission. Omitted information has been replaced with an asterisk. Omitted information has been filed separately with the Securities and Exchange Commission.

Aerovias del Continente Americano S.A. Avianca

Avenida Calle 26 No. 92-30

Bogota, Colombia

Subject : [*]

Aerovias del Continente Americano S.A. Avianca (the “ Buyer ”) and AIRBUS S.A.S. (the “ Seller ”) have entered into a Purchase Agreement (the “ Agreement ”) dated as of even date herewith, which covers, among other things, the manufacture and the sale by the Seller and the purchase by the Buyer of the Aircraft, under the terms and conditions in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement N°8 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.

Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement.

Both parties agree that this Letter Agreement, upon execution hereof, shall constitute an integral, nonseverable part of said Agreement and shall be governed by all the provisions of the Agreement, as such provisions have been specifically amended pursuant to this Letter Agreement. If there is any inconsistency between the provisions of the Agreement and the provisions of this Letter Agreement then the provisions of this Letter Agreement will govern.

 

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   Letter Agreement N°8 - Page 1/3   


LETTER AGREEMENT N°8

 

*[Two pages have been omitted in accordance with a request for confidential treatment.]

 

3. Assignment

Except as provided in Clause 21 of the Agreement, this Letter Agreement is not transferable, and the Buyer’s rights under this Letter Agreement shall not be assigned, sold, transferred or otherwise alienated by operation of law or otherwise to any person other than the Buyer. Any unauthorised assignment, sale, transfer or other alienation of the Buyer’s rights under this Letter Agreement with respect to any Aircraft will be void and without effect.

 

4. Confidentiality

This Letter Agreement (and its existence) shall be treated by both parties as confidential in accordance with Clause 22.12 of the Agreement.

 

5. Counterparts

This Letter Agreement may be signed in any number of separate counterparts. Each counterpart, when signed and delivered (including counterparts delivered by facsimile transmission) shall be an original, and the counterparts together shall constitute one and the same instrument.

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Letter Agreement N°8 - Page 2/3   


LETTER AGREEMENT N°8

 

If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

 

Agreed and Accepted     Agreed and Accepted
For and on behalf of     For and on behalf of
Aerovias del Continente     AIRBUS S.A.S.
Americano S.A. Avianca      
By:  

 

    By:  

 

Its:  

 

    Its:  

 

Date:  

 

    Date:  

 

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Letter Agreement N°8 - Page 3/3   


LETTER AGREEMENT N°9

Aerovias del Continente Americano S.A. Avianca

Avenida Calle 26 No. 92-30

Bogota, Colombia

Subject : INTENTIONALLY LEFT BLANK

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Letter Agreement N°9 - Page 1/2   


LETTER AGREEMENT N°9

 

If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

 

Agreed and Accepted     Agreed and Accepted
For and on behalf of     For and on behalf of
Aerovias del Continente     AIRBUS S.A.S.
Americano S.A. Avianca      
By:  

 

    By:  

 

Its:  

 

    Its:  

 

Date:  

 

    Date:  

 

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Letter Agreement N°9 - Page 2/2   


LETTER AGREEMENT N°10

Note: Certain portions have been omitted from this Letter Agreement in accordance with a request for confidential treatment submitted to the Securities and Exchange Commission. Omitted information has been replaced with an asterisk. Omitted information has been filed separately with the Securities and Exchange Commission.

Aerovias del Continente Americano S.A. Avianca

Avenida Calle 26 No. 92-30

Bogota, Colombia

Subject : PURCHASE RIGHTS

Aerovias del Continente Americano S.A. Avianca (the “ Buyer ”) and AIRBUS S.A.S. (the “ Seller ”) have entered into a Purchase Agreement (the “ Agreement ”) dated as of even date herewith, which covers, among other things, the manufacture and the sale by the Seller and the purchase by the Buyer of the Aircraft, under the terms and conditions in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement N°10 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.

Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement.

Both parties agree that this Letter Agreement, upon execution hereof, shall constitute an integral, nonseverable part of said Agreement and shall be governed by all the provisions of the Agreement, as such provisions have been specifically amended pursuant to this Letter Agreement. If there is any inconsistency between the provisions of the Agreement and the provisions of this Letter Agreement then the provisions of this Letter Agreement will govern.

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Letter Agreement N°10 - Page 1/4   


LETTER AGREEMENT N°10

 

1. General

The Seller hereby grants to the Buyer the right to purchase up to [*] additional A320 family aircraft (the “ Purchase Right Aircraft ”)

The Purchase Right Aircraft shall be manufactured in accordance with the Specification and Development Changes, SCNs and MSCNs which may be incorporated by the Seller in the Specification in accordance with Clause 2 of the Agreement prior to the delivery of the Purchase Right Aircraft.

Unless otherwise expressly stipulated, all terms and conditions applicable to the firmly ordered Aircraft, on a per firm ordered Aircraft basis, shall apply to the Purchase Right Aircraft.

 

2. Purchase Right Aircraft Price

The Basic Price of the Airframe of each Purchase Right Aircraft offered hereunder shall be the same as the Basic Price of the Airframe defined by the Seller in respect of the firmly ordered Aircraft.

Both the Reference Price of the Propulsion Systems and the price revision formula applicable thereto shall be as quoted by the corresponding Propulsion Systems Manufacturer as at the date the Purchase Right Aircraft provided hereunder is exercised by the Buyer in accordance with Paragraph 3 hereunder. The special conditions set out in Letter Agreement No.1 shall apply to the Purchase Right Aircraft except where specifically stated otherwise therein.

 

3. Purchase Right Aircraft exercise and Delivery Date

[*]

The scheduled delivery months for each Purchase Right Aircraft shall be specifically identified in an amendment to the Agreement.

 

4. Purchase Right Fee

For [*] Purchase Right Aircraft, the Buyer has paid to Seller a refundable purchase right fee of US Dollars [*]) (the “ Purchase Right Fee ”) and Seller hereby acknowledges receipt of such payment from the Buyer. Upon exercise by the Buyer of a Purchase Right, the Purchase Right Fee shall be applied to the first Pre-delivery Payments due in respect of such Purchase Right Aircraft in accordance with the Predelivery Payment schedule set out in Clause 5 of the Agreement as modified by Letter Agreement No. [*] to the Agreement (“ Letter Agreement No [*]”). The Purchase Right Fee for [*] remaining Purchase Right Aircraft shall be paid at signature of the Agreement.

 

5. Purchase Right Aircraft Validity

Once the Seller and the Buyer have agreed on the respective scheduled delivery months the exercise of the applicable Purchase Rights shall be validated by the execution and delivery of an amendment to the Agreement and the transfer to the Seller’s bank account of the Predelivery Payments then due and payable by the Buyer in respect of such Purchase Right Aircraft in accordance with Clause 5 of the Agreement, as modified by Letter Agreement No. [*].

 

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   Letter Agreement N°10 - Page 2/4   


LETTER AGREEMENT N°10

 

All other Predelivery Payments for the exercised Purchase Right Aircraft shall be made in accordance with Clause 5 of the Agreement, as modified by Letter Agreement No. [*].

In the event that the Buyer fails to timely exercise any or all of the Purchase Rights in accordance with the abovementioned Decision Dates, any of the Purchase Rights of such batch not exercised by such Decision Date shall lapse and neither party shall have any further rights or obligations hereunder as to such lapsed Purchase Right Aircraft, except that the Seller shall promptly apply an amount equal to the Purchase Right Fees related to such lapsed Purchase Right Aircraft to the next Predelivery Payments due under the Agreement.

 

6. [*] .

 

7. Assignment

Except as provided in Clause 21 of the Agreement, this Letter Agreement is not transferable, and the Buyer’s rights under this Letter Agreement shall not be assigned, sold, transferred or otherwise alienated by operation of law or otherwise to any person other than the Buyer. Any unauthorised assignment, sale, transfer or other alienation of the Buyer’s rights under this Letter Agreement with respect to any Aircraft will be void and without effect.

 

8. Confidentiality

This Letter Agreement (and its existence) shall be treated by both parties as confidential in accordance with Clause 22.12 of the Agreement.

 

9. Counterparts

This Letter Agreement may be signed in any number of separate counterparts. Each counterpart, when signed and delivered (including counterparts delivered by facsimile transmission) shall be an original, and the counterparts together shall constitute one and the same instrument.

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Letter Agreement N°10 - Page 3/4   


LETTER AGREEMENT N°10

 

If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

 

Agreed and Accepted     Agreed and Accepted
For and on behalf of     For and on behalf of
Aerovias del Continente     AIRBUS S.A.S.
Americano S.A. Avianca      
By:  

 

    By:  

 

Its:  

 

    Its:  

 

Date:  

 

    Date:  

 

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Letter Agreement N°10 - Page 4/4   


LETTER AGREEMENT N°11A

Note: Certain portions have been omitted from this Letter Agreement in accordance with a request for confidential treatment submitted to the Securities and Exchange Commission. Omitted information has been replaced with an asterisk. Omitted information has been filed separately with the Securities and Exchange Commission.

Aerovias del Continente Americano S.A. Avianca

Avenida Calle 26 No. 92-30

Bogota, Colombia

SUBJECT : [*]

Aerovias del Continente Americano S.A. Avianca (the “ Buyer ”) and AIRBUS S.A.S. (the “ Seller ”) have entered into a Purchase Agreement (the “ Agreement ”) dated as of even date herewith, which covers, among other things, the manufacture and the sale by the Seller and the purchase by the Buyer of the Aircraft, under the terms and conditions in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement N°11A (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.

Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement.

Both parties agree that this Letter Agreement, upon execution hereof, shall constitute an integral, nonseverable part of said Agreement and shall be governed by all the provisions of the Agreement, as such provisions have been specifically amended pursuant to this Letter Agreement. If there is any inconsistency between the provisions of the Agreement and the provisions of this Letter Agreement then the provisions of this Letter Agreement will govern.

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Letter Agreement N°11A - Page 1/3   


LETTER AGREEMENT N°11A

 

*[Eight pages have been omitted in accordance with a request for confidential treatment.]

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Letter Agreement N°11A - Page 2/3   


LETTER AGREEMENT N°11A

 

If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

 

Agreed and Accepted     Agreed and Accepted
For and on behalf of     For and on behalf of
Aerovias del Continente     AIRBUS S.A.S.
Americano S.A. Avianca      
By:  

 

    By:  

 

Its:  

 

    Its:  

 

Date:  

 

    Date:  

 

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Letter Agreement N°11A - Page 3/3   


LETTER AGREEMENT N°11B

Note: Certain portions have been omitted from this Letter Agreement in accordance with a request for confidential treatment submitted to the Securities and Exchange Commission. Omitted information has been replaced with an asterisk. Omitted information has been filed separately with the Securities and Exchange Commission.

Aerovias del Continente Americano S.A. Avianca

Avenida Calle 26 No. 92-30

Bogota, Colombia

SUBJECT : [*]

Aerovias del Continente Americano S.A. Avianca (the “ Buyer ”) and AIRBUS S.A.S. (the “ Seller ”) have entered into a Purchase Agreement (the “ Agreement ”) dated as of even date herewith, which covers, among other things, the manufacture and the sale by the Seller and the purchase by the Buyer of the Aircraft, under the terms and conditions in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement N°11B (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.

Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement.

Both parties agree that this Letter Agreement, upon execution hereof, shall constitute an integral, nonseverable part of said Agreement and shall be governed by all the provisions of the Agreement, as such provisions have been specifically amended pursuant to this Letter Agreement. If there is any inconsistency between the provisions of the Agreement and the provisions of this Letter Agreement then the provisions of this Letter Agreement will govern.

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Letter Agreement N°11B - Page 1/3   


LETTER AGREEMENT N°11B

 

*[Eight pages have been omitted in accordance with a request for confidential treatment.].

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Letter Agreement N°11B - Page 2/3   


LETTER AGREEMENT N°11B

 

If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

 

Agreed and Accepted     Agreed and Accepted
For and on behalf of     For and on behalf of
Aerovias del Continente     AIRBUS S.A.S.
Americano S.A. Avianca      
By:  

 

    By:  

 

Its:  

 

    Its:  

 

Date:  

 

    Date:  

 

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Letter Agreement N°11B - Page 3/3   


LETTER AGREEMENT N°11C

Note: Certain portions have been omitted from this Letter Agreement in accordance with a request for confidential treatment submitted to the Securities and Exchange Commission. Omitted information has been replaced with an asterisk. Omitted information has been filed separately with the Securities and Exchange Commission.

Aerovias del Continente Americano S.A. Avianca

Avenida Calle 26 No. 92-30

Bogota, Colombia

SUBJECT : [*]

Aerovias del Continente Americano S.A. Avianca (the “ Buyer ”) and AIRBUS S.A.S. (the “ Seller ”) have entered into a Purchase Agreement (the “ Agreement ”) dated as of even date herewith, which covers, among other things, the manufacture and the sale by the Seller and the purchase by the Buyer of the Aircraft, under the terms and conditions in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement N°11C (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.

Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement.

Both parties agree that this Letter Agreement, upon execution hereof, shall constitute an integral, nonseverable part of said Agreement and shall be governed by all the provisions of the Agreement, as such provisions have been specifically amended pursuant to this Letter Agreement. If there is any inconsistency between the provisions of the Agreement and the provisions of this Letter Agreement then the provisions of this Letter Agreement will govern.

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Letter Agreement N°11C - Page 1/3   


LETTER AGREEMENT N°11C

 

*[Eight pages have been omitted in accordance with a request for confidential treatment.]

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Letter Agreement N°11C - Page 2/3   


LETTER AGREEMENT N°11C

 

If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

 

Agreed and Accepted     Agreed and Accepted
For and on behalf of     For and on behalf of
Aerovias del Continente     AIRBUS S.A.S.
Americano S.A. Avianca      
By:  

 

    By:  

 

Its:  

 

    Its:  

 

Date:  

 

    Date:  

 

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Letter Agreement N°11C - Page 3/3   


LETTER AGREEMENT N°11D

Note: Certain portions have been omitted from this Letter Agreement in accordance with a request for confidential treatment submitted to the Securities and Exchange Commission. Omitted information has been replaced with an asterisk. Omitted information has been filed separately with the Securities and Exchange Commission.

Aerovias del Continente Americano S.A. Avianca

Avenida Calle 26 No. 92-30

Bogota, Colombia

SUBJECT : [*]

Aerovias del Continente Americano S.A. Avianca (the “ Buyer ”) and AIRBUS S.A.S. (the “ Seller ”) have entered into a Purchase Agreement (the “ Agreement ”) dated as of even date herewith, which covers, among other things, the manufacture and the sale by the Seller and the purchase by the Buyer of the Aircraft, under the terms and conditions in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement N°11D (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.

Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement.

Both parties agree that this Letter Agreement, upon execution hereof, shall constitute an integral, nonseverable part of said Agreement and shall be governed by all the provisions of the Agreement, as such provisions have been specifically amended pursuant to this Letter Agreement. If there is any inconsistency between the provisions of the Agreement and the provisions of this Letter Agreement then the provisions of this Letter Agreement will govern.

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Letter Agreement N°11D - Page 1/3   


LETTER AGREEMENT N°11D

 

*[Eight pages have been omitted in accordance with a request for confidential treatment.]

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Letter Agreement N°11D - Page 2/3   


LETTER AGREEMENT N°11D

 

If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

 

Agreed and Accepted     Agreed and Accepted
For and on behalf of     For and on behalf of
Aerovias del Continente     AIRBUS S.A.S.
Americano S.A. Avianca      
By:  

 

    By:  

 

Its:  

 

    Its:  

 

Date:  

 

    Date:  

 

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Letter Agreement N°11D - Page 3/3   


LETTER AGREEMENT N°11E

Note: Certain portions have been omitted from this Letter Agreement in accordance with a request for confidential treatment submitted to the Securities and Exchange Commission. Omitted information has been replaced with an asterisk. Omitted information has been filed separately with the Securities and Exchange Commission.

Aerovias del Continente Americano S.A. Avianca

Avenida Calle 26 No. 92-30

Bogota, Colombia

SUBJECT : [*]

Aerovias del Continente Americano S.A. Avianca (the “ Buyer ”) and AIRBUS S.A.S. (the “ Seller ”) have entered into a Purchase Agreement (the “ Agreement ”) dated as of even date herewith, which covers, among other things, the manufacture and the sale by the Seller and the purchase by the Buyer of the Aircraft, under the terms and conditions in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement N°11E (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.

Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement.

Both parties agree that this Letter Agreement, upon execution hereof, shall constitute an integral, nonseverable part of said Agreement and shall be governed by all the provisions of the Agreement, as such provisions have been specifically amended pursuant to this Letter Agreement. If there is any inconsistency between the provisions of the Agreement and the provisions of this Letter Agreement then the provisions of this Letter Agreement will govern.

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Letter Agreement N°11E - Page 1/3   


LETTER AGREEMENT N°11E

 

*[Eight pages have been omitted in accordance with a request for confidential treatment.]

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Letter Agreement N°11E - Page 2/3   


LETTER AGREEMENT N°11E

 

If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

 

Agreed and Accepted     Agreed and Accepted
For and on behalf of     For and on behalf of
Aerovias del Continente     AIRBUS S.A.S.
Americano S.A. Avianca      
By:  

 

    By:  

 

Its:  

 

    Its:  

 

Date:  

 

    Date:  

 

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Letter Agreement N°11E - Page 3/3   


LETTER AGREEMENT N°11F

Note: Certain portions have been omitted from this Letter Agreement in accordance with a request for confidential treatment submitted to the Securities and Exchange Commission. Omitted information has been replaced with an asterisk. Omitted information has been filed separately with the Securities and Exchange Commission.

Aerovias del Continente Americano S.A. Avianca

Avenida Calle 26 No. 92-30

Bogota, Colombia

SUBJECT : [*]

Aerovias del Continente Americano S.A. Avianca (the “ Buyer ”) and AIRBUS S.A.S. (the “ Seller ”) have entered into a Purchase Agreement (the “ Agreement ”) dated as of even date herewith, which covers, among other things, the manufacture and the sale by the Seller and the purchase by the Buyer of the Aircraft, under the terms and conditions in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement N°11F (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.

Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement.

Both parties agree that this Letter Agreement, upon execution hereof, shall constitute an integral, nonseverable part of said Agreement and shall be governed by all the provisions of the Agreement, as such provisions have been specifically amended pursuant to this Letter Agreement. If there is any inconsistency between the provisions of the Agreement and the provisions of this Letter Agreement then the provisions of this Letter Agreement will govern.

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Letter Agreement N°11F - Page 1/3   


LETTER AGREEMENT N°11F

 

*[Eight pages have been omitted in accordance with a request for confidential treatment.]

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Letter Agreement N°11F - Page 2/3   


LETTER AGREEMENT N°11F

 

If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

 

Agreed and Accepted     Agreed and Accepted
For and on behalf of     For and on behalf of
Aerovias del Continente     AIRBUS S.A.S.
Americano S.A. Avianca      
By:  

 

    By:  

 

Its:  

 

    Its:  

 

Date:  

 

    Date:  

 

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Letter Agreement N°11F - Page 3/3   


LETTER AGREEMENT N°11G

Note: Certain portions have been omitted from this Letter Agreement in accordance with a request for confidential treatment submitted to the Securities and Exchange Commission. Omitted information has been replaced with an asterisk. Omitted information has been filed separately with the Securities and Exchange Commission.

Aerovias del Continente Americano S.A. Avianca

Avenida Calle 26 No. 92-30

Bogota, Colombia

SUBJECT : [*]

Aerovias del Continente Americano S.A. Avianca (the “ Buyer ”) and AIRBUS S.A.S. (the “ Seller ”) have entered into a Purchase Agreement (the “ Agreement ”) dated as of even date herewith, which covers, among other things, the manufacture and the sale by the Seller and the purchase by the Buyer of the Aircraft, under the terms and conditions in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement N°11A (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.

Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement.

Both parties agree that this Letter Agreement, upon execution hereof, shall constitute an integral, nonseverable part of said Agreement and shall be governed by all the provisions of the Agreement, as such provisions have been specifically amended pursuant to this Letter Agreement. If there is any inconsistency between the provisions of the Agreement and the provisions of this Letter Agreement then the provisions of this Letter Agreement will govern.

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Letter Agreement N°11G - Page 1/3   


LETTER AGREEMENT N°11G

 

*[Eight pages have been omitted in accordance with a request for confidential treatment.]

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Letter Agreement N°11G - Page 2/3   


LETTER AGREEMENT N°11G

 

If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

 

Agreed and Accepted     Agreed and Accepted
For and on behalf of     For and on behalf of
Aerovias del Continente     AIRBUS S.A.S.
Americano S.A. Avianca      
By:  

 

    By:  

 

Its:  

 

    Its:  

 

Date:  

 

    Date:  

 

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Letter Agreement N°11G - Page 3/3   


LETTER AGREEMENT N°11H

Note: Certain portions have been omitted from this Letter Agreement in accordance with a request for confidential treatment submitted to the Securities and Exchange Commission. Omitted information has been replaced with an asterisk. Omitted information has been filed separately with the Securities and Exchange Commission.

Aerovias del Continente Americano S.A. Avianca

Avenida Calle 26 No. 92-30

Bogota, Colombia

SUBJECT : [*]

Aerovias del Continente Americano S.A. Avianca (the “ Buyer ”) and AIRBUS S.A.S. (the “ Seller ”) have entered into a Purchase Agreement (the “ Agreement ”) dated as of even date herewith, which covers, among other things, the manufacture and the sale by the Seller and the purchase by the Buyer of the Aircraft, under the terms and conditions in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement N°11H (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.

Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement.

Both parties agree that this Letter Agreement, upon execution hereof, shall constitute an integral, nonseverable part of said Agreement and shall be governed by all the provisions of the Agreement, as such provisions have been specifically amended pursuant to this Letter Agreement. If there is any inconsistency between the provisions of the Agreement and the provisions of this Letter Agreement then the provisions of this Letter Agreement will govern.

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Letter Agreement N°11H - Page 1/3   


LETTER AGREEMENT N°11H

 

*[Seven pages have been omitted in accordance with a request for confidential treatment.]

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Letter Agreement N°11H - Page 2/3   


LETTER AGREEMENT N°11H

 

If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

 

Agreed and Accepted     Agreed and Accepted
For and on behalf of     For and on behalf of

 

Aerovias del Continente     AIRBUS S.A.S.
Americano S.A. Avianca      
By:  

 

    By:  

 

Its:  

 

    Its:  

 

Date:  

 

    Date:  

 

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Letter Agreement N°11H - Page 3/3   


LETTER AGREEMENT N°12

Note: Certain portions have been omitted from this Letter Agreement in accordance with a request for confidential treatment submitted to the Securities and Exchange Commission. Omitted information has been replaced with an asterisk. Omitted information has been filed separately with the Securities and Exchange Commission.

Aerovias del Continente Americano S.A. Avianca

Avenida Calle 26 No. 92-30

Bogota, Colombia

Subject : [*]

Aerovias del Continente Americano S.A. Avianca (the “ Buyer ”) and AIRBUS S.A.S. (the “ Seller ”) have entered into a Purchase Agreement (the “ Agreement ”) dated as of even date herewith, which covers, among other things, the manufacture and the sale by the Seller and the purchase by the Buyer of the Aircraft, under the terms and conditions in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement N°12 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.

Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement.

Both parties agree that this Letter Agreement, upon execution hereof, shall constitute an integral, nonseverable part of said Agreement and shall be governed by all the provisions of the Agreement, as such provisions have been specifically amended pursuant to this Letter Agreement. If there is any inconsistency between the provisions of the Agreement and the provisions of this Letter Agreement then the provisions of this Letter Agreement will govern.

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Letter Agreement N°12 - Page 1/3   


LETTER AGREEMENT N°12

 

1. [*]

 

4. Assignment

Except as provided in Clause 21 of the Agreement, this Letter Agreement is not transferable, and the Buyer’s rights under this Letter Agreement shall not be assigned, sold, transferred or otherwise alienated by operation of law or otherwise to any person other than the Buyer. Any unauthorised assignment, sale, transfer or other alienation of the Buyer’s rights under this Letter Agreement with respect to any Aircraft will be void and without effect.

 

5. Confidentiality

This Letter Agreement (and its existence) shall be treated by both parties as confidential in accordance with Clause 22.12 of the Agreement.

 

6. Counterparts

This Letter Agreement may be signed in any number of separate counterparts. Each counterpart, when signed and delivered (including counterparts delivered by facsimile transmission) shall be an original, and the counterparts together shall constitute one and the same instrument.

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Letter Agreement N°12 - Page 2/3   


LETTER AGREEMENT N°12

 

If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

 

Agreed and Accepted     Agreed and Accepted
For and on behalf of     For and on behalf of

 

Aerovias del Continente     AIRBUS S.A.S.
Americano S.A. Avianca      
By:  

 

    By:  

 

Its:  

 

    Its:  

 

Date:  

 

    Date:  

 

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Letter Agreement N°12 - Page 3/3   


LETTER AGREEMENT N°13

Note: Certain portions have been omitted from this Letter Agreement in accordance with a request for confidential treatment submitted to the Securities and Exchange Commission. Omitted information has been replaced with an asterisk. Omitted information has been filed separately with the Securities and Exchange Commission.

Aerovias del Continente Americano S.A. Avianca

Avenida Calle 26 No. 92-30

Bogota, Colombia

Subject : [*]

Aerovias del Continente Americano S.A. Avianca (the “ Buyer ”) and AIRBUS S.A.S. (the “ Seller ”) have entered into a Purchase Agreement an aircraft purchase agreement (the “ Agreement ”) dated as of even date herewith, which covers, among other things, the manufacture and the sale by the Seller and the purchase by the Buyer of the A320 Family Aircraft, under the terms and conditions in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement N°13 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft. as described in the Agreement.

Capitalized terms used herein and not otherwise defined in this Letter Agreement will have the meanings assigned thereto in the Agreement.

[*]

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Letter Agreement N°13 - Page 1/5   


LETTER AGREEMENT N°13

 

*[Two pages have been omitted in accordance with a request for confidential treatment.]

 

6. Confidentiality

This Letter Agreement (and its existence) shall be treated by both parties as confidential in accordance with Clause 22.12 of the Agreement.

 

7. Counterparts

This Letter Agreement may be signed in any number of separate counterparts. Each counterpart, when signed and delivered (including counterparts delivered by facsimile transmission) shall be an original, and the counterparts together shall constitute one and the same instrument.

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Letter Agreement N°13 - Page 2/5   


LETTER AGREEMENT N°13

 

If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

 

Agreed and Accepted     Agreed and Accepted
For and on behalf of     For and on behalf of

 

Aerovias del Continente     AIRBUS S.A.S.
Americano S.A. Avianca      
By:  

 

    By:  

 

Its:  

 

    Its:  

 

Date:  

 

    Date:  

 

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Letter Agreement N°13 - Page 3/5   


LETTER AGREEMENT N°13

 

Annex A

*[Three pages have been omitted in accordance with a request for confidential treatment.]

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Letter Agreement N°13 - Page 4/5   


LETTER AGREEMENT N°13

 

Annex B

*[Ten pages have been omitted in accordance with a request for confidential treatment.]

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Letter Agreement N°13 - Page 5/5   


LETTER AGREEMENT N°13A

Note: Certain portions have been omitted from this Letter Agreement in accordance with a request for confidential treatment submitted to the Securities and Exchange Commission. Omitted information has been replaced with an asterisk. Omitted information has been filed separately with the Securities and Exchange Commission.

Aerovias del Continente Americano S.A. Avianca

Avenida Calle 26 No. 92-30

Bogota, Colombia

Subject : [*]

Aerovias del Continente Americano S.A. Avianca (the “ Buyer ”) and AIRBUS S.A.S. (the “ Seller ”) have entered into a Purchase Agreement (the “ Agreement ”) dated 16 February 2007, which covers, among other things, the manufacture and the sale by the Seller and the purchase by the Buyer of the Aircraft, under the terms and conditions in said Agreement.

Pursuant to an amendment N°1 to the Agreement (“ Amendment N°1 ”) dated the date hereof the Seller and the Buyer agreed, amongst other things, that the fourteen (14) Purchase Right Aircraft would be converted into firmly ordered Aircraft (hereafter “ Exercised Purchase Right Aircraft ”).

The Buyer and the Seller have agreed to set forth in this Letter Agreement N°13A certain additional terms and conditions regarding the sale of the Exercised Purchase Right Aircraft.

Capitalised terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement.

Both parties agree that this Letter Agreement, upon execution hereof, shall constitute an integral, nonseverable part of said Agreement and shall be governed by all the provisions of the Agreement, as such provisions have been specifically amended pursuant to this Letter Agreement.

 

AVA - A320 Family PA       FINAL
   Letter Agreement N°13A - Page 1/3   


LETTER AGREEMENT N°13A

 

[*]

 

2. Assignment

Except as provided in Clause 21 of the Agreement, this Letter Agreement is not transferable, and the Buyer’s rights under this Letter Agreement shall not be assigned, sold, transferred or otherwise alienated by operation of law or otherwise to any person other than the Buyer. Any unauthorised assignment, sale, transfer or other alienation of the Buyer’s rights under this Letter Agreement with respect to any Aircraft will be void and without effect.

 

3. Confidentiality

This Letter Agreement (and its existence) shall be treated by both parties as confidential in accordance with Clause 22.12 of the Agreement.

 

4. Counterparts

This Letter Agreement may be signed in any number of separate counterparts. Each counterpart, when signed and delivered (including counterparts delivered by facsimile transmission) shall be an original, and the counterparts together shall constitute one and the same instrument.

 

AVA - A320 Family PA       FINAL
   Letter Agreement N°13A - Page 2/3   


LETTER AGREEMENT N°13A

 

If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

 

Agreed and Accepted     Agreed and Accepted
For and on behalf of     For and on behalf of

 

Aerovias del Continente     AIRBUS S.A.S.
Americano S.A. Avianca      
By:  

 

    By:  

 

Its:  

 

    Its:  

 

Date:  

 

    Date:  

 

 

AVA - A320 Family PA       FINAL
   Letter Agreement N°13A - Page 3/3   


LETTER AGREEMENT N°14

Note: Certain portions have been omitted from this Letter Agreement in accordance with a request for confidential treatment submitted to the Securities and Exchange Commission. Omitted information has been replaced with an asterisk. Omitted information has been filed separately with the Securities and Exchange Commission.

Aerovias del Continente Americano S.A. Avianca

Avenida Calle 26 No. 92-30

Bogota, Colombia

Subject : [*]

Aerovias del Continente Americano S.A. Avianca (the “ Buyer ”) and AIRBUS S.A.S. (the “ Seller ”) have entered into a Purchase Agreement (the “ Agreement ”) dated as of even date herewith, which covers, among other things, the manufacture and the sale by the Seller and the purchase by the Buyer of the Aircraft, under the terms and conditions in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement N°14 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.

Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement.

Both parties agree that this Letter Agreement, upon execution hereof, shall constitute an integral, nonseverable part of said Agreement and shall be governed by all the provisions of the Agreement, as such provisions have been specifically amended pursuant to this Letter Agreement. If there is any inconsistency between the provisions of the Agreement and the provisions of this Letter Agreement then the provisions of this Letter Agreement will govern.

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Letter Agreement N°14 - Page 1/4   


LETTER AGREEMENT N°14

 

*[Four pages have been omitted in accordance with a request for confidential treatment.]

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Letter Agreement N°14 - Page 2/4   


LETTER AGREEMENT N°14

 

If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

 

Agreed and Accepted     Agreed and Accepted
For and on behalf of     For and on behalf of

 

Aerovias del Continente     AIRBUS S.A.S.
Americano S.A. Avianca      
By:  

 

    By:  

 

Its:  

 

    Its:  

 

Date:  

 

    Date:  

 

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Letter Agreement N°14 - Page 3/4   


LETTER AGREEMENT N°14

 

SCHEDULE A

[*]

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Letter Agreement N°14 - Page 4/4   


LETTER AGREEMENT N°14A

Note: Certain portions have been omitted from this Letter Agreement in accordance with a request for confidential treatment submitted to the Securities and Exchange Commission. Omitted information has been replaced with an asterisk. Omitted information has been filed separately with the Securities and Exchange Commission.

Aerovias del Continente Americano S.A. Avianca

Avenida Calle 26 No. 92-30

Bogota, Colombia

Subject : [*]

Aerovias del Continente Americano S.A. Avianca (the “ Buyer ”) and AIRBUS S.A.S. (the “ Seller ”) have entered into a Purchase Agreement (the “ Agreement ”) dated 16 February 2007, which covers, among other things, the manufacture and the sale by the Seller and the purchase by the Buyer of the Aircraft, under the terms and conditions in said Agreement.

Pursuant to an amendment N°1 to the Agreement (“ Amendment N°1 ”) dated the date hereof the Seller and the Buyer agreed, amongst other things, that the [*] Purchase Right Aircraft would be converted into firmly ordered Aircraft (hereafter “ Exercised Purchase Right Aircraft ”).

The Buyer and the Seller have agreed to set forth in this Letter Agreement N°14A [*].

Capitalised terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement or, as the context may require, Letter Agreement N°14.

Both parties agree that this Letter Agreement, upon execution hereof, shall constitute an integral, nonseverable part of said Agreement and shall be governed by all the provisions of the Agreement, as such provisions have been specifically amended pursuant to this Letter Agreement.

 

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   Letter Agreement N°14A - Page 1/3   


LETTER AGREEMENT N°14A

 

*[Two pages have been omitted in accordance with a request for confidential treatment.]

 

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   Letter Agreement N°14A - Page 2/3   


LETTER AGREEMENT N°14A

 

If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

 

Agreed and Accepted

For and on behalf of

   

Agreed and Accepted

For and on behalf of

Aerovias del Continente     AIRBUS S.A.S.
Americano S.A. Avianca      
By:  

 

    By:  

 

Its:  

 

    Its:  

 

Date:  

 

    Date:  

 

 

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   Letter Agreement N°14A - Page 3/3   


LETTER AGREEMENT N°14B

Note: Certain portions have been omitted from this Letter Agreement in accordance with a request for confidential treatment submitted to the Securities and Exchange Commission. Omitted information has been replaced with an asterisk. Omitted information has been filed separately with the Securities and Exchange Commission.

Aerovias del Continente Americano S.A. Avianca

Avenida Calle 26 No. 92-30

Bogota, Colombia

Subject : [*]

Aerovias del Continente Americano S.A. Avianca (the “ Buyer ”) and AIRBUS S.A.S. (the “ Seller ”) have entered into a Purchase Agreement (the “ Agreement ”) dated 16 February 2007, which covers, among other things, the manufacture and the sale by the Seller and the purchase by the Buyer of the Aircraft, under the terms and conditions in said Agreement.

Pursuant to an amendment N°1 to the Agreement (“ Amendment N°1 ”) dated the date hereof the Seller and the Buyer agreed, amongst other things, that the [*] Purchase Right Aircraft would be converted into firmly ordered Aircraft.

[*]

Capitalised terms used herein and not otherwise defined in this Letter Agreement N°14B shall have the meanings assigned thereto in Letter Agreement N°14 or, as the context may require, Letter Agreement N°14A.

Both parties agree that this Letter Agreement N°14B, upon execution hereof, shall constitute an integral, nonseverable part of the Agreement and shall be governed by all the provisions of the Agreement, as such provisions have been specifically amended pursuant to this Letter Agreement N°14B.

 

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LETTER AGREEMENT N°14B

 

*[Two pages have been omitted in accordance with a request for confidential treatment.]

 

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   Letter Agreement N°14B - Page 2/3   


LETTER AGREEMENT N°14B

 

If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

 

Agreed and Accepted

For and on behalf of

   

Agreed and Accepted

For and on behalf of

Aerovias del Continente     AIRBUS S.A.S.
Americano S.A. Avianca      
By:  

 

    By:  

 

Its:  

 

    Its:  

 

Date:  

 

    Date:  

 

 

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LETTER AGREEMENT N° 15

Note: Certain portions have been omitted from this Letter Agreement in accordance with a request for confidential treatment submitted to the Securities and Exchange Commission. Omitted information has been replaced with an asterisk. Omitted information has been filed separately with the Securities and Exchange Commission.

Aerovias del Continente Americano S.A. Avianca

Avenida Calle 26 No. 92-30

Bogota, Colombia

SUBJECT: [*]

Avianca (the “ Buyer ”) and Airbus (the “ Seller ”) have entered into an Airbus A319-100, A320-200 and A321-200 Purchase Agreement (the “ Agreement ”), dated as of even date herewith which covers, among other things, the sale by the Seller and the purchase by the Buyer of certain A319-100, A320-200 and A321-200 (the “Aircraft”).

The Buyer and the Seller have agreed to set forth in this Letter Agreement N° 15 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.

The terms “herein”, “hereof” and “hereunder” and words of similar import refer to this Letter Agreement. Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement.

Both parties agree that this Letter Agreement shall constitute an integral, nonseverable part of said Agreement, that the provisions of said Agreement are hereby incorporated herein by reference, and that this Letter Agreement shall be governed by the provisions of said Agreement, except that if the Agreement and this Letter Agreement have specific provisions that are inconsistent, the specific provisions contained in this Letter Agreement shall govern.

 

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LETTER AGREEMENT N° 15

 

*[Nine pages have been omitted in accordance with a request for confidential treatment.]

 

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   Letter Agreement N°15 - Page 2/4   


LETTER AGREEMENT N° 15

 

If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

 

Agreed and Accepted      Agreed and Accepted
For and on behalf of      For and on behalf of
Aerovias del Continente      AIRBUS S.A.S.
Americano S.A. Avianca        
          
          
          
          
          
By :   

 

     By:   

 

          
Its:   

 

     Its:   

 

          
          
Date:   

 

     Date:   

 

 

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LETTER AGREEMENT N° 15

 

Appendix 1 - [*]:

[*]

 

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   Letter Agreement N°15 - Page 4/4   


LETTER AGREEMENT N° 16A

Note: Certain portions have been omitted from this Letter Agreement in accordance with a request for confidential treatment submitted to the Securities and Exchange Commission. Omitted information has been replaced with an asterisk. Omitted information has been filed separately with the Securities and Exchange Commission.

Aerovias del Continente Americano S.A. Avianca

Avenida Calle 26 No. 92-30

Bogota, Colombia

SUBJECT: [*]

Aerovias del Continente Americano S.A. Avianca (the “ Buyer ”) and AIRBUS S.A.S. (the “ Seller ”) have entered into a Purchase Agreement (the “ Agreement ”) dated as of even date herewith, which covers, among other things, the manufacture and the sale by the Seller and the purchase by the Buyer of certain A319-100 Aircraft (the “ Aircraft ”), under the terms and conditions in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement N°16A (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.

Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement.

Both parties agree that this Letter Agreement, upon execution hereof, shall constitute an integral, nonseverable part of said Agreement and shall be governed by all the provisions of the Agreement, as such provisions have been specifically amended pursuant to this Letter Agreement. If there is any inconsistency between the provisions of the Agreement and the provisions of this Letter Agreement then the provisions of this Letter Agreement will govern.

 

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   Letter Agreement N°16A - Page 1/6   


LETTER AGREEMENT N° 16A

 

*[Ten pages have been omitted in accordance with a request for confidential treatment.]

 

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LETTER AGREEMENT N° 16A

 

If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

 

Agreed and Accepted     Agreed and Accepted
For and on behalf of     For and on behalf of
Aerovias del Continente     AIRBUS S.A.S.
Americano S.A. Avianca      
By:  

 

    By:  

 

Its:  

 

    Its:  

 

Date:  

 

    Date:  

 

 

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LETTER AGREEMENT N° 16A

 

APPENDIX 1 [*]

*[Two pages have been omitted in accordance with a request for confidential treatment.]

 

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LETTER AGREEMENT N° 16A

 

APPENDIX 2 [*]

[*]

 

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   Letter Agreement N°16A - Page 5/6   


LETTER AGREEMENT N° 16A

 

APPENDIX 3 [*]

[*]

 

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   Letter Agreement N°16A - Page 6/6   


LETTER AGREEMENT N° 16B

Note: Certain portions have been omitted from this Letter Agreement in accordance with a request for confidential treatment submitted to the Securities and Exchange Commission. Omitted information has been replaced with an asterisk. Omitted information has been filed separately with the Securities and Exchange Commission.

Aerovias del Continente Americano S.A. Avianca

Avenida Calle 26 No. 92-30

Bogota, Colombia

SUBJECT: [*]

Aerovias del Continente Americano S.A. Avianca (the “ Buyer ”) and AIRBUS S.A.S. (the “ Seller ”) have entered into a Purchase Agreement (the “ Agreement ”) dated as of even date herewith, which covers, among other things, the manufacture and the sale by the Seller and the purchase by the Buyer of certain A320-200 Aircraft (the “ Aircraft ”), under the terms and conditions in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement N°16B (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.

Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement.

Both parties agree that this Letter Agreement, upon execution hereof, shall constitute an integral, nonseverable part of said Agreement and shall be governed by all the provisions of the Agreement, as such provisions have been specifically amended pursuant to this Letter Agreement. If there is any inconsistency between the provisions of the Agreement and the provisions of this Letter Agreement then the provisions of this Letter Agreement will govern.

 

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   Letter Agreement N°16B - Page 1/6   


LETTER AGREEMENT N° 16B

 

*[Nine pages have been omitted in accordance with a request for confidential treatment.]

 

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LETTER AGREEMENT N° 16B

 

If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

 

Agreed and Accepted     Agreed and Accepted
For and on behalf of     For and on behalf of
Aerovias del Continente     AIRBUS S.A.S.
Americano S.A. Avianca      
By:  

 

    By:  

 

Its:  

 

    Its:  

 

Date:  

 

    Date:  

 

 

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LETTER AGREEMENT N° 16B

 

APPENDIX 1 [*]

[*]

 

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   Letter Agreement N°16B - Page 4/6   


LETTER AGREEMENT N° 16B

 

APPENDIX 2 [*]

[*]

 

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   Letter Agreement N°16B - Page 5/6   


LETTER AGREEMENT N° 16B

 

APPENDIX 3 [*]

[*]

 

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LETTER AGREEMENT N° 16C

Note: Certain portions have been omitted from this Letter Agreement in accordance with a request for confidential treatment submitted to the Securities and Exchange Commission. Omitted information has been replaced with an asterisk. Omitted information has been filed separately with the Securities and Exchange Commission.

Aerovias del Continente Americano S.A. Avianca

Avenida Calle 26 No. 92-30

Bogota, Colombia

SUBJECT: [*]

Aerovias del Continente Americano S.A. Avianca (the “ Buyer ”) and AIRBUS S.A.S. (the “ Seller ”) have entered into a Purchase Agreement (the “ Agreement ”) dated as of even date herewith, which covers, among other things, the manufacture and the sale by the Seller and the purchase by the Buyer of certain A321-200 Aircraft (the “ Aircraft ”), under the terms and conditions in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement N°16C (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.

Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement.

Both parties agree that this Letter Agreement, upon execution hereof, shall constitute an integral, nonseverable part of said Agreement and shall be governed by all the provisions of the Agreement, as such provisions have been specifically amended pursuant to this Letter Agreement. If there is any inconsistency between the provisions of the Agreement and the provisions of this Letter Agreement then the provisions of this Letter Agreement will govern.

 

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   Letter Agreement N°16C - Page 1/6   


LETTER AGREEMENT N° 16C

 

*[Nine pages have been omitted in accordance with a request for confidential treatment.]

 

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LETTER AGREEMENT N° 16C

 

If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

 

Agreed and Accepted     Agreed and Accepted
For and on behalf of     For and on behalf of
Aerovias del Continente     AIRBUS S.A.S.
Americano S.A. Avianca      
By:  

 

    By:  

 

Its:  

 

    Its:  

 

Date:  

 

    Date:  

 

 

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LETTER AGREEMENT N° 16C

 

APPENDIX 1 [*]

*[Two pages have been omitted in accordance with a request for confidential treatment.]

 

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   Letter Agreement N°16C - Page 4/6   


LETTER AGREEMENT N° 16C

 

APPENDIX 2 [*]

[*]

 

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   Letter Agreement N°16C - Page 5/6   


LETTER AGREEMENT N° 16C

 

APPENDIX 3 [*]

[*]

 

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LETTER AGREEMENT N° 17A

Note: Certain portions have been omitted from this Letter Agreement in accordance with a request for confidential treatment submitted to the Securities and Exchange Commission. Omitted information has been replaced with an asterisk. Omitted information has been filed separately with the Securities and Exchange Commission.

Aerovias del Continente Americano S.A. Avianca

Avenida Calle 26 No. 92-30

Bogota, Colombia

SUBJECT:         [*]

Avianca, (the “ Buyer ”) and Airbus S.A.S. (the “ Seller ”) have entered into an Airbus A319/A320 Aircraft Purchase Agreement, dated as of even date herewith (the “ Agreement ”), which covers, among other things, the sale by the Seller and the purchase by the Buyer of certain Aircraft, under the terms and conditions set forth in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement No. 17A (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft. Capitalized terms used herein and not otherwise defined in this Letter Agreement will have the meanings assigned thereto in the Agreement. The terms “herein,” “hereof” and “hereunder” and words of similar import refer to this Letter Agreement.

Both parties agree that this Letter Agreement will constitute an integral, nonseverable part of the Agreement, that the provisions of the Agreement are hereby incorporated herein by reference, and that this Letter Agreement will be governed by the provisions of the Agreement, except that if the Agreement and this Letter Agreement have specific provisions that are inconsistent, the specific provisions contained in this Letter Agreement will govern.

 

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   Letter Agreement N°17A - Page 1/5   


LETTER AGREEMENT N° 17A

 

*[Twelve pages have been omitted in accordance with a request for confidential treatment.]

 

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LETTER AGREEMENT N° 17A

 

If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

 

Agreed and Accepted     Agreed and Accepted
For and on behalf of     For and on behalf of
Aerovias del Continente     AIRBUS S.A.S.
Americano S.A. Avianca      
By:  

 

    By:  

 

Its:  

 

    Its:  

 

Date:  

 

    Date:  

 

 

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   Letter Agreement N°17A - Page 3/5   


LETTER AGREEMENT N° 17A

 

APPENDIX A          [*]

[*]

 

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   Letter Agreement N°17A - Page 4/5   


LETTER AGREEMENT N° 17A

 

APPENDIX B

[*]

 

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LETTER AGREEMENT N° 17B

Note: Certain portions have been omitted from this Letter Agreement in accordance with a request for confidential treatment submitted to the Securities and Exchange Commission. Omitted information has been replaced with an asterisk. Omitted information has been filed separately with the Securities and Exchange Commission.

Aerovias del Continente Americano S.A. Avianca

Avenida Calle 26 No. 92-30

Bogota, Colombia

SUBJECT:     [*]

Avianca, (the “ Buyer ”) and Airbus S.A.S. (the “ Seller ”) have entered into an Airbus A319/A320 Aircraft Purchase Agreement, dated as of even date herewith (the “ Agreement ”), which covers, among other things, the sale by the Seller and the purchase by the Buyer of certain Aircraft, under the terms and conditions set forth in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement No. 17B (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft. Capitalized terms used herein and not otherwise defined in this Letter Agreement will have the meanings assigned thereto in the Agreement. The terms “herein,” “hereof” and “hereunder” and words of similar import refer to this Letter Agreement.

Both parties agree that this Letter Agreement will constitute an integral, nonseverable part of the Agreement, that the provisions of the Agreement are hereby incorporated herein by reference, and that this Letter Agreement will be governed by the provisions of the Agreement, except that if the Agreement and this Letter Agreement have specific provisions that are inconsistent, the specific provisions contained in this Letter Agreement will govern.

 

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LETTER AGREEMENT N° 17B

 

*[Ten pages have been omitted in accordance with a request for confidential treatment.]

 

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LETTER AGREEMENT N° 17B

 

If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

 

Agreed and Accepted     Agreed and Accepted
For and on behalf of     For and on behalf of
Aerovias del Continente     AIRBUS S.A.S.
Americano S.A. Avianca      
By:  

 

    By:  

 

Its:  

 

    Its:  

 

Date:  

 

    Date:  

 

 

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   Letter Agreement N°17B - Page 1/5   


LETTER AGREEMENT N° 17B

 

APPENDIX A          [*]

[*]

 

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Letter Agreement N°17B - Page 2/5

  


LETTER AGREEMENT N° 17B

 

APPENDIX B

[*]

 

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Letter Agreement N°17B - Page 3/5

  


LETTER AGREEMENT N° 18

 

Note: Certain portions have been omitted from this Letter Agreement in accordance with a request for confidential treatment submitted to the Securities and Exchange Commission. Omitted information has been replaced with an asterisk. Omitted information has been filed separately with the Securities and Exchange Commission.

Aerovias del Continente Americano S.A. Avianca

Avenida Calle 26 No. 92-30

Bogota, Colombia

SUBJECT : ADDITIONAL SOFTWARE SERVICES AND PLANNING AND SUPPORTING DATA PACKAGE

Aerovias del Continente Americano S.A. Avianca (the “ Buyer ”) and AIRBUS S.A.S. (the “ Seller ”) have entered into a Purchase Agreement (the “ Agreement ”) dated as of even date herewith, which covers, among other things, the manufacture and the sale by the Seller and the purchase by the Buyer of the Aircraft, under the terms and conditions in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement N°18 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.

Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement.

Both parties agree that this Letter Agreement, upon execution hereof, shall constitute an integral, nonseverable part of said Agreement and shall be governed by all the provisions of the Agreement, as such provisions have been specifically amended pursuant to this Letter Agreement. If there is any inconsistency between the provisions of the Agreement and the provisions of this Letter Agreement then the provisions of this Letter Agreement will govern.

 

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Letter Agreement N°18 - Page 1/13

  


LETTER AGREEMENT N° 18

 

The Seller has developed a range of products, which are aimed at supporting the Buyer in the operation of the Aircraft.

The Seller shall provide to the Buyer the products and services described hereafter at the conditions defined herein (hereinafter referred to as “Additional Software”) as well as planning and supporting data package.

 

1. AIRMAN

 

1.1 Description

Airman is a ground software dedicated to maintenance operations for aircraft equipped with on-board monitoring systems.

The three major functions of Airman are line maintenance, hangar maintenance and engineering, as further described hereunder.

 

1.1.1 Line Maintenance Function (Transit check)

The line maintenance function provides a real time direct access to all maintenance data related to an Aircraft event. It therefore guides line maintenance personnel when troubleshooting the Aircraft. It also allows line mechanics to prepare the maintenance actions while the Aircraft is still flying.

 

1.1.2 Hangar Functions (Daily check)

With the use of this function of Airman, the Buyer shall be able to anticipate non-scheduled maintenance actions, which can be performed during night checks or integrated into a scheduled maintenance visit.

 

1.1.3 Engineering functions

By accessing the maintenance history, which is stored in Airman, detailed reports can be generated to monitor parameters that affect Aircraft reliability and maintenance efficiency. The data can be analysed per fleet, per system, per type of report and for any period of time. This enables the tool to be used to analyse trends and to identify issues that are affecting the operation of the fleet.

 

1.2 Commercial Conditions

[*]

 

1.3 Delivery and Installation

 

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Letter Agreement N°18 - Page 2/13

  


LETTER AGREEMENT N° 18

 

The prerequisites to the functioning of Airman and conditions of site preparation shall be indicated by the Seller to the Buyer, who shall be solely responsible for ensuring that all hardware and/or equipment necessary for installing Airman is available and operative.

Airman shall be delivered in digital media form. Delivery shall be mutually scheduled and agreed between the parties.

Airman shall be installed by the personnel of the Buyer and/or the Seller and/or its subcontractors, as the case may.

The Seller may assist the Buyer with the installation of Airman at the Buyer’s facilities upon the Buyer’s request and subject to conditions to be specified by the Seller, including but not limited to transportation costs and living expenses for representatives of the Seller assisting with such installation. Such assistance shall follow notification in writing that the prerequisites to such installation, as notified by the Seller, are met to enable the installation.

The Seller its Affiliates and/or their respective subcontractors shall be held harmless from any and all damage to any person (except employees of the Seller, and/or their respective subcontractors) and/or to property (except the property of the Seller, its Affiliates and/or their respective subcontractors) caused by or in any way connected to the handling and/or installation of Airman.

 

1.4 Training

Regular administrator training sessions on Airman features are organised at the Seller’s training facilities [*] administrators.

Such training shall be subject to the terms and conditions under Clause 16 of the Agreement.

 

1.5 Support

A description of the support and maintenance services, which are included in the yearly license fee for Airman, are the ones described in Appendix A of this Letter Agreement.

Any support, assistance or training over and above such services shall be provided upon

request by the Buyer [*].

Practical information, such as hotline, telephone numbers or contact persons, shall be given to the Buyer before installation and shall be updated on a regular basis.

 

1.6 Licence

The licensing conditions for the use of Airman shall be as set forth in Exhibit I of the Agreement, “License for use of software”.

 

2. LESS PAPER IN THE COCKPIT (LPC)

 

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Letter Agreement N°18 - Page 3/13

  


LETTER AGREEMENT N° 18

 

2.1 Description

Less Paper in the Cockpit (LPC) is an Airbus software provided in digital media form enabling the Buyer to consult Airbus Aircraft performance programs and the operational Technical Data for the Airbus Aircraft.

The modules covered by the LPC package and selected by the Buyer are the following:

 

   

Takeoff

Based on the TLC or Octopus software this module provides take-off performance from a given airfield. Computation accounts for elements such as, but not limited to, runway conditions, inoperative items and provides direct information to the pilot.

 

   

Landing

Based on the TLC or Octopus software this module provides landing performance on a given airfield. Computation accounts for elements such as, but not limited to, runway conditions, inoperative items and provides direct information to the pilot.

 

   

FCOM consultation

This module allows the pilot to access his Flight Crew Operating Manual using the provided browser. Information may be accessed by means of the 4 volumes of the FCOM or per topic (SOP…) or through a search mechanism.

 

   

MEL consultation

This module enables the pilot to access his Minimum Equipment List documentation using the Internet Explorer browser. The Seller shall deliver, as provided under Clause 14 of the Agreement, the Master Minimum Equipment List document that the Buyer shall then be able to convert into an MEL, provided the MMEL was ordered in SGML format and the FrameMaker version of the Starter Pack is used.

 

   

Aircraft Loading Weight and Balance

This module allows the pilot to load and trim the aircraft according to the kind of operations and according to the Buyer’s assumptions. It provides the aircraft weight (after loading) and center of gravity after checking against operational limits.

 

   

Load and Trim Sheet (LTS)

The LTS software is a ground software which allows to produce, for a given aircraft configuration and cabin configuration combination, a “blank” trim sheet

 

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Letter Agreement N°18 - Page 4/13

  


LETTER AGREEMENT N° 18

 

form (paper or digital) with the standard Airbus layout and its associated AHM 560 document. LTS provides the blank digital trim sheet, which is a necessary information to the LPC weight and balance module.

LPC shall be supplied to the Buyer together with administration tools to be specified by the Seller such as the MMEL Starter Pack enabling the conversion of SGML format to either FrameMaker format or RTF format.

 

2.2 Commercial Conditions

[*]

 

2.3 Deliveries and Installation

The prerequisites to the functioning of LPC and conditions of site preparation, including but not limited to the Aircraft installation/availability with flight deck power supply, shall be indicated by the Seller to the Buyer, the latter being solely responsible for ensuring that all hardware and/or equipment necessary for installing LPC is available and operative.

LPC shall be delivered in digital media form. Delivery shall be mutually scheduled and agreed between the parties.

In addition to the above, the Seller will provide to the Buyer the LPC flight deck power supply.

LPC shall be installed by the personnel of the Buyer and/or the Seller and/or its subcontractors, as the case may.

The Seller may assist the Buyer with the installation of LPC at the Buyer’s facilities upon the Buyer’s request and subject to conditions to be specified by the Seller, including but not limited to transportation costs and living expenses for representatives of the Seller assisting with such installation. Such assistance shall follow notification in writing that the prerequisites to such installation, as notified by the Seller, are met to enable the installation.

The Seller its Affiliates and/or their respective subcontractors be shall be held harmless from any and all damage to any person (except employees of the Seller, its Affiliates and/or their respective subcontractors) and/or to property (except he property of the Seller, its Affiliates and/or their respective subcontractors) caused by or in any way connected to the handling and/or installation of LPC.

 

2.4 Training

Regular administrator training sessions on LPC features are organised at the Seller’s training facilities [*] subject to the terms and conditions under Clause 16 of this Agreement.

 

2.5 Support

Any support, assistance or training over and above such services shall be provided upon request by the Buyer on a chargeable basis.

 

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LETTER AGREEMENT N° 18

 

Practical information, such as hotline, telephone numbers or contact persons, shall be provided to the Buyer before installation and shall be updated on a regular basis.

 

2.6 Licence

The licensing conditions for the use of LPC shall be as set forth in Exhibit I to the Clause 14 of the Agreement, “License for use of software”.

 

3. THE FLIGHT OPERATION MONITORING (FOM) PACKAGE

The FOM package shall include AirFASE, Line Operation Assessment System as well as FOM Assistance.

 

3.1 AirFASE

 

3.1.1 Technical description

AirFASE is a measurement, analysis and reporting software tool that detects and analyses flight operations, as well as deviation trends, by monitoring operational performance.

AirFASE shall be provided with FAP(s) applicable to the Aircraft.

 

3.1.2 Commercial Conditions

[*]

 

3.1.3 Delivery and Installation

The prerequisites to the functioning of AirFASE and conditions of site preparation shall be indicated by the Seller to the Buyer, the latter being the sole responsible for ensuring that all hardware and/or equipment necessary for installing AirFASE is available and operative.

The delivery of AirFASE shall be mutually scheduled and agreed between the parties. AirFASE shall be delivered with a user guide.

The Seller, its Affiliates and/or their respective subcontractors shall be held harmless from any and all damage to any person (except employees of the Seller, its Affiliates and/or their respective subcontractor) and/or to property (except the property of the Seller and/or its Affiliates) caused by or in any way connected to the handling and/or

installation of AirFASE.

 

3.1.4 AirFASE Integration Into a Flight Operation Quality Assurance Program

Following the installation of AirFASE and at a date mutually agreed upon by the parties, the Seller shall provide [*]assistance to be performed by a check captain and

 

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LETTER AGREEMENT N° 18

 

an engineer in order to facilitate the integration of AirFASE results into the Airline Flight Operation Quality Assurance Program as follows:

 

   

Check the accuracy of AirFASE results compared to the Airlines operation policy;

 

   

Verify the good performing of AirFASE;

 

   

Train the pilots to AirFASE results interpretation;

 

   

Assist the preparation of the first flight data analysis report.

 

3.1.5 Support

A description of the support and maintenance services related to AirFASE will be sent to the Buyer before installation of AirFASE.

 

3.1.6 License

The licensing conditions for the use of LPC shall be as set forth in Exhibit I to the Clause 14 of the Agreement, “License for use of software”.

 

3.2. Line Operation Assessment System (“LOAS”)

 

3.2.1 Technical description of LOAS

LOAS is a crew observation software developed for quantifying cockpit and cabin observations. The performance measurement output of individual pilots observations is accumulated to produce a series of weighted scores in a variety of crew performance and operational categories. The method of gross accumulation will yield a net signature score, a generalized performance grade for an airline’s crew population and dispatch system.

These are diagnostic values useful in evaluating the effectiveness of crew training, operating procedures and the conduct of line operations. Together with critiques of dispatch and line maintenance operations, as well as airport and airways facilities, LOAS provides the Buyer with a systematic overview of its operating network.

 

3.2.3 License

The licensing conditions for the use of LOAS shall be as set forth in Exhibit I to the Clause 14 of the Agreement, “License for use of software”.

 

3.2.4 LOAS Services Package

The LOAS Services Package includes the mandatory minimum dedicated on-site services for LOAS deployment which consists of:

[*]

In the frame of the LOAS Services Package, the Seller will assist the Buyer with the initial installation of the LOAS at the Buyer’s facilities, following notification in writing that the hardware as specified by the Seller shall be made available to the Seller. The Seller shall not be

 

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LETTER AGREEMENT N° 18

 

responsible for any incompatibility of such hardware with the LOAS and the Seller shall be held harmless from any damage to person (except employees of the Seller) and/or to property (except property of the Seller) caused by or in any way connected to the handling and/or installation of the LOAS.

 

3.2.5 Commercial Conditions

[*]

 

3.3. FLIGHT OPERATION MONITORING (FOM) ASSESSMENT

The objective of the Flight Operations Monitoring Assessment is to review the implementation of a flight operations monitoring system, as well as to review the Buyer’s organisation, methods and tools in place in the field of flight operations monitoring.

Said FOM Assessment shall consist of a [*] week on-site visit of [*] engineer and [*] pilot. [*]

Upon achievement, the Seller will issue a report on the Flight Operations Monitoring situation and a proposed action plan to enhance the situation.

 

4. ADOC JOBCARD PUBLISHER

[*].

The use of the ADOC JobCard Publisher shall be subject to the signature by the Buyer of separate terms and conditions.

 

5. MAINTENANCE PLANNING DATA SUPPORT (MPDS)

The Seller shall provide the Buyer with a Maintenance Planning Data Support (MPDS) in CD-Rom format.

The MPDS shall include the following options:

Planning Data:

 

   

Operator Maintenance Program (OMP) - revised following corresponding aircraft type MPD revision

 

   

Maintenance Task Operating Plan (MTOP) - not revised

 

   

Work Package (WP) - not revised

 

   

Maintenance Line Check List and Line Check Supporting data (LCL + LCSD) - not revised

 

   

Task Structured Data File (TSDF) - issued first with OMP/MTOP/WP data and revised with OMP data only

 

   

Resource Provision Data (RPD): list of consumables and expendables - not revised

The Planning Data will be provided for a period of [*] year and revised [*] charge to

 

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Letter Agreement N°18 - Page 8/13

  


LETTER AGREEMENT N° 18

 

Buyer in accordance with aircraft type MPD revision during this period except for those data identified above as “not revised”.

Supporting Data:

 

   

Job Cards (JC)

The Supporting Data will be revised in accordance with AMM revision (4, 2 or once a year) during the same period as above.

Note: the MPDS is a “service providing data” and not software.

Commercial conditions :

[*]

 

6. PACKAGE CONTENT

The AIRMAN, LPC, AirFASE, LOAS, ADOC Jobcard Publisher, FOM and MPDS software and support data packages and services referred to herein shall have the content described in the Customer Services Catalog in effect on the date of this Letter Agreement.

 

7. ASSIGNMENT

Except as provided in Clause 21 of the Agreement, this Letter Agreement is not transferable, and the Buyer’s rights under this Letter Agreement shall not be assigned, sold, transferred or otherwise alienated by operation of law or otherwise to any person other than the Buyer. Any unauthorised assignment, sale, transfer or other alienation of the Buyer’s rights under this Letter Agreement with respect to any Aircraft will be void and without effect.

 

8. CONFIDENTIALITY

This Letter Agreement (and its existence) shall be treated by both parties as confidential in accordance with Clause 22.12 of the Agreement.

 

9. COUNTERPARTS

This Letter Agreement may be signed in any number of separate counterparts. Each counterpart, when signed and delivered (including counterparts delivered by facsimile transmission) shall be an original, and the counterparts together shall constitute one and the same instrument.

 

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LETTER AGREEMENT N° 18

 

If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

 

Agreed and Accepted     Agreed and Accepted
For and on behalf of     For and on behalf of
Aerovias del Continente     AIRBUS S.A.S.
Americano S.A. Avianca      
By:  

 

    By:  

 

Its:  

 

    Its:  

 

Date:  

 

    Date:  

 

 

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LETTER AGREEMENT N° 18

 

APPENDIX A

AIRMAN SUPPORT AND MAINTENANCE SERVICES

 

1. Corrective Maintenance

Corrective Maintenance means the processing of problems or functionality issues (“ Incidents ”) relating to the use of Airman or Technical eLogbook (the “ Software ”). Incidents shall be classified as follows:

Critical

The Buyer cannot move forward with the Software until the issue is resolved or significant aspects of the operations are impacted, which makes the Software either non operational or operational but severely impaired or restricted.

The incident has a critical impact on the Buyer’s activity.

No timely and cost effective workaround is available.

Examples include but are not limited to system or application crash, data loss or corruption.

High

A major functional problem forces the application to run under degraded modes and performances.

A timely and cost effective workaround is available but is not practical for long term or permanent use.

Medium

The Buyer requires information or assistance on the usage of the Software. The Buyer submits an evolution request or a defect report describing a problem that does not significantly affect the usage of the Software.

The Buyer reports an incident that does not significantly affect the Buyer’s activity.

Both parties agree to the following response times:

 

CLASSIFICATION

  

ACKNOWLEDGMENT

OF BUYER’s

REQUEST

(Business Days)

  

PROVIDE

WORKAROUND

SOLUTION,

PROCEDURE OR

TEMPORARY

SOLUTION*

(Business Days)

  

PROVIDE

PLAN FOR

PERMANENT

SOLUTION**

(Business Days)

Critical    [*]    [*]    [*]
High    [*]    [*]    [*]
Medium    [*]    [*]    [*]

 

* Such workaround solution, procedure or temporary solution will correct the applicable Incident and be cost effective for Buyer to use and practical for Buyer’s long term use until the permanent solution is provided by Seller.
** The plan for permanent solution will cover analysis, commitment and schedule for completion.

 

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LETTER AGREEMENT N° 18

 

The Seller shall answer in writing or by telephone (and if by telephone, the solution shall be confirmed promptly in writing).

Said solution shall be based on the information related to the Incident reported by the Buyer:

Said solution shall come with the relevant instructions.

An Incident that arises during the term of Buyer’s license of the Software shall be corrected by Seller providing to Buyer [*] charge one of the following solutions:

 

   

A workaround solution, or

 

   

A procedure, or

 

   

A temporary solution or

 

   

An update of the Software.

The Seller shall be responsible for the choice of the adapted solution.

Any temporary solution, procedure or workaround solution shall be replaced by a permanent solution at the occasion of the release of a new Software version.

 

2. Minimum service level

Over any one-year period, the Seller shall have [*] ([*]%) of the problems and questions treated and corrected within the required lead times.

 

3. Technical Support Line

A regular telephone line shall be implemented in order to allow the Buyer to ask for technical assistance. This line shall operate from [*] (French time) [*] days a week. The phone number shall be provided during the installation phase.

In case of critical Incidents only, the Software Airman support team will be available seven (7) days a week.

 

4. Evolutive Maintenance

Evolutive Maintenance consists in providing the Buyer with the latest release of Airman [*] charge.

For so long as Buyer is licensing the Software, such release shall be supplied to the Buyer as soon as the said release is available and issued by the Seller to other operators.

Contents, availability and issue of the said release are at the Seller’s discretion.

 

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LETTER AGREEMENT N° 18

 

Each release is transmitted to the Buyer in the form of a CD-ROM.

 

5. Updates of Acknowledge Base (including TSM update)

All necessary updates to the Airman Acknowledge Base shall be provided by the Seller [*] charge to the Buyer, at the time Seller provides the same to other operators. The basic standard frequency is once every quarter.

 

6. Local Maintenance

The Seller is entitled to enter into an agreement with a local subcontractor that will provide the Buyer with all or part of the maintenance services required hereunder on behalf of the Seller. Notwithstanding the foregoing, Seller shall remain directly liable to Buyer for performance of all obligations under this Letter Agreement.

 

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LETTER AGREEMENT N° 19

Note: Certain portions have been omitted from this Letter Agreement in accordance with a request for confidential treatment submitted to the Securities and Exchange Commission. Omitted information has been replaced with an asterisk. Omitted information has been filed separately with the Securities and Exchange Commission.

Aerovias del Continente Americano S.A. Avianca

Avenida Calle 26 No. 92-30

Bogota, Colombia

SUBJECT : [*]

Aerovias del Continente Americano S.A. Avianca (the “ Buyer ”) and AIRBUS S.A.S. (the “ Seller ”) have entered into a Purchase Agreement (the “ Agreement ”) dated as of even date herewith, which covers, among other things, the manufacture and the sale by the Seller and the purchase by the Buyer of the Aircraft, under the terms and conditions in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement N°19 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.

Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement.

Both parties agree that this Letter Agreement, upon execution hereof, shall constitute an integral, nonseverable part of said Agreement and shall be governed by all the provisions of the Agreement, as such provisions have been specifically amended pursuant to this Letter Agreement. If there is any inconsistency between the provisions of the Agreement and the provisions of this Letter Agreement then the provisions of this Letter Agreement will govern.

 

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LETTER AGREEMENT N° 19

 

1. Exhibit [*] to the Agreement is deleted in its entirely and replaced with the following quoted text:

QUOTE

[*] [Eight pages have been omitted in accordance with a request for confidential treatment.]

UNQUOTE

 

2 [*]

The Buyer has notified the Seller of its intention to select the [*] for its A320 Aircraft. Provided the [*] is certified, the Seller shall grant the Buyer with a [*] of the Airbus modifications required to be made on the Aircraft that are to be delivered with said [*].

 

3 [*]

[*]

 

3.2 [*]

[*]

 

3.3 [*]

 

4 [*]

 

5 [*]

[*]

 

6 [*]

[*]

 

7. ASSIGNMENT

Except as provided in Clause 21 of the Agreement, this Letter Agreement is not transferable, and the Buyer’s rights under this Letter Agreement shall not be assigned, sold, transferred or otherwise alienated by operation of law or otherwise to any person other than the Buyer. Any unauthorised assignment, sale, transfer or other alienation of the Buyer’s rights under this Letter Agreement with respect to any Aircraft will be void and without effect.

 

8. CONFIDENTIALITY

This Letter Agreement (and its existence) shall be treated by both parties as confidential in accordance with Clause 22.12 of the Agreement.

 

9. COUNTERPARTS

 

 

 

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LETTER AGREEMENT N° 19

 

This Letter Agreement may be signed in any number of separate counterparts. Each counterpart, when signed and delivered (including counterparts delivered by facsimile transmission) shall be an original, and the counterparts together shall constitute one and the same instrument.

 

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LETTER AGREEMENT N° 19

 

If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

 

Agreed and Accepted     Agreed and Accepted
For and on behalf of     For and on behalf of
Aerovias del Continente     AIRBUS S.A.S.
Americano S.A. Avianca      
By:  

 

    By:  

 

Its:  

 

    Its:  

 

Date:  

 

    Date:  

 

 

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   Letter Agreement N°19 - Page 4/4   


LETTER AGREEMENT N° 20

Note: Certain portions have been omitted from this Letter Agreement in accordance with a request for confidential treatment submitted to the Securities and Exchange Commission. Omitted information has been replaced with an asterisk. Omitted information has been filed separately with the Securities and Exchange Commission.

Aerovias del Continente Americano S.A. Avianca

Avenida Calle 26 No. 92-30

Bogota, Colombia

SUBJECT : [*]

Aerovias del Continente Americano S.A. Avianca (the “ Buyer ”) and AIRBUS S.A.S. (the “ Seller ”) have entered into a Purchase Agreement (the “ Agreement ”) dated as of even date herewith, which covers, among other things, the manufacture and the sale by the Seller and the purchase by the Buyer of the Aircraft, under the terms and conditions in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement N°20 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.

Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement.

Both parties agree that this Letter Agreement, upon execution hereof, shall constitute an integral, nonseverable part of said Agreement and shall be governed by all the provisions of the Agreement, as such provisions have been specifically amended pursuant to this Letter Agreement. If there is any inconsistency between the provisions of the Agreement and the provisions of this Letter Agreement then the provisions of this Letter Agreement will govern.

 

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LETTER AGREEMENT N° 20

 

[*]

 

2. ASSIGNMENT

Except as provided in Clause 21 of the Agreement, this Letter Agreement is not transferable, and the Buyer’s rights under this Letter Agreement shall not be assigned, sold, transferred or otherwise alienated by operation of law or otherwise to any person other than the Buyer. Any unauthorised assignment, sale, transfer or other alienation of the Buyer’s rights under this Letter Agreement with respect to any Aircraft will be void and without effect.

 

3. CONFIDENTIALITY

This Letter Agreement (and its existence) shall be treated by both parties as confidential in accordance with Clause 22.12 of the Agreement.

 

4. COUNTERPARTS

This Letter Agreement may be signed in any number of separate counterparts. Each counterpart, when signed and delivered (including counterparts delivered by facsimile transmission) shall be an original, and the counterparts together shall constitute one and the same instrument.

 

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LETTER AGREEMENT N° 20

 

If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

 

Agreed and Accepted     Agreed and Accepted
For and on behalf of     For and on behalf of
Aerovias del Continente     AIRBUS S.A.S.
Americano S.A. Avianca      
By:  

 

    By:  

 

Its:  

 

    Its:  

 

Date:  

 

    Date:  

 

 

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LETTER AGREEMENT N° 21

Note: Certain portions have been omitted from this Letter Agreement in accordance with a request for confidential treatment submitted to the Securities and Exchange Commission. Omitted information has been replaced with an asterisk. Omitted information has been filed separately with the Securities and Exchange Commission.

Aerovias del Continente Americano S.A. Avianca

Avenida Calle 26 No. 92-30

Bogota, Colombia

SUBJECT: [*]

Aerovias del Continente Americano S.A. Avianca (the “ Buyer ”) and AIRBUS S.A.S. (the “ Seller ”) have entered into a Purchase Agreement (the “ Agreement ”) dated as of even date herewith, which covers, among other things, the manufacture and the sale by the Seller and the purchase by the Buyer of the Aircraft, under the terms and conditions in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement N°21 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.

[*]

Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement.

Both parties agree that this Letter Agreement, upon execution hereof, shall constitute an integral, nonseverable part of said Agreement and shall be governed by all the provisions of the Agreement, as such provisions have been specifically amended pursuant to this Letter Agreement. If there is any inconsistency between the provisions of the Agreement and the provisions of this Letter Agreement then the provisions of this Letter Agreement will govern.

*[Two pages have been omitted in accordance with a request for confidential treatment.]

 

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LETTER AGREEMENT N° 21

 

2. ASSIGNMENT

Except as provided in Clause 21 of the Agreement, this Letter Agreement is not transferable, and the Buyer’s rights under this Letter Agreement shall not be assigned, sold, transferred or otherwise alienated by operation of law or otherwise to any person other than the Buyer. Any unauthorised assignment, sale, transfer or other alienation of the Buyer’s rights under this Letter Agreement with respect to any Aircraft will be void and without effect.

 

3. CONFIDENTIALITY

This Letter Agreement (and its existence) shall be treated by both parties as confidential in accordance with Clause 22.12 of the Agreement.

 

4. COUNTERPARTS

This Letter Agreement may be signed in any number of separate counterparts. Each counterpart, when signed and delivered (including counterparts delivered by facsimile transmission) shall be an original, and the counterparts together shall constitute one and the same instrument.

 

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LETTER AGREEMENT N° 21

 

If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

 

Agreed and Accepted     Agreed and Accepted
For and on behalf of     For and on behalf of
Aerovias del Continente     AIRBUS S.A.S.
Americano S.A. Avianca      
By:  

 

    By:  

 

Its:  

 

    Its:  

 

Date:  

 

    Date:  

 

 

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LETTER AGREEMENT N° 22

Note: Certain portions have been omitted from this Letter Agreement in accordance with a request for confidential treatment submitted to the Securities and Exchange Commission. Omitted information has been replaced with an asterisk. Omitted information has been filed separately with the Securities and Exchange Commission.

Aerovias del Continente Americano S.A. Avianca

Avenida Calle 26 No. 92-30

Bogota, Colombia

SUBJECT : [*]

Aerovias del Continente Americano S.A. Avianca (the “ Buyer ”) and AIRBUS S.A.S. (the “ Seller ”) have entered into a Purchase Agreement (the “ Agreement ”) dated as of even date herewith, which covers, among other things, the manufacture and the sale by the Seller and the purchase by the Buyer of the Aircraft, under the terms and conditions in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement N°22 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.

Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement.

Both parties agree that this Letter Agreement, upon execution hereof, shall constitute an integral, nonseverable part of said Agreement and shall be governed by all the provisions of the Agreement, as such provisions have been specifically amended pursuant to this Letter Agreement. If there is any inconsistency between the provisions of the Agreement and the provisions of this Letter Agreement then the provisions of this Letter Agreement will govern.

 

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LETTER AGREEMENT N° 22

 

1. SCOPE

The parties hereby agree that, subject to the terms, conditions and limitations set forth in this Letter Agreement, Seller will, upon request of the Buyer, provide the Buyer with the support outlined in Paragraph 4 and the last paragraph of Paragraph 5 of this Letter Agreement, as applicable, with respect [*].

[*]

*[Three pages have been omitted in accordance with a request for confidential treatment.]

 

9. ASSIGNMENT

Except as provided in Clause 21 of the Agreement, this Letter Agreement is not transferable, and the Buyer’s rights under this Letter Agreement shall not be assigned, sold, transferred or otherwise alienated by operation of law or otherwise to any person other than the Buyer. Any unauthorised assignment, sale, transfer or other alienation of the Buyer’s rights under this Letter Agreement with respect to any Aircraft will be void and without effect.

 

10. CONFIDENTIALITY

This Letter Agreement (and its existence) shall be treated by both parties as confidential in accordance with Clause 22.12 of the Agreement.

 

11. COUNTERPARTS

This Letter Agreement may be signed in any number of separate counterparts. Each counterpart, when signed and delivered (including counterparts delivered by facsimile transmission) shall be an original, and the counterparts together shall constitute one and the same instrument.

 

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LETTER AGREEMENT N° 22

 

If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

 

Agreed and Accepted     Agreed and Accepted
For and on behalf of     For and on behalf of
Aerovias del Continente     AIRBUS S.A.S.
Americano S.A. Avianca    
By:  

 

    By:  

 

Its:  

 

    Its:  

 

Date:  

 

    Date:  

 

 

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LETTER AGREEMENT N° 23

Note: Certain portions have been omitted from this Letter Agreement in accordance with a request for confidential treatment submitted to the Securities and Exchange Commission. Omitted information has been replaced with an asterisk. Omitted information has been filed separately with the Securities and Exchange Commission.

Aerovias del Continente Americano S.A. Avianca

Avenida Calle 26 No. 92-30

Bogota, Colombia

SUBJECT : [*]

Aerovias del Continente Americano S.A. Avianca (the “ Buyer ”) and AIRBUS S.A.S. (the “ Seller ”) have entered into a Purchase Agreement (the “ Agreement ”) dated as of even date herewith, which covers, among other things, the manufacture and the sale by the Seller and the purchase by the Buyer of the Aircraft, under the terms and conditions in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement N°23 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.

Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement.

Both parties agree that this Letter Agreement, upon execution hereof, shall constitute an integral, nonseverable part of said Agreement and shall be governed by all the provisions of the Agreement, as such provisions have been specifically amended pursuant to this Letter Agreement. If there is any inconsistency between the provisions of the Agreement and the provisions of this Letter Agreement then the provisions of this Letter Agreement will govern.

 

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LETTER AGREEMENT N° 23

 

*[Fourteen pages have been omitted in accordance with a request for confidential treatment.]

 

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LETTER AGREEMENT N° 23

 

4. ASSIGNMENT

Except as provided in Clause 21 of the Agreement, this Letter Agreement is not transferable, and the Buyer’s rights under this Letter Agreement shall not be assigned, sold, transferred or otherwise alienated by operation of law or otherwise to any person other than the Buyer. Any unauthorised assignment, sale, transfer or other alienation of the Buyer’s rights under this Letter Agreement with respect to any Aircraft will be void and without effect.

 

5. CONFIDENTIALITY

This Letter Agreement (and its existence) shall be treated by both parties as confidential in accordance with Clause 22.12 of the Agreement.

 

6. COUNTERPARTS

This Letter Agreement may be signed in any number of separate counterparts. Each counterpart, when signed and delivered (including counterparts delivered by facsimile transmission) shall be an original, and the counterparts together shall constitute one and the same instrument.

If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

 

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LETTER AGREEMENT N° 23

 

Agreed and Accepted     Agreed and Accepted
For and on behalf of     For and on behalf of
Aerovias del Continente     AIRBUS S.A.S.
Americano S.A. Avianca      
By:  

 

    By:  

 

Its:  

 

    Its:  

 

Date:  

 

    Date:  

 

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Letter Agreement N°23 - Page 4/4   


LETTER AGREEMENT N°24

Aerovias del Continente Americano S.A. Avianca

Avenida Calle 26 No. 92-30

Bogota, Colombia

Subject : INTENTIONALLY LEFT BLANK

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Letter Agreement N°24 - Page 1/2   


LETTER AGREEMENT N°24

 

If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

 

Agreed and Accepted     Agreed and Accepted
For and on behalf of     For and on behalf of
Aerovias del Continente     AIRBUS S.A.S.
Americano S.A. Avianca    
By:  

 

    By:  

 

Its:  

 

    Its:  

 

Date:  

 

    Date:  

 

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Letter Agreement N°24 - Page 2/2   


LETTER AGREEMENT N° 25

Note: Certain portions have been omitted from this Letter Agreement in accordance with a request for confidential treatment submitted to the Securities and Exchange Commission. Omitted information has been replaced with an asterisk. Omitted information has been filed separately with the Securities and Exchange Commission.

Aerovias del Continente Americano S.A. Avianca

Avenida Calle 26 No. 92-30

Bogota, Colombia

SUBJECT : MISCELLANEOUS

Aerovias del Continente Americano S.A. Avianca (the “ Buyer ”) and AIRBUS S.A.S. (the “ Seller ”) have entered into a Purchase Agreement (the “ Agreement ”) dated as of even date herewith, which covers, among other things, the manufacture and the sale by the Seller and the purchase by the Buyer of the Aircraft, under the terms and conditions in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement N°25 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.

Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement.

Both parties agree that this Letter Agreement, upon execution hereof, shall constitute an integral, nonseverable part of said Agreement and shall be governed by all the provisions of the Agreement, as such provisions have been specifically amended pursuant to this Letter Agreement. If there is any inconsistency between the provisions of the Agreement and the provisions of this Letter Agreement then the provisions of this Letter Agreement will govern.

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Letter Agreement N°25 - Page 1/3   


LETTER AGREEMENT N° 25

 

[*]

 

2. [*]

The Agreement is hereby amended to delete in its entirety Clause [*] and replace with the following quoted text:

QUOTE

[*]

UNQUOTE

 

3. The Agreement is hereby amended to add a new Clause [*] per the following quoted text:

QUOTE

18.3.3 [*]

UNQUOTE

 

4. [*]

[*]

 

7. ASSIGNMENT

Except as provided in Clause 21 of the Agreement, this Letter Agreement is not transferable, and the Buyer’s rights under this Letter Agreement shall not be assigned, sold, transferred or otherwise alienated by operation of law or otherwise to any person other than the Buyer. Any unauthorised assignment, sale, transfer or other alienation of the Buyer’s rights under this Letter Agreement with respect to any Aircraft will be void and without effect.

 

8. CONFIDENTIALITY

This Letter Agreement (and its existence) shall be treated by both parties as confidential in accordance with Clause 22.12 of the Agreement.

 

9. COUNTERPARTS

This Letter Agreement may be signed in any number of separate counterparts. Each counterpart, when signed and delivered (including counterparts delivered by facsimile transmission) shall be an original, and the counterparts together shall constitute one and the same instrument.

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Letter Agreement N°25 - Page 2/3   


LETTER AGREEMENT N° 25

 

If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

 

Agreed and Accepted     Agreed and Accepted
For and on behalf of     For and on behalf of
Aerovias del Continente     AIRBUS S.A.S.
Americano S.A. Avianca    
By:  

 

    By:  

 

Its:  

 

    Its:  

 

Date:  

 

    Date:  

 

 

AVA - A320 Family PA       AMENDED AND RESTATED
   Letter Agreement N°25 - Page 3/3   

Exhibit 10.8

Note: Certain portions have been omitted from this Agreement in accordance with a request for confidential treatment submitted to the Securities and Exchange Commission. Omitted information has been replaced with an asterisk. Omitted information has been filed separately with the Securities and Exchange Commission.

A320 Family and A320 NEO Family

PURCHASE AGREEMENT

BETWEEN

AIRBUS S.A.S.

as Seller

AND

AVIANCATACA HOLDING S.A.

as Buyer

Reference : CT1004409

 

AVTA - A320 Family & A320 NEO Family PA

Foreword - Page 1/4


CONTENTS

 

CLAUSES

 

TITLES

0

 

DEFINITIONS AND INTERPRETATION

1

 

SALE AND PURCHASE

2

 

SPECIFICATION

3

 

PRICES

4

 

PRICE REVISION

5

 

PAYMENTS

6

 

MANUFACTURE PROCEDURE - INSPECTION

7

 

CERTIFICATION

8

 

BUYER’S TECHNICAL ACCEPTANCE

9

 

DELIVERY

10

 

EXCUSABLE DELAY

11

 

NON-EXCUSABLE DELAY

12

 

WARRANTIES AND SERVICE LIFE POLICY

13

 

PATENT AND COPYRIGHT INDEMNITY

14

 

TECHNICAL DATA AND SOFTWARE SERVICES

15

 

SELLER REPRESENTATIVES

16

 

TRAINING AND TRAINING AIDS

17

 

EQUIPMENT SUPPLIER PRODUCT SUPPORT

18

 

BUYER FURNISHED EQUIPMENT

19

 

INDEMNIFICATION AND INSURANCE

20

 

TERMINATION

21

 

ASSIGNMENTS AND TRANSFERS

22

 

MISCELLANEOUS PROVISIONS

 

AVTA - A320 Family & A320 NEO Family PA

Foreword - Page 2/4


CONTENTS

 

EXHIBITS

 

TITLES

Exhibit  A

 

SPECIFICATION

 

- APPENDIX 1: A319 AIRCRAFT

 

- APPENDIX 2: A320 AIRCRAFT

 

- APPENDIX 3: A321 AIRCRAFT

 

- APPENDIX 4: A319 NEO AIRCRAFT

 

- APPENDIX 5: A320 NEO AIRCRAFT

 

- APPENDIX 6: A321 NEO AIRCRAFT

Exhibit  B

 

FORM OF SPECIFICATION CHANGE NOTICE

Exhibit  C

 

PRICE REVISION FORMULAE

 

- PART 1: AIRFRAME PRICE REVISION FORMULA

 

- PART 2A: CFM INTERNATIONAL PRICE REVISION FORMULA FOR A320 FAMILY AIRCRAFT

 

- PART 2B: CFM INTERNATIONAL PRICE REVISION FORMULA FOR A320 NEO FAMILY AIRCRAFT

 

- PART 3: INTERNATIONAL AERO ENGINES PRICE REVISION FORMULA

 

- PART 4: PRATT AND WHITNEY ENGINES PRICE REVISION FORMULA

Exhibit  D

 

FORM OF CERTIFICATE OF ACCEPTANCE

Exhibit  E

 

FORM OF BILL OF SALE

Exhibit  F

 

SERVICE LIFE POLICY – LIST OF ITEMS

Exhibit  G

 

TECHNICAL DATA INDEX

Exhibit  H

 

MATERIAL SUPPLY AND SERVICES

Exhibit  I

 

LICENSES AND ON LINE SERVICES

 

AVTA - A320 Family & A320 NEO Family PA

Foreword - Page 3/4


A320 Family and A320 NEO Family PURCHASE AGREEMENT

This A320 Family and A320 NEO Family Purchase Agreement (the “ Agreement ”) is made as of the 27th day of December 2011.

BETWEEN:

AIRBUS S.A.S., a société par actions simplifiée, legal successor of Airbus S.N.C., formerly known as Airbus G.I.E. and Airbus Industrie G.I.E. created and existing under French law having its registered office at 1 Rond-Point Maurice Bellonte, 31707 Blagnac-Cedex, France and registered with the Toulouse Registre du Commerce under number RCS Toulouse 383 474 814 (the “ Seller ”),

and

AVIANCATACA HOLDING S.A ., a company created and existing under Panamanian law having its registered office at Calle Aquilino de la Guardia No. 8, Ciudad de Panamá, República de Panamá (the “ Buyer ”).

WHEREAS subject to the terms and conditions of this Agreement, the Seller desires to sell the Aircraft to the Buyer and the Buyer desires to purchase the Aircraft from the Seller.

NOW THEREFORE IT IS AGREED AS FOLLOWS:

 

AVTA - A320 Family & A320 NEO Family PA

Foreword - Page 4/4


0. DEFINITIONS AND INTERPRETATION

 

0.1 In addition to words and terms elsewhere defined in this Agreement, the initially capitalized words and terms used in this Agreement shall have the meaning set out below.

 

Affiliate    means with respect to any person or entity, any other person or entity directly or indirectly controlling, controlled by or under common control with such person or entity.
Agreement    this A320 Family Purchase Agreement, including all exhibits and appendixes attached hereto and any letter agreements hereto, as the same may be amended or modified and in effect from time to time.
Airbus|World    has the meaning set forth in Clause 14A.10.1 Part 2 of Exhibit I.
Aircraft    means individually or collectively an Airbus A319-100 Aircraft, and/or an A319 NEO Aircraft, and/or an A320-200 Aircraft, and/or an A320 NEO Aircraft, and/or an A321-200 Aircraft, and/or an A321 NEO Aircraft purchased under this Agreement.
A319 or A319 Aircraft    means, and is sometimes referred to herein as, an Airbus A319-100 aircraft delivered under this Agreement, including the Airframe, the Propulsion Systems, and any part, component, furnishing or equipment installed on the Aircraft on Delivery.
A319 NEO or A319 NEO Aircraft    means, and is sometimes referred to herein as, an Airbus A319-100 aircraft incorporating the New Engine Option, including the Airframe, the relevant Propulsion Systems, and any part, component, furnishing or equipment installed on the Aircraft on Delivery under the terms and conditions of this Agreement.
A320 or A320 Aircraft    means, and is sometimes referred to herein as, an Airbus A320-200 aircraft delivered under this Agreement, including the Airframe, the Propulsion Systems, and any part, component, furnishing or equipment installed on the Aircraft on Delivery.
A320 NEO or A320 NEO Aircraft    means, and is sometimes referred to herein as, an Airbus A320-200 aircraft aircraft incorporating the New Engine Option, including the Airframe, the relevant Propulsion Systems, and any part, component, furnishing or equipment installed on the Aircraft on Delivery under the terms and conditions of this Agreement.
A321 or A321 Aircraft    means, and is sometimes referred to herein as, an Airbus A321-200 aircraft delivered under this Agreement, including the Airframe, the Propulsion Systems, and any part, component, furnishing or equipment installed on the Aircraft on Delivery.
A321 NEO or A321 NEO Aircraft    means, and is sometimes referred to herein as, an Airbus A321-200 aircraft incorporating the New Engine Option, including the Airframe, the relevant Propulsion Systems, and any part, component, furnishing or equipment installed on the Aircraft on Delivery under the terms and conditions of this Agreement.

 

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Clause 00 - Page 1/9


A320 Family Aircraft    means individually or collectively an A319, A320, or an A321 which does not incorporate the New Engine Option.
A320 NEO Family Aircraft    means individually or collectively an A319 NEO, A320 NEO, or an A321 NEO.
Aircraft Training Services    means all training courses, flight training, line training, flight assistance, line assistance, maintenance support, maintenance training (including Practical Training) or training support performed on Aircraft and provided to the Buyer pursuant to this Agreement.
Airframe    means the Aircraft excluding the Propulsion Systems, or the NEO Propulsion System, as applicable.
Airframe Base Price    has the meaning set out in Clause 3.1.
Airframe Price Revision Formula    is set out in Part 1 of Exhibit C.
AirN@v Services    has the meaning set forth in Clause 14A.9.1.
ANACS    Airbus North America Customer Services, Inc., a corporation organized and existing under the laws of Delaware, having its registered office located at 198 Van Buren Street, Suite 300, Herndon, VA 20170, or any successor thereto.
AOG    has the meaning set forth in Clause 15.2.6.
AOT    has the meaning set forth in Clause 12.1.4.3.
Authorized Officer    has the meaning set forth in Clause 20.6.
Aviation Authority    means when used in respect of any jurisdiction the government entity, which under the laws of such jurisdiction has control over civil aviation or the registration, airworthiness or operation of civil aircraft in such jurisdiction.
Balance of Final Price    has the meaning set out in Clause 5.4.1.
Basic Issue    has the meaning set forth in Clause 14A.3.1.
Base Price    means the sum of the Airframe Base Price and the Propulsion Systems Base Price. as set forth in Clause 3.
BFE Data    has the meaning set forth in Clause 14A.3.2.1.
Bill of Sale    has the meaning set out in Clause 9.2.2.

 

AVTA - A320 Family & A320 NEO Family PA

Clause 00 - Page 2/9


Business Day    means a day, other than a Saturday or Sunday, on which business of the kind contemplated by this Agreement is carried on in France, in Germany, in Colombia, in Panama and in the Buyer’s country or, where used in relation to a payment, which is a day on which banks are open for business in France, in Germany, in the Buyer’s country and in New York, as appropriate.
Buyer    means AviancaTaca Holding S.A. or its successors and permitted assigns.
Buyer Furnished Equipment    has the meaning set out in Clause 18.1.1.
Buyer’s Inspectors    has the meaning set forth in Clause 6.2.1.
CAA    means the Colombian Civil Aviation Authority (Unidad Administrative Especial de Aeronautica Civil)
Certificate    has the meaning set forth in Clause 16.4.4.
Certificate of Acceptance    has the meaning set out in Clause 8.3.
Change in Law    has the meaning set forth in Clause 7.2.2.
Clause 5 Indemnitee    as defined in Clause 5.8.3.
Clause 5 Indemnitor    as defined in Clause 5.8.3.
Clause 19 Indemnitee    as defined in Clause 19.3.
Clause 19 Indemnitor    as defined in Clause 19.3.
COC Data    has the meaning set forth in Clause 14A.8.
Commitment Fee    means the commitment fee of [*] paid for the Aircraft as referenced in Clause 5.2
Customer Support Director    has the meaning set forth in Clause 15.1.
Customer Support Representative    has the meaning set forth in Clause 15.2.1.
Default Interest    has the meaning set forth in Clause 5.7.
Default Rate    means the rate of Default Interests as defined in Clause 5.7.
Delivery    means the transfer of title to the Aircraft from the Seller to the Buyer in accordance with Clause 9.
Delivery Date    means the date on which Delivery shall occur.

 

AVTA - A320 Family & A320 NEO Family PA

Clause 00 - Page 3/9


Delivery Location    means the facilities of the Seller at the location of final of the Aircraft in Europe, the United States of America or any other location mutually agreed between the Buyer and the Seller.
Delivery Period    has the meaning set forth in Clause 11.1.
Development Changes    has the meaning set forth in Clause 2.1.3.
DGAC    the Direction Générale de l’Aviation Civile of France or any successor thereto.
EASA    European Aviation Safety Agency or any successor agency thereto.
Engines    has the meaning set forth in Clause 2.2.
Excess BFE    has the meaning set forth in Clause 10.6(ii).
Excusable Delay    has the meaning set out in Clause 10.1.
Export Airworthiness Certificate    means an export certificate of airworthiness issued by the Aviation Authority of the Delivery Location pursuant to Clause 7.2.1.
FAA    the U.S. Federal Aviation Administration, or any successor thereto.
Failure    has the meaning set forth in Clause 12.2.1.
Final Price    has the meaning set out in Clause 3.3
Fleet Serial Numbers    has the meaning set forth in Clause 14A.2.1.
General Terms and Conditions or GTC    means the General Terms and Conditions of Access to and Use of the Secure Area of Airbus|World set forth in Clause 14A.10.3 and Part 4 to Exhibit I.
Goods and Services    means any goods and services that may be purchased by the Buyer from the Seller, excluding Aircraft.
Ground Training Services    means all training courses performed in classrooms (classical or Airbus CBT courses), full flight simulator sessions, fixed base simulator sessions and any other services provided to the Buyer on the ground pursuant to this Agreement and which are not Aircraft Training Services.
Irrevocable SCNs    means the list of SCNs, which are irrevocably part of the A320 NEO Family Aircraft specifications, as expressly set forth respectively in Appendix 4, 5 and 6 to Exhibit A.
In house Warranty    as referred to in Clause 12.1.7.1.

 

AVTA - A320 Family & A320 NEO Family PA

Clause 00 - Page 4/9


In house Warranty Labor Rate    as defined in Clause 12.1.7.5(b) of this Agreement.
Interface Problem    as defined in Clause 12.4.1 of this Agreement.
Item    has the meaning set forth in Clause 12.2.1.
License    has the meaning set forth in Clause 16.10.4.1.
Losses    has the meaning set forth in Clause 19.1.
Manufacture Facilities    means the various manufacture facilities of the Seller, its Affiliates or any sub-contractor, where the Airframe or its parts are manufactured or assembled.
Manufacturer’s Specification Change Notice (MSCN)    as defined in Clause 2.2.2.1.
Material    has the meaning given such term in Article 1.2.1 of Exhibit H.
NEO Propulsion Systems    has the meaning set out in Clause 2.5 to this Agreement.
NEO Propulsion Systems Base Price    means the price of a set of NEO Propulsion Systems as set out in Clauses 3.2.2.
NEO Propulsion Systems Reference Price    means the reference price of a set of NEO Propulsion Systems as set out respectively in Part 2, Part 3 or Part 4 of Exhibit C, as applicable.
NEO Propulsion Systems Manufacturer    means the manufacturer of the NEO Propulsion Systems as set out in Clause 2.5.
NEO Propulsion Systems Price Revision Formula    is set out respectively in Part 2 or Part 4 of Exhibit C, as applicable.
New Engine Option (“NEO”)    has the meaning set out in Clause 2.1.2 to this Agreement.
MSCN    see Manufacturer’s Specification Change Notice.
NFF    has the meaning set forth in Clause 12.1.6.7.
Non-Excusable Delay    has the meaning set out in Clause 11.1.
Other Item    as defined in Clause 13.1.3
Paying Party    as defined in Clause 5.7.
Paris Convention    has the meaning set forth in Clause 13.1.1(ii)(2).

 

AVTA - A320 Family & A320 NEO Family PA

Clause 00 - Page 5/9


PEP    has the meaning set forth in Clause 14B.1.1.
Practical Training    has the meaning set forth in Clause 16.8.2.
Predelivery Payment    means the payment(s) determined in accordance with Clauses 5.2 and 5.3.
Propulsion Systems    has the meaning set out in Clause 2.5.
Propulsion Systems Base Price    means the price of a set of Propulsion Systems as set out in Clauses 3.2.1.
Propulsion Systems Reference Price    means the reference price of a set of Propulsion Systems as set out respectively in Part 2, Part 3 or Part 4 of Exhibit C, as applicable.
Propulsion Systems Manufacturer    means the manufacturer of the Propulsion Systems as set out in Clause 2.5.
Propulsion Systems Price Revision Formula    is set out respectively in Part 2 or Part 3 of Exhibit C, as applicable.
PDP [*]    has the meaning set forth in Clause 10.6(i).
Ready for Delivery    means the time when (i) the Technical Acceptance Process has been successfully completed for an Aircraft in accordance with Clause 8 and (ii) all technical conditions required for the issuance of the Export Airworthiness Certificate have been satisfied for such Aircraft.
Receiving Party    as defined in Clause 5.7.
Revision Service Period    has the meaning set forth in Clause 14A.5.
Scheduled Delivery Month    has the meaning set out in Clause 9.1.1.
Scheduled Delivery Quarter    has the meaning set forth in Clause 9.1.1.
Secure Area    has the meaning set forth in Part 2 of Exhibit I.
Seller    means Airbus S.A.S. or its successors and permitted assigns.
Seller Representatives    means the representatives of the Seller referred to in Clause 15.2.
Seller Representatives Services    means the services provided by the Seller to the Buyer and from the Buyer to the Seller pursuant to Clause 15.
Seller Service Life Policy    has the meaning set out in Clause 12.2.

 

AVTA - A320 Family & A320 NEO Family PA

Clause 00 - Page 6/9


Sharklets    means a new large wingtip device, currently under development by the Seller, designed to enhance the eco-efficiency and payload range performance of the A320 family aircraft, and which are part of the New Engine Option and corresponding Irrevocable SCNs.
Seller’s Training Center    has the meaning set forth in Clause 16.3.1.
Service Life Policy    has the meaning set forth in Clause 12.2.1.
Spare Parts    means the items of equipment and material that may be provided pursuant to Exhibit H.
Spare Parts Representative    has the meaning set forth in Clause 15.2.2.
Specification Change Notice or SCN    means an agreement in writing between the parties to amend the Specification pursuant to Clause 2.
Specification    means either (a) the Standard Specification if no SCNs are applicable or (b) if SCNs and/or MSCNs are agreed, the Standard Specification as amended by all applicable SCNs and/or MSCNs.
Standard Specification    means respectively :
  

 

(i)     the A319-100 standard specification document number [*] with the following design weights:

 

[*]

  

 

(ii)    the A320-200 standard specification document number [*] with the following design weights:

 

[*]

  

 

(iii)  the A321-200 standard specification document number [*] with the following design weights:

 

[*]

Subsidiary    means an entity of which another owns directly or indirectly more than 50% of the voting share capital.
Successor    has the meaning set forth in Clause 21.2.2.
Supplier    has the meaning set out in Clause 12.3.1.1 and Article 1.1.3 of Exhibit H.
Supplier Part    has the meaning set out in Clause 12.3.1.2 and Article 1.1.3 of Exhibit H.
Supplier Product Support Agreement    has the meaning set out in Clauses 12.3.1.3 and 17.1.2.
Suspension    has the meaning set forth in Clause 15.3.6.
Technical Acceptance Process    as defined in Clause 8.1.1.

 

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Clause 00 - Page 7/9


Technical Acceptance Flight    has the meaning set forth in Clause 8.1.2.
Technical Data    has the meaning set out in Clause 14A.1.
Termination    has the meaning set forth in Clause 20.2.
Termination Event    has the meaning set forth in Clause 20.1.
Third Party Entity    has the meaning set forth in Clause 12.8.
Total Loss    has the meaning set out in Clause 10.4.
Training Conference    has the meaning set forth in Clause 16.4.1.
Training Course Catalog    has the meaning set forth in Clause 16.4.1.
Type Certificate    has the meaning set out in Clause 7.1.
Undelivered BFE    has the meaning set forth in Clause 10.6(ii)(c).
Warranty Claim    has the meaning set forth in Clause 12.1.5.
Warranted Part    has the meaning set out in Clause 12.1.1.
Warranty Period    has the meaning set forth in Clause 12.1.3.

 

0.2 Headings

All headings in this Agreement are for convenience of reference only and do not constitute a part of this Agreement.

 

AVTA - A320 Family & A320 NEO Family PA

Clause 00 - Page 8/9


0.3 In this Agreement unless the context otherwise requires:

 

  (a) references in this Agreement to an exhibit, clause or appendix refer, unless otherwise indicated, to the appropriate exhibit, clause or appendix in this Agreement;

 

  (b) words importing the plural shall include the singular and vice versa;

 

  (c) each agreement defined in this Clause 0 will include all exhibits and appendices thereto. If the prior written consent of any person is required hereunder for an amendment, restatement, supplement or other modification to any such agreement and the consent of each such person is obtained, references in this Agreement to such agreement will be to such agreement as so amended, restated, supplemented or modified. References in this Agreement to any statute will be to such statute as amended or modified and in effect at the time any such reference is operative;

 

  (d) references to a person shall be construed as including, without limitation, references to an individual, firm, company, corporation, unincorporated body of persons and any state or agency of a state;

 

  (e) the term “including” when used in this Agreement means “including without limitation” except when used in the computation of time periods;

 

  (f) the terms “herein,” “hereof” and “hereunder” and other words of similar import refer to this Agreement, and not a particular Clause thereof. The definition of a singular in this Agreement will apply to plurals of the same words and vice versa;

 

  (g) technical and trade terms not otherwise defined herein will have the meanings assigned to them as generally accepted in the aircraft manufacturing industry; and

 

AVTA - A320 Family & A320 NEO Family PA

Clause 00 - Page 9/9


1. SALE AND PURCHASE

The Seller shall sell and deliver and the Buyer shall buy and take delivery of fifty-one (51) Aircraft, of which eighteen (18) are A320 Family Aircraft and thirty-three (33) are A320 NEO Family Aircraft on the applicable Delivery Date at the Delivery Location upon the terms and conditions contained in this Agreement.

 

AVTA - A320 Family & A320 NEO Family PA

Clause 1 - Page 1/1


2. SPECIFICATION

 

2.1 Aircraft Specification

 

2.1.1 Specification

The Aircraft shall be manufactured in accordance with the Standard Specification applicable to the relevant Aircraft type, as stated in Clause 9 to this Agreement, as may have already been modified prior to the date of this Agreement by the Specification Change Notices listed in Exhibit A.

 

2.1.2 New Engine Option

 

2.1.2.1 The Seller is currently developing a new engine option (the “ New Engine Option ” or “ NEO ”), applicable to the A319, A320 and A321 type aircraft. The specification of the A319, A320 and A321 NEO Aircraft shall be derived from the current A319, A320 and A321 respective Standard Specification(s) and based on the new Propulsion Systems, as set forth in Clause 2.3 below, and Sharklets, combined with the required airframe structural adaptations, as well as Aircraft systems and software adaptations required to operate such A320 NEO Family Aircraft. The foregoing is currently reflected in the Irrevocable SCNs listed in Appendix 1 to Exhibit A, the implementation of which is hereby irrevocably accepted by the Buyer.

 

2.1.2.2 The New Engine Option shall modify the design weights of the Standard Specification(s) as follows:

 

      

A319-100

  

A320-200

  

A321-200

MTOW    [*]    [*]    [*]
MLW    [*](*)    [*](*)    [*](*)
MZFW    [*](*)    [*](*)    [*](*)

 

(*) : It is agreed and understood that the above design weights may be updated upon final NEO specification freeze. MLW and MZFW are indicative design weights representative of the Aircraft incorporating the NEO Option. Variations in MLW and MZFW values might be made by the Seller in order to maintain the payload capability of the A320 NEO Family Aircraft compared to that of the A320 Family Aircraft.

 

2.2 Specification Amendment

The parties understand and agree that the Specification may be further amended following signature of this Agreement in accordance with the terms of this Clause 2.

 

2.2.1 Specification Change Notice

The Specification may be amended by written agreement between the parties in a Specification Change Notice (“ SCN ”). Each SCN shall be substantially in the form set out in Exhibit B and shall set out such SCN’s scope of implementation and will also set forth in

 

AVTA - A320 Family & A320 NEO Family PA

Clause 2 - Page 2/5


detail the particular change to be made to the Specification [*]. Such SCN may result in an adjustment of the Basic Price. SCNs will not be binding until signed by persons duly authorized to execute the same on behalf of the Seller and the Buyer.

 

2.2.2 Development Changes

Development changes (“ Development Changes ”) are changes deemed necessary by the Seller to improve the Aircraft, prevent delay or ensure compliance with this Agreement. The Specification may be revised by the Seller without the Buyer’s consent in order to incorporate Development Changes if such changes do not adversely affect price, time of Delivery of the Aircraft, weight or performance of the Aircraft, maintainability, operation, balance or interchangeability or replaceability of parts under the Specification. In any other case the Seller shall issue to the Buyer a Manufacturer Specification Change Notice (“ MSCN ”). [*].

 

2.2.2.1 Manufacturer Specification Change Notice

A proposed Development Change will require an amendment to the Specification by way of a Manufacturer’s Specification Change Notice (“ MSCN ”) when such Development Change requires Buyer’s approval pursuant to Clause 2.2.2. MSCNs provided to the Buyer will be substantially in the form set out in Exhibit B-3 hereto and will set out such MSCN’s scope of implementation as well as, in detail, the effects thereof and the particular change to be made to the Specification.

The Buyer’s written consent shall be required for each MSCN except in respect of an MSCN necessitated by an Aviation Authority mandatory directive or equipment obsolescence. If equipment obsolescence giving rise to an MSCN results in an increase in Final Price, then the Buyer and the Seller shall agree on any increase in Final Price based upon the extent to which the equipment installed in replacement for the obsolete equipment has any operational advantages to the Buyer. Clause 7.3 shall apply to any Aviation Authority mandatory directive effecting certification that gives rise to an MSCN. The Seller will use reasonable efforts to limit MSCNs issued to address equipment obsolescence.

The Buyer’s written consent shall be required for each MSCN except in respect of an MSCN necessitated by an Aviation Authority [*]directive or equipment obsolescence. [*].

If an MSCN requires Buyers written approval, then the Seller will deliver to the Buyer the contemplated MSCN and notify the Buyer of a reasonable period of time following the Buyer’s receipt of such notice in which the Buyer must accept or reject such MSCN.

 

2.2.2.2 The Seller is considering turning certain items, which are currently BFE in the Specification, into SFE and the parties agree that such BFE items shall be excluded from the provisions of Clauses 2.2.2 and 2.2.2.1 above and, should they become SFE, shall furthermore be chargeable to the Buyer.

 

2.2.2.3 Specification Change Notices for Certification

The provisions relating to Specification Change Notices for certification are set out in Clauses 7.2. and 7.3.

 

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2.2.3 Buyer Import Requirements

The provisions relating to Specification Change Notices for Buyer import requirements are set out in Clause 7.4.

 

2.2.4 Inconsistency

In the event of any inconsistency between the Specification and any other part of this Agreement, this Agreement shall prevail to the extent of such inconsistency.

 

2.3 Propulsion Systems and NEO Propulsion Systems

The Airframe shall be equipped with:

 

  (i) For any A320 Family Aircraft, a set of either two (2) engines manufactured by one of the following manufacturers: CFM INTERNATIONAL INC. (“ CFM ”) engines or INTERNATIONAL AERO ENGINES (“ IAE ”), which upon selection will be referred to respectively as the “ Propulsion Systems ”, and

 

  (ii) For any A320 NEO Family Aircraft, a set of either two (2) CFM LEAP-X engines or two (2) Pratt & Whitney PW1100G engines, which upon selection will be referred to respectively as the “ NEO Propulsion Systems ”.

 

2.3.1 Propulsion Systems

 

Aircraft Type

  

CFM

  

IAE

A319-100   

CFM[*]

AET* [*]

  

IAE V2524-[*]

AET* [*]

  

 

CFM[*]

AET* [*]

  

 

IAE V2527M-[*]

AET* [*]

A320-200   

 

CFM[*]

AET* [*]

  

 

IAE V2527E-[*]

AET* [*]

A321-200   

 

CFM56-[*]

AET* [*]

  

 

IAE V2533-[*]

AET* [*]

 

* AET means Airbus Equivalent Thrust

If the Buyer has not selected the Propulsion Systems as of the date of this Agreement, such choice shall be made and notified to Seller no later than [*] months prior to the first day of the Scheduled Delivery Month of the first Aircraft as set forth in Clause 9.1.1.

 

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2.3.2 NEO Propulsion Systems

 

Aircraft Type

  

Pratt & Whitney

  

CFM

A319-100   

PW1124G

[*]

  

LEAP-X 1A24

[*]

A320-200   

PW1127G

[*]

  

LEAP-X 1A26

[*]

A321-200   

PW1133G

[*]

  

LEAP-X 1A32

[*]

 

* AET means Airbus Equivalent Thrust

If the Buyer has not selected the Propulsion Systems as of the date of this Agreement, such choice shall be made and notified to Seller no later than [*] prior to the first day of the Scheduled Delivery Month of the first Aircraft as set forth in Clause 9.1.1.

 

2.4 Customization Milestones

 

2.4.1 Customization Milestones Chart

Within a reasonable period, [*], following signature of the Agreement, the Seller shall provide the Buyer with a customization milestones chart (the “ Customization Milestones Chart ”). The chart will set out the minimum lead times prior to the Scheduled Delivery Month of the Aircraft when a mutual agreement shall be reached (execution of a SCN) in order to integrate into the Specification any items requested by the Buyer from the Seller’s catalogues of Specification change options (the “ Option Catalogues ”).

 

2.4.2 Contractual Definition Freeze

The Customization Milestone Chart shall in particular define the date(s) by which the contractual definition of the Aircraft must be finalized and all SCNs need to have been executed by the Buyer (the “ Contractual Definition Freeze ” or “ CDF ”) in order to enable their incorporation into the manufacturing of the Aircraft and Delivery of the Aircraft in the Scheduled Delivery Month. Each such date shall be referred to as a “ CDF Date ”.

 

2.5 Propulsion Systems, NEO Propulsion Systems and BFE Concessions

The concessions provided by the Propulsion Systems Manufacturers or the NEO Propulsion Systems Manufacturers shall be negotiated directly between the Buyer and the selected manufacturer. The concessions provided by the BFE suppliers shall be negotiated directly between the Buyer and the BFE suppliers.

 

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3. PRICES

 

3.1 Airframe Base Price

For each aircraft type, the base price of the airframe (the “ Airframe Base Price ”) is respectively the sum of:

 

  (i) the base price of the Airframe as defined in the relevant Standard Specification, including Nacelles and Thrust Reversers, and excluding Buyer Furnished Equipment, which is:

 

USD    [*]   
(US Dollars    [*]   
USD    [*]   
(US Dollars    [*]   
USD    [*]   
(US Dollars    [*]   

 

  (ii) the base price of the SCNs, as set forth in Exhibit A, which is:

 

USD    [*]   
(US Dollars    [*]   
USD    [*]   
(US Dollars    [*]   
USD    [*]   
(US Dollars    [*]   

 

  (iii) the base price of Aircraft [*]:

 

[*], which is:      
USD    [*]   
(US Dollars    [*]   
[*], which is:      
USD    [*]   
(US Dollars    [*]   
[*], which is:      
USD    [*]   
(US Dollars    [*]   

 

  (iv) for any A320 NEO Family Aircraft, the base price of the New Engine Option (excluding Sharklets), which is:

 

USD    [*]   
(US Dollars    [*]   
USD    [*]   
(US Dollars    [*]   
USD    [*]   
(US Dollars    [*]   

 

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  (v) for any Aircraft equipped with Sharklets, the base price of the Sharklets, which is:

 

USD    [*]   
(US Dollars    [*]   

 

  (vi) for any A320 NEO Family Aircraft, the base price of the master charge, which is applicable if a CFM LEAP-X Propulsion System is selected, which is:

 

USD    [*]   
(US Dollars    [*]   

All Airframe Base Prices have been established in accordance with the [*] corresponding to a theoretical delivery in [*] (the “ Base Period ”).

 

3.2 Propulsion Systems Base Prices and NEO Propulsion Systems Base Prices

 

3.2.1 Propulsion Systems Base Prices

For each A320 Family Aircraft, the base price of a set of Propulsion Systems (the “ Propulsion Systems Base Price ”) shall be the base price of the set of Propulsion System selected by the Buyer pursuant to Clause 3.2.1.1 or 3.2.1.2, as applicable.

 

3.2.1.1 CFM INTERNATIONAL CFM56- [*] series Propulsion Systems

The base price of a set of two (2) CFM INTERNATIONAL CFM56-[*] series Propulsion Systems is:

 

For CFM56- [*]:    USD [*]   
(US Dollars    [*]   
For CFM56- [*]:    USD [*]   
(US Dollars    [*]   
For CFM56- [*]:    USD [*]   
(US Dollars    [*]   
For CFM56- [*]:    USD [*]   
(US Dollars    [*]   

The Propulsion Systems Base Prices above have been established in accordance with [*] for a theoretical delivery in [*], and have been computed from the Propulsion System Reference Prices set forth below and in Part 2 of Exhibit C to the Agreement:

 

For CFM56- [*]:    USD [*]   
(US Dollars    [*]   
For CFM56- [*]:    USD [*]   
(US Dollars    [*]   
For CFM56- [*]:    USD [*]   
(US Dollars    [*]   
For CFM56- [*]:    USD [*]   
(US Dollars    [*]   

 

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The Propulsion System Reference Prices above have been established in accordance with the delivery conditions prevailing in [*], at Reference Composite Price Index of [*], as set forth in Part 2 of Exhibit C to the Agreement.

 

3.2.1.2 IAE V2500 series Propulsion Systems

The base price for a set of two (2) IAE V2500 series Propulsion Systems is:

 

For IAE V2524- [*]:    USD [*]   
(US Dollars    [*]   
For IAE V2527M- [*]:    USD [*]   
(US Dollars    [*]   
For IAE V2527E- [*]:    USD [*]   
(US Dollars    [*]   
For IAE V2533- [*]:    USD [*]   
(US Dollars    [*]   

The Propulsion Systems Base Prices above have been established in accordance with economic conditions prevailing for a theoretical delivery in [*], and have been computed from the Propulsion System Reference Prices set forth below and in Part 3 of Exhibit C to the Agreement:

 

For IAE V2524- [*]:    USD [*]   
(US Dollars    [*]   
For IAE V2527M- [*]:    USD [*]   
(US Dollars    [*]   
For IAE V2527E- [*]:    USD [*]   
(US Dollars    [*]   
For IAE V2533- [*]:    USD [*]   
(US Dollars    [*]   

The Propulsion System Reference Prices above have been established in accordance with the delivery conditions prevailing in [*] as set forth in Part 3 of Exhibit C to the Agreement.

 

3.2.2 NEO Propulsion Systems Base Prices

For each A320 NEO Family Aircraft, the base price of a set of NEO Propulsion Systems (the “ NEO Propulsion Systems Base Price ”) shall be the base price of the set of NEO Propulsion Systems selected by the Buyer pursuant to Clause 3.2.2.1 or 3.2.2.2, as applicable.

 

3.2.2.1 CFM INTERNATIONAL CFM LEAP-X NEO Propulsion Systems

The base price of a set of two (2) CFM INTERNATIONAL CFM LEAP-X NEO Propulsion Systems is:

 

For CFM LEAP-X [*]:    USD [*]   
(US Dollars    [*]   
For CFM LEAP-X [*]:    USD [*]   
(US Dollars    [*]   
For CFM LEAP-X [*]:    USD 22,785,360    for A321 NEO Aircraft
(US Dollars    [*]   

 

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The NEO Propulsion Systems Base Prices above have been established in accordance with economic conditions prevailing for a theoretical delivery in [*], and have been computed from the NEO Propulsion System Reference Prices set forth below and in Part 2 of Exhibit C to the Agreement:

 

For CFM LEAP-X [*]:   USD [*]  
(US Dollars   [*]  
For CFM LEAP-X [*]:   USD [*]  
(US Dollars   [*]  
For CFM LEAP-X [*]:   USD [*]  
(US Dollars   [*]  

The NEO Propulsion System Reference Prices above have been established in accordance with the delivery conditions prevailing in [*], at Reference Composite Price Index of [*], as set forth in Part 2 of Exhibit C to the Agreement.

 

3.2.2.2 Pratt & Whitney PW1100G NEO Propulsion Systems

The base price of a set of two (2) Pratt & Whitney PW1100G NEO Propulsion Systems is

 

For PW11 [*] G:   USD [*]  
(US Dollars   [*]  
For [*]:   USD [*]  
(US Dollars   [*]  
For [*]:   USD [*]  
(US Dollars   [*]  

The NEO Propulsion Systems Base Prices above have been established in accordance with economic conditions prevailing for a theoretical delivery in [*], and have been computed from the NEO Propulsion System Reference Prices set forth below and in Part 4 of Exhibit C to the Agreement:

 

For PW11 [*] G:   USD [*]  
(US Dollars   [*]  
For PW11 [*] G:   USD [*]  
(US Dollars   [*]  
For PW11 [*] G:   USD [*]  
(US Dollars   [*]  

The NEO Propulsion System Reference Prices above have been established in accordance with the delivery conditions prevailing in [*] as set forth in Part 4 of Exhibit C to the Agreement.

 

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3.2.3 Notwithstanding the foregoing, the NEO Propulsion System Reference Prices correspond to the thrust ratings defined for the respective NEO Propulsion System in Clause 2.3.2 and may be revised to reflect thrust rating adjustments upon final NEO Aircraft specification freeze.

 

3.2.4 The Propulsion System thrusts (lbf) and NEO Propulsion System thrusts (lbf) indicated in Clause 2.3 and in Appendix 1 under the name of each engine are Airbus Equivalent Thrust.

 

3.3 Final Price

The Final Price of each Aircraft shall be the sum of:

 

  (i) the Airframe Base Price as revised as of the Delivery Date in accordance with Clause 4.1; plus

 

  (ii) the aggregate of all increases or decreases to the Airframe Base Price as agreed in any Specification Change Notice or part thereof applicable to the Airframe subsequent to the date of this Agreement as revised as of the Delivery Date in accordance with Clause 4.1; plus

 

  (iii) the Propulsion Systems Reference Price, or NEO Propulsion Systems Reference Price, applicable, as revised as of the Delivery Date in accordance with Clause 4.2; plus

 

  (iv) the aggregate of all increases or decreases to the Propulsion Systems Reference Price, or NEO Propulsion Systems Reference Price, applicable, as agreed in any Specification Change Notice or part thereof applicable to the Propulsion Systems or NEO Propulsion Systems, as applicable, subsequent to the date of this Agreement as revised as of the Delivery Date in accordance with Clause 4.2; plus

 

  (v) any other amount resulting from any other provisions of this Agreement and/or any other written agreement between the Buyer and the Seller relating to the Aircraft and specifically stating that such amount is to be included in or deducted from the Final Price of an Aircraft.

 

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4. PRICE REVISION

 

4.1 Revision of Airframe Base Price

The Airframe Base Price is subject to revision in accordance with the Airframe Price Revision Formula up to and including the Delivery Date as set forth in Part 1 of Exhibit C to the Agreement.

 

4.2 Revision of Propulsion Systems Reference Price or NEO Propulsion Systems Reference Price

 

4.2.1. The Propulsion Systems Reference Price, or NEO Propulsion Systems Reference Price, as applicable, is subject to revision in accordance with the Propulsion Systems Price Revision Formula, or NEO Propulsion Systems Price Revision Formula, as applicable, up to and including the Delivery Date, as set forth in Parts 2A, 2B, 3 and 4 of Exhibit C to the Agreement.

 

4.2.2 Modification of Propulsion Systems Reference Price, NEO Propulsion Systems Reference Price, Propulsion Systems Price Revision Formula and NEO Propulsion Systems Price Revision Formula

The Propulsion Systems Reference Price or NEO Propulsion Systems Reference Price, as applicable, the prices of the related equipment and the Propulsion Systems Price Revision Formula or NEO Propulsion Systems Price Revision Formula, as applicable, are based on information received from the Propulsion Systems Manufacturer or NEO Propulsion Systems Manufacturer, as applicable, and are subject to amendment by the Propulsion Systems Manufacturer or NEO Propulsion Systems Manufacturer, as applicable, at any time prior to the Delivery Date. If the Propulsion Systems Manufacturer or NEO Propulsion Systems Manufacturer, as applicable, makes any such amendment, the amendment shall be automatically incorporated into this Agreement and the Propulsion Systems Reference Price or NEO Propulsion Systems Reference Price, as applicable, the prices of the related equipment and the Propulsion Systems Price Revision Formula or NEO Propulsion Systems Price Revision Formula, as applicable, shall be adjusted accordingly. The Seller agrees to notify the Buyer as soon as it receives notice of any such amendment from the Propulsion Systems Manufacturer or NEO Propulsion Systems Manufacturer, as applicable.

 

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5. PAYMENTS

 

5.1 Seller’s Account

The Buyer shall pay the Predelivery Payments, the Balance of Final Price and/or any other amount due by the Buyer to the Seller, to the Seller’s account:

Beneficiary Name: AIRBUS

account identification: [*]

with:

[*]

Buyer’s Account

The Seller shall pay any amount due by the Seller to the Buyer hereunder, to the Buyer’s account:

[*]

 

5.2 Commitment Fee

The Seller acknowledges that it has received from the Buyer the sum of US $[*] (U.S. Dollars [*]), which represents a non-refundable commitment fee of US$[*] (US Dollars [*]) for each Aircraft (the “ Commitment Fee ”). The Commitment Fee paid with respect to each particular Aircraft will be credited without interest against the first Predelivery Payment due for such Aircraft upon signature of the Agreement.

 

5.3 Predelivery Payments

 

5.3.1 [*]

 

5.3.2 [*]

 

5.3.3 [*]

 

5.3.4 [*]

 

5.3.5 [*]

 

5.4 Balance of Final Price

 

5.4.1 The Balance of Final Price payable by the Buyer to the Seller on the Delivery Date of an Aircraft shall be the Final Price less the amount of Predelivery Payments received by the Seller on or before the Delivery Date with respect to such Aircraft.

 

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5.4.2 Concurrent with each Delivery, the Buyer will pay to the Seller the Balance of the Final Price for the applicable Aircraft. Upon Seller’s receipt of the full amount of the Balance of the Final Price, including any amounts due under Clause 5.5, Seller shall transfer title to such Aircraft to the Buyer at Delivery.

 

5.5 Other Charges

Unless expressly stipulated otherwise, any other charges due under this Agreement other than those set out in Clauses 5.2, 5.3 and 5.4 shall be paid by the Buyer at the same time as payment of the Balance of Final Price or, if invoiced after the Delivery Date, within thirty (30) days after the invoice date.

 

5.6 Method of Payment

 

5.6.1 All payments provided for in this Agreement shall be made in United States Dollars (USD) in immediately available funds.

 

5.6.2 All payments due to the Seller hereunder shall be made in full, without set-off, counterclaim, deduction or withholding of any kind. Consequently, the Buyer shall assure that the sums received by the Seller under this Agreement shall be equal to the full amounts expressed to be due to the Seller hereunder, without deduction or withholding on account of and free from any and all taxes, levies, imposts, dues or charges of whatever nature (unless such deduction or withholding is for a tax, levy, impost, duty or charge for and from which the Seller is required to pay, indemnify and hold the Buyer harmless pursuant to Clause 5.8.2). If the Buyer is compelled by law to make any such deduction or withholding (unless such deduction or withholding is for a tax, levy, impost, duty or charge for and from which the Seller is required to pay, indemnify and hold the Buyer harmless pursuant to Clause 5.8.2) the Buyer shall pay such additional amounts as may be necessary in order that the net amount received by the Seller after such deduction or withholding shall be equal to the amounts which would have been received in the absence of such deduction or withholding and pay to the relevant taxation or other authorities within the period for payment permitted by applicable law, the full amount of the deduction or withholding.

 

5.7 Default Interest

If any payment or credit due from the Seller or the Buyer (“ Paying Party ”) under this Agreement including but not limited to any Predelivery Payment, Commitment Fee, Option Fee for the Aircraft as well as any payment or credit due to either party (the “ Receiving Party ”) for any spare parts, data, documents, training and services or otherwise under this Agreement, is not received on the due date, without prejudice to the Receiving Party’s other rights under this Agreement and at law, the Receiving Party shall be entitled to interest (“ Default Interest ”) for late payment or credit calculated on the amount due from and including the due date of payment up to and including the date when the payment or credit is received by the Receiving Party at a rate equal to [*] (the “ Default Rate ”).

[*]

 

5.8 [*]

 

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5.9 Proprietary Interest

The Buyer shall not, by virtue of anything contained in this Agreement (including, without limitation, any Commitment Fee or Predelivery Payments hereunder, or any designation or identification by the Seller of a particular aircraft as an Aircraft to which any of the provisions of this Agreement refers) acquire any proprietary, insurable or other interest whatsoever in any Aircraft before Delivery of and payment for such Aircraft, as provided in this Agreement.

 

5.10 Set-Off

The Seller may set-off any matured and undisputed obligation owed by the Buyer to the Seller and/or its Affiliates against any obligation (whether or not matured) owed by the Seller to the Buyer (it being understood that if this obligation is unascertainable it may be estimated reasonably and in good faith and the set-off made in respect of such estimate), regardless of the place of payment or currency provided that the Buyer must be provided prior written notice of Seller’s intentions to do the same. [*]

 

5.11 [*]

 

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6. MANUFACTURE PROCEDURE – INSPECTION

 

6.1 Manufacture Procedure

The Airframe shall be manufactured in accordance with the relevant requirements of the laws of the jurisdiction of incorporation of the Seller or of its relevant Affiliate as enforced by the Aviation Authority of such jurisdiction.

[*]

 

6.2 Inspection

 

6.2.1 Subject to providing the Seller with certificates evidencing compliance with the insurance requirements set forth in Clause 19, the Buyer or its duly authorised representatives (the “ Buyer’s Inspector(s) ”) shall be entitled to inspect the manufacture of the Airframe and all materials and parts obtained by the Seller for the manufacture of the Airframe on the following terms and conditions;

 

  (i) any inspection shall be made according to [*] the Seller’s own system of inspection as developed under the supervision of the relevant Aviation Authority;

 

  (ii) the Buyer’s Inspector(s) shall have access to such relevant technical data as is reasonably necessary for the purpose of the inspection;

 

  (iii) any inspection and any related discussions with the Seller and other relevant personnel by the Buyer’s Inspector(s) shall be at reasonable times during business hours and any inspection shall take place in the presence of relevant inspection department personnel of the Seller which personnel shall be available for this purpose upon reasonable notice;

 

  (iv) the inspections shall be performed in a manner not to unduly delay or hinder the manufacture or assembly of the Aircraft or the performance of this Agreement by the Seller or any other work in progress at the Manufacture Facilities.

 

6.2.2 Location of Inspections

The Buyer’s Inspector(s) shall be entitled to conduct any such inspection at the relevant Manufacture Facility of the Seller or the Affiliates and where possible at the Manufacture Facilities of the sub-contractors provided that if access to any part of the Manufacture Facilities where the Airframe manufacture is in progress or materials or parts are stored are restricted for security or confidentiality reasons, the Seller shall be allowed reasonable time to make the relevant items available for inspection elsewhere.

 

6.3 Seller’s Service for Buyer’s Inspector(s)

For the purpose of the inspections, and commencing with the date of this Agreement until the Delivery Date, the Seller shall furnish without additional charge suitable space and office equipment including access, for business purposes, to electronic mail, facsimile and telephones in or conveniently located with respect to the Delivery Location [*]

 

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7. CERTIFICATION

 

7.1 Type Certification

The Aircraft has been type certificated under EASA and by the FAA in the transport category. The Seller has obtained the relevant type certificate (the “ Type Certificate ”) to allow the issuance of the Export Airworthiness Certificate. [*]

 

7.2 Export Airworthiness Certificate

 

7.2.1 The Aircraft shall be delivered to the Buyer with, [*].

[*]

 

7.2.2 If, any time before the date on which any Aircraft is Ready for Delivery, any law or regulation is enacted, promulgated, becomes effective and/or an interpretation of any law, rule or regulation is issued which requires any change to the Specification for the purposes of obtaining the Export Airworthiness Certificate (a “ Change in Law ”), the Seller shall make the required variation or modification to such Aircraft and the parties hereto shall sign a Specification Change Notice in connection with such modification.

 

7.2.3 The Seller shall as far as practicable (but at its sole discretion and without prejudice to Clause 7.3.1 (ii)) take into account the information available to it concerning any proposed law, rule or regulation or interpretation which could become a Change in Law in order to minimise the costs of changes to the Specification as a result of such proposed law, regulation or interpretation becoming effective prior to the Aircraft being Ready for Delivery.

 

7.3 Costs of SCNs for Certification

 

7.3.1 The costs of implementing the variation or modification referred to in Clause 7.2.2 above shall be [*]

 

7.3.2. Notwithstanding the provisions of sub-Clauses 7.3.1 (i) and (ii), if the Change in Law relates to the Propulsion Systems, the costs shall be borne in accordance with such arrangements as may be made separately between the Buyer and the Propulsion Systems Manufacturer.

 

7.4 Validation of the Export Airworthiness Certificate

Where the Buyer’s Aviation Authority requires a modification to the Aircraft that is not also required by EASA or FAA to comply with additional import aviation requirements prior to the issuance of the Export Airworthiness Certificate, the Seller shall incorporate such modification in the Aircraft [*]. The parties shall sign a Specification Change Notice in connection with such modification.

 

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8. TECHNICAL ACCEPTANCE

 

8.1 Technical Acceptance Process

 

8.1.1 Prior to Delivery the Aircraft shall undergo a standard technical acceptance process that is applicable to deliveries of all aircraft of the same type as the Aircraft (the “ Technical Acceptance Process ”). [*] completion of the Technical Acceptance Process shall demonstrate the proper functioning and condition of the Aircraft and shall be deemed to demonstrate compliance with the Specification. Should the Aircraft fail to [*] complete the Technical Acceptance Process requirements, the Seller shall without hindrance from the Buyer be entitled to carry out any necessary changes to the Aircraft and, as soon as practicable thereafter, resubmit the Aircraft to such further Technical Acceptance Process as is necessary to demonstrate the proper functioning of the Aircraft, which will include an additional Technical Acceptance Flight (defined below) of the Aircraft if reasonably required to verify correction of the failure. Each successive failure of an Aircraft to [*] complete the Technical Acceptance Process will be governed by the preceding sentence. [*]

 

8.1.2 The Technical Acceptance Process shall:

 

  (i) commence on a date notified by the Seller to the Buyer as per clause 9.1.2 and in any case will commence no fewer than ten (10) days following the Buyer’s receipt of such notice;

 

  (ii) take place at the Delivery Location;

 

  (iii) be carried out by the personnel of the Seller;

 

  (iv) include a technical acceptance flight (the “ Technical Acceptance Flight ”) that will (a) not exceed three (3) hours, (b) have the purpose of demonstrating to the Buyer the function of the Aircraft and its equipment pursuant to the Technical Acceptance Process [*]

 

  (v) be conducted at the sole cost and expense of the Seller, excluding costs of travel, food and lodging of the Buyer’s representatives participating in such process.

 

8.2 Buyer’s Attendance

 

8.2.1 The Buyer shall be entitled to attend the Technical Acceptance Process.

 

8.2.2 If the Buyer attends the Technical Acceptance Process, the Buyer;

 

  (i) shall co-operate in complying with the reasonable requirements of the Seller with the intention of completing the Technical Acceptance Process within five (5) Business Days after its commencement;

 

  (ii) may have a maximum of five (5) of the Buyer’s representatives (with no more than three (3) such representatives having access to the cockpit at any one time) accompany the Seller’s representatives on the Technical Acceptance flight and during such flight the Buyer’s representatives shall comply with the instructions of the Seller’s representatives.

 

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8.2.3 If, following the Buyer’s receipt of notice pursuant to Clause 9.1.2, the Buyer does not attend [*] and/or fails to reasonably cooperate in the Technical Acceptance Process in respect of an Aircraft, the Seller acting as a reasonable buyer, will be entitled to commence the Technical Acceptance Process and, if Buyer or its designee does not thereafter join the Technical Acceptance Process, complete the Technical Acceptance Process in compliance with Clause 8.1 without the Buyer’s participation. Upon [*] completion of the Technical Acceptance Process for such Aircraft [*] the Buyer will be deemed to have accepted that the Technical Acceptance Process has been completed in all respects.

 

8.3 Certificate of Acceptance

Upon [*] completion of the Technical Acceptance Process, the Buyer shall, on or before the Delivery Date, sign and deliver to the Seller a certificate of acceptance in respect of the Aircraft in the form of Exhibit D (the “ Certificate of Acceptance ”).

 

8.4 Finality of Acceptance

The Buyer’s signature of the Certificate of Acceptance for the Aircraft shall constitute waiver by the Buyer of any right it may have under the Uniform Commercial Code as adopted by the State of New York or otherwise to revoke acceptance of the Aircraft for any reason, whether known or unknown to the Buyer at the time of acceptance.

 

8.5 Aircraft Utilization

The Seller shall, without payment or other liability, be entitled to use the Aircraft prior to Delivery as may be necessary to obtain the certificates required under Clause 7, and such use shall not prejudice the Buyer’s obligation to accept Delivery of the Aircraft hereunder.

[*]

 

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9. DELIVERY

 

9.1 Delivery Schedule

 

9.1.1 Subject to Clauses 2, 7, 8, 10, 11 and 18, the Seller shall have the Aircraft Ready for Delivery at the Delivery Location within the following months or quarters:

 

9.1.1.1 A320 Family Aircraft

 

Aircraft Rank

  

Scheduled Delivery Quarter

  

Aircraft Type

Aircraft N°1

   [*]    A319-100

Aircraft N°2

   [*]    A319-100

Aircraft N°3

   [*]    A320-200

Aircraft N°4

   [*]    A319-100

Aircraft N°5

   [*]    A319-100

Aircraft N°6

   [*]    A319-100

Aircraft N°7

   [*]    A319-100

Aircraft N°8

   [*]    A319-100

Aircraft N°9

   [*]    A319-100

Aircraft N°10

   [*]    A320-200

Aircraft N°11

   [*]    A320-200

Aircraft N°12

   [*]    A320-200

Aircraft N°13

   [*]    A320-200

Aircraft N°14

   [*]    A320-200

Aircraft N°15

   [*]    A320-200

Aircraft N°16

   [*]    A320-200

Aircraft N°17

   [*]    A320-200

Aircraft N°18

   [*]    A320-200

 

9.1.1.2 A320 NEO Family Aircraft

 

Aircraft Rank

  

Scheduled Delivery Quarter

  

NEO Aircraft Type

Aircraft N°1

   [*]    A320-200 NEO

Aircraft N°2

   [*]    A319-100 NEO

Aircraft N°3

   [*]    A319-100 NEO

Aircraft N°4

   [*]    A321-200 NEO

Aircraft N°5

   [*]    A320-200 NEO

Aircraft N°6

   [*]    A319-100 NEO

Aircraft N°7

   [*]    A319-100 NEO

Aircraft N°8

   [*]    A319-100 NEO

 

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Aircraft N°9

   [*]    A320-200 NEO

Aircraft N°10

   [*]    A319-100 NEO

Aircraft N°11

   [*]    A319-100 NEO

Aircraft N°12

   [*]    A319-100 NEO

Aircraft N°13

   [*]    A319-100 NEO

Aircraft N°14

   [*]    A319-100 NEO

Aircraft N°15

   [*]    A319-100 NEO

Aircraft N°16

   [*]    A319-100 NEO

Aircraft N°17

   [*]    A319-100 NEO

Aircraft N°18

   [*]    A319-100 NEO

Aircraft N°19

   [*]    A321-200 NEO

Aircraft N°20

   [*]    A320-200 NEO

Aircraft N°21

   [*]    A320-200 NEO

Aircraft N°22

   [*]    A319-100 NEO

Aircraft N°23

   [*]    A319-100 NEO

Aircraft N°24

   [*]    A319-100 NEO

Aircraft N°25

   [*]    A319-100 NEO

Aircraft N°26

   [*]    A319-100 NEO

Aircraft N°27

   [*]    A320-200 NEO

Aircraft N°28

   [*]    A321-200 NEO

Aircraft N°29

   [*]    A320-200 NEO

Aircraft N°30

   [*]    A320-200 NEO

Aircraft N°31

   [*]    A320-200 NEO

Aircraft N°32

   [*]    A320-200 NEO

Aircraft N°33

   [*]    A321-200 NEO

 

9.1.1.3 Initial NEO Delivery Schedule

The Scheduled Delivery Quarter for A320 NEO Aircraft stated in Clause 9.1.1.2 above will be referred to as the [*] NEO delivery schedule (the “[*] NEO Delivery Schedule ”).

 

9.1.1.4 [*] NEO Delivery Schedule

The delivery schedule indicated in Clause 9.1.1.2 for A320 Family Aircraft with NEO Option is based on the current production and certification projections for the NEO Option industrialization and may be modified by the Seller at any time until [*], to reflect the certification and industrialization planning and production ramp-up constraints of the NEO Option. The Buyer and the Seller hereby agree that with regard to NEO Aircraft scheduled for delivery in [*], the respective Scheduled Delivery Quarters quoted in Clause 9.1.1.2 above remain subject to the Seller’s industrial constraints regarding NEO engine type availability.

 

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Upon firming up of the final production and certification sequence for the NEO Option industrialization and no later than [*] the Seller will (i) confirm or (ii) review if required pursuant to the foregoing paragraph the delivery schedule for each of the NEO Aircraft and notify the Buyer of their final respective delivery quarter within their [*] given delivery year (the “[*] NEO Delivery Schedule ”).

However, the Seller undertakes [*].

 

9.1.1.5 Seller’s [*]

Notwithstanding the provisions of Clauses 9.1.1.3 and 9.1.1.4 above, the Buyer understands that, due to (i) certification and industrialization planning and production ramp-up constraints of the A321 NEO / engine type and (ii) industrial constraints regarding NEO engine type availability, the Seller might not be able to maintain the aircraft type associated with the A320 NEO Family Aircraft [*] (the “[*] NEO Aircraft ”), currently set as an [*] NEO Aircraft in Clause 9.1.1.2 above. As a result, the Buyer understands and agrees that the Seller might (i) [*] A320-200 NEO aircraft type and (ii) [*] A320 NEO Family Aircraft [*] NEO Aircraft (the “ Alternate First A321 NEO Aircraft ”), subject to the Seller’s then industrial and commercial constraints, it being understood that such [*] A321 NEO Aircraft might only be available in [*] (the “ Seller’s [*]”).

It is hereby understood that such Seller’s [*] shall be used by the Seller no later than [*].

 

9.1.1.6 Scheduled Delivery Month Notification

[*] Each of such delivery months shall be, with respect to the corresponding Aircraft, the “ Scheduled Delivery Month ”.

 

9.1.2 The Seller shall give the Buyer at least thirty (30) days prior written notice of the date on which the Aircraft shall be Ready for Delivery. Thereafter the Seller shall notify the Buyer of any change in such date necessitated by the conditions of manufacture or flight.

 

9.2 Delivery

 

9.2.1 The Buyer shall send its representatives to the Delivery Location to take Delivery of, and collect, the Aircraft within five (5) Business Days after the date on which the Aircraft is Ready for Delivery and shall sign the Certificate of Acceptance and pay the Balance of the Final Price on or before the Delivery Date.

 

9.2.2 The Seller shall deliver and transfer title to the Aircraft to the Buyer free and clear of all liens, claims, charges, security interests and all encumbrances of any kind whatsoever provided that the Balance of the Final Price has been paid by the Buyer pursuant to Clause 5.4 and that the Certificate of Acceptance has been signed and delivered to the Seller pursuant to Clause 8.3. The Seller shall provide the Buyer with a bill of sale in the form of Exhibit E (the “ Bill of Sale ”) and/or such other documentation confirming transfer of title and receipt of the Final Price as may reasonably be requested by the Buyer. Title to and risk of loss of or damage to the Aircraft shall be transferred to the Buyer on the date and at the time set forth in the executed Certificate of Acceptance.

[*]

 

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9.2.3 [*], should the Buyer fail to deliver the signed Certificate of Acceptance to the Seller within the delivery period set forth in Clause 9.2.1 and accept Delivery of and pay the Balance of the Final Price for an Aircraft that is Ready for Delivery and in respect of which the Buyer has or is obligated to deliver a Certificate of Acceptance, then the Buyer shall be deemed to have rejected Delivery of the Aircraft without warrant when duly tendered to it hereunder. In addition to Clause 5.7 and the Seller’s other rights under this Agreement, the Seller shall retain title to the Aircraft and the Buyer shall indemnify and hold the Seller harmless against any and all costs (including but not limited to any parking, storage, and insurance costs) actually incurred by the Seller resulting from any delay [*].

 

9.3 Fly Away

 

9.3.1 The Buyer and the Seller shall co-operate to obtain any licenses, permits and approvals which may be required by the Aviation Authority of the Delivery Location for the purpose of exporting the Aircraft.

 

9.3.2 Except as provided below, all expenses of, or connected with, flying the Aircraft from the Delivery Location after Delivery shall be borne by the Buyer. [*], and the Buyer will make direct arrangements with the supplying companies for its requirements. [*] Seller will also assist Buyer, at no out-of-pocket cost to Seller, to obtain the necessary authorizations from the Aviation Authority having jurisdiction over the Delivery Location to permit Buyer to remove the Aircraft from the Delivery Location immediately following Delivery

 

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10. EXCUSABLE DELAY

 

10.1 The Buyer acknowledges that the Aircraft are to be manufactured by Seller in performance of this Agreement and that the Scheduled Delivery Months are based on the assumption that there shall be no delay due to causes beyond the control of the Seller. Accordingly, Seller shall not be responsible for any delay in the Delivery of the Aircraft or delay or interruption in the performance of the other obligations of the Seller hereunder due to causes beyond its control, and not occasioned by its fault or negligence including (but without limitation) acts of God or the public enemy, war, civil war, warlike operations, terrorism, insurrections or riots, fires, explosions, natural disasters, compliance with any applicable foreign or domestic governmental regulation or order, labour disputes causing cessation, slowdown or interruption of work, inability after due and timely diligence to procure materials, equipment or parts, general hindrance in transportation or failure of a sub-contractor or supplier to furnish materials, equipment or parts, any delay caused directly or indirectly by the action or inaction of the Buyer; and any delay in delivery or otherwise in the performance of this Agreement by the Seller due in whole or in part to any delay in or failure of the delivery of, or any other event or circumstance relating to, the Propulsion Systems or Buyer Furnished Equipment. Any delay or interruption resulting from any of the foregoing causes is referred to as an “ Excusable Delay ”.

 

10.2 If an Excusable Delay occurs:

 

  (i) the Seller shall notify the Buyer of such Excusable Delay as soon as practicable after becoming aware of the same;

 

  (ii) the Seller shall not be responsible for any damages arising from or in connection with such Excusable Delay suffered or incurred by the Buyer;

 

  (iii) the Seller shall not be deemed to be in default in the performance of its obligations hereunder as a result of such Excusable Delay; and

 

  (iv) the Seller shall as soon as practicable after the removal of the cause of the delay resume performance of its obligations under this Agreement and in particular shall notify to the Buyer the revised Scheduled Delivery Month.

 

10.3 Termination on Excusable Delay

 

10.3.1 If the Delivery of any Aircraft is delayed as a result of an Excusable Delay for a period of more than [*] after the last day of the Scheduled Delivery Month then either party may terminate this Agreement with respect to the Aircraft so affected by giving written notice to the other party [*] period provided that the Buyer shall not be entitled to terminate this Agreement pursuant to this Clause if the Excusable Delay results from a cause within its control.

 

10.3.2 If the Seller concludes that the Delivery of any Aircraft shall be delayed for more than [*] after the last day of the Scheduled Delivery Month due to an Excusable Delay and as a result thereof reschedules Delivery of such Aircraft to a date or month reflecting such delay then the Seller shall promptly notify the Buyer in writing to this effect and shall include in such notification the new Scheduled Delivery Month. [*]

 

10.3.3 If this Agreement shall not have been terminated with respect to the delayed Aircraft during the [*] period referred to in either Clause 10.3.1 or 10.3.2 above, then the Seller shall be entitled to reschedule Delivery and the new Scheduled Delivery Month shall be notified to the Buyer and shall be binding on the parties.

 

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10.4 Total Loss, Destruction or Damage

If prior to Delivery, any Aircraft is lost, destroyed or in the reasonable opinion of the Seller is damaged beyond repair (“ Total Loss ”), the Seller shall notify the Buyer to this effect within [*] of such occurrence. The Seller shall include in said notification (or as soon after the issue of the notice as such information becomes available to the Seller) [*] may be delivered to the Buyer and the Scheduled Delivery Month shall be extended as specified in the Seller’s notice to accommodate the delivery of the replacement aircraft; provided, however, that in the event the specified extension of the Scheduled Delivery Month to a month is [*] after the last day of the original Scheduled Delivery Month then this Agreement shall terminate with respect to said Aircraft unless:

 

  (i) the Buyer notifies the Seller within [*] of the date of receipt of the Seller’s notice that it desires the Seller to provide a replacement aircraft during the month quoted in the Seller’s notice; and

 

  (ii) the parties execute an amendment to this Agreement recording the variation in the Scheduled Delivery Month;

provided, however, that nothing herein shall require the Seller to manufacture and deliver a replacement aircraft if such manufacture would require the reactivation of its production line for the model or series of aircraft which includes the Aircraft purchased hereunder.

 

10.5 Termination Rights Exclusive

In the event that this Agreement shall be terminated as provided for under the terms of Clauses 10.3 or 10.4, such termination shall discharge all obligations and liabilities of the parties hereunder with respect to such affected Aircraft and undelivered material, services, data or other items applicable thereto and to be furnished hereunder and neither party shall have any claim against the other for any loss resulting from such non-delivery. The Seller shall in no circumstances have any liability whatsoever for Excusable Delay other than as set forth in this Clause 10.

 

10.6 Remedies

THIS CLAUSE 10 SETS FORTH THE SOLE AND EXCLUSIVE REMEDY OF THE BUYER FOR DELAYS IN DELIVERY OR FAILURE TO DELIVER, OTHER THAN SUCH DELAYS AS ARE COVERED BY CLAUSE 11, AND THE BUYER HEREBY WAIVES ALL RIGHTS TO WHICH IT WOULD OTHERWISE BE ENTITLED IN RESPECT THEREOF, INCLUDING, WITHOUT LIMITATION, ANY RIGHTS TO INCIDENTAL AND CONSEQUENTIAL DAMAGES OR SPECIFIC PERFORMANCE. [*]

 

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11. NON-EXCUSABLE DELAY

 

11.1 Liquidated Damages

Should any of the Aircraft not be Ready for Delivery to the Buyer within [*] after the last day of the Scheduled Delivery Month (as varied by virtue of Clauses 2, 7 and 10) (the “ Delivery Period ”) and such delay is not as a result of an Excusable Delay or Total Loss (a “ Non-Excusable Delay ”), then the Buyer shall have the right to claim, and the Seller shall pay by way of liquidated damages to the Buyer [*] for each day of delay in the Delivery commencing on the date [*] after the last day of the Scheduled Delivery Month.

The amount of such liquidated damages shall in no event exceed the total of [*] in respect of any one Aircraft.

The Buyer’s right to be paid damages in respect of the Aircraft is conditional upon the Buyer submitting a claim in respect of such liquidated damages in writing to the Seller not later than one (1) month after the last day of the Scheduled Delivery Month.

 

11.2 Re-negotiation

If, as a result of Non-Excusable Delay, Delivery does not occur in the period falling [*] after the Delivery Period, the Buyer shall have the right exercisable by written notice to the Seller given not less than [*] nor more than [*] after the expiration of the [*] falling after the Delivery Period to require from the Seller a re-negotiation of the Scheduled Delivery Month for the affected Aircraft. Unless otherwise agreed between the Seller and the Buyer during such re-negotiation, the said re-negotiation shall not prejudice the Buyer’s right to receive liquidated damages in accordance with Clause 11.1 during the period of Non-Excusable Delay.

 

11.3 Termination

If, as a result of Non-Excusable Delay, Delivery does not occur in the period falling [*] after the Delivery Period and the parties have not renegotiated the Delivery Date pursuant to Clause 11.2, either party shall have the right exercisable by written notice to the other party, given not less than [*] nor more than [*] after expiration of such [*] to terminate this Agreement in respect of the affected Aircraft and neither party shall have any claim against the other in respect of such nondelivery [*]

 

11.4 Remedies

THIS CLAUSE 11 SETS FORTH THE SOLE AND EXCLUSIVE REMEDY OF THE BUYER FOR DELAYS IN DELIVERY OR FAILURE TO DELIVER, OTHER THAN SUCH DELAYS AS ARE COVERED BY CLAUSE 10, AND THE BUYER HEREBY WAIVES ALL RIGHTS TO WHICH IT WOULD OTHERWISE BE ENTITLED IN RESPECT THEREOF, INCLUDING WITHOUT LIMITATION ANY RIGHTS TO INCIDENTAL AND CONSEQUENTIAL DAMAGES OR SPECIFIC PERFORMANCE. [*]

 

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Clause 11 - Page 1/1


12. WARRANTIES AND SERVICE LIFE POLICY

This Clause covers the terms and conditions of the warranty and service life policy.

 

12.1 Standard Warranty

 

12.1.1 Nature of Warranty

For the purpose of this Agreement the term “Warranted Part” shall mean any component, equipment, proprietary software, accessory or part, which is installed on an Aircraft at Delivery thereof and

 

  (a) which is manufactured to the detailed design of the Seller or a subcontractor of the Seller and

 

  (b) which bears a part number of the Seller at the time of such Delivery.

Subject to the conditions and limitations as hereinafter provided for and except as provided for in Clause 12.1.2, the Seller warrants to the Buyer that each Aircraft and each Warranted Part shall at Delivery to the Buyer be free from defects:

 

  (i) in material;

 

  (ii) in workmanship, including without limitation processes of manufacture;

 

  (iii) in design (including without limitation the selection of materials) having regard to the state of the art at the date of such design; and

 

  (iv) arising from failure to conform to the Specification, except to those portions of the Specification relating to performance or where it is expressly stated in the Specification that they are estimates, approximations or design aims.

 

12.1.2 Exclusions

The warranties set forth in Clause 12.1.1 shall not apply to Buyer Furnished Equipment, nor to the Propulsion Systems, nor to any component, equipment, accessory or part installed on the Aircraft at Delivery that is not a Warranted Part except that:

 

  (i) any defect in the Seller’s workmanship in respect of the installation of such excluded items in the Aircraft, including any failure by the Seller to conform to the installation instructions of the manufacturers of such items, that invalidates any applicable warranty from such manufacturers, shall constitute a defect in workmanship for the purpose of this Clause 12.1 and be covered by the warranty set forth in Clause 12.1.1 (ii); and

 

  (ii) any defect inherent in the Seller’s design of the installation, in consideration of the state of the art at the date of such design, which impairs the use of such items, shall constitute a defect in design for the purpose of this Clause 12.1 and be covered by the warranty set forth in Clause 12.1.1 (iii).

 

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12.1.3 Warranty Period

The warranties set forth in Clauses 12.1.1 and 12.1.2 shall be limited to those defects that become apparent within [*] after Delivery of the affected Aircraft (the “ Warranty Period ”).

 

12.1.4 Buyer’s Remedy and Seller’s Obligation

 

12.1.4.1 The Buyer’s remedy and the Seller’s obligation and liability under Clauses 12.1.1 and 12.1.2 are limited to, at the Seller’s expense and option, the repair, replacement or correction of any Warranted Part which is defective (or to the supply of modification kits rectifying the defect), together with a credit to the Buyer’s account with the Seller of an amount equal to the mutually agreed direct labor costs expended in performing the removal and the reinstallation thereof on the Aircraft at the labor rate defined in Clause 12.1.7.5.

The Seller may alternatively, at Buyer’s request, furnish to the Buyer’s account with the Seller a credit equal to (a) the price at which the Buyer is entitled to purchase a replacement for the defective Warranted Part and (b) the mutually agreed direct labor costs expended in performing the removal and the reinstallation thereof on the Aircraft at the labor rate defined in Clause 12.1.7.5.

 

12.1.4.2 In the event of a defect covered by Clauses 12.1.1 (iii), 12.1.1 (iv) and 12.1.2 (ii) becoming apparent within the Warranty Period, the Seller shall also, correct such defect in any Aircraft which has not yet been delivered to the Buyer, provided, however,

 

  (i) that the Seller shall not be deemed to be in default on account of any delay in Delivery of any Aircraft or otherwise in respect of the performance of this Agreement, due to the Seller’s undertaking to make such correction to the extent any such delay could not be avoided using commercially reasonable efforts,

 

  (ii) that, rather than accept a delay in the Delivery of any such Aircraft, the Buyer and the Seller may agree to deliver such Aircraft with subsequent correction of the defect by the Buyer at the Seller’s expense, or the Buyer may elect to accept Delivery and thereafter file a Warranty Claim as though the defect had become apparent immediately after Delivery of such Aircraft,

 

  (iii) [*]

Nothing in this Clause 12.1.4.2 shall be deemed to constitute a waiver or release of any of Buyer’s rights under Clause 11.

 

12.1.4.3 Cost of inspection

In addition to the remedies set forth in Clauses 12.1.4.1 and 12.1.4.2, the Seller [*] incurred by the Buyer in performing inspections of the Aircraft that are conducted to determine whether a defect exists in any Warranted Part within the Warranty Period subject to the following conditions:

 

  (i) such inspections are recommended by a Seller Service Bulletin or an all operator telex (“ AOT ”) to be performed within the Warranty Period;

 

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  (ii) the reimbursement shall not apply for any inspections performed as an alternative to accomplishing corrective action as recommended by the Seller when such corrective action, including but not limited to instructions and materials, has been made available to the Buyer and such corrective action could have reasonably been accomplished by the Buyer in light of Buyer’s operational requirements, at the time such inspections are performed or earlier,

 

  (iii) the labor rate for the reimbursement shall be the Inhouse Warranty Labor Rate defined in Clause 12.1.7.5, and be equal to the Seller’s estimate of the manhours required for such inspections as set forth in the communication by the Seller to the Buyer or in the related Seller Service Bulletin or AOT, whichever is applicable.

 

12.1.5 Warranty Claim Requirements

The Buyer’s remedy and the Seller’s obligation and liability under this Clause 12.1, with respect to any warranty claim submitted by the Buyer (each a “ Warranty Claim ”) are subject to the following conditions:

 

  (i) the defect giving rise to such Warranty Claim having become known to Buyer or Buyer’s maintenance performer within the Warranty Period;

 

  (ii) the Buyer having filed a Warranty Claim within [*] of a defect becoming known to Buyer or Buyer’s maintenance performer, except where the Seller has issued a Service Bulletin or AOT intended to provide a remedy for such a defect, in which case the Warranty Claim must be filed [*] following embodiment of the Seller Service Bulletin or AOT in the Aircraft;

 

  (iii) the Buyer has operated and maintained the affected Aircraft or part thereof in accordance with the standards set forth in Clause 12.1.10;

 

  (iv) the claimed defect did not result from any act or omission of any third party;

 

  (v) the Seller having received a Warranty Claim complying with the provisions of Clause 12.1.6.5 below.

 

12.1.6 Warranty Administration

The warranties set forth in this Clause 12.1 shall be administered as hereinafter provided for in this Clause 12.1.6.

 

12.1.6.1 Claim Determination

The determination of the validity of any Warranty Claim by the Seller shall be made reasonably and in good faith, based upon the claim details, reports from the Seller’s Representatives, historical data logs, inspection, tests, findings during repair, defect analysis and other relevant documents.

 

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12.1.6.2 Transportation Costs

The cost of transporting a Warranted Part claimed to be defective to the facilities designated by the Seller will be borne by the Buyer. If the Warranty Claim for such Warranted Part is valid, [*].

 

12.1.6.3 Return of an Aircraft

If the Buyer and the Seller mutually agree, prior to such return, that it is necessary to return an Aircraft to the Seller for accomplishment of a warranty correction, the Seller shall bear the direct costs of fuel, taxes, navigation fees and landing fees to and from the Seller’s facilities for such return of the Aircraft. The party that will bear the additional costs, such as Buyer’s crew cost, shall be mutually agreed at the time. The Buyer shall make its reasonable efforts to minimize the duration of the corresponding flights.

 

12.1.6.4 On-Aircraft Work by the Seller

If the Parties determine that work to accomplish a repair or correction of a defect subject to this Clause 12.1 justifies the dispatch by the Seller of a working team to repair or correct such defect at the Buyer’s facilities or the facilities of a third party, then the labor and material costs and all associated travel, food and lodging expenses of the Seller’s personnel shall be borne by the Seller.

The condition which has to be fulfilled for on-Aircraft work by the Seller is that the work necessitates the technical expertise of the Seller as manufacturer of the Aircraft.

If said condition is fulfilled the Seller and the Buyer shall agree on a schedule and place for the work to be performed.

 

12.1.6.5 Warranty Claim Substantiation

Each Warranty Claim submitted by the Buyer under this Clause 12.1 shall contain at least the following data:

 

  a) description of defect and action taken, if any,

 

  b) date of incident and/or removal date,

 

  c) description of Warranted Part claimed to be defective,

 

  d) part number,

 

  e) serial number (if applicable),

 

  f) position on Aircraft,

 

  g) total flying hours or calendar time, as applicable, at the date the defect became known to the Buyer or Buyer’s maintenance performer,

 

  h) time since last shop visit at the date the defect became known to the Buyer or Buyer’s maintenance performer,

 

  i) Manufacturer Serial Number of the Aircraft and/or its registration,

 

  j) Aircraft total flying hours and/or number of landings at the date the defect became known to the Buyer or Buyer’s maintenance performer,

 

  k) Warranty Claim number,

 

  l) date of Warranty Claim, and

 

  m) Delivery Date of Aircraft or Warranted Part to the Buyer.

 

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Warranty Claims are to be addressed as follows:

AIRBUS

CUSTOMER SERVICES DIRECTORATE

WARRANTY ADMINISTRATION

Rond-Point Maurice Bellonte

B.P. 33

F-31707 BLAGNAC CEDEX

FRANCE

 

12.1.6.6 Replacements

Title to and risk of loss of any Aircraft, component, accessory, equipment or part returned by the Buyer to the Seller shall at all times remain with the Buyer, except that:

 

  (i) risk of loss (limited to cost of replacement and excluding in particular loss of use) shall be with the Seller for as long as such Aircraft, component, accessory, equipment or part shall be under the care, custody and control of the Seller and;

 

  (ii) title to and risk of loss of a returned component, accessory, equipment or part shall pass to the Seller upon shipment by the Seller to the Buyer of any item furnished by the Seller to the Buyer as a replacement thereof.

Upon the Seller’s shipment to the Buyer of any replacement component, accessory, equipment or part provided by the Seller pursuant to this Clause 12.1, title to and risk of loss of such replacement component, accessory, equipment or part shall pass to the Buyer.

 

12.1.6.7 Rejection

The Seller shall provide reasonable written substantiation in case of rejection of a Warranty Claim. In such event the Buyer shall refund to the Seller reasonable inspection and test charges incurred in connection therewith. [*]

 

12.1.6.8 Inspection

The Seller shall have the right to inspect the affected Aircraft, documents and other records relating thereto in the event of any Warranty Claim under this Clause 12.1. Such inspections will be made on Business Days, during reasonable times during the Buyer’s normal business hours and will not interfere with the Buyer’s operations or maintenance.

 

12.1.7 Inhouse Warranty

 

12.1.7.1 Seller’s Authorization

The Seller hereby authorizes the Buyer to repair Warranted Parts (“ Inhouse Warranty ”) subject to the terms of this Clause 12.1.7.

 

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12.1.7.2 Conditions for Seller’s Authorization

The Buyer shall be entitled to repair such Warranted Parts:

 

   

provided the Buyer notifies the Seller Representative of its intention to perform Inhouse Warranty repairs having an estimated cost of repair in [*] before any such repairs are started, unless it is not reasonably practicable to do so, in which case the Buyer will notify the Seller of the Inhouse Warranty Repair as soon as reasonably practicable. The Buyer’s notification shall include reasonable detail regarding the defect, estimated labor hours and material used by the Buyer to determine its estimate of the cost of such repair to allow the Seller to ascertain the reasonableness of the estimate. The Seller agrees to use all reasonable efforts to ensure a prompt response and shall not unreasonably withhold, delay or condition its authorization of the Buyer’s performance of any Inhouse Warranty Repair;

 

   

provided adequate facilities and qualified personnel are available to the Buyer; and

 

   

provided repairs are performed in accordance with the Seller’s Technical Data or written instructions; and

 

   

only to the extent reasonably necessary to correct the defect.

 

12.1.7.3 Seller’s Rights

The Seller shall have the right to require the return of any Warranted Part, or any part removed therefrom, which is claimed to be defective if, in the reasonable judgment of the Seller, the nature of the claimed defect requires technical investigation. Such return shall be subject to the provisions of Clause 12.1.6.2. Furthermore, the Seller and the Buyer will each have the right to have a representative present during the disassembly, inspection and testing of any Warranted Part claimed to be defective.

 

12.1.7.4 Inhouse Warranty Claim Substantiation

Claims for Inhouse Warranty credit shall be filed within the time period set forth in 12.1.5 (ii) and shall contain the same information as that required for Warranty Claims under Clause 12.1.6.5 and in addition shall include:

 

  a) a report of technical findings with respect to the defect,

 

  b) for parts required to remedy the defect:

 

   

part numbers,

 

   

serial numbers (if applicable),

 

   

parts description,

 

   

quantity of parts,

 

   

unit price of parts,

 

   

related Seller’s or third party’s invoices (if applicable),

 

   

total price of parts,

 

  c) detailed number of labor hours,

 

  d) Inhouse Warranty Labor Rate,

 

  e) total claim value.

 

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12.1.7.5 Credit

The Buyer’s sole remedy and the Seller’s sole obligation and liability with respect to Inhouse Warranty Claims shall be the credit to the Buyer’s account of an amount [*]

 

12.1.7.6 Limitation

Except in any situation in which a replacement for any defective Warranted Part is unavailable for purchase by Buyer or is available for purchase by Buyer but cannot be timely delivered to Buyer in light of Buyer’s operational requirements (including without limitation, AOG), if the Buyer elects to repair or have repaired any Warranted Part, the Buyer will not be credited for repair costs (including labor and material) for any Warranted Part that exceed in the aggregate sixty-five per cent (65%) of the Seller’s then current catalogue price for a replacement of such defective Warranted Part. [*]

 

12.1.7.7 Scrapped Material

The Buyer shall retain any defective Warranted Part and any defective part removed from a Warranted Part during repair for a period of either [*] after submission of a claim for Inhouse Warranty credit relating thereto, whichever is longer. Such parts shall be returned to the Seller, [*] of receipt of the Seller’s request therefor, provided that the Buyer receives such request within such above described retention periods and prior to the Buyer’s receipt of written notice, if any, from the Seller that the requested Warranty Part may or should be scrapped.

Notwithstanding the foregoing, the Buyer may scrap any such defective parts, which are beyond economic repair and not required for technical evaluation locally, with the agreement of the Seller Representative(s).

Scrapped Warranted Parts shall be evidenced by a record of scrapped material certified by an authorized representative of the Buyer and shall be kept in the Buyer’s file for a least the duration of the applicable Warranty Period.

 

12.1.8 Standard Warranty in case of Pooling or Leasing Arrangements

Notwithstanding Clause 21.1, the warranties provided for in this Clause 12.1 for any Warranted Part shall accrue to the benefit of any airline in revenue service, other than the Buyer, if the Warranted Part enters into the possession of any such airline as a result of a pooling or leasing agreement between such airline and the Buyer (or any successor or assignee of the Buyer), in accordance with the terms and subject to the limitations and exclusions of the foregoing warranties and to the extent permitted by any applicable law or regulations.

 

12.1.9 Warranty for Corrected, Replaced or Repaired Warranted Parts

Whenever any Warranted Part, which contains a defect for which the Seller is liable under Clause 12.1, has been corrected, replaced or repaired pursuant to the terms of this Clause 12.1, the period of the Seller’s warranty with respect to such corrected, repaired or replacement Warranted Part, whichever the case may be, shall be the remaining portion of the original warranty [*].

 

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If a defect is attributable to a improper repair or improper installation by the Buyer, a Warranty Claim with respect to such defect will not be accepted, notwithstanding any subsequent correction or repair, and shall immediately terminate the remaining warranties under this Clause 12.1 in respect of the affected Warranted Part. In such event, Seller shall reasonably justify to the Buyer its findings and conclusions.

 

12.1.10 Accepted Industry Standard Practices - Normal Wear and Tear

The Buyer’s rights under this Clause 12.1 are subject to the Aircraft and each component, equipment, accessory and part thereof being maintained, overhauled, repaired and operated in accordance with the Buyer’s Aviation Authority approved maintenance program and maintenance procedures and requirements and any other mandatory requirements issued by the Seller generally to all owners and operators of the Warranted part at issue, the Suppliers and the Propulsion Systems Manufacturer and all applicable rules, regulations and directives of the relevant Aviation Authorities.

The Seller’s liability under this Clause 12.1 shall not extend to normal wear and tear or to:

 

  (i) any Aircraft or component, equipment, accessory or part thereof, which has been repaired, altered or modified after Delivery, (except for any repair, alteration or modification made by the Seller or in a manner approved by the Seller);

 

  (ii) any Aircraft or component, equipment, accessory or part thereof, which Buyer has knowingly operated in a damaged state (other than in the case of operational necessity); or

 

  (iii) any component, equipment, accessory or part from which the trademark, part or serial number or other identification marks have been removed.

 

12.1.11 LIMITATION OF LIABILITY

THE SELLER SHALL NOT BE LIABLE FOR, AND THE BUYER SHALL INDEMNIFY THE SELLER AGAINST, ANY CLAIMS FROM ANY THIRD PARTIES FOR LOSSES DUE TO ANY DEFECT OR NONCONFORMITY OR PROBLEM OF ANY KIND, ARISING OUT OF OR IN CONNECTION WITH ANY REPAIR OF ANY WARRANTED PART UNDERTAKEN BY THE BUYER UNDER THIS CLAUSE 12.1.7 OR ANY OTHER ACTIONS UNDERTAKEN BY THE BUYER UNDER THIS CLAUSE 12, WHETHER SUCH CLAIM IS ASSERTED IN CONTRACT OR IN TORT, OR IS PREMISED ON ALLEGED, ACTUAL, IMPUTED, ORDINARY OR INTENTIONAL ACTS OR OMISSIONS OF THE BUYER.

 

12.2 Seller Service Life Policy

 

12.2.1 In addition to the warranties set forth in Clause 12.1, the Seller further agrees that should a Failure occur in any Item (as these terms are defined below) that did not result from an extrinsic force, then, subject to the general conditions and limitations set forth in Clause 12.2.4, the provisions of this Clause 12.2 shall apply.

For the purposes of this Clause 12.2:

 

  (i) Item ” means any item listed in Exhibit “F”;

 

  (ii) Failure ” means a breakage or defect that can reasonably be expected to occur on a fleetwide basis and which materially impairs the utility of the Item.

 

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The Seller’s obligations under this Clause 12.2.1 are referred to as the “ Service Life Policy ”.

 

12.2.2 Periods and Seller’s Undertakings

The Seller agrees that if a Failure occurs in an Item prior to the [*] anniversary of the Delivery Date of the Aircraft on which such Item was originally installed, the Seller shall, at its discretion and as promptly as practicable and with the Seller’s financial participation as hereinafter provided, either:

 

   

design and furnish to the Buyer a correction for such Item having the Failure and provide any parts required for such correction (including Seller designed standard parts but excluding industry standard parts that are not integrated into the Item), or

 

   

replace such Item.

 

12.2.3 Seller’s Participation in the Costs

[*]

 

12.2.4 General Conditions and Limitations

 

12.2.4.1 The undertakings set forth in this Clause 12.2 shall be valid after the period of the Seller’s warranty applicable to an Item under Clause 12.1. During the Warranty Period, all Items will be covered by the provisions of Clause 12.1.

 

12.2.4.2 The Buyer’s remedies and the Seller’s obligations and liabilities under this Service Life Policy are subject to the following conditions:

 

  (i) the Buyer shall maintain log books and other historical records with respect to each Aircraft or Item, as applicable, reasonably adequate to enable the Seller to determine whether the alleged Failure is covered by this Service Life Policy and, if so, to define the portion of the costs to be borne by the Seller in accordance with Clause 12.2.3;

 

  (ii) the Buyer shall keep the Seller reasonably informed of any significant incidents relating to an Aircraft, howsoever occurring or recorded;

 

  (iii) the Buyer shall comply with the conditions of Clause 12.1.10;

 

  (iv) the Buyer shall implement specific structural inspection programs for monitoring purposes as may be established from time to time by the Seller, as customarily provided for in the Seller’s maintenance manuals. Such programs shall be as compatible as possible with the Buyer’s operational requirements and shall be carried out at the Buyer’s expense. Reports relating thereto shall be regularly furnished to the Seller;

 

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  (v) the Buyer shall report any breakage or defect in a Item in writing to the Seller within sixty (60) days after such breakage or defect becomes apparent, if breakage or defect can reasonably be expected to occur in any other aircraft, and the Buyer shall have provided to the Seller with reasonably sufficient detail about the breakage or defect to enable the Seller to determine whether said breakage or defect is subject to this Service Life Policy.

 

12.2.4.3 Except as otherwise provided for in this Clause 12.2, any claim under this Service Life Policy shall be administered as provided for in, and shall be subject to the terms and conditions of, Clause 12.1.6.

 

12.2.4.4 In the event of the Seller having issued a Service Bulletin applicable to an Aircraft, the purpose of which is to avoid a Failure, the Seller may elect to supply the necessary modification kit to the Buyer free of charge or under a pro rata formula. If such a kit is so offered to the Buyer free of charge, then, to the extent of such Failure and any Failures that could ensue therefrom, the validity of the Seller’s commitment under this Clause 12.2 shall be subject to the Buyer incorporating such modification in the relevant Aircraft, as promulgated by the Seller and in accordance with the Seller’s instructions, within a reasonable time.

 

12.2.4.5 THIS SERVICE LIFE POLICY IS NOT A WARRANTY, PERFORMANCE GUARANTEE, OR AN AGREEMENT TO MODIFY ANY AIRCRAFT OR AIRFRAME COMPONENTS TO CONFORM TO NEW DEVELOPMENTS OCCURRING IN THE STATE OF AIRFRAME DESIGN AND MANUFACTURING ART.

THE SELLER’S OBLIGATION HEREUNDER IS TO FURNISH ONLY THOSE CORRECTIONS TO THE ITEMS OR PROVIDE REPLACEMENTS THEREFOR AS PROVIDED FOR IN THIS CLAUSE 12.2.

THE BUYER’S SOLE REMEDY AND RELIEF FOR THE NON-PERFORMANCE OF ANY OBLIGATION OR LIABILITY OF THE SELLER ARISING UNDER OR BY VIRTUE OF THIS SERVICE LIFE POLICY SHALL BE IN THE FORM OF A CREDIT, LIMITED TO THE AMOUNT THE BUYER REASONABLY EXPENDS IN PROCURING A CORRECTION OR REPLACEMENT FOR ANY ITEM THAT IS THE SUBJECT OF A FAILURE COVERED BY THIS SERVICE LIFE POLICY AND TO WHICH SUCH NON-PERFORMANCE IS RELATED.

 

12.3 Supplier Warranties and Service Life Policies

Prior to the Delivery of the first Aircraft, the Seller shall provide the Buyer with such warranties and service life policies that the Seller has obtained pursuant to the Supplier Product Support Agreements.

 

12.3.1 Definitions

 

12.3.1.1 “Supplier” means any supplier of Supplier Parts.

 

12.3.1.2 “Supplier Part” means any component, equipment, accessory or part installed in an Aircraft at the time of Delivery thereof and for which there exists a Supplier Product Support Agreement. However, the Propulsion Systems and Buyer Furnished Equipment and other equipment selected by the Buyer to be supplied by suppliers with whom the Seller has no existing enforceable warranty agreements are not Supplier Parts.

 

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12.3.1.3 “Supplier Product Support Agreement” means an agreement between the Seller and a Supplier containing, among other things, enforceable and transferable warranties and, in the case of landing gear suppliers, service life policies for selected structural landing gear elements.

 

12.3.2 Supplier’s Default

 

12.3.2.1 In the event any Supplier, under any warranty obtained by the Seller and transferred to the Buyer pursuant to the Supplier Product Support Agreement, defaults in the performance of any material obligation with respect thereto and the Buyer submits in reasonable time to the Seller reasonable evidence that such default has occurred, then Clause 12.1 shall apply to the extent the same would have been applicable had such Supplier Part been a Warranted Part, except that the Supplier’s warranty period as indicated in the Supplier Product Support Agreement shall apply.

 

12.3.2.2 In the event any Supplier, under any Supplier service life policy obtained by the Seller and transferred to the Buyer pursuant to the Supplier Product Support Agreement, defaults in the performance of any material obligation with respect thereto and the Buyer submits in reasonable time to the Seller reasonable evidence that such default has occurred, then Clause 12.2 shall apply to the extent the same would have been applicable had such Supplier Item been listed in Exhibit F, Seller Service Life Policy, except that the Supplier’s service life policy period as indicated in the Supplier Product Support Agreement shall apply.

 

12.3.2.3 If pursuant to Clause 12.3.2.1 or 12.3.2.2, a defect in a Supplier Part is corrected by the Seller, then at the Seller’s request, the Buyer shall assign to the Seller, and the Seller shall be subrogated to, all of the Buyer’s rights against the relevant Supplier with respect to and arising by reason of such default and shall provide reasonable assistance, provided the same is at not more than deminimus out of pocket cost to the Buyer, to enable the Seller to enforce the rights so assigned.

 

12.4 Interface Commitment

 

12.4.1 Interface Problem

If the Buyer experiences any technical problem in the operation of an Aircraft or its systems due to a malfunction, the cause of which, after due and reasonable investigation, is not readily identifiable by the Buyer but which the Buyer reasonably believes to be attributable to the design characteristics of one or more components of the Aircraft (“ Interface Problem ”), the Seller shall, if so requested by the Buyer, and without charge to the Buyer, promptly conduct or have conducted an investigation and analysis of such problem to determine, if possible, the cause or causes of the problem and to recommend corrective action. The Buyer shall furnish to the Seller all data and information in the Buyer’s possession relevant to the Interface Problem and shall cooperate with the Seller in the conduct of the Seller’s investigations and such tests as may be required.

At the conclusion of such investigation, the Seller shall promptly advise the Buyer in writing of the Seller’s opinion as to the cause or causes of the Interface Problem and the Seller’s recommendations as to corrective action, including materials, if applicable.

 

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12.4.2 Seller’s Responsibility

If the Parties determine that the Interface Problem is primarily attributable to the design of a Warranted Part and Buyer has notified Seller of the problem within the Warranty Period for such Warranted Part, the Seller shall correct the design of such Warranted Part and either repair or replace the same in accordance with Clause 12.1 to the extent of the Seller’s obligation as defined in Clause 12.1.

 

12.4.3 Supplier’s Responsibility

If the Parties determine that the Interface Problem is primarily attributable to the design of any Supplier Part, the Seller shall, if so requested by the Buyer, reasonably assist the Buyer in pursuing any warranty claim the Buyer may have against the Supplier of such Supplier Part.

 

12.4.4 Joint Responsibility

If the Parties determine that the Interface Problem is attributable partially to the design of a Warranted Part and partially to the design of any Supplier Part, the Seller shall, if so requested by the Buyer and without charge to the Buyer, use reasonable commercial efforts to provide a solution to the Interface Problem through cooperative efforts of the Seller and any Supplier involved.

The Seller shall promptly advise the Buyer of such corrective action as may be proposed by the Seller and any such Supplier. Such proposal shall be consistent with any then existing obligations of the Seller hereunder and of any such Supplier towards the Buyer. Such corrective action shall constitute full satisfaction of any claim the Buyer may have against either the Seller or any such Supplier with respect to such Interface Problem unless (i) reasonably rejected by the Buyer in which case Seller will use its commercially reasonable efforts to determine an alternative corrective action taking into consideration the reasons for Buyer’s rejection or (ii) such corrective action fails to resolve the Interface Problem.

 

12.4.5 [*]

 

12.4.6 General

 

12.4.6.1 All requests under this Clause 12.4 shall be directed to the Seller.

 

12.4.6.2 Except as specifically set forth in this Clause 12.4, this Clause 12.4 shall not be deemed to impose on the Seller any obligations not expressly set forth elsewhere in this Clause 12.

 

12.4.6.3 All reports, recommendations, data and other documents furnished by the Seller to the Buyer pursuant to this Clause 12.4 shall be deemed to be delivered under this Agreement and shall be subject to the terms, covenants and conditions set forth in this Clause 12 and Clause 22.12.

 

12.5 EXCLUSIVITY OF WARRANTIES

AS BETWEEN THE BUYER AND THE SELLER, THIS CLAUSE 12 (INCLUDING ITS SUBPROVISIONS) SETS FORTH THE EXCLUSIVE WARRANTIES, EXCLUSIVE LIABILITIES AND EXCLUSIVE OBLIGATIONS OF THE SELLER, AND THE EXCLUSIVE REMEDIES AVAILABLE TO THE BUYER,

 

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WHETHER UNDER THIS AGREEMENT OR OTHERWISE, ARISING FROM ANY DEFECT OR NONCONFORMITY OR PROBLEM OF ANY KIND IN ANY AIRCRAFT, COMPONENT, EQUIPMENT, ACCESSORY, PART, SOFTWARE, DATA OR SERVICE DELIVERED BY THE SELLER UNDER THIS AGREEMENT.

THE BUYER RECOGNIZES THAT THE RIGHTS, WARRANTIES AND REMEDIES IN THIS CLAUSE 12 ARE ADEQUATE AND SUFFICIENT TO PROTECT THE BUYER FROM ANY DEFECT OR NONCONFORMITY OR PROBLEM OF ANY KIND IN THE GOODS AND SERVICES SUPPLIED UNDER THIS AGREEMENT. THE BUYER HEREBY WAIVES, RELEASES AND RENOUNCES ALL OTHER WARRANTIES, OBLIGATIONS, GUARANTEES AND LIABILITIES OF THE SELLER AND ALL OTHER RIGHTS, CLAIMS AND REMEDIES OF THE BUYER AGAINST THE SELLER, WHETHER EXPRESS OR IMPLIED BY CONTRACT, TORT, OR STATUTORY LAW OR OTHERWISE, WITH RESPECT TO ANY NONCONFORMITY OR DEFECT OR PROBLEM OF ANY KIND IN ANY AIRCRAFT, COMPONENT, EQUIPMENT, ACCESSORY, PART, SOFTWARE, DATA OR SERVICE DELIVERED BY THE SELLER UNDER THIS AGREEMENT, INCLUDING BUT NOT LIMITED TO:

 

  (1) ANY IMPLIED WARRANTY OF MERCHANTABILITY AND/OR FITNESS FOR ANY GENERAL OR PARTICULAR PURPOSE;

 

  (2) ANY IMPLIED OR EXPRESS WARRANTY ARISING FROM COURSE OF PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE;

 

  (3) ANY RIGHT, CLAIM OR REMEDY FOR BREACH OF CONTRACT;

 

  (4) ANY RIGHT, CLAIM OR REMEDY FOR TORT, UNDER ANY THEORY OF LIABILITY, HOWEVER ALLEGED, INCLUDING, BUT NOT LIMITED TO, ACTIONS AND/OR CLAIMS FOR NEGLIGENCE, GROSS NEGLIGENCE, INTENTIONAL ACTS, WILLFUL DISREGARD, IMPLIED WARRANTY, PRODUCT LIABILITY, STRICT LIABILITY OR FAILURE TO WARN;

 

  (5) ANY RIGHT, CLAIM OR REMEDY ARISING UNDER THE UNIFORM COMMERCIAL CODE OR ANY OTHER STATE OR FEDERAL STATUTE;

 

  (6) ANY RIGHT, CLAIM OR REMEDY ARISING UNDER ANY REGULATIONS OR STANDARDS IMPOSED BY ANY INTERNATIONAL, NATIONAL, STATE OR LOCAL STATUTE OR AGENCY;

 

  (7) ANY RIGHT, CLAIM OR REMEDY TO RECOVER OR BE COMPENSATED FOR:

 

  (a) LOSS OF USE OR REPLACEMENT OF ANY AIRCRAFT, COMPONENT, EQUIPMENT, ACCESSORY OR PART PROVIDED UNDER THIS AGREEMENT;

 

  (b) LOSS OF, OR DAMAGE OF ANY KIND TO, ANY AIRCRAFT, COMPONENT, EQUIPMENT, ACCESSORY OR PART PROVIDED UNDER THIS AGREEMENT;

 

  (c) LOSS OF PROFITS AND/OR REVENUES;

 

  (d) ANY OTHER INCIDENTAL OR CONSEQUENTIAL DAMAGE.

THE WARRANTIES AND SERVICE LIFE POLICY PROVIDED BY THIS AGREEMENT SHALL NOT BE EXTENDED, ALTERED OR VARIED EXCEPT BY A WRITTEN INSTRUMENT SIGNED BY THE SELLER

 

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AND THE BUYER. IN THE EVENT THAT ANY PROVISION OF THIS CLAUSE 12 SHOULD FOR ANY REASON BE HELD UNLAWFUL, OR OTHERWISE UNENFORCEABLE, THE REMAINDER OF THIS CLAUSE 12 SHALL REMAIN IN FULL FORCE AND EFFECT.

THE ABOVE LIMITATION WILL NOT BE INTERPRETED TO IMPAIR THE EXPRESS CONTRACTUAL WARRANTIES OR GUARANTEES GRANTED TO THE BUYER ELSEWHERE UNDER THIS AGREEMENT OR TO RELIEVE THE SELLER OF ANY OF ITS EXPRESS CONTRACTUAL OBLIGATIONS UNDER THIS AGREEMENT. THIS CLAUE 12.5 SHALL NOT BE INTERPRETED TO IMPAIR ANY SELLER AFFILIATE OR ANY SUPPLIER.

FOR THE PURPOSE OF THIS CLAUSE 12.5, “SELLER” SHALL BE UNDERSTOOD TO INCLUDE THE SELLER AND ITS AFFILIATES EXCEPT FOR ANY AFFILIATE THAT IS A SUPPLIER AND IS PROVIDING A SEPARATE WARRANTY TO THE BUYER.

 

12.6 Duplicate Remedies

The remedies provided to the Buyer under Clause 12.1 and Clause 12.2 as to any defect in respect of the Aircraft or any part thereof are mutually exclusive and not cumulative. The Buyer shall be entitled to the remedy that provides the maximum benefit to it, as the Buyer may elect, pursuant to the terms and conditions of this Clause 12 for any particular defect for which remedies are provided under this Clause 12; provided, however, that the Buyer shall not be entitled to elect a remedy under both Clause 12.1 and Clause 12.2 for the same defect. The Buyer’s rights and remedies herein for the non performance of any obligations or liabilities of the Seller arising under these warranties shall be in monetary damages limited to the amount the Buyer expends in procuring a correction or replacement for any covered part subject to a defect or non performance covered by this Clause 12, and the Buyer shall not have any right to require specific performance by the Seller.

 

12.7 Negotiated Agreement

The Buyer specifically recognizes that:

 

  (i) the Specification has been agreed upon after careful consideration by the Buyer using its judgment as a professional operator of aircraft used in public transportation and as such is a professional within the same industry as the Seller;

 

  (ii) this Agreement, and in particular this Clause 12, has been the subject of discussion and negotiation and is fully understood by the Buyer; and

 

  (iii) the price of the Aircraft and the other mutual agreements of the Buyer set forth in this Agreement were arrived at in consideration of, inter alia, the provisions of this Clause 12, specifically including the Exclusivity of Warranties by the Buyer set forth in Clause 12.5.

 

12.8 Disclosure to Third Party Entity

In the event of the Buyer intending to designate a third party entity (a “ Third Party Entity ”) to administer this Clause 12, the Buyer shall notify the Seller of such intention prior to any disclosure of this Clause to the selected Third Party Entity and shall cause such Third Party Entity to enter into a confidentiality agreement and or any other relevant documentation with the Seller solely for the purpose of administrating this Clause 12.

 

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12.9 Transferability

Notwithstanding the provisions of Clause 12.1.8 hereof and without prejudice to Clause 21.1, the Buyer’s rights under this Clause 12 shall not be assigned, sold, transferred, novated or otherwise alienated by operation of law or otherwise, without the Seller’s prior written consent thereto, which shall not be unreasonably withheld, conditioned or delayed.

Any unauthorized assignment, sale, transfer, novation or other alienation of the Buyer’s rights under this Clause 12 shall be void and of no force and effect.

 

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13. PATENT AND COPYRIGHT INDEMNITY

 

13.1 Indemnity

 

13.1.1 Subject to the provisions of Clause 13.2.3, the Seller shall indemnify the Buyer from and against any damages, costs and expenses including legal costs (excluding damages, costs, expenses, loss of profits and other liabilities in respect of or resulting from loss of use of the Aircraft) resulting from any infringement or claim of infringement by (a) the Airframe or any part or software installed therein at Delivery or (b) any documentation, manuals, materials or training aids or software that are provided to the Buyer under this Agreement, of:

 

  (i) any British, French, German, Spanish or U.S. patent;

and

 

  (ii) any patent issued under the laws of any other country in which the Buyer may lawfully operate the Aircraft, provided that:

 

  (1) from the time of design of such Airframe, accessory, equipment or part and until infringement claims are resolved, such country and the flag country of the Aircraft are each a party to the Chicago Convention on International Civil Aviation of December 7, 1944, and are each fully entitled to all benefits of Article 27 thereof,

or in the alternative,

 

  (2) from such time of design and until infringement claims are resolved, such country and the flag country of the Aircraft are each a party to the International Convention for the Protection of Industrial Property of March 20, 1883 (“ Paris Convention ”);

and

 

  (iii) with respect to any claim of copyright infringement in respect of any documentation, manuals, materials, or training aids or associated software that are provided to the Buyer under this Agreement or any computer software installed on the Aircraft will be limited to infringements in countries which, at the time of infringement, are members of The Berne Union and, with respect to such software, recognise computer software as a “work” under the Berne Convention.

 

13.1.2 Clause 13.1.1 shall not apply to

 

  (i) Buyer Furnished Equipment or Propulsion Systems; or

 

  (ii) Supplier Parts; or

 

  (iii) software and Other Items (as defined below) unless such software or Other Items bear the copyright of the Seller.

 

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13.1.3 In the event that the Buyer is prevented from using the Aircraft or any other item described in Clause 13.1.1 (“ Other Item ”) or is required to pay any royalty or other amount to lawfully continue such use (whether by a valid judgement of a court of competent jurisdiction or by a settlement arrived at among the claimant, Seller and Buyer), the Seller shall at its expense either:

 

  (i) procure for the Buyer the right to use the same free of charge to the Buyer; or

 

  (ii) replace the infringing part, software or Other Item as soon as possible with a non-infringing substitute complying in all other respects with the requirements of this Agreement. [*]

 

13.2 Administration of Patent and Copyright Indemnity Claims

 

13.2.1 If the Buyer receives a written claim or a suit is threatened or commenced against the Buyer for infringement of a patent or copyright referred to in Clause 13.1, the Buyer shall:

 

  (i) promptly notify the Seller following the Buyer receiving notice of the same, giving particulars thereof to the extent known by the Buyer;

 

  (ii) upon the Seller’s request, furnish to the Seller all data, papers and records within the Buyer’s control or possession relating to the defense of such claim or suit;

 

  (iii) refrain from admitting any liability or making any payment or assuming any expenses, damages, costs or royalties or otherwise acting in a manner prejudicial to the defense or denial of such suit or claim provided always that nothing in this sub-Clause (iii) shall prevent the Buyer from paying such sums as may be required in order to obtain the right to use the Aircraft or the allegedly infringing part, software or Other Item, provided such payment, to the extent permitted by any applicable laws, is accompanied by a denial of liability and is made without prejudice;

 

  (iv) co-operate with, and render all such assistance to, the Seller as may be pertinent to the defense or denial of the suit or claim provided the same is at no out-of-pocket cost to Buyer; and

 

  (v) act in such a way as to mitigate damages and / or to reduce the amount of royalties which may be payable as well as to minimise costs and expenses, but in each case only to the extent that doing so would not materially adversely affect the Buyer’s operations or result in any out-of-pocket costs to Buyer not indemnified by Seller.

 

13.2.2 The Seller may, upon commitment to the Buyer in writing that it will indemnify the Buyer as provided herein, assume and conduct the defense or settlement of any claim or suit in the manner that, in the Seller’s opinion, the Seller deems proper. In that event, the Seller shall be entitled either in its own name or on behalf of the Buyer to conduct such defense with the party or parties alleging infringement.

 

13.2.3 The Seller’s liability hereunder shall be conditional upon the full and timely compliance by the Buyer with the terms of this Clause 13 and is in lieu of any other liability to the Buyer express or implied which the Seller might incur at law as a result of any infringement or claim of infringement of any patent or copyright.

THE INDEMNITY PROVIDED IN THIS CLAUSE 13 AND THE OBLIGATIONS AND LIABILITIES OF THE SELLER UNDER THIS CLAUSE 13 ARE EXCLUSIVE AND IN SUBSTITUTION FOR, AND THE

 

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BUYER HEREBY WAIVES, RELEASES AND RENOUNCES ALL OTHER INDEMNITIES, WARRANTIES, OBLIGATIONS, GUARANTEES AND LIABILITIES ON THE PART OF THE SELLER AND RIGHTS, CLAIMS AND REMEDIES OF THE BUYER AGAINST THE SELLER, EXPRESS OR IMPLIED, ARISING BY LAW OR OTHERWISE (INCLUDING WITHOUT LIMITATION ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY ARISING FROM OR WITH RESPECT TO LOSS OF USE OR REVENUE OR CONSEQUENTIAL DAMAGES), WITH RESPECT TO ANY ACTUAL OR ALLEGED PATENT INFRINGEMENT OR THE LIKE BY ANY AIRFRAME, PART OR SOFTWARE INSTALLED THEREIN AT DELIVERY, OR THE USE OR SALE THEREOF, PROVIDED THAT, IN THE EVENT THAT ANY OF THE AFORESAID PROVISIONS SHOULD FOR ANY REASON BE HELD UNLAWFUL OR OTHERWISE INEFFECTIVE, THE REMAINDER OF THIS CLAUSE WILL REMAIN IN FULL FORCE AND EFFECT. THIS INDEMNITY AGAINST PATENT AND COPYRIGHT INFRINGEMENTS WILL NOT BE EXTENDED, ALTERED OR VARIED EXCEPT BY A WRITTEN INSTRUMENT SIGNED BY THE SELLER AND THE BUYER.

 

13.3 Survivability

The provisions of this Clause 13 will, with respect to all delivered Aircraft and Other Items described in Clause 13.1.1, survive any termination of this Agreement.

 

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14. TECHNICAL DATA AND SOFTWARE SERVICES

 

14.A TECHNICAL DATA

 

14.B SOFTWARE SERVICES

 

14.C GENERAL PROVISIONS

 

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14A. TECHNICAL DATA

 

14A.1 Scope

This Clause covers the terms and conditions for the supply of technical data (hereinafter “ Technical Data ”) and software services described hereunder (hereinafter “ Software Services ”) to support the Aircraft operation.

 

14A.1.1 The Technical Data shall be supplied in the English language using the aeronautical terminology in common use.

 

14A.1.2 Range, form, type, format, quantity and delivery schedule of the Technical Data to be provided under this Agreement are outlined in Exhibit G hereto.

 

14A.2 Aircraft Identification for Technical Data

 

14A.2.1 For those Technical Data that are customized to the Buyer’s Aircraft, the Buyer agrees to the allocation of fleet serial numbers (“ Fleet Serial Numbers ”) in the form of a block of numbers selected in the range from 001 to 999.

 

14A.2.2 The sequence shall not be interrupted unless two (2) different Propulsion Systems or two (2) different Aircraft models are selected.

 

14A.2.3 The Buyer shall indicate to the Seller the Fleet Serial Number allocated to each Aircraft corresponding to the delivery schedule set forth in Clause 9.1.1 [*]. Neither the designation of such Fleet Serial Numbers nor the subsequent allocation of the Fleet Serial Numbers to Manufacturer Serial Numbers for the purpose of producing customized Technical Data shall constitute any property, insurable or other interest of the Buyer in any Aircraft prior to the Delivery of such Aircraft as provided under this Agreement.

The customized Technical Data that are affected by this Clause 14A.2.3 are:

 

   

Aircraft Maintenance Manual,

 

   

Illustrated Parts Catalog,

 

   

Trouble Shooting Manual,

 

   

Aircraft Wiring Manual,

 

   

Aircraft Schematics Manual,

 

   

Aircraft Wiring Lists.

 

14A.3 Integration of Equipment Data

 

14A.3.1 Supplier Equipment

Information, including revisions, relating to Supplier equipment that is installed on the Aircraft at Delivery, or through Airbus Service Bulletins thereafter, by the Seller shall be introduced [*] into the initial issue of the customized Technical Data delivered for each Aircraft (the “ Basic Issue ”) to the extent necessary to understand the affected systems. Changes to Supplier equipment after issuance of each Basic Issue, except for changes to the Technical Data due to Seller’s Service Bulletins, will be for the responsibility of the Buyer.

 

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14A.3.2 Buyer Furnished Equipment

 

14A.3.2.1 The Seller shall introduce data relative to Buyer Furnished Equipment , for equipment that is installed on the Aircraft by the Seller on or prior to the Delivery (hereinafter “ BFE Data ”), into the customized Technical Data [*] for the Technical Data for each Basic Issue, provided such BFE Data is provided in accordance with the conditions set forth in Clauses 14A.3.2.2 through 14A.3.2.5.

 

14A.3.2.2 The Buyer shall supply the BFE Data related to Buyer Furnished Equipment to the Seller at least [*] before the scheduled delivery of the customized Technical Data.

 

14A.3.2.3 The BFE Data shall be supplied in English and shall be established in compliance with the then applicable revision of ATA i Specification 2200 (iSpec 2200), Information Standards for Aviation Maintenance.

The Buyer and the Seller shall agree on the requirements for the provision to the Seller of BFE Data for “on-aircraft maintenance”, such as but not limited to timeframe, media and format in which the BFE Data shall be supplied to the Seller, in order to manage the BFE Data integration process in an efficient, expeditious and economic manner.

 

14A.3.2.4 The BFE Data shall be delivered in digital format (SGML) and/or in Portable Document Format (PDF), as agreed between the Buyer and the Seller.

 

14A.3.2.5 All costs related to the delivery to the Seller of the applicable BFE Data shall be borne by the Buyer.

 

14A.4 Supply

 

14A.4.1 Technical Data shall be supplied on-line and/or off-line, as set forth in Exhibit G hereto.

 

14A.4.2 The Buyer shall not receive any credit or compensation for any unused or only partially used Technical Data supplied pursuant to this Clause.

 

14A.4.3 Delivery

 

14A.4.3.1 For Technical Data provided off-line, such Technical Data and corresponding revisions shall be sent to [*] as indicated by the Buyer.

 

14A.4.3.2 In such case, the Seller shall deliver the Technical Data to the Buyer’s named place of destination [*].

 

14A.4.3.3 The Technical Data shall be delivered according to a mutually agreed schedule to correspond with Aircraft Deliveries. The Buyer shall provide no less than [*] notice when requesting a change to such delivery schedule.

 

14A.4.3.4

It shall be the responsibility of the Buyer to coordinate and satisfy local Aviation

 

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  Authorities’ needs for Technical Data. In addition to the quantities defined in Exhibit G, reasonable quantities of such Technical Data shall be supplied by the Seller at no charge to the Buyer at the Buyer’s named place of destination.

 

14A.5 Revision Service

Unless otherwise specifically stated, revision service for the Technical Data shall be provided [*] (the “ Revision Service Period ”).

 

14A.6 Service Bulletins (SB) Incorporation

During the Revision Service Period and upon the Buyer’s request for incorporation of Seller Service Bulletin information into the Technical Data, such information shall be incorporated into the Technical Data provided that the Buyer notifies the Seller through the relevant AirbusWorld on-line Service Bulletin Reporting application that it intends to accomplish such Service Bulletin. The split effectivity for the corresponding Service Bulletin shall remain in the Technical Data until notification from the Buyer that embodiment has been completed on all of the Buyer’s Aircraft. The foregoing is applicable for Technical Data relating to maintenance only. For operational Technical Data either the pre or post Service Bulletin status shall be shown.

 

14A.7 Technical Data Familiarization

The Seller will provide, [*] to the Buyer, [*] of Technical Data familiarization training, [*] at the Seller’s Training Center or, at the Buyer’s request, at the Buyer’s facility. If such familiarization is conducted at the Buyer’s facility, [*].

 

14A.8 Customer Originated Changes (COC)

If the Buyer elects to include Buyer originated data (hereinafter “ COC Data ”) into any of the customized Technical Data that are identified as eligible for such incorporation in the Seller’s then current Customer Services Catalog, the Buyer shall notify the Seller of such election.

The incorporation of any COC Data shall be perfomed under the methods and tools for achieving such introduction and the conditions specified in the then current ANACS Customer Services Catalog.

COC Data will be developed by the Buyer according to the methods and tools for achieving such introduction issued by the Seller. The Buyer will ensure that any COC Data is in compliance with the requirements of the Buyer’s Aviation Authorities.

Except for any Seller induced errors to the COC Data during its incorporation into the Technical Data, any COC Data will be at the Buyer’s sole risk, and [*]

 

14A.9 AirN@v Services

 

14A.9.1 The Technical Data listed below shall be provided through an advanced consultation tool (hereinafter referred to as “AirN@v Services”). The applicable Technical Data are the following:

 

   

AirN@v / Maintenance,

 

   

AirN@v / Planning,

 

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AirN@v / Repair,

 

   

AirN@v / Workshop,

 

   

AirN@v / Associated Data,

 

   

AirN@v / Engineering.

 

14A.9.2 The licensing conditions for the use of AirN@v Services shall be as set forth in Part 1 of Exhibit I to the Agreement, “Licence for Use of Software”.

 

14A.9.3 The license to use AirN@v Services as described above shall be granted [*] for the Aircraft [*] the revisions of the affected Technical Data [*] in accordance with Clause 14A.5.

 

14A.10 On-Line Technical Data

 

14A.10.1 The Technical Data defined in Exhibit “G” as being provided on-line shall be made available to the Buyer through the Secure Area of the Airbus customer portal Airbus|World (“ Airbus|World ”), as further described in Part 2 of Exhibit I to the Agreement.

 

14A.10.2 Such provision shall be [*] the Buyer for the duration of the Revision Service Period.

 

14A.10.3 Access to AirbusWorld be subject to the “General Terms and Conditions of Access to and Use of Airbus|World” (hereinafter the “ GTC ”), as set forth in Part 4 of Exhibit I to this Agreement.

 

14A.10.4 The list of the Technical Data provided on-line may be extended from time to time.

For any Technical Data which is or becomes available on-line, the Seller and Buyer will decide together whether to suppress other formats for the concerned Technical Data.

 

14A.10.5 Access to the Secure Area shall be granted [*] the Buyer’s users (including one Buyer Administrator) for the Technical Data related to the Aircraft which shall be operated by the Buyer.

 

14A.10.6 For the sake of clarification, it is hereby specified that Technical Data accessed through AirbusWorld – which access shall be covered by the terms and conditions set forth in the GTC – shall remain subject to the conditions of this Clause 14A.

In addition, should the Secure Area provide access to Technical Data in software format, the use of such software shall be further subject to the conditions of Part 1 of Exhibit I to the Agreement.

 

14A.11 Exclusivity of Warranties

The Seller warrants that the Technical Data are prepared in accordance with the state of art at the date of their conception. Should any Technical Data prepared by the Seller contain non-conformity or defect, the sole and exclusive liability of the Seller shall be to take all reasonable and proper steps to correct such Technical Data. [*] The provisions of Clause 12.5 shall apply in their entirety to Technical Data.

 

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14A.12 Proprietary Rights

 

14A.12.1 All proprietary rights, including but not limited to patent, design and copyrights, relating to Technical Data shall remain with the Seller and/or its Affiliates as the case may be.

These proprietary rights shall also apply to any translation into a language or languages or media that may have been performed or caused to be performed by the Buyer.

 

14A.12.2 Whenever this Agreement and/or any Technical Data provides for manufacturing by the Buyer, the consent given by the Seller shall not be construed as express or implicit approval howsoever of either the Buyer or the manufactured products. In and of itself, the supply of the Technical Data shall not be construed as any further right for the Buyer to design or manufacture any Aircraft or part thereof or spare part.

 

14B. SOFTWARE SERVICES

 

14B.1 Performance Engineer’s Program

 

14B.1.1 In addition to the standard operational Technical Data provided under Clause 14A, the Seller shall provide to the Buyer the Performance Engineer’s Programs (“ PEP ”) for the Aircraft type covered under this Agreement. Such PEP is composed of software components and databases and its use is subject to the licence conditions set forth in Part 1 of Exhibit I to the Agreement, “Licence for Use of Software”.

 

14B.1.2 Use of the PEP shall be limited to [*] copies to be used on such number of the Buyer’s computers as determined by Buyer for the purpose of computing performance engineering data. The PEP is intended for use on ground only and shall not be embarked on board the Aircraft. The Seller will provide [*] in respect of the PEP.

 

14B.1.3 The licence to use the PEP and the revision service shall be provided [*].

At the end of such PEP Revision Service Period, the above shall be provided to the Buyer at the standard commercial conditions set forth in the Seller’s then current Customer Services Catalog.

 

14C. GENERAL PROVISIONS

 

14C.1 Future Developments

The Seller continuously monitors technological developments and applies them to data, document and information systems’ production and methods of transmission.

The Seller shall inform the Buyer in due time of such new developments and their application and of the date by which the same shall be implemented by the Seller. The Buyer agrees to consider in good faith any such new development and whether Buyer desires to utilize the same in light of the implementation costs, systems capabilities and other circumstances unique to Buyer’s environment.

 

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14C.2 Confidentiality

 

14C.2.1 The Technical Data, the Software Services and their content are designated as confidential. All such Technical Data and Software Services are provided to the Buyer for the sole use of the Buyer who undertakes not to disclose the contents thereof to any third party without the prior written consent of the Seller save as permitted therein or otherwise pursuant to any government or legal requirement imposed upon the Buyer.

 

14C.2.2 In the event the Seller authorizes, upon Buyer’s request, the disclosure of any Technical Data or Software Services to third parties either under this Agreement or by an express prior written authorization, the Buyer will undertake to cause such third party to agree to be bound by the same conditions and restrictions as apply to the Buyer with respect to the confidentiality of the disclosed Technical Data or Software Services.

 

14C.2.3 Specifically, in the event the Buyer designates a maintenance and repair organization (MRO) to perform the maintenance of the Aircraft, the Buyer shall notify the Seller of such designation prior to any disclosure of this Clause and/or the Technical Data and/or the Software Services to the selected MRO and shall cause such MRO to (i) enter into a confidentiality agreement with the Seller in form and substance reasonably satisfactory to the Seller and the MRO and, in the case of Software Services, appropriate licensing conditions reasonably satisfactory to the Seller and the MRO, and (ii) commit to use such Technical Data and Software Services solely for the purpose of maintaining the Buyer’s Aircraft.

 

14C.3 Transferability

Without prejudice to Buyer’s rights to assign this Agreement under Clause 21.1, the Buyer’s rights under this Clause 14 shall not be assigned, sold, transferred, novated or otherwise alienated by operation of law or otherwise, without the Seller’s prior written consent thereto, which shall not be unreasonably withheld, conditioned or delayed.

Any unauthorized assignment, sale, transfer, novation or other alienation of the Buyer’s rights under this Clause 14 shall be null and void.

 

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15. SELLER REPRESENTATIVES

The Seller shall [*] to the Buyer the services described in this Clause 15, at the Buyer’s main base or at other locations to be mutually agreed.

 

15.1 Customer Support Director

The Seller shall provide the services of [*] customer support [*] (each a “ Customer Support Director ”) or similar function, based at one of the Seller’s offices (in Toulouse, France, Herndon, or Virginia, U.S.A., as applicable) to coordinate customer support matters between the Seller and the Buyer after signature of this Agreement, for as long as at least [*] Aircraft is operated by the Buyer.

 

15.2 Customer Support Representative(s)

 

15.2.1 The Seller shall provide [*] to the Buyer the services of Seller customer support representative(s), as defined in Appendix A to this Clause 15 (each a “ Customer Support Representative ”), at the Buyer’s main base or such other locations as the parties may agree. The services of Customer Support Representative(s) will commence at or about the delivery of the first Aircraft.

 

15.2.2 Spare Parts Representative

The Seller shall provide [*] to the Buyer the services of [*] Seller spare parts representative, for the duration specified in Appendix B to this Clause 15, to assist the Buyer with the planning, receipt and follow-up of its initial provisioning orders as well as to generally liaise between the Buyer and the Seller in any matters related to Material (the “ Spare Parts Representative ”).

 

15.2.3 For the purposes of this Clause 15, the Customer Support Representatives and the Spare Parts Representative(s) as defined above are individually and collectively referred to as “ Seller Representatives ”.

 

15.2.4 In providing the services as described hereabove, any Seller’s employees, including specifically Seller Representatives, or any Seller employee(s) providing services to the Buyer hereunder, are deemed to be acting in an advisory capacity only and at no time shall they be deemed to be acting or have the authority to act as Buyer’s employees or agents, either directly or indirectly, and shall not hold themselves out as having any such authority. The Seller shall ensure that each Seller Representative agrees, for the Buyer’s benefit, to maintain as confidential and proprietary such information to which such Seller Representative has access during the course of providing services to Buyer under this Agreement.

 

15.2.5 The Seller shall provide to the Buyer an annual written accounting of the consumed man-months and any remaining man-month balance from the allowance defined in Appendices A and B, respectively in this Clause 15. Such accounting shall be deemed final and accepted by the Buyer unless the Seller receives written objection from the Buyer within [*] of Buyer’s receipt of such accounting.

 

15.2.6 In the event of a need for non-routine or Aircraft On Ground (“ AOG ”) technical assistance after the end of the assignment referred to in Appendices A and B, respectively to this Clause 15 or at any time during such assignment when any of Seller Representatives assigned to Buyer is unavailable, the Buyer shall [*]:

 

  a) AIRTAC (Airbus Technical AOG Center);

 

  b) The Seller Representative network. A list of contacts of the Seller Representatives shall be provided to the Buyer.

 

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As a matter of reciprocity, the Seller Representative shall, during his assignment to the Buyer, be permitted to provide similar assistance to another airline, provided however that the Buyer’s requirements shall receive priority, Seller shall ensure that each Seller Representative is obligated to, for the Buyer’s benefit, maintain as confidential the Buyer’s confidential and proprietary information to which such Seller Representative has access during the course of providing services to the Buyer under this Agreement.

15.2.7 Should the Buyer request Seller Representative services exceeding the allocation specified in Appendices A and B, respectively to this Clause 15, the Seller may provide such additional services subject to terms and conditions to be mutually agreed.

 

15.2.8 The Seller shall cause similar services to be provided by representatives of the Propulsion Systems Manufacturer and Suppliers, when requested by Buyer and necessary for Buyer’s operations, as determined at Buyer’s discretion.

 

15.3 Buyer’s Support

 

15.3.1 From the date of arrival of the first Seller Representative and for the duration of the assignment, the Buyer shall provide [*] a suitable lockable office, conveniently located with respect to the Buyer’s maintenance facilities, with office furniture including telephone, internet, email and facsimile connections for the sole use of the Seller Representative(s) for business purposes relating to the performance of his/her obligations under this Agreement. All related communication costs [*]

 

15.3.2 [*]

 

15.3.3 [*]

 

15.3.4 Should the Buyer request any Seller Representative referred to in Clause 15.2 above to travel on business to a city other than his usual place of assignment, the Buyer shall be responsible for all related transportation costs and expenses.

 

15.3.5 Buyer shall have free of charge access to the Seller Representative network to cover the period [*].

 

15.3.6

If the Seller has taken all reasonable actions to fulfil the requirements of the applicable civil authorities of Buyer’s country necessary to permit the Seller Representative to work and live in Buyer’s country and is nonetheless unable to obtain such permission for reasons that are not personal and specific to such Seller Representative, the Seller’s obligation to provide a Seller Representative to the Buyer in Buyer’s country under Clause 15.2.1 shall be suspended (the “ Suspension ”). In the event that such permission is denied to such Seller

 

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  Representative for reasons personal and specific to such Seller Representative, the Seller shall provide a substitute Seller Representative without such disqualifying attributes. The Suspension shall terminate upon any change in laws, rules or regulations that would allow a Seller Representative to enter into Buyer’s country.

If it is required by the civil authorities in Buyer’s country that the Buyer provide any documentation or take other action to obtain the permits or authorizations necessary for the Seller’s Representative to work and live in the Buyer’s country, then Buyer shall provide the same so long as it is at no out-of-pocket cost to the Buyer. If Buyer fails to provide the assistance required under this paragraph, then (i) Seller’s obligation to provide a Seller Representative to Buyer shall be suspended during any period that the Seller Representative is denied the right to work and live in the Buyer’s country as a result of such failure and (ii) [*].

 

15.4 Withdrawal of the Seller Representative

The Seller shall have the right upon written notice to and consultation with the Buyer to withdraw its assigned Seller Representatives as it sees fit if conditions arise, which are, in the Seller’s reasonable opinion, dangerous to their safety or health or prevent them from fulfilling their contractual tasks. In the event that the Seller withdraws its assigned Seller Representative under this Clause 15.4, Seller shall provide Buyer free of charge access to the Seller Representative network. Seller shall restore the withdrawn Seller Representatives to their previous locations within Buyer’s country promptly following cessation of the conditions leading to their withdrawal.

If a Seller Representative is withdrawn from Buyer’s country under this Clause 15.4, the Buyer and Seller will agree on an alternative support solution to cover for the absence of the on-site Seller Representative and on the manner on which the man-months allocated for Seller Representative services will be adjusted and applied to the period during which such alternative support solution is provided.

 

15.5 Indemnities

INDEMNIFICATION PROVISIONS APPLICABLE TO THIS CLAUSE 15 ARE SET FORTH IN CLAUSE 19.

 

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APPENDIX A TO CLAUSE 15

CUSTOMER SUPPORT REPRESENTATIVE ALLOCATION

The Customer Support Representative allocation provided to the Buyer pursuant to Clause 15.2 is defined hereunder.

 

1 The Seller shall provide to the Buyer a [*] Customer Support Representative services at the Buyer’s main base or at other locations to be mutually agreed.

 

2 For the sake of clarification, such Customer Support Representatives’ services shall include initial Aircraft Entry Into Service ( EIS ) assistance and sustaining support services.

 

3 The number of the Customer Support Representatives assigned to the Buyer at any one time shall be mutually agreed, [*] Customer Support Representatives present at Buyer’s site at any one time.

 

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APPENDIX B TO CLAUSE 15

SPARE PARTS REPRESENTATIVE ALLOCATION

Pursuant to Clause 15.2.2 of the Agreement, the Seller shall provide to the Buyer [*] Spare Parts Representative services at the Buyer’s main base or at other locations to be mutually agreed.

 

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16. TRAINING AND TRAINING AIDS

 

16.1 General

 

16.1.1. This Clause 16 covers the terms and conditions for the supply of training support and services for the Buyer’s personnel to support the Aircraft operation.

 

16.2 Scope

 

16.2.1 The range and quantity of training support and services to be provided [*] under this Agreement are covered in Appendix A to this Clause 16. The Seller will arrange availability of such training support and services in relation to the delivery schedule for the Aircraft set forth in Clause 9.1.1.

Scheduling of training courses covered in Appendix A shall be mutually agreed during a training conference (the “ Training Conference ”) that shall be held no later than nine (9) months prior to Delivery of the first Aircraft.

 

16.2.2 The training courses, defined in Appendix A to this Clause 16, will be provided [*].

 

16.2.3 In the event that the Buyer should use none or only part of the training support and services to be provided pursuant to this Clause, no compensation or credit of any sort will be provided.

 

16.3 Training Organization / Location

 

16.3.1 The Seller will provide the training at the Airbus Training Center in Miami, Florida (the “ Seller’s Training Center ”) unless the particular training is not offered at the Seller’s Training Center in which case the training will be provided at an affiliated training center in the Americas or western Europe.

 

16.3.2 If unavailability of facilities or scheduling difficulties make training by the Seller impractical at the training centers referenced in Clause 16.3.1, the Seller will ensure that the Buyer is provided the training support described in this Clause 16 at locations other than those named in Clause 16.3.1.

 

16.3.3 Upon the Buyer’s request the Seller may also provide certain training at a location other than the Seller’s Training Centers, including one of the Buyer’s bases, if and when practicable for the Seller, under terms and conditions to be mutually agreed upon. In this event, all additional charges listed in Clause 16.6.2 will be borne by the Buyer.

 

16.3.4 If the Buyer requests a Seller approved course at a location as indicated in Clause 16.3.3, the Buyer shall, as necessary and in due time prior to the performance of such training, provide access to the training facilities set forth in Clause 16.3.3 to the Seller’s and the Aviation Authority’s representatives for approval of such facilities. Seller will not be required to provide training at any training facility not reasonably satisfactory to Seller.

 

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16.4 Training Courses

 

16.4.1 Training courses, as well as the minimum and maximum numbers of trainees per course provided for the Buyer’s personnel, are defined in the applicable training course catalog published by the Seller the “ Customer Services Catalog ”) and will be scheduled as mutually agreed upon during a training conference (the “ Training Conference ”).

 

16.4.2 The following terms will apply when training is performed by the Seller:

 

  (i) Subject to 16.4.2(ii) below, training courses will be standard Airbus courses as described in the Seller Customer Services Catalog valid at the time of execution of the course. The Seller will be responsible for all training course syllabi, training aids and training equipment (not to include aircraft) necessary for the organization of the training courses.

 

  (ii) Where the Seller agrees to perform training using Buyer’s standard courses, Buyer will be responsible for taking all steps necessary to assure approval by applicable Aviation Authorities of such training (including any needed approvals of specific Seller instructors).

 

  (iii) The training curricula and the training equipment used for flight crew, cabin crew and maintenance training will not be fully customized but will be configured in order to obtain the relevant Aviation Authority’s approval and to support the Seller’s training programs. Notwithstanding the foregoing, the training curricula used for training performed under such circumstances shall enumerate any differences that exist between the non-customized material and Buyer’s detailed specification.

 

  (iv) Training data and documentation necessary for training detailed in Appendix A to this Clause 16 will be [*] and will not be revised. Training data and documentation will be marked “FOR TRAINING ONLY” and as such will be supplied for the sole and express purpose of training.

 

  (v) Upon the request of the Buyer [*], the Seller will collect and pack for consolidated shipment to the Buyer’s facility, all training data and documentation of the Buyer’s trainees attending training at the Seller’s Training Center. This training data and documentation will be delivered [*]. It is understood that title to and risk of loss of the training data and documentation will pass to the Buyer [*].

 

16.4.2.1 Should the Buyer wish to exchange any of the training courses provided under Appendix A hereto, the Buyer shall place a request for exchange to this effect with the Seller. The Buyer may exchange, subject to the Seller’s confirmation, the training allowances granted under Appendix A of the present Agreement as follows:

 

  (i) flight operations training courses as listed under Article 1 of Appendix A against any flight operations training courses described in the Seller’s Customer Services Catalog current at the time of the Buyer’s request;

 

  (ii) maintenance training courses as listed under Article 3 of Appendix A against any maintenance training courses described in the Seller’s Customer Services Catalog current at the time of the Buyer’s request;

 

  (iii) should any one of the allowances granted thereunder (flight operations or maintenance) have been fully drawn upon, the Buyer shall be entitled to exchange flight operations or maintenance training courses as needed against the remaining allowances.

 

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The exchange value shall be based on the Seller’s “Training Course Exchange Matrix” applicable at the time of the request for exchange and which shall be provided to the Buyer at such time.

It is understood that the above shall apply to the extent that training allowances granted under Appendix A remain in credit to the full extent necessary to perform the exchange.

All requests to exchange training courses shall be submitted by the Buyer with a minimum of [*] prior notice. The requested training shall be subject to the Seller’s then existing planning constraints.

 

16.4.3.1 If the Buyer decides to cancel fully or partially or reschedule, a training course, a minimum advance notification of at least [*] calendar days prior to the relevant training course start date is required.

 

16.4.3.2 If such notification is received by the Seller or ANACS less than [*] but more than [*] calendar days prior to such training, a cancellation fee corresponding to [*] of such training will be deducted from the training allowance defined in Appendix A to the extent sufficient allowance then remains, with any balance invoiced at the price corresponding to such training in the then current ANACS Customer Services Catalog.

 

16.4.3.3 If such notification is received by the Seller less than [*] calendar days prior to such [*] of such training will be deducted from the training allowance defined in Appendix A to the extent sufficient allowance then remains, with any balance invoiced at the price corresponding to such training in the then current ANACS Customer Services Catalog.

 

16.4.3.4 [*]

 

16.4.4 In fulfillment of its obligation to provide training courses, when ANACS performs the training courses, it will deliver to the trainees a certificate of completion (each a “ Certificate ”) at the end of any such training course. A Certificate does not represent authority or qualification by any official Aviation Authorities but may be presented to such officials in order to obtain relevant formal qualification.

If training is provided by a training provider other than ANACS that is selected by the Seller, the Seller will cause such training provider to deliver a Certificate at the end of any such training course. Such Certificate will not represent authority or qualification by any official Aviation Authority but may be presented to such officials in order to obtain relevant formal qualification.

 

16.5 Prerequisites and Conditions

 

16.5.1 Training will be conducted in English and all training aids are written in English using common aeronautical terminology. Trainees must have the prerequisite experience as defined in Appendix B to this Clause 16.

 

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All training courses conducted pursuant to this Clause 16 are “ Standard Transition Training Courses ” and not “ Ab Initio Training Courses .”

The Buyer will be responsible for the selection of the trainees and for any liability with respect to the entry knowledge level of the trainees.

 

16.5.2.1 The Buyer will provide the Seller with an attendance list of the trainees for each course with the validated qualification of each trainee. The Seller reserves the right to verify the trainees’ proficiency and previous professional experience. The Seller will in no case warrant or otherwise be held liable for any trainee’s performance as a result of any training services provided.

 

16.5.2.2 The Buyer will also complete and provide to the Seller the “Airbus Pre-Training Survey” detailing the trainees’ associated background at the time of reservation of the training course and in no event any later than [*] calendar days prior to the start of the training course. If the Buyer makes a change to the attendance list pursuant to Clause 16.5.2.1 the Buyer will immediately inform the Seller thereof and send to the Seller an updated Airbus Pre-Training Survey reflecting such change. No such changes will be accepted less than [*] days prior to the beginning of the Training Course

 

16.5.3 Upon the Buyer’s request, the Seller may be consulted to direct trainee(s) not having the required prerequisites through a relevant entry level training program, which will be at the Buyer’s charge, and, if necessary, to coordinate with competent outside organizations for this purpose. Such consultation will be held during the Training Conference.

If the Seller should determine that a trainee lacks the required entry level training, such trainee will, following consultation with the Buyer, be withdrawn from the program or, at the Buyer’s request, be directed to a relevant entry level training program, which shall be at the Buyer’s expense. Buyer shall be entitled to provide a substitute trainee (satisfying the requisite entry level training) for the trainee so withdrawn provided such substitution occurs prior to the commencement of the applicable training course. In such event, the Buyer shall not be required to pay any cancellation fee pursuant to Clause 16.4.3.2 or Clause 16.4.3.3 in respect of such withdrawal. In all other cases, upon such withdrawal, the Seller will deduct the corresponding allowance from the total allowance for the applicable training in accordance with the provisions set forth in Clause 16.4.3.2 or Clause 16.4.3.3.

 

16.5.4 The Seller will in no case, warrant or otherwise be held liable for any trainee’s performance as a result of any training provided.

 

16.6 Logistics

 

16.6.1 Trainees

 

16.6.1.1 When training is done at the Airbus Training Center in Miami, Florida, the Seller will provide a free-of-charge rental car for all of the Buyer’s trainees for the duration of the training course on the basis of [*] rental car per [*] maintenance, operations and cabin attendant trainees and [*] rental car per [*] flight crew.

The Seller will provide rental cars with unlimited mileage, and the Buyer will pay for gas, and fines, if any. However, the Buyer will indemnify and hold the Seller harmless from and against all liabilities, claims, damages, costs and expenses for any injury to or death of any of the Buyer’s trainees occasioned during the course of such transportation.

 

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16.6.1.2 When training is done at the Airbus Training Center in Blagnac, France, the Seller will provide [*] local transportation by bus for the Buyer’s trainees to and from designated pick- up points and the training center.

 

16.6.1.3 Living expenses for the Buyer’s trainees will be borne by the Buyer. Seller shall cooperate in good faith with Buyer to find suitable accommodations for Buyer’s trainees and, when applicable and possible, shall pass to Buyer any volume discounts the Seller may obtain from local lodging facilities.

 

16.6.2 Training at External Location

 

16.6.2.1 Seller’s Instructors

If at the Buyer’s request pursuant to Clause 16.3.3, training is provided by the Seller’s instructors at any location other than the Seller’s Training Centers, the Buyer will, subject to Clause 16.6.2.5, reimburse the Seller for all the expenses, as provided below in Clauses 16.6.2.2, 16.6.2.3 and 16.6.2.4 related to the assignment of such instructors and their performance of the duties as aforesaid.

 

16.6.2.2 Living Expenses for the Seller’s Instructors

Such expenses, covering the entire period from day of assignment to day of return to the Seller’s base, will include but will not be limited to lodging, food and local transportation to and from the place of lodging and the training course location. The Buyer will reimburse the Seller for such actual expenses.

 

16.6.2.3 Air Travel

The Buyer will, at Buyer’s election, either provide or reimburse the Seller for the transportation costs of the Seller’s instructors performing such training in confirmed business class (for international travel) or in confirmed coach class (for domestic travel), to and from the Buyer’s designated training site and the Seller’s Training Center. When the training date is known to Seller [*] days in advance, Seller shall cause any air transportation tickets for travel relating to such training that are not being provided by the Buyer to be purchased not less than [*] days in advance of the travel date. Seller will cause its instructors to fly on Buyer’s aircraft whenever possible.

 

16.6.2.4 Training Material

The Buyer will reimburse the Seller for the cost of shipping the training material needed to conduct such courses.

 

16.6.2.5 Transportation Failure

If there is a delay in or failure of transportation of Seller’s instructors or the training materials that results in the delay or cancellation of any training, then neither Buyer nor Seller shall be liable to the other for, and each party waives and releases any claims against the other with respect to, any costs or expenses associated with such delayed or cancelled training including, without limitation, any amounts pursuant to Clause 16.4.3.2, or Clause 16.4.3.3.

 

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16.6.2.6 Training Equipment Availability

Training equipment necessary for course performance (i.e., video projectors, printers, etc.) at any course location other than the Seller’s Training Centers or the facilities of a training provider selected by the Seller will be made available by the Buyer in accordance with the Seller’s specifications.

 

16.7 Flight Operations Training

 

16.7.1 Flight Crew Training Course

 

16.7.1.1 The Seller will perform a flight crew training course program, as defined in Appendix A to this Clause 16, for the Buyer’s flight crews. A flight crew will consist of two (2) crew members who shall be either captains or first officers. Except for in-flight training, for which the Buyer’s customized Flight Crew Operating Manual will be used, the training manual used for all flight crew training courses will be the Seller’s Flight Crew Operating Manual. If the Seller agrees to use the Buyer’s Flight Crew Operating Manual for other flight crew training, the Buyer will be responsible for obtaining any necessary approvals required by applicable Aviation Authorities and for any costs associated therewith, including time spent by any Seller instructor to achieve such approvals.

 

16.7.1.2 The Buyer will use its delivered Aircraft, or any other aircraft of the same type that Buyer operates, for any required in-flight training and will pay all costs associated with such use. [*]

 

16.7.1.3 In all cases, the Buyer will bear the expenses of fuel, oil and landing fees.

 

16.7.2 Flight Crew Line Initial Operating Experience

 

16.7.2.1 In order to assist the Buyer with initial operating experience after Delivery of the first Aircraft, the Seller will provide to the Buyer pilot instructor(s) as defined in Appendix A to this Clause 16.

Should the Buyer request, subject to the Seller’s consent, such Seller pilot Instructors to perform any other flight support during the flight crew line initial operating period, such as but not limited to line assistance, demonstration flight(s), ferry flight(s) or any flight(s) required by the Buyer during the period of entry into service of the Aircraft, it is understood that such flight(s) shall be deducted from the flight crew line initial operating experience allowance set forth in Appendix A hereto.

It is hereby understood by the Parties that the Seller’s pilot Instructors shall only perform the above flight support services to the extent they bear the relevant qualifications to do so.

 

16.7.2.2 In addition to the number of pilots specified in Appendix A attached hereto, the Seller may provide pilot instructors, at the Buyer’s expense and upon conditions to be mutually agreed.

 

16.7.2.3 Prior to any flight training to be performed by the Seller on the Buyer’s Aircraft, the Buyer will provide to the Seller a copy of the certificate of insurance as requested in Clause 19.

 

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16.7.3 Instructor Cabin Attendants’ Familiarization Course

The Seller will provide cabin attendants training in accordance with Appendix A to this Clause 16. The instructor cabin attendants’ course when incorporating the features of the Aircraft, will be given no earlier than (2) weeks before the Delivery Date of the first Aircraft.

 

16.7.4.1 Performance / Operations Course

The Seller will provide the performance/operations training defined in Appendix A to this Clause 16 for the Buyer’s personnel.

The available courses are listed in the Seller’s applicable ANACS Training Courses Catalog.

 

16.7.5 Airbus Pilot Instructor Course (APIC)

The Seller shall provide Airbus Pilot Instructor Course (APIC) training for the Buyer’s flight crew instructors, as defined in Appendix A to this Clause 16.

This course provides the Buyer’s pilots and/or instructors with the training in both flight-instruction and synthetic-instruction required in order to enable them to instruct on Airbus aircraft.

 

16.8 Maintenance Training

 

16.8.1.1 The Seller will provide maintenance training for the Buyer’s ground personnel as defined in Appendix A to this Clause 16.

The available courses are listed in the Seller’s applicable Training Course Catalog.

 

16.8.1.2 Practical Training on Aircraft

In the event of practical training on aircraft (“Practical Training”) being requested by the Buyer, the Seller will assist in organizing such Practical Training at a third party’s facilities or on Buyer’s aircraft, without however guaranteeing the availability of any other airline’s facilities.

If the Buyer wishes to perform Practical Training at a third party facility without requiring a formal FAR – Part 147 (or equivalent or other applicable Aviation Authority) certificate, the Seller may assist the Buyer in organizing such Practical Training as set forth above.

In the event of the Buyer requiring a full FAR – Part 147 (or equivalent or other applicable Aviation Authority) certificate from the Seller, the Practical Training shall be conducted by the Seller in an FAR – Part 147 facility approved and selected by the Seller.

In the event of the Buyer requiring such Practical Training to be conducted at the Buyer’s FAR – Part 145 (or equivalent or other applicable Aviation Authority) approved facilities, such training shall be subject to prior approval by the Seller of the facilities at which the Practical Training is to be conducted.

The provision of a Seller Instructor for the Practical Training shall be deducted from the trainee days allowance defined in Appendix A to this Clause 16, subject to the conditions detailed in Paragraph 3.2 thereof.

 

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The Buyer shall reimburse to the Seller the expenses for said Seller Instructor(s) in accordance with Clause 16.5.2.

 

16.8.2 Line Maintenance Initial Operating Experience Training

In order to assist the Buyer during the entry into service of the Aircraft, the Seller will provide to the Buyer maintenance instructor(s) at the Buyer’s base as defined in Appendix A to this Clause 16. The maximum number of instructors to be assigned to Buyer’s base at one time will be [*].

 

16.8.2.1 This line maintenance initial operating experience training will cover training in handling and servicing of Aircraft, flight crew and maintenance coordination, use of Technical Data and/or any other activities that may be deemed necessary after Delivery of the first Aircraft.

 

16.8.2.2 The Buyer will reimburse the expenses for Seller’s maintenance instructor(s) providing services to Buyer hereunder, including without limitation, those specified in Appendix A attached hereto, in accordance with Clause 16.6.2.

 

16.9 Supplier and Propulsion System Manufacturer Training

Upon the Buyer’s request, the Seller will provide [*] to the Buyer a list of the maintenance and overhaul training courses provided by major Suppliers and the applicable Propulsion Systems Manufacturer on their products.

Seller will assist the Buyer to obtain from the Suppliers and the Propulsion System Manufacturer maintenance and overhaul training on their products at appropriate times.

 

16.10 Training Aids for the Buyer’s Training Organization

The Seller will provide access to the Buyer the Airbus Computer Based Training (the “ Airbus CBT ”), training aids, while used in the Seller’s Training Centers together with the Virtual Aircraft walk around component, subject to Buyer’s execution of appropriate agreements for the license and use of such Airbus CBT and Virtual Aircraft. The Seller will Deliver the Airbus CBT, training aids and Virtual Aircraft, at a date to be mutually agreed during the Training Conference

The items supplied to the Buyer pursuant to Clause 16.10.1 shall be delivered [*]. Title to and risk of loss of said items will pass to the Buyer upon receipt thereof.

 

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APPENDIX “A” TO CLAUSE 16

TRAINING ALLOWANCE

For the avoidance of doubt, all quantities indicated below are the total quantities granted for the whole of the Buyer’s fleet of firmly ordered ) [*] Aircraft, unless otherwise specified.

The contractual training courses defined in this Appendix A shall be provided up to [*].

 

1. FLIGHT OPERATIONS TRAINING

 

1.1 Flight Crew Training (standard transition course or cross crew qualification (CCQ) as applicable)

The Seller shall provide flight crew training (standard transition course or CCQ as applicable) [*] of the Buyer’s flight crews per firmly ordered Aircraft.

 

1.2 Flight Crew Line Initial Operating Experience

The Seller shall provide to the Buyer pilot Instructor(s) [*] for a period [*] pilot Instructor months.

 

1.2.1 The maximum number of pilot Instructors present at any one time at Buyer’s facilities shall be limited to [*] pilot Instructors; except that with respect to pilot training relating to the first Aircraft the number of pilot instructors present at one time at Buyer’s facilities shall be limited to [*].

 

1.3 Instructor Cabin Attendants’ Familiarization Course

The Seller shall provide to the Buyer instructor cabin attendants’ training [*] for [*] of the Buyer’s instructor cabin attendants.

 

1.4 Performance / Operations Course(s)

 

1.4.1 The Seller shall provide to the Buyer [*] trainee days of performance / operations / dispatch training [*] for the Buyer’s personnel.

 

1.4.2 The above trainee days shall be used solely for the performance/operations training courses as defined in the Seller’s applicable Training Course Catalog.

 

1.5 Airbus Pilot Instructor Course (APIC)

The Seller shall provide to the Buyer transition Airbus Pilot Instructor Course (APIC) training (transition or CCQ, as applicable) [*] for [*] of the Buyer’s flight instructors, such that the Buyer’s flight instructors will be authorized to provide training on the A320 family aircraft and the A330 aircraft subject to local Aviation Authority approval.

 

2. MAINTENANCE TRAINING

 

2.1 Maintenance Training Courses

 

2.1.1 The Seller shall provide to the Buyer [*] trainee days of maintenance training [*] for the Buyer’s personnel.

 

2.1.2 The above trainee days shall be used solely for the maintenance training courses as defined in the Seller’s applicable Training Courses Catalog.

 

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2.1.3 Within the trainee days allowance in Paragraph 2.1.1 above, the number of Engine Run-up courses shall be limited to [*] course for [*] trainees per firmly ordered Aircraft and to a maximum of [*] courses in total.

 

2.2 Line Maintenance Initial Operating Experience Training

The Seller shall provide to the Buyer [*] maintenance Instructor(s) weeks (1 week corresponding to 7 calendar days) at the Buyer’s base [*] in either Airframe, Electronics/Avionics or Powerplants, up to the “A” check.

 

3. TRAINEE DAYS ACCOUNTING

Trainee days are counted as follows:

 

3.1 For instruction at the Seller’s Training Centers or affiliated training centers: [*] of instruction for One (1) trainee equals One (1) trainee day. The number of trainees originally registered at the beginning of the course shall be counted as the number of trainees to have taken the course.

 

3.2 For instruction outside of the Seller’s Training Centers: [*] of instruction for one (1) trainee equals One (1) training day.

For maintenance training courses, the Buyer will be charged for a minimum of [*] training days notwithstanding that fewer than [*] trainees are actually in attendance.

 

3.3 For structure training courses, the Buyer will be charged for a minimum of [*] trainee days (notwithstanding that fewer than [*] trainees are actually in attendance) and a maximum of [*] trainee days (notwithstanding that fewer than [*] trainees are actually in attendance).

For the avoidance of doubt, Buyer will not be charged for any training provided by Seller to any Aviation Authority personnel.

In the event of training being provided outside of the Seller’s Training Centers specifically at the Seller’s request, Paragraph 3.1 hereabove shall be applicable to the trainee days accounting for such training.

 

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APPENDIX “B” TO CLAUSE 16

MINIMUM RECOMMENDED QUALIFICATION

IN RELATION TO TRAINING REQUIREMENTS

The prerequisites listed below are the minimum recommended requirements specified for Airbus training. If the appropriate Aviation Authority or the specific airline policy of the trainee demand greater or additional requirements, they shall apply as prerequisites.

FLIGHT CREW Standard Transition Courses

Captain prerequisites :

 

   

Previously qualified on FAR or EASA or CS 25 aircraft and commercial operations

 

   

Valid and Current Airline Transport Pilot License (ATPL)

 

   

Previous command experience

 

   

Fluency in English (able to write, read and communicate at an adequately understandable level in English language)

 

   

Jet experience

 

   

Flight time :

 

   

1 500 hours as pilot

 

   

1 000 hours on FAR or EASA or CS 25 aircraft

 

   

200 hours experience as airline, corporate or military transport pilot

First Officer prerequisites :

 

   

Previously qualified on FAR or EASA or CS 25 aircraft and commercial operations

 

   

Aircraft and commercial operations valid and current CPL (Commercial pilot license) with Instrument rating,

 

   

Fluency in English (able to write, read and communicate at an adequately understandable level in English language)

 

   

Jet experience

 

   

Flight time :

 

   

500 hours as pilot

 

   

300 hours on FAR/EASA/CS 25 aircraft

 

   

200 hours experience as airline, corporate or military transport pilot

If the Trainee does not speak English or is not fluent enough to follow the Standard Transition course, he shall follow the Adapted language transition and provide a translator as indicated by the Seller.

If no Jet experience, both CAPTAIN and/or FIRST OFFICER must follow, before entering the transition course, a dedicated “Jet Familiarization entry level course”. Such course(s), if required, shall be at the Buyer’s expense.

First type rating course

This course is designed for Ab initio pilots who do not hold an aircraft type rating on their pilot license

Pilot prerequisites

 

   

Valid and current CPL (commercial pilot license)

 

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Valid and current Instrument Rating on multi engine aircraft.

 

   

ATPL written examination

 

   

Fluency in English (able to write, read and communicate at an adequately understandable level in English language) (minimum :ICAO level 4)

 

   

Flight experience:

 

   

220 hours as pilot

 

   

100 hours as pilot in command (PIC)

 

   

25 hours on multi engine aircraft (up to 10 hours can be completed in a simulator)

In addition to the above conditions and in accordance with the JAR Flight Crew Licensing (FCL) and the Airbus Training Policy, a pilot applying for a first type rating must have followed either an approved JAR Multi Crew Cooperation (MCC) program or regulatory equivalent or the “Airbus Entry Level Training (ELT) program” (combined MCC and Jet familiarization course). Such course, if required, shall be at the Buyer’s expense.

CCQ additional prerequisites

In addition to the prerequisites set forth for the Flight Crew Standard Transition Course, both CAPTAIN and FIRST OFFICER must:

 

   

be qualified and current on the base aircraft type

 

   

have 150 hours minimum and 3 months minimum of operations on the base aircraft type.

APIC course additional prerequisites

In addition to the prerequisites set forth for the Flight Crew Standard Transition Course, it is the responsibility of the Buyer to:

 

   

select instructor candidate(s) with airmanship and behavior corresponding to the role and responsibility of an airline instructor

Performance and Operations personnel prerequisites

The Buyer’s performance and operations personnel shall be fluent in English (able to write, read and communicate at an adequately understandable level in English language).

All further detailed prerequisites shall be provided by the Seller to the Buyer during the Training Conference, depending on the type of training course(s) selected by the Buyer.

Maintenance Personnel prerequisites

 

 

Fluency in English (understanding of English (able to write, read and communicate at an adequately understandable level in English language) adequate to be able to follow the training (If this is not the case, the Buyer shall assign a minimum of one (1) translator for eight (8) trainees).

 

 

Technical experience in the line or/and base maintenance activity of commercial jet aircraft

Additional prerequisites for Aircraft Rigging Course

Qualification on the related systems Airbus aircraft family as aviation maintenance technician (AMT) or holder of a basis “B1” license or equivalent.

 

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Additional prerequisites for Maintenance Initial Operating Experience

Personnel attending this training course must have successfully completed the theoretical training element of the related Aircraft type course

Maintenance Training Difference Courses additional prerequisites

In addition to the prerequisites set forth for Maintenance Personnel, the personnel shall be currently qualified and operating on the base aircraft.

 

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17. EQUIPMENT SUPPLIER PRODUCT SUPPORT

 

17.1 Equipment Supplier Product Support Agreements

 

17.1.1 [*] Supplier Product Support Agreements from Suppliers of seller furnished equipment listed in the Specification and will transfer such support agreements to Buyer.

 

17.1.2 These agreements are based on the “World Airlines Suppliers Guide” and include Supplier commitments as contained in the “ Supplier Product Support Agreements ” which include the following provisions:

 

17.1.2.1 Technical data and manuals required to operate, maintain, service and overhaul the Supplier Parts will (a) be prepared in accordance with the provisions of the applicable ATA Specification, (b) include revision service [*], and (c) be published in the English language. The Seller shall recommend that any software userguide provided by a Supplier be supplied in the form of an appendix to the Component Maintenance Manual and be provided in compliance with the applicable ATA Specification.

 

17.1.2.2 Seller will ensure the provision by each Supplier of warranties and guarantees including Suppliers’ standard warranties. In addition, Seller will ensure that landing gear Suppliers provide service life policies for selected structural landing gear elements.

 

17.1.2.3 Seller will ensure the provision by each Supplier of training to ensure efficient operation, maintenance and overhaul of the Supplier Parts for the Buyer’s instructors, shop and line service personnel.

 

17.1.2.4 Seller will ensure the provision by each Supplier of spares data in compliance with ATA iSpecification 2200, initial provisioning recommendations, spare parts and logistic service including routine and expedited deliveries.

 

17.1.2.5 Seller will ensure the provision by each Supplier of technical service to assist the Buyer with maintenance, overhaul, repair, operation and inspection of Supplier Parts as well as required tooling and spares provisioning.

 

17.2 Supplier Compliance

The Seller shall, [*] monitor Supplier compliance with support commitments defined in the Supplier Product Support Agreements and shall take action together with the Buyer if the Seller becomes aware of a Supplier’s noncompliance with the goal of correcting Supplier’s noncompliance. [*]

Nothing in this Clause 17 shall be construed to prevent or limit the Buyer from entering into direct negotiations with a Supplier with respect to different or additional terms and conditions applicable to Suppliers Parts selected by the Buyer to be installed on the Aircraft.

The Seller’s obligations under this Clause 17.2 shall, with respect to all Delivered Aircraft, survive any termination of this Agreement.

 

17.3 Supplier Part Repair Stations

The Seller has developed with the Suppliers a comprehensive network of repair stations in the United States of America and Canada for those Supplier Parts originating from outside these countries. As a result, most Supplier Parts are repairable in the United States and Canada. The repair stations in the network are listed in the AOG and Repair Guide.

 

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Seller will ensure that Supplier Parts that have to be forwarded to a network repair station for repair shall be sent back to the Buyer with proper tagging as required by the FAA/EASA.

 

17.4 Familiarization Training

Upon the Buyer’s request, the Seller shall provide the Buyer free of charge with Supplier Product Support Agreements familiarization training at the Seller’s facilities in Blagnac, France. An on-line training module shall be further available through AirbusWorld, access to which shall be subject to the “General Terms and Conditions of Access to and Use of AirbusWorld” (hereinafter the “ GTC ”).

 

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18. BUYER FURNISHED EQUIPMENT

 

18.1 Administration

 

18.1.1 [*] the Seller shall provide for the installation of those items of equipment which are identified in the Specification as being furnished by the Buyer (“ Buyer Furnished Equipment ” or “ BFE ”), provided that they are referred to in the Airbus BFE Catalog of Approved Suppliers by Products valid at time of ordering of the concerned BFE.

 

18.1.2 Notwithstanding the foregoing and without prejudice to Clause 2.4, if the Buyer wishes to install BFE manufactured by a supplier who is not referred to in the Airbus BFE Product Catalog, the Buyer shall so inform the Seller and the Seller shall conduct a feasibility study of the Buyer’s request, in order to consider approving such supplier, provided that such request is compatible with the Seller’s industrial planning and the associated Scheduled Delivery Month for the Buyer’s Aircraft. In addition, it is a prerequisite to such approval that the considered supplier be qualified by the Seller’s Aviation Authorities to produce equipment for installation on civil aircraft. Any approval of a supplier by the Seller shall be performed at the Buyer’s expense. The Buyer shall cause any BFE supplier approved under this Clause 18.1.1.2 (each an “ Approved BFE Supplier ”) to comply with the conditions set forth in this Clause 18 and specifically Clause 18.2.

The Seller shall advise the Buyer reasonably in advance of the dates by which, in the planned release of engineering for the Aircraft, the Seller requires a written detailed engineering definition encompassing a Declaration of Design and Performance (the “ BFE Engineering Definition ”). The Seller will provide to the Buyer and/or the BFE Supplier(s), within an appropriate timeframe, the necessary interface documentation to enable the development of the BFE Engineering Definition. The BFE Engineering Definition will include the description of the dimensions and weight of BFE, the information related to its certification and information necessary for the installation and operation thereof. The Buyer shall furnish such detailed description and information by the dates so specified. Such information, dimensions and weights shall not thereafter be revised unless authorised by a Specification Change Notice.

The Seller shall also furnish in due time to the Buyer reasonably in advance of the dates on which BFE are required to be delivered to Seller a schedule of dates and indication of shipping addresses for delivery of BFE and, where requested by the Seller, additional spare BFE to permit installation in the Aircraft and delivery of the Aircraft in accordance with the delivery schedule. The Seller will use reasonable efforts to minimize any requirements for spare BFE. The Buyer shall provide such equipment by such dates in a serviceable condition, in order to allow performance of any assembly, test, or acceptance process in accordance with the Seller’s industrial schedule. In order to facilitate the follow-up of the timely receipt of BFE, the Buyer will, upon the Seller’s request, provide to the Seller dates and references of all BFE purchase orders placed by the Buyer.

The Buyer shall use reasonable commercial efforts to cause BFE Suppliers to provide, when requested by the Seller, at AIRBUS OPERATIONS S.A.S. works in TOULOUSE (FRANCE) and/or at AIRBUS OPERATIONS GmbH, works in HAMBURG (GERMANY), field service including support from BFE Suppliers to act in a technical advisory capacity to the Seller in the installation, calibration and possible repair of any BFE.

 

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Without prejudice to the Buyer’s obligations hereunder, in order to facilitate the development of the BFE Engineering Definition, the Seller shall organize meetings between the Buyer and BFE Suppliers. The Buyer hereby agrees to participate in such meetings and to provide adequate technical and engineering expertise to reach decisions within the defined timeframe.

In addition, throughout the development phase and up to Delivery of the Aircraft to the Buyer, the Buyer agrees:

 

   

to monitor the BFE Suppliers and ensure that they shall enable the Buyer to fulfil its obligations, including but not limited to those set forth in the Customization Milestone Chart;

 

   

that, should a timeframe, quality or other type of risk be identified at a given BFE Supplier, the Buyer shall allocate resources to such BFE Supplier so as not to jeopardize the industrial schedule of the Aircraft;

 

   

for major BFE, including, but not being limited to, seats, galleys and IFE (“ Major BFE ”) to participate on a mandatory basis in the specific meetings that take place between BFE Supplier selection and BFE delivery, namely:

 

   

Preliminary Design Review (“ PDR ”),

 

   

Critical Design Review (“ CDR ”);

 

   

to attend the First Article Inspection (“ FAI ”) for the first shipset of all Major BFE. Should the Buyer not attend such FAI, the Buyer shall delegate the FAI to the BFE Supplier and confirmation thereof shall be supplied to the Seller in writing;

 

   

to attend the Source Inspection (“ SI ”) that takes place at the BFE Supplier’s premises prior to shipping, for each shipset of all Major BFE. Should the Buyer not attend such SI, the Buyer shall delegate the SI to the BFE Supplier and confirmation thereof shall be brought to the Seller in writing. Should the Buyer not attend the SI, the Buyer shall be deemed to have accepted the conclusions of the BFE Supplier with respect to such SI.

 

18.1.3 The Seller shall be entitled to refuse any item of BFE not selected by Buyer from the A320 Family Standard Specification & Configuration Guide in effect at the time of Buyer’s selection which Seller determines to be incompatible with the Specification, the above mentioned engineering definition or the certification requirements.

 

18.1.4 The BFE shall be imported into FRANCE or into GERMANY by the Buyer under a suspensive customs system (“Régime de l’entrepôt industriel pour fabrication coordonnée” or “Zollverschluss”) without application of any French or German tax or customs duty, and shall be Delivered Delivery At Place (DAP) according to the Incoterms definition. At Buyer’s request, Seller will provide reasonable guidance to the Buyer regarding such customs system, so long as the same is at no out-of-pocket cost to the Seller.

Shipping Addresses :

AIRBUS OPERATIONS S.A.S.

316 Route de Bayonne

31300 TOULOUSE

FRANCE

or

AIRBUS OPERATIONS GmbH

Kreetslag 10

21129 HAMBURG

GERMANY

 

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as provided in Clause 18.1.

 

18.1.5 [*]

 

18.2 Aviation Authorities’ Requirements

It shall be Buyer’s responsibility if any BFE does not have adequate documentation to satisfy or does not otherwise satisfy, at the time of Delivery of the applicable Aircraft, the requirements of the Aviation Authority delivering the Export Certificate of Airworthiness or the requirements of the Buyer’s Aviation Authority for installation and use on the Aircraft. The Seller will promptly notify Buyer upon becoming aware that any BFE does not have such documentation or does not satisfy such Aviation Authority requirements. As part of the Fly Away Package process the Seller will confirm that the selected BFE suppliers are properly qualified by the applicable Aviation Authorities.

 

18.3 Buyer’s Obligation and Seller’s Remedies

 

18.3.1 Any delay or failure in complying with the foregoing Clause 18.2 or in providing the descriptive information or service representatives mentioned in Clause 18.1 or in furnishing the BFE in serviceable condition at the requested delivery date or in obtaining any required approval for such equipment under the above mentioned Aviation Authorities regulations may delay the performance of any act to be performed by the Seller, and cause the Final Price of the Aircraft to be adjusted in accordance with the updated delivery schedule and to include in particular the amount of the Seller’s additional costs, attributable to such delay or failure such as storage, taxes, insurance and costs of out-of sequence installation.

 

18.3.2 Further, in any such event, the Seller may:

 

  (i) select, purchase and install equipment substantially similar [*] in which event the Final Price of the affected Aircraft shall also be adjusted by the purchase price of such equipment, and the Buyer will be responsible for the reasonable costs and expenses incurred by the Seller for handling charges, transportation, insurance, packaging and if so required and not already provided for in the price of the Aircraft for adjustment and calibration; or

 

  (ii) if the BFE is delayed by more than [*] days beyond, or unapproved within thirty (30) days of, the date specified in Clause 18.1.1, then the Seller may deliver or the Buyer may elect to have the Aircraft delivered without the installation of such equipment [*].

 

18.4 Title and Risk of Loss

Title to and risk of loss of any BFE shall at all times remain with the Buyer except that risk of loss (limited to cost of replacement of said BFE and excluding in particular loss of use) shall be with the Seller for as long as such BFE shall be under the care, custody and control of the Seller.

 

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18.5 Disposition of BFE Following Termination

If a termination of this Agreement pursuant to the provisions of Clause 20 occurs with respect to an Aircraft in which all or any part of the BFE has been installed prior to the date of such termination, then:

 

  (i) in the case of a termination by Seller,

[*]

 

18.6 Return of BFE

BFE not installed in an Aircraft will be returned to the Buyer in accordance with, and to the location specified in, the Buyer’s instructions upon or promptly after delivery of the last Aircraft to be delivered hereunder, in as good condition as when delivered by the Buyer to the Seller. Buyer will be responsible for all such transportation costs and expenses.

 

18.7 Survival Clause of 18.4 and 18.5

Clauses 18.4 and 18.5 of this Agreement shall survive any termination of this Agreement.

 

18.8 SFE and BFE are defined in the Standard Specification as updated from time to time.

 

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19. INDEMNITIES AND INSURANCE

The Seller and the Buyer shall each be liable for Losses (as defined below) arising from the acts or omissions of their respective directors, officers, agents or employees occurring during or incidental to such party’s exercise of its rights and performance of its obligations under this Agreement, except as provided in Clauses 19.1 and 19.2.

 

19.1 Seller’s Indemnities

The Seller shall, except in the case of gross negligence or willful misconduct of the Buyer or Buyer’s directors, officers, agents and/or employees, be solely liable for and shall indemnify and hold the Buyer, its Affiliates and each of their respective directors, officers, agents, employees and insurers harmless against all losses, liabilities, claims, damages, costs and expenses, including court costs and reasonable attorneys’ fees (“ Losses ”), arising from:

 

  (a) claims for injuries to, or death of, the directors, officers, agents or employees of the Seller or its Subsidiaries, or loss of, or damage to, property of the Seller or its Subsidiaries or their respective employees when such Losses occur during or are incidental to either party’s exercise of any right or performance of any obligation under this Agreement, and

 

  (b) claims for injuries to, or death of, third parties, or loss of, or damage to, property of third parties, occurring during or incidental to the inspection provided in Clause 6 or the Technical Acceptance Flights provided in Clause 8.

 

19.2 Buyer’s Indemnities

The Buyer shall, except in the case of gross negligence or willful misconduct of the Seller or Seller’s directors, officers, agents and/or employees, be solely liable for and shall indemnify and hold the Seller, its Affiliates, its subcontractors (not including any Supplier), and each of their respective directors, officers, agents, employees and insurers, harmless against all Losses arising from:

 

  (a) claims for injuries to, or death of, the Buyer’s directors, officers, agents or employees of the Buyer or its Subsidiaries, or loss of, or damage to, property of the Buyer or its Subsidiaries or their respective employees, when such Losses occur during or are incidental to either party’s exercise of any right or performance of any obligation under this Agreement, and

 

  (b) claims for injuries to, or death of, third parties, or loss of, or damage to, property of third parties, occurring during or incidental to (i) the provision of Seller Representatives Services under Clause 15.2 or (ii) the provision of Aircraft Training Services to the Buyer where the injury, death, loss or damage has been caused directly or indirectly by the Buyer.

 

19.3 Notice and Defense of Claims

If any claim is made or suit is brought against a party or entity entitled to indemnification under this Clause 19 (the “ Clause 19 Indemnitee ”) for damages for which liability has been assumed by the other party under this Clause 19 (the “ Clause 19 Indemnitor ”), the Clause 19 Indemnitee shall promptly give notice to the Clause 19 Indemnitor and the Clause 19 Indemnitor (unless otherwise requested by the Clause 19 Indemnitee) shall assume and conduct the defense, or settlement, of such claim or suit, as the Clause 19 Indemnitor shall deem prudent. Notice of the claim or suit shall be accompanied by all information pertinent to the matter as is reasonably available to the Clause 19 Indemnitee and shall be followed

 

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by such cooperation by the Clause 19 Indemnitee as the Clause 19 Indemnitor or its counsel may reasonably request, at the expense of the Clause 19 Indemnitor.

If the Clause 19 Indemnitor fails or refuses to assume the defense of any claim or suit notified to it under this Clause 19, the Clause 19 Indemnitee shall have the right to proceed with the defense or settlement of the claim or suit as it deems prudent and shall have a claim against the Clause 19 Indemnitor for any judgments, settlements, costs or expenses, including reasonable attorneys’ fees. Further, in such event, the Clause 19 Indemnitor shall be deemed to have waived any objection or defense to the Clause 19 Indemnitee’s claim based on the reasonableness of any settlement.

 

19.4 Insurance

To the extent of the Buyer’s undertaking set forth in Clause 19.2, the Buyer shall:

 

  (a) cause the Seller, its Affiliates, its subcontractors and each of their respective directors, officers, agents and employees to be named as additional insureds under the Buyer’s Comprehensive Aviation Legal Liability insurance policies, including War Risks and Allied Perils (such insurance to include the AVN 52E Extended Coverage Endorsement or any further Endorsement replacing AVN 52E as may be available as well as any excess coverage in respect of War and Allied Perils Third Parties Legal Liabilities Insurance), and

 

  (b) with respect to the Buyer’s Hull All Risks and Hull War Risks insurances and Allied Perils, cause the insurers of the Buyer’s hull insurance policies to waive all rights of subrogation against the Seller, its Affiliates, its subcontractors and each of their respective directors, officers, agents, employees and insurers.

Any applicable deductible shall be borne by the Buyer. The Buyer shall furnish to the Seller, not less than seven (7) Business Days prior to the start of any Aircraft Training Services, certificates of insurance, in English, evidencing the limits of liability cover and period of insurance coverage in a form acceptable to the Seller from the Buyer’s insurance broker(s), certifying that such policies have been endorsed as follows:

 

  (i) under the Comprehensive Aviation Legal Liability Insurances, the Buyer’s policies are primary and non-contributory to any insurance maintained by the Seller,

 

  (ii) such insurance can only be cancelled or materially altered by the giving of not less than thirty (30) days (but seven (7) days or such lesser period as may be customarily available in respect of War Risks and Allied Perils) prior written notice thereof to the Seller, and

 

  (iii) under any such cover, all rights of subrogation against the Seller, its Affiliates, its subcontractors and each of their respective directors, officers, agents, employees and insurers have been waived.

 

19.5 Survivability

The provisions of this Clause 19 will survive termination of this Agreement but only with respect to acts occurring prior to such termination.

 

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20. TERMINATION

 

20.1 Termination Events

Each of the following will constitute a “ Termination Event

 

  (1) The Buyer or any of its Affiliates commences in any jurisdiction any case, proceeding or other action with respect to the Buyer or any of its Affiliates or their properties relating to bankruptcy, insolvency, reorganization, winding-up, liquidation, dissolution or other relief from, or with respect to, or readjustment of, its debts or obligations.

 

  (2) An action is commenced in any jurisdiction seeking the appointment of a receiver, trustee, custodian or other similar official for the Buyer or any of its respective Affiliates or for all or any substantial part of their respective assets, and such action remains unstayed, undismissed or undischarged for [*], or the Buyer or any of its Affiliates makes a general assignment for the benefit of its creditors.

 

  (3) An action is commenced in any jurisdiction against the Buyer or any of its respective Affiliates seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of their respective assets, and such action remains unstayed, undismissed or undischarged for [*] days.

 

  (4) The Buyer or any of its Affiliates becomes the object, in any jurisdiction, of a case, proceeding or action similar or analogous to any of the events mentioned in Clause 20.1(1), (2) or (3).

 

  (5) The Buyer or any of its Affiliates is generally not able, or is expected to be unable to, or will admit in writing its inability to, pay its debts as they become due.

 

  (6) The Buyer or any of its Affiliates commences negotiations with significant creditors, existing or potential, either with the intention of restructuring all or a substantial part of all of its outstanding obligations or in preparation for a bankruptcy filing under the U.S. Bankruptcy Code.

 

  (7) The Buyer or any of its Affiliates fails to make payment of (i) any payment required to be made under this Agreement or any other material agreement between the Buyer or any of its Affiliates and the Seller or any of its Affiliates when such payment is due, (ii) any Predelivery Payment required to be made under this Agreement when such payment is due, or (iii) payment of all or part of the Final Price of any Aircraft required to be made under this Agreement.

 

  (8) The Buyer repudiates, cancels or terminates this Agreement in whole or in part.

 

  (9) The Buyer defaults in its obligation to take delivery of an Aircraft as provided in Clause 9.2.

 

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  (10) The Buyer or any of its Affiliates defaults in the observance or performance of any other covenant, undertaking or obligation contained in this Agreement or any other material agreement between the Buyer or its Affiliates, on the one hand, and the Seller or its Affiliates on the other hand, provided that, if such breach or default is capable of being cured and such breach or default is not cured within any specified cure period.

 

  (11) Any other event that the parties agree in writing constitutes a Termination Event.

 

20.2 Remedies in Event of Termination

 

20.2.1 If a Termination Event occurs, the Buyer will be in material breach of this Agreement, and the Seller can elect any of the following remedies under the applicable law:

 

  A. suspend its performance under this Agreement with respect to any or all Aircraft;

 

  B. reschedule the Scheduled Delivery Month of any or all Aircraft remaining to be delivered under this Agreement without prejudice to Seller’s rights under Clause 5.8.2;

 

  C. suspend or reschedule the date for performance under this Agreement with respect to any or all equipment, services, data and other items; and/or

 

  D. cancel or terminate this Agreement (a “ Termination ”) with respect to any or all Aircraft, and/or equipment, services, data and/or other items related thereto.

 

20.2.2 In the event Seller elects a remedy under any of Clauses 20.2.1(A)(B) or (C), above:

 

  A. Seller shall be entitled to any incidental damages incurred as a result of electing such remedy, including without limitation any commercially reasonable charges, expenses, commissions or costs of care or custody incurred in suspending or rescheduling performance after the Buyer’s breach or any costs identified in Clause 9.2.3.1;

 

  B. Buyer shall compensate Seller for such incidental damages within [*] days of Seller issuing an invoice for such damages to Buyer; and

 

  C. for the avoidance of doubt, nothing herein shall preclude Seller from subsequently electing a Termination under 20.2.1(D), above.

 

20.2.3 If the Seller elects a Termination under Clause 20.2.1(D) above:

 

  A. Seller may claim and receive payment from the Buyer, as liquidated damages and not as a penalty, [*]

 

  B. Liquidated damages will be payable by the Buyer promptly, and in any event within [*] calendar days of the date of written notice and demand therefor from the Seller that the Buyer is in breach. The parties agree that the remedy of liquidated damages is not to be denied to the Seller due to the inability of the Seller to deliver a notice and demand for payment thereof due to the operation of law following a bankruptcy or other Termination Event under Clause 20.1(1) - (4).

 

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20.2.4. The parties to this Agreement are commercially sophisticated parties acting within the same industry, and represented by competent counsel and the parties expressly agree and declare as follows:

 

  A. damages for material breach of this Agreement by the Buyer resulting in a Termination of this Agreement as to any or all Aircraft have been liquidated at amounts that are reasonable in light of the anticipated or actual harm caused by the Buyer’s breach, the difficulties of proof of loss and the nonfeasibility of otherwise obtaining an adequate remedy;

 

  B. it is understood and agreed by the parties that the amount of liquidated damages set forth herein is the total amount of monetary damages, no more and no less, to which the Seller will be entitled for and with respect to any Aircraft as recovery for material breach of this Agreement by Buyer resulting in a Termination by the Seller of this Agreement as to such Aircraft; provided, however, that for the avoidance of doubt the foregoing shall not be deemed to preclude Seller’s entitlement to (i) incidental damages where it is electing remedies under Clause 20.2.1(A),(B) or (C), (ii) exercise any set-off or similar rights under Clauses 5.6 and 5.12 with respect to payments due under this Clause 20 or (iii) interest specified in Clause 5.8.1 with respect to any payments overdue under this Clause 20; and

 

  C. the liquidated damages provision of this Clause 20 has been fully negotiated by sophisticated parties represented by counsel, is a material component of the consideration granted and, in the absence of such liquidated damages provision, the consideration would have been materially different.

 

20.3 Definitions

For purposes of this Clause 20, the terms “Affected Aircraft”, “Applicable Date” and [*] are defined as follows:

 

  i. Affected Aircraft ” – any or all Aircraft with respect to which the Seller has cancelled or terminated this Agreement pursuant to Clause 20.2.1 D,

 

  ii. Applicable Date ” – for any Affected Aircraft, the date the Seller issues the notice and demand for payment of liquidated damages pursuant to Clause 20.2.3 B.

 

  iii. [*]

 

20.4 Notice of Termination Event

Within [*] days of becoming aware of the occurrence of a Termination Event by the Buyer, the Buyer will notify the Seller of such occurrence in writing, provided, that any failure by the Buyer to notify the Seller will not prejudice the Seller’s rights or remedies hereunder.

 

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20.5 Information Covenants

The Buyer hereby covenants and agrees that, from the date of this Agreement until no further Aircraft are to be delivered hereunder, the Buyer will furnish or cause to be furnished to the Seller the following:

 

  a. Annual Financial Statements . As soon as available and in any event no later than the date that the Buyer furnishes such annual statements to the Securities and Exchange Commission or successor thereto (the “ SEC ”) (i) a copy of the SEC Form 10-K filed by the Buyer with the SEC for such fiscal year, or, if no such Form 10-K was filed by the Buyer for such a fiscal year, the consolidated balance sheet of the Buyer and its Subsidiaries, as at the end of such fiscal year and the related consolidated statements of operations, of common stockholders’ equity (deficit) (in the case of the Buyer and its Subsidiaries) and of cash flows for such fiscal year, setting forth comparative consolidated figures as of the end of and for the preceding fiscal year, and examined by any firm of independent public accountants of recognized standing selected by the Buyer and reasonably acceptable to the Seller, whose opinion will not be qualified as to the scope of audit or as to the status of the Buyer as a going concern, and (ii) a certificate of such accounting firm stating that its audit of the business of the Buyer was conducted in accordance with generally accepted auditing standards.

 

  b. Quarterly Financial Statements . As soon as available and in any event no later than the date that the Buyer furnishes such quarterly statements to the Securities and Exchange Commission or successor thereto, a copy of the SEC Form 10-Q filed by the Buyer with the SEC for such quarterly period, or, if no such Form 10-Q was filed by the Buyer with respect to any such quarterly period, the consolidated balance sheet of the Buyer and its Subsidiaries, as at the end of such quarterly period and the related consolidated statements of operations for such quarterly period and for the elapsed portion of the fiscal year ended with the last day of such quarterly period and in each case setting forth comparative consolidated figures as of the end of and for the related periods in the prior fiscal year, all of which will be certified by an Authorized Officer of the Buyer, subject to changes resulting from audit and normal year-end audit adjustments.

 

  c. Debt Rescheduling . (i) Promptly upon the Buyer commencing negotiations with one or more of its significant creditors with a view to general readjustment or rescheduling of all or any material part of its indebtedness under circumstances in which a reasonable business person, in the exercise of prudent business judgment, would conclude that the Buyer would otherwise not be able to pay such indebtedness as it falls due, notice of commencement of such negotiations, and (ii) thereafter timely advice of the progress of such negotiations until such negotiations are terminated or completed.

 

  d.

Acceleration of other indebtedness . Immediately upon knowledge by the Buyer that the holder of any bond, debenture, promissory note or any similar evidence of indebtedness of the Buyer or Affiliate thereof (“ Other Indebtedness ”) has demanded

 

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  payment, given notice or exercised its right to a remedy having the effect of acceleration with respect to a claimed event of default under any Other Indebtedness, where the impact of the acceleration is likely to have a material adverse effect on the Buyer’s ability to perform its obligations under or in connection with the transactions contemplated by this Agreement, notice of the demand made, notice given or action taken by such holder and the nature and status of the claimed event of default and what the action the Buyer is taking with respect thereto.

 

  e. Other Information . Promptly upon transmission thereof, copies of any filings and registrations with, and reports to, the SEC by the Buyer or any of its Subsidiaries, and, with reasonable promptness, such other information or documents (financial or otherwise) as the Seller may reasonably request from time to time.

For the purposes of this Clause 20, (x) an “ Authorized Officer ” of the Buyer will mean the Chief Executive Officer, the Chief Financial Officer or any Vice President and above who reports directly or indirectly to the Chief Financial Officer and (y) “ Subsidiaries ” will mean, as of any date of determination, those companies owned by the Buyer whose financial results the Buyer is required to include in its statements of consolidated operations and consolidated balance sheets.

 

20.6 Nothing contained in this Clause 20 will be deemed to waive or limit the Seller’s rights or ability to request adequate assurance under Article 2, Section 609 of the Uniform Commercial Code (the “UCC”). It is further understood that any commitment of the Seller or the Propulsion Systems manufacturer to provide financing to the Buyer shall not constitute adequate assurance under Article 2, Section 609 of the UCC.

 

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21. ASSIGNMENTS AND TRANSFERS

 

21.1 Assignments

Except as expressly provided for in this Agreement, neither party may sell, assign or transfer its rights or obligations (in whole or in part) under this Agreement to any person without the prior written consent of the other party.

 

21.2 Assignments on Sale, Merger or Consolidation

 

21.2.1 Assignment by the Buyer

The Buyer will not be entitled to assign its rights under this Agreement except to an entity that results from any merger, consolidation, or acquisition of the Buyer or acquires substantially all the assets of the Buyer and provided that the Seller receives prior written notice and the following conditions are met:

 

  (i) the surviving or acquiring entity has executed an assumption agreement, in form and substance reasonably acceptable to the Seller, agreeing to assume all of the Buyer’s obligations and comply with all applicable terms and conditions under this Agreement;

 

  (ii) at the time and immediately following the consummation of the merger, consolidation or sale, there exists with respect to the surviving or acquiring entity no basis for a Termination Event or a termination event;

 

  (iii) immediately following the consummation of such sale, merger or consolidation, the surviving or acquiring entity holds an Operating Certificate or Operations Specifications issued by the FAA or EASA, as applicable;

 

  (iv) the surviving entity intends to operate the Buyer’s assets for the purpose of providing passenger air transport and a Buyer under this Agreement shall be an airline holding an operating certificate issued by EASA or the FAA at the time, and immediately following the consummation, of such merger, consolidation, or acquisition;

 

  (v) following the sale, merger or consolidation, the surviving or acquiring entity is in a financial condition at least equal to that of the Buyer immediately prior to the closing of the sale, merger or consolidation;

 

21.2.2 Assignment by the Seller

The Seller will be entitled to assign its rights under this Agreement at any time to an entity that results from any merger, consolidation, or acquisition of the Seller or acquires substantially all the assets of the Seller, provided that the following conditions are met:

 

  (i) the surviving or acquiring entity has executed an assumption agreement, in form and substance reasonably acceptable to the Buyer, agreeing to assume all of the Seller’s obligations and comply with all applicable terms and conditions under this Agreement;

 

  (ii) at the time, and immediately following the consummation, of the merger, consolidation or sale, no event of default exists or will have occurred and be continuing;

 

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  (iii) [*]

 

  (iv) following the sale, merger or consolidation, the surviving or acquiring entity is in a financial condition at least equal to that of the Seller immediately prior to the closing of the sale, merger or consolidation.

 

21.3 Assignments to Subsidiaries

 

21.3.1 The Seller may assign its rights and obligations under this agreement to a Subsidiary of the Seller, provided that

[*]

 

21.3.2 [*]

 

21.4 [*]

 

21.5 Post-Delivery Sale or Lease

The Seller agrees that, upon the post-Delivery sale or lease of an Aircraft (including a sale or lease for financing purposes) all of the Buyer’s rights and obligations remaining at the time of such sale or lease under Clauses 12, 13, and 17 of this Agreement and this Clause 21.5 with respect to the affected Aircraft will inure to the benefit of the transferee upon delivery to the Seller of notice of such sale or lease and written agreement by the transferee, in form and substance satisfactory to the Seller, to be bound by the terms thereof.

 

21.6 Designations by Seller

The Seller may at any time by notice to the Buyer designate facilities or personnel of AACS or any Affiliate of the Seller at which or by whom the services to be performed under this Agreement will be performed. Notwithstanding such designation, the Seller will remain ultimately responsible for fulfillment of all obligations undertaken by the Seller in this Agreement.

 

21.7 Transfer of Rights and Obligations upon Reorganization

In the event that the Seller is subject to a corporate restructuring having as its object the transfer of, or succession by operation of law in, all or a substantial part of its assets and liabilities, rights and obligations, including those existing under this Agreement, to a person (the “ Successor ”) that is an Affiliate of the Seller at the time of that restructuring, for the purpose of the Successor’s carrying on the business carried on by the Seller at the time of the restructuring, such restructuring will be completed without consent of the Buyer following notification by the Seller to the Buyer in writing. The Buyer recognizes that succession of the Successor to the Agreement by operation of law, which is valid under the law pursuant to which that succession occurs, will be binding upon the Buyer. The Seller will ensure that the Successor agrees in writing in a form enforceable by the Buyer to be bound by and comply with all applicable terms, conditions and limitations of this Agreement to the same extent as if the successor had been the Seller originally under this Agreement.

 

21.8 No Increase in Liability

No action taken under this Clause 21 by either party or by an assignee of either party to whom rights under this Agreement inure pursuant to this Clause 21 will subject the other party to any liability to which it would not otherwise be subject under this Agreement, or

 

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modify in any way the other party’s contract rights under this Agreement. Neither party will be obliged to recognize any assignment or transfer for which its consent is required but to which it has not consented. Any attempted assignment in violation of the provisions of this agreement will be null and void.

 

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22. MISCELLANEOUS PROVISIONS

 

22.1 Data Retrieval

The Buyer shall provide the Seller, as the Seller may reasonably request, with all the necessary data as customarily compiled by the Buyer and pertaining to the operation of the Aircraft to assist the Seller in making efficient and coordinated survey of all reliability, maintainability, operational and cost data with a view to improving the safety, availability and operational costs of the Aircraft.

 

22.2 Notices

All notices and requests required or authorized hereunder shall be given in writing either by personal delivery to an authorized representative of the party to whom the same is given or by registered mail (return receipt requested), express mail (tracking receipt requested) or by facsimile, to be confirmed by subsequent registered mail, and the date upon which any such notice or request is so personally delivered or if such notice or request is given by registered mail, the date upon which it is received by the addressee or, if given by facsimile, the date upon which it is sent with a correct confirmation printout, provided that if such date of receipt is not a Business Day notice shall be deemed to have been received on the first following Business Day, shall be deemed to be the effective date of such notice or request.

Seller’s address for notices is:

AIRBUS

Attn.: S.V.P. Contracts

1 Rond-Point Maurice Bellonte

31707 Blagnac Cedex

France

Buyer’s address for notices is:

AviancaTaca Holding S.A.

Attn.: Secretary

Avenida El Dorado No. 59-15 Piso 10

Bogotá – Colombia

Email: fleet@aviancataca.com

or such other address or such other person as the party receiving the notice or request may reasonably designate in writing from time to time.

 

22.3 Waiver

The failure of either party to enforce at any time any of the provisions of this Agreement, or to exercise any right herein provided, or to require at any time performance by the other party of any of the provisions hereof, shall in no way be construed to be a present or future waiver of such provisions nor in any way to affect the validity of this Agreement or any part thereof or the right of the other party thereafter to enforce each and every such provision. The express waiver (whether made one (1) or several times) by either party of any provision, condition or requirement of this Agreement shall not constitute a waiver of any future obligation to comply with such provision, condition or requirement except to the extent provided in such express waiver.

 

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22.4 INTERPRETATION AND LAW

THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND THE PERFORMANCE THEREOF SHALL BE DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ITS CONFLICTS OF LAWS PROVISIONS THAT WOULD RESULT IN THE APPLICATION OF THE LAW OF ANY OTHER JURISDICTION.

Each of the Seller and the Buyer (i) hereby irrevocably submits itself to the nonexclusive jurisdiction of the courts of the state of New York, New York County, and of the United States District Court for the Southern District of New York, located in the borough of Manhattan for the purposes of any suit, action or other proceeding arising out of this Agreement, the subject matter hereof or any of the transactions contemplated hereby brought by any party or parties hereto, and (ii) hereby waives, and agrees not to assert, by way of motion, as a defense or otherwise, in any such suit, action or proceeding, to the extent permitted by applicable law, any defense based on sovereign or other immunity or that the suit, action or proceeding which is referred to in clause (i) above is brought in an inconvenient forum, that the venue of such suit, action or proceeding is improper, or that this Agreement or the subject matter hereof or any of the transactions contemplated hereby may not be enforced in or by these courts.

 

22.4.1 The appointment in Clause 22.4.2 made for the purpose of effecting the service of process shall not affect any assertion of diversity by either party hereto initiating a proceeding in the New York Federal Courts or seeking transfer to the New York Federal Courts on the basis of diversity.

 

22.4.2 Service of process in any suit, action or proceeding in respect of any matter as to which the Seller or the Buyer has submitted to jurisdiction under Clause 22.4 may be made [*] provided in each case that failure to deliver or mail such copy shall not affect the validity or effectiveness of the service of process.

 

22.5 Waiver of Jury Trial

EACH OF THE PARTIES HERETO WAIVES ITS RIGHT TO TRIAL BY JURY IN ANY LITIGATION ARISING OUT OF OR RELATING TO THIS AGREEMENT AND FOR ANY COUNTERCLAIM OR CROSS-CLAIM THEREIN.

 

22.6 No Representations outside of this Agreement

The parties declare that, prior to the execution of this Agreement, they, with the advice of their respective counsel, apprised themselves of sufficient relevant data in order that they might intelligently exercise their own judgments in deciding whether to execute this Agreement and in deciding on the contents of this Agreement. Each party further declares that its decision to execute this Agreement is not predicated on or influenced by any declarations or representations by any other person, party, or any predecessors in interest, successors, assigns, officers, directors, employees, agents or attorneys of any said person or party, except as set forth in this Agreement. This Agreement resulted from negotiation involving counsel for all of the parties hereto and no term herein shall be construed or interpreted against any party under the contra proferentum or any related doctrine.

 

AVTA - A320 Family & A320 NEO Family PA

Clause 22 - Page 2/5


22.7 International Supply Contract

The Buyer and the Seller recognise that this Agreement is an international supply contract which has been the subject of discussion and negotiation, that all its terms and conditions are fully understood by the parties, and that the Specification and price of the Aircraft and the other mutual agreements of the parties set forth herein were arrived at in consideration of, inter alia, all the provisions hereof specifically including all waivers, releases and renunciations by the Buyer set out herein.

THE BUYER AND THE SELLER HEREBY ALSO AGREE THAT THE UNITED NATIONS CONVENTION ON CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS SHALL NOT APPLY TO THIS TRANSACTION.

 

22.8 Severability

In the event that any provision of this Agreement should for any reason be held ineffective, the remainder of this Agreement shall remain in full force and effect. To the extent permitted by applicable law, each party hereto hereby waives any provision of law which renders any provision of this Agreement prohibited or unenforceable in any respect.

 

22.9 Alterations to Contract

This Agreement contains the entire agreement between the parties with respect to the subject matter hereof and supersedes any previous understandings, commitments or representations whatsoever, whether oral or written, in respect thereto. This Agreement shall not be varied except by an instrument in writing of date even herewith or subsequent hereto executed by both parties or by their duly authorized representatives.

 

22.10 Language

All correspondence, documents and any other written matters in connection with this Agreement shall be in English.

 

22.11 Counterparts

This Agreement has been executed in two (2) original copies.

Notwithstanding the above, this Agreement may be executed by the parties in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute one and the same Agreement.

 

22.12 Confidentiality

Subject to any legal or governmental requirements of disclosure, the parties (which for this purpose shall include their employees, consultants, advisors and legal counsel) shall maintain the terms and conditions of this Agreement and any reports, information or other data furnished hereunder strictly confidential, including but not limited to, the Aircraft pricing and other concessions and any data furnished under Clause 22.1 (the “ Confidential Information ”). Without limiting the generality of the foregoing, the Buyer and Seller will each use its best efforts to limit the disclosure of the contents of this Agreement to the

 

AVTA - A320 Family & A320 NEO Family PA

Clause 22 - Page 3/5


extent legally permissible in any filing required to be made with any governmental agency and shall make such applications as shall be necessary to protect the confidentiality of the Confidential Information. With respect to any public disclosure or filing by the Buyer (including any filing by Buyer with the US Securities and Exchange Commission or any similar body in connection with registration and/or offering of the Buyer’s securities), the disclosing party agrees to submit to the other party a copy of the proposed document to be filed or disclosed and shall give the Seller a reasonable period of time (at least five (5) Business Days) in which to review and comment on said document and any redactions thereof. The Buyer and the Seller shall consult with each other prior to the making of any public disclosure or filing of this Agreement permitted hereunder or the terms and conditions hereof as well as any press release concerning the whole or any part of the contents and/or subject matter hereof or of any future amendment hereof.

The provisions of this Clause 22.12 shall survive any termination of this Agreement.

 

AVTA - A320 Family & A320 NEO Family PA

Clause 22 - Page 4/5


IN WITNESS WHEREOF this Agreement was entered into the day and year first above written.

 

AVIANCATACA HOLDING S.A.     AIRBUS S.A.S.
By:  

/s/ Elisa Murgas de Moreno

    By:  

/s/ Christophe Mourey

Its:  

Secretary

    Its:  

Senior Vice President Contracts


EXHIBIT A

APPENDIX 1 - A319 AIRCRAFT

A319 Aircraft - Specification Change Notice List

 

* [Three pages have been omitted in accordance with a request for confidential treatment.]


EXHIBIT A

APPENDIX 2 - A320 AIRCRAFT

A320 Aircraft - Specification Change Notice List

 

* [Three pages have been omitted in accordance with a request for confidential treatment.]


EXHIBIT A

APPENDIX 3 - A321 AIRCRAFT

A321 Aircraft - Specification Change Notice List

 

* [Three pages have been omitted in accordance with a request for confidential treatment.]


EXHIBIT A

APPENDIX 4 - A319 NEO AIRCRAFT

A319 NEO Aircraft - Specification Change Notice List

 

* [Three pages have been omitted in accordance with a request for confidential treatment.]


EXHIBIT A

APPENDIX 5 - A320 NEO AIRCRAFT

A320 NEO Aircraft - Specification Change Notice List

 

* [Three pages have been omitted in accordance with a request for confidential treatment.]


EXHIBIT A

APPENDIX 6 - A321 NEO AIRCRAFT

A321 NEO Aircraft - Specification Change Notice List

 

* [Three pages have been omitted in accordance with a request for confidential treatment.]


EXHIBIT B

EXHIBIT B

Exhibit B-1: Form of a Specification Change Notice

Exhibit B-2: Form of a Manufacturer’s Specification Change Notice

 

AVTA - A320 Family & A320 Family NEO PA

Exhibit B - Page 1


EXHIBIT B-1

 

 

 

LOGO

 

SPECIFICATION CHANGE NOTICE

 

(SCN)

 

  

 

For

 

SCN Number

Issue

Dated

Page

 

Title:

 

Description:

 

 

Remarks / References

 

Specification changed by this SCN

 

This SCN requires prior or concurrent acceptance of the following SCN (s):

 

 

Price per aircraft

 

US DOLLARS:

AT DELIVERY CONDITIONS:

 

This change will be effective on                                         AIRCRAFT N°                                        and subsequent.

 

Provided approval is received by

 

 

AVTA - A320 Family & A320 Family NEO PA

Exhibit B-1 - Page 2


EXHIBIT B-1

 

 

Buyer approval   Seller approval    
   
By :           By :    

 

Date :

 

 

        Date :

 

   
   

LOGO

 

SPECIFICATION CHANGE NOTICE

 

(SCN)

 

For

 

SCN Number

Issue

Dated

Page

 

 

Specification repercussion:

 

After contractual agreement with respect to weight, performance, delivery, etc, the indicated part of the specification wording will read as follows:

 

 

AVTA - A320 Family & A320 Family NEO PA

Exhibit B-1 - Page 3


EXHIBIT B-1

 

 

 

LOGO

 

SPECIFICATION CHANGE NOTICE

 

(SCN)

 

 

For

 

SCN Number

Issue

Dated

Page

 

 

Scope of change (FOR INFORMATION ONLY)

 

 

AVTA - A320 Family & A320 Family NEO PA

Exhibit B-1 - Page 4


EXHIBIT B-1

 

 

 

LOGO

 

MANUFACTURER’S SPECIFICATION CHANGE NOTICE

 

(MSCN)

  

 

For

 

MSCN Number

Issue

Dated

Page

 

 

Title :

 

Description :

 

Effect on weight :

 

•      Manufacturer’s Weight Empty change :

 

•      Operational Weight Empty change :

 

•      Allowable Payload change :

 

Remarks / References

 

Specification changed by this MSCN

 

 

Price per aircraft

 

US DOLLARS:

AT DELIVERY CONDITIONS:

 

This change will be effective on                     AIRCRAFT N°                     and subsequent.

 

Provided MSCN is not rejected by

 

          Buyer approval   Seller approval     

 

          By:

 

          Date:

 

 

 

        By:

 

        Date:

 

    

 

AVTA - A320 Family & A320 Family NEO PA

Exhibit B - Page 5


EXHIBIT B-2

 

 

 

LOGO

 

MANUFACTURER’S SPECIFICATION CHANGE NOTICE

 

(MSCN)

 

 

For

 

MSCN Number

Issue

Dated

Page

 

 

Specification repercussion:

 

After contractual agreement with respect to weight, performance, delivery, etc, the indicated part of the specification wording will read as follows:

 

 

AVTA - A320 Family & A320 Family NEO PA

Exhibit B-2 - Page 1


EXHIBIT B-2

 

 

 

LOGO

 

MANUFACTURER’S SPECIFICATION CHANGE NOTICE

 

(MSCN)

 

 

For

 

MSCN Number

Issue

Dated

Page

 

 

Scope of change (FOR INFORMATION ONLY)

 

 

AVTA - A320 Family & A320 Family NEO PA

Exhibit B-2 - Page 2


EXHIBIT C

 

PART 1 AIRFRAME PRICE REVISION FORMULA

 

* [Three pages have been omitted in accordance with a request for confidential treatment.]


EXHIBIT C

 

 

PART 2A PROPULSION SYSTEMS PRICE REVISION FORMULA FOR A320 FAMILY AIRCRAFT
   CFM INTERNATIONAL

 

* [Four pages have been omitted in accordance with a request for confidential treatment.]


EXHIBIT C

 

 

PART 2B PROPULSION SYSTEMS PRICE REVISION FORMULA FOR A320 NEO FAMILY AIRCRAFT
   CFM INTERNATIONAL

 

* [Five pages have been omitted in accordance with a request for confidential treatment.]


EXHIBIT C

 

 

PART 3 PROPULSION SYSTEMS PRICE REVISION FORMULA
   INTERNATIONAL AERO ENGINES

 

* [Three pages have been omitted in accordance with a request for confidential treatment.]


EXHIBIT C

 

 

PART 4 PROPULSION SYSTEMS PRICE REVISION FORMULA
   PRATT AND WHITNEY

 

* [Four pages have been omitted in accordance with a request for confidential treatment.]


EXHIBIT D

CERTIFICATE OF ACCEPTANCE

In accordance with the terms of clause 8 of the A320 Family & A320 Family NEO Purchase Agreement dated [ day ] [ month ] [ year ] and made between AviancaTaca Holding S.A. (the “ Customer ”) and Airbus S.A.S. as amended and supplemented from time to time (the “ Purchase Agreement ”), the technical acceptance tests relating to one Airbus A3[ ]-[ ] aircraft, bearing manufacturer’s serial number [ ], and registration mark [ ] (the “ Aircraft ”) have taken place in [Blagnac/Hamburg].

In view of said tests having been carried out with satisfactory results, the Customer hereby approves the Aircraft as being in conformity with the provisions of the Purchase Agreement and accepts the Aircraft for delivery in accordance with the provisions of the Purchase Agreement.

Such acceptance shall not impair the rights that may be derived from the warranties relating to the Aircraft set forth in the Purchase Agreement.

Any right at law or otherwise to revoke this acceptance of the Aircraft is hereby irrevocably waived.

IN WITNESS WHEREOF, the Customer has caused this instrument to be executed by its duly authorised representative this             day of [ month ], [ year ] in [Blagnac/Hamburg].

AVIANCATACA HOLDING S.A.

Name:

Title:

Signature:


EXHIBIT E

BILL OF SALE

Know all men by these presents that Airbus S.A.S., a Société par Actions Simplifiée existing under French law and having its principal office at 1 rond-point Maurice Bellonte, 31707 Blagnac Cedex, FRANCE (the “ Seller ”), was this [ day ] [ month ] [ year ] the owner of the title to the following airframe (the “ Airframe ”), the propulsion systems as specified (the “ Propulsion Systems ”) and [all appliances, components, parts, instruments, accessories, furnishings, modules and other equipment of any nature], [excluding buyer furnished equipment (“ BFE ”),] incorporated therein, installed thereon or attached thereto on the date hereof (the “ Parts ”):

 

AIRFRAME :    PROPULSION SYSTEMS :
AIRBUS Model A3[ ]-[ ]    [Insert name of propulsion system manufacturer] Model [ ]
MANUFACTURER’S SERIAL NUMBER : [ ]   

ENGINE SERIAL NUMBERS :

LH: [ ]

RH: [ ]

REGISTRATION MARK : [ ]   

[and had such title to the BFE as was acquired by it from [ insert name of vendor of the BFE ] pursuant to a bill of sale dated     [month] [year] (the “ BFE Bill of Sale ”).]

The Airframe, Propulsion Systems and Parts are hereafter together referred to as the “ Aircraft ”.

The Seller did this     day of [month] [year], sell, transfer and deliver all of its above described rights, title and interest in and to the Aircraft [and the BFE] to the following entity and to its successors and assigns forever, said Aircraft [and the BFE] to be the property thereof:

AVIANCATACA HOLDING S.A.

Calle Aquilino de la Guardia No. 8,

Ciudad de Panamá, República de Panamá

(the “ Buyer ”)

The Seller hereby warrants to the Buyer, its successors and assigns that it had [(i)] good and lawful right to sell, deliver and transfer title to the Aircraft to the Buyer and that there was conveyed to the Buyer good, legal and valid title to the Aircraft, free and clear of all liens, claims, charges, encumbrances and rights of others and that the Seller will warrant and defend such title forever against all claims and demands whatsoever [and (ii) such title to the BFE as Seller has acquired from [ insert name of vendor of the BFE ] pursuant to the BFE Bill of Sale].

This Bill of Sale shall be governed by and construed in accordance with the laws of the State of New York.

IN WITNESS WHEREOF, the undersigned has caused this instrument to be executed by its duly authorized representative this     day of [month], [year] in [Blagnac/Hamburg].

AIRBUS S.A.S.

Name:

Title:

Signature:


EXHIBIT F

SERVICE LIFE POLICY

ITEMS OF PRIMARY STRUCTURE


EXHIBIT F

 

SELLER SERVICE LIFE POLICY

 

1. The Items covered by the Service Life Policy pursuant to Clause 12.2 are those Seller Items of primary and auxiliary structure described hereunder.

 

* [Three pages have been omitted in accordance with a request for confidential treatment.]


EXHIBIT G

TECHNICAL DATA INDEX


EXHIBIT G

 

TECHNICAL DATA INDEX

Where applicable data will be established in general compliance with ATA 100 Information Standards for Aviation Maintenance, and the applicable provisions for digital standard of ATA Specification 2200 (iSpec2200).

The following index identifies the Technical Data provided in support of the Aircraft.

The explanation of the table is as follows:

 

NOMENCLATURE    Self-explanatory.   
ABBREVIATED DESIGNATION (Abbr)    Self-explanatory.   
AVAILABILITY (Avail)      

Technical Data can be made available :

 

 

ON-LINE (ON) through the relevant service on AirbusWorld,

and / or

 

 

OFF-LINE (OFF) through the most suitable means applicable to the size of the concerned document (e.g CD or DVD).

FORMAT (Form)

Following Technical Data formats may be used:

 

 

SGML – Standard Generalized Mark-up Language, which allows further data processing by the Buyer.

 

 

XML – Extensible Mark-up Language, evolution of the SGML text format to cope with WEB technology requirements.

 

   

XML is used for data processing. Processed data shall be consulted through the e-doc Viewer FOCT – Flight Operations Consultation Tool.

 

   

XML data may be customized using Airbus customization tools (Flight Operations Documentation Manager , ADOC) or the Buyer’s own XML based editing tools.

 

 

CGM – Computer Graphics Metafile, format of the interactive graphics associated with the XML and /or SGML text file delivery.

 

 

PDF (PDF) – Portable Document Format allowing data consultation.

 

 

Advanced Consultation Tool – refers to Technical Data consultation application that offers advanced consultation & navigation functionality compared to PDF. Both browser software & Technical Data are packaged together.


EXHIBIT G

 

 

 

P1 / P2 – refers to manuals printed on one side or both sides of the sheet.

 

 

CD-P – refers to CD-Rom including Portable Document Format (PDF) Data.

 

 

CD-XML – Refers to CD-Rom including XML data

 

TYPE   C     CUSTOMIZED. Refers to manuals that are applicable to an individual Airbus customer/operator fleet or aircraft.
  G     GENERIC. Refers to manuals that are applicable for all Airbus aircraft types/models/series.
  E     ENVELOPE. Refers to manuals that are applicable to a whole group of Airbus customers for a specific aircraft type/model/series.
QUANTITY (Qty)     Self-explanatory for physical media.
DELIVERY (Deliv)     Delivery refers to scheduled delivery dates and is expressed in either the number of corresponding days prior to first Aircraft delivery, or nil (0) referring to the Delivery Date of corresponding Aircraft.
      The number of days indicated shall be rounded up to the next regular revision release date.


EXHIBIT G

 

 

* [Twelve pages have been omitted in accordance with a request for confidential treatment.]


EXHIBIT H

MATERIAL

SUPPLY AND SERVICES


EXHIBIT H

 

1. GENERAL

 

1.1 Scope

 

1.1.1 This Exhibit H sets forth the terms and conditions for the support and services offered by the Seller to the Buyer with respect to Material (as defined below).

 

1.1.2 References made to Articles shall be deemed to refer to articles of this Exhibit H unless otherwise specified.

 

1.1.3 For purposes of this Exhibit H:

 

1.1.4 the term “Supplier” shall mean any supplier providing any of the Material listed in Article 1.2.1 and the term “Supplier Part” shall mean an individual item of Material.

 

1.1.5 The term “ SPEC 2000 ” means the “E-Business Specification for Materials Management” document published by the Air Transport Association of America.

 

1.2 Material Categories

 

1.2.1 Each of the following constitutes “ Material ” for purposes of this Exhibit H:

 

  (i) Seller parts;

 

  (ii) Supplier Parts classified as Repairable Line Maintenance Parts (as defined in SPEC 2000);

 

  (iii) Supplier Parts classified as Expendable Line Maintenance Parts (as defined in SPEC 2000);

 

  (iv) Seller and Supplier ground support equipment and specific-to-type tools

where “ Seller Parts ” means Seller’s proprietary parts bearing a part number of the Seller or for which the Seller has the exclusive sales rights.

 

1.2.2 Propulsion Systems, engine exchange kits, their accessories and parts for any of the foregoing, are not covered under this Exhibit H.

 

1.3 Term

[*]

 

1.4 Airbus Material Store

 

1.4.1 AACS Spares Center

The Seller has established and shall maintain or cause to be maintained, during the Term, a US store (“ US Spares Center ”). The US Spares Center shall be operated twenty-four (24) hours per day, seven (7) days per week, for the handling of AOG and critical orders for Seller Parts.

Seller acknowledges that Buyer’s preference of Miami, FL as a location for development of future US Spares center.


EXHIBIT H

 

The Seller shall make reasonable efforts to deliver Seller Parts to the Buyer from the US Spares Center.

 

1.4.2 Material Support Center, Germany

The Seller has established its material headquarters in Hamburg, Germany (the “ Airbus Material Center ”) and shall, during the Term, maintain, or have maintained on its behalf, a central store of Seller Parts. The Airbus Material Center shall be operated twenty-four (24) hours per day, seven (7) days per week.

If for any reason this is not possible to deliver Seller Parts from a US Spares Center, the Seller shall make available for pick-up Seller Parts from the Airbus Material Center or from any of the Regional Satellite Stores in accordance with Clause 3.1.2 and 3.1.3

 

1.4.3 Other Points of Shipment

 

1.4.3.1 In addition to the AACS Spares Center and the Airbus Material Center, the Seller and its Affiliates operate a global network of regional satellite stores (The “ Regional Satellite Stores ”). A list of such stores shall be provided to the Buyer upon the Buyer’s request.

 

1.4.3.2 The Seller reserves the right to effect deliveries from distribution centers other than the US Spares Center or the Airbus Material Center, which may include the Regional Satellite Stores or any other production or Supplier’s facilities.

 

1.5 Customer Order Desk

The Seller operates a “ Customer Order Desk ”, the main functions of which are:

 

  (i) Management of order entries for all priorities, including Aircraft On Ground (“ AOG ”);

 

  (ii) Management of order changes and cancellations;

 

  (iii) Administration of Buyer’s routing instructions;

 

  (iv) Management of Material returns;

 

  (v) Clarification of delivery discrepancies;

 

  (vi) Issuance of credit and debt notes.

 

  (vii) Lease of certain Seller Parts

 

  (viii) Loan of Ground Support Equipment and Tools

The Buyer hereby agrees to communicate its orders for Material to the Customer Order Desk either in electronic format (SPEC 2000), telephone, fax, SITA message, e-mail or via the Internet.


EXHIBIT H

 

1.6 Commitments of the Buyer

 

1.6.1 During the Term, the Buyer agrees to purchase from

 

  (a) the Seller, AACS or the Seller’s licensee(s) the Seller Parts required for the Buyer’s own needs; or

 

  (b) other operators or purchase Seller Parts from said operators or from distributors, provided said Seller Parts were originally designed by the Seller and manufactured by the Seller or its licensees.

 

1.6.2 Subject to the express further agreement of the Seller in relation to Article 1.6.2, the Buyer may manufacture, exclusively for its own use or the use of any commercial aviation subsidiaries of the Buyer, without paying any license fee to the Seller, parts equivalent to Seller Parts, provided, however, that it may only do so in one of the following circumstances:

 

1.6.2.1 if at such time the Seller Parts are out of stock from the Seller, its licensees or other approved sources, in accordance with Clause 3.1.2 and 3.1.3.

 

1.6.2.2 at any time, to the extent that Seller Parts are needed to perform aircraft on ground (“AOG”) repairs upon any Aircraft and are not available from the Seller, its Licensees or other approved sources within a lead time shorter than or equal to the time in which the Buyer can manufacture or have manufactured such Seller Parts, and provided the Buyer shall not sell such Seller Parts,

 

1.6.2.3 in the event that the Seller fails to fulfil its obligations with respect to any Seller Parts pursuant to Clause 1.2 within a reasonable time after written notice thereof from the Buyer,

 

1.6.2.4 in those instances when a Seller Part is identified as “Local Manufacture” in the Illustrated Parts Catalog (IPC).

 

1.6.3 The rights granted to the Buyer in Article 1.6.2 shall not in any way be construed as a license, nor shall they in any way obligate the Buyer to the payment of any license fee or royalty, nor shall they in any way be construed to affect the rights of third parties.

 

1.6.4 Furthermore, in the event of the Buyer manufacturing or having manufactured any parts, subject to the conditions of Article 1.6.2, such manufacturing and any use made of the manufactured parts shall be under the sole liability of the Buyer and the consent given by the Seller shall not be construed as express or implicit approval howsoever either of the Buyer or of the manufactured parts.

It shall further be the Buyer’s sole responsibility to ensure that such manufacturing is performed in accordance with the relevant procedures and Aviation Authority requirements.

THE SELLER SHALL NOT BE LIABLE FOR, AND THE BUYER SHALL INDEMNIFY THE SELLER AGAINST, ANY CLAIMS FROM ANY THIRD PARTIES FOR LOSSES DUE TO ANY MANUFACTURING OR MATERIALS DEFECT OR ANY DESIGN DEFECT (TO THE EXTENT ANY PART WAS NOT MANUFACTURED STRICTLY IN ACCORDANCE WITH THE DETAILED DESIGN OF SELLER OR ITS AFFILIATES) OR NONCONFORMITY, ARISING OUT OF OR IN CONNECTION WITH ANY MANUFACTURING OF ANY PART UNDERTAKEN BY THE BUYER, OR CAUSED TO BE UNDERTAKEN BY THE BUYER, UNDER ARTICLE 1.6.2, WHETHER SUCH CLAIM IS ASSERTED IN CONTRACT OR IN TORT, OR IS PREMISED ON ALLEGED, ACTUAL, IMPUTED, ORDINARY OR INTENTIONAL ACTS OR OMISSIONS OF THE BUYER.


EXHIBIT H

 

1.6.5 The Buyer shall allocate, or cause to be allocated, its own part number to any part manufactured, or caused to be manufactured, in accordance with Article 1.6.2 above. The Buyer shall under no circumstances be allowed to use, or cause to be used, the Airbus part number of the Seller Part to which such manufactured part is equivalent.

 

1.6.6 Notwithstanding any right provided to the Buyer under Article 1.6.2, the Buyer shall not be entitled to sell or loan any part manufactured under the provisions of Article 1.6.2 to any third party except if that sell or lend is made to any commercial aviation subsidiaries of the Buyer.

 

2. INITIAL PROVISIONING

 

2.1 Period

The initial provisioning period commences with the Pre-Provisioning Meeting, as defined in Article 2.2.1, and [*] as of the date hereof (“ Initial Provisioning Period ”).

 

2.2 Pre-Provisioning Meeting

 

2.2.1 The Seller shall organize a pre-provisioning meeting at AACS Spares Center or at the Airbus Material Center, or at any other agreed location, for the purpose of setting an acceptable schedule and working procedure for the preparation of the initial issue of the Provisioning Data and the Initial Provisioning Conference referred to in Articles 2.3 and 2.4 below (the “ Pre-Provisioning Meeting ”).

During the Pre-Provisioning Meeting, the Seller shall familiarize the Buyer with the provisioning processes, methods and formulae of calculation and documentation.

 

2.2.2 The Pre-Provisioning Meeting shall take place on an agreed date that is no later than nine (9) months prior to Scheduled Delivery Month of the first Aircraft, allowing a minimum preparation time of eight (8) weeks for the Initial Provisioning Conference.

 

2.3 Initial Provisioning Conference

The Seller shall organize an initial provisioning conference at the AACS Spares Center or at the Airbus Material Center (the “ Initial Provisioning Conference ”), the purpose of which shall be to agree the material scope and working procedures to accomplish the initial provisioning of Material (the “ Initial Provisioning ”).

The Initial Provisioning Conference shall take place at the earliest [*] after Aircraft Manufacturer Serial Number allocation or Contractual Definition Freeze, whichever occurs last [*].

 

2.4 Provisioning Data

 

2.4.1 Provisioning data generally in accordance with SPEC 2000, Chapter 1, for Material described in Articles 1.2.1 (i) through 1.2.1 (iii) (“ Provisioning Data ”) shall be supplied by the Seller to the Buyer in the English language, in a format and timeframe to be agreed during the Pre-Provisioning Meeting.

 

2.4.1.1 Unless a longer revision cycle has been agreed, the Provisioning Data shall be revised every [*] up to the end of the Initial Provisioning Period.


EXHIBIT H

 

2.4.1.2 The Seller shall ensure that Provisioning Data is provided to the Buyer in time to permit the Buyer to perform any necessary evaluation and to place orders in a timely manner.

 

2.4.1.3 Provisioning Data generated by the Seller shall comply with the configuration of the Aircraft as documented [*] before the date of issue.

This provision shall not cover:

 

  (i) Buyer modifications not known to the Seller,

 

  (ii) other modifications not approved by the Seller’s Aviation Authorities.

 

2.4.2 Supplier-Supplied Data

Provisioning Data relating to each Supplier Part (both initial issue and revisions) shall be produced by Supplier thereof and may be delivered to the Buyer either by the Seller or such Supplier. It is agreed and understood by the Buyer that the Seller shall not be responsible for the substance, accuracy or quality of such data. Such Provisioning Data shall be provided in either SPEC 2000 format or any other agreed format.

 

2.4.3 Supplementary Data

The Seller shall provide the Buyer with data supplementary to the Provisioning Data, comprising local manufacture tables, ground support equipment, specific-to-type tools and a pool item candidate list. The list of spare parts required for the installation of all airframe LRUs will be provided by the Seller to the Buyer during the Initial Provisioning Conference

 

2.5 Commercial Offer

Upon the Buyer’s request, the Seller shall submit a commercial offer for Initial Provisioning Material.

 

2.6 Delivery of Initial Provisioning Material

 

2.6.1 During the Initial Provisioning Period, Initial Provisioning Material shall conform to the latest known configuration standard of the Aircraft for which such Material is intended as reflected in the Provisioning Data transmitted by the Seller.

 

2.6.2 The delivery of Initial Provisioning Material shall take place according to the conditions specified in the commercial offer mentioned in Article 2.5.

 

2.6.3 All Initial Provisioning Material shall be packaged in accordance with ATA 300 Specification.

 

2.7 Buy-Back Period and Buy-Back of Initial Provisioning Surplus Material

 

  a) The “ Buy-Back Period ” is defined as the period starting [*]


EXHIBIT H

 

  b) At any time during the Buy-Back Period, the Buyer shall have the right to return to the Seller solely Seller Parts as per Article 1.2.1 (i) or Supplier Parts as per Article 1.2.1 (ii), subject to the Buyer providing sufficient evidence that such Material fulfils the conditions defined hereunder.

 

  c) Material as set forth in Article b) above shall be eligible for Buy-Back provided:

 

  i) The Material is unused and undamaged and is accompanied by the Seller’s original documentation (tag, certificates);

 

  ii) The Seller provided the Buyer with an Initial Provisioning recommendation for such Material at the time of the Initial Provisioning Conference based upon a maximum protection level of [*];

 

  iii) The quantity procured by the Buyer was not in excess of the provisioning quantities recommended by the Seller;

 

  iv) The Material was purchased for Initial Provisioning purposes by the Buyer directly from the Seller;

 

  v) The Material ordered by the Buyer is identified as an Initial Provisioning order;

 

  vi) The Material and its components have at least [*] shelf life remaining when returned;

 

  vii) The Material is returned to the Seller by the Buyer and has effectively been received and accepted by the Seller before the end of the Buy-Back Period.

Acceptance from the Seller shall not be unreasonably withheld and shall be within a reasonable timeframe.

 

  d) If any Material is accepted for Buy-Back, the Seller shall credit the Buyer as follows:

 

   

For Seller Parts as per Article 1.2.1 (i) the Seller shall credit the Buyer [*] of the price originally paid;

 

   

For Supplier Parts as per Article 1.2.1 (ii) the Seller shall credit the Buyer [*] of the original Supplier list price valid at the time of order placement.

 

  e) In the event of the Buyer electing to procure Material in excess of the Seller’s recommendation, the Buyer shall notify the Seller thereof in writing, with due reference to the present Article 2.7. The Seller’s acknowledgement and agreement in writing shall be necessary before any Material in excess of the Seller’s Initial Provisioning recommendation shall be considered for Buy-Back.

 

  f) It is expressly understood and agreed that all credits described in Article 2.7 (d) shall be provided by the Seller to the Buyer exclusively by means of credit notes to the Buyer’s Material account with the Seller.

 

  g) Transportation costs for the agreed return of Material under this Article 2.7 shall be borne by the Seller.

 

  h) The Seller shall use its reasonable efforts to obtain for the Buyer the same buy back protection from Suppliers for Supplier Parts.


EXHIBIT H

 

3 OTHER MATERIAL SUPPORT

 

3.1 Replenishment and Delivery

 

3.1.1 General

For the purpose of clarification, it is expressly stated that the provisions of Article 3.1.2 do not apply to Initial Provisioning Material and Provisioning Data as described in Article 2.

 

3.1.2 Lead times

In general, lead times shall be in accordance with the provisions of the latest edition of the “World Airlines and Suppliers Guide”.

 

3.1.2.1 Seller Parts as per Article 1.2.1 (i) shall be dispatched within the lead times published by the Seller.

Lead times for Seller Parts as per Article 1.2.1 (i), which are not published by the Seller, shall be quoted upon request.

 

3.1.2.2 Material defined in Articles 1.2.1 (ii) through 1.2.1 (iv) can be dispatched within the Supplier’s lead time augmented by the Seller’s own order and delivery administration time.

 

3.1.3 Expedite Service

The Seller shall provide a twenty-four (24) hours a day / seven (7) days a week expedite service to provide for the supply of critically required parts (the “ Expedite Service ”).

 

3.1.3.1 The Expedite Service is operated in accordance with the “World Airlines and Suppliers Guide” and the Seller shall notify the Buyer of the action taken to satisfy an expedite order received from the Buyer within:

 

  (i) four (4) hours after receipt of an AOG order;

 

  (ii) twenty-four (24) hours after receipt of a critical order (imminent AOG or work stoppage);

 

  (iii) seven (7) days after receipt of an expedite order (urgent stock replenishment).

 

3.1.3.2 In exceptional AOG circumstances, should the Buyer be unable to send a written order for reasons beyond his control, the Seller may deliver the Material after a telephone call, provided a purchase order is sent to the Seller by the end of the next Business Day. Should the Buyer fail to send such purchase order, the Seller reserves the right to refuse any subsequent purchase orders without receipt of a firm written purchase order.


EXHIBIT H

 

3.1.4 Shortages, Overshipments, Non-Conformity in Orders

 

3.1.4.1 The Buyer shall, within thirty (30) days after delivery of Material pursuant to a purchase order, advise the Seller:

 

  (i) of any alleged shortages or overshipments;

 

  (ii) of any non-conformities of delivered Material.

In the event of the Buyer not having advised the Seller of any such alleged shortages, overshipments or non-conformities within the above-defined period, the Buyer shall be deemed to have accepted the delivery.

 

3.1.4.2 In the event of the Buyer reporting an overshipment or non-conformity to the order within the period defined in Article 3.1.4.1 the Seller shall, if the Seller recognizes such overshipment or non-conformity, either replace the concerned Material or credit the Buyer for the returned Material, if the Buyer chooses to return the Material subject of an overshipment or non-conformity. In such case, reasonable transportation costs shall be borne by the Seller.

 

3.1.5 Delivery Terms

Material shall be delivered to the Buyer as follows:

 

  (i) Free Carrier (FCA) Airbus Material Center;

 

  (ii) Free Carrier (FCA) Seller’s Regional Satellite Stores;

 

  (iii) Free Carrier (FCA) Seller’s or Supplier’s facility for deliveries from any other Seller or Supplier facilities.

The term Free Carrier (FCA) is as defined in the Incoterms 2010 publication issued by the International Chamber of Commerce.

 

3.1.6 Packaging

All Material shall be packaged in accordance with ATA 300 Specification.

 

3.1.7 Cessation of Deliveries

The Seller reserves the right to restrict, stop or otherwise suspend deliveries if the Buyer fails to meet its obligations defined in Articles 5.2 through 5.3.

 

3.2 Seller Parts Leasing

The Seller offers the Buyer the option to lease certain Seller Parts as listed in the Customer Services Catalog. The terms and conditions applicable to such service shall be as set forth in the then current Customer Services Catalog.

 

3.3 Tools and Ground Support Equipment

The Seller offers for sale and/or loan a range of ground support equipment and specific-to-type tools, as defined in 1.2.1 (iv).


EXHIBIT H

 

The terms and conditions applicable to such service shall be as set forth in the then current Customer Services Catalog.

 

3.4 Seller Parts Repair

The Seller may offer the Buyer a service whereby the Seller would manage the repair of Seller Parts as defined in Article 1.2.1 (i).

The terms and conditions applicable to such service shall be as set forth in the then current Customer Services Catalog.

 

4. WARRANTIES

 

4.1 Seller Parts

Subject to the limitations and conditions as hereinafter provided, the Seller warrants to the Buyer that all Seller Parts, sold under this Exhibit H shall at delivery to the Buyer:

 

  (i) be free from defects in material.

 

  (ii) be free from defects in workmanship, including without limitation processes of manufacture.

 

  (iii) be free from defects arising from failure to conform to the applicable specification for such part.

 

4.1.1 Warranty Period

 

4.1.1.1 The warranty period for Seller Parts is [*] for new Seller Parts and [*] for used Seller Parts from delivery of such parts to the Buyer.

 

4.1.1.2 Whenever any Seller Part that contains a defect for which the Seller is liable under Article 4.1 has been corrected, replaced or repaired pursuant to the terms of this Article 4.1, the period of the Seller’s warranty with respect to such corrected, repaired or replacement Seller Part, as the case may be, shall be the remaining portion of the original warranty period [*], whichever is longer.

 

4.1.2 Buyer’s Remedy and Seller’s Obligation

The Buyer’s remedy and Seller’s obligation and liability under this Article 4.1 are limited to the repair, replacement or correction, at the Seller’s expense and option, of any Seller Part that is defective.

The Seller may alternatively furnish to the Buyer’s account with the Seller a credit equal to the price such Seller Part.

The provisions of Clauses 12.1.5 through 12.1.11 of the Agreement shall apply to claims made pursuant to this Article 4.1.


EXHIBIT H

 

4.2 Supplier Parts

With respect to Supplier Parts to be delivered to the Buyer under this Exhibit H, the Seller agrees to transfer to the Buyer the benefit of any warranties, which the Seller may have obtained from the corresponding Suppliers and the Buyer hereby agrees that it shall accept the same.

 

4.3 Waiver, Release and Renunciation

THIS ARTICLE 4 (INCLUDING ITS SUBPARTS) SETS FORTH THE EXCLUSIVE WARRANTIES, EXCLUSIVE LIABILITIES AND EXCLUSIVE OBLIGATIONS OF THE SELLER, AND THE EXCLUSIVE REMEDIES AVAILABLE TO THE BUYER, WHETHER UNDER THIS AGREEMENT OR OTHERWISE, ARISING FROM ANY DEFECT OR NONCONFORMITY OR PROBLEM OF ANY KIND IN ANY SELLER PART, MATERIAL, LEASED PART, OR SERVICES DELIVERED BY THE SELLER UNDER THIS AGREEMENT.

THE BUYER RECOGNIZES THAT THE RIGHTS, WARRANTIES AND REMEDIES IN THIS ARTICLE 4 ARE ADEQUATE AND SUFFICIENT TO PROTECT THE BUYER FROM ANY DEFECT OR NONCONFORMITY OR PROBLEM OF ANY KIND IN THE SELLER PARTS, MATERIALS, LEASED PARTS, OR SERVICES SUPPLIED UNDER THIS AGREEMENT. THE BUYER HEREBY WAIVES, RELEASES AND RENOUNCES ALL OTHER WARRANTIES, OBLIGATIONS, GUARANTEES AND LIABILITIES OF THE SELLER AND ALL OTHER RIGHTS, CLAIMS AND REMEDIES OF THE BUYER AGAINST THE SELLER AND ITS SUPPLIERS, WHETHER EXPRESS OR IMPLIED BY CONTRACT, TORT, OR STATUTORY LAW OR OTHERWISE, WITH RESPECT TO ANY NONCONFORMITY OR DEFECT OR PROBLEM OF ANY KIND IN ANY SELLER PART, MATERIAL, LEASED PART, OR SERVICES DELIVERED BY THE SELLER UNDER THIS AGREEMENT, INCLUDING BUT NOT LIMITED TO:

 

  (1) ANY IMPLIED WARRANTY OF MERCHANTABILITY AND/OR FITNESS FOR ANY GENERAL OR PARTICULAR PURPOSE;

 

  (2) ANY IMPLIED OR EXPRESS WARRANTY ARISING FROM COURSE OF PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE;

 

  (3) ANY RIGHT, CLAIM OR REMEDY FOR BREACH OF CONTRACT;

 

  (4) ANY RIGHT, CLAIM OR REMEDY FOR TORT, UNDER ANY THEORY OF LIABILITY, HOWEVER ALLEGED, INCLUDING, BUT NOT LIMITED TO, ACTIONS AND/OR CLAIMS FOR NEGLIGENCE, IMPLIED WARRANTY, PRODUCT LIABILITY, STRICT LIABILITY OR FAILURE TO WARN;

 

  (5) ANY RIGHT, CLAIM OR REMEDY TO RECOVER OR BE COMPENSATED FOR:

 

  (a) LOSS OF USE OR REPLACEMENT OF ANY AIRCRAFT, COMPONENT, EQUIPMENT, ACCESSORY OR PART PROVIDED UNDER THE AGREEMENT;

 

  (b) LOSS OF, OR DAMAGE OF ANY KIND TO, ANY AIRCRAFT, COMPONENT, EQUIPMENT, ACCESSORY OR PART PROVIDED UNDER THE AGREEMENT;

 

  (c) LOSS OF PROFITS AND/OR REVENUES;

 

  (d) ANY OTHER INCIDENTAL OR CONSEQUENTIAL DAMAGE.


EXHIBIT H

 

THE WARRANTIES PROVIDED BY THIS AGREEMENT SHALL NOT BE EXTENDED, ALTERED OR VARIED EXCEPT BY A WRITTEN INSTRUMENT SIGNED BY THE SELLER AND THE BUYER. IN THE EVENT THAT ANY PROVISION OF THIS ARTICLE 4 SHOULD FOR ANY REASON BE HELD UNLAWFUL, OR OTHERWISE UNENFORCEABLE, THE REMAINDER OF THIS ARTICLE 4 SHALL REMAIN IN FULL FORCE AND EFFECT.

FOR THE PURPOSES OF THIS ARTICLE 4, THE “SELLER” SHALL BE UNDERSTOOD TO INCLUDE THE SELLER, ANY OF ITS SUPPLIERS, SUBCONTRACTORS, AND AFFILIATES AND ANY OF THEIR RESPECTIVE INSURERS.

 

4.4 Duplicate Remedies

The remedies provided to the Buyer under this Article 4 as to any part thereof are mutually exclusive and not cumulative. The Buyer shall be entitled to the remedy that provides the maximum benefit to it, as the Buyer may elect, pursuant to the terms and conditions of this Article 4 for any particular defect for which remedies are provided under this Article 4; provided, however, that the Buyer shall not be entitled to elect a remedy under one part of this Article 4 that constitutes a duplication of any remedy elected by it under any other part hereof for the same defect. The Buyer’s rights and remedies herein for the non-performance of any obligations or liabilities of the Seller arising under these warranties shall be in monetary damages limited to the amount the Buyer expends in procuring a correction or replacement for any covered part subject to a defect or non-performance covered by this Article 4, and the Buyer shall not have any right to require specific performance by the Seller.

Upon Buyer’s request, the Seller agrees to use reasonable effors to correct or replace such covered part.

 

5. COMMERCIAL CONDITIONS

 

5.1 Delivery Terms

All Material prices are quoted on the basis of Free Carrier (FCA) delivery terms, without regard to the place from which such Material is shipped. The term “ Free Carrier (FCA) ” is as defined by publication n° 560 of the International Chamber of Commerce, published in January 2000.

 

5.2 Payment Procedures and Conditions

All payments under this Exhibit H shall be made in accordance with the terms and conditions set forth in the then current Customer Services e-Catalog.

 

5.3 Title

Title to any Material purchased under this Exhibit H shall remain with the Seller until full payment of the invoices and interest thereon, if any, has been received by the Seller.

The Buyer hereby undertakes that Material title to which has not passed to the Buyer, shall be kept free from any debenture or mortgage or any similar charge or claim in favour of any third party.


EXHIBIT H

 

5.4 Cessation of Deliveries

The Seller has the right to restrict, stop or otherwise suspend deliveries if the Buyer fails to meet its obligations set forth in this Exhibit H.

 

5.5 Price

 

5.5.1 All quoted Material prices shall be expressed in US Dollars and shall be firm for each calendar year. The Seller however reserves the right to revise the prices of said Seller Parts during the course of the calendar year in case of any of the following:

 

   

significant revision in the manufacturing costs and purchase price of materials,

 

   

significant variation of exchange rates,

 

   

significant error in the estimation or expression of any price.

The Seller commits that the average annual increase rate in the price of Seller Parts shall be capped at a maximum annual rate calculated as follows:

 

5.5.2 [*]

 

6. EXCUSABLE DELAY

Clauses 10.1 and 10.2 of the Agreement shall apply, mutatis mutandis, to all Material support and services provided under this Exhibit H.

 

7. TERMINATION OF MATERIAL PROCUREMENT COMMITMENTS

If the Agreement is terminated with respect to any Aircraft, then the rights and obligations of the parties with respect to undelivered spare parts, services, data or other items to be purchased hereunder and which are applicable to those Aircraft for which the Agreement has been terminated shall also be terminated. Unused Material in excess of the Buyer’s requirements due to such termination may be repurchased by the Seller, at the Seller’s option and transportation costs, as provided in Article 2.7.

 

8. INCONSISTENCY

In the event of any inconsistency between this Exhibit H and the Customer Services Catalog or any order placed by the Buyer, this Exhibit H shall prevail to the extent of such inconsistency.


EXHIBIT I

LICENSES AND ON LINE SERVICES

 

Part 1 END-USER LICENSE AGREEMENT FOR AIRBUS SOFTWARE

 

Part 2 GENERAL TERMS AND CONDITIONS OF ACCESS TO AND USE OF AIRBUSWORLD

 

Part 3 END-USER SUBLICENSE AGREEMENT FOR SUPPLIER SOFTWARE


EXHIBIT I

 

PART 1

END-USER LICENSE AGREEMENT FOR AIRBUS SOFTWARE

 

1. DEFINITIONS

For the purposes of this end-user license agreement for Airbus software (the “ Software License ”) the following definitions shall apply:

Agreement ” means the Purchase Agreement of even date herewith entered into between the Licensee and the Licensor covering the purchase and sale of the Aircraft subject thereof.

Airbus Software ” means each of the Licensor’s proprietary products including Composite Work, configurations, processes, rules (together with any related documentation), as well as any modifications, enhancements or extensions thereto as may be provided by the Licensor from time to time. The Airbus Software shall be supplied in machine-readable code form only, for use in connection with the Aircraft or operations related to the Aircraft. The Airbus Software shall be either On Board Certified Software or Software Products. For the avoidance of doubt, this Software License does not apply to (i) open source software contained in the Airbus Software, if any, and it is hereby acknowledged and agreed by both parties hereto that such open source software is independently distributed on an “as is” basis under the respective license terms therefor, and that the Licensor disclaims any liability in relation to such open source software, or (ii) any proprietary third party software that the Licensor purchases or licenses from any third party and delivers to the Licensee, either as a sublicense or as a direct license from such third party.

Aircraft ” means, individually or collectively, the Aircraft subject of the Agreement.

Composite Work ” means the package composed of various elements, such as database(s), software or data, and which necessitates the use of the Airbus Software.

Licensee ” means the Buyer under the Agreement.

Licensor ” means the Seller under the Agreement.

On Board Certified Software ” means those Airbus Part 125 and/or FAR 125 certified software that are installed on board the Aircraft and bear a part number of the Licensor, excluding any software embedded in any component, furnishing or equipment installed on the Aircraft and itself bearing a part number.

Permitted Purpose ” means use of the Airbus Software by the Licensee for its own internal business needs, solely in conjunction with the Aircraft and in particular pertaining to (i) operation of the Aircraft; (ii) on ground operational support of the Aircraft; or (iii) related authorized customization of software.

Software Product(s) ” means either those Airbus Software intended to be used on ground at the Licensee’s facilities or Airbus Software that are installed on board the Aircraft and that are not Part 125 and/or FAR 125 certified – whether or not bearing a part number of the Licensor – excluding any software embedded in any component, furnishing or equipment installed on the Aircraft and itself bearing a part number.


EXHIBIT I

 

Update(s) ” means any update(s) or replacement(s) to the Airbus Software licensed hereunder, which the Licensor, at its discretion, makes generally available to the Licensee.

User Guide ” means the documentation, which may be in electronic format, designed to assist the Licensee in using the Airbus Software.

Capitalized terms used herein and not otherwise defined in this Software License shall have the meaning assigned thereto in the Agreement.

 

2. LICENSE

In consideration of the purchase by the Licensee of the Aircraft, the Licensee is hereby granted a worldwide and non-exclusive right to use the Airbus Software, for a Permitted Purpose. The Licensor shall remain the owner of all intellectual property rights in the Airbus Software. There shall be one license encompassing all Airbus Software granted in respect of each Aircraft purchased by the Licensee.

Notwithstanding the foregoing, license rights regarding the use of Software Products may be subject to specific commercial conditions and to the payment of specific fees relating to such Software Products.

The Licensee hereby acknowledges that it is aware that certain Airbus Software subject of this Software License may incorporate some third party software or open source software components. The Licensee hereby agrees to be bound by the licensing terms and conditions applicable to such third party software and made available by the Licensor through AirbusWorld.

 

3. ASSIGNMENT AND DELEGATION

 

3.1 Assignment

 

3.1.1 On Board Certified Software

The Licensee may at any time assign or otherwise transfer all or part of its rights pertaining to any On Board Certified Software under this Software License only as part of, and to the extent of, a sale, transfer or lease of each Aircraft on which such On Board Certified Software is installed. The Licensee shall assign as many Software Licenses as the number of sold, transferred or leased Aircraft and shall retain all other Software Licenses attached to any Aircraft that the Licensee continues to operate.

In the event of any such assignment or transfer, the Licensee shall transfer the copies of the Airbus Software attached to the sold, transferred or leased Aircraft (including all component parts, media, any upgrades or backup copies and, if applicable, certificate(s) of authenticity), except as otherwise instructed by the Licensor.


EXHIBIT I

 

3.1.2 Software Products

Save as otherwise set forth in the Agreement, the right to use any Software Product is personal to the Licensee, for its own internal use, and is non-transferable, except with the Licensor’s prior written consent, in which case the Licensee shall cause the assignee or sub-licensee to agree to the terms of this Software License.

 

3.2 Delegation

Without prejudice to Article 6 (a) hereof, in the event of the Licensee intending to designate a maintenance and repair organization or a third party to perform the maintenance of the Aircraft or to perform data processing on its behalf (each a “ Third Party ”), the Licensee shall notify the Licensor of such intention prior to any disclosure of this Software License and/or the Airbus Software Services to such Third Party.

The Licensee hereby undertakes to cause such Third Party to agree to be bound by the conditions and restrictions set forth in this Software License with respect to the Airbus Software and shall in particular cause such Third Party to enter into an appropriate licensing conditions and to commit to use the Airbus Software solely for the purpose of maintaining the Licensee’s Aircraft and/or for processing the Licensee’s data.

 

4. COPIES

Use of the Airbus Software is limited to the number of copies delivered by the Licensor to the Licensee and to the medium on which the Airbus Software is delivered. No reproduction shall be made without the prior written consent of the Licensor, except that the Licensee is authorized to copy the Airbus Software for back-up and archiving purposes. Any copy the Licensor authorizes the Licensee to make shall be performed under the sole responsibility of the Licensee. The Licensee agrees to reproduce the copyright and other notices as they appear on or within the original media on any copies that the Licensee makes of the Airbus Software.

 

5. TERM

 

5.1 On Board Certified Software

Subject to the Licensee having complied with the terms of this Software License, the rights under this Software License shall be granted from the date of Delivery of each Aircraft until the earlier of (i) the Aircraft definitively ceasing to be operated, in which case the license rights pertaining to such Aircraft shall be deemed terminated on the date of the last operation thereof by the Licensee or any of its assignees, or (ii) the Agreement, this Software License or any part thereof being terminated for any reason whatsoever, in which case the Licensee shall immediately cease to use the On Board Certified Software.

 

5.2 Software Products

Save as otherwise specified in any applicable commercial conditions relating to any Software Product as set forth in the Agreement and subject to the Licensee having complied with the terms of this Software License, the rights under this Software License shall be granted from the date of first delivery of the Software Product until the earlier of (i) for Software Products that are installed on board the Aircraft, the Licensee ceasing to operate the Aircraft on which such Software Products are installed, or (ii) the Licensee no longer owning or operating any Aircraft, or (iii) the Agreement or this Software License being terminated for any reason whatsoever, in which case the Licensee shall immediately cease to use the Software Products


EXHIBIT I

 

6. CONDITIONS OF USE

The Airbus Software shall only be used for the Permitted Purpose.

The Licensee shall be solely responsible for, and agrees to be careful in the use of, all outputs and results derived from the operation of the Airbus Software and all consequences, direct and indirect, relating to the use of such output and results. The Licensee agrees to use such outputs and results only once it has verified such outputs and results and has checked the relevance and correctness thereof, in the light of its particular needs.

The Licensee expressly acknowledges that it shall take all appropriate precautions for the use of the Airbus Software, including without limitation measures required for its compliance with the User Guide or any information or directive regarding the use of the Supplier Software.

In the event the Licensor should offer a replacement product, the conditions for using such product shall be subject to a separate agreement.

Under the present Software License, the Licensee shall:

 

  a) not permit any parent, subsidiary [Should be amended in case TACA Holding signs the partial purchase agreement assignment] affiliate, agent or third party to use the Airbus Software in any manner, including, but not limited to, any outsourcing, loan, commercialization of the Airbus Software or commercialization by merging the Airbus Software into another software or adapting the Airbus Software, without the prior written consent from the Licensor;

 

  b) do its utmost to maintain the Airbus Software and the relating documentation in good working condition, in order to ensure the correct operation thereof;

 

  c) use the Airbus Software in accordance with such documentation and the User Guide, and ensure that the personnel using the Airbus Software has received appropriate training;

 

  d) use the Airbus Software exclusively in the technical environment defined in the applicable User Guide, except as otherwise agreed in writing between the parties;

 

  e) except as permitted by any applicable law, not alter, reverse engineer, modify, correct, translate, disassemble, decompile or adapt the Airbus Software, nor integrate all or part of the Airbus Software in any manner whatsoever into another software product, nor create a software product derived from the Airbus Software save with the Licensor’s prior written approval.

 

  f) should the Licensor have elected to provide the source code to the Licensee, have the right to study and test the Airbus Software, under conditions to be expressly specified by the Licensor, but in no event shall the Licensee have the right to correct, modify or translate the Airbus Software;


EXHIBIT I

 

  g) except with respect to Software Products intended to be used on ground, use the Airbus Software exclusively on the referenced machines and the declared sites;

 

  h) not attempt to discover or re-write the Airbus Software source codes in any manner whatsoever;

 

  i) not delete any identification or declaration relative to the intellectual property rights, trademarks or any other information related to ownership or intellectual property rights in the Airbus Software;

 

  j) not pledge, sell, distribute, grant, sublicense, lease, lend, whether on a free-of-charge basis or against payment, or permit access on a time-sharing basis or any other utilization of the Airbus Software, whether in whole or in part, for the benefit of a third party.

With respect to Software Products intended for use on ground, the Licensor shall be entitled, subject to providing reasonable prior written notice thereof to the Licensee, to verify at the Licensee’s facilities whether the conditions specified in the present Software License are fulfilled.

 

7. TRAINING

In addition to the User Guide provided with the Airbus Software, training and other assistance may be provided upon the Licensee’s request, subject to the conditions set forth in the Agreement. Such assistance or training shall not operate to relieve the Licensee of its sole responsibility with respect to the use of the Airbus Software under this Software License.

 

8. PROPRIETARY RIGHTS – RIGHT TO CORRECT AND MODIFY

 

8.1 The Airbus Software is proprietary to the Licensor or the Licensor has acquired the intellectual property rights necessary to grant this Software License. The copyright and all other proprietary rights in the Airbus Software are and shall remain the property of the Licensor.

 

8.2 The Licensor reserves the right to correct and modify any Airbus Software at its sole discretion and the Licensee shall not undertake any correction or modification of the Airbus Software without the Licensor’s prior written approval. The Licensee shall install any Updates provided by the Licensor, at its own cost, in accordance with the time schedule notified with the provision of such Update(s). In the event of the Licensee failing to install any such Update(s), the Licensor shall be relieved of any warranty or liability of any kind with respect to the conformity or operation of the Airbus Software.

 

9. COPYRIGHT INDEMNITY

 

9.1 Indemnity

 

9.1.1

Subject to the provisions of Article 9.2.3, the Licensor shall defend and indemnify the Licensee from and against any damages, costs and expenses including legal costs (excluding damages, costs, expenses, loss of profits and other liabilities in respect of or resulting from loss of use of the Aircraft) resulting from any infringement, or claim of infringement, by any Airbus Software provided by the Licensor, of any copyright, provided that the Licensor’s obligation to indemnify


EXHIBIT I

 

  shall be limited to infringements in countries which, at the time of the infringement or alleged infringement, are members of The Berne Union and recognize computer software as a “work” under the Berne Convention.

 

9.1.2 In the event that the Licensee is prevented from using the Airbus Software for infringement of a copyright referred to in Article 9.1.1 (whether by a valid judgment of a court of competent jurisdiction or by a settlement arrived at between claimant, Licensor and Licensee), the Licensor shall at its expense either:

 

  (i) procure for the Licensee the right to use the same free of charge to the Licensee; or

 

  (ii) replace the infringing part of the Airbus Software as soon as possible with a non-infringing substitute complying in all other respects with the requirements of this Software License. In addition the Licensor will reimburse the Licensee for any charges costs and expenses incurred by the Licensee in connection with such infringement.

 

9.2 Administration of Copyright Indemnity Claims

 

9.2.1 If the Licensee receives a written claim or a suit is threatened or commenced against the Licensee for infringement of a copyright referred to in Article 9.1 as a result of the use of the Airbus Software, the Licensee shall:

 

  (i) forthwith promptly notify the Licensor following the Licensee receiving notice of the same, giving particulars thereof to the extent known by the Licensee.;

 

  (ii) upon the Licensor’s request, furnish to the Licensor all data, papers and records within the Licensee’s control or possession relating to such claim or suit;

 

  (iii) refrain from admitting any liability or making any payment or assuming any expenses, damages, costs or royalties or otherwise acting in a manner prejudicial to the defense or denial of such suit or claim provided always that nothing in this sub-Article (iii) shall prevent the Licensee from paying such sums as may be required in order to obtain the release of the Aircraft, or the allegedly infringing part, software or Other Items provided such payment, to the extend permitted by any applicable laws, is accompanied by a denial of liability and is made without prejudice;

 

  (iv) fully co-operate with, and render all such assistance to the Licensor as be may be pertinent to the defense or denial of the suit or claim provided the same is at no out-of-pocket cost to the Licensor; and

 

  (v) act in such way as to mitigate damages and/or reduce the amount of royalties that may be payable as well as to minimize costs and expenses but in each case only to the extent that doing so would not materially adversely affect the Licensee’s operation or result in any out-of-pocket cost to the Licensee not inde;nified by the Licensor.

 

9.2.2 The Licensor may, upon commitment to the Licensee in writing that it will indemnify the Licensee as provided herein, assume and conduct the defense or settlement of any suit or claim in the manner that, in the Licensor’s opinion, it deems proper. In the event that the Licensor shall be entitled, either in its own name or on behalf of the Licensee, to conduct such defense with the party or parties alleging infringement.


EXHIBIT I

 

9.2.3 The Licensor’s obligations and the Licensee’s remedies hereunder shall be conditional upon the strict and timely compliance by the Licensee with the terms of this Clause 9 and of Clauses 6(e), 6(h), 6(i) and 8.2 and are exclusive and in substitution for, and the Licensee hereby waives, releases and renounces all other obligations and liabilities of the Licensor and rights, claims and remedies of the Licensee against the Licensor, express or implied, arising by law or otherwise with respect to any infringement or claim of infringement of any copyright.

THE INDEMNITY PROVIDED IN THIS ARTICLE 9 AND THE OBLIGATIONS AND LIABILITIES OF THE LICENSOR UNDER THIS ARTICLE 9 ARE EXCLUSIVE AND IN SUBSTITUTION FOR, AND THE LICENSEE HEREBY WAIVES, RELEASES AND RENOUNCES ALL OTHER INDEMNITIES, WARRANTIES, OBLIGATIONS, GUARANTEES AND LIABILITIES ON THE PART OF THE LICENSOR AND RIGHTS, CLAIMS AND REMEDIES OF THE LICENSEE AGAINST THE LICENSOR, EXPRESS OR IMPLIED, ARISING BY LAW OR OTHERWISE (INCLUDING WITHOUT LIMITATION ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY ARISING FROM OR WITH RESPECT TO LOSS OF USE OR REVENUE OR CONSEQUENTIAL DAMAGES), WITH RESPECT TO ANY ACTUAL OR ALLEGED COPYRIGHT INFRINGEMENT OR THE LIKE BY ANY AIRFRAME, PART OR SOFTWARE INSTALLED THEREIN AT DELIVERY, OR THE USE OR SALE THEREOF, PROVIDED THAT, IN THE EVENT THAT ANY OF THE AFORESAID PROVISIONS SHOULD FOR ANY REASON BE HELD UNLAWFUL OR OTHERWISE INEFFECTIVE, THE REMAINDER OF THIS ARTICLE WILL REMAIN IN FULL FORCE AND EFFECT. THIS INDEMNITY AGAINST COPYRIGHT INFRINGEMENTS WILL NOT BE EXTENDED, ALTERED OR VARIED EXCEPT BY A WRITTEN INSTRUMENT SIGNED BY THE LICENSOR AND THE LICENSEE.

 

10. CONFIDENTIALITY

The Airbus Software, this Software License and their contents are designated as confidential. The Licensee undertakes not to disclose the Software License, the Airbus Software or any parts thereof to any third party without the prior written consent of the Licensor, except to the lessee in case of lease of an Aircraft or to the buyer in case of resale of an Aircraft, without prejudice to any provisions set forth in the Agreement. In so far as it is necessary to disclose aspects of the Airbus Software to the Licensee’s employees, such disclosure is permitted solely for the purpose for which the Airbus Software is supplied and only to those employees who need to know the same, save as permitted herein or where otherwise required pursuant to an enforceable court order or any governmental decision or regulatory provision imposed on the Licensee, provided that reasonable prior notice of the intended disclosure is provided to the Licensor.

The obligations of the Licensee to maintain confidentiality shall survive the termination of this Software License for a period of ten (10) years.

 

11. ACCEPTANCE

On Board Certified Software shall be deemed accepted as part of the Technical Acceptance Process set out in Clause 8 of the Agreement.

Software Products shall be deemed accepted upon delivery thereof unless otherwise specifically provided for in the Agreement.


EXHIBIT I

 

12. WARRANTY

 

12.1 On Board Certified Software

Any On Board Certified Software installed on board an Aircraft at Delivery thereof shall be deemed a Warranted Part for the purposes of Clause 12.1 of the Agreement and the relevant provisions of such Clause 12.1 shall be fully applicable to such On Board Certified Software.

 

12.2 Software Products

The Licensor warrants that Software Products are prepared in accordance with the state of art at the date of their conception and shall perform substantially in accordance with their functional and technical specifications current at the time of their delivery.

Should Software Products be found not to conform to their documentation, the Licensee shall notify the Licensor promptly, but no later than four (4) months after delivery of Software Products, in such case, the exclusive liability of the Licensor shall be to take reasonable, and proper steps to correct and/or replace Software Products at its own expense.

 

12.3 The Licensor shall be relieved of any obligations under Articles 12.1 and 12.2 in case of:

 

  (i) Airbus Software defects or non-conformities caused by alterations or modifications to the Airbus Software carried out without the prior approval of the Licensor;

 

  (ii) Airbus Software defects or non-conformities caused by negligence of the Licensee or other causes beyond the Licensor’s reasonable control;

 

  (iii) Failure of the Licensee to install any Update in accordance with Article 8 hereof;

 

  (iv) Airbus Software defects or non-conformities caused by errors in or modifications of or Updates to operating systems, databases or other software or hardware with which the Airbus Software interfaces, where such elements have not been provided by the Licensor.

The Licensee shall be responsible for the cost and expense of any correction services provided by the Licensor as a result of any of the foregoing exclusions. Such correction services shall be subject to the then applicable commercial conditions.

 

12.4 EXCLUSIVITY OF WARRANTIES

AS BETWEEN THE LICENSEE AND THE LICENSOR, THIS ARTICLE 12 (INCLUDING ITS SUBPROVISIONS) SETS FORTH THE EXCLUSIVE WARRANTIES, EXCLUSIVE LIABILITIES AND EXCLUSIVE OBLIGATIONS OF THE LICENSOR, AND THE EXCLUSIVE REMEDIES AVAILABLE TO THE LICENSEE, WHETHER UNDER THIS SOFTWARE LICENSE OR OTHERWISE, ARISING FROM ANY DEFECT OR NONCONFORMITY OR PROBLEM OF ANY KIND IN ANY AIRBUS SOFTWARE AND SERVICES DELIVERED BY THE LICENSOR UNDER THIS SOFTWARE LICENSE.

THE LICENSEE RECOGNIZES THAT THE RIGHTS, WARRANTIES AND REMEDIES IN THIS ARTICLE 12 ARE ADEQUATE AND SUFFICIENT TO PROTECT THE LICENSEE FROM ANY DEFECT OR NONCONFORMITY OR PROBLEM OF ANY KIND IN THE GOODS AND SERVICES SUPPLIED UNDER THIS SOFTWARE LICENSE. THE LICENSEE HEREBY WAIVES, RELEASES AND RENOUNCES ALL OTHER WARRANTIES, OBLIGATIONS, GUARANTEES AND LIABILITIES OF THE LICENSOR AND ALL OTHER RIGHTS, CLAIMS AND REMEDIES OF THE LICENSEE AGAINST THE LICENSOR, WHETHER EXPRESS OR IMPLIED BY CONTRACT, TORT, OR STATUTORY LAW OR OTHERWISE, WITH RESPECT TO ANY NONCONFORMITY OR DEFECT OR PROBLEM OF ANY KIND IN ANY AIRBUS SOFTWARE AND/OR SERVICES DELIVERED BY THE LICENSOR UNDER THIS SOFTWARE LICENSE, INCLUDING BUT NOT LIMITED TO:

 

  (8) ANY IMPLIED WARRANTY OF MERCHANTABILITY AND/OR FITNESS FOR ANY GENERAL OR PARTICULAR PURPOSE;


EXHIBIT I

 

  (9) ANY IMPLIED OR EXPRESS WARRANTY ARISING FROM COURSE OF PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE;

 

  (10) ANY RIGHT, CLAIM OR REMEDY FOR BREACH OF CONTRACT;

 

  (11) ANY RIGHT, CLAIM OR REMEDY FOR TORT, UNDER ANY THEORY OF LIABILITY, HOWEVER ALLEGED, INCLUDING, BUT NOT LIMITED TO, ACTIONS AND/OR CLAIMS FOR NEGLIGENCE, GROSS NEGLIGENCE, INTENTIONAL ACTS, WILLFUL DISREGARD, IMPLIED WARRANTY, PRODUCT LIABILITY, STRICT LIABILITY OR FAILURE TO WARN;

 

  (12) ANY RIGHT, CLAIM OR REMEDY ARISING UNDER THE UNIFORM COMMERCIAL CODE OR ANY OTHER STATE OR FEDERAL STATUTE;

 

  (13) ANY RIGHT, CLAIM OR REMEDY ARISING UNDER ANY REGULATIONS OR STANDARDS IMPOSED BY ANY INTERNATIONAL, NATIONAL, STATE OR LOCAL STATUTE OR AGENCY;

 

  (14) ANY RIGHT, CLAIM OR REMEDY TO RECOVER OR BE COMPENSATED FOR:

 

  (e) LOSS OF USE OR REPLACEMENT OF ANY AIRBUS SOFTWARE PROVIDED UNDER THIS SOFTWARE LICENSE;

 

  (f) LOSS OF, OR DAMAGE OF ANY KIND TO, ANY AIRBUS SOFTWARE PROVIDED UNDER THIS SOFTWARE LICENSE;

 

  (g) LOSS OF PROFITS AND/OR REVENUES;

 

  (h) ANY OTHER INCIDENTAL OR CONSEQUENTIAL DAMAGE.

THE WARRANTIES AND SERVICE LIFE POLICY PROVIDED BY THIS SOFTWARE LICENSE SHALL NOT BE EXTENDED, ALTERED OR VARIED EXCEPT BY A WRITTEN INSTRUMENT SIGNED BY THE LICENSOR AND THE LICENSEE. IN THE EVENT THAT ANY PROVISION OF THIS ARTICLE 12 SHOULD FOR ANY REASON BE HELD UNLAWFUL, OR OTHERWISE UNENFORCEABLE, THE REMAINDER OF THIS ARTICLE 12 SHALL REMAIN IN FULL FORCE AND EFFECT.

THE ABOVE LIMITATION WILL NOT BE INTERPRETED TO IMPAIR THE EXPRESS CONTRACTUAL WARRANTIES OR GUARANTEES GRANTED TO THE LICENSEE ELSEWHERE UNDER THIS SOFTWARE LICENSE OR TO RELIEVE THE LICENSOR OF ANY OF ITS EXPRESS CONTRACTUAL OBLIGATIONS UNDER THIS SOFTWARE LICENSE. THIS ARTICLE 12.4 SHALL NOT BE INTERPRETED TO IMPAIR ANY LICENSOR AFFILIATE OR ANY SUPPLIER.

FOR THE PURPOSE OF THIS ARTICLE 12.4, “LICENSOR” SHALL BE UNDERSTOOD TO INCLUDE THE LICENSOR AND ITS AFFILIATES EXCEPT FOR ANY AFFILIATE THAT IS A SUPPLIER AND IS PROVIDING A SEPARATE WARRANTY TO THE LICENSEE.


EXHIBIT I

 

13. LIABILITY AND INDEMNITY

The Airbus Software is supplied under the express condition that the Licensor shall have no liability in contract or in tort arising from or in connection with the use and/or possession by the Licensee of the Airbus Software and that the Licensee shall indemnify and hold the Licensor harmless from and against any liabilities and claims from third parties arising from such use and/or possession. Nothing in this Article 13 shall be construed to limit or negate the Licensor’s liability under Article 9.

 

14. EXCUSABLE DELAYS

 

14.1 The Licensor shall not be responsible nor be deemed to be in default on account of delays in delivery of any Airbus Software or Update due to causes reasonably beyond the Licensor’s or its subcontractors’ control including but not limited to: natural disasters, fires, floods, explosions or earthquakes, epidemics or quarantine restrictions, serious accidents, total or constructive total loss, any act of the government of the country of the Licensee or the governments of the countries of Licensor or its subcontractors, war, insurrections or riots, failure of transportation, communications or services, strikes or labor troubles causing cessation, slow down or interruption of services, inability after due and timely diligence to procure materials, accessories, equipment or parts, failure of a subcontractor or supplier to furnish materials, accessories, equipment or parts due to causes reasonably beyond such subcontractor’s or supplier’s control or failure of the Licensee to comply with its obligations arising out of the present Software License.

 

14.2 The Licensor shall, as soon as practicable after becoming aware of any delay falling within the provisions of this Article, notify the Licensee of such delay and of the probable extent thereof and shall, subject to the conditions as hereinafter provided and as soon as practicable after the removal of the cause or causes for delay, resume delivery of the delayed Airbus Software or Update.

 

15. TERMINATION

In the event of breach of an obligation set forth in this Software License by either the Licensor or the Licensee or failure to comply with the commercial conditions applicable to Airbus Software as set forth in the Agreement, which is not cured within 30 days from the date of receipt of a written notice notifying the breach, the non-breaching party shall be entitled to terminate this Software License.

In the event of termination for any cause, the Licensee shall no longer have any right to use the Airbus Software and shall return to the Licensor all copies of the Airbus Software and any relating documentation together with an affidavit to that effect. In case of breach by the Licensee, the Licensor shall be entitled to retain any amount paid for the ongoing year.

 

16. GENERAL PROVISIONS

 

16.1 This Software License is an Exhibit to the Agreement and integrally forms part thereof. As a result, any non-conflicting terms of the Agreement are deemed incorporated herein to the extent they are relevant in the context of this Software License.

 

16.2 In the event of any inconsistency or discrepancy between any term of this Software License and any term of the Agreement (including any other Exhibit or Appendices thereto), the terms of this Software License shall take precedence over the conflicting terms of the Agreement to the extent necessary to resolve such inconsistency or discrepancy.


EXHIBIT I

 

16.3 This Software License is subject to and construed and the performance thereof shall be determined in accordance with the laws in effect in the State of New York without regard to conflict of laws principles that could result in the application of the laws of any other jurisdiction. All disputes arising in connection with this Software License shall be submitted to the competent courts of New York and the parties hereby agree to submit to the jurisdiction of those courts.


EXHIBIT I

PART 2

 

 

LOGO

GENERAL TERMS AND CONDITIONS

OF

ACCESS TO

AND

USE OF

AIRBUSWORLD

This document and all information contained herein is the sole property of AIRBUS S.A.S. No intellectual property rights are granted by the delivery of this document or the disclosure of its content. This document shall not be reproduced or disclosed to a third party without the express written consent of AIRBUS S.A.S. This document and its content shall not be used for any purpose other than that for which it is supplied.


EXHIBIT I

Preamble

For the sole purposes of the General Terms and Conditions of Access to and Use of AirbusWorld (the “ GTC ”), the Buyer and the Seller hereby agree that in such GTC:

The Seller ” shall be referred to as AIRBUS S.A.S.,

The Buyer ” shall be referred to as “the Company”,

The Agreement ” shall have the meaning assigned thereto in the GTC.

For the sake of clarification, it is understood that the term “Agreement” as defined in the Clause 00B shall be referred to within the GTC with the meaning assigned thereto under the definition of “Contracts”

GENERAL TERMS AND CONDITIONS OF ACCESS TO AND USE OF

AIRBUSWORLD

ARTICLE 1: DEFINITIONS

 

Administrator(s):    Company’s employee(s) appointed by the Company, entitled to represent the Company for and in the management of the Agreement and responsible for the compliance by the Designated Users and the Company’s employees with the Agreement.
Agreement    The agreement between the Parties shall be understood as including, in the following order of precedence, (i) Specific Terms and Conditions applicable to specific Services if any and to that extent only, (ii) these General Terms and Conditions, and any other relating functional or technical document agreed between the Parties, it being understood that, in the event of any inconsistency the former ranking document shall prevail over the following one(s) to the extent of such inconsistency.
AIRBUS S.A.S.    AIRBUS S.A.S, a French Société par Actions Simplifiée , with a share capital of Euros 2 704 375, registered with the Trade and Companies Registry of Toulouse (France) under n° 383 474 814 and whose registered office is located 1 Rond Point Maurice Bellonte, 31700 Blagnac, France
AIRBUS    Collectively AIRBUS S.A.S and the legal entities controlled by AIRBUS S.A.S, the term “control” meaning the direct or indirect ownership of at least fifty percent (50%) of the voting stocks in such legal entities.
AIRBUS Data    Any and all data, information and material made accessible and available by AIRBUS to the Company through AW.


EXHIBIT I

 

 

AW    AirbusWorld, access to which may be given by AIRBUS S.A.S. to Designated Users of the Company
Company    The company entering into these General Terms and Conditions as identified on the execution page of this document.
Company Data    Any and all data, information and other material made accessible and available by the Company to AIRBUS through AW.

Contracts

   Any and all present and future contracts, agreements or letters, the terms of which imply a commitment of the Company and/or AIRBUS other than related to the present Agreement, namely but without limitation: confidentiality agreements, exchanges in the course of a call for tender, contracts for the supply of services, procurement/sale agreements, aircraft purchase agreements, co-operation agreements, research contracts, maintenance contracts.
Data    Collectively the AIRBUS Data and the Company Data.
Databases    Any and all collections of independent works, data or other materials arranged in a systematic or methodical way and individually accessible by electronic or other means by the Company through AW.
Designated Users    Employees of the Company authorized by a Company Administrator to access and use AW.
Identification Codes    Confidential and personal identification codes attached to each Designated User and which formally identify each Designated User accessing and using AW.
Party or Parties    Individually or collectively AIRBUS S.A.S. and/or the Company.
Services    Any and all on line services made available to the Company through AW under the terms and conditions of the Agreement.
Specific Terms and Conditions    Terms and conditions under which AIRBUS S.A.S. grants access to specific Services to the Company.
System    Equipment (hardware, software, connections, etc) set up by AIRBUS S.A.S. and enabling AIRBUS S.A.S. to provide the Services on AW through the internet.
User Documentation    Documentation intended for the Administrators and Designated Users of AW describing the technical means enabling connection to the System and access to AW and providing information related to the use of AW and/or the Services. User Documentation may be modified from time to time by AIRBUS S.A.S and is available on AW.


EXHIBIT I

 

ARTICLE 2: PURPOSE / CONTRACTUAL DOCUMENTS

 

2.1 The purpose of these General Terms and Conditions is to define the terms and conditions under which AIRBUS S.A.S. authorizes the Company to access and use AW and to benefit from some of the Services offered through the latter.

 

2.2 Access to and use of certain Services may be subject to acceptance by the Company of Specific Terms and Conditions.

 

2.3 AW may be used by the Company for the purpose of exchanging information with AIRBUS and specifically for the performance of the Contracts. The Agreement shall not be construed as interfering with the terms and conditions of any such Contracts. The terms and conditions of the Contracts shall in any case prevail over the terms of the Agreement.

 

2.4 The Company and AIRBUS shall not exchange Data through AW that are not necessary for professional or business purposes as mentioned in Article 2.3. Activities directly or indirectly related to spamming are prohibited on AW.

 

2.5 Should there be a need for the Company to use AW in its quality of subcontractor of a supplier, a customer, or a co-contractor of AIRBUS (hereafter individually and collectively an “ AIRBUS Co-contractor ”), then the Company hereby guarantees that it is duly authorised by such AIRBUS Co-contractor to request from AIRBUS S.A.S. an access to AW and the use of the Services. The Agreement between AIRBUS S.A.S. and the Company is entered into for the sole purpose of the use of AW and shall in no event be construed as a change to the contracts entered into by AIRBUS and the AIRBUS Co-contractor and/or establish a direct contractual relationship between AIRBUS and the Company other than the Agreement.

ARTICLE 3: EXTENT OF ACCESS TO AND USE OF AW

 

3.1 AIRBUS S.A.S. grants to the Company, a worldwide, personal, non-exclusive and non-transferable right to access and use AW and the Services, pursuant to the terms and conditions of and for the duration of the Agreement. The Company shall not fully or partially assign, sublicense nor subcontract any of its rights and/or obligations under the Agreement, without the express prior written authorization of AIRBUS S.A.S.

 

3.2 No right other than that provided in Article 3.1 above is granted by AIRBUS S.A.S. to the Company under these General Terms and Conditions, and the Company shall not, directly or indirectly, without limitation, extract, reproduce, represent, adapt, modify and/or translate, all or part of AW, the System and/or the Databases, nor create any derivative work therefrom, nor use any and/or all of the aforesaid elements for any purposes other than those agreed upon between the Parties.

 

3.3 AW, the System, the Databases and the AIRBUS Data shall remain the sole ownership of AIRBUS and/or its licensors.


EXHIBIT I

 

ARTICLE 4: ADMINISTRATORS AND DESIGNATED USERS

 

4.1 AIRBUS S.A.S. shall propose on-line standard training for the Administrator on AW at AIRBUS S.A.S’ expense and AIRBUS S.A.S. shall make available appropriate documentation to the Designated Users.

 

4.2 The Company shall be solely responsible for the enforcement of the Agreement by its employees, including the Administrator(s) and the Designated Users. The Company shall ensure, at its own expense, that the Administrator(s) and the Designated Users are qualified and properly trained for the purpose of the performance of the Agreement.

 

4.3 The Company shall designate one Administrator. AIRBUS S.A.S. may, at its sole discretion and upon the Company’s request, authorise in writing the Company to designate additional Administrator(s), provided the Company defines non-overlapping areas and/or timeframes for each of the Administrators, e.g. for different branches or sites of the Company. It is understood that the Company shall be solely responsible in the event of inconsistent instructions received from the Administrators.

 

4.4 The Administrator(s) shall have the capacity to represent the Company with respect to the execution and performance of any contractual document related to the access, use and operation of AW.

 

4.5 The Administrator(s) shall appoint Designated Users among the employees of the Company. Each Designated User shall be provided with a personal and confidential Identification Code, at AIRBUS S.A.S.’ discretion, either by the Administrator, by AIRBUS S.A.S. or by an independent, reputable and reliable organism.

 

4.6 Each and every access, use and operation of AW with an Identification Code shall be deemed to have been made by the corresponding Designated User.

 

4.7 The Company shall ensure that:

 

  (I) each Identification Code is used by the corresponding Designated User only and is personal to such Designated User;

 

  (II) each personal Identification Code shall not be communicated to any person other than the corresponding Designated User;

 

  (III) each Designated User accesses and uses AW in accordance with the specific rights he/she has been granted under the Agreement;

 

  (IV) no third party can access the Identification Codes or AW.


EXHIBIT I

 

 

4.8 Should the Company become aware of any potential risk that Identification Code(s) could be or could have been disclosed to anyone other than the corresponding Designated User, then the Administrator(s) shall, without any delay, cancel the access to AW in respect of such Identification Code(s) and notify AIRBUS S.A.S. of such potential risk and of such cancellation of the Identification Code(s), notwithstanding AIRBUS S.A.S.’ rights to cancel such access.

 

4.9 The Company shall inform AIRBUS S.A.S., without any delay, of (i) any modification in the professional situation of the Administrator(s) and/or Designated Users, including without limitation leave or resignation from the Company, (ii) the termination/expiration of any or all of the Contracts (iii) the termination/expiration of any contract of the Company with an AIRBUS Co-contractor as referred to in Article 2.5 above. In any of such cases, the Company shall without delay cancel the access to AW for the corresponding Designated Users, notwithstanding AIRBUS S.A.S.’ rights to cancel such access.

 

4.10 Should any one of Designated Users and/or Administrators not comply with any provision of the Agreement and/or any applicable laws and regulations, or should AIRBUS S.A.S. fear that his/her access may possibly result in a breach of the Agreement, including but not limited to confidentiality and/or security provisions and/or result in an illegal situation, AIRBUS S.A.S. shall be entitled, at any time, without prejudice to its other rights and without prior notice, to restrict or suspend access to all or part of AW by any or all such Designated User(s) and/or Administrator(s).

ARTICLE 5: ACCESS REQUIREMENTS

 

5.1 The Company shall, at its own costs and under its sole responsibility and liability, procure, install and maintain the information technology equipment necessary to access the System and AW. The Company shall use all care and means available in the state of the art necessary to prevent intrusion of any third party and/or malicious codes into the System and/or AW.

 

5.2 The Company shall be responsible for obtaining and maintaining any relevant authorisations and/or accomplishing any and all relevant formalities necessary to have access to and benefit from AW as well as for performing its own obligations under the Agreement and/or any applicable laws and regulations.

 

5.3 AIRBUS S.A.S. shall be entitled, without limitation for security purposes, to at any time modify or have the Company modify, the Identification Codes. Any modification of such Identification Codes shall be notified by the modifying Party to the other Party.


EXHIBIT I

 

ARTICLE 6: CHARACTERISTICS AND AVAILABILITY OF AW

 

6.1 AIRBUS S.A.S. shall make its reasonable efforts to provide the necessary means in order to make AW accessible seven (7) days a week and twenty-four (24) hours a day. Should the access to or use of AW be disturbed, AIRBUS S.A.S. shall take all reasonable and proper steps to restore the access to or use of AW.

 

6.2 In this respect and without limitation, AIRBUS S.A.S. shall be entitled, at any time and without notification, to suspend, temporarily or permanently, access to all or part of AW:

 

  (i) in order to proceed with any maintenance of the System and/or updating of AW, the Databases and/or the Data;

 

  (ii) for security reasons;

 

  (iii) in order to comply with any regulatory constraints and/or court injunction or decision.

 

6.3 Should AIRBUS S.A.S. foresee that the unavailability of AW, in whole or in part, will exceed twenty-four (24) consecutive hours, AIRBUS S.A.S. shall make reasonable efforts to inform as promptly as possible the Company, by whatever means, of such unavailability.

 

6.4 Without prejudice to any other provision of the Agreement, should the Company be unable for any reason to access AW for more than twenty four (24) consecutive hours and/or for a period incompatible with the performance schedule of a Contract requiring the use of AW, the Company shall inform AIRBUS S.A.S. and the Parties shall determine together alternative solutions, related but not limited to, the exchange of data.

ARTICLE 7: CONFIDENTIALITY

 

7.1 Unless otherwise agreed upon in the Agreement and/or the Contracts, and unless the same information may be accessed in the freely accessible public area of AW, all information made available by the Company and AIRBUS to each other through AW shall be deemed confidential information and shall not be disclosed by the receiving party to any third party and shall not be used for any purpose other than those agreed upon by the Company and AIRBUS, even for the receiving party’s internal needs.

 

7.2 The Company hereby authorises AIRBUS to disclose such information within AIRBUS, provided the AIRBUS legal entities exchanging such information have entered with each other into a confidentiality agreement.

ARTICLE 8: EXCHANGE OF DATA

 

8.1 As part of the Services, AW enables the Company and AIRBUS to exchange or have access to the Data, for the purpose of collaboration between the Company and AIRBUS and/or performance of the Contracts.

 

8.2 The Company shall have the right to access to and use the AIRBUS Data, and AIRBUS shall have the right to access to and use the Company Data, solely to the extent defined in the Agreement and/or the Contracts.


EXHIBIT I

 

 

8.3 Except as otherwise agreed in the Agreement and/or the Contracts, the Company and AIRBUS may, during the term of the Agreement, for internal use only, adapt, translate, make hard copies and/or numeric reproductions of the Data received from the disclosing party, for the sole purpose of the Agreement and of, as the case may be, the performance of the Contract(s) or the collaboration of the Company and AIRBUS. The Data received from the disclosing party, their hard copies and numeric reproductions, may be processed by and circulated worldwide only to the employees of the receiving party having a need to know the same for the purpose of the Agreement and of, as the case may be, the performance of the Contract(s) or the collaboration of the Company and AIRBUS.

 

8.4 The Company and AIRBUS shall ensure that all proprietary rights and confidentiality mentions stated on any original document are replicated on any reproduction made thereof. Any translation and/or adaptation shall expressly state that it is a derivative from the original document. The Company and AIRBUS shall refrain from removing and/or altering any of these mentions.

 

8.5 The Company shall take care and use all means available in the state of the art at any time of the Agreement in order to prevent the Company Data from creating permanent or temporary disturbance of the operation and/or the use of the System, AW and/or the Database.

 

8.6 The Company shall immediately notify AIRBUS S.A.S. of the occurrence or possible occurrence of any of the events referred to in Article 8.5 above. Should AIRBUS S.A.S. be aware of any of such aforesaid events, it shall be entitled, without notice and without prejudice to its other rights, to delete the implicated Company Data from the System.

 

8.7 Taking into account the electronic nature of the Data exchanged through AW, the Company and AIRBUS agree to give to such electronic exchanges the same probatory value as exchanges made by registered mail.

 

8.8 Should any creation or development be made by the Company when accessing and using AW and/or exchanging Data with AIRBUS, then the rights of each party on such creation or development shall be determined pursuant to the corresponding Contract or Specific Terms and Conditions, if any.

ARTICLE 9: PRIVACY

 

9.1 AIRBUS S.A.S. and, when applicable, the Company shall comply at all times with their obligations under any local law towards the relevant authority(ies) with regard to data protection principles, including any personal data files or personal data automated processing systems and shall inform each other of any information system evolution which could affect such obligations.

 

9.2

The Company is hereby notified that AIRBUS may request personal data directly from the Administrator(s) and the Designated Users for accessing and using AW. The Company shall inform


EXHIBIT I

 

  the Administrator(s) and the Designated Users (i) in accordance with applicable laws, and specifically with article 27 of the French law n°78-17 of January 6, 1978 when data are collected and/or processed in France, (ii) of the provisions of this Article 9 and their related rights.

 

9.3 The Company undertakes, according to article 27 of the French law n°78-17 of January 6, 1978, to inform the Administrator(s) and the Designated Users that:

 

  (i) failure to provide such data may prevent access to AW;

 

  (ii) such personal data shall be used by AIRBUS for the sole purpose of (a) security, operation and maintenance of AW and (b) the Services and/or communication to and information of the Administrator(s) and the Designated Users in respect of AW and the Services;

 

  (iii) such personal data may be transferred to AIRBUS service providers or other AIRBUS entities throughout the world; and

 

  (iv) they benefit from a right of access to and rectification of, their personal data archived by AIRBUS.

 

9.4 AW uses “cookies” (small data files transferred to computer hard drives for the sole purpose of recording computer connections to AW such as date, time, consulted pages, etc.). AIRBUS S.A.S. may access and record this information during Designated Users’ visits. The use of cookies is a prerequisite to the operation of AW and the Company recognizes that any Designated User exercising his/her right to disable cookies shall not have access to AW.

 

9.5 Personal data may be accessed by the Company, Administrators and/or Designated Users and, as the case may be, rectified upon written request to AIRBUS S.A.S, 1 Rond-Point Maurice Bellonte, 31707 Blagnac Cedex, France.

 

9.6 As the performance of the Agreement may imply cross-border transfer of personal data protected under New York law, the Company hereby declares that it is aware of (i) the Council of Europe Convention for the Protection of Individuals with regards to Automatic Processing of Personal Data, (ii) the European Directive n° 95/46/EC on the protection of individuals with regard to the processing of personal data and on the free movement of such data and the Company shall ensure that it remains aware of any further modification of the applicable laws in force and undertakes to respect the same.


EXHIBIT I

 

ARTICLE 10: WARRANTY / LIABILITY

 

10.1 To the extent permitted by New York law, the Company acknowledges that AW, including any and all of its supporting elements and contents, i.e. without limitation the System, the Databases and, unless otherwise stated in the Contracts, AIRBUS Data, are provided “as is” and “as available”.

 

10.2 To the extent permitted by New York law, AIRBUS S.A.S. neither warrants nor represents, without limitation, that (i) AW, the System, the Services and/or the User Documentation will meet the Company’s requirements and expectations, nor will be uninterrupted, timely, secure or error-free, (ii) the results that may be displayed through AW, the Data, Databases and/or any material obtained through AW will be accurate, reliable or error free.

 

10.3 Access to and use of AW are therefore performed at the Company’s sole risk and the Company shall be solely responsible and AIRBUS S.A.S. shall not be liable for damages, on whatever grounds, including third parties’ rights’ infringement, arising out or in connection with access, use, computer intrusion, security failure, or unavailability of the Services, AW and/or the materials contained therein or accessed there through. In no event, shall AIRBUS, their successive successors and assignees be liable for any damage, whether direct or indirect, such as but without limitation loss of data or of programs, loss of use, financial loss, any deterioration or infection by malicious codes of the Company’s information technology equipment (including but not limited to software, hardware, connections and/or any system or network).

 

10.4 Notwithstanding the preceding provisions, AIRBUS S.A.S. agrees to support the defence of the Company against any claim alleging that the normal use by the Company of the System infringes the intellectual property rights of any third party by answering the Company’s reasonable related information requests, provided the Company notifies AIRBUS S.A.S. in writing of any such claim within fifteen (15) days from the date it has knowledge of the latter.

 

10.5 Should any provision of the Agreement become prohibited or unlawful or unenforceable under any applicable law actually applied by any court of competent jurisdiction, such provision shall, to the extent required by such law, be severed from the Agreement and rendered ineffective insofar as possible without modifying the remaining provisions. Where, however, the provisions of any such applicable law may be waived, the Parties hereby agree that they shall waive such provisions to the fullest extent permitted by such law, with the result that the provisions of the Agreement shall be valid, binding and enforceable. The Parties agree to replace, as far as practicable, any provision which is prohibited, unlawful or unenforceable with another provision having substantially the same effect (in its legal and commercial content) as the replaced provision, but which is not prohibited, unlawful or unenforceable. The invalidity in whole or in part of any provision(s) of the Agreement shall not void or affect the validity of any other provision.

ARTICLE 11: DURATION / TERMINATION

 

11.1 These General Terms and Conditions shall enter into force on the date of their execution by both Parties. The entry into force or termination of these General Terms and Conditions shall not interfere in any way with the term of any Contracts in force.

The duration of any other contractual document entered into by the Parties as part of the Agreement shall be provided in the corresponding document. Should these General Terms and Conditions be terminated, all such documents shall, automatically and notwithstanding any other provision in the Agreement, be terminated concurrently therewith.


EXHIBIT I

 

In the event of the Company being in breach any of its obligations under the Agreement, AIRBUS S.A.S. shall be entitled, without prejudice to any of its other rights and without prior notice, to immediately and automatically suspend access to AW or terminate all or part of the Agreement.

 

11.2 Upon termination, for whatever reason, of all or part of the Agreement, the Company shall immediately, at AIRBUS S.A.S.’ discretion, (i) cease to access to AW and/or the corresponding Service(s) and (ii) return or destroy, except in the event that a dispute arises or is raised between the Company and AIRBUS under the Agreement or the Contracts, the Identification Codes as well as all AIRBUS Data the Company may have held in the frame of the terminated part of the Agreement.

 

11.3 Should a force majeure event occur and continue for a period of more than one (1) month, then either Party may terminate the Agreement upon written notice to the other Party.

ARTICLE 12: MISCELLANEOUS

Airbus S.A.S. is entitled to assign all or part of its rights and/or obligations under the Agreement to any legal entity controlled by AIRBUS S.A.S.

Airbus S.A.S. is entitled to subcontract any of its obligations under the Agreement.

The Agreement shall not be modified except through a written amendment signed by the duly authorized representatives of both Parties.

ARTICLE 13: LAW – JURISDICTION

THE AGREEMENT IS GOVERNED BY NEW YORK LAWS AND THE EXCLUSIVE JURISDICTION FOR ANY DISPUTE ARISING OUT OR IN CONNECTION WITH ITS EXISTENCE, VALIDITY, INTERPRETATION OR EXECUTION SHALL BE GIVEN TO THE COMMERCIAL COURTS AND TRIBUNALS OF NEW YORK, WITH AIRBUS RESERVING THE RIGHT TO PETITION ANY OTHER COMPETENT COURT.


EXHIBIT I

 

PART 3

END-USER SUBLICENSE AGREEMENT FOR SUPPLIER SOFTWARE

 

1. DEFINITIONS

For the purposes of this end-user sublicense agreement for Supplier Software (the “ Software Sublicense ”) the following definitions shall apply:

Agreement ” means the Purchase Agreement of even date herewith covering the purchase and sale of the Aircraft subject thereof.

Aircraft ” means, individually or collectively, the Aircraft subject of the Agreement.

Composite Work ” means the package composed of various elements, such as database(s), software or data, and which necessitates the use of the Supplier Software.

Permitted Purpose ” means use of the Supplier Software by the Sublicensee for its own internal business needs, solely in conjunction with the Aircraft and in particular pertaining to (i) operation of the Aircraft; (ii) on ground operational support of the Aircraft; or (iii) related authorized customization of software.

Sublicensee ” means the Buyer under the Agreement.

Sublicensor ” means the Seller under the Agreement as authorized by the Supplier to sublicense the Supplier Software to the operators of Airbus aircraft.

Supplier ” means each of the Sublicensor’s suppliers owning the intellectual property rights in the corresponding Supplier Software (or holding the right to authorize the Sublicensor to sublicense such Supplier Software) and having granted to the Sublicensor the right to sublicense such Supplier Software.

Supplier Product Support Agreement ” shall have the meaning set forth in Clause 12.3.1.3 of the Agreement.

Supplier Software ” means each of the Supplier’s proprietary products including Composite Work, configurations, processes, rules (together with any related documentation) as well as any modifications, enhancements or extensions thereto, as may be provided by the Supplier or the Sublicensor from time to time and the supply of which to the Sublicensee is governed by a Supplier Product Support Agreement. The Supplier Software shall be supplied in machine-readable code form only, for use in connection with the Aircraft or operations related to the Aircraft. For the avoidance of doubt, this Software Sublicense does not apply to (i) any software embedded in any component, furnishing or equipment installed on the Aircraft and itself bearing a partnumber (ii) third party software not provided under a Supplier Product Support Agreement, including but not limited to any standard, “off the shelf” software (Components Off The Shelf/COTS) and (iii) open source software contained in the Supplier Software, if any, and it is hereby acknowledged and agreed by both parties hereto that such open source software is independently distributed on an “as is” basis under the respective license terms therefor, and that the Sublicensor disclaims any liability in relation to such open source software.


EXHIBIT I

 

Update(s) ” means any update(s) or replacement(s) to the Supplier Software licensed hereunder, which the Sublicensor or the Supplier, at their discretion, make generally available to the Sublicensee.

User Guide ” means the documentation, which may be in electronic format, designed to assist the Sublicensee in using the Supplier Software.

Capitalized terms used herein and not otherwise defined in this Software Sublicense shall have the meaning assigned thereto in the Agreement.

 

2. LICENSE

In consideration of the purchase by the Sublicensee of the Aircraft, the Sublicensee is hereby granted a free of charge, worldwide and non-exclusive right to use the Supplier Software, for a Permitted Purpose. Each Supplier shall remain the owner of all intellectual property rights in the Supplier Software. There shall be one Software Sublicense granted in respect of each Aircraft purchased by the Sublicensee.

The Sublicensee hereby acknowledges that it is aware that certain Supplier Software subject of this Software Sublicense may incorporate some third party software or open source software components. The Sublicensee hereby agrees to be bound by the licensing terms and conditions applicable to such third party software and made available by the Sublicensor through AirbusWorld.

 

3. ASSIGNMENT AND DELEGATION

 

3.1 Assignment

The Sublicensee may, at any time, assign or otherwise transfer all or part of its rights under this Software Sublicense only as part of, and to the extent of, a sale, transfer or lease of any or all of the Aircraft to which the Supplier Software are related provided that the Sublicensee causes the assignee to agree to the terms of this Software Sublicense.

The Sublicensee shall assign a Software Sublicense for all Supplier Software installed on the sold, transferred or leased Aircraft and shall retain all other Software Sublicenses attached to any Aircraft that the Sublicensee continues to operate.

In the event of any such assignment or transfer, the Sublicensee shall transfer the copies of the Supplier Software attached to the sold, transferred or leased Aircraft (including all component parts, media, any upgrades or backup copies, this Software Sublicense, and if applicable, certificate(s) of authenticity), except as otherwise instructed by the Sublicensor.


EXHIBIT I

 

 

3.2 Delegation

Without prejudice to Article 10 hereof, in the event of the Sublicensee intending to designate a maintenance and repair organization or a third party to perform the maintenance of the Aircraft or to perform data processing on its behalf (each a “ Third Party ”), the Sublicensee shall notify the Sublicensor of such intention prior to any disclosure of this Software Sublicense and/or the Supplier Software to such Third Party.

The Sublicensee hereby undertakes to cause such Third Party to enter into appropriate licensing conditions with the corresponding Supplier and to commit to use the Supplier Software solely for the purpose of maintaining the Sublicensee’s Aircraft and/or processing the Sublicensee’s data.

 

4. COPIES

Use of the Supplier Software is limited to the number of copies delivered by the Sublicensor to the Sublicensee and to the medium on which the Supplier Software is delivered. No reproduction shall be made without the written consent of the Sublicensor, except that the Sublicensee is authorized to copy the Supplier Software for back-up and archiving purposes. Any copy the Sublicensor authorizes the Sublicensee to make shall be performed under the sole responsibility of the Sublicensee. The Sublicensee agrees to reproduce the copyright and other notices as they appear on or within the original media on any copies that the Sublicensee makes of the Supplier Software.

 

5. TERM

Subject to the Sublicensee having complied with the terms of this Software Sublicense, the rights under this Software Sublicense shall be granted from the date of Delivery of each Aircraft until the earlier of (i) the Aircraft ceasing to be operated, in which case the license rights pertaining to such Aircraft shall be deemed terminated for such Aircraft on the date of the last operation thereof by the Sublicensee or any of its assignees, or (ii) the Agreement, this Software Sublicense or any part thereof, being terminated for any reason whatsoever, in which case the Sublicensee shall immediately cease to use the affected Supplier Software upon the effective termination date.

 

6. CONDITIONS OF USE

The Supplier Software shall only be used for the Permitted Purpose.

The Sublicensee shall be solely responsible for, and agrees to be careful in the use of, all outputs and results derived from the operation of the Supplier Software and all consequences, direct and indirect, relating to the use of such output and results. The Sublicensee agrees to use such outputs and results only once it has verified such outputs and results and has checked the relevance and correctness thereof, in the light of its particular needs.

The Sublicensee expressly acknowledges that it will take all appropriate precautions for the use of the Supplier Software, including without limitation measures required for its compliance with the User Guide or any information or directive regarding the use of the Supplier Software.


EXHIBIT I

 

Under the present Software Sublicense, the Sublicensee shall:

 

  a) not permit any parent, subsidiary, affiliate, agent or other third party to use the Supplier Software in any manner, including, but not limited to, any outsourcing, loan, commercialization of the Supplier Software or commercialization by merging the Supplier Software into another software or adapting the Supplier Software, without the prior written consent from the Supplier;

 

  b) do its utmost to maintain the Supplier Software and the relating documentation in good working condition, in order to ensure the correct operation thereof;

 

  c) use the Supplier Software in accordance with such documentation and the User Guide, and ensure that the personnel using the Supplier Software has received appropriate training;

 

  d) use the Supplier Software exclusively in the technical environment defined in the applicable User Guide, except as otherwise agreed in writing between the parties;

 

  e) except as permitted by New Yorklaw, not alter, reverse engineer, modify, correct, translate, disassemble, decompile or adapt the Supplier Software, nor integrate all or part of the Supplier Software in any manner whatsoever into another software product; nor create a software product derived from the Supplier Software save with the Supplier’s prior written approval;

 

  f) should the Sublicensor or the Supplier have elected to provide the source code to the Sublicensee, have the right to study and test the Supplier Software, under conditions to be expressly specified by the Sublicensor, but in no event shall the Sublicensee have the right to correct, modify or translate the Supplier Software;

 

  g) not attempt to discover or re-write the Supplier Software source codes in any manner whatsoever;

 

  h) not delete any identification or declaration relative to the intellectual property rights, trademarks or any other information related to ownership or intellectual property rights in the Supplier Software;

 

  i) not pledge, sell, distribute, grant, sublicense, lease, lend, whether on a free-of-charge basis or against payment, or permit access on a time-sharing basis or any other utilization of the Supplier Software, whether in whole or in part, for the benefit of a third party;

 

7. TRAINING

In addition to the User Guide provided with the Supplier Software, training and other assistance shall be provided upon the Sublicensee’s request, subject to conditions set forth in the Agreement. Such assistance or training shall not operate to relieve the Sublicensee of its sole responsibility with respect to the use of the Supplier Software under this Software Sublicense.


EXHIBIT I

 

 

8. PROPRIETARY RIGHTS – RIGHT TO CORRECT AND MODIFY

 

8.1 The Supplier Software is proprietary to the Supplier and the Sublicensor represents and warrants that it has been granted the intellectual property rights necessary to grant this Software Sublicense. The copyright and all other proprietary rights in the Supplier Software are and shall remain the property of the Supplier.

 

8.2 The Supplier may correct or modify its Supplier Software from time to time at its sole discretion and the Sublicensee shall not undertake any correction or modification of the Supplier Software without the Sublicensor’s prior written approval. The Sublicensee shall install any Updates provided either by the Supplier or the Sublicensor in accordance with the time schedule notified with the provision of such Update(s). In the event of the Sublicensee failing to install any such Update(s), both the Sublicensor and the Supplier shall be relieved of any warranty or liability of any kind with respect to the conformity or operation of the Supplier Software.

 

9. COPYRIGHT INDEMNITY

The Sublicensee hereby accepts the transfer to its benefit of all transferable and enforceable copyright indemnity conditions related to the corresponding Supplier Software and contained in the applicable Supplier Product Support Agreement.

 

10. CONFIDENTIALITY

The Supplier Software, this Software Sub-license and their contents are designated as confidential. The Sublicensee undertakes not to disclose the Software Sub-license, the Supplier Software or any parts thereof to any third party without the prior written consent of the Sublicensor, except to the lessee in case of lease of an Aircraft or to the buyer in case of resale of the Aircraft, without prejudice to any provisions set forth in the Agreement. In so far as it is necessary to disclose aspects of the Supplier Software to the Sublicensee’s employees, such disclosure is permitted solely for the purpose for which the Supplier Software is supplied and only to those employees who need to know the same, save as permitted herein or where otherwise required pursuant to an enforceable court order or any governmental decision or regulatory provision imposed on the Sublicensee, provided that reasonable prior notice of the intended disclosure is provided to the Sublicensor.

The obligations of the Sublicensee to maintain confidentiality shall survive the termination of this Software Sublicense for a period of ten (10) years.

 

11. ACCEPTANCE

Supplier Software shall be deemed accepted as part of the Technical Acceptance Process set out in Clause 8 of the Agreement.


EXHIBIT I

 

 

12 WARRANTY

The Sublicensee hereby accepts the transfer to its benefit of all transferable and enforceable warranties related to the corresponding Supplier Software and contained in the applicable Supplier Product Support Agreement.

As a result, THE SUBLICENSEE acknowledges that the transferable and enforceable warranties, OBLIGATIONS and LIABILITIES contained in the Supplier Product Support Agreement shall constitute the sole and exclusive remedy available in the event of any defect or non-conformity of the Supplier Software.

Neither the Supplier nor the Sublicensor shall have any liability for data that is entered into the Supplier Software by the Sublicensee and/or used for computation purposes.

 

13 LIABILITY AND INDEMNITY

The Supplier Software is supplied under the express condition that neither the Supplier nor the Sublicensor shall have any liability in contract or in tort arising from or in connection with the use and/or possession by the Sublicensee of the Supplier Software and that the Sublicensee shall indemnify and hold the Sublicensor and the Supplier harmless from and against any liabilities and claims from third parties arising from such use and/or possession.

 

14 EXCUSABLE DELAYS

 

14.1 Neither the Sublicensor nor the Supplier(s) shall be responsible nor be deemed to be in default on account of delays in delivery of any Supplier Software or Updates due to causes reasonably beyond Sublicensor’s or its suppliers’ or subcontractors’ (including the Supplier) control including but not limited to: natural disasters, fires, floods, explosions or earthquakes, epidemics or quarantine restrictions, serious accidents, total or constructive total loss, any act of the government of the country of the Sublicensee or the governments of the countries of Sublicensor or its subcontractors or its suppliers (including the Supplier), war, insurrections or riots, failure of transportation, communications or services, strikes or labor troubles causing cessation, slow down or interruption of services, inability after due and timely diligence to procure materials, accessories, equipment or parts, failure of a subcontractor or supplier (including the Supplier) to furnish materials, accessories, equipment or parts due to causes reasonably beyond such subcontractor’s or supplier’s (including the Supplier) control or failure of the Sublicensee or the Supplier to comply with its obligations arising out of the present Software Sublicense.

 

14.2 The Sublicensor shall, and/or shall cause the Supplier to, as soon as practicable after becoming aware of any delay falling within the provisions of this Article, notify the Sublicensee of such delay and of the probable extent thereof and shall, subject to the conditions as hereinafter provided and as soon as practicable after the removal of the cause or causes for delay, resume delivery of the delayed Supplier Software or Update.


EXHIBIT I

 

 

15 TERMINATION

In the event of breach of an obligation set forth in this Software Sublicense by either the Sublicensor or the Sublicensee, which is not cured within 30 days from the date of receipt of a written notice notifying the breach, the non-breaching party shall be entitled to terminate this Software Sublicense.

In the event of termination for any cause, the Sublicensee shall no longer have any right to use the Supplier Software and shall return to the Supplier all copies of the Supplier Software and any relating documentation together with an affidavit to that effect.

 

16 GENERAL PROVISIONS

 

16.1 This Software Sublicense is an Exhibit to the Agreement and integrally forms part thereof. As a result, any non-conflicting terms of the Agreement are deemed incorporated herein to the extent they are relevant in the context of this Software Sublicense.

 

16.2 In the event of any inconsistency or discrepancy between any term of this Software Sublicense and any term of the Agreement (including any Appendix or other Exhibits thereto), the terms of this Software Sublicense shall take precedence over the conflicting terms of the Agreement to the extent necessary to resolve such inconsistency or discrepancy.

 

16.3 The Sublicensee acknowledges that the Supplier Software covered under the present Sub-license Agreement is also subject to the conditions relative to each Supplier Software set forth in the corresponding Supplier Product Support Agreement. In the event of any inconsistency between the terms of this Sub-license Agreement and the terms contained in the corresponding Supplier Product Support Agreement, the latter shall prevail to the extent of such inconsistency.

 

16.4 This Software Sublicense is subject to and construed and the performance thereof shall be determined in accordance with the laws in effect in the State of New York without regard to conflict of laws principles that could result in the application of the laws of any other jurisdiction. All disputes arising in connection with this Software Sublicense shall be submitted to the competent courts of New York and the parties hereby agree to submit to the jurisdiction of those courts.


LETTER AGREEMENT N°1

AVIANCATACA HOLDING S.A.

Calle Aquilino de la Guardia No. 8, Ciudad de Panamá

República de Panamá

Subject: [*]

AVIANCATACA HOLDING S.A. (the “ Buyer ”) and AIRBUS S.A.S. (the “ Seller ”) have entered into a Purchase Agreement (the “ Agreement ”) dated as of even date herewith, which covers, among other things, the manufacture and the sale by the Seller and the purchase by the Buyer of the Aircraft, under the terms and conditions in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement N°1 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.

Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement.

Both parties agree that this Letter Agreement, upon execution hereof, shall constitute an integral, nonseverable part of said Agreement and shall be governed by all the provisions of the Agreement, as such provisions have been specifically amended pursuant to this Letter Agreement. If there is any inconsistency between the provisions of the Agreement and the provisions of this Letter Agreement then the provisions of this Letter Agreement will govern.

 

AVTA - A320 Family & A320 NEO Family PA

Letter Agreement N°1


LETTER AGREEMENT N°1

 

 

* [Two pages have been omitted in accordance with a request for confidential treatment.]

 

1.5.2  Sharklets Availability for Current Standard Aircraft

Should the Buyer require A320 Family Aircraft to be equipped with Sharklets, the Seller shall grant such request, based on the current industrial availability of such devices, and no earlier than the available timeframes indicated in the table below:

 

Aircraft

Type

  

Earliest Availability

Timeframe

A319-100    [*]
A320-200    [*]
A321-200    [*]

Such optional incorporation of the Sharklets onto any A320 Family Aircraft shall be made by way of execution of an SCN.

Any A320 Family Aircraft which the Buyer would elect to equip with Sharklets shall be made at commercial conditions set forth in Clause 3.1 (iv) to the Agreement. In addition, The Seller shall grant the Buyer, upon Delivery of each such A320 Family Aircraft equipped with Sharklets, the [*]

 

1.6 Specific A321 Aircraft & A321 NEO Aircraft Conditions

 

1.6.1  Definitions

For the purpose of this Clause 1.4 to Letter Agreement N°1 to the Agreement, the following capitalized terms shall have the meaning set out below:

 

Backlog Aircraft    Means any and all A320 Family aircraft ordered to the Seller pursuant to either the 2007 A320 Purchase Agreement or the 1998 A320 Purchase Agreement.
2007 A320 Purchase Agreement
   Means the A320 Family purchase agreement dated April 16 th , 2007 and made between Airbus S.A.S and Aerovias del Continente Americano S.A. Avianca.
1998 A320 Purchase Agreement
   Means the A320 Family purchase agreement dated March 19 th , 1998 and made between Airbus S.A.S and Atlantic Aircraft Holding Limited.

 

1.6.2  A321 & A321 NEO Aircraft

[*]

 

1.7

[*]

 

2. Assignment

Except as provided in Clause 21 of the Agreement, this Letter Agreement is not transferable, and the Buyer’s rights under this Letter Agreement shall not be assigned, sold, transferred

 

AVTA - A320 Family & A320 NEO Family PA

Letter Agreement N°1


LETTER AGREEMENT N°1

 

or otherwise alienated by operation of law or otherwise to any person other than the Buyer. Any unauthorised assignment, sale, transfer or other alienation of the Buyer’s rights under this Letter Agreement with respect to any Aircraft will be void and without effect.

 

3. Confidentiality

This Letter Agreement (and its existence) shall be treated by both parties as confidential in accordance with Clause 22.12 of the Agreement.

 

4. Counterparts

This Letter Agreement may be signed in any number of separate counterparts. Each counterpart, when signed and delivered (including counterparts delivered by facsimile transmission) shall be an original, and the counterparts together shall constitute one and the same instrument.

 

AVTA - A320 Family & A320 NEO Family PA

Letter Agreement N°1


LETTER AGREEMENT N°1

 

If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

 

Agreed and Accepted     Agreed and Accepted
For and on behalf of     For and on behalf of
AVIANCATACA HOLDING S.A.     AIRBUS S.A.S.
By:  

/s/ Elisa Murgas de Moreno

    By:  

/s/ Christophe Mourey

Its:   Secretary     Its:   Senior Vice President Contracts

 

AVTA - A320 Family & A320 NEO Family PA

Letter Agreement N°1


LETTER AGREEMENT N°2

 

AVIANCATACA HOLDING S.A.

Calle Aquilino de la Guardia No. 8, Ciudad de Panamá

República de Panamá

Subject: [*]

AVIANCATACA HOLDING S.A. (the “ Buyer ”) and AIRBUS S.A.S. (the “ Seller ”) have entered into a Purchase Agreement (the “ Agreement ”) dated as of even date herewith, which covers, among other things, the manufacture and the sale by the Seller and the purchase by the Buyer of the Aircraft, under the terms and conditions in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement N°2 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.

Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement.

Both parties agree that this Letter Agreement, upon execution hereof, shall constitute an integral, nonseverable part of said Agreement and shall be governed by all the provisions of the Agreement, as such provisions have been specifically amended pursuant to this Letter Agreement. If there is any inconsistency between the provisions of the Agreement and the provisions of this Letter Agreement then the provisions of this Letter Agreement will govern.

 

AVTA - A320 Family & A320 NEO Family PA

Letter Agreement N°2


LETTER AGREEMENT N°2

 

 

1. The Seller agrees to delete sub-Clause 5.3.3 of the Agreement in its entirety and replace it with the following quoted text:

QUOTE

 

5.3.3  Such [*] shall be made in accordance with the following schedule:

[*]

The Buyer shall [*]

 

2. Assignment

Except as provided in Clause 21 of the Agreement, this Letter Agreement is not transferable, and the Buyer’s rights under this Letter Agreement shall not be assigned, sold, transferred or otherwise alienated by operation of law or otherwise to any person other than the Buyer. Any unauthorised assignment, sale, transfer or other alienation of the Buyer’s rights under this Letter Agreement with respect to any Aircraft will be void and without effect.

 

3. Confidentiality

This Letter Agreement (and its existence) shall be treated by both parties as confidential in accordance with Clause 22.12 of the Agreement.

 

4. Counterparts

This Letter Agreement may be signed in any number of separate counterparts. Each counterpart, when signed and delivered (including counterparts delivered by facsimile transmission) shall be an original, and the counterparts together shall constitute one and the same instrument.

 

AVTA - A320 Family & A320 NEO Family PA

Letter Agreement N°2


LETTER AGREEMENT N°2

 

If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

 

Agreed and Accepted     Agreed and Accepted
For and on behalf of     For and on behalf of

 

AVIANCATACA HOLDING S.A.     AIRBUS S.A.S.
By:  

/s/ Elisa Murgas de Moreno

    By:  

/s/ Christophe Mourey

Its:   Secretary     Its:   Senior Vice President Contracts

 

AVTA - A320 Family & A320 NEO Family PA

Letter Agreement N°2


LETTER AGREEMENT N°3

AVIANCATACA HOLDING S.A.

Calle Aquilino de la Guardia No. 8, Ciudad de Panamá

República de Panamá

Subject: [*]

AVIANCATACA HOLDING S.A. (the “ Buyer ”) and AIRBUS S.A.S. (the “ Seller ”) have entered into a Purchase Agreement (the “ Agreement ”) dated as of even date herewith, which covers, among other things, the manufacture and the sale by the Seller and the purchase by the Buyer of the Aircraft, under the terms and conditions in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement N°3 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.

Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement.

Both parties agree that this Letter Agreement, upon execution hereof, shall constitute an integral, nonseverable part of said Agreement and shall be governed by all the provisions of the Agreement, as such provisions have been specifically amended pursuant to this Letter Agreement. If there is any inconsistency between the provisions of the Agreement and the provisions of this Letter Agreement then the provisions of this Letter Agreement will govern.

[*]

 

2. Assignment

Except as provided in Clause 21 of the Agreement, this Letter Agreement is not transferable, and the Buyer’s rights under this Letter Agreement shall not be assigned, sold, transferred or otherwise alienated by operation of law or otherwise to any person other than the Buyer. Any unauthorised assignment, sale, transfer or other alienation of the Buyer’s rights under this Letter Agreement with respect to any Aircraft will be void and without effect.

 

AVTA - A320 Family & A320 NEO Family PA

Letter Agreement N°3


LETTER AGREEMENT N°3

 

 

3. Confidentiality

This Letter Agreement (and its existence) shall be treated by both parties as confidential in accordance with Clause 22.12 of the Agreement.

 

4. Counterparts

This Letter Agreement may be signed in any number of separate counterparts. Each counterpart, when signed and delivered (including counterparts delivered by facsimile transmission) shall be an original, and the counterparts together shall constitute one and the same instrument.

 

AVTA - A320 Family & A320 NEO Family PA

Letter Agreement N°3


LETTER AGREEMENT N°3

 

If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

 

Agreed and Accepted     Agreed and Accepted
For and on behalf of     For and on behalf of

 

AVIANCATACA HOLDING S.A.     AIRBUS S.A.S.
By:  

/s/ Elisa Murgas de Moreno

    By:  

/s/ Christophe Mourey

Its:   Secretary     Its:   Senior Vice President Contracts

 

AVTA - A320 Family & A320 NEO Family PA

Letter Agreement N°3


LETTER AGREEMENT N°4

AVIANCATACA HOLDING S.A.

Calle Aquilino de la Guardia No. 8, Ciudad de Panamá

República de Panamá

Subject: [*]

AVIANCATACA HOLDING S.A. (the “ Buyer ”) and AIRBUS S.A.S. (the “ Seller ”) have entered into a Purchase Agreement (the “ Agreement ”) dated as of even date herewith, which covers, among other things, the manufacture and the sale by the Seller and the purchase by the Buyer of the Aircraft, under the terms and conditions in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement N°4 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.

Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement.

Both parties agree that this Letter Agreement, upon execution hereof, shall constitute an integral, nonseverable part of said Agreement and shall be governed by all the provisions of the Agreement, as such provisions have been specifically amended pursuant to this Letter Agreement. If there is any inconsistency between the provisions of the Agreement and the provisions of this Letter Agreement then the provisions of this Letter Agreement will govern.

[*]

 

4. Assignment

Except as provided in Clause 21 of the Agreement, this Letter Agreement is not transferable, and the Buyer’s rights under this Letter Agreement shall not be assigned, sold, transferred or otherwise alienated by operation of law or otherwise to any person other than the Buyer. Any unauthorised assignment, sale, transfer or other alienation of the Buyer’s rights under this Letter Agreement with respect to any Aircraft will be void and without effect.

 

AVTA - A320 Family & A320 NEO Family PA

Letter Agreement N°4


LETTER AGREEMENT N°4

 

 

5. Confidentiality

This Letter Agreement (and its existence) shall be treated by both parties as confidential in accordance with Clause 22.12 of the Agreement.

 

6. Counterparts

This Letter Agreement may be signed in any number of separate counterparts. Each counterpart, when signed and delivered (including counterparts delivered by facsimile transmission) shall be an original, and the counterparts together shall constitute one and the same instrument.

 

AVTA - A320 Family & A320 NEO Family PA

Letter Agreement N°4


LETTER AGREEMENT N°4

 

If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

 

Agreed and Accepted     Agreed and Accepted
For and on behalf of     For and on behalf of

 

AVIANCATACA HOLDING S.A.     AIRBUS S.A.S.
By:  

/s/ Elisa Murgas de Moreno

    By:  

/s/ Christophe Mourey

Its:   Secretary     Its:   Senior Vice President Contracts

 

AVTA - A320 Family & A320 NEO Family PA

Letter Agreement N°4


LETTER AGREEMENT N°5

AVIANCATACA HOLDING S.A.

Calle Aquilino de la Guardia No. 8, Ciudad de Panamá

República de Panamá

Subject: [*]

AVIANCATACA HOLDING S.A. (the “ Buyer ”) and AIRBUS S.A.S. (the “ Seller ”) have entered into a Purchase Agreement (the “ Agreement ”) dated as of even date herewith, which covers, among other things, the manufacture and the sale by the Seller and the purchase by the Buyer of the Aircraft, under the terms and conditions in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement N°5 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.

Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement.

Both parties agree that this Letter Agreement, upon execution hereof, shall constitute an integral, nonseverable part of said Agreement and shall be governed by all the provisions of the Agreement, as such provisions have been specifically amended pursuant to this Letter Agreement. If there is any inconsistency between the provisions of the Agreement and the provisions of this Letter Agreement then the provisions of this Letter Agreement will govern.

 

AVTA - A320 Family & A320 NEO Family PA

Letter Agreement N°5


LETTER AGREEMENT N°5

 

[*]

 

3. Assignment

Except as provided in Clause 21 of the Agreement, this Letter Agreement is not transferable, and the Buyer’s rights under this Letter Agreement shall not be assigned, sold, transferred or otherwise alienated by operation of law or otherwise to any person other than the Buyer. Any unauthorised assignment, sale, transfer or other alienation of the Buyer’s rights under this Letter Agreement with respect to any Aircraft will be void and without effect.

 

4. Confidentiality

This Letter Agreement (and its existence) shall be treated by both parties as confidential in accordance with Clause 22.12 of the Agreement.

 

5. Counterparts

This Letter Agreement may be signed in any number of separate counterparts. Each counterpart, when signed and delivered (including counterparts delivered by facsimile transmission) shall be an original, and the counterparts together shall constitute one and the same instrument.

If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

 

Agreed and Accepted     Agreed and Accepted
For and on behalf of     For and on behalf of

 

AVIANCATACA HOLDING S.A.     AIRBUS S.A.S.
By:  

/s/ Elisa Murgas de Moreno

    By:  

/s/ Christophe Mourey

Its:   Secretary     Its:   Senior Vice President Contracts

 

AVTA - A320 Family & A320 NEO Family PA

Letter Agreement N°5


LETTER AGREEMENT N°6

AVIANCATACA HOLDING S.A.

Calle Aquilino de la Guardia No. 8, Ciudad de Panamá

República de Panamá

Subject: PRODUCT SUPPORT

AVIANCATACA HOLDING S.A. (the “ Buyer ”) and AIRBUS S.A.S. (the “ Seller ”) have entered into a Purchase Agreement (the “ Agreement ”) dated as of even date herewith, which covers, among other things, the manufacture and the sale by the Seller and the purchase by the Buyer of the Aircraft, under the terms and conditions in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement N°6 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.

Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement.

Both parties agree that this Letter Agreement, upon execution hereof, shall constitute an integral, nonseverable part of said Agreement and shall be governed by all the provisions of the Agreement, as such provisions have been specifically amended pursuant to this Letter Agreement. If there is any inconsistency between the provisions of the Agreement and the provisions of this Letter Agreement then the provisions of this Letter Agreement will govern.

 

AVTA - A320 Family & A320 NEO Family PA

Letter Agreement N°6


LETTER AGREEMENT N°6

 

 

1. Warranties

The provisions in ‘Clause 12. 1.3 Warranty Period’ are cancelled and replaced by the following;

QUOTE

 

  12.1.3 Warranty Period

The warranties set forth in Clauses 12.1.1 and 12.1.2 shall be limited to those defects that become apparent within [*] months after Delivery of the affected Aircraft (the “Warranty Period”).

UNQUOTE

The provisions in ‘Clause 12.2.2 Periods and Undertakings’ are cancelled and replaced by the following;

QUOTE

 

  12.2.2 Periods and Seller’s Undertakings

The Seller agrees that if a Failure occurs in an Item prior to the [*] anniversary of the Delivery Date of the Aircraft on which such Item was originally installed, the Seller shall, at its discretion and as promptly as practicable and with the Seller’s financial participation as hereinafter provided, either:

 

   

design and furnish to the Buyer a correction for such Item having the Failure and provide any parts required for such correction (including Seller designed standard parts but excluding industry standard parts that are not integrated into the Item), or

 

   

replace such Item.

UNQUOTE

The definition of [*] in ‘Clause 12.2.3 Seller’s Participation in the Costs’ is cancelled and replaced by the following;

QUOTE

[*]

UNQUOTE

[*]

 

3. Training Services

[*] in order to facilitate the entry into service and operation of the Aircraft, the Seller will provide the Buyer with following services [*] :

 

   

[*] Trainee days for Maintenance training

 

   

[*] Man-months of Flight Crew Initial Operating Experience

 

   

[*]

 

   

[*] trainee days of Performance /Operations course

 

AVTA - A320 Family & A320 NEO Family PA

Letter Agreement N°6


LETTER AGREEMENT N°6

 

4. Technical Data

The provisions in ‘Clause 14A.5 Revision Period’ are cancelled and replaced by the following;

QUOTE

 

  14A.5 Revision Service

Unless otherwise specifically stated, revision service for the Technical Data shall be provided [*], (the “ Revision Service Period ”).

UNQUOTE

 

5. Good & Services [*]

[*]

 

6. [*] Goods & Services

 

* [Two pages have been omitted in accordance with a request for confidential treatment.]

 

8. Buyer’s Rights

Should the Buyer wish to exchange any of the training allowances provided under Appendix A to Clause 16 of the Agreement, the Buyer shall place a request for exchange to this effect to the Customer Support Director, as defined in Clause 15.1 of the Agreement, for confirmation. The Buyer may exchange the training allowances granted under Appendix A of the present Agreement as follows:

 

  (i) allowances as listed under the heading “FLIGHT OPERATIONS TRAINING” in Article 1 of Appendix A to Clause 16 of the Agreement may be used to acquire any flight operation training courses described in the Seller’s Customer Services Catalog current at the time of the Buyer’s request;

 

  (ii) any of the training allowances as listed under the heading “MAINTENANCE TRAINING” under Article 2 of Appendix A to Clause 16 of the Agreement may be used to acquire any maintenance training courses described in the Seller’s Customer Services Catalog current at the time of the Buyer’s request;

 

  (iii) should any one of the allowances granted thereunder (flight operations or maintenance) have been fully used, the Buyer shall be entitled to exchange flight operation or maintenance training courses as needed against the remaining allowances;

The exchange value shall be based on the training course swapping matrix as published by Seller at the time of the Training Conference.

 

AVTA - A320 Family & A320 NEO Family PA

Letter Agreement N°6


LETTER AGREEMENT N°6

 

9. Assignment

Except as provided in Clause 21 of the Agreement, this Letter Agreement is not transferable, and the Buyer’s rights under this Letter Agreement shall not be assigned, sold, transferred or otherwise alienated by operation of law or otherwise to any person other than the Buyer. Any unauthorised assignment, sale, transfer or other alienation of the Buyer’s rights under this Letter Agreement with respect to any Aircraft will be void and without effect.

 

10. Confidentiality

This Letter Agreement (and its existence) shall be treated by both parties as confidential in accordance with Clause 22.12 of the Agreement.

 

11. Counterparts

This Letter Agreement may be signed in any number of separate counterparts. Each counterpart, when signed and delivered (including counterparts delivered by facsimile transmission) shall be an original, and the counterparts together shall constitute one and the same instrument.

 

AVTA - A320 Family & A320 NEO Family PA

Letter Agreement N°6


LETTER AGREEMENT N°6

 

If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

 

Agreed and Accepted     Agreed and Accepted
For and on behalf of     For and on behalf of

 

AVIANCATACA HOLDING S.A.     AIRBUS S.A.S.
By:  

/s/ Elisa Murgas de Moreno

    By:  

/s/ Christophe Mourey

Its:   Secretary     Its:   Senior Vice President Contracts

 

AVTA - A320 Family & A320 NEO Family PA

Letter Agreement N°6


LETTER AGREEMENT N°7

AVIANCATACA HOLDING S.A.

Calle Aquilino de la Guardia No. 8, Ciudad de Panamá

República de Panamá

Subject: PURCHASE RIGHTS

AVIANCATACA HOLDING S.A. (the “ Buyer ”) and AIRBUS S.A.S. (the “ Seller ”) have entered into a Purchase Agreement (the “ Agreement ”) dated as of even date herewith, which covers, among other things, the manufacture and the sale by the Seller and the purchase by the Buyer of the Aircraft, under the terms and conditions in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement N°7 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.

Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement.

Both parties agree that this Letter Agreement, upon execution hereof, shall constitute an integral, nonseverable part of said Agreement and shall be governed by all the provisions of the Agreement, as such provisions have been specifically amended pursuant to this Letter Agreement. If there is any inconsistency between the provisions of the Agreement and the provisions of this Letter Agreement then the provisions of this Letter Agreement will govern.

 

AVTA - A320 Family & A320 NEO Family PA

Letter Agreement N°7


LETTER AGREEMENT N°7

 

 

1. Definitions

For the purpose of this Letter Agreement, the following capitalized terms shall have the meaning set out below:

2007 A320 Purchase Agreement

Means the A320 Family purchase agreement dated April 16 th , 2007 and made between Airbus S.A.S and Aerovias del Continente Americano S.A. Avianca (“ Avianca ”);

1998 A320 Purchase Agreement

Means the A320 Family purchase agreement dated March 19 th , 1998 and made between Airbus S.A.S and Atlantic Aircraft Holding Limited (“ AAHL ”).

 

2. General

[*] hereby grants to the Buyer the right to purchase up to [*] additional A320 NEO Family Aircraft (the “ NEO Purchase Right Aircraft ”), [*]

The NEO Purchase Right Aircraft shall be manufactured in accordance with the Specification and Development Changes, SCNs and MSCNs which may be incorporated by the Seller in the Specification in accordance with Clause 2 of the Agreement prior to the delivery of the NEO Purchase Right Aircraft.

Unless otherwise expressly stipulated, all terms and conditions applicable to the firmly ordered Aircraft, on a per firm ordered Aircraft basis, shall apply to the NEO Purchase Right Aircraft.

 

3. NEO Purchase Right Aircraft Price

[*]

Both the Reference Price of the NEO Propulsion Systems and the price revision formula applicable thereto shall be as quoted by the corresponding Propulsion Systems Manufacturer at the date the NEO Purchase Right Aircraft provided hereunder is exercised by the Buyer, in accordance with Paragraph 4 hereunder. The special conditions set out in Letter Agreement N°1 shall apply to the NEO Purchase Right Aircraft except where specifically stated otherwise therein.

 

4. NEO Purchase Right Aircraft exercise and Delivery Date

[*]

The scheduled delivery months for each NEO Purchase Right Aircraft shall be specifically identified in an amendment to the Agreement.

 

AVTA - A320 Family & A320 NEO Family PA

Letter Agreement N°7


LETTER AGREEMENT N°7

 

 

5. NEO Purchase Right Fee

For [*] NEO Purchase Right Aircraft, and upon signature of this Agreement, the Buyer will [*] for each NEO Purchase Right Aircraft (the “ NEO Purchase Right Fee ”), in a total amount of [*].

[*]

Upon exercise by the Buyer of a NEO Purchase Right, the corresponding NEO Purchase Right Fee shall be applied to the first Predelivery Payments due in respect of such NEO Purchase Right Aircraft, in accordance with the Predelivery Payment schedule set out in Clause 5 of the Agreement, as modified by Letter Agreement N°[*] to the Agreement (“ Letter Agreement N° [*]”).

 

6. NEO Purchase Right Aircraft Validity

Once the Seller and the Buyer have agreed on the scheduled delivery months applicable to the relevant NEO Purchase Right Aircraft, the exercise of the applicable NEO Purchase Rights shall be validated by the execution and delivery of an amendment to the Agreement and the transfer to the Seller’s bank account of the Predelivery Payments then due and payable by the Buyer with respect to such NEO Purchase Right Aircraft, in accordance with Clause 5 of the Agreement, as modified by Letter Agreement N°[*].

All other Predelivery Payments owed by the Buyer for the exercised NEO Purchase Right Aircraft shall be made in accordance with Clause 5 of the Agreement, as modified by Letter Agreement N°[*].

If the Buyer fails to timely exercise any or all of the NEO Purchase Rights in accordance with the above-mentioned Decision Dates, any of the NEO Purchase Rights of such batch not exercised by such Decision Date shall lapse and neither party shall have any further rights or obligations hereunder as to such lapsed NEO Purchase Right Aircraft, except that the Seller shall promptly apply an amount equal to the NEO Purchase Right Fees related to such lapsed NEO Purchase Right Aircraft to the next Predelivery Payments due under the Agreement.

 

7. Assignment

Except as provided in Clause 21 of the Agreement, this Letter Agreement is not transferable, and the Buyer’s rights under this Letter Agreement shall not be assigned, sold, transferred or otherwise alienated by operation of law or otherwise to any person other than the Buyer. Any unauthorised assignment, sale, transfer or other alienation of the Buyer’s rights under this Letter Agreement with respect to any Aircraft will be void and without effect.

 

8. Confidentiality

This Letter Agreement (and its existence) shall be treated by both parties as confidential in accordance with Clause 22.12 of the Agreement.

 

AVTA - A320 Family & A320 NEO Family PA

Letter Agreement N°7


LETTER AGREEMENT N°7

 

9. Counterparts

This Letter Agreement may be signed in any number of separate counterparts. Each counterpart, when signed and delivered (including counterparts delivered by facsimile transmission) shall be an original, and the counterparts together shall constitute one and the same instrument.

 

AVTA - A320 Family & A320 NEO Family PA

Letter Agreement N°7


LETTER AGREEMENT N°7

 

If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

 

Agreed and Accepted     Agreed and Accepted
For and on behalf of     For and on behalf of
AVIANCATACA HOLDING S.A.     AIRBUS S.A.S.
By:  

/s/ Elisa Murgas de Moreno

    By:  

/s/ Christophe Mourey

Its:   Secretary     Its:   Senior Vice President Contracts

 

AVTA - A320 Family & A320 NEO Family PA

Letter Agreement N°7


LETTER AGREEMENT N°8

AVIANCATACA HOLDING, S.A.

Calle Aquilino de la Guardia No. 8, Ciudad de Panamá

República de Panamá

Subject: [*]

AVIANCATACA HOLDING, S.A. (the “ Buyer ”) and AIRBUS S.A.S. (the “ Seller ”) have entered into a Purchase Agreement (the “ Agreement ”) dated as of even date herewith, which covers, among other things, the manufacture and the sale by the Seller and the purchase by the Buyer of the Aircraft, under the terms and conditions in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement N°8 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.

Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement.

Both parties agree that this Letter Agreement, upon execution hereof, shall constitute an integral, nonseverable part of said Agreement and shall be governed by all the provisions of the Agreement, as such provisions have been specifically amended pursuant to this Letter Agreement. If there is any inconsistency between the provisions of the Agreement and the provisions of this Letter Agreement then the provisions of this Letter Agreement will govern.

 

AVTA - A320 Family & A320 NEO Family PA    A319 CFM 5B6
  

 

Letter Agreement N°8

  


LETTER AGREEMENT N°8

 

* [Eight pages have been omitted in accordance with a request for confidential treatment.]

 

AVTA - A320 Family & A320 NEO Family PA    A319 CFM 5B6
  

 

Letter Agreement N°8

  


LETTER AGREEMENT N°8

 

If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

 

Agreed and Accepted     Agreed and Accepted
For and on behalf of     For and on behalf of
AVIANCATACA HOLDING, S.A.     AIRBUS S.A.S.
By:  

/s/ Elisa Murgas de Moreno

    By:  

/s/ Christophe Mourey

Its:   Secretary     Its:   Senior Vice President Contracts

 

AVTA - A320 Family & A320 NEO Family PA    A319 CFM 5B6
  

 

Letter Agreement N°8

  


LETTER AGREEMENT N°8

 

AVIANCATACA HOLDING, S.A.

Calle Aquilino de la Guardia No. 8, Ciudad de Panamá

República de Panamá

Subject: [*]

AVIANCATACA HOLDING, S.A. (the “ Buyer ”) and AIRBUS S.A.S. (the “ Seller ”) have entered into a Purchase Agreement (the “ Agreement ”) dated as of even date herewith, which covers, among other things, the manufacture and the sale by the Seller and the purchase by the Buyer of the Aircraft, under the terms and conditions in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement N°8 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.

Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement.

Both parties agree that this Letter Agreement, upon execution hereof, shall constitute an integral, nonseverable part of said Agreement and shall be governed by all the provisions of the Agreement, as such provisions have been specifically amended pursuant to this Letter Agreement. If there is any inconsistency between the provisions of the Agreement and the provisions of this Letter Agreement then the provisions of this Letter Agreement will govern.

 

AVTA - A320 Family & A320 NEO Family PA    A319 CFM 5B7
  

 

Letter Agreement N°8

  


LETTER AGREEMENT N°8

 

* [Eight pages have been omitted in accordance with a request for confidential treatment.]

 

AVTA - A320 Family & A320 NEO Family PA    A319 CFM 5B7
  

 

Letter Agreement N°8

  


LETTER AGREEMENT N°8

 

If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

 

Agreed and Accepted     Agreed and Accepted
For and on behalf of     For and on behalf of
AVIANCATACA HOLDING, S.A.     AIRBUS S.A.S.
By:  

/s/ Elisa Murgas de Moreno

    By:  

/s/ Christophe Mourey

Its:   Secretary     Its:   Senior Vice President Contracts

 

AVTA - A320 Family & A320 NEO Family PA    A319 CFM 5B7
  

 

Letter Agreement N°8

  


LETTER AGREEMENT N°8

 

AVIANCATACA HOLDING, S.A.

Calle Aquilino de la Guardia No. 8, Ciudad de Panamá

República de Panamá

Subject : [*]

AVIANCATACA HOLDING, S.A. (the “ Buyer ”) and AIRBUS S.A.S. (the “ Seller ”) have entered into a Purchase Agreement (the “ Agreement ”) dated as of even date herewith, which covers, among other things, the manufacture and the sale by the Seller and the purchase by the Buyer of the Aircraft, under the terms and conditions in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement N°8 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.

Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement.

Both parties agree that this Letter Agreement, upon execution hereof, shall constitute an integral, nonseverable part of said Agreement and shall be governed by all the provisions of the Agreement, as such provisions have been specifically amended pursuant to this Letter Agreement. If there is any inconsistency between the provisions of the Agreement and the provisions of this Letter Agreement then the provisions of this Letter Agreement will govern.

 

AVTA - A320 Family & A320 NEO Family PA    A319 IAE V2524-A5
  

 

Letter Agreement N°8

  


LETTER AGREEMENT N°8

 

* [Eight pages have been omitted in accordance with a request for confidential treatment.]

 

AVTA - A320 Family & A320 NEO Family PA    A319 IAE V2524-A5
  

 

Letter Agreement N°8

  


LETTER AGREEMENT N°8

 

If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

 

Agreed and Accepted     Agreed and Accepted
For and on behalf of     For and on behalf of
AVIANCATACA HOLDING, S.A.     AIRBUS S.A.S.
By:  

/s/ Elisa Murgas de Moreno

    By:  

/s/ Christophe Mourey

Its:   Secretary     Its:   Senior Vice President Contracts

 

AVTA - A320 Family & A320 NEO Family PA    A319 IAE V2524-A5
  

 

Letter Agreement N°8

  


LETTER AGREEMENT N°8

 

AVIANCATACA HOLDING, S.A.

Calle Aquilino de la Guardia No. 8, Ciudad de Panamá

República de Panamá

Subject: [*]

AVIANCATACA HOLDING, S.A. (the “ Buyer ”) and AIRBUS S.A.S. (the “ Seller ”) have entered into a Purchase Agreement (the “ Agreement ”) dated as of even date herewith, which covers, among other things, the manufacture and the sale by the Seller and the purchase by the Buyer of the Aircraft, under the terms and conditions in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement N°8 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.

Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement.

Both parties agree that this Letter Agreement, upon execution hereof, shall constitute an integral, nonseverable part of said Agreement and shall be governed by all the provisions of the Agreement, as such provisions have been specifically amended pursuant to this Letter Agreement. If there is any inconsistency between the provisions of the Agreement and the provisions of this Letter Agreement then the provisions of this Letter Agreement will govern.

 

AVTA - A320 Family & A320 NEO Family PA    A319 IAE V2527M-A5
  

 

Letter Agreement N°8

  


LETTER AGREEMENT N°8

 

* [Eight pages have been omitted in accordance with a request for confidential treatment.]

 

AVTA - A320 Family & A320 NEO Family PA    A319 IAE V2527M-A5
  

 

Letter Agreement N°8

  


LETTER AGREEMENT N°8

 

If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

 

Agreed and Accepted     Agreed and Accepted
For and on behalf of     For and on behalf of
AVIANCATACA HOLDING, S.A.     AIRBUS S.A.S.
By:  

/s/ Elisa Murgas de Moreno

    By:  

/s/ Christophe Mourey

Its:   Secretary     Its:   Senior Vice President Contracts

 

AVTA - A320 Family & A320 NEO Family PA    A319 IAE V2527M-A5
  

 

Letter Agreement N°8

  


LETTER AGREEMENT N°8

AVIANCATACA HOLDING, S.A.

Calle Aquilino de la Guardia No. 8, Ciudad de Panamá

República de Panamá

Subject: [*]

AVIANCATACA HOLDING, S.A. (the “ Buyer ”) and AIRBUS S.A.S. (the “ Seller ”) have entered into a Purchase Agreement (the “ Agreement ”) dated as of even date herewith, which covers, among other things, the manufacture and the sale by the Seller and the purchase by the Buyer of the Aircraft, under the terms and conditions in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement N°8 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.

Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement.

Both parties agree that this Letter Agreement, upon execution hereof, shall constitute an integral, nonseverable part of said Agreement and shall be governed by all the provisions of the Agreement, as such provisions have been specifically amended pursuant to this Letter Agreement. If there is any inconsistency between the provisions of the Agreement and the provisions of this Letter Agreement then the provisions of this Letter Agreement will govern.

 

AVTA - A320 Family & A320 NEO Family PA    A319 NEO PW1124
  

 

Letter Agreement N°8

  


LETTER AGREEMENT N°8

 

* [Ten pages have been omitted in accordance with a request for confidential treatment.]

 

AVTA - A320 Family & A320 NEO Family PA    A319 NEO PW1124
  

 

Letter Agreement N°8

  


LETTER AGREEMENT N°8

 

If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

 

Agreed and Accepted     Agreed and Accepted
For and on behalf of     For and on behalf of
AVIANCATACA HOLDING, S.A.     AIRBUS S.A.S.
By:  

/s/ Elisa Murgas de Moreno

    By:  

/s/ Christophe Mourey

Its:   Secretary     Its:   Senior Vice President Contracts

 

AVTA - A320 Family & A320 NEO Family PA    A319 NEO PW1124
  

 

Letter Agreement N°8

  


LETTER AGREEMENT N°8

AVIANCATACA HOLDING, S.A.

Calle Aquilino de la Guardia No. 8, Ciudad de Panamá

República de Panamá

Subject: [*]

AVIANCATACA HOLDING, S.A. (the “ Buyer ”) and AIRBUS S.A.S. (the “ Seller ”) have entered into a Purchase Agreement (the “ Agreement ”) dated as of even date herewith, which covers, among other things, the manufacture and the sale by the Seller and the purchase by the Buyer of the Aircraft, under the terms and conditions in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement N°8 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.

Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement.

Both parties agree that this Letter Agreement, upon execution hereof, shall constitute an integral, nonseverable part of said Agreement and shall be governed by all the provisions of the Agreement, as such provisions have been specifically amended pursuant to this Letter Agreement. If there is any inconsistency between the provisions of the Agreement and the provisions of this Letter Agreement then the provisions of this Letter Agreement will govern.

 

* [Nine pages have been omitted in accordance with a request for confidential treatment.]

 

AVTA - A320 Family & A320 NEO Family PA    A320 CFM
  

 

Letter Agreement N°8

  


LETTER AGREEMENT N°8

 

If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

 

Agreed and Accepted     Agreed and Accepted
For and on behalf of     For and on behalf of
AVIANCATACA HOLDING, S.A.     AIRBUS S.A.S.
By:  

/s/ Elisa Murgas de Moreno

    By:  

/s/ Christophe Mourey

Its:   Secretary     Its:   Senior Vice President Contracts

 

AVTA - A320 Family & A320 NEO Family PA    A320 CFM
  

 

Letter Agreement N°8

  


LETTER AGREEMENT N°8

AVIANCATACA HOLDING, S.A.

Calle Aquilino de la Guardia No. 8, Ciudad de Panamá

República de Panamá

Subject: [*]

AVIANCATACA HOLDING, S.A. (the “ Buyer ”) and AIRBUS S.A.S. (the “ Seller ”) have entered into a Purchase Agreement (the “ Agreement ”) dated as of even date herewith, which covers, among other things, the manufacture and the sale by the Seller and the purchase by the Buyer of the Aircraft, under the terms and conditions in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement N°8 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.

Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement.

Both parties agree that this Letter Agreement, upon execution hereof, shall constitute an integral, nonseverable part of said Agreement and shall be governed by all the provisions of the Agreement, as such provisions have been specifically amended pursuant to this Letter Agreement. If there is any inconsistency between the provisions of the Agreement and the provisions of this Letter Agreement then the provisions of this Letter Agreement will govern.

 

* [Nine pages have been omitted in accordance with a request for confidential treatment.]

 

AVTA - A320 Family & A320 NEO Family PA    A320 IAE
  

 

Letter Agreement N°8

  


LETTER AGREEMENT N°8

 

If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

 

Agreed and Accepted     Agreed and Accepted
For and on behalf of     For and on behalf of
AVIANCATACA HOLDING, S.A.     AIRBUS S.A.S.
By:  

/s/ Elisa Murgas de Moreno

    By:  

/s/ Christophe Mourey

Its:   Secretary     Its:   Senior Vice President Contracts

 

AVTA - A320 Family & A320 NEO Family PA    A320 IAE
  

 

Letter Agreement N°8

  


LETTER AGREEMENT N°8

AVIANCATACA HOLDING, S.A.

Calle Aquilino de la Guardia No. 8, Ciudad de Panamá

República de Panamá

Subject : [*]

AVIANCATACA HOLDING, S.A. (the “ Buyer ”) and AIRBUS S.A.S. (the “ Seller ”) have entered into a Purchase Agreement (the “ Agreement ”) dated as of even date herewith, which covers, among other things, the manufacture and the sale by the Seller and the purchase by the Buyer of the Aircraft, under the terms and conditions in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement N°8 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.

Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement.

Both parties agree that this Letter Agreement, upon execution hereof, shall constitute an integral, nonseverable part of said Agreement and shall be governed by all the provisions of the Agreement, as such provisions have been specifically amended pursuant to this Letter Agreement. If there is any inconsistency between the provisions of the Agreement and the provisions of this Letter Agreement then the provisions of this Letter Agreement will govern.

 

AVTA - A320 Family & A320 NEO Family PA    A320 NEO CFM
  

 

Letter Agreement N°8

  


LETTER AGREEMENT N°8

 

 

* [Ten pages have been omitted in accordance with a request for confidential treatment.]

 

AVTA - A320 Family & A320 NEO Family PA       A320 NEO CFM
  

 

Letter Agreement N°8

  


LETTER AGREEMENT N°8

 

If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

 

Agreed and Accepted     Agreed and Accepted
For and on behalf of     For and on behalf of
AVIANCATACA HOLDING, S.A.     AIRBUS S.A.S.
By :  

/s/ Elisa Murgas de Moreno

    By :  

/s/ Christophe Mourey

Its :   Secretary     Its :   Senior Vice President Contracts

 

AVTA - A320 Family & A320 NEO Family PA       A320 NEO CFM
  

 

Letter Agreement N°8

  


LETTER AGREEMENT N°8

AVIANCATACA HOLDING, S.A.

Calle Aquilino de la Guardia No. 8, Ciudad de Panamá

República de Panamá

Subject: [*]

AVIANCATACA HOLDING, S.A. (the “ Buyer ”) and AIRBUS S.A.S. (the “ Seller ”) have entered into a Purchase Agreement (the “ Agreement ”) dated as of even date herewith, which covers, among other things, the manufacture and the sale by the Seller and the purchase by the Buyer of the Aircraft, under the terms and conditions in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement N°8 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.

Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement.

Both parties agree that this Letter Agreement, upon execution hereof, shall constitute an integral, nonseverable part of said Agreement and shall be governed by all the provisions of the Agreement, as such provisions have been specifically amended pursuant to this Letter Agreement. If there is any inconsistency between the provisions of the Agreement and the provisions of this Letter Agreement then the provisions of this Letter Agreement will govern.

 

AVTA - A320 Family & A320 NEO Family PA       A320 NEO PW
  

 

Letter Agreement N°8

  


LETTER AGREEMENT N°8

 

* [Ten pages have been omitted in accordance with a request for confidential treatment.]

 

AVTA - A320 Family & A320 NEO Family PA       A320 NEO PW
  

 

Letter Agreement N°8

  


LETTER AGREEMENT N°8

 

If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

 

Agreed and Accepted     Agreed and Accepted
For and on behalf of     For and on behalf of
AVIANCATACA HOLDING, S.A.     AIRBUS S.A.S.
By :  

/s/ Elisa Murgas de Moreno

    By :  

/s/ Christophe Mourey

Its :   Secretary     Its :   Senior Vice President Contracts

 

AVTA - A320 Family & A320 NEO Family PA       A320 NEO PW
  

 

Letter Agreement N°8

  


LETTER AGREEMENT N°8

AVIANCATACA HOLDING, S.A.

Calle Aquilino de la Guardia No. 8, Ciudad de Panamá

República de Panamá

Subject: [*]

AVIANCATACA HOLDING, S.A. (the “ Buyer ”) and AIRBUS S.A.S. (the “ Seller ”) have entered into a Purchase Agreement (the “ Agreement ”) dated as of even date herewith, which covers, among other things, the manufacture and the sale by the Seller and the purchase by the Buyer of the Aircraft, under the terms and conditions in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement N°8 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.

Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement.

Both parties agree that this Letter Agreement, upon execution hereof, shall constitute an integral, nonseverable part of said Agreement and shall be governed by all the provisions of the Agreement, as such provisions have been specifically amended pursuant to this Letter Agreement. If there is any inconsistency between the provisions of the Agreement and the provisions of this Letter Agreement then the provisions of this Letter Agreement will govern.

 

* [Nine pages have been omitted in accordance with a request for confidential treatment.]

 

AVTA - A320 Family & A320 NEO Family PA       A321 CFM
  

 

Letter Agreement N°8

  


LETTER AGREEMENT N°8

 

If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

 

Agreed and Accepted     Agreed and Accepted
For and on behalf of     For and on behalf of
AVIANCATACA HOLDING, S.A.     AIRBUS S.A.S.
By :  

/s/ Elisa Murgas de Moreno

    By :  

/s/ Christophe Mourey

Its :   Secretary     Its :   Senior Vice President Contracts

 

AVTA - A320 Family & A320 NEO Family PA       A321 CFM
  

 

Letter Agreement N°8

  


LETTER AGREEMENT N°8

AVIANCATACA HOLDING, S.A.

Calle Aquilino de la Guardia No. 8, Ciudad de Panamá

República de Panamá

Subject: [*]

AVIANCATACA HOLDING, S.A. (the “ Buyer ”) and AIRBUS S.A.S. (the “ Seller ”) have entered into a Purchase Agreement (the “ Agreement ”) dated as of even date herewith, which covers, among other things, the manufacture and the sale by the Seller and the purchase by the Buyer of the Aircraft, under the terms and conditions in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement N°8 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.

Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement.

Both parties agree that this Letter Agreement, upon execution hereof, shall constitute an integral, nonseverable part of said Agreement and shall be governed by all the provisions of the Agreement, as such provisions have been specifically amended pursuant to this Letter Agreement. If there is any inconsistency between the provisions of the Agreement and the provisions of this Letter Agreement then the provisions of this Letter Agreement will govern.

 

* [Nine pages have been omitted in accordance with a request for confidential treatment.]

 

AVTA - A320 Family & A320 NEO Family PA       A321 IAE
  

 

Letter Agreement N°8

  


LETTER AGREEMENT N°8

 

If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

 

Agreed and Accepted     Agreed and Accepted
For and on behalf of     For and on behalf of
AVIANCATACA HOLDING, S.A.     AIRBUS S.A.S.
By :  

/s/ Elisa Murgas de Moreno

    By :  

/s/ Christophe Mourey

Its :   Secretary     Its :   Senior Vice President Contracts

 

AVTA - A320 Family & A320 NEO Family PA       A321 IAE
  

 

Letter Agreement N°8

  


LETTER AGREEMENT N°8

AVIANCATACA HOLDING, S.A.

Calle Aquilino de la Guardia No. 8, Ciudad de Panamá

República de Panamá

Subject: [*]

AVIANCATACA HOLDING, S.A. (the “ Buyer ”) and AIRBUS S.A.S. (the “ Seller ”) have entered into a Purchase Agreement (the “ Agreement ”) dated as of even date herewith, which covers, among other things, the manufacture and the sale by the Seller and the purchase by the Buyer of the Aircraft, under the terms and conditions in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement N°8 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.

Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement.

Both parties agree that this Letter Agreement, upon execution hereof, shall constitute an integral, nonseverable part of said Agreement and shall be governed by all the provisions of the Agreement, as such provisions have been specifically amended pursuant to this Letter Agreement. If there is any inconsistency between the provisions of the Agreement and the provisions of this Letter Agreement then the provisions of this Letter Agreement will govern.

 

* [Nine pages have been omitted in accordance with a request for confidential treatment.]

 

AVTA - A320 Family & A320 NEO Family PA       A321 NEO CFM
  

 

Letter Agreement N°8

  


LETTER AGREEMENT N°8

 

If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

 

Agreed and Accepted     Agreed and Accepted
For and on behalf of     For and on behalf of
AVIANCATACA HOLDING, S.A.     AIRBUS S.A.S.
By :  

/s/ Elisa Murgas de Moreno

    By :  

/s/ Christophe Mourey

Its :   Secretary     Its :   Senior Vice President Contracts

 

AVTA - A320 Family & A320 NEO Family PA       A321 NEO CFM
  

 

Letter Agreement N°8

  


LETTER AGREEMENT N°8

AVIANCATACA HOLDING, S.A.

Calle Aquilino de la Guardia No. 8, Ciudad de Panamá

República de Panamá

Subject : [*]

AVIANCATACA HOLDING, S.A. (the “ Buyer ”) and AIRBUS S.A.S. (the “ Seller ”) have entered into a Purchase Agreement (the “ Agreement ”) dated as of even date herewith, which covers, among other things, the manufacture and the sale by the Seller and the purchase by the Buyer of the Aircraft, under the terms and conditions in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement N°8 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.

Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement.

Both parties agree that this Letter Agreement, upon execution hereof, shall constitute an integral, nonseverable part of said Agreement and shall be governed by all the provisions of the Agreement, as such provisions have been specifically amended pursuant to this Letter Agreement. If there is any inconsistency between the provisions of the Agreement and the provisions of this Letter Agreement then the provisions of this Letter Agreement will govern.

 

* [Nine pages have been omitted in accordance with a request for confidential treatment.]

 

AVTA - A320 Family & A320 NEO Family PA       A321 NEO PW
  

 

Letter Agreement N°8

  


LETTER AGREEMENT N°8

 

If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

 

Agreed and Accepted     Agreed and Accepted
For and on behalf of     For and on behalf of
AVIANCATACA HOLDING, S.A.     AIRBUS S.A.S.
By:  

/s/ Elisa Murgas de Moreno

    By:  

/s/ Christophe Mourey

Its:   Secretary     Its:   Senior Vice President Contracts

 

AVTA - A320 Family & A320 NEO Family PA    A321 NEO PW
  

 

Letter Agreement N°8

  


LETTER AGREEMENT N°8

 

AVIANCATACA HOLDING, S.A.

Calle Aquilino de la Guardia No. 8, Ciudad de Panamá

República de Panamá

Subject: PERFORMANCE GUARANTEES

AVIANCATACA HOLDING, S.A. (the “ Buyer ”) and AIRBUS S.A.S. (the “ Seller ”) have entered into a Purchase Agreement (the “ Agreement ”) dated as of even date herewith, which covers, among other things, the manufacture and the sale by the Seller and the purchase by the Buyer of the Aircraft, under the terms and conditions in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement N°8 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.

Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement.

Both parties agree that this Letter Agreement, upon execution hereof, shall constitute an integral, nonseverable part of said Agreement and shall be governed by all the provisions of the Agreement, as such provisions have been specifically amended pursuant to this Letter Agreement. If there is any inconsistency between the provisions of the Agreement and the provisions of this Letter Agreement then the provisions of this Letter Agreement will govern.

 

* [Four pages have been omitted in accordance with a request for confidential treatment.]

 

4. Assignment

Except as provided in Clause 21 of the Agreement, this Letter Agreement is not transferable, and the Buyer’s rights under this Letter Agreement shall not be assigned, sold, transferred or otherwise alienated by operation of law or otherwise to any person other than the Buyer. Any unauthorised assignment, sale, transfer or other alienation of the Buyer’s rights under this Letter Agreement with respect to any Aircraft will be void and without effect.

 

AVTA - A320 Family & A320 NEO Family PA

Letter Agreement N°8


LETTER AGREEMENT N°8

 

5. Confidentiality

This Letter Agreement (and its existence) shall be treated by both parties as confidential in accordance with Clause 22.12 of the Agreement.

 

6. Counterparts

This Letter Agreement may be signed in any number of separate counterparts. Each counterpart, when signed and delivered (including counterparts delivered by facsimile transmission) shall be an original, and the counterparts together shall constitute one and the same instrument.

 

AVTA - A320 Family & A320 NEO Family PA

Letter Agreement N°8


LETTER AGREEMENT N°8

 

If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

 

Agreed and Accepted     Agreed and Accepted
For and on behalf of     For and on behalf of
AVIANCATACA HOLDING, S.A.     AIRBUS S.A.S.
By:  

/s/ Elisa Murgas de Moreno

    By:  

/s/ Christophe Mourey

Its:   Secretary     Its:   Senior Vice President Contracts

 

AVTA - A320 Family & A320 NEO Family PA

Letter Agreement N°8


LETTER AGREEMENT N°9

AVIANCATACA HOLDING S.A.

Calle Aquilino de la Guardia No. 8, Ciudad de Panamá

República de Panamá

Subject: [*]

AVIANCATACA HOLDING S.A. (the “ Buyer ”) and AIRBUS S.A.S. (the “ Seller ”) have entered into a Purchase Agreement (the “ Agreement ”) dated as of even date herewith, which covers, among other things, the manufacture and the sale by the Seller and the purchase by the Buyer of the Aircraft, under the terms and conditions in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement N° 9 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.

Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement.

Both parties agree that this Letter Agreement, upon execution hereof, shall constitute an integral, nonseverable part of said Agreement and shall be governed by all the provisions of the Agreement, as such provisions have been specifically amended pursuant to this Letter Agreement. If there is any inconsistency between the provisions of the Agreement and the provisions of this Letter Agreement then the provisions of this Letter Agreement will govern.

 

AVTA - A320 Family & A320 NEO Family PA

Letter Agreement N°9


LETTER AGREEMENT N°9

 

* [Two pages have been omitted in accordance with a request for confidential treatment.]

 

4. Assignment

This Letter Agreement is not transferable, and the Buyer’s rights under this Letter Agreement shall not be assigned, sold, transferred or otherwise alienated by operation of law or otherwise to any person or entity other than the Buyer. Any unauthorized assignment, sale, transfer or other alienation of the Buyer’s rights under this Letter Agreement with respect to any Aircraft will be void and without effect.

 

5. Confidentiality

This Letter Agreement (and its existence) shall be treated by both parties as confidential in accordance with Clause 22.12 of the Agreement.

 

6. Governing Law

THIS LETTER AGREEMENT AND THE AGREEMENTS CONTEMPLATED HEREBY WILL BE GOVERNED BY AND CONSTRUED AND THE PERFORMANCE THEREOF WILL BE DETERMINED IN ACCORDANCE WITH THE PROVISIONS OF CLAUSE 22.4 OF THE AGREEMENT.

IT IS AGREED THAT THE UNITED NATIONS CONVENTION ON CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS WILL NOT APPLY TO THIS AMENDMENT.

 

7. Counterparts

This Letter Agreement may be signed in any number of separate counterparts. Each counterpart, when signed and delivered (including counterparts delivered by facsimile transmission) shall be an original, and the counterparts together shall constitute one and the same instrument.

 

AVTA - A320 Family & A320 NEO Family PA

Letter Agreement N°9


LETTER AGREEMENT N°9

 

If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

 

Agreed and Accepted     Agreed and Accepted
For and on behalf of     For and on behalf of
AVIANCATACA HOLDING S.A.     AIRBUS S.A.S.
By:  

/s/ Elisa Murgas de Moreno

    By:  

/s/ Christophe Mourey

Its:   Secretary     Its:   Senior Vice President Contracts

 

AVTA - A320 Family & A320 NEO Family PA

Letter Agreement N°9


LETTER AGREEMENT N°10

AVIANCATACA HOLDING S.A.

Calle Aquilino de la Guardia No. 8, Ciudad de Panamá

República de Panamá

Subject: [*]

AVIANCATACA HOLDING S.A. (the “ Buyer ”) and AIRBUS S.A.S. (the “ Seller ”) have entered into an aircraft purchase agreement as amended and supplemented from time to time (the “ Agreement ”) of even date herewith, which covers, among other things, the manufacture and the sale by the Seller and the purchase by the Buyer of certain A320 Family Aircraft and A320 NEO Family Aircraft, under the terms and conditions in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement N°10 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.

Capitalized terms used herein and not otherwise defined in this Letter Agreement will have the meanings assigned thereto (a) in the Agreement or, (b) with respect to capitalized terms used in Annex A, in the Sector Understanding on Export Credit for Civil Aircraft as entered into force on February 1 ST , 2011 as may be further amended from time to time by the Organisation for Economic Cooperation and Development (the “ OECD” ), as the case may be.

This Letter Agreement will not constitute part of the Agreement, but will be a separate and independent contract of financial accommodation to or for the benefit of the Buyer.

 

AVTA - A320 Family & A320 NEO Family PA

Letter Agreement N°10


LETTER AGREEMENT N°10

 

[*]

 

4. Assignment

The Buyer shall not be entitled to assign any of its rights under this Letter Agreement except in accordance with the provisions of clause 21 of the Agreement.

 

5. Confidentiality

This Letter Agreement is provided by the Seller to the Buyer in the context of the special relationship between the Buyer and the Seller and is therefore considered by the Seller as commercially sensitive and as constituting confidential information.

The Manufacturers may disclose the existence and content of this Letter Agreement to any [*]. The Buyer agrees that the provisions of this Letter Agreement are personal to it and that it will not disclose the existence or content of this Letter Agreement to any other party, save only to the Propulsion Systems Manufacturer for the purposes of its participation in any [*]. In addition, the Buyer may disclose the provisions of this Letter Agreement to:

 

  (a) its legal advisers and to the Guarantor provided that such parties are bound by a professional duty of confidentiality or enter into confidentiality agreements with and satisfactory to the Seller before any such disclosure occurs; and

 

  (b) any governmental authority to which the Buyer is obliged to disclose such information, any parties entitled to receive such information (pursuant to an order or relevant request of any court, legal or regulatory body having jurisdiction over the Buyer or otherwise in accordance with any obligation to disclose imposed by any applicable law) provided that:

 

  (i) the Buyer shall promptly notify the Seller prior to such disclosure;

 

  (ii) the parties shall work together to ensure the minimum amount of information required to comply with such public disclosure obligation is disclosed; and:

 

  (iii) the Buyer shall use its best endeavours to:

 

  (A) procure that the party to whom such information may be disclosed itself enters into confidentiality agreement (if it is not already bound by a duty of confidentiality) with The Seller and satisfactory to The Seller; or

 

  (B) obtain assurances from the party to whom such information may be disclosed that such information shall be treated in the utmost confidence.

Non-compliance by the Buyer with the terms of this paragraph shall give The Seller the right [*] to the Buyer pursuant to this Letter Agreement.

 

AVTA - A320 Family & A320 NEO Family PA

Letter Agreement N°10


LETTER AGREEMENT N°10

 

 

6. Counterparts

This Letter Agreement may be signed in any number of separate counterparts. Each counterpart, when signed and delivered (including counterparts delivered by facsimile transmission) shall be an original, and the counterparts together shall constitute one and the same instrument.

 

AVTA - A320 Family & A320 NEO Family PA

Letter Agreement N°10


LETTER AGREEMENT N°10

 

If the foregoing correctly sets forth your understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

 

Agreed and Accepted     Agreed and Accepted
For and on behalf of     For and on behalf of
AVIANCATACA HOLDING S.A.     AIRBUS S.A.S.
By :  

/s/ Elisa Murgas de Moreno

    By :  

/s/ Christophe Mourey

Its :   Secretary     Its :   Senior Vice President Contracts

 

AVTA - A320 Family & A320 NEO Family PA

Letter Agreement N°10


LETTER AGREEMENT N°10

 

Annex A

[*]

 

AVTA - A320 Family & A320 NEO Family PA

Letter Agreement N°10


LETTER AGREEMENT N°10

 

 

* [Six pages have been omitted in accordance with a request for confidential treatment.]

 

AVTA - A320 Family & A320 NEO Family PA

Letter Agreement N°10


LETTER AGREEMENT N°10

 

Annex B

 

* [Fifteen pages have been omitted in accordance with a request for confidential treatment.]

 

AVTA - A320 Family & A320 NEO Family PA

Letter Agreement N°10


LETTER AGREEMENT N°10

 

Exhibit

[*]

 

Yours faithfully

 

 

AVIANCATACA HOLDING S.A.

 

AVTA - A320 Family & A320 NEO Family PA

Letter Agreement N°10


LETTER AGREEMENT N°10

 

If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

 

Agreed and Accepted     Agreed and Accepted
For and on behalf of     For and on behalf of
AVIANCATACA HOLDING S.A.     AIRBUS S.A.S.
By :  

/s/ Elisa Murgas de Moreno

    By :  

/s/ Christophe Mourey

Its :   Secretary     Its :   Senior Vice President Contracts

 

AVTA - A320 Family & A320 NEO Family PA

Letter Agreement N°10


LETTER AGREEMENT N°11

AVIANCATACA HOLDING, S.A.

Calle Aquilino de la Guardia No. 8, Ciudad de Panamá

República de Panamá

Subject: [*]

AVIANCATACA HOLDING, S.A. (the “ Buyer ”) and AIRBUS S.A.S. (the “ Seller ”) have entered into a Purchase Agreement (the “ Agreement ”) dated as of even date herewith, which covers, among other things, the manufacture and the sale by the Seller and the purchase by the Buyer of the Aircraft, under the terms and conditions in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement N°11 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.

Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement.

Both parties agree that this Letter Agreement, upon execution hereof, shall constitute an integral, nonseverable part of said Agreement and shall be governed by all the provisions of the Agreement, as such provisions have been specifically amended pursuant to this Letter Agreement. If there is any inconsistency between the provisions of the Agreement and the provisions of this Letter Agreement then the provisions of this Letter Agreement will govern.

 

AVTA - A320 Family & A320 NEO Family PA

Letter Agreement N°11 - Page 1/3


LETTER AGREEMENT N°11

[*]

 

2. Assignment

Except as provided in Clause 21 of the Agreement, this Letter Agreement is not transferable, and the Buyer’s rights under this Letter Agreement shall not be assigned, sold, transferred or otherwise alienated by operation of law or otherwise to any person other than the Buyer. Any unauthorised assignment, sale, transfer or other alienation of the Buyer’s rights under this Letter Agreement with respect to any Aircraft will be void and without effect.

 

3. Confidentiality

This Letter Agreement (and its existence) shall be treated by both parties as confidential in accordance with Clause 22.12 of the Agreement.

 

4. Counterparts

This Letter Agreement may be signed in any number of separate counterparts. Each counterpart, when signed and delivered (including counterparts delivered by facsimile transmission) shall be an original, and the counterparts together shall constitute one and the same instrument.

 

AVTA - A320 Family & A320 NEO Family PA

Letter Agreement N°11 - Page 2/3


LETTER AGREEMENT N°11

If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

 

Agreed and Accepted     Agreed and Accepted
For and on behalf of     For and on behalf of
AVIANCATACA HOLDING, S.A.     AIRBUS S.A.S.
By :  

/s/ Elisa Murgas de Moreno

    By :  

/s/ Christophe Mourey

Its :   Secretary     Its :   S.V.P. Contracts

 

AVTA - A320 Family & A320 NEO Family PA

Letter Agreement N°11 - Page 3/3


LETTER AGREEMENT N° 12

 

AVIANCATACA HOLDING, S.A.

Calle Aquilino de la Guardia No. 8, Ciudad de Panamá

República de Panamá

Subject: [*] ADDENDUM & A320 NEO FAMILY CONSIDERATIONS

AVIANCATACA HOLDING, S.A. Avianca (the “ Buyer ”) and AIRBUS S.A.S. (the “ Seller ”) have entered into a Purchase Agreement (the “ Agreement ”) dated as of even date herewith, which covers, among other things, the manufacture and the sale by the Seller and the purchase by the Buyer of the Aircraft, under the terms and conditions in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement N°12 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.

Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement.

Both parties agree that this Letter Agreement, upon execution hereof, shall constitute an integral, nonseverable part of said Agreement and shall be governed by all the provisions of the Agreement, as such provisions have been specifically amended pursuant to this Letter Agreement. If there is any inconsistency between the provisions of the Agreement and the provisions of this Letter Agreement then the provisions of this Letter Agreement will govern.

 

AVTA - A320 Family & A320 NEO Family PA

Letter Agreement N°12


LETTER AGREEMENT N° 12

 

 

1. [*] Addendum

[*]

 

2. [*] A320 NEO Family Aircraft Considerations

 

2.1 [*] A320 NEO Family Aircraft

[*]

 

2.2 A319 NEO Aircraft [*]

[*]

 

2.3 A320 NEO Aircraft [*]

[*]

 

3. Assignment

Except as provided in Clause 21 of the Agreement, this Letter Agreement is not transferable, and the Buyer’s rights under this Letter Agreement shall not be assigned, sold, transferred or otherwise alienated by operation of law or otherwise to any person other than the Buyer. Any unauthorised assignment, sale, transfer or other alienation of the Buyer’s rights under this Letter Agreement with respect to any Aircraft will be void and without effect.

 

4. Confidentiality

This Letter Agreement (and its existence) shall be treated by both parties as confidential in accordance with Clause 22.12 of the Agreement.

 

5. Counterparts

This Letter Agreement may be signed in any number of separate counterparts. Each counterpart, when signed and delivered (including counterparts delivered by facsimile transmission) shall be an original, and the counterparts together shall constitute one and the same instrument.

 

AVTA - A320 Family & A320 NEO Family PA

Letter Agreement N°12


LETTER AGREEMENT N° 12

 

If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

 

Agreed and Accepted     Agreed and Accepted
For and on behalf of     For and on behalf of
AVIANCATACA HOLDING, S.A.     AIRBUS S.A.S.
By :  

/s/ Elisa Murgas de Moreno

    By :  

/s/ Christophe Mourey

Its :   Secretary     Its :   Senior Vice President Contracts

 

AVTA - A320 Family & A320 NEO Family PA

Letter Agreement N°12


LETTER AGREEMENT N°13

 

AVIANCATACA HOLDING S.A.

Calle Aquilino de la Guardia No. 8, Ciudad de Panamá

República de Panamá

Subject: [*]

AVIANCATACA HOLDING S.A. (the “ Buyer ”) and AIRBUS S.A.S. (the “ Seller ”) have entered into a Purchase Agreement (the “ Agreement ”) dated as of even date herewith, which covers, among other things, the manufacture and the sale by the Seller and the purchase by the Buyer of the Aircraft, under the terms and conditions in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement N°13 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.

Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement.

Both parties agree that this Letter Agreement, upon execution hereof, shall constitute an integral, nonseverable part of said Agreement and shall be governed by all the provisions of the Agreement, as such provisions have been specifically amended pursuant to this Letter Agreement. If there is any inconsistency between the provisions of the Agreement and the provisions of this Letter Agreement then the provisions of this Letter Agreement will govern.

 

AVTA - A320 Family & A320 NEO Family PA

Letter Agreement N°13


LETTER AGREEMENT N°13

 

 

* [Fourteen pages have been omitted in accordance with a request for confidential treatment.]

UNQUOTE

 

4. Assignment

Except as provided in Clause 21 of the Agreement, this Letter Agreement is not transferable, and the Buyer’s rights under this Letter Agreement shall not be assigned, sold, transferred or otherwise alienated by operation of law or otherwise to any person other than the Buyer. Any unauthorised assignment, sale, transfer or other alienation of the Buyer’s rights under this Letter Agreement with respect to any Aircraft will be void and without effect.

 

5. Confidentiality

This Letter Agreement (and its existence) shall be treated by both parties as confidential in accordance with Clause 22.12 of the Agreement.

 

6. Counterparts

This Letter Agreement may be signed in any number of separate counterparts. Each counterpart, when signed and delivered (including counterparts delivered by facsimile transmission) shall be an original, and the counterparts together shall constitute one and the same instrument.

If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

 

AVTA - A320 Family & A320 NEO Family PA

Letter Agreement N°13


LETTER AGREEMENT N°13

 

If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

 

Agreed and Accepted     Agreed and Accepted
For and on behalf of     For and on behalf of
AVIANCATACA HOLDING S.A.     AIRBUS S.A.S.
By :  

/s/ Elisa Murgas de Moreno

    By :  

/s/ Christophe Mourey

Its :   Secretary     Its :   Senior Vice President Contracts

 

AVTA - A320 Family & A320 NEO Family PA

Letter Agreement N°13


LETTER AGREEMENT N°14

AVIANCATACA HOLDING S.A.

Calle Aquilino de la Guardia No. 8, Ciudad de Panamá

República de Panamá

Subject : MISCELLANEOUS

AVIANCATACA HOLDING S.A. (the “ Buyer ”) and AIRBUS S.A.S. (the “ Seller ”) have entered into a Purchase Agreement (the “ Agreement ”) dated as of even date herewith, which covers, among other things, the manufacture and the sale by the Seller and the purchase by the Buyer of the Aircraft, under the terms and conditions in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement N°14 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.

Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement.

Both parties agree that this Letter Agreement, upon execution hereof, shall constitute an integral, nonseverable part of said Agreement and shall be governed by all the provisions of the Agreement, as such provisions have been specifically amended pursuant to this Letter Agreement. If there is any inconsistency between the provisions of the Agreement and the provisions of this Letter Agreement then the provisions of this Letter Agreement will govern.

 

AVTA - A320 Family & A320 NEO Family PA

Letter Agreement N°14


LETTER AGREEMENT N°14

 

 

1. [*]

The Agreement is hereby amended to delete in its entirety Clause 8.2.3 and replace with the following quoted text:

QUOTE

[*]

UNQUOTE

 

2. The Agreement is hereby amended to add a new Clause 18.3.3 per the following quoted text:

QUOTE

[*]

UNQUOTE

 

3. Assignment

Except as provided in Clause 21 of the Agreement, this Letter Agreement is not transferable, and the Buyer’s rights under this Letter Agreement shall not be assigned, sold, transferred or otherwise alienated by operation of law or otherwise to any person other than the Buyer. Any unauthorised assignment, sale, transfer or other alienation of the Buyer’s rights under this Letter Agreement with respect to any Aircraft will be void and without effect.

 

4. Confidentiality

This Letter Agreement (and its existence) shall be treated by both parties as confidential in accordance with Clause 22.12 of the Agreement.

 

5. Counterparts

This Letter Agreement may be signed in any number of separate counterparts. Each counterpart, when signed and delivered (including counterparts delivered by facsimile transmission) shall be an original, and the counterparts together shall constitute one and the same instrument.

 

AVTA - A320 Family & A320 NEO Family PA

Letter Agreement N°14


LETTER AGREEMENT N°14

 

If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

 

Agreed and Accepted     Agreed and Accepted
For and on behalf of     For and on behalf of
AVIANCATACA HOLDING S.A.     AIRBUS S.A.S.
By :  

/s/ Elisa Murgas de Moreno

    By :  

/s/ Christophe Mourey

Its :   Secretary     Its :   Senior Vice President Contracts

 

AVTA - A320 Family & A320 NEO Family PA

Letter Agreement N°14


LETTER AGREEMENT N°15

AVIANCATACA HOLDING S.A.

Calle Aquilino de la Guardia No. 8, Ciudad de Panamá

República de Panamá

Subject: PURCHASE AGREEMENT [*]

AVIANCATACA HOLDING S.A. (the “ Buyer ”) and AIRBUS S.A.S. (the “ Seller ”) have entered into a Purchase Agreement (the “ Agreement ”) dated as of even date herewith, which covers, among other things, the manufacture and the sale by the Seller and the purchase by the Buyer of the Aircraft, under the terms and conditions in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement N°15 (the “ Letter Agreement ”) certain additional terms and conditions regarding the sale of the Aircraft.

Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement.

Both parties agree that this Letter Agreement, upon execution hereof, shall constitute an integral, nonseverable part of said Agreement and shall be governed by all the provisions of the Agreement, as such provisions have been specifically amended pursuant to this Letter Agreement. If there is any inconsistency between the provisions of the Agreement and the provisions of this Letter Agreement then the provisions of this Letter Agreement will govern.

 

AVTA - A320 Family & A320 NEO Family PA

Letter Agreement N°15 - Page 1/3


LETTER AGREEMENT N°15

 

1. Purchase Agreement

Solely with respect to the A320 Family Aircraft, the Buyer and the Seller [*] January 27 th , 2012 (the “ [*] ”). The Buyer shall pay and the Seller shall receive, in accordance with the terms and conditions of the Agreement, the Predelivery Payments with respect to the A320 Family Aircraft [*] as more fully described in Letter Agreement No. [*] .

Except as set forth herein, nothing contained herein shall modify the terms and conditions of the Agreement. For the avoidance of doubt, the Buyer and the Seller shall remain obligated to perform their respective obligations and are subject to the rights and remedies under the Agreement on the date thereof.

 

2. Assignment

Except as provided in Clause 21 of the Agreement, this Letter Agreement is not transferable, and the Buyer’s rights under this Letter Agreement shall not be assigned, sold, transferred or otherwise alienated by operation of law or otherwise to any person other than the Buyer. Any unauthorised assignment, sale, transfer or other alienation of the Buyer’s rights under this Letter Agreement with respect to any Aircraft will be void and without effect.

 

3. Confidentiality

This Letter Agreement (and its existence) shall be treated by both parties as confidential in accordance with Clause 22.12 of the Agreement.

 

4. Counterparts

This Letter Agreement may be signed in any number of separate counterparts. Each counterpart, when signed and delivered (including counterparts delivered by facsimile transmission) shall be an original, and the counterparts together shall constitute one and the same instrument.

 

AVTA - A320 Family & A320 NEO Family PA

Letter Agreement N°15 - Page 2/3


LETTER AGREEMENT N°15

If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

 

Agreed and Accepted     Agreed and Accepted
For and on behalf of     For and on behalf of
AVIANCATACA HOLDING S.A.     AIRBUS S.A.S.
By :  

/s/ Elisa Murgas de Moreno

    By :  

/s/ Christophe Mourey

Its :   Secretary     Its :   S.V.P. Contracts

 

AVTA - A320 Family & A320 NEO Family PA

Letter Agreement N°15 - Page 3/3

Exhibit 10.8.1

Note: Certain portions have been omitted from this Agreement in accordance with a request for confidential treatment submitted to the Securities and Exchange Commission. Omitted information has been replaced with an asterisk. Omitted information has been filed separately with the Securities and Exchange Commission.

AMENDMENT N°1

TO THE A320 FAMILY AND A320 NEO FAMILY PURCHASE AGREEMENT

BETWEEN

AIRBUS S.A.S.

AND

AVIANCATACA HOLDING S.A.

 

CT1004409-AMDT1-94U-A320 Family    1


AMENDMENT N°1

This amendment N°1 to the Purchase Agreement (as defined below) is entered into as of the 28 day of February 2013 (hereinafter referred to as the “ Amendment N°1 ”).

BETWEEN

AIRBUS S.A.S., a société par actions simplifiée, created and existing under French law having its registered office at 1 Rond-Point Maurice Bellonte, 31707 Blagnac-Cedex, France and registered with the Toulouse Registre du Commerce under number RCS Toulouse 383 474 814 (the “ Seller ”),

AND

AVIANCATACA HOLDING S.A., a company created and existing under Panamanian law having its registered office at Calle Aquilino de la Guardia No. 8, Ciudad de Panamá, República de Panamá (the “ Buyer ”).

(together, the “ Parties ” and each, a “ Party ”).

WHEREAS

 

A -

The Parties have entered into an A320 family and A320 NEO family purchase agreement dated December 27 th , 2011 (hereinafter referred to, together with its Exhibits and Letter Agreements as the “ Purchase Agreement ”) covering the purchase by the Buyer and the sale by the Seller of fifty-one (51) A320 Family Aircraft and A320 NEO Family Aircraft.

 

B - The Parties wish to enter into this Amendment N°1 to amend certain provisions of the Purchase Agreement.

 

CT1004409-AMDT1-94U-A320 Family    2


NOW THEREFORE IT IS AGREED AS FOLLOWS:

 

1. AMENDMENTS TO THE PURCHASE AGREEMENT

 

1.1 In the whole Purchase Agreement and except as otherwise expressly provided:

 

  1.1.1 any reference to the term “PW1124G” shall be deleted and replaced with “PW1124G-JM”, and

 

  1.1.2 any reference to the term “PW1127G” shall be deleted and replaced with “PW1127G-JM”, and,

 

  1.1.3 any reference to the term “PW1133G” shall be deleted and replaced with “PW1133G-JM”.

 

1.2 Clause 2.3.2 of the Purchase Agreement shall be deleted in its entirety and replaced by the following quoted provisions:

QUOTE

 

2.3.2  NEO Propulsion Systems

 

Aircraft Type

  

Pratt & Whitney

  

CFM

A319-100

  

PW1124G-JM

AET* (23,500 lbf)

  

LEAP-X 1A24

AET* (23,500 lbf)

A320-200

  

PW1127G-JM

AET* (26,300 lbf)

  

LEAP-X 1A26

AET* (26,300 lbf)

A321-200

  

PW1133G-JM

AET* (32,100 lbf)

  

LEAP-X 1A32

AET* (32,100 lbf)

 

* AET means Airbus Equivalent Thrust

If the Buyer has not selected the Propulsion Systems as of the date of this Agreement, such choice shall be made and notified to Seller no later [*].

UNQUOTE

 

1.3 Clause 3.1 of the Purchase Agreement shall be deleted in its entirety and replaced by the following quoted provisions:

QUOTE

 

3.1 Airframe Base Price

For each aircraft type, the base price of the airframe (the “ Airframe Base Price ”) is respectively the sum of:

 

  (i) the base price of the Airframe as defined in the relevant Standard Specification, including Nacelles and Thrust Reversers, and excluding Buyer Furnished Equipment , which is:

[*]

 

  (ii) the base price of the SCNs, as set forth in Exhibit A, which is:

[*]

 

CT1004409-AMDT1-94U-A320 Family    3


  (iii) for any A320 NEO Family Aircraft, the base price of the New Engine Option (excluding Sharklets), which is :

[*]

 

  (iv) for any Aircraft equipped with Sharklets, the base price of the Sharklets, which is:

[*]

 

  (v) for any A320 NEO Family Aircraft, [*]

All Airframe Base Prices have been established in accordance with the average economic conditions prevailing in [*] and corresponding to a theoretical delivery [*] (the “ Base Period ”).

 

CT1004409-AMDT1-94U-A320 Family    4


UNQUOTE

 

1.4 Clause 9.1.1.6 of the Purchase Agreement shall be deleted in its entirety and replaced by the following quoted provisions:

QUOTE

 

9.1.1.6 Scheduled Delivery Month Notification

The Seller shall notify the Buyer [*] prior to the first month of the concerned delivery quarter (the “ Scheduled Delivery Quarter ”), the delivery month in respect of each such Aircraft. Each of such delivery months shall be, with respect to the corresponding Aircraft, the “ Scheduled Delivery Month ”.

For the sole purpose of calculating the Predelivery Payments, the second month of each quarter shall be deemed to be the Scheduled Delivery Month until the time the Seller notifies the Buyer of the effective Scheduled Delivery Month as set forth hereof.

UNQUOTE

 

1.5 Clause 13.1.2 of the Purchase Agreement shall be deleted in its entirety and replaced by the following quoted provisions:

QUOTE

 

13.1.2 Clause 13.1.1 shall not apply to

 

  (i) Buyer Furnished Equipment or Propulsion Systems; or

 

  (ii) parts not the subject of a Supplier Product Support Agreement; or

 

  (iii) software and Other Items (as defined below) unless such software or Other Items bear the copyright of the Seller.

 

CT1004409-AMDT1-94U-A320 Family    5


UNQUOTE

 

1.6 Clause 1.5.2 of Letter Agreement N°1 to the Purchase Agreement shall be deleted in its entirety and replaced by the following quoted provisions:

QUOTE

 

  1.5.2 Sharklets Availability for Current Standard Aircraft

Should the Buyer require A320 Family Aircraft to be equipped with Sharklets, the Seller shall grant such request, based on the current industrial availability of such devices, and no earlier than the available timeframes indicated in the table below:

 

Aircraft Type

   [*]

A319-100

   [*]

A320-200

   [*]

A321-200

   [*]

Such optional incorporation of the Sharklets onto any A320 Family Aircraft shall be made by way of execution of an SCN.

Any A320 Family Aircraft which the Buyer would elect to equip with Sharklets shall be made at commercial conditions set forth in Clause 3.1 (iv) to the Agreement [*].

 

CT1004409-AMDT1-94U-A320 Family    6


UNQUOTE

 

1.7 Clause 1.2 of Letter Agreement N°1 to the Purchase Agreement shall be deleted in its entirety and replaced by the following quoted provisions:

QUOTE

[*].

UNQUOTE

 

1.8 Clause 1.6.1 of Letter Agreement N°1 to the Purchase Agreement shall be deleted in its entirety and shall be of no further effect.

 

1.9 Clause 1 of Letter Agreement N°3 to the Purchase Agreement shall be deleted in its entirety and replaced by the following quoted provisions:

QUOTE

 

* [Two pages have been omitted in accordance with a request for confidential treatment.]

 

CT1004409-AMDT1-94U-A320 Family    7


UNQUOTE

 

1.10 Clause 20 of the Purchase Agreement as modified by Clause 3 of Letter Agreement N°13 to the Purchase Agreement shall be amended such that:

 

  1.10.1 any references to the term “Buyer” in Clauses 20.1(a)(8), 20.1(a)(9), 20.2(b) and 20.6 shall be deleted and replaced by the term “Buyer and/or Grupo TACA Holdings Limited and/or Aerovias del Continente Americano S.A. Avianca (as applicable)”, and

 

  1.10.2 Clause 20.2 (a) shall be deleted in its entirety and replaced by the following quoted provisions:

QUOTE

 

20.2(a) If a Buyer Termination Event occurs, the Seller shall have the following rights:

(1) The Seller may elect to: (i) suspend its performance under this Agreement with respect to any or all Aircraft, (ii) reschedule the Scheduled Delivery Month of any or all Aircraft remaining to be delivered under this Agreement, [*] (iii) reschedule the date for performance by Seller under this Agreement with respect to any or all equipment, services, data and other items, and/or (iv) cancel or terminate this Agreement (a “Termination”) with respect to all Aircraft, and/or equipment, services, data and/or other items related thereto that are undelivered or unfurnished on the effective date of such Termination; and

(2) If Seller does not exercise its Termination right, the Seller will be entitled to deduct from the Predelivery Payments then held by it an amount equal to the Seller’s actual damages arising from such Termination Event and the Buyer and/or Grupo TACA Holdings Limited and/or Aerovias del Continente Americano S.A. Avianca will be obligated to, [*] of demand from Seller confirming that it has made such deduction, restore the Predelivery Payments to the amount of the Predelivery Payments that would otherwise then be held by the Seller pursuant to Predelivery Payment schedule under this Agreement.

(3) If Seller elects to exercise its Termination right, the Seller shall be entitled to resort to any remedy under applicable law, including without limitation, to recover its actual damages arising from such Termination. During the period prior to resolution of Seller’s actual damages claims either by final judgment or settlement, Seller will be entitled to retain the Predelivery Payments held by Seller as of the date of such Termination. Upon resolution of Seller’s actual damages claims either by final judgment or settlement, either (i) Buyer and/or Grupo TACA Holdings Limited and/or Aerovias del Continente Americano S.A. Avianca shall pay over to Seller the amount by which the actual damages awarded to Seller or agreed to be paid by Buyer and/or Grupo TACA Holdings Limited and/or Aerovias del Continente Americano S.A. Avianca to Seller exceed the Predelivery Payments held by Seller as of the date of the Termination or (ii) Seller shall pay over to the Buyer and/or Grupo TACA Holdings Limited and/or Aerovias del Continente Americano S.A. Avianca the amount by which the Predelivery Payments held by Seller as of the date of the Termination exceed the actual damages awarded to Seller or agreed to be paid by Buyer and/or Grupo TACA Holdings Limited and/or Aerovias del Continente Americano S.A. Avianca to Seller.

 

CT1004409-AMDT1-94U-A320 Family    8


UNQUOTE

 

1.11 The term “Scheduled Delivery Month” shall be replaced by the term “Scheduled Delivery Month or Scheduled Delivery Quarter (as applicable)” in the following clauses:

 

   

Clause 2.4.1 to the Purchase Agreement;

 

   

Clause 2.4.2 to the Purchase Agreement;

 

   

Clause 5.3.5 to the Purchase Agreement;

 

   

Clause 10.1, 10.2 (v), 10.3.2, 10.3.3, 10.4, 11.1 and 11.2 as modified by Letter Agreement N°13 to the Purchase Agreement;

 

   

Clause 18.1.2 to the Purchase Agreement;

 

1.12 In clause 10.2 (vi) of the Purchase Agreement as modified by Letter Agreement N°13 to the Purchase Agreement, the term [*] of the Scheduled Delivery Month” shall be replaced by the term “[*] day of the Scheduled Delivery Month [*].

 

1.13 In clause 11.1 of the Purchase Agreement as modified by Letter Agreement N°13 to the Purchase Agreement, the definition of the term “Anticipated Delivery Time” shall be deleted in its entirety and replaced by the following quoted provisions

QUOTE

Anticipated Delivery Time ” for purposes of this Clause 11.1 means the date notified to Buyer by Seller pursuant to Clause 9.1.2 as the date on which the affected Aircraft will be Ready for Delivery or, if no such notification has been given, [*] of the Scheduled Delivery Month of the affected Aircraft [*] of the middle month of the Scheduled Delivery Quarter (as applicable).

 

CT1004409-AMDT1-94U-A320 Family    9


UNQUOTE

 

2 MISCELLANEOUS PROVISIONS

 

2.1 The Parties agree that this Amendment N°1, upon execution hereof, shall constitute an integral and non-severable part of the Purchase Agreement and shall be governed by all of its provisions, as such provisions have been specifically amended pursuant to this Amendment N°1.

 

2.2 In the event of any inconsistency between the terms and conditions of the Purchase Agreement, its Exhibits and Letter Agreements and the present Amendment N°1, the latter shall prevail to the extent of such inconsistency, whereas the part not concerned by such inconsistency shall remain in full force.

 

2.3 Capitalised terms used herein and not otherwise defined herein shall have the meaning assigned thereto in the Purchase Agreement including its Exhibits and Letter Agreements. The terms “herein”, “hereof” and “hereunder” and words of similar import refer to this Amendment N°1

 

2.4 This Amendment N°1 has been executed in two (2) original copies which are in English and shall not be varied or modified except by an instrument in writing executed by both Parties or by their duly authorised representatives. This Amendment N°1 may be executed by the Parties in separate counterparts and any single counterpart shall be deemed to be an original and a set of such counterparts executed and delivered by the Parties shall constitute one and the same Amendment N°1 and a full original Amendment N°1 for all purposes.

 

2.5 This Amendment N°1 contains the entire agreement of the Parties in respect of the subject matter hereof and supersedes all other prior agreements, letters, representations, understandings and negotiations, oral and written.

 

2.6 Clauses 22.4, 22.5, 22.6, 22.7, 22.8 and 22.12 of the Purchase Agreement shall be incorporated by reference into this Amendment N°1 as if the same were set out in full herein, mutatis mutandis .

 

CT1004409-AMDT1-94U-A320 Family    10


IN WITNESS WHEREOF this Amendment N°1 was entered into the day and year first above written.

 

Agreed and accepted

 

For and on behalf of

AVIANCATACA HOLDING S.A.,

   

Agreed and accepted

 

For and on behalf of

AIRBUS S.A.S.

/s/ Elisa Murgas de Moreno        

Name: Elisa Murgas de Moreno

Its: Secretary

   

Name:

Its:

 

CT1004409-AMDT1-94U-A320 Family    11

Exhibit 10.8.2

Note: Certain portions have been omitted from this General Terms Agreement in accordance with a request for confidential treatment submitted to the Securities and Exchange Commission. Omitted information has been replaced with an asterisk. Omitted information has been filed separately with the Securities and Exchange Commission.

AVIANCATACA HOLDING S.A.,

as Original Buyer

AEROVIAS DEL CONTINENTE AMERICANO S.A. AVIANCA,

as Avianca

and

AIRBUS S.A.S.

as Seller

 

 

ASSIGNMENT, ASSUMPTION AND AMENDMENT AGREEMENT

in respect of twenty-six (26)

A320 Family and A320 NEO Family Aircraft

under the

A320 Family and A320 NEO Family Purchase Agreement

dated December 27 th 2011

 

 

 

 

CT1004409-Assignment to PA AVTA-AVA-A320 Fam    Page 1   


CONTENTS

 

Clause    Page

[*]

 

CT1004409-Assignment to PA AVTA-AVA-A320 Fam    Page 2   


This assignment, assumption and amendment agreement (this “ AVA Assignment ”) is dated as of the 28th day of February 2013,

BETWEEN :

 

(1) AVIANCATACA HOLDING S.A., a company created and existing under Panamanian law having its registered office at Calle Aquilino de la Guardia No. 8, Ciudad de Panamá, República de Panamá (the “ Original Buyer ”);

 

(2) AEROVIAS DEL CONTINENTE AMERICANO S.A. AVIANCA , a company created and existing under the laws of Colombia having its registered office at Avenida Calle 26 No. 59-15 Bogota, Colombia (“ Avianca ”); and

 

(3) AIRBUS S.A.S. , a société par actions simplifiée, created and existing under French law having its registered office at 1 Rond-Point Maurice Bellonte, 31707 Blagnac-Cedex, France and registered with the Toulouse Registre du Commerce under number RCS Toulouse 383 474 814 (the “ Seller ”).

(together, the “ Parties ” and each, a “ Party ”).

WHEREAS:

 

(A)

Pursuant to the A320 Family and A320 NEO Family Purchase Agreement dated December 27 th 2011, including all exhibits and appendixes attached thereto and any letter agreements thereto entered into between the Seller and the Original Buyer attached as Exhibit A (the “ Purchase Agreement ”), inter alia, the Original Buyer agreed to buy, and the Seller agreed to sell, certain aircraft upon the terms and subject to the conditions contained therein; and

 

(B) Concurrently with this AVA Assignment, the Original Buyer and the Seller are entering into an amendment N°1 to the Purchase Agreement dated on or about the date hereof to amend certain provisions of the Purchase Agreement (the “ Amendment N°1 ”); The Purchase Agreement as amended by the terms and provisions of Amendment N ° 1 shall be hereinafter referred to the “ Agreement ”; and

 

(C) Pursuant to Letter Agreement N°9 to the Purchase Agreement, as more fully described in this AVA Assignment and subject to the terms and conditions contained herein, the Parties agree that as of the Effective Date (as defined below), except as modified by Clause 2 and Clause 3 herein, the Original Buyer transfers and assigns to Avianca all of its rights, title, benefits and interests and all of its obligations and liabilities under the Agreement so far as they relate to the Assigned Avianca Aircraft (as defined below) and Avianca acquires such rights, title, benefits, interests, obligations and liabilities; and

 

(D) As a condition to the Seller agreeing to this AVA Assignment, the Original Buyer shall remain jointly and severally liable with Avianca for Avianca’s performance under the AVA Assigned Agreement (as defined below).

NOW THEREFORE , in consideration of the mutual representations, warranties and covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by each of the Parties, the Parties agree as follows:

 

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1. DEFINITIONS AND INTERPRETATION

 

1.1 Definitions

Except as otherwise defined herein capitalized terms used herein shall have the same meanings as ascribed thereto in the Agreement. The following terms shall have the following meanings:

Assigned Avianca Aircraft ” means any or all of the twenty-six (26) Airbus A320 Family or A320 NEO Family Aircraft of the Agreement which are set forth in Exhibit B to this AVA Assignment.

“AVA Assigned Agreement” means the Agreement as assigned from Original Buyer to Avianca in accordance with the terms of this AVA Assignment.

“Effective Date ” means the date of entry into force of this AVA Assignment which shall be deemed to be the date of execution and release of each of the following: (i) this AVA Assignment by the Parties and (ii) an assignment, assumption and amendment agreement made between the Original Buyer, the Seller and Grupo TACA Holdings Limited and (iii) the Amendment N°1 made between the Original Buyer and the Seller.

Encumbrance ” means any encumbrance or security interest whatsoever, howsoever created or arising including (without prejudice to the generality of the foregoing) any right of ownership, security, mortgage, pledge, charge, encumbrance, lien, assignment, statutory right in rem, hypothecation, title, retention, attachment, levy, claim, right of possession or detention, right of set-off (but excluding any right of set-off arising by way of operation of law) or any agreement or arrangement having a similar effect to any of the foregoing.

 

1.2 Interpretation

In this AVA Assignment:

 

  1.2.1  references to Clauses are to be construed as references to the clauses of this AVA Assignment;

 

  1.2.2  references to this AVA Assignment (or to any specified provisions of this AVA Assignment) or any other document shall be construed as references to this AVA Assignment, that provision or that document as in force for the time being and as amended in accordance with its terms.

 

  1.2.3  words importing the plural shall include the singular and vice versa;

 

  1.2.4  headings to Clauses or sections are for convenience only and are to be ignored in construing this AVA Assignment;

 

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  1.2.5  references to a person shall be construed as including references to an individual, firm, company, corporation, unincorporated body of persons or any state or any agency thereof and shall include references to its successors, permitted transferees and permitted assigns;

 

  1.2.6  references to any statute or statutory provision include any statute or statutory provision which amends, extends, consolidates or replaces the same, or which has been amended, extended, consolidated or replaced by the same, and shall include any orders, regulations, instruments or other subordinate legislation made under the relevant statute;

 

  1.2.7  liability includes any obligation or liability (whether present or future, actual or contingent, secured or unsecured, as principal or surety or otherwise); and

 

  1.2.8  the words herein, hereof and hereunder, and words of similar import shall be construed to refer to a document in its entirety and not to any particular provision of such document.

 

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2. ASSIGNMENT, ASSUMPTION AND AMENDMENT

 

2.1 As of, and with effect from, the Effective Date and subject to the terms and conditions set forth herein, including without limitation the amendments and adjustments set out in Clause 3 herein, the Parties agree that:

 

  2.1.1  the Original Buyer shall assign and transfer to Avianca all of the rights, title, benefits and interests and all of the obligations and liabilities of the Original Buyer under the Agreement (except as set forth in Clause 3 herein) so far as they relate only to the Assigned Avianca Aircraft;

 

  2.1.2  Avianca shall assume, undertake and perform all of the obligations and liabilities of the Original Buyer under the Agreement (except as set forth in Clause 3 herein) as contemplated in this AVA Assignment so far as they relate only to the Assigned Avianca Aircraft in every way as if Avianca had at all times been a party to the Agreement in place of the Original Buyer;

 

  2.1.3  notwithstanding the assignment and assumption contemplated above, the Original Buyer shall remain liable, on a joint and several basis with Avianca, for all covenants, undertakings, obligations, duties, responsibilities and liabilities under the AVA Assigned Agreement, which can be further amended or supplemented by the Seller and Avianca from time to time;

 

  2.1.4  with respect to the Assigned Avianca Aircraft and all of the rights, title, benefits and interests of the Original Buyer under the Agreement (except as set forth in Clause 3 herein), the Original Buyer: (i) irrevocably and forever releases the Seller from all of its respective covenants, undertakings, obligations, duties, responsibilities and liabilities under the Agreement to the extent that the same relate to the Assigned Avianca Aircraft; and (ii) irrevocably and forever waives any rights against the Seller with respect to the Assigned Avianca Aircraft and any of their rights, title, benefits and interests under the Agreement from and continuing at all times after the Effective Date;

 

  2.1.5  [*]

 

2.2 Each of the foregoing agreements are conditional on, and shall take effect simultaneously with, the others.

 

2.3 Each of the Original Buyer and Avianca agree that the Seller shall incur no additional obligations or liabilities in connection with agreeing to consent to the assignment and assumption contemplated herein, and each of the Original Buyer and Avianca agrees to indemnify and hold harmless the Seller to the extent of any losses, costs, expenses, liabilities and/or damages suffered by the Seller as a result of the Seller entering into this AVA Assignment.

 

2.4 Avianca and the Seller each acknowledge that from the Effective Date hereof, Avianca shall be the “Buyer” under, and is bound, liable and responsible for all terms and conditions relating to the Assigned Avianca Aircraft set forth in this AVA Assignment and the AVA Assigned Agreement except as set forth in Clause 3 herein.

 

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3. AMENDMENTS AND ADJUSTMENTS

The Parties hereby agree that, with effect from the Effective Date, the AVA Assigned Agreement shall include all of the terms and conditions of the Agreement amended to reflect the assignment of the Assigned Avianca Aircraft to Avianca, except as otherwise provided herein, and shall include the amendments set forth in this Clause 3.

 

3.1 The Agreement shall be amended to reflect the assignment of the Assigned Avianca Aircraft to Avianca and shall include the following amendments:

 

  3.1.1  in clause 1, the sentence “fifty-one (51) Aircraft, of which eighteen (18) are A320 Family Aircraft and thirty-three (33) are A320 NEO Family Aircraft” shall be deleted and replaced with “twenty-six (26) Aircraft, of which eight (8) are A320 Family Aircraft and eighteen (18) are A320 NEO Family Aircraft”;

 

  3.1.2  in clause 5.1, the references to the Buyer’s account shall be deleted and replaced with the following text:

             [*]

 

  3.1.3  in clause 9.1.1.1 and 9.1.1.2, the delivery schedule indicated shall be replaced by the delivery schedule set forth in Exhibit B of this AVA Assignment.

 

  3.1.4  in clause 22.2, the address for notices shall be changed to add Avianca as additional addressee:

             Aerovías del Continente Americano S.A. – Avianca

             Attn.: Secretary General

             Avenida El Dorado No. 59-15 Piso 10

             Bogotá – Colombia

             Email: fleet@aviancataca.com

 

3.2 For the AVA Assigned Agreement, clause 5.10 of the Purchase Agreement shall be deleted in its entirety and replaced by the following quoted provisions:

QUOTE

 

5.10 Set-Off

The Seller may set-off any matured and undisputed obligation owed by the Buyer and/or AviancaTaca Holding S.A. and/or Grupo TACA Holdings Limited (individually or collectively the “ Relevant Set-Off Parties ”), to the Seller and/or its Affiliates against any obligation (whether or not matured) owed by the Seller to any of the Relevant Set-Off Parties [*].

UNQUOTE

 

3.3 For the AVA Assigned Agreement, clause 5.11 of the Purchase Agreement shall be deleted in its entirety and replaced by the following quoted provisions:

 

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QUOTE

 

* [Two pages have been omitted in accordance with a request for confidential treatment.]

UNQUOTE

 

3.4 For the AVA Assigned Agreement, clause 9.1.1.4 of the Purchase Agreement shall be deleted in its entirety and replaced by the following quoted provisions:

QUOTE

[*]

 

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UNQUOTE

 

3.5 The Parties agree that the following clauses to the Purchase Agreement shall not be assigned to Avianca and that all of the rights, title, benefits and interests and all of the obligations and liabilities under the following clauses to the Purchase Agreement shall remain vested with the Original Buyer:

 

  a) [*];

 

  b) clause [*] to the Purchase Agreement;

 

  c) clause [*] to the Purchase Agreement; and

 

  d) clause [*] to the Purchase Agreement.

Avianca agrees that (i) any and all actions and/or inactions taken by the Original Buyer pursuant to the above specified clauses and (ii) any amendments to the above specified clauses by the Original Buyer and Seller, are hereby approved and do not require Avianca’s prior consent.

 

3.6 The Parties agree that the following Letter Agreements to the Purchase Agreement shall not be assigned to Avianca and that all of the rights, title, benefits and interests and all of the obligations and liabilities under the following Letter Agreements shall remain vested with the Original Buyer

[*]

Avianca agrees that any and all actions and/or inactions taken by the Original Buyer pursuant to the above specified clauses and (ii) any amendments to the above specified clauses by the Original Buyer and Seller, are hereby approved and do not require Avianca’s prior consent.

 

3.7 Notwithstanding the assignment of the Agreement to Avianca pursuant to this AVA Assignment, the Parties agree that the following provisions of the Purchase Agreement shall also remain vested with the Original Buyer, as applicable:

 

  a) clause [*];

 

  b) clause [*];

 

  c) clause [*]; and

 

  d) clause [*] to [*].

 

4. ORIGINAL BUYER’S LIABILITY

Each of Avianca and the Original Buyer agree that any notice sent by the Seller to the Original Buyer pursuant to any default by Avianca under the terms of the AVA Assigned Agreement shall be automatically construed as a Seller’s first demand to the Original Buyer to fulfill its obligations as guarantor and cure Avianca’s default.

 

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5. REPRESENTATIONS AND WARRANTIES

 

5.1 Each Party to this AVA Assignment represents and warrants to each other Party that:

 

  5.1.1  it is duly established and validly existing under the laws of the place of its incorporation and has full power, authority and legal right to execute and perform this AVA Assignment;

 

  5.1.2  it has taken all necessary legal and corporate action to authorise the execution and performance of this AVA Assignment;

 

  5.1.3  its execution and delivery of this AVA Assignment, and the performance by it of its obligations hereunder, does not, and will not, violate any provision of its constitutive documents or any provision of any applicable law in any material respect; and

 

  5.1.4  this AVA Assignment constitutes a legal, valid and binding obligation of such Party in accordance with its terms.

 

5.2 As of the date hereof, each of the Original Buyer and the Seller represents and warrants to each of the other Parties that it is not in default under the Agreement and has not created or granted any Encumbrance with respect to the Agreement so far as it relates to the Assigned Avianca Aircraft or its rights thereunder.

 

6. INDEMNITY

Avianca shall indemnify and hold harmless the Seller for:

 

5.1 any liabilities, costs, expenses and obligations arising out of this AVA Assignment which would not have been incurred by the Seller had the AVA Assignment not occurred, including, without limitation, liabilities, costs, expenses and obligations relating to (1) any amendment to the Specification of any Assigned Avianca Aircraft (as such has been agreed between the Original Buyer and the Seller in accordance with the terms of the Agreement with respect to the Aircraft); or (2) the performance of any additional work on the Assigned Avianca Aircraft beyond what is currently contemplated in the Agreement with regard to the Aircraft; and

 

5.2 all reasonable out-of-pocket costs and expenses incurred by the Seller (including all reasonable costs and expenses relating to external legal and tax advice) in connection with the negotiation, preparation and execution of any of the agreements and arrangements contemplated by this AVA Assignment, such amounts to be borne by Avianca.

 

7. FUTURE AMENDMENTS

No amendment, modification or waiver in respect of this AVA Assignment will be effective unless in writing (including a writing evidenced by a facsimile or e-mail transmission) and executed by each of the Parties.

 

8. GOVERNING LAW

THIS AVA ASSIGNMENT WILL BE GOVERNED BY AND CONSTRUED AND THE PERFORMANCE THEREOF WILL BE DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ITS CONFLICTS OF LAWS PROVISIONS THAT WOULD RESULT IN THE APPLICATION OF THE LAW OF ANY OTHER JURISDICTION OTHER THAN SECTION 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW.

 

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Each of the Parties (i) hereby irrevocably submits itself to the nonexclusive jurisdiction of the courts of the state of New York, New York County, or the United States District Court for the Southern District of New York, for the purposes of any suit, action or other proceeding arising out of this AVA Assignment, the subject matter hereof or any of the transactions contemplated hereby brought by any party or parties hereto, and (ii) hereby waives, and agrees not to assert, by way of motion, as a defense or otherwise, in any such suit, action or proceeding, to the extent permitted by applicable law, any defense based on sovereign or other immunity or that the suit, action or proceeding which is referred to in Clause (i) above is brought in an inconvenient forum, that the venue of such suit, action or proceeding is improper, or that this AVA Assignment or the subject matter hereof or any of the transactions contemplated hereby may not be enforced in or by these courts.

THE PARTIES HEREBY ALSO AGREE THAT THE UNITED NATIONS CONVENTION ON CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS 1988 WILL NOT APPLY TO THIS TRANSACTION.

 

9. NOTICES

The address and fax number (and the department or officer, if any, for whose attention the communication is to be made) of each Party for any communication or document to be made or delivered under or in connection with this AVA Assignment is identified with its name below or in any substitute details which that Party may notify to the other Parties by not less than [*] notice.

 

  9.1.1  In the case of the Original Buyer:

AviancaTaca Holding S.A.

Attn.: Secretary

Avenida El Dorado No. 59-15 Piso 10

Bogotá – Colombia

Email: fleet@aviancataca.com

 

  9.1.2  In the case of Avianca:

Aerovías del Continente Americano S.A. – Avianca

Attn.: Secretary General

Avenida El Dorado No. 59-15 Piso 10

Bogotá – Colombia

Email: fleet@aviancataca.com

With a copy to:

AviancaTaca Holding S.A.

Attn.: Secretary

Avenida El Dorado No. 59-15 Piso 10

Bogotá – Colombia

Email: fleet@aviancataca.com

 

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  9.1.3  In the case of the Seller:

Airbus S.A.S.

1 rond point Maurice Bellonte

31707 Blagnac Cedex

France

Fax: +33 (0) 5 61 93 49 81

Attention: Vice-President Contracts Division

 

10. REFERENCE

Any future reference to (a) the Agreement in relation to any of the Assigned Avianca Aircraft in any document or instrument in connection therewith, shall, after the Effective Date, be deemed to be a reference to the AVA Assigned Agreement and (b) the “Buyer” under the AVA Assigned Agreement, as assigned, or in any other document or instrument, and in any case in relation to any of the Assigned Avianca Aircraft, shall, after the Effective Date, be deemed to be a reference to Avianca.

 

11. ONWARD TRANSFER OF RIGHTS

Avianca agrees that it may not assign, novate, transfer, sell, delegate or otherwise deal with or dispose of any of its rights hereunder or under the AVA Assigned Agreement without the prior written consent of the Seller.

 

12. CONFIDENTIALITY

This AVA Assignment (and its existence) shall be treated by all of the Parties as confidential in accordance with clause 22.12 of the Purchase Agreement and the AVA Assigned Agreement.

 

13. ENTIRE AGREEMENT

This AVA Assignment constitutes the entire agreement between the Parties and supersedes all previous negotiations, representations, undertakings and agreements heretofore made between the parties with respect to its subject matter.

 

14. COUNTERPARTS

This AVA Assignment (and each amendment, modification and waiver in respect of it) may be executed and delivered in counterparts (including by facsimile transmission), each of which will be deemed an original.

 

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IN WITNESS WHEREOF the parties have executed this AVA Assignment on the date first above written.

 

AVIANCATACA HOLDING S.A.,
By:   /s/ Elisa Murgas de Moreno
Name:   Elisa Murgas de Moreno
Title:   Secretary

 

AEROVIAS DEL CONTINENTE
AMERICANO S.A. AVIANCA,
By:   /s/ Elisa Murgas de Moreno
Name:   Elisa Murgas de Moreno
Title   Secretary General Officer

 

AIRBUS S.A.S.
By    
Name    
Title    

 

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Exhibit A

[Copy of Agreement]

[Included elsewhere in this filing as Exhibit 10.8]

 

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Exhibit B

[*]

 

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Exhibit 10.8.3

Note: Certain portions have been omitted from this General Terms Agreement in accordance with a request for confidential treatment submitted to the Securities and Exchange Commission. Omitted information has been replaced with an asterisk. Omitted information has been filed separately with the Securities and Exchange Commission.

AVIANCATACA HOLDING S.A.,

as Original Buyer

GRUPO TACA HOLDINGS LIMITED,

as Taca

and

AIRBUS S.A.S.

as Seller

 

 

ASSIGNMENT, ASSUMPTION AND AMENDMENT AGREEMENT

in respect of twenty-five (25)

A320 Family and A320 NEO Family Aircraft

under the

A320 Family and A320 NEO Family Purchase Agreement

dated December 27 th 2011

 

 

 

 

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CONTENTS

 

Clause    Page

[*]

 

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This assignment, assumption and amendment agreement (this “ TACA Assignment ”) is dated as of the 28th day of February 2013,

BETWEEN:

 

(1) AVIANCATACA HOLDING S.A., a company created and existing under Panamanian law having its registered office at Calle Aquilino de la Guardia No. 8, Ciudad de Panamá, República de Panamá (the “ Original Buyer ”);

 

(2) GRUPO TACA HOLDINGS LIMITED , a company created and existing under the laws of The Commonwealth of the The Bahamas having its registered office at Wintherbotham Place, Marlborough & Queen Streets P.O. Box N-3026, Nassau, The Bahamas (“ Taca ”); and

 

(3) AIRBUS S.A.S. , a société par actions simplifiée, created and existing under French law having its registered office at 1 Rond-Point Maurice Bellonte, 31707 Blagnac-Cedex, France and registered with the Toulouse Registre du Commerce under number RCS Toulouse 383 474 814 (the “ Seller ”).

(together, the “ Parties ” and each, a “ Party ”).

WHEREAS:

 

(A)

Pursuant to the A320 Family and A320 NEO Family Purchase Agreement dated December 27 th 2011, including all exhibits and appendixes attached thereto and any letter agreements thereto entered into between the Seller and the Original Buyer attached as Exhibit A (the “ Purchase Agreement ”), inter alia, the Original Buyer agreed to buy, and the Seller agreed to sell, certain aircraft upon the terms and subject to the conditions contained therein; and

 

(B) Concurrently with this TACA Assignment, the Original Buyer and the Seller are entering into an amendment N°1 to the Purchase Agreement dated on or about the date hereof to amend certain provisions of the Purchase Agreement (the “ Amendment N°1 ”); The Purchase Agreement as amended by the terms and provisions of Amendment N ° 1 shall be hereinafter referred to the “ Agreement ”; and

 

(C) Pursuant to Letter Agreement N°9 to the Purchase Agreement, as more fully described in this TACA Assignment and subject to the terms and conditions contained herein, the Parties agree that as of the Effective Date (as defined below), except as modified by Clause 2 and Clause 3 herein, the Original Buyer transfers and assigns to Taca all of its rights, title, benefits and interests and all of its obligations and liabilities under the Agreement so far as they relate to the Assigned Taca Aircraft (as defined below) and Taca acquires such rights, title, benefits, interests, obligations and liabilities; and

 

(D) As a condition to the Seller agreeing to this TACA Assignment, the Original Buyer shall remain jointly and severally liable with Taca for Taca’s performance under the GTH Assigned Agreement (as defined below).

 

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NOW THEREFORE , in consideration of the mutual representations, warranties and covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by each of the Parties, the Parties agree as follows:

 

1. DEFINITIONS AND INTERPRETATION

 

1.1 Definitions

Except as otherwise defined herein capitalized terms used herein shall have the same meanings as ascribed thereto in the Agreement. The following terms shall have the following meanings:

Assigned Taca Aircraft ” means any or all of the twenty-five (25) Airbus A320 Family or A320 NEO Family Aircraft of the Agreement which are set forth in Exhibit B to this TACA Assignment.

“GTH Assigned Agreement” means the Agreement as assigned from Original Buyer to Taca in accordance with the terms of this TACA Assignment.

“Effective Date ” means the date of entry into force of this TACA Assignment which shall be deemed to be the date of execution and release of each of the following: (i) this TACA Assignment by the Parties and (ii) an assignment, assumption and amendment agreement made between the Original Buyer, the Seller and Aerovias del Continente Americano S.A. Avianca and (iii) the Amendment N°1 made between the Original Buyer and the Seller.

Encumbrance ” means any encumbrance or security interest whatsoever, howsoever created or arising including (without prejudice to the generality of the foregoing) any right of ownership, security, mortgage, pledge, charge, encumbrance, lien, assignment, statutory right in rem, hypothecation, title, retention, attachment, levy, claim, right of possession or detention, right of set-off (but excluding any right of set-off arising by way of operation of law) or any agreement or arrangement having a similar effect to any of the foregoing.

 

1.2 Interpretation

In this TACA Assignment:

 

  1.2.1 references to Clauses are to be construed as references to the clauses of this TACA Assignment;

 

  1.2.2 references to this TACA Assignment (or to any specified provisions of this TACA Assignment) or any other document shall be construed as references to this TACA Assignment, that provision or that document as in force for the time being and as amended in accordance with its terms.

 

  1.2.3 words importing the plural shall include the singular and vice versa;

 

  1.2.4 headings to Clauses or sections are for convenience only and are to be ignored in construing this TACA Assignment;

 

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  1.2.5 references to a person shall be construed as including references to an individual, firm, company, corporation, unincorporated body of persons or any state or any agency thereof and shall include references to its successors, permitted transferees and permitted assigns;

 

  1.2.6 references to any statute or statutory provision include any statute or statutory provision which amends, extends, consolidates or replaces the same, or which has been amended, extended, consolidated or replaced by the same, and shall include any orders, regulations, instruments or other subordinate legislation made under the relevant statute;

 

  1.2.7 liability includes any obligation or liability (whether present or future, actual or contingent, secured or unsecured, as principal or surety or otherwise); and

 

  1.2.8 the words herein, hereof and hereunder, and words of similar import shall be construed to refer to a document in its entirety and not to any particular provision of such document.

 

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2. ASSIGNMENT, ASSUMPTION AND AMENDMENT

 

2.1 As of, and with effect from, the Effective Date and subject to the terms and conditions set forth herein, including without limitation the amendments and adjustments set out in Clause 3 herein, the Parties agree that:

 

  2.1.1 the Original Buyer shall assign and transfer to Taca all of the rights, title, benefits and interests and all of the obligations and liabilities of the Original Buyer under the Agreement (except as set forth in Clause 3 herein) so far as they relate only to the Assigned Taca Aircraft;

 

  2.1.2 Taca shall assume, undertake and perform all of the obligations and liabilities of the Original Buyer under the Agreement (except as set forth in Clause 3 herein) as contemplated in this TACA Assignment so far as they relate only to the Assigned Taca Aircraft in every way as if Taca had at all times been a party to the Agreement in place of the Original Buyer;

 

  2.1.3 notwithstanding the assignment and assumption contemplated above, the Original Buyer shall remain liable, on a joint and several basis with Taca, for all covenants, undertakings, obligations, duties, responsibilities and liabilities under the GTH Assigned Agreement, which can be further amended or supplemented by the Seller and Taca from time to time;

 

  2.1.4 with respect to the Assigned Taca Aircraft and all of the rights, title, benefits and interests of the Original Buyer under the Agreement (except as set forth in Clause 3 herein), the Original Buyer: (i) irrevocably and forever releases the Seller from all of its respective covenants, undertakings, obligations, duties, responsibilities and liabilities under the Agreement to the extent that the same relate to the Assigned Taca Aircraft; and (ii) irrevocably and forever waives any rights against the Seller with respect to the Assigned Taca Aircraft and any of their rights, title, benefits and interests under the Agreement from and continuing at all times after the Effective Date;

 

  2.1.5 [*]

 

  2.1.6 The Seller acknowledges the aforesaid assignment, transfer, assumption, release and undertaking and consents to the same. For the avoidance of doubt, the Seller shall be responsible to perform its obligations to Taca under the Agreement (except as set forth in Clause 3 herein) as contemplated in this TACA Assignment so far as they relate only to the Assigned Taca Aircraft in every way as if Taca had at all times been a party to the Agreement in place of the Original Buyer.

 

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  2.2 Each of the foregoing agreements are conditional on, and shall take effect simultaneously with, the others.

 

  2.3 Each of the Original Buyer and Taca agree that the Seller shall incur no additional obligations or liabilities in connection with agreeing to consent to the assignment and assumption contemplated herein, and each of the Original Buyer and Taca agrees to indemnify and hold harmless the Seller to the extent of any losses, costs, expenses, liabilities and/or damages suffered by the Seller as a result of the Seller entering into this TACA Assignment.

 

  2.4 Taca and the Seller each acknowledge that from the Effective Date hereof, Taca shall be the “Buyer” under, and is bound, liable and responsible for all terms and conditions relating to the Assigned Taca Aircraft set forth in this TACA Assignment and the GTH Assigned Agreement except as set forth in Clause 3 herein.

 

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3. AMENDMENTS AND ADJUSTMENTS

The Parties hereby agree that, with effect from the Effective Date, the GTH Assigned Agreement shall include all of the terms and conditions of the Agreement amended to reflect the assignment of the Assigned Taca Aircraft to Taca, except as otherwise provided herein, and shall include the amendments set forth in this Clause 3.

 

3.1 The Agreement shall be amended to reflect the assignment of the Assigned Taca Aircraft to Taca and shall include the following amendments:

 

  3.1.1 in clause 1, the sentence “fifty-one (51) Aircraft, of which eighteen (18) are A320 Family Aircraft and thirty-three (33) are A320 NEO Family Aircraft” shall be deleted and replaced with “twenty-five (25) Aircraft, of which ten (10) are A320 Family Aircraft and fifteen (15) are A320 NEO Family Aircraft”;

 

  3.1.2 in clause 5.1, the references to the Buyer’s account shall be deleted and replaced with the following text:

[*]

 

  3.1.3 in clause 9.1.1.1 and 9.1.1.2, the delivery schedule indicated shall be replaced by the delivery schedule set forth in Exhibit B of this TACA Assignment.

 

  3.1.4 in clause 22.2, the address for notices shall be changed to add Taca as additional addressee:

GRUPO TACA HOLDINGS LIMITED ,

Attn.: Secretary General

Wintherbotham Place, Marlborough and Queen Streets

Nassau, The Bahamas

Email: flota@aviancataca.com

 

3.2 For the GTH Assigned Agreement, clause 5.10 of the Purchase Agreement shall be deleted in its entirety and replaced by the following quoted provisions:

QUOTE

 

5.10 Set-Off

The Seller may set-off any matured and undisputed obligation owed by the Buyer and/or AviancaTaca Holding S.A. and/or Aerovias del Continente Americano S.A. Avianca (individually or collectively the “ Relevant Set-Off Parties ”), to the Seller and/or its Affiliates against any obligation (whether or not matured) owed by the Seller to any of the Relevant Set-Off Parties [*]

 

CT1004409-Assignment to PA AVTA-TACA-A320 Fam    Page 8


UNQUOTE

 

3.3 For the GTH Assigned Agreement, clause 5.11 of the Purchase Agreement shall be deleted in its entirety and replaced by the following quoted provisions:

QUOTE

 

* [Two pages have been omitted in accordance with a request for confidential treatment.]

UNQUOTE

 

3.4 For the GTH Assigned Agreement, clause 9.1.1.4 of the Purchase Agreement shall be deleted in its entirety and replaced by the following quoted provisions:

QUOTE

[*]

 

CT1004409-Assignment to PA AVTA-TACA-A320 Fam    Page 9


UNQUOTE

 

3.5 The Parties agree that the following clauses to the Purchase Agreement shall not be assigned to Taca and that all of the rights, title, benefits and interests and all of the obligations and liabilities under the following clauses to the Purchase Agreement shall remain vested with the Original Buyer:

[*]

 

  a) clause [*] to the Purchase Agreement;

 

  b) clause [*] to the Purchase Agreement; and

 

  c) clause [*] to the Purchase Agreement.

Taca agrees that (i) any and all actions and/or inactions taken by the Original Buyer pursuant to the above specified clauses and (ii) any amendments to the above specified clauses by the Original Buyer and Seller, are hereby approved and do not require Taca’s prior consent.

 

3.6 The Parties agree that the following Letter Agreements to the Purchase Agreement shall not be assigned to Taca and that all of the rights, title, benefits and interests and all of the obligations and liabilities under the following Letter Agreements shall remain vested with the Original Buyer

[*]

Taca agrees that any and all actions and/or inactions taken by the Original Buyer pursuant to the above specified clauses and (ii) any amendments to the above specified clauses by the Original Buyer and Seller, are hereby approved and do not require Taca’s prior consent.

 

3.7 Notwithstanding the assignment of the Agreement to Taca pursuant to this TACA Assignment, the Parties agree that the following provisions of the Purchase Agreement shall also remain vested with the Original Buyer, as applicable:

 

  a) clause [*];

 

  b) clause [*]

 

  c) clause [*]; and

 

  d) clause [*].

 

4. ORIGINAL BUYER’S LIABILITY

Each of Taca and the Original Buyer agree that any notice sent by the Seller to the Original Buyer pursuant to any default by Taca under the terms of the GTH Assigned Agreement shall be automatically construed as a Seller’s first demand to the Original Buyer to fulfill its obligations as guarantor and cure Taca’s default.

 

CT1004409-Assignment to PA AVTA-TACA-A320 Fam    Page 10


5. REPRESENTATIONS AND WARRANTIES

 

5.1 Each Party to this TACA Assignment represents and warrants to each other Party that:

 

  5.1.1 it is duly established and validly existing under the laws of the place of its incorporation and has full power, authority and legal right to execute and perform this TACA Assignment;

 

  5.1.2 it has taken all necessary legal and corporate action to authorise the execution and performance of this TACA Assignment;

 

  5.1.3 its execution and delivery of this TACA Assignment, and the performance by it of its obligations hereunder, does not, and will not, violate any provision of its constitutive documents or any provision of any applicable law in any material respect; and

 

  5.1.4 this TACA Assignment constitutes a legal, valid and binding obligation of such Party in accordance with its terms.

 

5.2 As of the date hereof, each of the Original Buyer and the Seller represents and warrants to each of the other Parties that it is not in default under the Agreement and has not created or granted any Encumbrance with respect to the Agreement so far as it relates to the Assigned Taca Aircraft or its rights thereunder.

 

6. INDEMNITY

Taca shall indemnify and hold harmless the Seller for:

 

5.1 any liabilities, costs, expenses and obligations arising out of this TACA Assignment which would not have been incurred by the Seller had the TACA Assignment not occurred, including, without limitation, liabilities, costs, expenses and obligations relating to (1) any amendment to the Specification of any Assigned Taca Aircraft (as such has been agreed between the Original Buyer and the Seller in accordance with the terms of the Agreement with respect to the Aircraft); or (2) the performance of any additional work on the Assigned Taca Aircraft beyond what is currently contemplated in the Agreement with regard to the Aircraft; and

 

5.2 all reasonable out-of-pocket costs and expenses incurred by the Seller (including all reasonable costs and expenses relating to external legal and tax advice) in connection with the negotiation, preparation and execution of any of the agreements and arrangements contemplated by this TACA Assignment, such amounts to be borne by Taca.

 

7. FUTURE AMENDMENTS

No amendment, modification or waiver in respect of this TACA Assignment will be effective unless in writing (including a writing evidenced by a facsimile or e-mail transmission) and executed by each of the Parties.

 

CT1004409-Assignment to PA AVTA-TACA-A320 Fam    Page 11


8. GOVERNING LAW

THIS TACA ASSIGNMENT WILL BE GOVERNED BY AND CONSTRUED AND THE PERFORMANCE THEREOF WILL BE DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ITS CONFLICTS OF LAWS PROVISIONS THAT WOULD RESULT IN THE APPLICATION OF THE LAW OF ANY OTHER JURISDICTION OTHER THAN SECTION 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW.

Each of the Parties (i) hereby irrevocably submits itself to the nonexclusive jurisdiction of the courts of the state of New York, New York County, or the United States District Court for the Southern District of New York, for the purposes of any suit, action or other proceeding arising out of this TACA Assignment, the subject matter hereof or any of the transactions contemplated hereby brought by any party or parties hereto, and (ii) hereby waives, and agrees not to assert, by way of motion, as a defense or otherwise, in any such suit, action or proceeding, to the extent permitted by applicable law, any defense based on sovereign or other immunity or that the suit, action or proceeding which is referred to in Clause (i) above is brought in an inconvenient forum, that the venue of such suit, action or proceeding is improper, or that this TACA Assignment or the subject matter hereof or any of the transactions contemplated hereby may not be enforced in or by these courts.

THE PARTIES HEREBY ALSO AGREE THAT THE UNITED NATIONS CONVENTION ON CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS 1988 WILL NOT APPLY TO THIS TRANSACTION.

 

9. NOTICES

The address and fax number (and the department or officer, if any, for whose attention the communication is to be made) of each Party for any communication or document to be made or delivered under or in connection with this TACA Assignment is identified with its name below or in any substitute details which that Party may notify to the other Parties by not less than [*] notice.

 

  9.1.1 In the case of the Original Buyer:

AviancaTaca Holding S.A.

Attn.: Secretary

Avenida El Dorado No. 59-15 Piso 10

Bogotá – Colombia

Email: fleet@aviancataca.com

 

  9.1.2 In the case of Taca:

Grupo Taca Holdings Limited

Attn: Director

Winterbotham Place, Marlborough & Queen Streets

Nassau, The Bahamas

With a copy to:

AviancaTaca Holding S.A.

Attn.: Secretary

Avenida El Dorado No. 59-15 Piso 10

Bogotá – Colombia

Email: fleet@aviancataca.com

 

CT1004409-Assignment to PA AVTA-TACA-A320 Fam    Page 12


  9.1.3 In the case of the Seller:

Airbus S.A.S.

1 rond point Maurice Bellonte

31707 Blagnac Cedex

France

Fax: +33 (0) 5 61 93 49 81

Attention: Vice-President Contracts Division

 

10. REFERENCE

Any future reference to (a) the Agreement in relation to any of the Assigned Taca Aircraft in any document or instrument in connection therewith, shall, after the Effective Date, be deemed to be a reference to the GTH Assigned Agreement and (b) the “Buyer” under the GTH Assigned Agreement, as assigned, or in any other document or instrument, and in any case in relation to any of the Assigned Taca Aircraft, shall, after the Effective Date, be deemed to be a reference to Taca.

 

11. ONWARD TRANSFER OF RIGHTS

Taca agrees that it may not assign, novate, transfer, sell, delegate or otherwise deal with or dispose of any of its rights hereunder or under the GTH Assigned Agreement without the prior written consent of the Seller.

 

12. CONFIDENTIALITY

This TACA Assignment (and its existence) shall be treated by all of the Parties as confidential in accordance with clause 22.12 of the Purchase Agreement and the GTH Assigned Agreement.

 

13. ENTIRE AGREEMENT

This TACA Assignment constitutes the entire agreement between the Parties and supersedes all previous negotiations, representations, undertakings and agreements heretofore made between the parties with respect to its subject matter.

 

14. COUNTERPARTS

This TACA Assignment (and each amendment, modification and waiver in respect of it) may be executed and delivered in counterparts (including by facsimile transmission), each of which will be deemed an original.

 

CT1004409-Assignment to PA AVTA-TACA-A320 Fam    Page 13


IN WITNESS WHEREOF the parties have executed this TACA Assignment on the date first above written.

 

AVIANCATACA HOLDING S.A.,
By:   /s/ Elisa Murgas de Moreno
Name:   Elisa Murgas de Moreno
Title:   Secretary General Officer

 

GRUPO TACA HOLDINGS LIMITED
By    
Name    
Title   Sole Director

 

AIRBUS S.A.S.
By    
Name    
Title    

 

CT1004409-Assignment to PA AVTA-TACA-A320 Fam    Page 14


Exhibit A

[Copy of Agreement]

[Included elsewhere in this filing as Exhibit 10.8]

 

CT1004409-Assignment to PA AVTA-TACA-A320 Fam    Page 15


Exhibit B

[*]

 

CT1004409-Assignment to PA AVTA-TACA-A320 Fam    Page 16

Exhibit 10.11

Note: Certain portions have been omitted from this Agreement in accordance with a request for confidential treatment submitted to the Securities and Exchange Commission. Omitted information has been replaced with an asterisk. Omitted information has been filed separately with the Securities and Exchange Commission.

GENERAL TERMS AGREEMENT

BETWEEN

ROLLS-ROYCE Plc

ROLLS-ROYCE TOTALCARE SERVICES LIMITED

AND

AEROVÍAS DEL CONTINENTE AMERICANO S.A. AVIANCA

TRENT 700

 

LOGO    Contract Ref :- DEG 5104    Page 1 of 36


TABLE OF CONTENTS

Recitals

SECTION 1 – GENERAL TERMS

 

Clauses

  

1       Definitions

  

2       Scope of Agreement

  

3       Purchase Orders

  

4       Delivery

  

5       Prices

  

6       Payment

  

7       Taxes and Other Charges

  

8       Delay

  

9       Events of Default and Termination

  

10     Non Disclosure F

  

11     Intellectual Property Rights

  

12     Grant of Warranties and Limitation of Liability

  

13     Occupier’s Liability

  

14     General Terms

  

15     Export/Import Shipment and Government Authorisation

  

16     Conflict

  

SECTION 2 – EXHIBITS

 

Exhibits   

A      AIRCRAFT DELIVERY SCHEDULE

  

B      OPERATING ASSUMPTIONS

  

C      [*]

  

D      [*]

  

E-1   [*]

  

E-2   SPARE PARTS TERMS

  

F       [*]

  

G      TOTAL CARE

  

 

LOGO    Contract Ref :- DEG 5104    Page 2 of 36


THIS AGREEMENT is made this 15 day of June, 2007 BETWEEN:

 

(1) Rolls-Royce plc whose registered office is at 65 Buckingham Gate, London SW1E 6AT;

 

   and

 

   Rolls-Royce TotalCare Services Limited whose registered office is at Moor Lane, Derby DE24 8BJ;

 

   (each hereinafter called Rolls-Royce); and

 

(2) Aerovías del Continente Americano S.A. Avianca whose registered office or principal place of business is at Centro Administrativo, Avenida El Dorado, No. 92-30, Bogotá, Colombia

 

   (hereinafter called Avianca).

Avianca and Rolls-Royce may hereinafter be referred to as a “Party” or collectively as the “Parties”.

WHEREAS:

Avianca has entered into an Agreement with Airframer for the purchase of new Rolls-Royce Engine powered Aircraft.

Avianca and Rolls-Royce desire to enter into this Agreement for the sale and support by Rolls-Royce, and the purchase by Avianca from Rolls-Royce, of Products and Services;

 

LOGO    Contract Ref :- DEG 5104    Page 3 of 36


NOW THEREFORE IT IS AGREED AS FOLLOWS:

SECTION 1 GENERAL TERMS

CLAUSE 1 DEFINITIONS

The following words and phrases, when used in this Agreement (including in the recitals), shall have the meaning and definition set forth. All other words and phrases as defined in the Engine Manuals shall also apply. Should the definitions used in this Agreement differ from the definitions contained in the Engine Manuals, the definitions used in this Agreement shall take precedence for the purpose of this Agreement.

[*]

“Agreement ” means the General Terms together with all Exhibits.

“Aircraft” means the A330-200 type Aircraft, as described in Exhibit A, together with any option/purchase right aircraft, powered by Engines which are being purchased from Airframer by Avianca, or its permitted assigns.

“Airframer” means Airbus SAS.

“Aircraft Manual” means an Aircraft manual as defined by the Airframer.

“Airworthiness Authority” means the FAA, EASA, or UAEAC or other agreed applicable authority (provided that the directives of the UAEAC are consistent with those of other ICAO members), as applicable, and

“Airworthiness Authorities” shall be construed accordingly.

[*]

“Anniversary Date(s)” means, in respect of Guarantees, any or all of the anniversary dates from the date of delivery of the first Aircraft to Avianca through to the end of the Term of Guarantee.

“Assumptions” means the assumed conditions of operation of the Engines and Aircraft as detailed in Exhibits A (Aircraft Delivery Schedule), B (Operating Assumptions), and E (Fleet Purchasing Support).

“AOG” means aircraft on ground as defined in the World Airlines Technical Operations Glossary (WATOG) .

“ATA Specifications” means the then current revisions of ATA specifications Numbers 100, 101, 102, 103, 200, 300, 400 and 2000 or their equivalent.

“Commercial Price List(s)” means Rolls-Royce’s published or applicable price catalogues of Parts, Tooling, Services and other products and services as may apply from time to time.

[*]

“Dressed Engine” means a “Dressed Trent 772B Engine” as defined in section A.2.1.3 of the Specification.

 

LOGO    Contract Ref :- DEG 5104    Page 4 of 36


“Documentation” means all airworthiness documentation for Products as required by the applicable Airworthiness Authority including, but not limited to, Log Books, the EASA Form 1/FAA Form 8130-3 serviceable tag, certificate of compliance, and tags for such Products indicating Time since New (TSN), Cycles Since New (CSN), calendar time, including Aircraft effectivity, as applicable.

“EASA” means the European Aviation Safety Agency and any successor agency thereto.

“EMP” means the Engine Management Program proposed by Rolls-Royce and agreed by Avianca [*]

“Engine(s)” means the Rolls-Royce Trent 772B Installation Pack, as described in the Specification, acquired by Avianca or its lessors, in support of the Aircraft and delivered either to Avianca on Aircraft or as spare Engines pursuant to Exhibit E hereto.

“Entry Into Service” or “EIS” shall mean the date of delivery of the first Aircraft to Avianca.

[*]

“Exhibit(s)” means those exhibits from time to time comprising Section 2 of this Agreement.

“FAA” means the United States Federal Aviation Administration, and any successor agency.

[*]

“Fleet” means the fleet of Rolls-Royce Trent 700 engines in operation from time to time.

“Flight Cycle” means the operation of an Engine from the time an Aircraft leaves the ground until it touches the ground at the end of a flight. For the purposes of this Agreement, an aborted take-off, or a touch and go landing shall also be considered as a Flight Cycle.

“Flight Hour” means each airborne hour (or part thereof) in operation of each Engine computed from the time an Aircraft leaves the ground until it touches the ground at the end of a flight.

“Guarantees” means the fleet guarantees set out in Exhibit F.

“General Terms” means those terms and conditions set out in Section 1 of this Agreement.

[*]

“Information” means (a) all software and electronic communications disclosed by one Party to another, and (b) all other information including, but not limited to, information contained in Engine and Aircraft Manuals, all oral, written information, know how, data, reports, drawings and specifications that are marked or otherwise clearly identified as proprietary or confidential except that all software and electronic communications shall be considered as such.

[*]

“Line Maintenance” means any work required to be carried out on an Engine in accordance with the aircraft manuals, which may be accomplished either on-wing or off-wing but without necessitating the return of such Engine to an Overhaul Base. Line Maintenance includes, without limitation, troubleshooting, inspection, servicing or diagnostic testing of the Engine and the removal of unserviceable Parts requiring repair or replacement and the refitting of serviceable Parts.

 

LOGO    Contract Ref :- DEG 5104    Page 5 of 36


“Line Replaceable Part” or “LRP” means all Parts (excluding LRUs), which are replaceable during Line Maintenance, with the following exceptions:

all LLPs which are line replaceable; or

all industry standard “common-consumable” external parts without Rolls-Royce part number (e.g. nuts, bolts, o-rings, gaskets, etc.).

“Line Replaceable Unit” or “LRU” means those Parts listed in Schedule 3 to Exhibit C.

“Life Limited Parts” or “LLP” means any Part listed in Schedule 2 of Exhibit C.

“Logistics Provider” means the logistics provider elected by Rolls-Royce to collect and re-deliver LRU/LRPs on behalf of Rolls-Royce from Designated Location(s).

“Main Base” shall mean Operator’s main base at Bogotá, Colombia.

“Max Spare” means “Maximum Trent 772B Spare Engine” as defined in section A.2.2 of the Specification.

“Engine Manuals” means the Engine series manuals as defined by Rolls-Royce.

[*]

“Overhaul Base” means a Repair station as may be specified by Rolls-Royce to Avianca from time to time and which is certified by the Airworthiness Authorities for the Repair of Engines and Parts.

“Part” means any new Engine or Nacelle part manufactured or supplied by Rolls-Royce or a source approved by Rolls-Royce.

[*]

“Pool Engine” shall mean a spare Engine provided as a Rolls-Royce Owned Product for the support of Avianca’s Aircraft.

“Products” means Engines, Parts and Tooling therefor.

"Resultant Damage” means the damage suffered by a part [*].

“Repair” means the refurbishment at an Overhaul Base or Vendor (including the provision of Parts) necessary to return Engines or Parts to a serviceable condition in accordance with the applicable Engine Manuals and the EMP.

“Repair Vendor” means, with respect to a particular Product, either Rolls-Royce or a third party designated by Rolls-Royce as the repair vendor for such Product.

 

LOGO    Contract Ref :- DEG 5104    Page 6 of 36


“Security Interest” means any mortgage, charge, assignment, pledge, lien or any other agreement or arrangement that has the effect of giving another person security.

“Services” means the services to be provided pursuant to Exhibit D (Customer Services) hereto, or under any other provision hereunder.

“Specification” means the Rolls-Royce specification for Engines as set out in Exhibit E-1 Schedule 1.

[*]

“Tooling” means tools, jigs, fixtures, transportation equipment and other products which are provided by or sold by Rolls-Royce for the installation, maintenance and/or storage of an Engine and not for installation in the Engine.

“UAEAC” means Unidad Administrativa Especial Aeronautica Civil

“Ultimate Flight Cycles” means the maximum permitted Flight Cycles imposed by Rolls-Royce or the Airworthiness Authorities.

“Used Part(s)” means parts purchased by Avianca directly from Rolls-Royce which are used and serviceable.

“Vendor” means a Rolls-Royce approved manufacturer of Parts, as identified in the Engine Manuals or as may be notified by Rolls-Royce from time to time, from whom Avianca may purchase Parts direct.

“Warranties” shall mean the warranties as set out in Exhibit C and the Guarantees as set out in Exhibit F.

[*]

CLAUSE 2 SCOPE OF AGREEMENT

Rolls-Royce agrees to sell to Avianca and Avianca agrees to purchase Products and Services from Rolls-Royce in accordance with the terms and conditions contained in this Agreement. [*].

The Exhibits to this Agreement set forth the terms and conditions that apply to specific Products and Services in addition to the General Terms.

The General Terms and the Exhibits together constitute the terms and conditions of this Agreement.

CLAUSE 3 PURCHASE ORDERS

 

3.1 Rolls-Royce agrees to sell and deliver to Avianca and Avianca agrees to buy and take delivery of spare Engines as set out in Schedule 2 to Exhibit E1 of this Agreement. Signature of this Agreement by the Parties and its entry into force in accordance with its terms shall constitute an Avianca purchase order therefor and Rolls-Royce’s acknowledgement of its acceptance.

 

LOGO    Contract Ref :- DEG 5104    Page 7 of 36


3.2 Subject to Clause 3.1 above, Products and Services purchased under the terms of this Agreement shall be ordered by means of purchase orders issued by Avianca in an agreed format consistent with the requirements of ATA Specifications. The terms and conditions in this Agreement apply to all purchase orders to the extent applicable to the Product or Service requested. Any purchase order issued hereunder shall contain; description, quantity, delivery dates, the unit and extended price of the Products and Services and shipping instructions, as appropriate.

 

3.3 Subject to Clause 3.1 above, Rolls-Royce shall provide written or electronic acknowledgment of its acceptance of purchase orders[*].

 

3.4 Avianca shall, not later than thirty (30) calendar days after signature of this Agreement, notify Rolls-Royce in writing that it has placed an irrevocable purchase order with the Airframer for the aircraft detailed in Exhibit A of the General Terms to be installed with the Engines.

 

3.5 [*].

CLAUSE 4 DELIVERY

 

4.1 Unless otherwise stated in this Agreement, Rolls-Royce shall deliver Products Ex Works, Rolls-Royce at Derby (Incoterms 2000).

 

4.2 Shipping documents, invoices, packaging and marking of packaging for Products and Services shall be in accordance with ATA Specifications and International Standards for Phytosanitary Measures ISPM No. 15 (Guidelines for regulating wood packaging material in international trade).

CLAUSE 5 PRICES

 

5.1 Unless otherwise specified in this Agreement, the price for Products and Services shall be as described in the applicable Commercial Price List or, for those Products and Services not specified in such a listing, as quoted by Rolls-Royce.

CLAUSE 6 PAYMENT

 

6.1 Immediately following, or concurrent with, the supply of Products and Services, Rolls-Royce shall submit an invoice to Avianca stating amounts due. Unless otherwise specified in this Agreement, payment shall be made by Avianca in United States Dollars by from the date the invoice is issued.

 

6.2 [*]

 

6.3 Unless otherwise stated or provided herein, all payments by Avianca under this Agreement shall be made without any abatement, withholding, deduction, counterclaim or set off, by wire transfer to Rolls-Royce’s account as follows:

JP Morgan Chase Bank

Trinity Tower (TT8)

9 Thomas More Street

London E1 9YT

Account no: [*]

Sort code: [*]

Swift code: [*]

or such other account as may be notified from time to time. Confirmation of Avianca’s payment shall be transmitted to Rolls-Royce at the following address by facsimile the day payment is made:

Rolls-Royce plc

PO Box 31

Derby

DE24 8BJ

England

Fax: +44 (0)1332 240303

Attention: Accounts Receivable

For the avoidance of doubt, notwithstanding the foregoing, all credits issued hereunder may be used as described in this Agreement.

 

   For the purpose of this Clause 6.3, payment shall only be deemed to have been made when cleared or good value funds are received in the applicable numbered Rolls-Royce or Avianca bank account, as applicable.

 

   Unless otherwise stated, all payments and credits by Rolls-Royce under this Agreement shall be made without any abatement, withholding, deduction, counterclaim or set of, by wire transfer to Avianca’s account.

 

LOGO    Contract Ref :- DEG 5104    Page 8 of 36


CLAUSE 7 TAXES AND OTHER CHARGES

For the purpose of this Clause 7, the following terms shall have the following meanings:

“Agent” means the nominated agent of the Avianca

“Declarant” means the person making the customs declaration of import or export.

“Direct Representation” means the agent is acting in the name of and on behalf of another person, as detailed in European Union Customs.

“Single Administrative Document” means the document lodged with a European Union customs authority declaring an import into or an export from the territory of the European Union.

 

7.1 All amounts stated to be payable by Avianca pursuant to this Agreement exclude any value added tax (VAT), sales tax, use tax, service tax, goods and services tax (GST), taxes on Rolls-Royce’s turnover or similar taxes. If the supply of any Products or Services is chargeable to any value added tax (VAT), sales tax, use tax, service tax, goods and services tax (GST), taxes on Rolls-Royce’s turnover or similar taxes, such taxes will be added to the amount payable by Avianca and will be paid and borne by Avianca .

 

7.2 [*]

 

7.3 [*]

 

7.4 Both Parties agree to co-operate to eliminate or reduce any applicable taxes, duties, interests, penalties or similar charges which may be payable by either Party, including, where applicable, providing or issuing the necessary documentation to support or secure exemptions or recoveries. Furthermore, if as a result of a change in law or a change in the tax practice of any tax authority, either Party becomes subject to additional taxes, duties or similar charges which increases their financial liability during the term of this Agreement, both Parties will negotiate in good faith to attempt to reduce or eliminate such additional taxes, duties and similar charges. This is provided that neither Party need take any steps, which in its reasonable opinion, and acting in good faith would increase its obligations or would be prejudicial or adverse to it (whether in respect of tax affairs or otherwise).

 

7.5 [*]:

CLAUSE 8 DELAY

 

8.1 If Rolls-Royce is hindered or prevented from delivering Products or Services or both within the agreed delivery schedule (as such time may be extended pursuant to the other provisions of this Agreement) by reason of:

 

  8.1.1 any cause beyond the reasonable control of Rolls-Royce; or

 

  8.1.2 [*];

 

   the time for delivery shall be extended by a period equal to the period for which delivery shall have been so hindered or prevented. [*]

 

LOGO    Contract Ref :- DEG 5104    Page 9 of 36


8.2 If Avianca is hindered or prevented from performing its obligations hereunder, excluding any of its payment obligations, within the agreed delivery schedule (as such time may be extended pursuant to the other provisions of this Agreement) by reason of:

 

  8.2.1 any cause beyond the reasonable control of Avianca; or

 

  8.2.2 [*];

 

   the time for delivery shall be extended by a period equal to the period for which delivery shall have been so hindered or prevented.

 

8.3 [*]

 

8.4 [*].

CLAUSE 9 EVENTS OF DEFAULT AND TERMINATION

 

9.1 Either Party shall have the right to terminate this Agreement without incurring any liability if

 

  9.1.1 a court of competent jurisdiction makes an order or a resolution is passed (whether by its shareholders or creditors), for the dissolution or the administration of the other Party (or any holding company of the other Party) otherwise than in the course of a solvent reorganisation or restructuring; or

 

  9.1.2 any person takes any step (which is not withdrawn or discharged without) days) to appoint a liquidator, manager, receiver, administrator, administrative receiver or other similar officer in respect of any material portion of any assets of the other Party; or

 

  9.1.3 the other Party (or any holding company of the other Party) makes any arrangement or composition with, or any assignment for the benefit of its creditors’ or

 

  9.1.4 the other Party ceases to carry on its business or a substantial part of it or is unable to pay its debts within the meaning of Section 123 of the Insolvency Act 1986; or

 

  9.1.5 the other party (not being a company registered in England) carries out or becomes subject to actions or proceedings which, within the jurisdiction to which it is subject, are similar in nature or effect to those specified in Clauses 9.1.1 to 9.1.4 above.

 

9.2 Termination under Clause 9.1 shall be effected by the Party entitled to terminate issuing notice of termination in writing to the other Party and such notice shall be effective ours after it is issued.

 

9.3 [*]

 

9.4 [*]

 

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CLAUSE 10 NONDISCLOSURE

 

10.1 Subject to Clause 10.4 below, each Party agrees to hold in confidence any Information (including this agreement and any of its terms) which it acquires directly or indirectly from the other Party or any of such Party’s affiliates and agrees:

 

  10.1.1 to protect the Information with at least the same degree of care as it uses to protect its own Information.

 

  10.1.2 not to use the Information otherwise than for the purposes of this Agreement;

 

  10.1.3 not to disclose the Information at any time or the Information to any third person without the written approval of the other Party;

 

  10.1.4 not to copy or to reduce the Information to writing or store whether in a machine readable form or otherwise except as may be reasonably required for the purposes of this Agreement; and

 

  10.1.5 not to remove; alter or deface any proprietary or confidential designation denoted on the Information.

 

10.2 The provisions of Clause 10.1 above shall not apply to Information which is or becomes generally known in the aero engine industry, known by the receiving Party at time of receipt, received from a third party who is without an obligation of nondisclosure, or required to be produced by a legitimate legal authority, nor shall the provisions of Clause 10.1 above prevent any necessary disclosure of Information to enable Avianca itself to use, operate, maintain or service Products and Services. In the case of a legally-compelled disclosure, the Party compelled to disclose shall promptly advise the other Party.

 

10.3 Each Party shall be responsible for the observance of the provisions of Clause 10.1 above by its employees or any other third parties to whom Information is disclosed in accordance with this Clause.

 

10.4 This Clause 10 shall not be construed as granting expressly or impliedly any rights in respect of any patent, copyright or other industrial property right in force and belonging to the disclosing Party except to the extent necessary for the purposes of this Agreement.

 

10.5 Any breach of this Clause 10 shall be deemed a material breach under the terms of Clause 9.4.

 

10.6 Without prejudice to any other rights of the disclosing Party the Parties agree that damages may not be an adequate remedy for any use or disclosure of Information by the recipient Party in breach of this Agreement and that any Party may seek an injunction, specific performance or other equitable relief for any actual or threatened breach of this Agreement in any court of competent jurisdiction.

 

10.7 Notwithstanding Clause 10.1 above, both Parties shall be entitled to disclose this Agreement and financial information concerning business between Rolls-Royce and Avianca to appointed auditors, legal advisors, insurers and accountants and Rolls-Royce shall be entitled to disclose this Agreement and financial Information concerning business between Rolls-Royce and Avianca to Rolls-Royce’s risk and revenue sharing partners. Avianca shall be entitled to disclose this Agreement and financial information concerning business between Rolls-Royce and Avianca to Avianca’s lessors, financiers and advisers upon prior written approval from Rolls-Royce, such approval not to be unreasonably withheld.

 

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CLAUSE 11 INTELLECTUAL PROPERTY RIGHTS

 

11.1 Rolls-Royce shall, subject to the conditions set out in this Clause 11 and as the sole liability of Rolls-Royce in respect of any claims for infringement of industrial property rights, indemnify and defend Avianca against any claim that the use of any of the Products and Services by Avianca within any country to which at the date of such claim, the benefits of Clause 27 of the Convention on International Civil Aviation of 7th December 1944 (The Chicago Convention) apply, infringesany patent, [*], however, that Rolls-Royce shall not be liable to Avianca for any loss (whether direct or indirect):-

 

   [*]

 

11.2 Avianca will give immediate notice in writing to Rolls-Royce of any claim under Clause 11.1, whereupon Rolls-Royce shall elect to either assume the defense of or dispose of or settle such claim, at its own expense and in its sole discretion, and Avianca will give Rolls-Royce all reasonable assistance and will not, by any act or omission, do anything which may directly or indirectly prejudice Rolls-Royce in this connection.

 

11.3 If any Product or Service is subject to any claim under Clause 11.1, Rolls-Royce shall either

 

   [*]

CLAUSE 12 GRANT OF WARRANTIES AND LIMITATION OF LIABILITY

 

12.1 Rolls-Royce grants to Avianca the Warranties. Except as elsewhere provided in this Agreement, these Warranties are personal to Avianca and the obligations of Rolls-Royce thereunder shall only apply insofar as Avianca has possession of and operates the Products and receives the Services. The Parties also agree that the Warranties, excluding the Guarantees, shall apply to any equipment which falls into the categories of the Warranties and which is manufactured, supplied or inspected by Rolls-Royce howsoever and whenever acquired by Avianca from whatever source.

 

12.2 [*].

 

12.3 [*].

 

12.4 [*]

 

12.5 [*]

 

12.6 [*].

 

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CLAUSE 13 OCCUPIER’S LIABILITY

If any employee of either Party enters upon the property occupied by or under the control of the other Party in the performance of this Agreement, the Party occupying or controlling such premises assumes responsibility for and agrees to pay for any loss, cost, damage to property, or for personal injury or death of the person entering such premises arising out of, as a result of, or in connection with the actions or omissions of the Party occupying or controlling such premises. Each Party also agrees that it will maintain public liability and property damage insurance in reasonable limits consistent with industry standards covering the obligations set forth above and will maintain proper occupier’s liability insurance (or other comparable insurance).

CLAUSE 14 GENERAL

 

14.1 Effective Date and Expiration

 

   This Agreement will commence upon the date of signature and remain in full force and effect for as long as Avianca, or its permitted assigns, owns or operates at least [*], unless terminated in accordance with Clause 9.

 

14.2 Survival

 

   The provisions of Clauses 1 (Definitions), 7 (Tax), 10 (NonDisclosure), Clause 11 (Intellectual Property Rights), 12 (Grant of Warranties and Limitation of Liability), 13 (Occupier’s Liability), 14.2 (Survival), 14.3 (Notices), 14.6 (Headings), 14.7 (Waiver), 14.8 (Severability), 14.9 (Law and Jurisdiction), 14.10 (Sole Agreement), 14.11 (Third Party Rights), 14.12 (Relationship of Parties) and Exhibit C (Warranties) of this Agreement shall survive and continue to have effect should this Agreement expire or be terminated for any reason or after this Agreement becomes impossible of performance or is otherwise frustrated. The provisions of Exhibit F (Fleet Guarantees) of this Agreement shall survive and continue to have effect should this Agreement be terminated by Avianca in accordance with the provisions of Clause 9.1.

 

14.3 Notices

Any notice required to be given by either Party to the other under or in connection with this Agreement shall be in writing and delivered personally, by certified mail or by facsimile. Notices to Avianca shall be directed to:

Aerovias del Continente Americano S.A. Avianca

Avenida El Dorado No. 92-30

Torre 1, Piso 5,

Bogota,

Colombia

Attn: Secretary General

Tel # TBD

Facsimile #: TBD

Notices to Rolls-Royce shall be directed to:

Rolls-Royce plc

PO Box 31

Derby

DE24 8BJ

 

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Attn: Assistant Vice President—Americas

Tel: +44 1332 248671

Facsimile: +44 1332 248728

or in each case to such other place of business as may be notified from time to time by the receiving Party.

 

14.4 Assignment

Except as otherwise stated herein, neither Party may assign any of its rights or obligations hereunder without the written consent of the other [*]. Any assignment made in violation of this Clause 14.4 shall be null and void.

[*].

 

14.5 Amendment

This Agreement may only be amended by agreement in writing, executed by the parties hereto, on or after the date of this Agreement, and which expressly amends this Agreement, and in no event shall it be amended or terminated orally. Unless expressly agreed no amendment shall constitute a general waiver of any provisions of the Agreement nor shall it affect any rights, obligations or liabilities arising under or pursuant to this Agreement which have already accrued up to the date of the amendment and the rights and obligations of the Parties arising under or pursuant to the Agreement shall remain at full force and effect, except only to the extent that they are so amended.

 

14.6 Headings

Clause headings and the index are for convenience only and do not form a part of the Agreement and shall not govern or affect the interpretation of the Agreement.

 

14.7 Waiver

No failure by either Party to enforce any provision of this Agreement shall constitute an ongoing waiver of that or any other provision hereof.

 

14.8 Severability

Each of the provisions of the Agreement is severable. If any such provision is held to be or becomes illegal, invalid or unenforceable in any respect under the law of any jurisdiction:

 

  14.8.1 so far as it is illegal, invalid or unenforceable, it shall be given no effect and shall be deemed not to be included in the Agreement, it shall not affect or impair the legality, validity or enforceability in that jurisdiction of the other provisions of the Agreement, or of that or any provisions of this Agreement in any other jurisdiction; and

 

  14.8.2 the Parties shall use all reasonable endeavours to replace it with the valid and enforceable substitute provisions satisfactory to any Government or other relevant regulatory authority but differing from the replaced provision as little as possible and the effect of which is as close to the intended effect of the illegal, invalid or unenforceable provision.

 

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14.9 Law and Jurisdiction

 

  14.9.1. This Agreement shall be subject to and interpreted and construed in accordance with the laws of the State of New York excluding its conflict of law rules and excluding the United Nations Convention for the International Sale of Goods (CISG, 1980, “Vienna Convention”).

 

  14.9.2. EACH PARTY IRREVOCABLY CONSENTS TO THE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK IN ANY SUIT, ACTION OR PROCEEDING BROUGHT BY EITHER PARTY UNDER THIS AGREEMENT AND ANY MATTER RELATED THERETO.

 

  14.9.3. Notwithstanding anything to the contrary herein, this Agreement and each Party’s respective rights and obligations are expressly subject to all applicable laws and regulations including, but not limited to, United States laws relating to exports.

 

  14.9.4. The official text of this Agreement is the English language. If this Agreement is translated into another language for the convenience of Avianca or its personnel, the English text shall govern any question with respect to interpretation.

 

14.10 Sole Agreement

 

  14.10.1 This Agreement contains the only provisions governing the sale and purchase of Products and Services and such provisions shall apply to the exclusion of any other provisions on or attached to or otherwise forming part of any purchase order of Avianca or any acknowledgement or acceptance by Rolls-Royce or of any other document which may be issued by either Party relating to the sale and purchase of Products and Services.

 

  14.10.2 The parties agree that neither of them has placed any reliance whatsoever on any representations, agreements, statements or understandings made prior to the signature of this Agreement, whether orally or in writing, relating to the Products or Services other than those expressly incorporated in this Agreement which has been negotiated on the basis that its provisions represent their entire agreement relating to the Products or Services and shall supersede all such representations, agreements, statements and understandings. The Parties further agree that neither of them shall place any reliance on any and all future representations whatsoever in respect of the performance of this Agreement unless such representations are expressly agreed by the Parties in writing to form a part of this Agreement. For the avoidance of doubt, it is not the intention of this Clause to exclude the liability of either party for fraudulent misrepresentations.

 

14.11 Third Party Rights

 

   No term of this Agreement shall be construed as creating any right in respect of any person who is not a party to this Agreement and the provisions of the Contracts (Rights of Third Parties) Act 1999 are hereby expressly excluded.

 

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14.12 Relationship of Parties

 

   The relationship between Avianca and Rolls-Royce shall be that of independent contractors and not that of principal and agent or that of partners.

 

   Neither Avianca nor Rolls-Royce shall represent itself as agent or partner of the other Party nor do any act or thing which might result in other persons believing that they have authority to contract or in any other way to enter into commitments on behalf of, or in the name of the other Party.

 

   Each of Avianca and Rolls-Royce shall be fully and solely responsible for all obligations undertaken by such Party under this Agreement in relation to the Products and Services to be supplied.

 

   The Parties acknowledge and agree that each of the Rolls-Royce group companies which are at the date of this Agreement or from time to time become a Party to this Agreement with the written consent of Avianca, is and shall be severally (but not jointly and severally) liable for its respective obligations under this Agreement in relation to the respective Products and Services supplied.

 

14.13 Publicity

 

   Except as required by law or by any stock exchange or governmental or other regulatory or supervisory body or authority of competent jurisdiction to whose rules the Party making the announcement or disclosure is subject, no announcement or disclosure in connection with the existence, contents or subject matter of this Agreement shall be made or issued by or on behalf of the either Party without the prior written consent of the other, such approval not to be unreasonably withheld or delayed.

 

14.14 Counterparts and Facsimile

 

   This Agreement may be executed in several counterparts and any single counterpart or set of counterparts, signed in either case by all the Parties, shall be deemed to be an original and all taken together shall constitute one and the same instrument. Transmission by facsimile of a signed counterpart signature page shall be deemed and constitute due and valid delivery of an executed counterpart of this Agreement.

CLAUSE 15 EXPORT/IMPORT SHIPMENT AND GOVERNMENT AUTHORISATION

 

15.1 [*]. Where an export license is required, supply will not take place unless and until any required export license is granted. [*].

 

15.2 Except as otherwise expressly provided in this Agreement, Avianca shall be responsible for obtaining any authorisation, including but not limited to any import licenses and exchange permits required by the countries in which the Engines are to be registered, operated, or imported into.

 

15.3 Rolls-Royce and Avianca shall provide each other with reasonable assistance in obtaining and complying with any authorisations that may be required.

 

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CLAUSE 16 CONFLICT

In the event of any conflict between the terms set out in Clauses 1 to 15 above (the General Terms) and those set out in the Exhibits and the Schedules to the Exhibits, then the terms and conditions set out in the Exhibits and the Schedules shall prevail.

CLAUSE 17 [*]

[*]

CLAUSE 18 [*]

[*]

CLAUSE 19 [*]

[*]

 

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IN WITNESS WHEREOF, the Parties have caused this Agreement to be entered into by their duly authorised officers, on the date first before written.

 

Signed for and on behalf of:     Signed for and on behalf of:
AEROVÍAS DEL CONTINENTE AMERICANO S.A.     ROLLS-ROYCE PLC
By:         By:    
Printed         Printed    
Title:         Title:    
   

Signed for and on behalf of:

 

ROLLS-ROYCE TOTALCARE SERVICES LIMITED

      By:    
      Printed    
      Title:    

 

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SECTION 2 EXHIBITS

Exhibits

 

A AIRCRAFT DELIVERY SCHEDULE

 

B OPERATING ASSUMPTIONS

 

C [*]

 

   [*]

 

D CUSTOMER SERVICES

 

E-1 [*]

 

   [*]

 

E-2 SPARE PARTS TERMS

 

F [*]

 

   [*]

 

G [*]

 

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EXHIBIT A

AIRCRAFT DELIVERY SCHEDULE

Avianca will take delivery of the Aircraft in accordance with the delivery schedule below:

[*]

 

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EXHIBIT B

OPERATING ASSUMPTIONS

Aircraft maximum take-off weight of [*] tonnes;

Engines rated at [*] lbf max. take-off thrust;

[*]

Aircraft will operate primarily in a benign operational environment (not containing, without limitation, abnormal levels of corrosive or abrasive materials or pollutants);

[*]

Avianca will acquire and retain for its operation spare Engines in accordance with the delivery schedule contained in Exhibit E hereto.

Avianca will procure and maintain as a minimum the agreed reorder level of spare Parts and Tooling consistent with the Aircraft fleet size.

The Repair of the Engines in accordance with the Rolls-Royce proposed EMP and the Repair of LRUs in accordance with the CMP.

[*]

Avianca will not order or instruct maintenance or operation of the Engine in contravention of the Engine Manuals.

[*]

Aircraft and engines operated and maintained in accordance with all applicable airframer and engine manuals, EMP, ADs and in all material respects in accordance with Rolls-Royce recommendations for on-wing performance retention.

[*]

All parts being installed in the engines being Rolls-Royce manufactured or manufactured by a company specifically approved by Rolls-Royce for the manufacture or supply of such part.

 

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EXHIBIT C

WARRANTIES

 

1 GENERAL WARRANTY CONDITIONS

 

1.1 Rolls-Royce shall have no obligation under the provisions of this Exhibit C if it is clearly demonstrated that any Engine or Part:

 

  1.1.1 has not been properly stored, installed, operated and maintained materially in accordance with the recommendations of Rolls-Royce as contained in its Engine Manuals, operating procedures or other written instructions, including instructions on life limitations; or

 

  1.1.2 has been repaired or altered by anyone other than Rolls-Royce in such a way as to impair its safety, operation, efficiency or design features, or has been repaired or altered by a facility other than those specifically approved by Rolls-Royce in writing; or

 

  1.1.3 has been subject to misuse, negligence, accident; or

 

  1.1.4 has been damaged by foreign objects; or

 

  1.1.5 has been subjected to acts of war, rebellion, seizure or any other defect or cause not within the control of Rolls-Royce.

 

1.2 [*].

 

1.3 [*].

 

1.4 [*].

 

1.5 [*].

 

1.6 Avianca shall present any claim under this Exhibit C to Rolls-Royce within [*]after the date [*] and shall keep and disclose accurate records of Engine operation, including records of maintenance, adequate to support such claims.

 

1.7 [*].

 

1.8 Avianca shall keep accurate records of Engine and Parts operation, maintenance and storage, and engine condition monitoring data and / or trend monitoring data (as applicable) adequate to support claims hereunder and shall permit Rolls-Royce to inspect such records during normal business hours upon request at reasonable times and upon reasonable notice.

 

1.9 Avianca shall make available all Engines and Parts for inspection by Rolls-Royce during normal business hours at reasonable times and with reasonable notice from Rolls-Royce.

 

1.10 [*].

 

1.11 Any allowance granted under this Exhibit C shall be made as a credit note usable against Rolls-Royce Products and Services.

 

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1.12 [*].

 

1.13 [*].

 

1.14 [*].

*[Ten pages have been omitted in accordance with a request for confidential treatment.]

 

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EXHIBIT D

CUSTOMER SERVICES

 

1 SCOPE

This Exhibit D sets out support services available to Avianca subject to the General Terms during the term of this Agreement.

Standardized procedures and policies will be followed to ensure that Services are performed in accordance with industry accepted standards. These procedures and policies include, but are not limited to, ATA Specifications and Airworthiness Authority rules and/or guidance. All Services supplied to Avianca under this Exhibit will be in compliance with the then current world customers supplier guide (hereinafter “WASG”) and the current revision ATA Specifications.

 

2 ROLLS-ROYCE CUSTOMER SERVICES PACKAGE

 

2.1 Rolls-Royce will designate a Customer Services Manager at its [*] who will provide coordination and liaison between Avianca and Rolls-Royce in respect of the operation of the Engines by Avianca and its permitted assigns. Such services extend to issues including:

 

  2.1.1 managing emergency requirements;

 

  2.1.2 managing plans to incorporate Products into Avianca’s operations;

 

  2.1.3 agreeing shop visit forecasts with Avianca,

 

  2.1.4 providing technical and operational direction and field support recommendations to Avianca, and

 

  2.1.5 assisting Avianca with the interpretation of Engine Manuals.

 

  2.1.6 make scheduled visits to Avianca for the purposes of liaison

The services of the Customer Services Manager are free of charge. Rolls-Royce will also maintain a field representative service based [*], to provide advice and assistance in the resolution of technical problems.

Should Avianca require additional or specialist visits to Avianca’s facilities to assist in the operation of Engines or training activities including, but not limited to, borescope inspections and other Line Maintenance activities, Rolls-Royce reserves the right to charge for such services in accordance with pricing established in its Commercial Price List.

 

2.2 On Site Service Representative

 

  2.2.1 Rolls-Royce or an affiliate of Rolls-Royce will make available the services of a customer service representative at Avianca’s facilities at [*]. Such representative will provide, in addition to those Services described above, the following:

 

  2.2.1.1 Local technical support to assist in the resolution of technical problems;

 

  2.2.1.2 Training in the operation and maintenance of Engines;

 

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  2.2.1.3 Advice regarding the borescoping and life management of installed Engines; and

 

     shall notify Rolls-Royce of all aspects of in-service issues affecting Avianca’s operation of the Engine.

 

  2.2.2 [*].

 

2.3 Supply of Technical Publications Data

 

  2.3.1 [*].

 

  2.3.2 Engine Manuals will be supplied in English in accordance with ATA Specifications and any translation or interpretation that may be required by Avianca is the responsibility of Avianca.

 

  2.3.3 Avianca acknowledges that, although Rolls-Royce may provide instruction training and advice under this Agreement, Products are only to be maintained, operated and otherwise handled in accordance with the Engine Manuals.

 

  2.3.4 Engine Manuals are available in a variety of media. The Rolls-Royce preferred format is digital source data or CD ROM format.

 

2.4 Customer Training

Rolls-Royce provides training courses in the operation and maintenance of Engines at one of the following locations: the Rolls-Royce Training Center in Indianapolis, Indiana, USA; Rolls-Royce’s training facilities in Derby, England UK; or the Rolls-Royce/CASC training centre in Tianjin, China in accordance with a schedule published by Rolls-Royce.

Rolls-Royce’s training for the Engine comprises levels I through levels IV in accordance with the ATA Specifications and details as published by Rolls-Royce from time to time.

The following general provisions apply to training:

[*]

 

2.5 General Planning

Avianca and Rolls-Royce shall within a reasonable time following signature of this Agreement but not (where possible) later than, agree a schedule to establish processes and procedures in connection with, without limitation, following items:

 

  2.5.1 Initial Provisioning;

 

  2.5.2 Training; and

 

  2.5.3 EIS planning.

 

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EXHIBIT E

FLEET PROVISIONING SUPPORT

E-1 SPARE ENGINE PURCHASE

 

1 INTENT

This Exhibit E-1 details the specific terms that are applicable to the purchase of spare Engines in addition to the General Terms.

 

2 TYPE APPROVAL/CHANGES

The Specification, which forms Schedule 1 to this Exhibit E, has been drawn up to meet the Airworthiness Authority requirements in place at the date of this Agreement.

All spare Engines shall, at the time of delivery, conform to the Specification and a type certificate Issued by the Airworthiness Authority.

Rolls-Royce may make any changes in spare Engines which do not adversely affect the Specification (including, but not limited to, adverse affects in performance and weight), interchangeability in the airframe, prices or dates of delivery of the Engine.

[*]

 

2.1 [*]

 

2.2 [*];

then Rolls-Royce will issue a written change order, to be executed by the Parties, and which shall constitute an amendment to this Agreement. Unless otherwise agreed, any increase in price that is a result of that change order is to be borne by Avianca.

Notwithstanding the foregoing, if, after the date of signature of this Agreement and prior to the date of manufacture of an Engine, a change is required to such Engine to conform to the Current Rules, for example as reflected in an Airworthiness Directive, then Rolls-Royce will incorporate such change at its own cost.

 

3 INSPECTION AND ACCEPTANCE

Conformance to the Specification will be assured by Rolls-Royce through the maintenance of procedures (including Engine acceptance testing), systems and records approved by the appropriate airworthiness authority. An authorised Release Certificate will be issued by Rolls-Royce.

 

4 PRICE AND PAYMENT

The base price and description of supply of spare Engines is set out in Schedule 2 to this Exhibit E-1. The purchase price of spare Engines shall be the base price escalated in accordance with the formula specified in Schedule 3 to this Exhibit E-1.

[*].

 

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5 [*]

[*].

 

6 [*]

[*].

 

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EXHIBIT E-1—SCHEDULE 1

[*]

[*]

 

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EXHIBIT E-1—SCHEDULE 2

DELIVERY SCHEDULE AND BASE PRICE

[*]

 

* [Two pages have been omitted in accordance with a request for confidential treatment.]

 

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EXHIBIT E-2

SPARE PARTS TERMS

 

1 INTENT AND TERM

 

1.1 Parts .

Avianca shall buy from Rolls-Royce [*] Parts [*] and Rolls-Royce shall sell such Parts to Avianca in quantities sufficient to meet Avianca’s requirements. From time to time Avianca may request and Rolls-Royce may sell Used Parts.

 

1.2. Tooling .

Avianca shall purchase any Tooling from Rolls-Royce[*]. Lead times for Tooling shall be quoted by Rolls-Royce on an as-required basis.

 

1.3 Rolls-Royce and Avianca shall comply with the ATA Specifications with regard to supply of Parts except as specifically amended in this Agreement.

 

1.4 Avianca will provide any information required to become established on the Rolls-Royce on-line spares management system.

 

2 PROVISIONING

Avianca shall purchase and maintain an adequate stock of Parts and Tooling to support its operation of the Engines [*]. Rolls-Royce and Avianca shall agree the required stock of Parts and Tooling within a timescale commensurate with Avianca’s operational requirements. Consistent with changes in Avianca’s operational requirements, Rolls-Royce and Avianca will regularly review and agree changes to required stock levels of Parts and Tooling.

In the event Avianca has not provisioned Parts and Tooling in accordance with Rolls-Royce and Avianca’s agreed levels, then Rolls-Royce shall have the right to charge Avianca an additional fee [*] of list price for any Parts and Tooling not so provisioned and provided to Avianca on an AOG, critical or expedite basis.

 

3 FORECASTING

 

3.1 Avianca shall provide Rolls-Royce with forecasts, [*] specifying projected requirements for Parts and Tooling to cover a minimum of the following [*] period. Avianca shall give Rolls-Royce as much notice [*] of any change in such requirements. Avianca shall, upon request, inform Rolls-Royce of the intended use of Parts and Tooling.

 

3.2 Avianca shall provide to Rolls-Royce an estimated Engine shop visit forecast covering any desired scheduled Repair at an Overhaul Base and a reasonable contingency covering likely unscheduled Repair at an Overhaul Base. Such forecast shall, as a minimum, detail monthly shop visits for a period [*] and [*] shop visits [*] and such forecast shall be updated at [*]. Such estimates shall be for planning purposes only and does not obligate Avianca to send Engines for repair at an Overhaul Base.

 

3.3 [*]:

 

3.4 Rolls-Royce shall provision long lead time Parts and shall set manufacturing capacity and inventory levels of other Parts on the basis of the information provided under Clause 3.1, 3.2 and 3.3 above.

 

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4 ORDERING PROCEDURE

Avianca shall issue a purchase order for Parts and Tooling in an agreed format in accordance with the ATA Specifications and the terms of this Agreement. Rolls-Royce shall promptly acknowledge receipt of each order for Parts and Tooling in accordance with the ATA Specifications. Unless qualified, such acknowledgement shall constitute an acceptance of the order under the terms of this Agreement.

 

5 ORDER CANCELLATION

Where Avianca wishes to cancel a purchase order placed in accordance with Clause 4 above, Avianca shall inform Rolls-Royce immediately. [*]

 

6 LEAD TIMES

 

6.1 Parts shall be scheduled to be delivered in accordance with the lead time specified in the Commercial Price List current at the receipt of Avianca’s order except for:

 

  6.1.1 Parts required for provisioning in accordance with Clause 2 above, or

 

  6.1.2 Purchase orders significantly in excess of Avianca’s normal requirements, in which case, Rolls-Royce shall notify Avianca of the applicable lead time.

 

6.2 [*].

 

6.3 [*].

 

7 MODIFICATIONS TO PARTS

Rolls-Royce shall, subject to Avianca’s approval, be entitled to substitute modified Parts in place of Parts ordered by Avianca hereunder, provided that the said modification has received the approval of the Airworthiness Authority in accordance with the relevant Rolls-Royce Service Bulletin, and provided that such substitute Parts are materially similar in terms of form and function, and are provided to Avianca at the same price as the Parts ordered. Rolls-Royce shall notify Avianca of such substitution prior to delivery.

 

8 CONFORMANCE

All Parts and, where necessary, Tooling will be assured by Rolls-Royce through the maintenance of procedures, systems and records approved by the Airworthiness Authority. An Authorised Release Certificate will be issued by Rolls-Royce.

 

9 ELECTRONIC COMMUNICATIONS

The Parties shall use electronic data interchange (“EDI”) links to enable electronic ordering and invoicing, in accordance with ATA Specifications. Such EDI Links shall also be used for formal communications between the Parties, in a format to be agreed.

 

LOGO    Contract Ref :- DEG 5104    Page 31 of 36


10 SURPLUS INVENTORY

[*]

 

11 ROLLS-ROYCE PARTS CATALOGUE ADJUSTMENT

Rolls-Royce’s parts catalogue pricing is amended on [*]. Rolls-Royce will inform Avianca of pricing amendments [*] prior to such amendments. Rolls-Royce reserves the right to amend such pricing at other times, and will provide [*]notice of such an amendment.

 

LOGO    Contract Ref :- DEG 5104    Page 32 of 36


EXHIBIT F

 

* [Two pages have been omitted in accordance with a request for confidential treatment.]

 

LOGO    Contract Ref :- DEG 5104    Page 33 of 36


EXHIBIT F

Schedules

 

* [Twenty-three pages have been omitted in accordance with a request for confidential treatment.]

 

LOGO    Contract Ref :- DEG 5104    Page 34 of 36


Exhibit G

TRENT 700

TOTALCARE

 

LOGO    Contract Ref :- DEG 5104    Page 35 of 36


* [Twenty-eight pages have been omitted in accordance with a request for confidential treatment.]

 

LOGO    Contract Ref :- DEG 5104    Page 36 of 36

Exhibit 10.11.1

Note: Certain portions have been omitted from this Amendment Number One to the General Terms Agreement in accordance with a request for confidential treatment submitted to the Securities and Exchange Commission. Omitted information has been replaced with an asterisk. Omitted information has been filed separately with the Securities and Exchange Commission.

Aerovias del Continente Americano S.A., Avianca

Centro Administrativo,

Avenida El Dorado, No. 92-30,

Bogota, Colombia

Date: February 28 2008

Dear Sirs,

AMENDMENT NUMBER ONE TO GENERAL TERMS AGREEMENT REFERENCE DEG 5104, DATED 15 th  June 2007, AS AMENDED BY SIDE LETTER NUMBER ONE THERETO DATED JUNE 15, 2007 (COLLECTIVELY THE “AGREEMENT”)

INTRODUCTION

Aerovias Del Continente Americano S.A., Avianca (“Avianca”) has agreed to purchase certain Airbus A330 aircraft from Airbus, which will be powered by new Trent 700 Engines (the “Aircraft”);

[*]

Defined terms used in this AM1 shall have the same meanings as in the Agreement, unless defined otherwise.

NOW THEREFORE IT IS AGREED AS FOLLOWS:

 

1. AIRCRAFT DELIVERY SCHEDULE

[*]

 

2. SPARE ENGINE DELIVERY SCHEDULE

[*]

 

3. ESCALATION FORMULA

[*]

 

4. SPLIT RIGHT MECHANISM

[*]

 

5. EXHIBIT G

[*]

 

6. GENERAL

All rights, obligations and liabilities under this AM1 shall be subject to and in accordance with the provisions of the Agreement and except as specifically amended herein, the provisions of the Agreement shall remain in full force and effect as if set out in full herein and further, this AM1 is made without prejudice to either of the Parties’ existing rights (unless expressly stated in this AM1) set forth or arising under the Agreement. In the event of any conflict between the terms of this AM1 and the Agreement, the terms of this AM1 shall prevail.

 

Page 1 of 3

Rolls-Royce plc Registered office:65 Buckingham Gate, London SW1E 6AT.

Company number: 1003142. Registered in England


7. CONFIDENTIALITY AND LAW

New York Law shall govern this AM1. The provisions of this AM1 are confidential and shall not (except as provided in Clause 10 of the Agreement) be disclosed to any third party without the prior written consent of the other party.

 

8. FACSIMILE TRANSMISSION

Transmission by facsimile of a signed counterpart signature page shall be deemed and constitute due and valid delivery of an executed counterpart of this AM1.

As WITNESS WHEROF the Parties have caused this AM1 to be signed on their behalf by the hands of their duly authorised officers the day and year first before written.

 

Signed for and on behalf of:     Signed for and on behalf of:

AEROVIAS DEL CONTINENTE

AMERICANO S.A., AVIANCA

    ROLLS-ROYCE plc
By         By:    
Printed          Printed     
Title:         Title:    

 

Page 2 of 3

Rolls-Royce plc Registered office:65 Buckingham Gate, London SW1E 6AT.

Company number: 1003142. Registered in England


Exhibit A

[*]

 

Page 3 of 3

Rolls-Royce plc Registered office:65 Buckingham Gate, London SW1E 6AT.

Company number: 1003142. Registered in England

Exhibit 10.11.2

Note: Certain portions have been omitted from this Amendment Number Two to the General Terms Agreement in accordance with a request for confidential treatment submitted to the Securities and Exchange Commission. Omitted information has been replaced with an asterisk. Omitted information has been filed separately with the Securities and Exchange Commission.

Aerovias del Continente Americano S.A., Avianca

Centro Administrativo,

Avenida El Dorado, No. 92-30,

Bogota, Colombia

Date: February 28, 2009

Dear Sirs,

AMENDMENT NUMBER TWO TO GENERAL TERMS AGREEMENT REFERENCE DEG 5104, DATED 15 th  June 2007, AS AMENDED BY SIDE LETTER NUMBER ONE THERETO DATED JUNE 15, 2007 (“SLA1”), AND AMENDMENT NUMBER ONE THERETO DATED 28 TH FEBRUARY 2008 (COLLECTIVELY THE “AGREEMENT”)

INTRODUCTION

Aerovias Del Continente Americano S.A., Avianca (“Avianca”) has agreed to purchase certain Airbus A330 aircraft from Airbus, which will be powered by new Trent 700 Engines (the “Aircraft”);

[*]

NOW THEREFORE IT IS AGREED AS FOLLOWS:

 

1. SPARE ENGINE DELIVERY SCHEDULE

[*]

 

2. SPARE ENGINE CREDIT

[*]

 

3. ESCALATION PROTECTION

[*]

 

4. GENERAL

All rights, obligations and liabilities under this AM2 shall be subject to and in accordance with the provisions of the Agreement and except as specifically amended herein, the provisions of the Agreement shall remain in full force and effect as if set out in full herein and further, this AM2 is made without prejudice to either of the Parties’ existing rights (unless expressly stated in this AM2) set forth or arising under the Agreement. In the event of any conflict between the terms of this AM2 and the Agreement, the terms of this AM2 shall prevail.

 

5. CONFIDENTIALITY AND LAW

New York Law shall govern this AM2. The provisions of this AM2 are confidential and shall not (except as provided in Clause 10 of the Agreement) be disclosed to any third party without the prior written consent of the other party.

 

6. FACSIMILE TRANSMISSION

Transmission by facsimile of a signed counterpart signature page shall be deemed and constitute due and valid delivery of an executed counterpart of this AM2.

 

Page 1 of 2

Rolls-Royce plc Registered office:65 Buckingham Gate, London SW1E 6AT.

Company number: 1003142. Registered in England


As WITNESS WHEROF the Parties have caused this AM2 to be signed on their behalf by the hands of their duly authorised officers the day and year first before written.

 

Signed for and on behalf of:     Signed for and on behalf of:

AEROVIAS DEL CONTINENTE

AMERICANO S.A., AVIANCA

    ROLLS-ROYCE plc
By         By:    
Printed          Printed     
Title:         Title:    

 

Page 2 of 2

Rolls-Royce plc Registered office:65 Buckingham Gate, London SW1E 6AT.

Company number: 1003142. Registered in England

Exhibit 10.11.3

Note: Certain portions have been omitted from this Amendment Number Three to the General Terms Agreement in accordance with a request for confidential treatment submitted to the Securities and Exchange Commission. Omitted information has been replaced with an asterisk. Omitted information has been filed separately with the Securities and Exchange Commission.

Aerovias del Continente Americano S.A., Avianca

Centro Administrativo,

Avenida Calle 26 No 59-15,

Bogota, Colombia

Date: 1 September 2009

Dear Sirs,

AMENDMENT NUMBER THREE TO GENERAL TERMS AGREEMENT REFERENCE DEG 5104, DATED 15 th JUNE 2007, AS AMENDED BY SIDE LETTER NUMBER ONE THERETO DATED JUNE 15, 2007 (“SLA1”), AND AMENDMENT NUMBER ONE THERETO DATED 28 TH FEBRUARY 2008, AND AMENDMENT NUMBER TWO THERETO DATED 28 TH FEBRUARY 2009 (COLLECTIVELY THE “AGREEMENT”)

INTRODUCTION

Aerovias Del Continente Americano S.A., Avianca (“Avianca”) has agreed to purchase certain Airbus A330 aircraft from Airbus, which will be powered by new Trent 700 Engines (the “Aircraft”);

[*]

NOW THEREFORE IT IS AGREED AS FOLLOWS:

 

1. ESCALATION FORMULA

[*]

 

2. GENERAL

All rights, obligations and liabilities under this AM3 shall be subject to and in accordance with the provisions of the Agreement and except as specifically amended herein, the provisions of the Agreement shall remain in full force and effect as if set out in full herein and further, this AM3 is made without prejudice to either of the Parties’ existing rights (unless expressly stated in this AM3) set forth or arising under the Agreement. In the event of any conflict between the terms of this AM3 and the Agreement, the terms of this AM3 shall prevail.

 

3. CONFIDENTIALITY AND LAW

New York Law shall govern this AM3. The provisions of this AM3 are confidential and shall not (except as provided in Clause 10 of the Agreement) be disclosed to any third party without the prior written consent of the other party.

 

4. FACSIMILE TRANSMISSION

Transmission by facsimile of a signed counterpart signature page shall be deemed and constitute due and valid delivery of an executed counterpart of this AM3.

 

Page 1 of 3

Rolls-Royce plc Registered office:65 Buckingham Gate, London SW1E 6AT.

Company number: 1003142. Registered in England


As WITNESS WHEROF the Parties have caused this AM3 to be signed on their behalf by the hands of their duly authorised officers the day and year first before written.

 

Signed for and on behalf of:     Signed for and on behalf of:

AEROVIAS DEL CONTINENTE

AMERICANO S.A., AVIANCA

    ROLLS-ROYCE plc
By         By:    

Printed 

        Printed     

Title:

        Title:    

 

Page 2 of 3

Rolls-Royce plc Registered office:65 Buckingham Gate, London SW1E 6AT.

Company number: 1003142. Registered in England


* [Three pages have been omitted in accordance with a request for confidential treatment.]

 

Page 3 of 3

Rolls-Royce plc Registered office:65 Buckingham Gate, London SW1E 6AT.

Company number: 1003142. Registered in England

Exhibit 10.11.4

Note: Certain portions have been omitted from this Amendment Number Four to the General Terms Agreement in accordance with a request for confidential treatment submitted to the Securities and Exchange Commission. Omitted information has been replaced with an asterisk. Omitted information has been filed separately with the Securities and Exchange Commission.

Aerovias del Continente Americano S.A., Avianca

Avenida calle 26 No 59-15

Bogota, Colombia

Date: March 18, 2011

Dear Sirs,

AMENDMENT NUMBER FOUR TO GENERAL TERMS AGREEMENT REFERENCE DEG 5104, DATED 15 th JUNE 2007, AS AMENDED BY SIDE LETTER NUMBER ONE THERETO DATED JUNE 15, 2007, AND AMENDMENT NUMBER ONE THERETO DATED 28 TH FEBRUARY 2008, AND AMENDMENT NUMBER TWO THERETO DATED 28 TH FEBRUARY 2009, AND AMENDMENT NUMBER THREE THERETO DATED 1 st SEPTEMBER 2009 (COLLECTIVELY THE “AGREEMENT”)

INTRODUCTION

Aerovias Del Continente Americano S.A., Avianca (“Avianca”) has agreed to purchase certain Airbus A330 aircraft from Airbus, which will be powered by new Trent 700 Engines (the “Aircraft”);

[*]

NOW THEREFORE IT IS AGREED AS FOLLOWS:

 

1. AIRCRAFT DELIVERY SCHEDULE

[*]

 

2. GENERAL

All rights, obligations and liabilities under this AM4 shall be subject to and in accordance with the provisions of the Agreement and except as specifically amended herein, the provisions of the Agreement shall remain in full force and effect as if set out in full herein and further, this AM4 is made without prejudice to either of the Parties’ existing rights (unless expressly stated in this AM4) set forth or arising under the Agreement. In the event of any conflict between the terms of this AM4 and the Agreement, the terms of this AM4 shall prevail.

 

3. CONFIDENTIALITY AND LAW

New York Law shall govern this AM4. The provisions of this AM4 are confidential and shall not (except as provided in Clause 10 of the Agreement) be disclosed to any third party without the prior written consent of the other party.

 

4. FACSIMILE TRANSMISSION

Transmission by facsimile of a signed counterpart signature page shall be deemed and constitute due and valid delivery of an executed counterpart of this AM4.

 

Page 1 of 2

Rolls-Royce plc Registered office:65 Buckingham Gate, London SW1E 6AT.

Company number: 1003142. Registered in England


As WITNESS WHEROF the Parties have caused this AM4 to be signed on their behalf by the hands of their duly authorised officers the day and year first before written.

 

Signed for and on behalf of:     Signed for and on behalf of:

AEROVIAS DEL CONTINENTE

AMERICANO S.A., AVIANCA

    ROLLS-ROYCE plc
By:         By:    

Printed:

        Printed:    
Title:         Title:    

 

Page 2 of 2

Rolls-Royce plc Registered office:65 Buckingham Gate, London SW1E 6AT.

Company number: 1003142. Registered in England

Exhibit 10.12

Note: Certain portions have been omitted from this Agreement in accordance with a request for confidential treatment submitted to the Securities and Exchange Commission. Omitted information has been replaced with an asterisk. Omitted information has been filed separately with the Securities and Exchange Commission.

GENERAL TERMS AGREEMENT

BETWEEN

ROLLS-ROYCE Plc

ROLLS-ROYCE TOTAL CARE SERVICES LIMITED

AEROVÍAS DEL CONTINENTE AMERICANO S.A. AVIANCA

AND

TAMPA CARGO S.A.

TRENT 700

DEG 7308

 

DEG 7308    Page 1 of 39


TABLE OF CONTENTS

Recitals

SECTION 1 – GENERAL TERMS

Clauses

 

  1 Definitions
  2 Scope of Agreement
  3 Purchase Orders
  4 Delivery
  5 Prices
  6 Payment
  7 Taxes and Other Charges
  8 Delay
  9 Events of Default and Termination
  10 Non Disclosure
  11 Intellectual Property Rights
  12 Grant of Warranties and Limitation of Liability
  13 Occupier’s Liability
  14 General Terms
  15 Export/Import Shipment and Government Authorisation
  16 Conflict

SECTION 2 – EXHIBITS

Exhibits

 

  A AIRCRAFT DELIVERY SCHEDULE

 

  B OPERATING ASSUMPTIONS

 

  C [*]

 

  D CUSTOMER SERVICES

 

  E-1 [*]

 

  E-2 SPARE PARTS TERMS

 

  F [*]

 

  G [*]

 

  H [*]

 

DEG 7308    Page 2 of 39


THIS AGREEMENT is made this 1 day of June, 2012 BETWEEN:

 

(1) Rolls-Royce plc whose registered office is at 65 Buckingham Gate, London SW1E 6AT; and

Rolls-Royce Total Care Services Limited whose registered office is at Moor Lane, Derby, DE24 8BJ

(both hereinafter Rolls-Royce); and

 

(2) Aerovías del Continente Americano S.A. Avianca, whose registered office is at Avenida Calle 26 No. 59-15 Centro Administrativo Bogotá, Colombia;

(hereinafter called Avianca). and

 

(3) Tampa Cargo S.A. whose registered office is at Aeropuerto Jose Maria Cordova, zona de carga, Hangar Tampa Cargo S.A. Rionegro, Colombia

(hereinafter called Tampa Cargo)

Avianca, Tampa Cargo or Rolls-Royce (as applicable) may hereinafter be referred to as a “Party” or collectively as the “Parties”.

WHEREAS:

Avianca has entered into an Agreement with Airframer for the purchase of new Rolls-Royce Engine powered Aircraft.

Avianca acknowledges that (i) Rolls-Royce is providing concessions; and (ii) in giving these concessions, Rolls-Royce has assumed that it will receive the benefit of aftermarket revenues generated by the Engines over their operational life. Avianca and Rolls-Royce desire to enter into this Agreement for the sale and support by Rolls-Royce, and the purchase by Avianca from Rolls-Royce, of Products and Services;

Tampa Cargo S.A, a wholly owned subsidiary of Avianca, will be operating the Aircraft and will be performing obligations and receiving services pursuant to Exhibit G.

 

DEG 7308    Page 3 of 39


NOW THEREFORE IT IS AGREED AS FOLLOWS:

SECTION 1 GENERAL TERMS

CLAUSE 1 DEFINITIONS

The following words and phrases, when used in this Agreement (including in the recitals), shall have the meaning and definition set forth. All other words and phrases as defined in the Engine Manuals shall also apply. Should the definitions used in this Agreement differ from the definitions contained in the Engine Manuals, the definitions used in this Agreement shall take precedence for the purpose of this Agreement.

[*]

“Affiliate” means any subsidiary or affiliate of Avianca that is directly or indirectly controlled by AviancaTaca. The term “controlled by” with respect to a person, shall mean the possession of power (directly or indirectly) by AviancaTaca to direct or cause the direction of management or policies of such person.

“Agreement ” means the General Terms together with all Exhibits.

“Aircraft” means the Airbus A330 type Aircraft as described in Exhibit A, powered by Engines which are being purchased from Airframer by Avianca, or its permitted assigns.

“Aircraft Purchase Agreement” means the agreement dated September 5, 2011 between Avianca and Airframer for the purchase of the Aircraft.

“Airframer” means Airbus SAS.

“Aircraft Manual” means an Aircraft manual as defined by the Airframer.

“Airworthiness Authority” means EASA.

[*]

“ANAC” means the Brazilian aviation authority (Agência Nacional de Aviação Civil).

“Anniversary Date(s)” means, in respect of Guarantees, any or all of the anniversary dates from the date of delivery of the first Aircraft to Avianca through to the end of the Term of Guarantee.

“Assumptions” means the assumed conditions of operation of the Engines and Aircraft as detailed in Exhibits A (Aircraft Delivery Schedule), B (Operating Assumptions), and E (Fleet Purchasing Support).

“AOG” means aircraft on ground as defined in the World Airlines Technical Operations Glossary (WATOG) .

“ATA Specifications” means the then current revisions of ATA specifications Numbers 100, 101, 102, 103, 200, 300, 400 and 2000 or their equivalent.

“AviancaTaca” means a Panamanian company duly incorporated and existing under the laws of the Republic of Panamá with offices and Avenida Calle 26 No 59-15, piso 10, Bogotá, Colombia.

 

DEG 7308    Page 4 of 39


“Bankruptcy Event” means an event where a person ceases doing business as a going concern or commences or has commenced against it any dissolution or liquidation proceeding, attempts or suffers a rearrangement or adjustment of any substantial portion of its debts, is insolvent, has a trustee, receiver, custodian or conservator appointed for it or, for all or substantially all of its assets, makes an assignment for the benefit of creditors, is generally not paying (except where demonstrated to the contrary), or admits in writing its inability to pay its debts as they become due or commences or has commenced against it, or suffers, approves, acquiesces in or consents to any bankruptcy proceeding seeking relief by way of reorganisation, arrangement, adjustment, winding-up or composition under any present or future statute, law or regulation or will take, or publicly announce its intention to take, corporate action in furtherance of any of the foregoing.

“Commercial Price” means Rolls-Royce’s then current price of Parts, Services and other products and services that are available for sale, as may be quoted or applied from time to time by Rolls-Royce..

[*]

“Customer’s Airworthiness Authority” means UAEAC or other agreed applicable authority pursuant to the Sublease provisions (provided that the directives of such authorities are consistent with those of other ICAO members).

[*]

“Direct Warranty Agreement” means Rolls-Royce’s form of warranty agreement, in which warranty benefits are provided to operators.

“Documentation” means all airworthiness documentation for Products as required by the applicable Airworthiness Authority including, but not limited to, Log Books, the EASA Form 1/FAA Form 8130-3 serviceable tag, certificate of compliance, and tags for such Products indicating Time since New (TSN), Cycles Since New (CSN), calendar time, including Aircraft effectivity, as applicable.

Where applicable, all documentation should be properly identified with RR logo, stamps and signature.

“Dressed Engine” means an Engine to the Dressed Engine configuration as defined in the Specification

“EASA” means the European Aviation Safety Agency and any successor agency thereto.

“EHM” means the engine health monitoring services provided by Rolls-Royce, as detailed in Clause 4 of Schedule 1 to Exhibit G.

“EHM Supplier” means the supplier nominated by Rolls-Royce to perform EHM.

“EMP” means the Engine Management Program proposed by Rolls-Royce and agreed by Avianca [*].

“Engine(s)” means an installed or spare Trent 772B Installation Pack as described in the Trent 700 spare engine Specification (reference 4113-S Issue 1), acquired by Avianca, its lessors or Affiliates in support of the Aircraft and delivered either to Avianca on Aircraft or as spare Engines pursuant to Exhibit E hereto.

“Engine Manuals” means the Engine series manuals as defined by Rolls-Royce.

 

DEG 7308    Page 5 of 39


“Entry Into Service” or “EIS” shall mean the date of delivery of the first Aircraft to Avianca.

[*]

“Exhibit(s)” means those exhibits from time to time comprising Section 2 of this Agreement.

“FAA” means the United States Federal Aviation Administration, and any successor agency.

[*]

“Fleet” means the fleet of Rolls-Royce Trent 700 engines in operation from time to time.

“Flight Cycle” means the operation of an Engine from the time an Aircraft leaves the ground until it touches the ground at the end of a flight. For the purposes of this Agreement, an aborted take-off or a touch and go landing shall also be considered as a Flight Cycle.

“Flight Hour” means each airborne hour (or part thereof) in operation of each Engine computed from the time an Aircraft leaves the ground until it touches the ground at the end of a flight.

“Freighter Aircraft” means the Airbus A330 type Aircraft as described in Exhibit A, powered by Engines which are being purchased from Airframer by Avianca, or its permitted assigns.

“Guarantees” means the fleet guarantees set out in Exhibit F.

“General Terms” means those terms and conditions set out in Section 1 of this Agreement.

[*]

“Information” means (a) all software and electronic communications disclosed by one Party to another, and (b) all other information including, but not limited to, information contained in Engine and aircraft Manuals, all oral, written information, know how, data, reports, drawings and specifications that are marked or otherwise clearly identified as proprietary or confidential except that all software and electronic communications shall be considered as such.

[*]

“Installed Engines” means those engines originally delivered with each Aircraft (not as spare engines).

“Lease Agreement” means an agreement that, unless otherwise agreed, shall be in the form of the IATA Master Short-Term Engine Lease Agreement 2002 (Reference 5016-00) (as amended from time to time) pursuant to which a Lease Engine is be made available to Avianca or Tampa Cargo. The term “Lease” shall be construed accordingly

“Lease Engine” means an engine which is not owned by Avianca or Tampa Cargo and which is made available by Rolls-Royce or Rolls-Royce Leasing Limited for the use of Avianca or Tampa Cargo.

“Line Maintenance” means any work required to be carried out on an Engine in accordance with the aircraft manuals, which may be accomplished either on-wing or off-wing but without necessitating the return of such Engine to an Overhaul Base. Line Maintenance includes, without limitation, troubleshooting, inspection, servicing or diagnostic testing of the Engine and the removal of unserviceable Parts requiring repair or replacement and the refitting of serviceable Parts.

 

DEG 7308    Page 6 of 39


“Line Replaceable Part” or “LRP” means all Parts (excluding LRUs), which are replaceable during Line Maintenance, with the following exceptions:

all LLPs which are line replaceable; or

all industry standard “common-consumable” external parts without Rolls-Royce part number (e.g. nuts, bolts, o-rings, gaskets, etc.).

“Line Replaceable Unit” or “LRU” means those Parts listed in Schedule 3 to Exhibit C.

“Life Limited Parts” or “LLP” means any Part listed in Schedule 2 of Exhibit C.

“Logistics Provider” means the logistics provider elected by Rolls-Royce to collect and re-deliver LRU/LRPs on behalf of Rolls-Royce from Designated Location(s).

“Main Base” shall mean Avianca’s main base at Medellin, Colombia.

“Max Spare” means “Maximum Spare Engine” as defined in the Specification.

[*]

“Overhaul Base” means a Repair station which is certified by the Airworthiness Authorities for the Repair of Engines and Parts.

“Part” means any new Engine part manufactured or supplied by Rolls-Royce or a source approved by Rolls-Royce.

“Permitted Sub-Lessee” means Tampa Cargo S.A.

[*]

“Products” means Engines and Parts.

“Remaining Term ” means the period commencing on the first day following the termination date and ending on the final day of the Period of Cover, assuming that this Agreement had not been terminated.

“Resultant Damage” means the damage suffered by a [*]

“Repair” means the refurbishment at an Overhaul Base or Vendor (including the provision of Parts) necessary to return Engines or Parts to a serviceable condition in accordance with the applicable Engine Manuals and the EMP.

“Repair Vendor” means, with respect to a particular Product, either Rolls-Royce or a third party designated by Rolls-Royce as the repair vendor for such Product.

“Services” means the services to be provided pursuant to Exhibit D (Customer Services) hereto, or under any other provision hereunder.

 

DEG 7308    Page 7 of 39


“Specification” means the Rolls-Royce specification for Engines.

“Sub-Lessee” means any operator with which Avianca enters Sublease arrangements, other than a permitted Sub-Lessee.

“Sublease” means arrangements where Avianca/Tampa Cargo allows another operator to use the Engines for any period of time including by way of lease, sub-lease or other bailment agreements.

“Subleased Aircraft” has the meaning given to it in Clause 20.

“Taca” means Taca International Airlines S.A., a company whose registered office is at Edificio TACA, Blvd Sur y Calle El Almendro Urbanizacion Madreselva, Antiguo Cuscatlan, El Salvador

[*]

“Tooling” means tools, jigs, fixtures, transportation equipment and other products which are required for the installation, maintenance and/or storage of an Engine and not for installation in the Engine.

“Tooling Supplier” means Hydro A.G.

“TotalCare Termination Compensation Amount ” means the sum of:

 

  (a) all Charges that would have been payable by Tampa Cargo to Rolls-Royce in the Remaining Term and discounted from the month in which they would have fallen due back to the Termination Date at the rate of 10 per cent per annum; less

 

  (b) a reasonable allowance (discounted on the same basis as (a) above) for the future expenditure on provision of services (if any) which Rolls-Royce will avoid by reason of the early termination of this Agreement,

With each of a) and b) above to be calculated on the basis of the Assumptions and the assumption that Tampa Cargo would have complied with its obligations under this Agreement for the Remaining Term.

“Ultimate Flight Cycles” means the maximum permitted Flight Cycles imposed by Rolls-Royce or the Airworthiness Authorities.

“UAEAC” means Unidad Administativa Especial de la Aeronautica Civil Colombiana.

“Used Part(s)” means parts purchased by Avianca directly from Rolls-Royce which are used and serviceable.

“Vendor” means a Rolls-Royce approved manufacturer of Parts or Tooling, as identified in the Engine Manuals or as may be notified by Rolls-Royce from time to time.

“Warranties” shall mean the warranties as set out in Exhibit C and the Guarantees as set out in Exhibit F.

[*].

 

DEG 7308    Page 8 of 39


CLAUSE 2 SCOPE OF AGREEMENT

Rolls-Royce agrees to sell to Avianca (and with respect to Exhibit G, to Tampa Cargo) and Avianca (and with respect to Exhibit G, Tampa Cargo) agrees to purchase Products and Services from Rolls-Royce in accordance with the terms and conditions contained in this Agreement. [*]

The Exhibits to this Agreement set forth the terms and conditions that apply to specific Products and Services in addition to the General Terms.

The General Terms and the Exhibits together constitute the terms and conditions of this Agreement.

CLAUSE 3 PURCHASE ORDERS

 

3.1 Rolls-Royce agrees to sell and deliver to Avianca and Avianca agrees to buy and take delivery of spare Engines as set out in Schedule 2 to Exhibit E1 of this Agreement. Signature of this Agreement by the Parties and its entry into force in accordance with its terms shall constitute a Avianca purchase order therefor and Rolls-Royce’s acknowledgement of its acceptance.

 

3.2 Subject to Clause 3.1 above, Products and Services purchased under the terms of this Agreement shall be ordered by means of purchase orders issued by Avianca in an agreed format consistent with the requirements of ATA Specifications. The terms and conditions in this Agreement apply to all purchase orders to the extent applicable to the Product or Service requested. Any purchase order issued hereunder shall contain; description, quantity, delivery dates, the unit and extended price of the Products and Services and shipping instructions, as appropriate.

 

3.3 Subject to Clause 3.1 above, Rolls-Royce shall provide written or electronic acknowledgment of its acceptance of purchase orders. [*]

 

3.4 Avianca shall, not later than thirty (30) calendar days after signature of this Agreement, notify Rolls-Royce in writing that it has placed an irrevocable purchase order with the Airframer for the aircraft detailed in Exhibit A of the General Terms to be installed with the Engines.

CLAUSE 4 DELIVERY

 

4.1 Unless otherwise stated in this Agreement, Rolls-Royce shall deliver Products Ex Works, Rolls-Royce’s facility (Incoterms 2010). In the event that Avianca’s reasonable demonstrated cost of transporting a spare Engine from Rolls-Royce’s facility, should it be any other location than Derby, UK, to the Americas exceeds the transportation cost that would have been incurred had Rolls-Royce’s delivery facility been in Derby, UK, then Rolls-Royce will provide a credit note to Avianca for such incremental costs.

 

4.2 Shipping documents, invoices, packaging and marking of packaging for Products and Services shall be in accordance with ATA Specifications and International Standards for Phytosanitary Measures ISPM No. 15 (Guidelines for regulating wood packaging material in international trade).

 

DEG 7308    Page 9 of 39


CLAUSE 5 PRICES

 

5.1 Unless otherwise specified in this Agreement, the price for Products and Services shall be as described in the applicable Commercial Price or, for those Products and Services not specified in such a listing, as quoted by Rolls-Royce.

CLAUSE 6 PAYMENT

 

6.1 Immediately following, or concurrent with, the supply of Products and Services, Rolls-Royce shall submit an invoice to Avianca stating amounts due. Unless otherwise specified in this Agreement, payment shall be made by Avianca in United States Dollars by [*] from the date the invoice is issued.

 

6.2 [*]:

.

 

6.3 Unless otherwise stated or provided herein, all payments by Avianca under this Agreement shall be made without any abatement, withholding, deduction, counterclaim or set off, by wire transfer to Rolls-Royce’s account as follows:

JP Morgan Chase Bank

Trinity Tower (TT8)

9 Thomas More Street

London E1 9YT

Account no: [*]

Sort code: [*]

Swift code: [*]

or such other account as may be notified from time to time. Confirmation of Avianca’s payment shall be transmitted to Rolls-Royce at the following address by facsimile the day payment is made:

Rolls-Royce plc

PO Box 31

Derby

DE24 8BJ

England

Fax: +44 (0)1332 240303

Attention: Accounts Receivable

For the avoidance of doubt, notwithstanding the foregoing, all credits issued hereunder may be used as described in this Agreement.

For the purpose of this Clause 6.3, payment shall only be deemed to have been made when cleared or good value funds are received in the applicable numbered Rolls-Royce or Avianca bank account, as applicable.

Unless otherwise stated, all payments and credits by Rolls-Royce under this Agreement shall be made without any abatement, withholding, deduction, counterclaim or set of, by wire transfer to Avianca’s account.

CLAUSE 7 TAXES AND OTHER CHARGES

For the purpose of this Clause 7, the following terms shall have the following meanings:

“Agent” means the nominated agent of Avianca

“Declarant” means the person making the customs declaration of import or export.

“Direct Representation” means the agent is acting in the name of and on behalf of another person, as detailed in European Union Customs.

“Single Administrative Document” means the document lodged with a European Union customs authority declaring an import into or an export from the territory of the European Union.

7.1

 

(a) All amounts stated to be payable by Avianca pursuant to this Agreement exclude any value added tax (VAT), sales tax, use tax, service tax, goods and services tax (GST), taxes on turnover or similar taxes. If the supply of any Products or Services is chargeable to any value added tax (VAT), sales tax, use tax, service tax, goods and services tax (GST), taxes on turnover or similar taxes, such taxes will be added to the amount payable by Avianca and will be paid and borne by Avianca . [don’t understand]

 

DEG 7308    Page 10 of 39


(b) All amounts stated to be payable by Rolls-Royce pursuant to this Agreement exclude any value added tax (VAT), sales tax, use tax, service tax, goods and services tax (GST), taxes on turnover or similar taxes. If the supply of any Products or Services is chargeable to any value added tax (VAT), sales tax, use tax, service tax, goods and services tax (GST), taxes on turnover or similar taxes, such taxes will be added to the amount payable by Rolls-Royce and will be paid and borne by Rolls-Royce .

 

7.2 [*]

 

7.3 [*].

 

7.4 Both Parties agree to co-operate to eliminate or reduce any applicable taxes, duties, interests, penalties or similar charges which may be payable by either Party, including, where applicable, providing or issuing the necessary documentation to support or secure exemptions or recoveries. Furthermore, if as a result of a change in law or a change in the tax practice of any tax authority, either Party becomes subject to additional taxes, duties or similar charges which increases their financial liability during the term of this Agreement, both Parties will negotiate in good faith to attempt to reduce or eliminate such additional taxes, duties and similar charges. This is provided that neither Party need take any steps, which in its reasonable opinion, and acting in good faith would increase its obligations or would be prejudicial or adverse to it (whether in respect of tax affairs or otherwise).

 

7.5 [*]:

a) [*]

b) [*]

CLAUSE 8 DELAY

 

8.1 If Rolls-Royce is hindered or prevented from delivering Products or Services or both within the agreed delivery schedule (as such time may be extended pursuant to the other provisions of this Agreement) by reason of:

 

  8.1.1 any cause beyond the reasonable control of Rolls-Royce; or

 

  8.1.2 [*];

the time for delivery shall be extended by a period equal to the period for which delivery shall have been so hindered or prevented. [*].

 

8.2 If Avianca is hindered or prevented from performing its obligations hereunder, excluding any of its payment obligations, within the agreed delivery schedule (as such time may be extended pursuant to the other provisions of this Agreement) by reason of:

 

  8.2.1 any cause beyond the reasonable control of Avianca; or

 

  8.2.2 [*];

the time for delivery shall be extended by a period equal to the period for which delivery shall have been so hindered or prevented.

 

8.3 [*]:

 

DEG 7308    Page 11 of 39


8.4 In the event of a delay, whether excusable or not, in delivery of a spare Engine or Part, where such delay will lead to a Avianca AOG, Rolls-Royce’s sole obligation to Avianca shall be to provide a Lease Engine or to lease such Part to Avianca in accordance with the terms of a Lease Agreement, and Rolls-Royce shall waive the daily rental for any such Lease Engine or Part for the period of unexcused delay (as defined in Clause 8.3 above). In the event of an unexcused delay in the delivery of a spare engine, Rolls-Royce will transport the Lease Engine or Part to Avianca’s Main Base or other location as agreed between the Parties.

CLAUSE 9 EVENTS OF DEFAULT AND TERMINATION

 

9.1 Without prejudice to its other rights and remedies, either Party shall have the right to terminate this Agreement without incurring any liability if either suffers a Bankruptcy Event.

 

9.2 Termination under Clause 9.1 shall be effected by the Party entitled to terminate issuing notice of termination in writing to the other Party and such notice shall be effective [*] after it is issued.

[*]

CLAUSE 10 NONDISCLOSURE

 

10.1 Subject to Clause 10.4 below, each Party agrees to hold in confidence any Information (including this agreement and any of its terms) which it acquires directly or indirectly from the other Party or any of such Party’s affiliates and agrees:

 

  10.1.1 to protect the Information with at least the same degree of care as it uses to protect its own Information.

 

  10.1.2 not to use the Information otherwise than for the purposes of this Agreement;

 

  10.1.3 not to disclose the Information at any time or the Information to any third person without the written approval of the other Party;

 

  10.1.4 not to copy or to reduce the Information to writing or store whether in a machine readable form or otherwise except as may be reasonably required for the purposes of this Agreement; and

 

  10.1.5 not to remove, alter or deface any proprietary or confidential designation denoted on the Information.

 

10.2 The provisions of Clause 10.1 above shall not apply to Information which is or becomes generally known in the aero engine industry, known by the receiving Party at time of receipt, received from a third party who is without an obligation of nondisclosure, or required to be produced by a legitimate legal authority, nor shall the provisions of Clause 10.1 above prevent any necessary disclosure of Information to enable Avianca itself to use, operate, maintain or service Products and Services. In the case of a legally-compelled disclosure, the Party compelled to disclose shall promptly advise the other Party.

 

DEG 7308    Page 12 of 39


10.3 Each Party shall be responsible for the observance of the provisions of Clause 10.1 above by its employees or any other third parties to whom Information is disclosed in accordance with this Clause.

 

10.4 This Clause 10 shall not be construed as granting expressly or impliedly any rights in respect of any patent, copyright or other industrial property right in force and belonging to the disclosing Party except to the extent necessary for the purposes of this Agreement.

 

10.5 Any breach of this Clause 10 shall be deemed a material breach under the terms of Clause 9.4.

 

10.6 Without prejudice to any other rights of the disclosing Party, the Parties agree that damages may not be an adequate remedy for any use or disclosure of Information by the recipient Party in breach of this Agreement and that any Party may seek an injunction, specific performance or other equitable relief for any actual or threatened breach of this Agreement in any court of competent jurisdiction.

 

10.7 Notwithstanding Clause 10.1 above, both Parties shall be entitled to disclose this Agreement and financial information concerning business between Rolls-Royce and Avianca to appointed auditors, legal advisors, insurers and accountants and Rolls-Royce shall be entitled to disclose this Agreement and financial Information concerning business between Rolls-Royce and Avianca to Rolls-Royce’s risk and revenue sharing partners. Avianca shall be entitled to disclose this Agreement and financial information concerning business between Rolls-Royce and Avianca to Avianca’s lessors, financiers and advisers upon prior written approval from Rolls-Royce, such approval not to be unreasonably withheld.

 

10.8 Clause 10.1 will not prevent Rolls-Royce from being entitled to have access to the EHM Data provided by Customer to the EHM Supplier, and the analysed data subsequently produced by EHM Supplier to support Engine Health Monitoring, and for Rolls-Royce to support safety investigations. Rolls-Royce and EHM Supplier, subject to taking steps to protect the confidentiality of the EHM Data, may disclose the EHM Data to third parties,, to the extent that such third parties have a need to know the EHM Data to perform their obligations to Rolls-Royce or EHM Supplier (as applicable);

 

10.9 For the purposes of this Clause 10 only, Avianca shall be deemed to include Taca, and any reference to Party/Parties within this Clause 10 must be construed accordingly.

CLAUSE 11 INTELLECTUAL PROPERTY RIGHTS

 

11.1 Rolls-Royce shall, subject to the conditions set out in this Clause 11 and as the sole liability of Rolls-Royce in respect of any claims for infringement of industrial property rights, indemnify and, as provided in Clause 11.2, defend Avianca against any claims, that the use of any of the Products and Services by Avianca within any country to which at the date of such claim, the benefits of Clause 27 of the Convention on International Civil Aviation of 7th December 1944 (The Chicago Convention) apply, infringes any patent, [*].

 

11.2 Avianca will give immediate notice in writing to Rolls-Royce of any claim under Clause 11.1, whereupon Rolls-Royce shall elect to either assume the defense of or dispose of or settle such claim, at its own expense and in its sole discretion, and Avianca will give Rolls-Royce all reasonable assistance and will not, by any act or omission, do anything which may directly or indirectly prejudice Rolls-Royce in this connection.

 

DEG 7308    Page 13 of 39


11.3 [*].

 

11.4 The indemnity contained in Clause 11.1 shall not apply to claims in respect of:

[*]

 

11.5 [*].

CLAUSE 12 GRANT OF WARRANTIES AND LIMITATION OF LIABILITY

For the purposes of this Clause 12 only, reference to Avianca shall be deemed to include Tampa Cargo, and any reference to Party/Parties within this Clause 12 must be construed accordingly.

 

12.1 Rolls-Royce grants to Avianca the Warranties. Except as elsewhere provided in this Agreement, these Warranties are personal to Avianca, and the obligations of Rolls-Royce thereunder shall only apply insofar as Avianca has possession of and operates the Products and receives the Services. The Parties also agree that the Warranties, excluding the Guarantees, shall apply to any equipment which falls into the categories of the Warranties and which is manufactured, supplied or inspected by Rolls-Royce howsoever and whenever acquired by Avianca from whatever source.

Rolls-Royce hereby agrees that, on receiving notice from time to time from Avianca that a person other than Avianca or an Affiliate will be the operator of the Engines, Rolls-Royce shall, upon request from such person, enter into a direct warranty agreement with that person in substantially the same form as provided in Exhibit C hereto. In such circumstances, Avianca shall make such person aware of (a) its right to enter into a direct warranty agreement with Rolls-Royce and (b) its inability to claim against Rolls-Royce in respect of the Warranties unless it enters into a direct warranty agreement with Rolls-Royce.

[*]

CLAUSE 13 OCCUPIER’S LIABILITY

If any employee of either Party enters upon the property occupied by or under the control of the other Party in the performance of this Agreement, the Party occupying or controlling such premises assumes responsibility for and agrees to pay for any loss, cost, damage to property, or for personal injury or death of the person entering such premises arising out of, as a result of, or in connection with the actions or omissions of the Party occupying or controlling such premises. Each Party also agrees that it will maintain public liability and property damage insurance in reasonable limits consistent with industry standards covering the obligations set forth above and will maintain proper occupier’s liability insurance (or other comparable insurance).

 

DEG 7308    Page 14 of 39


CLAUSE 14 GENERAL

 

14.1 Effective Date and Expiration

With the exception of Exhibit G which is subject to the Period of Cover, this Agreement will commence upon the date of signature and remain in full force and effect for as long as Avianca, or its permitted assigns, owns or operates [*], unless terminated in accordance with Clause 9.

 

14.2 Survival

The provisions of Clauses 1 (Definitions), 7 (Tax), 10 (NonDisclosure), Clause 11 (Intellectual Property Rights), 12 (Grant of Warranties and Limitation of Liability), 13 (Occupier’s Liability), 14.2 (Survival), 14.3 (Notices), 14.6 (Headings), 14.7 (Waiver), 14.8 (Severability), 14.9 (Law and Jurisdiction), 14.10 (Sole Agreement), 14.11 (Third Party Rights), 14.12 (Relationship of Parties) and Exhibit C (Warranties) of this Agreement shall survive and continue to have effect should this Agreement expire or be terminated for any reason or after this Agreement becomes impossible of performance or is otherwise frustrated.

The provisions of Exhibit F (Fleet Guarantees) of this Agreement shall survive and continue to have effect should this Agreement be terminated by Avianca in accordance with the provisions of Clause 9.1.

 

14.3 Notices

Any notice required to be given by either Party to the other under or in connection with this Agreement shall be in writing and delivered personally, by certified mail or by facsimile. Notices to Avianca (and Tampa Cargo) shall be directed to:

Aerovias del Continente Americano S.A. Avianca

Avenida Calle 26 No. 59-15, Piso 10

Bogotá—Colombia

Attn: Secreteria General

Tel # +57 1 5877700 ext 272Facsimile #

Notices to Rolls-Royce shall be directed to:

Rolls-Royce plc

PO Box 31

Derby

DE24 8BJ

Attn: Assistant Vice President—Americas

Tel: +44 1332 248671

Facsimile: +44 1332 248728

or in each case to such other place of business as may be notified from time to time by the receiving Party.

 

14.4 Assignment

 

(a) Except as otherwise stated herein, neither Party may assign any of its rights or obligations hereunder without the written consent of the other Party [*]. provided that Avianca is given prior written notice). Any assignment made in violation of this Clause 14.4 shall be null and void.

 

DEG 7308    Page 15 of 39


14.5 Amendment

This Agreement may only be amended by agreement in writing, executed by the parties hereto, on or after the date of this Agreement, and which expressly amends this Agreement, and in no event shall it be amended or terminated orally. Unless expressly agreed no amendment shall constitute a general waiver of any provisions of the Agreement nor shall it affect any rights, obligations or liabilities arising under or pursuant to this Agreement which have already accrued up to the date of the amendment and the rights and obligations of the Parties arising under or pursuant to the Agreement shall remain at full force and effect, except only to the extent that they are so amended.

 

14.6 Headings

Clause headings and the index are for convenience only and do not form a part of the Agreement and shall not govern or affect the interpretation of the Agreement.

 

14.7 Waiver

No failure by either Party to enforce any provision of this Agreement shall constitute an ongoing waiver of that or any other provision hereof.

 

14.8 Severability

Each of the provisions of the Agreement is severable. If any such provision is held to be or becomes illegal, invalid or unenforceable in any respect under the law of any jurisdiction:

 

  14.8.1 so far as it is illegal, invalid or unenforceable, it shall be given no effect and shall be deemed not to be included in the Agreement, it shall not affect or impair the legality, validity or enforceability in that jurisdiction of the other provisions of the Agreement, or of that or any provisions of this Agreement in any other jurisdiction; and

 

  14.8.2 the Parties shall use all reasonable efforts to replace it with the valid and enforceable substitute provisions satisfactory to any Government or other relevant regulatory authority but differing from the replaced provision as little as possible and the effect of which is as close to the intended effect of the illegal, invalid or unenforceable provision.

 

14.9 Law and Jurisdiction

 

  14.9.1. This Agreement shall be subject to and interpreted and construed in accordance with the laws of the State of New York excluding its conflict of law rules and excluding the United Nations Convention for the International Sale of Goods (CISG, 1980, “Vienna Convention”).

 

  14.9.2 WHERE SUBMISSION TO A COURT OF A CLAIM OR OTHER ENFORCEMENT ACTION IS PERMITTED UNDER THIS AGREEMENT, EACH PARTY IRREVOCABLY CONSENTS TO THE EXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND THE SUPREME COURT OF THE STATE OF NEW YORK LOCATED IN NEW YORK COUNTY, NEW YORK, IN ANY SUIT, ACTION OR PROCEEDING BROUGHT BY EITHER PARTY UNDER THIS AGREEMENT AND ANY MATTER RELATED TO IT.

 

DEG 7308    Page 16 of 39


  14.9.3. Notwithstanding anything to the contrary herein, this Agreement and each Party’s respective rights and obligations are expressly subject to all applicable laws and regulations including, but not limited to, United States laws relating to exports.

 

  14.9.4. The official text of this Agreement is the English language. If this Agreement is translated into another language for the convenience of Avianca or its personnel, the English text shall govern any question with respect to interpretation.

 

  14.9.5. Avianca irrevocably appoints Avianca Inc., currently of 8350 NW ST, Terrace, Suite 100, Miami – 33166 (Phone +1 305 599 7266) or its registered office from time to time, as its process agent under this Agreement for service of process in any proceedings before the New York courts. If any person appointed as process agent is unable for any reason to act as agent for service of process, Avianca will immediately appoint another agent on terms acceptable to Rolls-Royce. Failing this, Rolls-Royce may appoint another agent for this purpose. Avianca agrees that failure by a process agent to notify it of any process will not invalidate the relevant proceedings. This Clause 14 does not affect any other method of service allowed by Law.

 

14.10 Sole Agreement

 

  14.10.1 This Agreement contains the only provisions governing the sale and purchase of Products and Services and such provisions shall apply to the exclusion of any other provisions on or attached to or otherwise forming part of any purchase order of Avianca or any acknowledgement or acceptance by Rolls-Royce or of any other document which may be issued by either Party relating to the sale and purchase of Products and Services.

 

  14.10.2 The parties agree that neither of them has placed any reliance whatsoever on any representations, agreements, statements or understandings made prior to the signature of this Agreement, whether orally or in writing, relating to the Products or Services other than those expressly incorporated in this Agreement which has been negotiated on the basis that its provisions represent their entire agreement relating to the Products or Services and shall supersede all such representations, agreements, statements and understandings. The Parties further agree that neither of them shall place any reliance on any and all future representations whatsoever in respect of the performance of this Agreement unless such representations are expressly agreed by the Parties in writing to form a part of this Agreement. For the avoidance of doubt, it is not the intention of this Clause to exclude the liability of either party for fraudulent misrepresentations.

 

14.11 Relationship of Parties

The relationship between Avianca and Rolls-Royce shall be that of independent contractors and not that of principal and agent or that of partners.

Neither Avianca nor Rolls-Royce shall represent itself as agent or partner of the other Party nor do any act or thing which might result in other persons believing that they have authority to contract or in any other way to enter into commitments on behalf of, or in the name of the other Party.

Each of Avianca and Rolls-Royce shall be fully and solely responsible for all obligations undertaken by such Party under this Agreement in relation to the Products and Services to be supplied.

 

DEG 7308    Page 17 of 39


The Parties acknowledge and agree that each of the Rolls-Royce group companies which are at the date of this Agreement or from time to time become a Party to this Agreement with the written consent of Avianca, is and shall be severally (but not jointly and severally) liable for its respective obligations under this Agreement in relation to the respective Products and Services supplied.

 

14.12 Publicity

Except as required by law or by any stock exchange or governmental or other regulatory or supervisory body or authority of competent jurisdiction to whose rules the Party making the announcement or disclosure is subject, no announcement or disclosure in connection with the existence, contents or subject matter of this Agreement shall be made or issued by or on behalf of the either Party without the prior written consent of the other, such approval not to be unreasonably withheld or delayed.

 

14.13 Counterparts and Facsimile

This Agreement may be executed in several counterparts and any single counterpart or set of counterparts, signed in either case by all the Parties, shall be deemed to be an original and all taken together shall constitute one and the same instrument. Transmission by facsimile of a signed counterpart signature page shall be deemed and constitute due and valid delivery of an executed counterpart of this Agreement.

CLAUSE 15 EXPORT/IMPORT SHIPMENT AND GOVERNMENT AUTHORISATION

 

15.1 [*]. Where an export license is required, supply will not take place unless and until any required export license is granted. [*].

 

15.2 Except as otherwise expressly provided in this Agreement, Avianca shall be responsible for obtaining any authorisation, including but not limited to any import licenses and exchange permits required by the countries in which the Engines are to be registered, operated, or imported into.

 

15.3 Rolls-Royce and Avianca shall provide each other with reasonable assistance in obtaining and complying with any authorisations that may be required.

CLAUSE 16 CONFLICT

In the event of any conflict between the terms set out in Clauses 1 to 15 above (the General Terms) and those set out in the Exhibits and the Schedules to the Exhibits, then the terms and conditions set out in the Exhibits and the Schedules shall prevail.

 

* [Three pages have been omitted in accordance with a request for confidential treatment.]

 

DEG 7308    Page 18 of 39


IN WITNESS WHEREOF, the Parties have caused this Agreement to be entered into by their duly authorized officers, on the date first before written.

 

Signed for and on behalf of:

     Signed for and on behalf of:
AEROVIAS DEL CONTINENTE AMERICANO S.A.      ROLLS-ROYCE PLC

By:

         By:     

Printed:

         Printed:     

Title:

         Title:     

Signed for and on behalf of

     Signed for and on behalf of
TAMPA CARGO S.A.      ROLLS-ROYCE TOTAL CARE SERVICES LIMITED

By:

         By:     

Printed:

         Printed:     

Title:

         Title:     

 

DEG 7308    Page 19 of 39


SECTION 2 EXHIBITS

Exhibits

 

A AIRCRAFT DELIVERY SCHEDULE

 

B OPERATING ASSUMPTIONS

 

C [*]

 

D CUSTOMER SERVICES

 

E-1 [*]

 

E-2 SPARE PARTS TERMS

 

F [*]

 

G [*]

 

H [*]

 

DEG 7308    Page 20 of 39


EXHIBIT A

AIRCRAFT DELIVERY SCHEDULE

Avianca will take delivery of the Aircraft in accordance with the delivery schedule below:

[*]

 

DEG 7308    Page 21 of 39


EXHIBIT B

OPERATING ASSUMPTIONS

Aircraft maximum take-off weight [*];

Engines rated at [*] max. take-off thrust;

[*];

Aircraft will operate primarily in a benign operational environment (not containing, without limitation, abnormal levels of corrosive or abrasive materials or pollutants);

[*]

Avianca will procure and maintain as a minimum the agreed reorder level of spare Parts and Tooling consistent with the Aircraft fleet size.

The Repair of the Engines in accordance with the Rolls-Royce proposed EMP and the Repair of LRUs in accordance with the CMP.

[*]

Avianca will only use single Engine taxi operations subject to compliance with Engine warm-up and cool-down times and procedures as defined in the Aircraft or Engine Manuals.

Avianca will not order or instruct maintenance or operation of the Engine in contravention of the Engine Manuals.

[*]

Aircraft and engines operated and maintained in accordance with all applicable airframer and engine manuals, EMP, ADs and in all material respects in accordance with Rolls-Royce recommendations for on-wing performance retention.

[*]

All parts being installed in the engines being Rolls-Royce manufactured or manufactured by a company specifically approved by Rolls-Royce for the manufacture or supply of such part.

 

DEG 7308    Page 22 of 39


EXHIBIT C

WARRANTIES

 

1 GENERAL WARRANTY CONDITIONS

 

1.1 Rolls-Royce shall have no obligation under the provisions of this Exhibit C if it is clearly demonstrated that any Engine or Part:

 

  1.1.1 has not been properly stored, installed, operated and maintained materially in accordance with the recommendations of Rolls-Royce as contained in its Engine Manuals, operating procedures or other written instructions, including instructions on life limitations; or

 

  1.1.2 has been repaired or altered by anyone other than Rolls-Royce in such a way as to impair its safety, operation, efficiency or design features, or has been repaired or altered by a facility other than those specifically approved by Rolls-Royce in writing; or

 

  1.1.3 has been subject to misuse, negligence, accident; or

 

  1.1.4 has been damaged by foreign objects; or

 

  1.1.5 has been subjected to acts of war, rebellion, seizure or any other defect or cause not within the control of Rolls-Royce.

 

1.2 [*].

 

1.3 [*].

 

1.4 [*].

 

1.5 [*].

 

1.6 Avianca shall present any claim under this Exhibit C to Rolls-Royce within [*] after the date [*] and shall keep and disclose accurate records of Engine operation, including records of maintenance, adequate to support such claims.

 

1.7 [*].

 

1.8 Avianca shall keep accurate records of Engine and Parts operation, maintenance and storage, and engine condition monitoring data and / or trend monitoring data (as applicable) adequate to support claims hereunder and shall permit Rolls-Royce to inspect such records during normal business hours upon request at reasonable times and upon reasonable notice.

 

1.9 Avianca shall make available all Engines and Parts for inspection by Rolls-Royce during normal business hours at reasonable times and with reasonable notice from Rolls-Royce.

 

* [Five pages have been omitted in accordance with a request for confidential treatment.]

 

DEG 7308    Page 23 of 39


EXHIBIT C—SCHEDULE 1

 

* [Two pages have been omitted in accordance with a request for confidential treatment.]

 

DEG 7308    Page 24 of 39


EXHIBIT C—SCHEDULE 2

 

[*]

 

DEG 7308    Page 25 of 39


EXHIBIT C—SCHEDULE 3

 

* [Three pages have been omitted in accordance with a request for confidential treatment.]

 

DEG 7308    Page 26 of 39


EXHIBIT D

CUSTOMER SERVICES

 

1 SCOPE

This Exhibit D sets out support services available to Avianca subject to the General Terms for the term of this Agreement.

Standardized procedures and policies will be followed to ensure that Services are performed in accordance with industry accepted standards. These procedures and policies include, but are not limited to, ATA Specifications and Airworthiness Authority rules and/or guidance. All Services supplied to Avianca under this Exhibit will be in compliance with the then current world customers supplier guide (hereinafter “WASG”) and the current revision ATA Specifications.

 

2 ROLLS-ROYCE CUSTOMER SERVICES PACKAGE

 

2.1 Rolls-Royce will designate a Customer Services Manager at its facility who will provide coordination and liaison between Avianca and Rolls-Royce in respect of the operation of the Engines by Avianca and its permitted assigns. Such services extend to issues including:

 

  2.1.1 managing emergency requirements;

 

  2.1.2 managing plans to incorporate Products into Avianca’s operations;

 

  2.1.3 agreeing shop visit forecasts with Avianca,

 

  2.1.4 providing technical and operational direction and field support recommendations to Avianca, and

 

  2.1.5 assisting Avianca with the interpretation of Engine Manuals.

 

  2.1.6 making scheduled visits to Avianca for the purposes of liaison

The services of the Customer Services Manager are free of charge. Rolls-Royce will also maintain a field representative service based in [*], to provide advice and assistance in the resolution of technical problems. In providing the field service representative service, Avianca acknowledges that Rolls-Royce may not provide an additional field service representative, and that the field service representative may provide services connected with other Rolls-Royce engines pursuant to other agreements.

Should Avianca require additional or specialist visits to Avianca’s facilities to assist in the operation of Engines or training activities including, but not limited to, borescope inspections and other Line Maintenance activities, Rolls-Royce reserves the right to charge for such services in accordance with its Commercial Price.

 

2.2 On Site Service Representative

 

DEG 7308    Page 27 of 39


  2.2.1 Rolls-Royce or an affiliate of Rolls-Royce will make available the services of a customer service representative [*] Such representative will provide, in addition to those Services described above, the following:

 

  2.2.1.1 Local technical support to assist in the resolution of technical problems;

 

  2.2.1.2 Training in the operation and maintenance of Engines;

 

  2.2.1.3 Advice regarding the borescoping and life management of installed Engines; and

shall notify Rolls-Royce of all aspects of in-service issues affecting Avianca’s operation of the Engine.

Rolls-Royce hereby acknowledges that the representative will be responsible for assisting Avianca and Tampa Cargo to manage the fleet of aircraft delivered pursuant to this Agreement, and those pursuant to DEG 5104 (dated 15/06/07) with the aim of facilitating efficient delivery of services to both Avianca and Tampa Cargo. Rolls-Royce acknowledges that the representative may be required to travel to Medellin on a regular basis, in order to support Tampa Cargo’s integration and operation of the Aircraft. Such travel to Medellin will be at no incremental cost to Avianca.

 

  2.2.2 [*].

 

2.3 Supply of Technical Publications Data

 

  2.3.1 [*].

 

  2.3.2 Engine Manuals will be supplied in English in accordance with ATA Specifications and any translation or interpretation that may be required by Avianca is the responsibility of Avianca.

 

  2.3.3 Avianca acknowledges that, although Rolls-Royce may provide instruction training and advice under this Agreement, Products are only to be maintained, operated and otherwise handled in accordance with the Engine Manuals.

 

  2.3.4 Engine Manuals are available in a variety of media. The Rolls-Royce preferred format is digital source data (Aeromanager) and CD ROM format.

 

2.4 Customer Training

Rolls-Royce provides training courses in the operation and maintenance of Engines at one of the following locations: the Rolls-Royce Training Center in Indianapolis, Indiana, USA; Rolls-Royce’s training facilities in Derby, England UK; or the Rolls-Royce/CASC training centre in Tianjin, China in accordance with a schedule published by Rolls-Royce.

Rolls-Royce’s training for the Engine comprises levels I through levels IV in accordance with the ATA Specifications and details as published by Rolls-Royce from time to time.

The following general provisions apply to training:

[*]

 

DEG 7308    Page 28 of 39


2.5 General Planning

Avianca and Rolls-Royce shall within a reasonable time following signature of this Agreement but not (where possible) later than twelve (12) months prior to EIS, agree a schedule to establish processes and procedures in connection with, without limitation, following items:

 

  2.5.1 Initial Provisioning;

 

  2.5.2 Training; and

 

  2.5.3 EIS planning.

 

2.6 Specialist Line Maintenance

[*]

 

DEG 7308    Page 29 of 39


EXHIBIT E

FLEET PROVISIONING SUPPORT

 

E-1 SPARE ENGINE PURCHASE

 

1 INTENT

This Exhibit E-1 details the specific terms that are applicable to the purchase of spare Engines in addition to the General Terms.

 

2 TYPE APPROVAL/CHANGES

The Specification, which forms Schedule 1 to this Exhibit E, has been drawn up to meet the Airworthiness Authority requirements in place at the date of this Agreement.

All spare Engines shall, at the time of delivery, conform to the Specification and a type certificate Issued by the Airworthiness Authority.

Rolls-Royce may make any changes in spare Engines which do not adversely affect the Specification (including, but not limited to, adverse affects in performance and weight), interchangeability in the airframe, prices or dates of delivery of the Engine.

[*]

whether instituted as an AD, SB or otherwise, then Rolls-Royce will issue a written change order, to be executed by the Parties, and which shall constitute an amendment to this Agreement. Any increase in price, after applying the same discounts as originally provided between date of signature of this Agreement and delivery of the spare Engines will be shared on a 50:50 basis between the Parties. In any case Rolls-Royce shall be responsible for any engineering and development costs required to develop such changes.

Notwithstanding the foregoing, if, after the date of signature of this Agreement and prior to the date of manufacture of an Engine, a change is required to such Engine to conform to the Current Rules, for example as reflected in an Airworthiness Directive, then Rolls-Royce will incorporate such change at its own cost.

 

3 INSPECTION AND ACCEPTANCE

Conformance to the Specification will be assured by Rolls-Royce through the maintenance of procedures (including Engine acceptance testing), systems and records approved by the appropriate airworthiness authority. An authorised Release Certificate will be issued by Rolls-Royce.

 

4 PRICE AND PAYMENT

The base price and description of supply of spare Engines is set out in Schedule 2 to this Exhibit E-1. The purchase price of spare Engines shall be the base price escalated in accordance with the formula specified in Schedule 3 to this Exhibit E-1.

 

[*].

 

DEG 7308    Page 30 of 39


* [Eighteen pages have been omitted in accordance with a request for confidential treatment.]


EXHIBIT E-1—SCHEDULE 2

[*]

 

DEG 7308    Page 32 of 39


EXHIBIT E-1—SCHEDULE 3

 

* [Four pages have been omitted in accordance with a request for confidential treatment.]

 

DEG 7308    Page 33 of 39


EXHIBIT E-2

SPARE PARTS TERMS

 

1 INTENT AND TERM

 

1.1 Parts .

Avianca shall buy from Rolls-Royce [*] Parts [*]) and Rolls-Royce shall sell such Parts to Avianca in quantities sufficient to meet Avianca’s requirements. Notwithstanding the above, Avianca shall buy its initial provisioning of line maintenance Parts from Rolls-Royce. From time to time Avianca may request and Rolls-Royce may sell Used Parts.

 

1.2. Tooling .

Avianca shall purchase any Tooling from Rolls-Royce’s approved Vendor(s) . Lead times for Tooling shall be quoted by Rolls-Royce’s approved Vendor(s).

 

1.3 Rolls-Royce and Avianca shall comply with the ATA Specifications with regard to supply of Parts except as specifically amended in this Agreement.

 

1.4 Avianca will provide any information required to become established on the Rolls-Royce on-line spares management system.

 

2 PROVISIONING

Avianca shall purchase and maintain an adequate stock of Parts and Tooling to support its operation of the Engines [*]. Rolls-Royce and Avianca shall agree the required stock of Parts and Tooling within a timescale commensurate with Avianca’s operational requirements. Consistent with changes in Avianca’s operational requirements, Rolls-Royce and Avianca will regularly review and agree changes to required stock levels of Parts and Tooling.

In the event Avianca has not provisioned Parts and Tooling in accordance with Rolls-Royce’s and Avianca’s agreed levels, then Rolls-Royce shall have the right to charge Avianca an additional fee of 10% of list price for any Parts and Tooling not so provisioned and provided to Avianca on an AOG, critical or expedite basis.

 

3 FORECASTING

 

3.1 Avianca shall provide Rolls-Royce with forecasts, [*], specifying projected requirements for Parts and Tooling to cover a minimum of the following [*]. Avianca shall give Rolls-Royce as much notice [*] of any change in such requirements. Avianca shall, within a reasonable timescale following a request by Rolls-Royce, inform Rolls-Royce of the intended use of Parts and Tooling.

 

3.2 Avianca shall provide to Rolls-Royce an estimated Engine shop visit forecast covering any desired scheduled Repair at an Overhaul Base and a reasonable contingency covering likely unscheduled Repair at an Overhaul Base. Such forecast shall, as a minimum, detail monthly shop visits for a period of [*] for a further [*] and such forecast shall be updated at least quarterly. Such estimates shall be for planning purposes only and does not obligate Avianca to send Engines for repair at an Overhaul Base.

[*]

 

DEG 7308    Page 34 of 39


4 ORDERING PROCEDURE

Avianca shall issue a purchase order for Parts in an agreed format in accordance with the ATA Specifications and the terms of this Agreement. Rolls-Royce shall promptly acknowledge receipt of each order for Parts in accordance with the ATA Specifications. Unless qualified, such acknowledgement shall constitute an acceptance of the order under the terms of this Agreement.

 

5 ORDER CANCELLATION

Where Avianca wishes to cancel a purchase order placed in accordance with Clause 4 above, Avianca shall inform Rolls-Royce immediately. [*]

 

6 LEAD TIMES

 

6.1 Parts shall be scheduled to be delivered in accordance with the lead time specified at the receipt of Avianca’s order except for:

 

  6.1.1 Parts required for provisioning in accordance with Clause 2 above, or

 

  6.1.2 Purchase orders significantly in excess of Avianca’s normal requirements, in which case, Rolls-Royce shall notify Avianca of the applicable lead time.

[*].

 

7 MODIFICATIONS TO PARTS

Rolls-Royce shall, subject to Avianca’s approval, be entitled to substitute modified Parts in place of Parts ordered by Avianca hereunder, provided that the said modification has received the approval of the Airworthiness Authority in accordance with the relevant Rolls-Royce Service Bulletin, and provided that such substitute Parts are materially similar in terms of form and function, and are provided to Avianca at the same price as the Parts ordered. Rolls-Royce shall notify Avianca of such substitution prior to delivery.

 

8 CONFORMANCE

All Parts will be assured by Rolls-Royce through the maintenance of procedures, systems and records approved by the Airworthiness Authority. An Authorised Release Certificate will be issued by Rolls-Royce.

 

9 ELECTRONIC COMMUNICATIONS

The Parties shall use electronic data interchange (“EDI”) links to enable electronic ordering and invoicing, in accordance with ATA Specifications. Such EDI Links shall also be used for formal communications between the Parties, in a format to be agreed.

 

10 SURPLUS INVENTORY

[*]

 

DEG 7308    Page 35 of 39


11 ROLLS-ROYCE PARTS CATALOGUE ADJUSTMENT

Rolls-Royce’s parts catalogue pricing is amended on an [*]. Rolls-Royce will inform Avianca of pricing amendments by [*] of the year prior to such amendments. Rolls-Royce reserves the right to amend such pricing at other times, and will [*] notice of such an amendment.

 

DEG 7308    Page 36 of 39


EXHIBIT F

 

* [Nineteen pages have been omitted in accordance with a request for confidential treatment.]

 

DEG 7308    Page 37 of 39


Exhibit G

TRENT 700

TOTALCARE

 

DEG 7308    Page 38 of 39


* [Thirty-three pages have been omitted in accordance with a request for confidential treatment.]

 

DEG 7308    Page 39 of 39

Exhibit 10.13

Note: Certain portions have been omitted from this General Terms Agreement in accordance with a request for confidential treatment submitted to the Securities and Exchange Commission. Omitted information has been replaced with an asterisk. Omitted information has been filed separately with the Securities and Exchange Commission.

 

 

General

Terms

Agreement

No. CFM-03-2007

 

 

PROPRIETARY INFORMATION NOTICE The information contained in this document is CFM Proprietary Information and is disclosed in confidence. It is the property of CFM and shall not be used, disclosed to others, or reproduced without the express written consent of CFM. If consent is given for reproduction in whole or in part, this notice and the notice set forth on each page of this document shall appear on any such reproduction. Export control laws may also control the information contained in this document. Unauthorized export or re-export is prohibited.


GENERAL TERMS AGREEMENT NO. CFM-03-2007

 

Table of Contents

 

  Agreement
  SECTION I - DEFINITIONS
  SECTION II - TERMS AND CONDITIONS
  ARTICLE 1     

-

     PRODUCTS
  ARTICLE 2     

-

     PRODUCT PRICES
  ARTICLE 3     

-

     PRODUCT ORDER PLACEMENT
  ARTICLE 4     

-

     DELIVERY, TITLE, TRANSPORTATION, RISK OF LOSS, PACKAGING OF PRODUCTS
  ARTICLE 5     

-

     [*]
  ARTICLE 6     

-

     TAXES AND DUTIES
  ARTICLE 7     

-

     [*]
  ARTICLE 8     

-

     EXCUSABLE DELAY
  ARTICLE 9     

-

     [*]
  ARTICLE 10     

-

     DATA
  ARTICLE 11     

-

     LIMITATION OF LIABILITY
  ARTICLE 12     

-

     GOVERNMENT AUTHORIZATION, EXPORT SHIPMENT
  ARTICLE 13     

-

     PERSONAL DATA PROTECTION
  ARTICLE 14     

-

     NOTICES
  ARTICLE 15     

-

     MISCELLANEOUS
  Exhibit A - [*]
  SECTION I     

-

     [*]
  SECTION II     

-

     [*]
  Exhibit B - Product Support Plan
  SECTION I     

-

     SPARE PARTS PROVISIONING
  SECTION II     

-

     TECHNICAL PUBLICATIONS AND DATA
  SECTION III     

-

     TECHNICAL TRAINING
  SECTION IV     

-

     CUSTOMER SUPPORT AND SERVICE
  SECTION V     

-

     ENGINEERING SUPPORT
  SECTION VI     

-

     ENGINE HEALTH MONITORING
  SECTION VII     

-

     GENERAL CONDITIONS – CFM56 PRODUCT SUPPORT PLAN
  Exhibit C - [*]
 

•    Exhibit D- Standard Diagnostics Services

 

•    Exhibit E- [*]

 

 

1

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GENERAL TERMS AGREEMENT NO. CFM-03-2007

 

THIS GENERAL TERMS AGREEMENT NO. 03-2007 (hereinafter referred to as this “ Agreement ”), dated as of the 29 day of March, 2007, by and between CFM International, Inc. (hereinafter referred to as “ CFM ”), a corporation organized under the law of the State of Delaware, U.S.A., and jointly owned by the General Electric Company (hereinafter referred to as “ GE ”) and Snecma Moteurs (hereinafter referred to as “ SNECMA ”) and Aerovias del Continente Americano S.A. Avianca, a corporation organized under the law of Columbia (hereinafter referred to as “ Airline ”). CFM and Airline are also referred to in this Agreement as the “ Parties ” or individually as a “ Party ”.

WITNESSETH

WHEREAS , Airline has acquired, or is in the process of acquiring a certain number of aircraft equipped with installed CFM Engines, and

WHEREAS , CFM and Airline desire to enter into this Agreement for (i) a standing offer by CFM to sell and a continuing opportunity for Airline to purchase from CFM, spare Engines, spare Parts, and support equipment for such installed and spare Engines and (ii) product services to be supplied by CFM in support of such installed and spare Engines, and

NOW, THEREFORE , in consideration of the mutual covenants herein contained, the respective Parties hereto agree as follows to the respective Sections of this Agreement. Capitalized terms used herein that are otherwise undefined shall have the meanings ascribed to them in Section I (“ Definitions ”), unless the context requires otherwise.

 

 

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SECTION I - DEFINITIONS

These definitions shall apply for all purposes of this Agreement unless the context otherwise requires.

Aircraft ” means the aircraft on which the Engine(s) listed in the applicable letter agreement to this Agreement is (are) installed.

“Affiliates” in the case of either party shall include any parent or subsidiary of a party, or any party controlled by or controlling any such entity

Agreement ” means this General Terms Agreement (together with all Exhibits and attachments) between CFM and Airline.

Airworthiness Directive ” means a requirement for the inspection, repair or modification of the Engine or any portion thereof as issued by the Federal Aviation Administration of the United States Department of Transportation (“ FAA ”) and/or Colombian Civil Aviation Authority (CAA) and/or the European Aviation Safety Agency (“ EASA ”).

ATA ” means the Air Transport Association of America.

Data ” means all information and data of any type, form or nature (including, but not limited to, designs, drawings, blueprints, tracings, plans, models, layouts, software, specifications, technical publications, electronic transmittals, customer website data and memoranda) which may be furnished or made available, directly or indirectly, as the result of this Agreement.

Engine ” means the Engine(s) described in the applicable letter agreement(s) to this Agreement.

Expendable Parts ” means those parts which must routinely be replaced during Inspection, repair, or maintenance, whether or not such parts have been damaged, and other parts which are customarily replaced at each such Inspection and maintenance period such as filter inserts and other short-lived items which are not dependent on wear out but replaced at predetermined intervals.

Failed Parts ” means those Parts and Expendable Parts suffering a Failure, and includes Resultant Damage.

Failure ” means the breakage of a Part, deterioration (other than normal wear and tear), malfunction of a Part, or damage to a Part, rendering it not Serviceable and such breakage, deterioration, malfunction or damage has been determined to be due to causes within CFM’s control including, but not limited to, a defect in design. Failure shall also include any defect in material or workmanship. Failure does not include any such breakage, malfunction or damage that is due to normal wear and tear that can be restored by overhaul or repair.

 

 

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Flight Cycle ” means the complete running of an Engine from start through any condition of flight and ending at Engine shutdown. A “ touch and go landing ” used during pilot training shall be considered as a “ Flight Cycle .”

Flight Hours ” means the cumulative number of airborne hours in operation of each Engine computed from the time an aircraft leaves the ground until it touches the ground at the end of a flight.

Foreign Object Damage ” means any damage to the Engine caused by objects that are not part of the Engine and Engine optional equipment.

Labor Allowance ” means a CFM credit calculated by multiplying the established labor rate by man-hours allowed for disassembly, reassembly (when applicable), and for Parts repair. If a Labor Allowance is granted for a repair, it shall not exceed the credit that would have been quoted if the Part had not been repairable. The established labor rate means either (a) the then current labor rate mutually agreed between CFM and Airline if the work has been performed by Airline, or (b) the then current labor rate agreed between CFM and the third party repair and overhaul shop if the work has been performed by such repair and overhaul shop.

Module ” means a major sub-assembly of any of the Engines described in the applicable letter agreements.

Part ” means only those Engine and Engine Module Parts which have been sold originally to Airline or its Affiliates by CFM or a CFM approved supplier for commercial use. The term excludes parts that were furnished on new Engines and Modules but are procured directly from vendors. Such parts are covered by the vendor warranty and the CFM “Vendor Warranty Back Up.” Also excluded are Expendable Parts and customary short-lived items such as igniters and filter inserts.

Parts Credit Allowance ” means the credit granted by CFM to Airline in connection with the Failure of a Part based on the price of a replacement Part at the time the Part is removed. This credit may take the form of a new replacement Part at CFM’s option.

Part Cycles ” means the total number of Flight Cycles accumulated by a Part.

Parts Repair ” means the CFM recommended rework or restoration of Failed Parts to a Serviceable condition.

Part Time ” means the total number of Flight Hours accumulated by a Part.

Resultant Damage ” means the damage suffered by a Part or Expendable Part in warranty because of a Failure of another Part or Expendable Part within the same engine.

Serviceable ” when used to describe an Engine or Part, means in a flight worthy condition within the limits defined in the applicable Engine manuals, specification and/or publications by the type certificate holder.

 

 

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GENERAL TERMS AGREEMENT NO. CFM-03-2007

 

Scrapped Parts ” means those Parts determined by CFM to be un-Serviceable and not repairable by virtue of reliability, performance or repair costs. Such Parts shall be considered as scrapped if they bear a scrap tag duly countersigned by a CFM representative. Such Parts shall be destroyed and disposed of by Airline unless requested by CFM for engineering analysis, in which event any handling and shipping shall be at CFM’s expense.

Spare Engine ” means an Engine acquired in support of Airline’s fleet of Aircraft for use as a spare Engine when another Engine in such fleet is unavailable due to damage or is otherwise being repaired or serviced.

Ultimate Life ” of a Part means the approved limitation on use of a Part, in cumulative Flight Hours or Flight Cycles, which a U.S. government authority establishes as the maximum period of allowed operational time for such Parts in Airline service, with periodic repair and restoration.

 

 

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SECTION II - TERMS AND CONDITIONS

ARTICLE 1 - PRODUCTS

Airline may purchase under the terms and subject to the conditions hereinafter set forth, spare Engines, spare Parts, Engine Modules, related optional equipment, technical data and other products offered from time to time, as may be offered for sale by CFM (hereinafter collectively referred to as “ Product(s )”). CFM shall also provide certain Product services as described in Exhibit B.

ARTICLE 2 - PRODUCT PRICES

 

A. [*]. CFM shall quote such prices in U.S. Dollars and Airline shall pay for Products in U.S. Dollars. All Product prices include the cost of CFM’s standard tests, inspection and commercial packaging. Transportation costs and costs resulting from special inspection, packaging, testing or other special requirements, requested by Airline, will be paid for by Airline.

 

B. [*]. The appropriate CFM escalation provisions will be set forth in each applicable letter agreement to this Agreement.

 

C. The selling price of spare Parts, except for those which may be quoted by CFM to Airline, will be the respective prices which are both (i) quoted in CFM’s Spare Parts Price Catalog, as revised from time to time (the “ Spare Parts Catalog ” or “ Catalog ”) or in procurement data and (ii) confirmed in a purchase order placed by Airline and accepted by CFM. CFM shall quote such prices in U.S. Dollars, and Airline shall pay for CFM Products in U.S. Dollars. Transportation costs and costs resulting from special inspection, packaging, testing or other special requirements requested by Airline, will be paid for by Airline.

 

D. The selling price of spare Parts will be set forth in the most current Catalog or in procurement data. The price of a new spare Part which is first listed in procurement data may be changed in subsequent procurement data revisions until such time as the spare Part is included in the Catalog. Initial provisioning Part prices quoted by CFM will be firm until November 1, 2007, provided a purchase order is placed by Airline prior to that date. CFM will advise Airline in writing ninety (90) days in advance of any changes in prices affecting a significant portion of the prices in the Catalog, such changes to occur only once a year. During such ninety (90) day period, CFM shall not be obligated to accept Airline purchase orders for quantities of spare Parts in excess of up to one hundred and eighty (180) days of Airline’s normal usage beyond the effective date of the announced price change.

ARTICLE 3 - PRODUCT ORDER PLACEMENT

 

A. This Agreement shall constitute the terms and conditions applicable to all purchase orders which may hereafter be placed by Airline and accepted by CFM for Products in lieu of all printed terms and conditions appearing on Airline’s purchase orders; except, that, the description of Products, price, quantity, delivery dates and shipping instructions shall be as set forth on each purchase order accepted by CFM.

 

 

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GENERAL TERMS AGREEMENT NO. CFM-03-2007

 

B. Airline shall place purchase orders for CFM Products quoted by CFM, in accordance with CFM’s quotation for said Products.

 

C. Airline may place purchase orders for spare Parts using any of the following methods: telephone, facsimile transmission, ARNC or SITA utilizing ATA Specification 2000 (chapter 3 format), Airline purchase order as prescribed in the Spare Parts Catalog or CFM’s quotation, or, if applicable, CFM’s Customer Web Center (in accordance with the Customer Web Center e-commerce terms and conditions).

 

D. Airline shall place purchase orders for initial provisioning quantities of spare Parts as provided in the attached Exhibit B within one hundred eighty days (180) following receipt from CFM of initial Provisioning Data relating thereto.

 

E. CFM’s acknowledgment of each purchase order shall constitute acceptance thereof.

ARTICLE 4 - DELIVERY, TITLE, TRANSPORTATION, RISK OF LOSS PACKAGING OF PRODUCTS

 

A. CFM shall supply Products under each purchase order placed by Airline and accepted by CFM, on a mutually agreed upon schedule consistent with CFM lead times and set forth in each purchase order. Shipment of such CFM Products shall be from CFM’s facility in Evendale, Ohio, U.S.A., Peebles, Ohio, U.S.A., or Erlanger, Kentucky, U.S.A., or point of manufacture, or other facility at CFM’s option. Shipment dates are subject to (1) prompt receipt by CFM of all information necessary to permit CFM to proceed with work immediately and without interruption, and (2) Airline’s compliance with the payment terms set forth herein with no payment being more than sixty (60) days past due.

 

B. Delivery of all Products shall be as follows (hereinafter “ Delivery ”):

 

  (i) For Products shipped from the U.S. to a domestic U.S. destination (if requested by Airline), Delivery of such Products shall be Ex Works (Incoterms 2000) at the point of shipment described in Paragraph A of this Article;

 

  (ii) For Products shipped from the U.S. to a destination outside the U.S., Delivery of such Products shall be to Airline at the frontier of the destination country specified by Airline. .;

 

  (iii) For Products shipped from a location outside the U.S., Delivery of such Products shall be Ex Works (Incoterms 2000) from such foreign CFM facility;

 

  (iii) In the event shipment cannot be made for reasons set forth in Paragraph F of this Article, delivery shall be to storage.

Upon Delivery, title to Products as well as risk of loss thereof or damage thereto shall pass to Airline. CFM shall be responsible for obtaining any export licenses from the US, France

 

 

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GENERAL TERMS AGREEMENT NO. CFM-03-2007

 

and any country of manufacture Airline shall be responsible for all risk and expense in obtaining any required import licenses and carrying out all customs formalities for the importation of goods in accordance with the Article titled “Government Authorization” of this Agreement.

 

C. Notwithstanding that Delivery of Products shall be as set forth in Paragraph B of this Article, Airline shall arrange for transportation of such Products from the point of shipment described in Paragraph A of this Article until Delivery in accordance with Paragraph B of this Article. Further notwithstanding that Airline is responsible for arranging transportation of all Products that it purchases from CFM, CFM agrees to contact Airline’s freight forwarder prior to shipment in order to facilitate the transportation activity. For shipment of major items such as spare Engines which (i) require that the ground transportation carrier enter CFM’s facilities and (ii) necessitate CFM’s assistance in placing such Products into the hands of the carrier, CFM agrees to contact the carrier directly to arrange the carrier’s scheduled arrival at CFM’s facility. Also, CFM agrees, unless otherwise directed by Airline or Airline’s freight forwarder, to select a carrier who will act as Airline’s agent to transport Products on the initial leg of ground transportation.

 

D. For Products shipped from the U.S. to a destination outside the U.S., CFM shall bear the risk of loss and ensure that, in the event of loss of or damage to such Products, it is fully insured against any carrier having custody of the Products at the time of the loss or damage, whether transportation is arranged on Airline’s own aircraft or otherwise. Upon Delivery, risk of loss shall, as stated above, pass to Airline and Airline shall thereafter take measures it deems appropriate with respect thereto.

 

E. Airline shall pay the cost of the transportation of the Products from the point of shipment

 

F. If the Product(s) cannot be shipped when ready due to any cause specified in the Article titled “Excusable Delay” of this Agreement, CFM may place such Product(s) in storage. In such event, all expenses incurred by CFM for activities such as, but not limited to, preparation for and placement into storage and handling, storage, inspection, preservation and insurance shall be paid by CFM. However, if shipment cannot be made due to causes within Airline’s reasonable control, all such reasonable out of pocket expenses related to placing the Product into storage shall be paid by Airline within thirty (30) days of presentation of CFM’s invoices.

 

G.

Unless otherwise instructed by Airline, CFM shall ship each Product packaged in accordance with wood packaging certification according to the FAO’s Phytosanitary International Standards (NIMF15 Regulation. More info at www.fao.org). Any penalty / fee, delay or repackaging required as a result of not meeting this international standard will be responsibility of CFM unless packaging is changed for whatever reason by third parties for shipment. Any special boxing or preparation, different than ATA 3000, for shipment specified by Airline shall be for Airline’s account and responsibility. The cost of any shipping stand or container is not included in the price of the

 

 

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GENERAL TERMS AGREEMENT NO. CFM-03-2007

 

  Product. In the event any such CFM-owned items are not returned by Airline to the original point of shipment, in re-usable condition within one hundred twenty (120) days after shipment, Airline will pay CFM the price of such items within 30 days after presentation of CFM’s invoice.

 

H. Airline’s order number shall be indicated on all shipments, packing sheets, bills of lading and invoices.

 

I. Notwithstanding the distinctions set forth in this Article as to when shipment of a Product occurs as opposed to when Delivery of such Product occurs, for all other purposes of the Agreement (including but not limited to (i) escalation of base prices for Products per the Article titled “Product Prices” of this Agreement, (ii) dates to be provided in Airline’s purchase orders to CFM per the Article titled “Product Order Placement” of this Agreement, (iii) payment for Products in accordance with the CFM Payment Terms of this Agreement, and (iv) Exhibit A, Warranties and Guarantees, the terms “deliver” or “delivery” with respect to a Product shall be deemed to mean the shipment of that Product. However, use of the terms “delivery” or “deliver” and “shipment” or “ship” shall not be construed so that any acts will pass title or risk of loss or damage with respect to the Products to Airline prior to Delivery in accordance with Paragraph B of this Article.

 

J. If the delivery schedule for Aircraft to be delivered to Airline is materially changed, CFM and Airline will mutually agree to a corresponding revision to the delivery dates set forth in previously accepted Product purchase orders.

 

K. Spare Parts purchase orders, excluding Initial Provisioning and Tooling, may be terminated without penalty if notice is provided greater than the individual Spare Part lead time listed in the spare Parts catalog.

ARTICLE 5 [*]

[*]

ARTICLE 6 - TAXES AND DUTIES

Unless otherwise specified in this Agreement, CFM shall be responsible for and pay directly all corporate and individual taxes measured by net income or profit imposed by any governmental authority on CFM, its employees or subcontractors in any way connected with this Agreement (“CFM taxes”). Airline shall be responsible for and pay directly when due and payable all taxes, duties, fees, or other charges of any nature (including, but not limited to, ad valorem, consumption, excise, franchise, gross receipts, import, license, property, sales, stamp, storage, transfer, turnover, use, or value-added taxes, and any and all items of withholding, deficiency, penalty, addition to tax, interest, or assessment related thereto), imposed by any governmental authority in Colombia or Brazil, or any other country in which Products are delivered at the

 

 

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direction of Airline (“Airline taxes”). All payments due and payable to CFM by Airline under this Agreement shall be made without deduction or withholding for Airline taxes, except that if Airline shall be required by law to deduct or withhold any Airline taxes from or in respect of any amount payable by it to CFM hereunder, the amount payable by Airline shall be increased by such amount as may be necessary so that after making all required deductions or withholdings (including deductions or withholdings with respect to any additional amounts payable pursuant to this sentence), CFM receives the same amount that it would have received if no such deduction or withholding had been made. If CFM is nevertheless required to pay Airline taxes, Airline shall, within 30 days of presentation of CFM’s invoice for the Airline taxes, reimburse CFM for the Airline taxes. Airline shall provide to CFM on a timely basis accurate official receipts for deducted or withheld taxes. All rights to drawback of customs duties paid by CFM to the customs authorities of the country of manufacture of any products shall belong to CFM. Airline agrees to cooperate with CFM to obtain a drawback.

ARTICLE 7 [*]

[*]

ARTICLE 8 - EXCUSABLE DELAY

Neither Party shall be liable or in breach of its obligations under this Agreement to the extent performance of such obligations is delayed or prevented, directly or indirectly, by causes beyond its reasonable control, including acts of God, fire, terrorism, war (declared or undeclared), severe weather conditions, earthquakes, epidemics, material shortages, insurrection, acts or omissions of the other Party or the other Party’s suppliers or agents, any act or omission by any governmental authority, strikes, labor disputes, acts or threats of vandalism or terrorism (including disruption of technology resources), transportation shortages, or vendor’s failure to perform (each an “Excusable Delay”). The delivery or performance date shall be extended for a period equal to the time lost by reason of delay, including time to overcome the effect of the delay. The Party experiencing the Excusable Delay shall use reasonable efforts to continue performance whenever such causes are removed. In the event an excusable delay continues for a period of six (6) months or more beyond the scheduled delivery or performance date, Airline or CFM may, upon sixty (60) days written notice to the other, cancel the part of this Agreement so delayed, CFM shall return to Airline all payments relative to the canceled part of this Agreement.

ARTICLE 9 [*]

[*]

The obligations recited in this Article shall constitute the sole and exclusive liability of CFM for actual or alleged patent infringement.

 

 

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ARTICLE 10 - DATA

 

A. All Data is proprietary to and shall remain the property of the Party disclosing it. All Data is provided to or disclosed in confidence, and shall neither (1) be used by the other Party or be furnished by the other Party to any other person, firm or corporation for the design or manufacture or repair of any products, articles, compositions of matter, or processes, nor (2) be permitted out of the other Party’s possession, or divulged to any other person, firm or corporation, nor (3) shall Airline use CFM’s Data in the creation, manufacture, [*]

 

B. [*]

ARTICLE 11 - LIMITATION OF LIABILITY

The liability of CFM to Airline arising out of, connected with, or resulting from the manufacture, design, sale, possession, use or handling of any Product (including Engines installed on Airline’s owned or leased aircraft as original equipment and engines obtained, acquired, leased or operated before or after the execution of the Agreement) or furnishing of services, whether in contract, tort (including, without limitation, negligence, but excluding willful misconduct or gross negligence) or otherwise, shall be as set forth in this Agreement or in Exhibit A or B or in the applicable letter agreements to this Agreement and shall not, except as otherwise set forth in this Agreement, in any event exceed the purchase price (or in the absence of a purchase price, the fair market value) of the Engine, service or other thing giving rise to Airline’s claim. The remedies provided in this Agreement shall constitute the sole remedy of Airline and the sole liability of CFM. In no event shall either Party be liable for incidental, punitive, special, indirect or consequential damages, including but not limited to, damage to, or loss of use, revenue or profit with respect to any aircraft, engine, or part thereof, or any other obligation hereunder. THE WARRANTIES AND GUARANTEES SET FORTH IN EXHIBIT A AND ANY APPLICABLE LETTER AGREEMENTS ARE EXCLUSIVE AND IN LIEU OF ALL OTHER WARRANTIES AND GUARANTEES WHETHER WRITTEN, STATUTORY, ORAL, OR IMPLIED (INCLUDING WITHOUT LIMITATION ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR ANY IMPLIED WARRANTY ARISING FROM COURSE OF DEALING, COURSE OF PERFORMANCE, OR USAGE OF TRADE).

For the purpose of this Article, the term “ CFM ” shall be deemed to include CFM, GE, SNECMA, and CFM’s subsidiaries, assigns, subcontractors, suppliers, Product co-producers, and the respective directors, officers, employees, and agents of each. The foregoing shall not apply to any other claims arising from other agreements.

ARTICLE 12 - GOVERNMENT AUTHORIZATION, EXPORT SHIPMENT

CFM shall be responsible for obtaining any required export licenses from the US and France or any other country of manufacture and Airline shall be responsible for obtaining and complying with all licensing and reporting requirements of Colombia and other countries of foreign destination. Airline shall restrict disclosure of all information and data furnished in connection with such authorization and shall ship the subject matter of the authorization to only those destinations that are authorized by the U.S. under applicable Export Regulations.

ARTICLE 13 - PERSONAL DATA PROTECTION

 

A. “Personal Data” is any information relating to an identified or identifiable natural person or to any legal entity if such legal entity is subject to data protection legislation in their country of incorporation (“Data Subject”).

 

B. Airline and CFM each agree that any Personal Data obtained from the other Party will be deemed “Data” of the other Party as defined in this Agreement whether or not the Personal Data is publicly available.

 

C. Airline and CFM each represent that in providing Personal Data to one another they will comply with all applicable laws and regulations, including but not limited to providing notices to or obtaining consents from the Data subjects when required.

 

D. Steps shall be taken to implement and maintain physical, technical and organizational measures to ensure the security and confidentiality of Personal Data in order to prevent accidental, unauthorized or unlawful access, use, modification, disclosure, loss or destruction of Personal Data. The security measures taken shall be in compliance with applicable data protection laws and shall be adapted to the risks represented by the processing and the nature of the personal data to be collected and/or stored.

 

 

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ARTICLE 14 - NOTICES

Any notices under this Agreement shall become effective upon receipt and shall be in writing and be delivered or sent by mail, courier service, personal service or fax to the respective parties at the following addresses, which may be changed by written notice:

 

If to:    Aerovias del Continente Americano S.A. Avianca    If to:   CFM International, Inc.
              One Neumann Way, M.D.
              Cincinnati, Ohio 45215-1988 USA
Attn:             Attn:   Customer Support Manager
   Facsimile Number:   

 

        Facsimile Number:   

 

   Telephone Number:   

 

        Telephone Number:   

 

Notice sent by the U.S. mail, postage prepaid, shall be deemed received within seven (7) days after deposit.

ARTICLE 15 - MISCELLANEOUS

 

A. Assignment of Agreement . [*]. Notwithstanding anything to the contrary contained herein, Airline shall be entitled to assign its rights hereunder at any time to any subsidiary or affiliate of Airline, including, any special purpose vehicle (an “SPV”) incorporated by Airline or utilized in connection with the financing of the Aircraft or Engines in order to provide security for the financing of any pre-delivery payments or in connection with the financing of its obligation to pay the final price of the Aircraft or Engines. It is understood and agreed that, notwithstanding any such assignment of rights by Airline under this Article 15, Airline will remain fully responsible for the performance of its obligations hereunder as though no such assignment had taken place.

 

B. Applicable Law; Venue . All aspects of this Agreement and the obligations arising hereunder will be governed in accordance with the law of the State of New York, U.S.A.; except, that New York conflict of law rules will not apply if the result would be the application of the laws of another jurisdiction. The United Nations Convention on Contracts for the International Sale of Goods shall not apply to this Agreement.

 

C. Entire Agreement; Modification . This Agreement (and any amendments, exhibits, and letter agreement supplements hereto) contains the entire and only agreement between the Parties, and it supersedes all pre-existing agreements between such Parties, respecting the subject matter hereof; and any representation, promise or condition in connection therewith not incorporated herein shall not be binding upon either Party. No modification or termination of this Agreement or any of the provisions herein contained shall be binding upon the Party against whom enforcement of such modification or termination is sought, unless it is made in writing and signed on behalf of CFM and Airline by duly authorized executives.

 

D.

Confidentiality of Information . This Agreement and letter agreements contain information specifically for Airline and CFM, and nothing herein contained shall be divulged by Airline or CFM to any third person, firm or corporation, without the prior written consent of the

 

 

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  other Parties, which consent shall not be unreasonably withheld; except (i) that Airline’s consent shall not be required for disclosure by CFM of this Agreement and letter agreements, and related information given by Airline to CFM, to an Engine program participant, joint venture participant, engineering service provider or consultant to CFM so as to enable CFM to perform its obligations under this Agreement or letter agreements or to build the Engine or to provide informational data; (ii) to the extent required by Government agencies, by law, or to enforce this Agreement; and (iii) to the extent necessary for disclosure to the Parties’ respective insurers, accountants, financial parties, or other professional advisors who must likewise agree to be bound by the provisions of this Article. In the event (i) or (iii) occur, suitable restrictive legends limiting further disclosure shall be applied. In the event the Agreement, or other information or data is required to be disclosed or filed by or to government agencies by law, or by court order, the disclosing party shall notify the other where possible, at least thirty (30) days in advance of such disclosure or filing and shall cooperate fully with the other party in seeking confidential treatment of sensitive terms of the Agreement or such information and data.

 

E. Duration of Agreement . This Agreement shall remain in full force and effect until (i) Airline ceases to operate at least one (1) aircraft powered by Products set forth herein, or (ii) less than five (5) aircraft powered by such Products are in commercial airline service, or (iii) the occurrence of a material breach of the obligations set forth in Article 10. Nothing herein shall affect the rights and obligations and limitations set forth in this Agreement as to Products ordered for delivery and work performed prior to termination of this Agreement.

 

F. Survival Of Certain Clauses . The rights and obligations of the Parties under the following Articles and related Exhibits shall survive the expiration, termination, completion or cancellation of this Agreement:

Payment for Products

Taxes and Duties

Patents

Data

Limitation of Liability

Governmental Authorization, Export Shipment

Miscellaneous

 

G. Language . This Agreement, orders, Data, notices, shipping invoices, correspondence and other writings furnished hereunder shall be in the English language.

 

H. Severability . The invalidity or un-enforceability of any part of this Agreement, or the invalidity of its application to a specific situation or circumstance, shall not effect the validity of the remainder of this Agreement, or its application to other situations or circumstances. In addition, if a part of this Agreement becomes invalid, the Parties will endeavor in good faith to reach agreement on a replacement provision that will reflect, as nearly as possible, the intent of the original provision.

 

 

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I. Waiver . The waiver by any Party of any provision, condition, or requirement of this Agreement, shall not constitute a waiver of any subsequent obligation to comply with such provision, condition, or requirement.

 

J. Dispute Resolution . If any dispute arises relating to this Agreement, the Parties will endeavor to resolve the dispute amicably, including by designating senior managers who will meet and use commercially reasonable efforts to resolve any such dispute. If the Parties’ senior managers do not resolve the dispute within sixty (60) days of first written request, either party may request that the dispute be settled and finally determined by binding arbitration, in accordance with the Commercial Arbitration Rules of the American Arbitration Association in New York, New York, by one or more arbitrators appointed in accordance with the AAA Rules. The arbitrator(s) will have no authority to award punitive damages, attorney’s fees and related costs or any other damages not measured by the prevailing party’s actual damages, and may not, in any event, make any ruling, finding or award that does not conform to the terms and conditions of the Agreement and applicable law. The award of the arbitrator(s) will be final, binding and non-appealable, and judgment may be entered thereon in any court of competent jurisdiction. All statements made or materials produced in connection with this dispute resolution process and arbitration are confidential and will not be disclosed to any third party except as required by law or subpoena. The Parties intend that the dispute resolution process set forth in this Article will be their exclusive remedy for any dispute arising under or relating to this Agreement or its subject matter. Either party may at any time, without inconsistency with this Article, seek from a court of competent jurisdiction any equitable, interim, or provisional relief to avoid irreparable harm or injury. This Article will not apply to and will not bar litigation regarding claims related to a party’s proprietary or intellectual property rights, not will this Article be construed to modify or displace the ability of the Parties to effectuate any termination contemplated in this Agreement.

 

K. Electronic Transactions .

 

  (i) CFM may grant Airline access to and use of the Customer Web Center (“ CWC ”) and/or other CFM Web sites (collectively, “ CFM Sites ”). Airline agrees that such access and use shall be governed by the applicable CFM Site Terms and Conditions, provided, however, that in the event of a conflict with the provisions of this Agreement, this Agreement shall govern.

 

  (ii) CFM may permit Airline to place purchase orders for certain Products on the CFM Sites by various electronic methods (“Electronic POs”). The Parties agree that such Electronic POs a) constitute legally valid, binding agreements; b) have the same force and effect as purchase orders placed in paper format signed by Airline in ink; and c) are subject to the terms and conditions hereof.

 

  (iii) CFM may permit Airline to access certain technical Data through the CWC, including, but not limited to CFM technical publications under the terms and conditions of this Agreement. Airline shall be responsible for contacting its FAA representative for guidelines on the use of such electronic technical data.

 

  (iv) Airline represents and warrants that any employee or representative who places Electronic POs or accesses Data through the CWC is authorized by Airline to do so and has obtained a login name(s) and password(s) through the GE Site registration process. CFM shall be entitled to rely on the validity of a login name or password unless notified

Counterparts: This Agreement may be signed by the Parties in separate counterparts, and any single counterpart or set of counterparts, when signed and delivered to the other Party shall together constitute one and the same document and be an original Agreement for all purposes.

 

 

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IN WITNESS WHEREOF , the Parties hereto have executed this Agreement as of the day and the year first above written.

 

Aerovias del Continente Americano S.A. Avianca
By:   

 

Typed Name:   

 

Title:   

 

  

 

  

 

Date:   

 

CFM INTERNATIONAL, INC.
By:  

 

Typed Name:  

 

Title:  

 

 

 

 

 

Date:  

 

 

 

 

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EXHIBIT A

 

* [Seven pages have been omitted in accordance with a request for confidential treatment.]

 

 

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EXHIBIT B

PRODUCT SUPPORT PLAN

(Covers Airline’s Purchased Aircraft, and Leased Aircraft)

SECTION I - SPARE PARTS PROVISIONING

 

A. Provisioning Data

In connection with Airline’s initial provisioning of spare Parts, CFM shall furnish Airline with data in accordance with ATA Specification 2000 using a revision mutually agreed to in writing by CFM and Airline. The data shall be presented to Airline within a reasonable time period so as to enable Airline to order Parts and have delivery prior to first Aircraft delivery.

 

B. Return Of Parts

Airline shall have the right to return to CFM, at CFM’s expense, any new or unused Part which has been shipped in excess of the quantity ordered or which is not the part number ordered or which is in a discrepant condition except for damage in transit.

 

C. Parts Buy-Back

Within the first three (3) years after delivery of the first Aircraft to Airline, CFM will agree (i) to repurchase at the invoiced price, any initially provisioned spare Parts purchased from CFM that CFM recommended that Airline purchase, in the event Airline finds such Parts to be surplus to Airline’s needs or if such parts become obsolete due to service bulletins or airworthiness directives; or (ii) to exchange with Airline the equivalent value thereof in other Spare Parts as Airline may elect. Such Parts must be new and unused, in original CFM packaging, and shall meet CFM inspection requirements. Parts that become surplus to Airline’s needs by reason of Airline’s decision to upgrade or dispose of Products (other than, in either case, due to service bulletins or Airworthiness Directives) are excluded from this provision. Shipping costs for Parts returned will be paid by CFM.

 

D. Parts of Modified Design

 

  1. CFM shall have the right to make modifications to design or changes in the spare Parts sold to Airline hereunder in each case the change shall be in CFM’s opinion, a change which improves the quality or performance of the parts.

 

  2. CFM will from time to time inform Airline in accordance with the means set forth in ATA Specification 2000, when such spare Parts of modified design become available for shipment hereunder.

 

  3.

Spare Parts of the modified design will be supplied unless Airline advises CFM in writing of its contrary desire within ninety (90) days of the issuance of the Service

 

 

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  Bulletin specifying the change to the modified Parts. In such event, Airline may negotiate for the continued supply of spare Parts of the pre-modified design at a rate of delivery and price to be agreed upon.

 

E. Spare Parts Availability

 

  1. CFM will maintain a stock of spare Parts to cover Airline’s emergency needs. For purposes of this Paragraph, emergency is understood by CFM and Airline to mean the occurrence of any one of the following conditions:

 

AOG    -    Aircraft on Ground
Critical    -    Imminent AOG or Work Stoppage
Expedite    -    Less than Normal Lead Time

Airline will order spare Parts according to lead time as provided in Paragraph 1. above, but should Airline’s spare Parts requirements arise as a result of an emergency, Airline can draw such spare Parts from CFM’s stock. A 24-hour Customer Response Center is available to Airline for this purpose. If an emergency does exist, CFM will use its best efforts to ship required spare Part(s) within the time period set forth below following receipt of an acceptable purchase order from Airline:

 

AOG    -    4 Hours
Critical    -    24 Hours
Expedite    -    7 Days

In case of an imminent AOG caused by an Excusable Delay, Airline will be free to acquire CFM certified Products and Parts from other sources, and any such purchase will not represent any violation to this Agreement.

 

  2. All Airworthiness Directives (“AD”) issued (regardless of the permitted compliance date) by the Federal Aviation Administration of the United States, Colombia Aviation Administration and any other foreign aviation authority having jurisdiction over the operations of Airline or its affiliates prior to the delivery date of any Engine to Airline shall be accomplished or performed prior to such delivery date unless the AD states that the necessary actions can be accomplished at the next shop visit, in which case it may be performed at such shop visit.

 

  3. In the event of an AOG and provided Airline has procured the recommended number of Spare Engines, Airline will have access to Shannon Engine Services (SES) lease pool after paying the required access fees which is currently $50,000 per year for the first Spare Engine access, and $45,000 per year for the second.

SECTION II - TECHNICAL PUBLICATIONS AND DATA

CFM will provide Airline with technical publications in sufficient copies. CFM will provide free of charge technical publications and revision services to Airline for as long as Airline

 

 

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operates at least one Aircraft in a quantity reasonably requested by Airline, which quantity shall be appropriate to the quantity of Aircraft ordered by Airline.

All technical manuals provided by CFM shall be in the English language and in accordance with mutually agreed upon provisions of the ATA Specification.

SECTION III - TECHNICAL TRAINING

 

  A. Introduction

CFM shall make technical training available to Airline, at CFM’s designated facilities. Training can be performed at Airline’s facilities, if a spare engine is provided for training purposes as needed. Details on scope, quantity, materials, and planning are outlined below, and in Exhibit E.

 

  B. Scope

The training furnished under the GTA shall be as follows:

 

   

Product – as defined in the GTA

 

   

Quantity – 100 Student-Days* at no charge to Airline for 1st Firm Aircraft delivered; 50 Student-Days at no charge to Airline for each additional Firm, Aircraft delivered to Airline.

 

   

Courses – detailed in CFM training catalog and Exhibit E.

 

   

Availability – Training shall commence as soon as Airline may reasonably request in order to complete such training prior to delivery of the first A320 family leased aircraft scheduled for delivery in February 2008. Further the aforesaid quantity of training days at no charge may be utilized as needed by Airline based upon Firm Aircraft orders notwithstanding the scheduled delivery of Firm Aircraft. Airline shall reimburse CFM to the extended training and no charge is provided in anticipation of a Firm Aircraft delivery which is cancelled

 

* Student-Days = the number of students multiplied by the number of class days

The Customer Support Manager, in conjunction with appropriate CFM Training representatives, will be available to conduct a review session with Airline to schedule required training. To assure training availability, such review shall be conducted six (6) to twelve (12) months prior to the delivery date of the first Firm Aircraft.

CFM will provide software, tooling, and other training aids and tools to enable Airline to train its selected personnel to become trainers for in house training.

 

 

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  C. Training Location

Unless arranged otherwise with CFM concurrence, training shall be provided by CFM at one or more of the CFM designated facilities identified in the training catalog. CFM shall use its best efforts to arrange training at its facilities in Cincinnati, Ohio. CFM looks forward to discussing Airline training requirements to design the best approach, and work to provide certain agreed to training in Colombia and Brazil.

 

  D. Training Material

All instruction, examinations and materials will be prepared and presented in the English language and in the units of measure used by CFM. If necessary, Airline will provide interpreters at Airline’s expense.

Additional training material (beyond the normal scope defined in the training catalog) may be provided as negotiated between Airline and CFM Customer Support.

 

  E. Airline Responsibility

During Engine maintenance training at any of the CFM designated facilities, Airline shall be responsible for typical expenses such as:

 

   

Air and ground transportation expenses

 

   

Lodging (hotel accommodations)

 

   

Meals

 

   

All Medical – physicians, medication, emergencies, etc.

 

   

Other various and sundry expenses (visits to other businesses, entertainment, etc.).

Airline will be responsible for shipping costs of training materials in all cases to the extent training is conducted at Airline’s facilities, including shipping costs for shipping a CFM56-5 engine to Airline’s facilities to support a training class.

 

  F. Training on Vendor-Furnished Products

As an integral part of CFM maintenance training, CFM also provides the following training for vendor-furnished products installed on CFM Engines:

 

   

Familiarity with the product’s location on the engine and its purpose

 

   

On-engine servicing of the product

 

   

Removal and Installation functions

 

 

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If Airline requires additional maintenance training on any vendor-furnished products, Airline shall schedule such training directly with the vendor.

SECTION IV - CUSTOMER SUPPORT AND SERVICE

 

A. Customer Support Manager

CFM shall assign to Airline at no charge, a Customer Support Manager located at CFM’s factory to provide and coordinate appropriate liaison between the Airline and CFM’s factory personnel.

 

B. Field Support

CFM will reimburse the payroll, and all other employee related expenses, and costs, and travel expenses of an in country Airline resource to fulfill field support requirements in Colombia. CFM will work with Airline to relocate and arrange training of an Airline employee following an agreed to selection process. After training, this employee will serve the Airline as a CFM Field Service Engineer, on a non-exclusive basis. The term of the assignment will be agreed to by CFM and Airline, as well as the replacement process. CFM will also have or obtain the logistical support team and network to provide parts, data and oversight on routine and non-routine field trips to provide responsive, continuous, system-wide technical support. Cost effective, timely and reliable services will be provided to help return the Airline Aircraft to revenue service.

CFM will also assist with the introduction of new aircraft/Engines into Airline’s fleet, resolution of unscheduled maintenance actions, product scrap approval, and rapid communication between Airline’s maintenance base and CFM’s factory personnel. Throughout the operation of these Engines, the Customer Support Center (“ CSC ”) and the Customer Web Center (“ CWC ”) will augment support at no additional charge to Airline.

SECTION V - ENGINEERING SUPPORT

CFM shall make factory based engineering support available, at no charge, to Airline, for typical powerplant issues.

SECTION VI - Engine Health Monitoring:

At no cost to Airline, CFM will provide a comprehensive engine health monitoring service to Airline and its affiliates for as long as Airline or its affiliates operates at least one Aircraft. This service is set forth in Exhibit D.

SECTION VII - GENERAL CONDITIONS - PRODUCT SUPPORT PLAN

 

A.

All support provided by CFM pursuant to Sections II through V above, is provided to Airline exclusively for the maintenance and overhaul of Airline’s Products by Airline, and may not be utilized for any other purpose, or assigned or otherwise transferred to any third

 

 

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  party, without the written consent of CFM, which consent may be exercised by CFM in its sole discretion. Technical support for shops offering engine maintenance and overhaul services to third party customers is available from CFM directly. All support provided by CFM pursuant to Sections II through V will be provided for as long as the Airline operates one Engine, and shall commence and be provided to the Airline upon commencement of the operation of the new leased A320 family aircraft schedule to commence in February 2008.

 

B. Airline will maintain adequate operational and maintenance records and make these available for CFM inspection at any reasonable time during regular business hours and upon reasonable notice.

 

C. This Product Support Plan is subject to the provisions the of the Article titled “Limitation of Liability” of the Agreement to which this Exhibit B is attached.

 

D. Airline may cooperate with CFM where practicable in the development of Engine operating practices, repair procedures, and the like with the objective of improving Engine operating costs.

 

E. Except as provided in the Warranty Pass-On provisions in Paragraph E of Exhibit A of the Agreement to which this Exhibit B is attached, this Product Support Plan applies only to the original purchaser of the Engine except that installed Engines supplied to Airline through the aircraft manufacturer and installed Engines on Aircraft sold and leased back by Airline shall be considered as original Airline purchases covered by this Product Support Plan.

 

 

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EXHIBIT C

[*]

 

 

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EXHIBIT D

STANDARD DIAGNOSTICS SERVICES

 

1) DIAGNOSTICS SERVICE ELEMENTS

[*]

 

2) AIRLINE’S RESPONSIBILITY UNDER THE DIAGNOSTICS PROGRAM

 

  A) Airline (or Airline’s operator by delegation of this responsibility) shall:

 

  1) Provide CFM all information and records requested by CFM that are reasonably necessary for CFM to establish and provide the Service (including, but not limited to, avionics specifications, aircraft/engine maintenance history, engine configuration information, etc.). To the extent that such information and records are not owned by Airline, Airline represents and warrants that it has full authorization to disclose such information and records to CFM and that CFM has the right to use such information and records for all of the purposes that they are provided to CFM by Airline, including fulfilling CFM’s obligations under this Agreement.

 

  2) Make available to CFM data used in the monitoring and diagnostics of Engines eligible for coverage. Airline will authorize Airline’s air-to-ground service provider to forward the data directly to the CFM SITA/ARINC address ILNGE7X. If air-to-ground equipment is not available, CFM will work with the Airline to establish means such that the data is provided with minimal manual intervention.

 

  3) Access the Service via the CFM Extranet. A web browser, an internet service provider and a userid/password (supplied by CFM) is required. Such access shall be subject to the then-current CFM Extranet Terms and Condition as provided on the CFM Extranet site.

 

  4) It remains the sole responsibility of Airline to conclusively identify and resolve aircraft and Engine faults or adverse trends and make all maintenance decisions affecting Airline aircraft. CFM and Airline agree that this allocation of responsibility is reflected in the price of the Service.

 

  B) Airline acknowledges that the Services performed hereunder may be conducted by CFM affiliates outside of the U.S., and that there is no prohibition on CFM’s export of Customer data for such purposes.

 

3) [*]

[*]

 

4) ASSIGNMENT

[*]

 

 

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EXHIBIT E

[*]

 

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LOGO

LETTER AGREEMENT NO. 1

TO GTA No. 03—2007

Aerovias del Continente Americano S.A. Avianca

WHEREAS, CFM International, Inc. (hereinafter individually referred to as “ CFM ”) and Aerovias del Continente Americano S.A. Avianca (hereinafter referred to as “ Airline ”) (CFM and Airline being hereinafter collectively referred to as the “ Parties ”) have entered into General Terms Agreement 03-2007 dated March 29, 2007 (hereinafter referred to as “ GTA ”); and

WHEREAS, the GTA contains the applicable terms and conditions governing the sale by CFM and the purchase by Airline of spare engines, related equipment and spare parts therefor in support of Airline’s CFM powered fleet of aircraft from Airbus S.A.S (“ Airbus ”).

NOW THEREFORE, in consideration of the mutual covenants herein contained, the Parties agree as follows:

 

1. [*]

 

2. [*]

 

3. [*] Any such rescheduling of Aircraft or Spare Engines delivery will be at no cost or penalty to Airline hereunder if notification is provided to CFM at least twelve months before delivery, and will not affect the provisions, allowances, commitments, benefits or other provisions hereof.

In consideration of the above, CFM agrees to the following:

 

A. *[Five pages have been omitted in accordance with a request for confidential treatment.]

[*] In the event an interim settlement results in a credit to Airline because the guaranteed rate is exceeded at that time but the guarantee is met at either a subsequent interim settlement or the final settlement, then such credit shall be repaid by Airline at such time. In the event the guarantee is not subsequently met, the interim settlement shall be offset against any subsequent amount due under the guaranteed cumulative rate.

 

 

PROPRIETARY INFORMATION NOTICE The information contained in this document is CFM Proprietary Information and is disclosed in confidence. It is the property of CFM and shall not be used, disclosed to others, or reproduced without the express written consent of CFM. If consent is given for reproduction in whole or in part, this notice and the notice set forth on each page of this document shall appear on any such reproduction. Export control laws may also control the information contained in this document. Unauthorized export or re-export is prohibited.


LETTER AGREEMENT NO. 1

 

[*]

 

  4. *[Five pages have been omitted in accordance with a request for confidential treatment.]

 

D. [*]

[*] Should Airline obtain financing from a financial institution with respect to a delivered Aircraft or Spare Engine, Airline will be entitled to assign certain of its right under the Agreements to the financial institution to serve as security for Airline obligations under such financing provided always that such assignment will not adversely affect CFM’s rights under the Agreements.

For the avoidance of doubt, any of such Aircraft or Engine financing or leasing shall be for the benefit of Airline. Further, there is no limit on the number of Aircraft that may be subject to a sale/leaseback or otherwise converted or swapped into an operating lease (with Avianca or any of their affiliates or the Operator. In either such event, the acquisition of an Aircraft by a leasing company for lease to Avianca or Synergy or their affiliates with installed Engines shall constitute for all purposes of this Side Letter and the GTA the acquisition of an Aircraft by Airline and all of the Allowances, warranties, guaranties and other provisions hereof shall apply to such new Aircraft and Engines. Upon any such sale/leaseback or conversion, the acceptance of the applicable Aircraft by the lessor shall constitute Aircraft acceptance under this Agreement, and the provisions of paragraphs 4, 7 and 11 of Attachment B hereto shall not apply.

 

E. Authority

The parties represent and warrant that they have the corporate authority, and CFM represents that it has all other necessary authority, including approvals of the U.S. and French governments, to enter into this Side Letter and GTA and are not under any other constraint or obligation which would adversely effect their performance of its obligations hereunder or under the agreements contemplated herein.

 

F. Counterparts

This Side Letter may be signed by the Parties in separate counterparts and any single counterpart or set of counterparts, when signed and delivered to the other Party shall together constitute one and the same document and be an original Side Letter for all purposes.

 

 

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LETTER AGREEMENT NO. 1

 

G. Santos Dumont Operations

If requested by Airline, CFM will cooperate in all reasonable respects without charge to the Airline, to obtain certification , including all applicable documentation and modifications of the A319 and A320 Aircraft for operation at the Santos Dumont Airport in Brazil. CFM will not incur any direct or indirect expenses in providing such cooperation. CFM has advised Airline that it has received, for the A319 aircraft, a Landing Improvement Package for operation at Santos Dumont Airport.

 

 

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LETTER AGREEMENT NO. 1

 

The obligations, benefits and other provisions set forth in this Letter Agreement are in addition to the obligations, benefits and provisions set forth in the GTA. In the event of conflict between the terms of this Letter Agreement and the terms of the GTA, the terms of this Letter Agreement shall take precedence. Terms which are capitalized but not otherwise defined herein shall have the meaning given to them in Article I of the GTA. Capitalized terms used herein but not otherwise defined in the GTA but which are defined herein shall have the meaning given to them herein.

Please indicate your agreement with the foregoing by signing two (2) duplicate originals as provided below.

 

      Very truly yours,
Aerovias del Continente Americano S.A. Avianca     CFM International, Inc.
By:  

 

    By:  

 

Typed Name:  

 

    Typed Name:  

 

Title:  

 

    Title:  

 

 

 

     

 

 

 

     

 

Date:  

 

    Date:  

 

 

 

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LETTER AGREEMENT NO. 1

 

[*]

[*]

 

A/C Qty.

  

Engine Type

  

Delivery Date

[*]    [*]    [*]
[*]    [*]    [*]
[*]    [*]    [*]
[*]    [*]    [*]
[*]    [*]    [*]
[*]    [*]    [*]
[*]    [*]    [*]
[*]    [*]    [*]
[*]    [*]    [*]
[*]    [*]    [*]
[*]    [*]    [*]
[*]    [*]    [*]
[*]    [*]    [*]
[*]    [*]    [*]
[*]    [*]    [*]
[*]    [*]    [*]

[*]

Spare Engine Delivery Schedule

 

Spare Engine Qty.

  

Engine Type

  

Delivery Date

[*]    [*]    [*]
[*]    [*]    [*]
[*]    [*]    [*]
[*]    [*]    [*]
[*]    [*]    [*]
[*]    [*]    [*]

Total 6 Spare Engines

 

 

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LETTER AGREEMENT NO. 1

 

ATTACHMENT B

[*]

 

1. *[One page has been omitted in accordance with a request for confidential treatment.]

 

Half or less of required Minimum Number of Aircraft delivered to Airline    Per-Aircraft allowances reduced to 75% of specified allowances on Aircraft delivered to Airline
More than half of required Minimum Number of Aircraft delivered to Airline    Per-Aircraft allowances reduced to 75% of specified allowances increased incrementally on a straight-line basis beginning from 75% up to 100% if 80% of the Minimum Number of Aircraft are delivered to Airline

[*] The above terms shall also apply to Purchase Right Aircraft which are subsequently ordered by Airline as firm deliveries. Notwithstanding the foregoing, if allowances are assigned to a financing entity to effect pre-delivery payments as permitted pursuant to Section 5 below, there shall be no adjustment of such assigned allowances. If pursuant to the terms of this Section 4 an assigned allowance would otherwise be reduced the amount of any such allowance reduction shall be allocated among the balance of the unassigned Firm Aircraft allowances (i.e. those Firm Aircraft for which allowances have not been assigned to a financing entity). If there are not enough remaining unassigned Firm Aircraft remaining to so allocate, then Airline shall pay the reduction(s) due, in cash.

 

5. [*], financing, and title transfer of the Aircraft or a Spare Engine (sale and leaseback arrangement), or (iv) a subsidiary or affiliate Airline.

 

6. [*]

 

7. [*]

CFM shall retain any progress payments or other deposits made to CFM for any such Engine and such progress payments will be applied to the aforesaid cancellation charge for such Engine . Progress payments held by CFM in respect of any such Engine which are in excess of such amounts will be refunded to Airline, provided Airline is not then in arrears on other amounts owed to CFM or its subsidiaries and affiliates, in which event they shall be applied against such other amounts owed.

[*]

 

 

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LETTER AGREEMENT NO. 1

 

There shall be no cancellation charge, adjustment or other charge or fee charged by CFM for any delay of Aircraft delivery agreed to by Avianca and Airbus.

 

8. Delay Charge for Installed or Spare Engines

[*]

 

9. Aircraft Substitution Rights

[*] However, if Airline replaces any of the Aircraft which are the subject of this Letter Agreement with another aircraft type, and the replacement aircraft is not equipped with CFM Engines such event shall be considered a cancellation and the cancellation provisions described in Section 7 above shall apply. If the replacement aircraft is equipped with other CFM engines, CFM will agree to adjust the allowance commensurate with the then current list price of the replacement engine as well as the quantity of the replacement aircraft, and the cancellation provisions of Section 7 above shall not apply.

 

10 . [*]

 

11. [*]

[*] The allowance reimbursement is due no later than thirty (30) days from the time Airline ceases to own or operate such Aircraft. Interest will be calculated at Libor plus 2%, from the time of initial allowance payment on such Aircraft until the time of full reimbursement. Any sale and leaseback or other lease arrangement of an Aircraft which is operated by Airline, Synergy, Operator or affiliate of Airline, shall be permitted without the application of this Section 11.

 

12. Cash Out of Credits

Any credits or other allowances granted hereunder which are available and unused one year after the delivery of the last Aircraft shall be liquidated and paid in cash to Airline within 30 days of its request therefore provided Airline has purchased (or leased through a sale and leaseback) the required level of Spare Engines.

 

13. [*]

 

 

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LETTER AGREEMENT NO. 1

 

ATTACHMENT C

[*]

[*]

 

[*]

  

[*]

[*]    [*]

 

A. Base prices are effective for firm orders received by CFM within quoted lead-time for basic spare Engines (including associated equipment and maximum climb thrust increase) for delivery to Airline by CFM on or before December 31, 2014 in support of the Aircraft. The base prices are subject to adjustment for escalation as set forth herein, and Airline shall be responsible, upon delivery, for the payment of all taxes, duties, fees or other similar charges [*]

 

B. [*]

 

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LETTER AGREEMENT NO. 1

 

ATTACHMENT D

 

I. [*]

 

II. [*]

 

  A. [*]

 

  B. [*]

[*] The resulting values will then be calculated as follows: A three-month arithmetic average value (expressed as a decimal and rounded to the nearest tenth) using the months set forth in the Table below for the applicable Spare Engine / Major Module, with the released Employment Cost Index value described above for the month of March also being used for the months of January and February; the value for June also used for April and May; the value for September also used for July and August; and the value for December also used for October and November).

[*]

 

MONTH OF

SCHEDULED ENGINE

DELIVERY

  

MONTHS TO BE UTILIZED IN DETERMINING THE THREE MONTH ARITHMETIC AVERAGE

January    December A, January B, February B
February    January B, February B, March B
[*]    February B, March B, April B
[*]    [*]
[*]    [*]
[*]    [*]
[*]    [*]
[*]    [*]
[*]    [*]
[*]    [*]
[*]    [*]
[*]    [*]

 

A   =   Two calendar years before the year of the scheduled month of delivery.
B   =   The calendar year before the year of the scheduled month of delivery.
C   =   The calendar year during the year of the scheduled month of delivery.

 

  C. Each CPI shall be determined to the second decimal place. Calculation shall be to the third decimal digit and if the third decimal digit is five or more, the second decimal digit shall be raised to the next higher figure. If the third decimal digit is less than five, the second decimal figure shall remain as calculated.

 

  D. The Base Composite Index (CPIb) shall be the base index stated in the published prices.

 

 

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LETTER AGREEMENT NO. 1

 

III. [*]

[*]

 

IV. The invoice price shall be the final price and will not be subject to further adjustments in the indices. In no event shall the invoice price be lower than the base price.

 

V. The ratio (CPI / CPIb) shall be calculated to the fourth decimal digit. If the fourth decimal digit is five or more, the third decimal digit shall be raised to the next higher figure, and if the fourth decimal digit is less than five, the third decimal figure shall remain as calculated. If the calculation of this ratio results in a number less than 1.000, the ratio will be adjusted to 1.000. The resulting three digit decimal shall be used to calculate Pn.

 

VI. Values to be utilized in the event of unavailability .

*[One page has been omitted in accordance with a request for confidential treatment.]

 

Note :    Any rounding of a number, with respect to escalation of the Product Price, will be accomplished as follows: If the first digit of the portion to be dropped from the number is five or greater, the preceding digit will be raised to the next higher number.

 

VII. [*]

 

 

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LETTER AGREEMENT NO. 1

 

ATTACHMENT E

BASIS AND CONDITIONS FOR SPECIAL GUARANTEES

 

A. General Conditions

The Guarantees offered in this Letter Agreement have been developed specifically for Airline’s new installed and spare Engines. They are offered to Airline contingent upon:

 

  1. [*]

 

  2. [*]

 

  3. [*]

 

  4. All workscopes are developed in accordance with the Workscope Planning Guide during each shop visit;

 

  5. Available on-wing maintenance and performance restoration procedures being used to avoid unnecessary shop visits; and

 

 

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LETTER AGREEMENT NO. 1

 

ATTACHMENT E

BASIS AND CONDITIONS FOR SPECIAL GUARANTEES

(continued)

 

 

  6. [*]

 

B. [*]

 

C. [*]

 

D. Miscellaneous

[*]

The General Conditions described in Section II of Exhibit A of the GTA between CFM and Airline apply to the guarantees.

 

 

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LETTER AGREEMENT NO. 1

 

ATTACHMENT F

[*]

[*]

 

   

[*]

 

   

The shop visit was necessary to comply with an Airworthiness Directive issued by FAA, EASA or CAA or recommendations contained in CFM’s mandatory compliance service bulletins requiring compliance within a specified number of Flight Hours or Cycles.

 

   

[*]

 

 

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LETTER AGREEMENT NO. 1

 

ATTACHMENT G

DELAY AND CANCELLATION DEFINITIONS FOR GUARANTEE

Delay

[*]

 

   

An originating flight departs later than the scheduled departure time.

 

   

A through service or turnaround flight remains on the ground longer than the allowable ground time.

 

   

The aircraft is released late from maintenance.

[*]

[*]

[*]

NOTE :

Cancellation of any or all of the flight legs of multi-leg trip constitutes only one cancellation.

 

 

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LETTER AGREEMENT NO. 1

 

ATTACHMENT H

 

 

*[One page has been omitted in accordance with a request for confidential treatment.]

 

 

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Exhibit 10.14

Note: Certain portions have been omitted from this Agreement in accordance with a request for confidential treatment submitted to the Securities and Exchange Commission. Omitted information has been replaced with an asterisk. Omitted information has been filed separately with the Securities and Exchange Commission.

Aviation

General

Terms

Agreement

No. GE-1-1090789943

PROPRIETARY INFORMATION NOTICE The information contained in this document is GE Proprietary Information and is disclosed in confidence. It is the property of GE and shall not be used, disclosed to others, or reproduced without the express written consent of GE. If consent is given for reproduction in whole or in part, this notice and the notice set forth on each page of this document shall appear on any such reproduction. Export control laws may also control the information contained in this document. Unauthorized export or re-export is prohibited.


GENERAL TERMS AGREEMENT NO. GE-1-1090789943

Table of Contents

Agreement

SECTION I - DEFINITIONS

SECTION II - TERMS & CONDITIONS

 

ARTICLE 1    -      PRODUCTS
ARTICLE 2    -      PRODUCT PRICES
ARTICLE 3    -      PRODUCT ORDER PLACEMENT
ARTICLE 4    -      DELIVERY, TITLE, TRANSPORTATION, RISK OF LOSS, PACKAGING OF GE PRODUCTS
ARTICLE 5    -     

PAYMENT FOR PRODUCTS

ARTICLE 6    -      [*]
ARTICLE 7    -      TAXES AND DUTIES
ARTICLE 8    -      [*]
ARTICLE 9    -      EXCUSABLE DELAY
ARTICLE 10    -      [*]
ARTICLE 11    -      DATA
ARTICLE 12    -     

LIMITATION OF LIABILITY

ARTICLE 13    -      GOVERNMENT AUTHORIZATION, EXPORT SHIPMENT
ARTICLE 14    -      PERSONAL DATA PROTECTION
ARTICLE 15    -      NOTICES
ARTICLE 16    -      MISCELLANEOUS
Exhibit A - [*]
SECTION I    -      [*]
SECTION II    -      GENERAL CONDITION
Exhibit B - Product Support Plan
SECTION I    -      SPARE PARTS PROVISIONING
SECTION II    -      TECHNICAL PUBLICATIONS AND DATA
SECTION III    -      TECHNICAL TRAINING
SECTION IV    -      CUSTOMER SUPPORT AND SERVICE
SECTION V    -      ENGINEERING SUPPORT
SECTION VI    -      PERFORMANCE TREND MONITORING
SECTION VII    -      GENERAL CONDITIONS – CF34 PRODUCT SUPPORT PLAN
Exhibit C - Payment Terms
Exhibit D - Standard Diagnostics Services

 

 

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GENERAL TERMS AGREEMENT NO. GE-1-1090789943

 

THIS GENERAL TERMS AGREEMENT NO. GE-1-1090789943 (hereinafter referred to as this “ Agreement ”), dated as of the 18 th day of December, 2007, by and between General Electric Company , a corporation organized under the law of the State of New York, U.S.A. (including its successors and assigns), acting through its GE-Aviation business unit located in Evendale, Ohio, U.S.A. (hereinafter referred to as “ GE ”), GE Engine Services Distribution, LLC , a Delaware limited liability company having its principal office at One Neumann Way MD 111, Cincinnati, Ohio 45215 (hereinafter referred to as “ GE-LLC ”) and Atlantic Aircraft Holding, Ltd., a corporation organized under the law of the Commonwealth of the Bahamas, having its principal place of business at Marlborough and Queen Streets, Nassau, The Bahamas (hereinafter referred to as “Buyer”). GE, GE-LLC and Buyer are also referred to in this Agreement as the “ Parties ” or individually as a “ Party ”.

WITNESSETH

WHEREAS , Buyer has acquired, or is in the process of acquiring a certain number of aircraft equipped with installed GE Engines, and

WHEREAS , GE, GE-LLC and Buyer desire to enter into appropriate Sections of this Agreement for (i) the mutually agreed terms and conditions which will apply to any purchase order placed by Buyer, and accepted by GE or GE-LLC, for Spare Engines, spare Parts including Expendable Parts and support equipment for such installed and spare Engines and (ii) Product Services to be supplied by GE in support of such installed and spare Engines, and

FURTHER , GE acknowledges that GE-LLC is a 100% owned subsidiary of GE.

NOW, THEREFORE , in consideration of the mutual covenants herein contained, the respective Parties hereto agree as follows to the respective Sections of this Agreement. Capitalized terms used herein that are otherwise undefined shall have the meanings ascribed to them in Section I (“ Definitions ”), unless the context requires otherwise.

SECTION I - DEFINITIONS

These definitions shall apply for all purposes of this Agreement unless the context otherwise requires.

Aircraft ” means the Embraer aircraft on which the Engine(s) listed in the applicable letter agreement to this Agreement is (are) or will be installed.

Agreement ” means this General Terms Agreement (together with all exhibits, and specific transaction agreements (“Letter Agreements”) and attachments) between GE and / or GE-LLC and Buyer.

Airworthiness Authority ” means the Federal Aviation Administration of the United States Department of Transportation (“FAA”), EASA, ANAC, or successors of such entities as applicable.

 

 

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GENERAL TERMS AGREEMENT NO. GE-1-1090789943

 

Airworthiness Directive ” means a requirement for the inspection, repair or modification of the Engine or any portion thereof as issued by the applicable Airworthiness Authority.

ATA ” means the Air Transport Association of America.

Buyer’s Affiliated Airlines ” means any airline subsidiaries or affiliates of Buyer that are either wholly-owned or otherwise controlled by Buyer or its shareholders.

Data ” means all information and data of any type, form or nature (including, but not limited to, designs, drawings, blueprints, tracings, plans, models, layouts, software, specifications, technical publications, electronic transmittals, customer website data and memoranda) which may be furnished or made available to Buyer, directly or indirectly, as the result of this Agreement.

Engine ” means the Airworthiness Authority certified Engine(s) described in the applicable letter agreement(s) to this Agreement.

Expendable Parts ” means those parts which must routinely be replaced during inspection, repair, or maintenance, whether or not such parts have been damaged, and other parts which are customarily replaced at each such Inspection and maintenance period such as filter inserts and other short-lived items which are not dependent on wear out but replaced at predetermined intervals.

Failed Parts ” means those Parts and Expendable Parts suffering a Failure, including Parts suffering Resultant Damage.

Failure ” means the breakage of a Part, failure to function of a Part, or damage to a Part, rendering it not Serviceable using the applicable OEM Engine manuals and such breakage, failure or damage has been determined to the reasonable satisfaction of GE to be due to causes within GE’s control, including, but not limited to, a defect in design. Failure shall also include any defect in material or workmanship. Failure does not include any such breakage, malfunction or damage that is due to normal wear and tear that can be restored by overhaul or repair.

Flight Cycle ” means the complete running of an Engine from start through any condition of flight and ending at Engine shutdown. A “ touch and go landing ” used during pilot training shall be considered as a “ Flight Cycle.

Flight Hours ” means the cumulative number of airborne hours in operation of each Engine computed from the time an aircraft leaves the ground until it touches the ground at the end of a flight.

Foreign Object Damage ” means any damage to the Engine caused by objects that are not part of the Engine and Engine optional equipment.

GE Products ” means spare Engines, related optional equipment, technical data, and other products offered from time to time, as may be offered for sale and/or provided by GE.

 

 

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GENERAL TERMS AGREEMENT NO. GE-1-1090789943

 

GE-LLC Products ” means spare Parts, Expendable Parts, Engine Modules, and other products offered from time to time, as may be offered for sale and/or provided by GE-LLC.

Labor Allowance ” means a GE credit calculated by multiplying the established labor rate by man-hours allowed for disassembly, reassembly (when applicable), and for Parts repair. If a Labor Allowance is granted for a repair, it shall not exceed the credit that would have been quoted if the Part had not been repairable. The established labor rate means either (a) the labor rate that has been quoted in the GE Engine Services OnPoint Solution agreement 1-504321606 which is sixty-five U.S. dollars per labor hour ($65.00 per labor hour), or (b) the then current labor rate agreed between GE and the third party repair and overhaul shop if the work has been performed by such repair and overhaul shop.

Module ” means a major sub-assembly of any of the Engines described in the applicable OEM Engine manuals.

Part ” means only those Airworthiness Authority certified Engine and Engine Module Parts which have been sold originally to Buyer by GE for commercial use. The term excludes parts that were furnished on new Engines and Modules but are procured directly from vendors. Such parts are covered by the vendor warranty and the GE “Vendor Back-Up Warranty.” Also excluded are Expendable Parts.

Parts Credit Allowance ” means the credit granted by GE to Buyer, in connection with either a GE-declared campaign change or the Failure of a Part, based on the price of a replacement Part at the time the Part is removed. This credit may take the form of a replacement Part with Buyer’s approval, which shall not be unreasonably withheld, delayed, or conditioned.

Part Cycles ” means the total number of Flight Cycles accumulated by a Part.

Parts Repair ” means the GE recommended rework or restoration of Failed Parts to a Serviceable condition.

Part Time ” means the total number of Flight Hours accumulated by a Part.

Resultant Damage ” means the damage suffered by a Part because of a Failure of another Part or Expendable Part within the same engine, provided the Part or Expendable Part causing the damage was in a New Engine Warranty or a New Part Warranty.

Serviceable ” when used to describe an Engine or Part, means in a flight worthy condition within the limits defined in the applicable Engine manuals, specification and/or publications by the type certificate holder.

Scrapped Parts ” means those Parts determined by GE to be un-Serviceable and not repairable by virtue of reliability, performance or repair costs. Such Parts shall be considered as scrapped if they bear a scrap tag duly countersigned by a GE representative, or if requested by Buyer confirmed by another agreed to method. Such Parts shall be destroyed and disposed of by Buyer unless requested by GE for engineering analysis, in which event any handling and shipping shall be at GE’s expense.

 

 

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GENERAL TERMS AGREEMENT NO. GE-1-1090789943

 

Spare Engine ” means an Engine acquired in support of Buyer’s Affiliated Airlines’ fleet of Aircraft for use as a spare Engine when another Engine in such fleet is unavailable due to damage or is otherwise being repaired or serviced.

Ultimate Life ” of a Part means the approved limitation on use of a Part, in cumulative Flight Hours or Flight Cycles, which Airworthiness Authority establishes as the maximum period of allowed operational time for such Parts in airline service, with periodic repair and restoration.

SECTION II - TERMS AND CONDITIONS

ARTICLE 1 - PRODUCTS

Buyer may purchase under the terms and subject to the conditions hereinafter set forth, spare Engines, spare Parts, related optional equipment, technical data and other products offered from time to time, as may be offered for sale by GE and GE-LLC.

ARTICLE 2 - PRODUCT PRICES

 

A. In General . The selling price of GE-LLC or GE Products will be the lesser of: (i) the respective prices which are quoted in GE-LLC’s Spare Parts Price Catalog, as revised from time to time (the “ Spare Parts Catalog ” or “ Catalog ”), (ii) the prices quoted in GE’s written quotation or proposal from time to time. The applicable selling prices shall be confirmed in a purchase order placed by Buyer and accepted by GE. GE shall quote such prices in U.S. Dollars and Buyer shall pay for GE Products in U.S. Dollars. GE-LLC will advise Buyer in writing ninety (90) days in advance of any changes in prices in the Catalog.

 

B. Other . Spare Engine prices will be quoted as base prices, subject to escalation using the GE Engine escalation provisions then in effect between Buyer and GE. No change to such escalation provisions will apply unless mutually agreed by GE and Buyer.

ARTICLE 3 - GE PRODUCT ORDER PLACEMENT

 

A. The terms and conditions set forth herein are in lieu of all printed terms and conditions appearing on Buyer’s purchase orders, other than any specific description of Products ordered, quantity, price, delivery dates or shipping instructions set forth on a purchase order accepted by GE.

 

B. Buyer shall place purchase orders for GE or GE-LLC Products and GE’s or GE-LLC’s acknowledgment of each purchase order shall constitute acceptance thereof.

ARTICLE 4 - DELIVERY, TITLE, TRANSPORTATION, RISK OF LOSS, PACKAGING OF PRODUCTS

 

A. Shipment of GE Products and GE-LLC Products shall be from GE’s facility in Evendale, Ohio, U.S.A., Peebles, Ohio, U.S.A., or Erlanger, Kentucky, U.S.A., or point of manufacture, or other facility at GE’s option.

 

 

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GENERAL TERMS AGREEMENT NO. GE-1-1090789943

 

B. Delivery of all GE Products and GE-LLC Products shall be as follows (hereinafter “ Delivery ”):

 

  (i) For GE Products and GE-LLC Products shipped from the U.S. to a domestic U.S. destination, Delivery of such GE Products and GE-LLC Products shall be Ex Works (Incoterms 2000) at the point of shipment described in Paragraph A of this Article;

 

  (ii) For GE Products and GE-LLC Products shipped from the U.S. to a destination outside the U.S., Delivery of such GE Products and GE-LLC Products shall be to Airline at the frontier of the destination country. Unless otherwise agreed, Airline shall be responsible for exporting the GE Products and GE-LLC Products out of the U.S.;

 

  (iii) For GE Products and GE-LLC Products shipped from a location outside the U.S., Delivery of such GE Products and GE-LLC Products shall be Ex Works (Incoterms 2000) from such foreign GE facility.

Upon Delivery, title to GE Products and GE-LLC Products as well as risk of loss thereof or damage thereto shall pass to Buyer. Buyer shall be responsible for all risk and expense in obtaining any required licenses and carrying out all customs formalities for the exportation and importation of goods in accordance with the Article titled “Government Authorization” of this Agreement.

 

C. Buyer shall arrange and pay for transportation of such GE and GE-LLC Products from the point of shipment described in Paragraph A of this Article until Delivery in accordance with paragraph B of this Article.

 

D. Products subject to Buyer’s purchase orders that have been accepted by GE shall be delivered by GE within the lead times as set forth in the Catalog (if applicable) or in an individual purchase order.

ARTICLE 5 - PAYMENT FOR PRODUCTS

Payment terms are set forth in the attached Exhibit C.

ARTICLE 6 - [*]

[*]

ARTICLE 7 - TAXES AND DUTIES

Unless otherwise specified in this Agreement, Seller shall be responsible for and pay directly all corporate and individual taxes measured by net income or profit imposed by any governmental authority on Seller, its employees or subcontractors in any way connected with this Agreement (“Seller taxes”). Buyer shall be responsible for and pay directly when due and payable all taxes,

 

 

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duties, fees, or other charges of any nature (including, but not limited to, ad valorem, consumption, excise, franchise, gross receipts, import, license, property, sales, stamp, storage, transfer, turnover, use, or value-added taxes, and any and all items of withholding, deficiency, penalty, addition to tax, interest, or assessment related thereto), other than Seller taxes, imposed by any governmental authority on Seller or its employees or subcontractors in any way connected with this Agreement (“Buyer taxes”). All payments due and payable to Seller by Buyer under this Agreement shall be made without deduction or withholding for Buyer taxes, except that if Buyer shall be required by law to deduct or withhold any Buyer taxes from or in respect of any amount payable by it to Seller hereunder, the amount payable by Buyer shall be increased by such amount as may be necessary so that after making all required deductions or withholdings (including deductions or withholdings with respect to any additional amounts payable pursuant to this sentence), Seller receives the same amount that it would have received if no such deduction or withholding had been made. If Seller is nevertheless required to pay Buyer taxes, Buyer shall, promptly upon presentation of Seller’s invoice for the Buyer taxes, reimburse Seller for the Buyer taxes. Buyer shall provide to Seller on a timely basis accurate official receipts for deducted or withheld taxes. All rights to drawback of customs duties paid by Seller to the customs authorities of the country of manufacture of any products shall belong to Seller. Buyer agrees to cooperate with Seller to obtain a drawback.

ARTICLE 8 - [*]

[*]

ARTICLE 9 - EXCUSABLE DELAY

Seller shall not be liable or in breach of its obligations under this Agreement to the extent performance of such obligations is delayed or prevented, directly or indirectly, by causes beyond its reasonable control, including acts of God, fire, terrorism, war (declared or undeclared), severe weather conditions, earthquakes, epidemics, material shortages, insurrection, acts or omissions of Buyer or Buyer’s suppliers or agents, any act or omission by any governmental authority, strikes, labor disputes, acts or threats of vandalism or terrorism (including disruption of technology resources (for example, a virus affecting IT resources)), transportation shortages, or vendor’s failure to perform, or acts or omissions of Buyer or Buyer’s other contractors or suppliers (each an “Excusable Delay”). The delivery or performance date shall be extended for a period equal to the time lost by reason of delay, including time to overcome the effect of the delay. Seller shall promptly notify Buyer in writing upon the occurrence of any Excusable Delay and from time to time thereafter, which notices shall indicate the effect thereof on the applicable delivery or performance date, and Seller shall use best efforts to continue performance whenever such causes are removed. In the event an Excusable Delay continues for a period of six (6) months or more beyond the scheduled delivery or performance date, Buyer or Seller may, upon thirty (30) days written notice to the other, cancel the part of this Agreement so delayed, Seller shall return to Buyer all payments relative to the canceled part of this Agreement. Buyer shall pay Seller its reasonable cancellation charges in the event Buyer elects to cancel the affected part of this Agreement due to an Excusable Delay caused solely by acts or omissions of Buyer or Buyer’s other contractors or suppliers.

 

 

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ARTICLE 10 - [*]

[*]

The obligations recited in this Article shall constitute the sole and exclusive liability of Seller for actual or alleged patent infringement.

ARTICLE 11 - DATA

 

A. All Data is proprietary to and shall remain the property of Seller. All Data is provided to or disclosed to Buyer in confidence, and shall neither (1) be used by Buyer or be furnished by Buyer to any other person, firm or corporation for the design or manufacture or repair of any products, articles, compositions of matter, or processes, nor (2) be permitted out of Buyer’s possession, or divulged to any other person, firm or corporation, other than Buyer’s Affiliated Airlines, nor (3) be used in the creation, manufacture, development, or derivation of any repairs, modifications, spare parts, designs or configuration changes, or to obtain Airworthiness Authority or any other government or regulatory approval of any of the foregoing. Data shall not be used for the maintenance, repair, or assessment of continued airworthiness of any products not supplied or covered under this Agreement. If GE’s written consent is given for reproduction in whole or in part, any existing notice or legend shall appear in any such reproduction. Nothing in this Agreement shall preclude Buyer from using such Data for the modification, overhaul, or maintenance work performed by Buyer or Buyer’s Affiliated Airlines on Buyer’s Products; except that all repairs or repair processes that require substantiation (including, but not limited to, high technology repairs) will be the subject of a separate license and substantiated repair agreement between Seller and Buyer or Buyer’s Affiliated Airlines.

 

B. Seller warrants that it either owns or will secure the right for Buyer or Buyer’s Affiliated Airlines to use, as set forth in this paragraph, software delivered as part of an Engine by Seller to Buyer under this Agreement. Seller agrees to provide to Buyer, as part of the delivered Engines, a copy of all software, in machine readable (object code) format, necessary solely for the operation of Engines provided under this Agreement. Seller will provide to Buyer and Buyer agrees to accept and execute all necessary license agreements, if any, that are required to memorialize such rights to use such software. Buyer agrees that it shall have no rights to sublicense, decompile or modify any software provided by Seller without the prior express written consent of the owner of such software. Buyer shall be solely responsible for negotiating any licenses necessary to secure for Buyer any additional rights in any software.

ARTICLE 12 - LIMITATION OF LIABILITY

The liability of Seller to Buyer arising out of, connected with, or resulting from the manufacture, sale, design, possession, use or handling of any Product or Parts thereof or therefor (including Engines installed on Buyer or Buyer’s Affiliated Airlines owned or leased aircraft as original equipment and engines obtained, acquired, leased or operated before or after the execution of this Agreement) or furnishing of services, whether in contract, warranty, tort (including, without limitation, negligence, but excluding willful misconduct or gross negligence) or otherwise, shall be as set forth in this Agreement or in Exhibit A or B or in the applicable letter agreements to the Agreement and shall not in any event exceed the purchase price (or in the absence of a purchase price, the fair market value) of the Engine, service or other thing giving rise to Buyer’s claim. The foregoing shall constitute the sole remedy of Buyer and the sole liability of Seller. In no event shall Seller be liable for incidental, punitive, special, indirect or consequential damages, including but not limited to, damage to, or loss of use, revenue or profit with respect to any aircraft, engine, or part thereof. THE WARRANTIES AND GUARANTEES SET FORTH IN EXHIBIT A AND ANY APPLICABLE LETTER AGREEMENTS ARE EXCLUSIVE AND, EXCEPT AS OTHERWISE EXPRESSLY SET FORTH HEREIN, ARE IN LIEU OF ALL OTHER WARRANTIES AND GUARANTEES WHETHER WRITTEN, STATUTORY, ORAL, OR IMPLIED (INCLUDING WITHOUT LIMITATION ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR ANY IMPLIED WARRANTY ARISING FROM COURSE OF DEALING, COURSE OF PERFORMANCE, OR USAGE OF TRADE).

ARTICLE 13 - GOVERNMENT AUTHORIZATION, EXPORT SHIPMENT

Buyer shall be responsible for obtaining any required licenses or any other required governmental authorization and shall be responsible for complying with all U.S. and foreign

 

 

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government licensing and reporting requirements. Buyer shall restrict disclosure of all information and data furnished in connection with such authorization and shall ship the subject matter of the authorization to only those destinations that are authorized by the U.S. Government.

ARTICLE 14 - PERSONAL DATA PROTECTION

 

A. “Personal Data” is any information relating to an identified or identifiable natural person or to any legal entity if such legal entity is subject to data protection legislation in their country of incorporation (“Data Subject”).

 

B. Buyer and Seller each agree that any Personal Data obtained from the other Party will be deemed Data of the other Party as defined in this Agreement whether or not the Personal Data is publicly available.

 

C. Buyer and Seller each represent that in providing Personal Data to one another they will comply with all applicable laws and regulations, including but not limited to providing notices to or obtaining consents from the Data subjects when required.

 

D. Steps shall be taken to implement and maintain physical, technical and organizational measures to ensure the security and confidentiality of Personal Data in order to prevent accidental, unauthorized or unlawful access, use, modification, disclosure, loss or destruction of Personal Data. The security measures taken shall be in compliance with applicable data protection laws and shall be adapted to the risks represented by the processing and the nature of the personal data to be collected and/or stored.

ARTICLE 15 - NOTICES

Any notices under this Agreement shall become effective upon receipt and shall be in writing and be delivered or sent by mail, courier service, personal service or fax to the respective parties at the following addresses, which may be changed by written notice:

 

If to:   

Atlantic Aircraft Holding, Ltd.

Winterbotham Place

Marlbourough and Queen Streets

Nassau, The Bahamas

   If to:     

General Electric Company

GE-Aviation

One Neumann Way, M.D.             

Cincinnati, Ohio 45215-1988 USA

Attn:   

Directors

Facsimile Number:                     

Telephone Number:                     

   Attn:     

Customer Support Manager

Facsimile Number: +1 513 552-3329

Telephone Number: +1 513 552-3272

With a Copy to:    Taca International Airlines, S.A.    If to:      GE Engine Services Distribution, LLC
  

Edificio Caribe, 2d Piso

San Salvador, El Salvador

       

One Neumann Way, MD 111

Cincinnati, OH 45215-6301

  

Attn: Director of Contracts

Facsimile Number: +503 2267-8166

Telephone Number: +503 (2267) 8888

   Attn:     

President

Facsimile Number: (513) 552-2144

Telephone Number: (513) 552-2278

 

 

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Notice sent by the U.S. mail, postage prepaid, shall be deemed received within seven (7) days after deposit.

ARTICLE 16 - MISCELLANEOUS

 

A. [*].

Seller understands that Buyer may use any of various mechanisms (including sale leasebacks) to finance or acquire the Aircraft or any spare Engine or any predelivery payments in respect thereof. Seller agrees to Buyer’s assignment of Buyer’s rights or obligations hereunder to facilitate any such financing or acquisition, provided, that Buyer, Seller, and the assignee shall enter into a written assignment agreement on customary terms. In respect of the purchase of the Aircraft or any spare Engine, Seller agrees that Buyer may assign this Agreement insofar as it relates to such Aircraft or spare Engine to an affiliated special purpose entity or other entity formed by Buyer.

Seller also understands that Buyer is not an operator of equipment and that Buyer’s Affiliated Airlines will be the ultimate users of the Aircraft, spare Engines, spare Parts, related optional equipment, technical data and other products and Product support furnished by Sellers hereunder. Buyer may, without Seller’s consent, assign to such Affiliated Airlines the relevant portions of this Agreement; provided, that from time to time Buyer shall provide Seller with a list of all airlines that qualify as Buyer’s Affiliated Airlines and such Buyer’s Affiliated Airlines acknowledge in writing that the terms and conditions of this Agreement apply to the Buyer’s Affiliated Airlines.

Buyer agrees that to the extent Buyer assigns any rights it may have under this Agreement to an Affiliated Airline, Buyer shall be jointly liable with such Affiliated Airline for any obligations or liabilities to Seller incurred by such Affiliated Airline hereunder in respect of the exercise of such assigned rights.

 

B. Applicable Law; Venue . All aspects of this Agreement and the obligations arising hereunder will be governed in accordance with the law of the State of New York, U.S.A.; except, that New York conflict of law rules will not apply if the result would be the application of the laws of another jurisdiction. The United Nations Convention on Contracts for the International Sale of Goods shall not apply to this Agreement.

 

C. Entire Agreement; Modification . This Agreement contains the entire and only agreement between the parties, and it supersedes all pre-existing agreements between such parties, respecting the subject matter hereof; and any representation, promise or condition in connection therewith not incorporated herein shall not be binding upon either Party. No modification or termination of this Agreement or any of the provisions herein contained shall be binding upon the Party against whom enforcement of such modification or termination is sought, unless it is made in writing and signed on behalf of Seller and Buyer by duly authorized executives or attorneys-in-fact.

 

 

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D. Confidentiality of Information . This Agreement and letter agreements contain information specifically for Buyer and Seller, and nothing herein contained shall be divulged by Buyer or Seller to any third person, firm or corporation, without the prior written consent of the other Parties, which consent shall not be unreasonably withheld; except (i) that Buyer’s consent shall not be required for disclosure by Seller of this Agreement and letter agreements, and related information given by Buyer to Seller, to an Engine program participant, joint venture participant, engineering service provider or consultant to Seller so as to enable Seller to perform its obligations under this Agreement or letter agreements or to build the Engine or to provide informational data; (ii) to the extent required by Government agencies, by law, or to enforce this Agreement; and (iii) to the extent necessary for disclosure to the Parties’ respective insurers, accountants or other professional advisors who must likewise agree to be bound by the provisions of this Article. In the event (i) or (iii) occur, suitable restrictive legends limiting further disclosure shall be applied. In the event the Agreement, or other Seller information or data is required to be disclosed or filed by government agencies by law, or by court order, Buyer shall notify Seller at least thirty (30) days in advance of such disclosure or filing and shall cooperate fully with Seller in seeking confidential treatment of sensitive terms of the Agreement or such information and data

 

E. Duration of Agreement . This Agreement shall remain in full force and effect until (1) Buyer’s Affiliated Airlines cease to operate at least one (1) aircraft powered by Products set forth herein, or (ii) less than five (5) aircraft powered by such Products are in commercial airline service, or (iii) the occurrence of a material breach of the obligations set forth in Article 11. Nothing herein shall affect the rights and obligations and limitations set forth in this Agreement as to Products delivered or ordered for delivery and work performed prior to termination of this Agreement.

 

F. Survival Of Certain Clauses . The rights and obligations of the Parties under the following Articles and related Exhibits shall survive the expiration, termination, completion or cancellation of this Agreement:

Payment for Products

Taxes and Duties

Patents

Data

Limitation of Liability

Governmental Authorization, Export Shipment

Miscellaneous

 

G. Language . This Agreement, orders, Data, notices, shipping invoices, correspondence and other writings furnished hereunder shall be in the English language.

 

H. Severability . The invalidity or unenforceability of any part of this Agreement, or the invalidity of its application to a specific situation or circumstance, shall not effect the validity of the remainder of this Agreement, or its application to other situations or circumstances. In addition, if a part of this Agreement becomes invalid, the Parties will endeavor in good faith to reach agreement on a replacement provision that will reflect, as nearly as possible, the intent of the original provision.

 

 

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I. Waiver . The waiver by any Party of any provision, condition, or requirement of this Agreement, shall not constitute a waiver of any subsequent obligation to comply with such provision, condition, or requirement.

 

J. Dispute Resolution . If any dispute arises relating to this Agreement, the Parties will endeavor to resolve the dispute amicably, including by designating senior managers who will meet and use commercially reasonable efforts to resolve any such dispute. If the Parties’ senior managers do not resolve the dispute within sixty (60) days of first written request, either party may request that the dispute be settled and finally determined by binding arbitration, in accordance with the Commercial Arbitration Rules of the American Arbitration Association in New York, New York, by one or more arbitrators appointed in accordance with the AAA Rules. The arbitrator(s) will have no authority to award punitive damages, attorney’s fees and related costs or any other damages not measured by the prevailing party’s actual damages, and may not, in any event, make any ruling, finding or award that does not conform to the terms and conditions of the Agreement and applicable law. The award of the arbitrator(s) will be final, binding and non-appealable, and judgment may be entered thereon in any court of competent jurisdiction. All statements made or materials produced in connection with this dispute resolution process and arbitration are confidential and will not be disclosed to any third party except as required by law or subpoena. The Parties intend that the dispute resolution process set forth in this Article will be their exclusive remedy for any dispute arising under or relating to this Agreement or its subject matter. Either party may at any time, without inconsistency with this Article, seek from a court of competent jurisdiction any equitable, interim, or provisional relief to avoid irreparable harm or injury. This Article will not apply to and will not bar litigation regarding claims related to a party’s proprietary or intellectual property rights, not will this Article be construed to modify or displace the ability of the Parties to effectuate any termination contemplated in this Agreement.

 

K. Electronic Transactions .

 

  (i) Seller may grant Buyer access to and use of the GE Customer Web Center (“ CWC ”) and/or other GE Web sites (collectively, “ GE Sites ”). Buyer agrees that such access and use shall be governed by the applicable GE Site Terms and Conditions, provided, however, that in the event of a conflict with the provisions of this Agreement, this Agreement shall govern.

 

  (ii) Seller may permit Buyer to place purchase orders for certain Products on the GE Sites by various electronic methods (“Electronic POs”). The Parties agree that such Electronic POs a) constitute legally valid, binding agreements; b) have the same force and effect as purchase orders placed in paper format signed by Buyer in ink; and c) are subject to the terms and conditions hereof.

 

  (iii) Seller may permit Buyer to access certain technical Data through the CWC, including, but not limited to GE technical publications under the terms and conditions of this Agreement. Buyer shall be responsible for contacting its Airworthiness Authority representative for guidelines on the use of such electronic technical data.

 

  (iv) Buyer represents and warrants that any employee or representative who (A) is identified in advance by Buyer or Buyer’s Affiliated Airlines as being authorized to do so and (B) obtains a login name(s) and password(s) through the GE Site registration process, is authorized by Buyer to place Electronic PO’s or access Data through the CWC. Seller shall be entitled to rely on the validity of a login name or password issued to any such person unless notified otherwise in writing by Buyer.

Counterparts : This Agreement may be signed by the Parties in separate counterparts, and any single counterpart or set of counterparts, when signed and delivered to the other Parties shall together constitute one and the same document and be an original Agreement for all purposes.

 

 

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IN WITNESS WHEREOF , the parties hereto have executed this Agreement as of the day and the year first above written.

 

ATLANTIC AIRCRAFT HOLDING, LTD.     GENERAL ELECTRIC COMPANY
By:   /s/ Joaquin A. Palomo     By:   /s/ Rex A. Williams
Typed Name:   Joaquin A. Palomo     Typed Name:   Rex A. Williams
Title:   Attorney-in-Fact     Title:   General Manager
        Business Ops
       
Date:   December 20, 2009     Date:   2/6/08
      GE ENGINE SERVICES DISTRIBUTION, LLC
      By:   /s/ Steven J. Shaknaitis
      Typed Name:   Steven J. Shaknaitis
      Title:   President
      Date:   Feb. 5, 2008

 

 

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EXHIBIT A

SECTION I - [*]

 

* [Three pages have been omitted in accordance with a request for confidential treatment.]

SECTION II - GENERAL CONDITIONS

 

A. Buyer’s Affiliated Airlines will maintain adequate operational and maintenance records and make these available for GE inspection at GE’s request.

 

B. GE will deny a claim under any of the Warranty provisions, and the Warranty provisions will not apply if it has been reasonably determined by GE that:

 

  (1) such claim resulted from the subject Engine, Module or any Parts thereof:

 

   

Not being properly installed or maintained; or

 

   

Being operated contrary to applicable GE recommendations as contained in its Manuals, Bulletins, or other written instructions; or

 

   

Being repaired or altered in such a way as to impair its safety of operation or efficiency; or

 

   

Being subjected to misuse, neglect or accident; or

 

   

Being subjected to Foreign Object Damage as opposed to Resultant Damage; or

 

   

Being subjected to any other defect (whether sole or contributory) not within the control of GE or its sub-contractors; or

 

   

Being the result of Buyer not incorporating all reliability service bulletins related to the cause or failure, unless an applicable service bulletin has not been incorporated either due to timing constraints ( i.e. , for purposes of this exclusion, Buyer shall not be deemed to have failed to incorporate in an Engine a reliability service bulletin unless it does not do so during the overhaul of the Engine next scheduled or occurring following adoption of the service bulletin) or for service bulletins that have been proven to create more failures than it solves.

 

  (2) the Engine, Module or any Parts thereof that are the subject of the claim:

 

   

Has/have been subjected to the control or use of another engine manufacturer; or

 

   

Has/have not been sold originally by GE to Buyer or installed on an Aircraft when delivered to Buyer, unless already covered by a warranty granted by GE to the original buyer and/or its assignees.

 

 

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C. [*].

 

D. [*].

 

E. [*]

 

F. The warranty applicable to a replacement Part provided under the terms of the New Engine Warranty or New Parts Warranty shall be the same as the warranty on the original Part. The unexpired portion of the applicable warranty will apply to Parts repaired under the terms of such warranty.

 

G. Buyer will cooperate with GE in the development of Engine operating practices, repair procedures, and the like with the objective of improving Engine operating costs.

 

H. If compensation becomes available to Buyer under more than one warranty or other Engine program consideration, Buyer will not receive duplicate compensation but will receive the compensation most beneficial to Buyer under a single warranty or other program consideration.

 

I. Any repair which is not in accordance with the appropriate engine manual or other applicable document transmitted by GE to Buyer or Buyer’s Affiliated Airlines will not be covered by the applicable warranty.

 

J. Transportation to and from repair facilities shall be paid by GE if the Failure causes the Engine shop visit.

 

 

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ATTACHMENT I

 

* [Two pages have been omitted in accordance with a request for confidential treatment.]

 

 

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EXHIBIT B

PRODUCT SUPPORT PLAN

SECTION I - SPARE PARTS PROVISIONING

 

A. Provisioning Data

 

  1. In connection with Buyer’s initial provisioning of spare Parts, GE or GE-LLC shall furnish Buyer with data in accordance with ATA Specification 2000 using a revision mutually agreed to in writing by GE and Buyer.

 

B. [*]

[*]

 

C. [*]

[*]

 

D. Parts of Modified Design

 

  1. GE-LLC shall have the right to make modifications to design or changes in the spare Parts sold to Buyer hereunder.

 

  2. GE-LLC will from time to time inform Buyer in accordance with the means set forth in ATA Specification 2000, when such spare Parts of modified design become available for shipment hereunder.

 

  3. [*]. In such event, Buyer may negotiate for the continued supply of spare Parts of the pre-modified design at a rate of delivery and price to be agreed upon.

 

E. [*]

SECTION II - TECHNICAL PUBLICATIONS AND DATA

[*]. Technical manuals shall be furnished by GE to Buyer in mutually agreed upon quantities. All technical manuals provided by GE shall be in the English language and in accordance with mutually agreed upon provisions of the ATA Specification.

SECTION III - TECHNICAL TRAINING

 

A. Introduction

GE shall make technical training available to Buyer, at GE’s designated facilities. Details on scope, quantity, materials, and planning shall be as specified below or, if not specified, as mutually agreed.

 

 

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B. Scope

The training furnished under this Agreement shall be as follows:

 

   

Product – as previously defined in this Agreement.

 

   

Quantity – 100 Student-Days* at no charge to Buyer for 1st aircraft delivered; 20 Student-Days at no charge to Buyer for each additional aircraft. Student-Days will be available to Buyer prior to delivery of any firm ordered Aircraft.

 

   

Courses – detailed in training catalog.

 

* Student-Days = the number of students multiplied by the number of class days

The Customer Support Manager, in conjunction with appropriate GE Training representatives, will be available to conduct a review session with Buyer to schedule required training. To assure training availability, such review shall be conducted six (6) to twelve (12) months prior to the delivery date of the first aircraft.

 

C. Training Location

Unless arranged otherwise with GE concurrence, training shall be provided by GE in English at one or more of the GE designated facilities identified in the training catalog.

If an alternate site is desired, GE will furnish a quotation with following minimum conditions that must be met in order to deliver “equivalent” training at the alternate site.

 

  1. Buyer will be responsible for providing acceptable classroom space and equipment including engines, special tools, and hand tools required to conduct the training.

 

  2. Buyer will pay GE’s travel and living charges for each GE instructor for each day, or fraction thereof, such instructor is away from GE’s designated facility, including travel time.

 

  3. Buyer will pay for round-trip transportation for GE’s instructors and shipment of training materials between the designated facility and such alternate training site.

 

D. Buyer Responsibility

During engine maintenance training at any of the GE designated facilities, Buyer shall be responsible for typical expenses such as:

 

   

Air and ground transportation expenses

 

   

Lodging (hotel accommodations)

 

   

Meals

 

   

All Medical – physicians, medication, emergencies, etc.

 

   

Other various and sundry expenses (visits to other businesses, entertainment, etc.).

Buyer will be responsible for shipping costs of training materials in all cases.

 

 

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SECTION IV - CUSTOMER SUPPORT AND SERVICE

 

A. Customer Support Manager

GE shall assign to Buyer at no charge, a Customer Support Manager located at GE’s factory to provide and coordinate appropriate liaison between the Buyer and GE’s factory personnel.

 

B. Field Support

GE shall make available to Buyer, at no charge, field service representation at Buyer’s facility. GE will provide the level of representation required to ensure that GE is able to expeditiously and accurately deliver data that is required to resolve technical issues.

GE will also assist with the introduction of new aircraft/Engines into Buyer’s fleet, resolution of unscheduled maintenance actions, product scrap approval, and rapid communication between Buyer’s maintenance base and GE’s factory personnel. Throughout the operation of these Engines, the Customer Support Center (“CSC”) and the Customer Web Center (“CWC”) will augment support at no additional charge to Buyer.

SECTION V - ENGINEERING SUPPORT

GE shall make factory based engineering support available, at no charge, to Buyer, for typical powerplant issues.

SECTION VI - PERFORMANCE TREND MONITORING

GE will also provide the standard diagnostics services set forth in Exhibit D.

SECTION VII - GENERAL CONDITIONS - PRODUCT SUPPORT PLAN

 

A. All support provided by GE above is provided to Buyer exclusively for the maintenance and overhaul of Buyer’s Products by Buyer and Buyer’s Affiliated Airlines, and may not be utilized for any other purpose, or assigned or otherwise transferred to any third party, without the written consent of GE, which consent shall not unreasonably be withheld or delayed. Technical support for shops offering engine maintenance and overhaul services to third party customers is available from GE directly.

 

B. Buyer will maintain adequate operational and maintenance records and make these available for GE inspection when requested.

 

C. This Product Support Plan is subject to the provisions of the Article titled “Limitation of Liability” of the Agreement to which this Exhibit B is attached.

 

D. Buyer will cooperate with GE in the development of Engine operating practices, repair procedures, and the like with the objective of improving Engine operating costs.

 

 

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E. Except as provided in the Warranty Pass-On provisions in Paragraph E of Exhibit A of the Agreement to which this Exhibit B is attached, this Product Support Plan applies only to the original purchaser of the Engine except that installed Engines supplied to Buyer through the aircraft manufacturer shall be considered as original Buyer purchases covered by this Product Support Plan.

 

 

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EXHIBIT C

PAYMENT TERMS

 

A. [*]

 

B. [*]

 

C. [*]

 

D. GE may establish different payment terms in the event Buyer consistently fails to make payment according to the terms set forth above.

 

E. [*]

 

 

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EXHIBIT D

STANDARD DIAGNOSTICS SERVICES

 

1. DIAGNOSTICS SERVICE ELEMENTS

[*]

 

2. BUYER’S RESPONSIBILITY UNDER THE DIAGNOSTICS PROGRAM

 

  A. Buyer (or Buyer’s operator by delegation of this responsibility) shall:

 

  1. Provide GE all information and records requested by GE that are reasonably necessary for GE to establish and provide the Service (including, but not limited to, avionics specifications, aircraft/engine maintenance history, engine configuration information, etc.). To the extent that such information and records are not owned by Buyer, Buyer represents and warrants that it has full authorization to disclose such information and records to GE and that GE has the right to use such information and records for all of the purposes that they are provided to GE by Buyer, including fulfilling GE’s obligations under this Agreement.

 

  2. Make available to GE data used in the monitoring and diagnostics of Engines eligible for coverage. Buyer will authorize Buyer’s air-to-ground service provider to forward the data directly to the GE SITA/ARINC address ILNGE7X. If air-to ground equipment is not available, GE will work with the Buyer to establish means such that the data is provided with minimal manual intervention.

 

  3. Access the Service via the GE Extranet. A web browser, an internet service provider and a userid/password (supplied by GE) is required. Such access shall be subject to the then-current GE Extranet Terms and Condition as provided on the GE Extranet site.

 

  4. It remains the sole responsibility of Buyer to conclusively identify and resolve aircraft and Engine faults or adverse trends and make all maintenance decisions affecting Buyer aircraft. GE and Buyer agree that this allocation of responsibility is reflected in the price of the Service.

 

  B. Buyer acknowledges that the Services performed hereunder may be conducted by GE affiliates outside of the U.S., and that there is no prohibition on GE’s export of Customer data for such purposes.

 

3. [*]

 

 

D-1

GE PROPRIETARY INFORMATION

(subject to restrictions on cover page)


GENERAL TERMS AGREEMENT NO. GE-1-1090789943

 

4. ASSIGNMENT

[*]. System access by a third party service provider pursuant to such authorization shall be limited to the features for data entry, plotting and configuration updates. In no event shall such third parties have access to other features of the system, including without limitation, real-time viewing, root-cause analysis, customized reporting or alarm configurations. In no event shall any such authorization by Buyer and agreement by the third party service provider increase, duplicate or expand GE’s obligations, liability or any available remedies hereunder.

 

 

D-2

GE PROPRIETARY INFORMATION

(subject to restrictions on cover page)

Exhibit 10.15

Note: Certain portions have been omitted from this Agreement in accordance with a request for confidential treatment submitted to the Securities and Exchange Commission. Omitted information has been replaced with an asterisk. Omitted information has been filed separately with the Securities and Exchange Commission.

 

LOGO

OnPoint sm Solutions

Rate Per Engine Flight Hour

ENGINE SERVICES AGREEMENT

BETWEEN

GE ENGINE SERVICES, INC.

AND

AVIANCA

CFM56-5B

Agreement Number: 1-271756304

Dated: January 18, 2008

This proposed Agreement will remain open until January 18, 2008 and will expire if not signed by all Parties on or before that date.

PROPRIETARY INFORMATION NOTICE

The information contained in this document is GE Engine Services, Inc. (“GE”) and AVIANCA Proprietary Information and is disclosed in confidence. It is the property of GE and AVIANCA and will not be used, disclosed to others or reproduced without their express written consent. If consent is given for reproduction in whole or in part, this notice and the notice set forth on each page of this document will appear in any such reproduction. U.S. export control laws may also control the information contained in this document. Unauthorized export or re-export is prohibited.

 

RATE PER EFH    GE and AVIANCA PROPRIETARY INFORMATION   

Subject to restrictions on the cover or first page

 

1


TABLE OF CONTENTS

 

Article No.

 

Topic

   Page
No.
 

1.

  Recitals      3   

2.

  Definitions      3   

3.

  Term      3   

4.

  Scope      3   

5.

  Equipment Covered      3   

6.

  Rate Per EFH Services      3   

7.

  Supplemental Work      7   

8.

  General Provisions      8   

9.

  Customer Responsibilities      9   

10.

  [*]      10   

11.

  [*]      10   

12.

  [*]      11   

13.

  Termination      11   

14.

  General Terms and Conditions      12   

Exhibit No.

 

Topic

   Page
No.
 

A.

  Definitions      14   

B.

  Equipment Covered      17   

C.

  Addition of Engines      20   

D.

  Removal of Engines      21   

E.

  Pricing      22   

F.

  On-Wing Support – Supplemental Work      28   

G.

  Line Replaceable Units      29   

H.

  Warranty      31   

I.

  General Terms & Conditions      32   

J.

  Warranty Assignment Letter      35   

 

RATE PER EFH    GE and AVIANCA PROPRIETARY INFORMATION   

Subject to restrictions on the cover or first page

2


OnPoint sm Solutions Engine Services Agreement

 

Article 1 – Recitals
1.1    Parties and Effective Date    THIS ENGINE SERVICES AGREEMENT is made as of this 10th day of January, 2008 by and between Aerovias del Continente Americano S.A. (AVIANCA), having its principal place of business at Centro Administrativo, Avenida El Dorado, Bogota, Colombia (“Customer”) and GE Engine Services, Inc., having its principal place of business at 1 Neumann Way, Cincinnati, Ohio 45215 (“GE” ) (either a “Party” or collectively, the “Parties” ).
Article 2 – Defined Terms
2.1    Definitions    See Exhibit A for terms not otherwise defined in this Agreement
Article 3 – Term
3.1    [*]    [*]
3.2    Exclusive Agreement    This Agreement, insofar as it relates to Services, including Supplemental Work, will be exclusive. Except as otherwise expressly provided in this Agreement, Customer will not enter into any other arrangement with a third party, including Customer’s or Customer’s affiliates’ shops, for such Services with respect to Customer’s Engines during the term hereof. If the Customer regains operational control and/or maintenance responsibility for a previously removed Engine, Customer will add such Engine to this Agreement.
Article 4 – Scope
4.1    Scope    The OnPoint Solutions program is a comprehensive engine maintenance program under which Services are performed by GE on Engines and priced on a rate per engine flight hour (hereinafter “Rate Per EFH” ) basis or, for Supplemental Work as described in Article 7, priced on a time and material or other pricing basis as set forth in Exhibit E . GE agrees to provide parts, materials and Service(s) to restore Equipment to Serviceable condition in accordance with the established Repair Specification, the Workscope and the terms of this Agreement.
Article 5 – Equipment Covered
5.1    Equipment Covered    Customer’s fleet of Engines covered under this Agreement as of the Effective Date are identified in Exhibit B , which may be amended from time to time to incorporate addition or removal of Engines from the Agreement. GE will provide rates (based on the methodology used for the Firm Aircraft) for any of the Purchase Right Aircraft, and Rolling Purchase Right Aircraft, if so requested by Customer. Customer then has the option to include these into this Agreement under such revised rates.
Article 6 – Rate Per EFH Services
6.1    [*]    [*]
6.2    [*]    [*]
6.3    Addition or Removal of Engines    [*] delivered new to Customer will be covered without the requirement for any Qualifying Shop Visit; only the impact on pricing must be agreed on by the parties. Customer may remove Engines from the Agreement in accordance with Exhibit D . GE has the right to adjust the Rate Per EFH for additions or removals of Engines as further described therein. [*]
6.4    [*]    [*]

 

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6.5    [*]    [*]
     

1.       Correct a deficiency known or suspected at that time or performance deterioration which has created an Unserviceable condition or to comply with an AD if such AD mandates compliance prior to the next scheduled shop visit per the Removal Schedule.

     

2.       If applicable, to install new LLP due to life expiration (unless the LLP installed at the last shop visit prior to the Effective Date did not conform to the minimum build requirement in the Repair Specification).

     

3.       A Minimum Build Standard of 12,000 cycles will be used for all shop visits.

6.6    Workscope and Repair Specification    Upon Induction of Engines, GE will prepare a preliminary Workscope and provide a copy of such Workscope to Customer. Such Workscope may include reliability and performance enhancements and Approved Aviation Authority approved repairs. GE may recommend amendment to the Repair Specification to include reliability and performance enhancements during the term hereof to improve Engine operating characteristics and incorporate OEM-approved repairs, subject to Customer’s comments and approval that will not be unreasonably withheld, conditioned or delayed, provided there is no cost or operational impact. The final Workscope must be approved in writing by Customer before restorative Services commence. Any changes or amendments to the Repair Specification will be mutually agreed by the Parties and may result in an adjustment in the pricing set forth in Exhibit E.
6.7    [*]   

[*]

 

3. Recommend, as appropriate, the replacement of a Delivered Engine with a Serviceable replacement Engine of like configuration and condition. In such case, title to the removed Engine will vest with GE and title to the replacement Engine will vest with Customer or the owner of the Delivered Engine, provided the terms of such replacement comply with any aircraft lease or mortgage applicable to such replaced Engine. Customer will make reasonable commercial efforts to facilitate such title passage.

 

4. Repair or replace LLP with LLP having at least as much remaining life, on a part by part basis, as the removed LLP.

 

5. Repair LRU’s received with an Engine for a Rate Per EFH Shop Visit and which were installed on the Engine when it was removed from the aircraft for Services, as evidenced by records provided in accordance with Article 9.9.

 

6. Comply with Airworthiness Directives (“ADs”), that are published as of the Effective Date and AD’s and Category 1 through 6 Service Bulletins that are required to be incorporated during the term of this Agreement regardless of the permitted compliance date. If an AD has an option of inspecting or making repairs, GE and Airline will mutually agree as to the proper course of action.

 

7. Provide all labor, materials and parts necessary to return Engine to a Serviceable condition where an Engine or module requires Services for, or as a result of, Major FOD, to a maximum amount for each Engine of the greater of any insurance deductible covering such Major FOD event or $500,000.00. The rate for this coverage is based upon the historical fleet average for this Engine line and is subject to adjustment for the actual FOD rate experienced by Customer during this Agreement.

 

8. Administer the support and repair services subcontract with Goodrich Aerostructures for the nacelles and thrust reversers for the fee plus any other fees charged by the vendor under the subcontract, which will be passed through from the vendor, listed in Exhibit E-1 . Customer has until September 30, 2008 to elect this coverage. Customer may elect to have this coverage cover only its owned Engines and not the Engines leased from C.I.T. as identified on Exhibit B . Should Customer elect this coverage it must also elect the Optional Line Replaceable Units coverage set forth on Exhibit G .

 

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4


     

9. Repair LRU’s identified in Exhibit G that are removed from an Engine at the flight line in accordance with the terms set forth in the Exhibit. Customer has until September 30, 2008 to elect coverage for the Optional Line Replaceable Units set forth on the Exhibit. Customer may elect to have this coverage cover only its owned Engines and not the Engines leased from C.I.T. as identified on Exhibit B .

6.8    [*]    [*]
6.9    Transportation    GE will be obligated for arranging and paying for the costs of roundtrip transportation from the location of Engine removal to the location of Engine installation specified by Customer, provided such costs do not exceed the costs of roundtrip transportation from Customer’s primary hub in BOG to the Designated Repair Station and from the Designated Repair Station to Customer’s primary hub in BOG for each Rate Per EFH Shop Visit and will provide all required maintenance services for such Engine’s transportation stands and containers while at GE’s facility. If such costs do exceed the costs of roundtrip transportation from Customer’s primary hub in BOG to the DRS, and return, Customer will be responsible for such excess cost.
6.10    Program Manager    Assign a Customer Program Manager who will:
     

1.       Be the point of contact for Customer with respect to Services.

     

2.       Draft a Procedures Manual to the extent required for the Customer’s Rate Per EFH Program, and submit such Procedures Manual for comments and joint approval.

     

3.       Develop with Customer, on a monthly basis, a Removal Schedule (“RS”) to forecast Delivery for Engines for Services. The RS will identify by serial number the Engine(s) to be removed during the following six (6) month period, the anticipated reason for removal of each and the schedule for Delivery. The forecast will be provided in a mutually agreeable format quarterly on a rolling annual basis.

6.11    Engineering Support    GE will provide the following engineering support services:
     

1.       Notify Customer of any deviations from the configuration specification of Engines Delivered for Service, and request resolution of same.

     

2.       Provide an Engine findings report (which may include photographs), identifying damage detected and repair(s) accomplished.

     

3.       Consultation on trend reports.

     

4.       Advice covering engine enhancements.

     

5.       GE will work with Customer in Inspection of records for used engines being considered by Customer for acquisition and shop visit development for return of leased engines, but Customer shall be solely responsible for making the final determination as to the quality of the used engines.

 

RATE PER EFH    GE and AVIANCA PROPRIETARY INFORMATION   

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5


6.12    [*]    [*]
6.12.1    [*]    [*]
6.12.2    Return of Lease Engines    Customer will ship the lease engine DDP ( Incoterms 2000 ) to a GE housekeeping facility as soon as practicable, but in no case later than ten (10) Days following Redelivery of an Engine. Daily engine rental fees and hourly restoration charges will be waived during such ten (10) day period. Customer will commence paying such applicable daily rental fees and hourly restoration charge on the eleventh (11th) day following correction of the AOG condition. The foregoing will constitute the sole remedy of Customer and the sole liability of GE for lease engine availability and resolution of AOG conditions under this Agreement.
6.13    Diagnostics   

Implement Comprehensive Diagnostics services (“Diagnostics”) to identify and diagnose trend shifts as follows:

 

•      [*]

 

Any information provided to Customer by GE for use in troubleshooting and managing operations is advisory only. GE is not responsible for line maintenance or other actions resulting from such advice. Customer is responsible for identifying and resolving any aircraft or Engine faults or adverse trends.

 

RATE PER EFH    GE and AVIANCA PROPRIETARY INFORMATION   

Subject to restrictions on the cover or first page

6


6.14    OnWing Support    Customer will have access to GE On-Wing Support Worldwide Network for scheduled, unscheduled, line or hospital shop maintenance Services not otherwise considered to be Rate Per EFH Services, up to a maximum of seven hundred and fifty (750) hours per year of the Agreement. Customer may carry over a maximum of fifty percent (50%) of unused hours from any one Agreement year the carry-over amount is not cumulative. Non-labor related expenses (travel time, shipping, materials, etc.) will be liquidated at $80/hr to calculate an equivalent OWS hour. Any excess OWS Services above the hours described above will be invoiced as Supplemental Work.
6.15    BER Engine    If an Engine is determined by GE to be BER, GE will offer either to repair such engine under applicable Rate Per EFH Rates or replace such Engine by substituting an engine of at least equivalent value, utility and marketability, in either case at no additional charge to Customer beyond the applicable Rate Per EFH Rates. If the latter option is selected by Customer, there will be no penalty charged under Exhibit C for the engine which is BER.
6.16    [*]    [*]
Article 7 – Supplemental Work
7.1    Supplemental Work    [*]
7.1.1    Supplemental Services   

1.      Any shop visit not described in the Rate Per EFH Program, including Services provided on Engines not eligible for Rate Per EFH Services;

 

2.      Services described in Article 6 of this Agreement will be Supplemental Work if GE and Customer have reasonably determined that Equipment requires Services for, or as a result of:

 

a.      An Aircraft Accident or Aircraft Incident;

 

b.      Major FOD above and beyond what is covered in Article 6.7 ;

 

c.      The incorporation of SBs not covered in Article 6.7

 

d.      An act of God, military action or terrorist activity;

 

e.      Improper or negligent installation, operation, removal or maintenance of Customer’s Equipment not in conformance with OEM manuals and experimental test applied to the Equipment, unless performed by GE;

 

f.       Failure of a non-OEM-approved LRU, part or repair;

 

g.      Engine upgrade programs or conversion to another thrust rating;

 

h.      Lease return conditions or sale of the Engine;

 

i.       Repair or replacement of BFE/QEC components;

 

j.       Damage caused by transport of Equipment by unapproved method, unless at GE’s direction or under GE’s control.

 

k.      Replacement of scrapped LRU’s, except as provided in Exhibit G .

 

3.      Cost of LLP material replaced for life expiration will be priced in accordance with the Supplemental Work pricing terms set forth in Exhibit E-5 through E-6.

 

4.      GE will provide, at Customer’s request, Supplemental Work on-wing Services at the rates set forth in Exhibit F.

 

RATE PER EFH    GE and AVIANCA PROPRIETARY INFORMATION   

Subject to restrictions on the cover or first page

7


     

5.      In the event that Customer decides to Deliver an Engine for Services not eligible for Rate per EFH Services against the advice and consent of GE’s Customer Program Manager or delegate, GE will treat such shop visit as Supplemental Work.

 

6.      Maintenance services for Engine transportation stands and containers during Supplemental Work shop visits are charged as Supplemental Work.

 

7.      For Engines undergoing a shop visit initiated by a requirement for Supplemental Work to be performed, restoration and parts replacement which would have been performed as Rate per EFH Services had the event or condition which initiated the requirement for Supplemental Work not occurred, will nevertheless be performed as Rate per EFH Services.

Article 8 – General Provisions
8.1    [*]    [*]
8.2    Documentation    GE will prepare and provide to Customer a Services records package that complies with AAA regulations.
8.3    [*]    [*]
8.4    Preparation for Redelivery    GE will prepare and package Equipment in shipping containers which Customer has provided for Redelivery in accordance with standard commercial practice.
8.5    Redelivery    After completion of Services, GE will Redeliver the Engine to Customer. In the event Redelivery of an Engine cannot occur due to any act or failure to act of Customer, GE may place such Engine into storage. In such event, GE will notify Customer of such storage, GE’s Redelivery obligations will be deemed fulfilled, all risk of loss or damage to the Equipment will thereupon pass to Customer, and any amounts payable to GE upon Redelivery will be payable upon presentation of GE’s invoice. Engines in storage will be considered available spare Engines for purposes of Article 6.12 above. Customer will reimburse GE for all expenses incurred by GE, such as, but not limited to, preparation for and placement into storage, handling, inspections, preservation and insurance of the Equipment. Upon payment of all amounts due hereunder, GE will assist and cooperate with Customer in the removal of Equipment placed in storage.
8.6    Parts Replacement Procedures   

8.6.1

   [*]    [*]

8.6.2

   [*]    [*]

8.6.3

   [*]    [*]

8.6.4

   [*]    [*]

8.6.5

   Customer Furnished Equipment (“CFE”)    For Supplemental Work only, Customer may supply parts to GE as CFE, if such parts are: (A) consistent with the approved Workscope; (B) provided with an AAA serviceability tag; and (C) ready for immediate use. Such CFE is subject to a material handling fee in accordance with Supplemental Work pricing in Exhibit E . If such CFE includes non-OEM parts, Customer will release GE from, and will indemnify and hold GE harmless from and against, any and all claims, liabilities, damages and losses of any nature whatsoever resulting from use of such CFE.

8.6.6

   [*]    [*]

8.6.7

   Scrapped Parts    GE will dispose of all Scrapped Parts at its sole expense and without any further adjustment to Customer. If the Services are being provided as Supplemental Work, Scrapped Parts will instead be retained for at least thirty (30) days pending Customer instruction for possible warranty claims.

 

RATE PER EFH    GE and AVIANCA PROPRIETARY INFORMATION   

Subject to restrictions on the cover or first page

8


8.7    Subcontracting    Except as provided in Section 6.8 regarding repair of Engines at GE’s facility in Brazil, GE has the right to subcontract any Services to any GE Repair Station or affiliate or any subcontractor selected by GE or GE’s affiliates, as long as such facility, affiliate or subcontractor is properly certified and rated by the AAA to perform the required Services. If GE does subcontract, the Customer obligations under this Agreement, including transportation expense, will be no greater than if such Services were performed at the DRS, Customer will, at its sole expense, have the right to review GE’s quality system audit report(s) for such subcontractor(s). Subcontracting of any Services will not relieve GE of its performance obligations set forth in this Agreement.
Article 9 – Customer Responsibilities
9.0    Customer Obligations    Customer will:
9.1    Qualifying Shop Visit    For Engines added under Exhibit C, Section 2, have a Qualifying Shop Visit performed on all used Engines added to this Agreement, unless waived by GE. All non-OEM approved parts or repairs will be removed at Customer’s expense prior to eligibility for Rate Per EFH Services.
9.2    Notice of Delivery    Provide three (3) Days advance written notice of Delivery of Equipment for scheduled removals prior to dispatch. Customer will not Deliver piece parts or components for repair separate from Customer’s Engine without GE’s written consent.
9.3    Customer Representative    Designate in writing one (1) or more Customer representative.
9.4    Removal Schedule    Prepare with GE’s Customer Program Manager, a forecast of operational and maintenance program schedules, fleet operational status, Engine/aircraft flight hours and cycles, scheduled Engine or Engine module removals, Engine sale or return, and any other relevant information to allow the Parties to formulate an RS.
9.5    Line Maintenance    Provide all line maintenance and repair and line station support, consistent with applicable maintenance manuals.
9.6    Troubleshooting    Troubleshoot Equipment in accordance with applicable maintenance manuals.
9.7    Pre-existing Warranties    Assure that any requested repair of an Engine, accessory or component that is covered under a third-party warranty that is not assigned to GE will be performed directly by that person at no expense to GE. Notwithstanding the above, GE may accept a purchase order for the time and material repair of a warranted item from Customer or the person giving the warranty.
9.8    Assignment of Warranties    Assign to GE all applicable Engine warranties and guarantees using the Warranty Assignment Letter attached hereto as Exhibit J . GE will arrange with CFM and Customer for assignment of warranties.
9.9    Engine Documentation    Provide to GE the information and records, set forth in the Procedures Manual, to establish the Engine condition. Customer’s failure to timely furnish the required information may cause delay of and records may delay Induction of the Engine for Service, may cause an Excusable Delay and may result in premature LLP replacement.
9.10    External Equipment Configuration    Provide to GE, or arrange for Airbus to provide to GE, an external Engine configuration specification.
9.11    Office Facilities    Ensure that adequate office space, parking, telephone, facsimile and computer connection is available for the GE representative(s), if assigned to the Customer’s facility.
9.12    [*]    [*]

 

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9.13   

Monitoring

Equipment

   Provide an automated method to transfer operational and maintenance data to GE for the monitoring and diagnosis of Engine condition. If the aircraft is equipped with air-to-ground equipment such as ACARS, the Customer will forward the data directly to the GE SITA/ARINC address. If air-ground equipment is not available, GE will work with Customer to establish an alternative electronic means of providing this data.
9.14    Packaging Equipment    Be obligated for all packaging, labeling and associated documentation of the Equipment at Delivery, in accordance with the International Civil Aviation Organizations (ICAO) Technical Instructions for the Safe Transport of Dangerous Goods by Air, and if the Equipment is to be transported over the United States of America, the US Department of Transportation Regulations 49 CFR 171-180. If required by applicable law or regulations, Customer will further provide a material safety data sheet to GE at Delivery of the Equipment indicating any substances contained within the Equipment to be consigned. Customer will indemnify, defend and hold harmless GE from all or any claims, liabilities, damages, judgments, costs, penalties, fines or any punitive damages imposed, alleged, or assessed by any third party against GE and caused by and to the extent of Customer’s non-compliance with this Article 9.14.
9.15    Shipping Stands    Provide all shipping stands, shipping containers, mounting adapters, inlet plugs and covers, required to package Equipment for Redelivery.
Article 10 – [*]
10.1    [*]    [*]
Article 11 – [*]
11.1   

[*]

 

Time of Shop Visit (“TSV”)

  

[*]

 

Customer will remit to GE, prior to Redelivery of each Engine, an amount equal to the actual EFH incurred by that Engine since delivery from manufacturer of the aircraft in which such Engine was originally installed (for a new installed Engine), or since delivery from manufacturer (for a new spare Engine), or since the last Rate Per EFH Shop Visit for that Engine, whichever occurred last, but no less than the monthly minimum set forth in Article 11.2 below, multiplied by the Current adjusted and escalated TSV Rate Per EFH. Such amount will be set forth in an invoice issued by GE to Customer at least ten (10) days prior to the expected Redelivery date. In the event that Customer causes such payment to be made on its behalf by a third party, and such third party fails to pay some or all of the payment due to GE, then Customer will make the payment, in whole or in part, to make up the amount not paid. In the event that such payment is not paid in full, GE is entitled to suspend its performance under this Agreement with respect to such Engine until such amount is paid in full.

11.2    [*]    [*]
11.3    Added Engines    For Engines added subsequent to the Effective Date, Customer will make Rate Per EFH payments in accordance with Article 11.1 for all EFH from the date such added Engines enter the Program.
11.4    Supplemental Work Payments   
11.4.1    Initial Invoice    [not used]
11.4.2    Final Invoice    [*]
11.5    Alternate Payment Terms    In the event Customer’s account becomes delinquent, GE reserves the right to require different terms of payment or other commercially acceptable assurances of payment.
11.6    [*]    [*].

 

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11.7    [*]    [*]
11.8       [not used]
11.9    Other Liens    Customer: (i) acknowledges that GE has the legal right to assert mechanic’s liens or other statutory or common law liens under applicable law (foreign or domestic) against Engines following performance of Services under this Agreement, for which payment has not been made by Customer and (ii) agrees to supply such information, including name and address of the owner of each Engine, as reasonably requested by GE to facilitate filing of such liens in New York or any other jurisdiction where Services may be performed. With respect to Engines leased by Customer, GE understands that Customer has been authorized and required by the owners to cause Services to be performed. GE may, at its option, notify the owners of the existence of this Agreement and GE’s lien rights arising from performance of Services.
11.10    Enforcement    If Customer fails to tender any payment owing under this Agreement and GE initiates foreclosure with respect to any Engine, for which payment has not been made, whether pursuant to a security interest granted under this Agreement or a mechanic’s lien, then Customer agrees to supply to GE all records, log books and other documentation pertaining to the maintenance condition of the Engine, and a certificate either (i) certifying that the Engine has not been involved in any Aircraft Accident or Incident or (ii) specifying the date and facts surrounding any accident or incident in which the Engine has been involved and the nature and extent of the damage sustained (such records, log books, certificate and other documentation referred to hereinafter as the “Engine Documents”). The Parties recognize that the failure by Customer to deliver the Engine Documents may have a material, adverse effect on the value of any Engine with respect to which foreclosure has been initiated by GE and the ability of GE to sell or lease the Engine, and that the damages GE may sustain as a result are not readily calculable.
Article 12 – [*]
12.1    [*]    [*]
12.2    [*]    [*]
Article 13 – Termination
13.1    Failure to Pay/Insolvency    GE may terminate or suspend performance of all or any portion of this Agreement if Customer: (A) fails to make any payments when due, unless cured within thirty (30) Days of such due date; (B) makes any agreement with creditors due to its inability to make timely payments of its debts; (C) enters into bankruptcy or liquidation, whether compulsory or voluntary; (D) becomes insolvent; or (E) becomes subject to the appointment of a receiver of the whole or material part of its assets. If such termination should occur, Customer will not be relieved of its payment obligation for Services rendered hereunder.
13.2    [*]    [*]

 

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13.3    Effect of Termination    Upon termination or upon expiration of the Agreement:
     

(A) All Customer Engine documentation, manuals and records shall be transferred to Customer at no cost to Customer, and

 

(B) The parties will cooperate reasonably and in good faith to accomplish the transition described above with no disruption to the operations of Customer or the maintenance of the Engines.

13.4    [*]    [*]
13.5    [*]    [*]
13.6   

Work in Process,

Redelivery of Customer Equipment

   Upon the termination or expiration of this Agreement, GE will complete all work in process in a diligent manner and Redeliver all Engines, parts and related documentation, provided that Customer (a) has paid in full all charges for all such Services and material, plus all costs and fees, incurred by GE in providing support, including any lease engines, and (b) has returned all lease engines provided under this Agreement.
Article 14 – General Terms and Conditions
   General Terms & Conditions    See Exhibit I for General Terms and Conditions.
Article 15    Insurance and Indemnity   
15.1    Liability Insurance    Throughout the Term and for a period of two (2) years thereafter, GE will maintain for the benefit of Customer commercial aviation liability insurance in an amount of not less than One Hundred Million Dollars ($100,000,000.00) combined single limit on an occurrence basis for bodily injury and property damage including contract liability and products liability on an aggregate basis coverage. GE will also maintain for the benefit of Customer throughout the Term aircraft all risk hull and spares insurance, including transit coverage. All insurance policies shall be primary without contribution from any insurance carried by Customer and shall name Customer as an Additional Insured with respect to GE’s indemnity obligations hereunder. All insurance policies will continue in full force and effect for at least thirty (30) days after Customer receives written notice of cancellation, termination or material alteration thereof. GE will obtain the insurance required by this Section from a financially sound insurance company of recognized responsibility and will furnish Customer with a certificate of insurance evidencing such coverage in compliance with this Agreement prior to the commencement of any Services and at least annually thereafter, as well as on request from Customer not more than twice per year.
15.2    [*]   

[*] Agreement has caused damage to tangible personal property or bodily injury (including death), if and to the extent that such damage or injury is proximately caused by the negligent or other legally culpable act or omission of GE. Customer shall furnish to GE prompt written notice and requisite authority, information and assistance to defend.

 

Customer agrees to indemnify, defend and hold GE harmless from claims by third parties asserted against GE that Customer’s possession, use, or maintenance of the aircraft or Engine (not attributable to GE) has caused damage to tangible personal property or bodily injury (including death), if and to the extent that such damage or injury is proximately caused by the negligent or other legally culpable act or omission of Customer and is determined by a court of competent jurisdiction to be the legal liability of Customer, provided that GE furnishes to Customer prompt written notice and requisite authority, information and assistance to defend.

15.3    Claims    Customer will promptly notify GE of any claim made or suit brought within the scope of Section 15.2 and GE may assume and conduct the defense of such claim and may effect any settlement which it deems proper, provided that no such settlement may result in any cost or penalty to Customer or require Customer to change or restrict its operations or maintenance functions or waive any rights hereunder.

 

RATE PER EFH    GE and AVIANCA PROPRIETARY INFORMATION   

Subject to restrictions on the cover or first page

12


The Parties have caused this Agreement to be executed by their duly authorized officer or representatives who represent to each other and both Parties that each is employed in the capacity indicated below and has the unequivocal authority to execute and deliver this Agreement, which shall be effective as of the date first above written.

This Agreement is executed by each of the Parties as of the day and year written below:

GE ENGINE SERVICES, INC.     Aerovias del Continente Americano S.A. ( AVIANCA)
BY:  

 

    BY:  

 

PRINTED NAME:  

 

    PRINTED NAME:  

 

TITLE:  

 

    TITLE:  

 

DATE:  

 

    DATE:  

 

 

RATE PER EFH    GE and AVIANCA PROPRIETARY INFORMATION   

Subject to restrictions on the cover or first page

13


EXHIBIT A – DEFINITIONS

Capitalized terms used but not otherwise defined in this Agreement will have the following meanings:

 

Agreement    This Rate Per EFH Engine Services Agreement, as the same may be amended or supplemented from time to time, including all its Exhibits and Schedules.
Aircraft Accident    An occurrence caused by the operation of an aircraft, and in which any person suffers a fatal injury or serious injury as a result of being in or upon the aircraft or by direct contact with the aircraft or anything attached to the aircraft, or in which the aircraft receives substantial damage or a third party’s property is damaged in any way.
Aircraft Incident    An occurrence, other than an Aircraft Accident, caused by the operation of an aircraft that affects or could affect the safety of operations and that is investigated and reported.
Airworthiness Directive or “AD”    A document issued by the Approved Aviation Authority having jurisdiction over the Engines, identifying an unsafe condition relating to such Engines and, as appropriate, prescribing inspections and the conditions and limitations, if any, under which the Engines may continue to operate.
Approved Aviation Authority or “AAA”    As applicable, the Federal Aviation Administration of the United States (“FAA”), or the Unidad Administrativo Especial de Aeronautica Civil (UAEAC) or such other equivalent aviation authority having jurisdiction over the Engines or the performance of Services provided hereunder.
Base Year    2006 is the calendar year in which the Base Price is applicable and which is the baseline year used for economic adjustments.
Beyond Economic Repair or “BER”    Where the cost to restore Equipment to the requirements of the Repair Specification, when calculated on a Supplemental Work basis, exceeds sixty-five percent (65%) of the fair market value of a comparable item of Serviceable Equipment.
CLP    The manufacturer’s Current catalog or manufacturer’s Current list price pertaining to a new item of Equipment.
Current    As of the time of the applicable Service or determination.
Day    Calendar day unless expressly stated otherwise. If performance is due on a recognized public holiday, performance will be postponed until the next business day without penalty.
Delivery    The arrival of Equipment together with all applicable records and required data Delivery Duty Paid (“DDP”) International Chamber of Commerce, Incoterms 2000, at the DRS, whereby Customer fulfills the obligations of seller and GE fulfills the obligations of buyer. “Deliver” means the act by which Customer accomplishes Delivery.
Designated Repair Station or “DRS”    The primary Repair Station designated by GE, where GE performs or is obligated to perform Services on Engines.
Dollars or “$”    The lawful currency of the United States of America.
Engine    Each bare engine assembly, which is the subject of this Agreement and identified in Exhibit B, including its essential LRU’s, controls, accessories and parts as described in the engine manufacturer’s specification manuals.
Engine Flight Cycle or EFC    A flight cycle of an Aircraft on which an Engine is installed from wheels up to wheels down
Engine Flight Hour or “EFH”    Engine flight hour expressed in hourly increments of aircraft flight from wheels up to wheels down.
Equipment    An individual or collective reference, in the proper context, to Engines, Engine modules, Engine assemblies and sub-assemblies, Engine mounted controls and accessories, LRU’s, and components and parts of any of the foregoing.
Foreign Object Damage or “FOD”    Damage to any portion of the Engine caused by impact with or ingestion of a non-Engine object such as birds, stones, hail, ice, vehicles, tools or debris. FOD may be further classified as a “Major FOD,” which means FOD that causes an out of limit condition per the Aircraft Maintenance Manual, and which, either immediately or over time, requires the Engine to be removed from service or prevents the reinstallation of the Engine.
Induction    The date work commences on the Equipment at the DRS when all of the following have taken place: (i) GE’s receipt of the Equipment and required data (ii) Parties’ approval of the Workscope (iii) Parties’ agreement on use of the Customer Furnished Equipment; and (iv) receiving inspection (including pre-testing if needed).
Life Limited Part or “LLP”    A part with a limitation on use established by the OEM or the AAA, stated in cumulative EFH or cycles.

 

RATE PER EFH    GE and AVIANCA PROPRIETARY INFORMATION   

Subject to restrictions on the cover or first page

14


Line Replaceable Unit or “LRU”    A major control or accessory that is mounted on the external portion of an Engine, which can be replaced while the Engine is on-wing.
OEM    The original manufacturer of an item of Equipment.
Overtime    All labor hours charged on a basis other than Straight Time.
Performance Restoration    The Services performed during an Engine shop visit in which, at a minimum, the compressor, combustor and high-pressure turbine are exposed and subsequently refurbished, consistent with the Repair Specification.
Procedures Manual    A separate document, not part of this Agreement, which provides detailed procedures and guidance for the administration of the Rate Per EFH Program. In case of conflict between the Procedures Manual and the Agreement, the Agreement will prevail.
Qualifying Shop Visit    A Repair Station visit during which the initial Performance Restoration is performed on an Engine on a Supplemental Work basis. The purpose of the Qualifying Shop Visit is to qualify such Engine for the Rate Per EFH fixed rate pricing for subsequent shop visits.
QEC or Quick Engine Change    An assembly of parts mounted on an Engine to enable the Engine to be installed on an aircraft.
Rate Per EFH    The Monthly Rate Per EFH and the TSV Rate Per EFH as set forth on Exhibit E-1.
Redelivery    The arrival at Customer’s facility of Serviceable Equipment with legally required certifications, Delivery Duty Paid (“DDP”), International Chamber of Commerce, Incoterms 2000, whereby Customer fulfills the obligations of buyer and GE fulfills the obligations of seller. “Redeliver” will also mean the act by which GE completes Redelivery.
Removal Schedule or “RS”    The schedule jointly developed by GE and Customer for scheduled or anticipated Engine removals for Services or scheduled or anticipated Engine removal from operation.
Repair Specification    The mutually agreed repair specification which establishes the baseline to which an Engine or item of Equipment will be inspected, disassembled, repaired, modified, reassembled and tested to make such Engine or item of Equipment Serviceable. Such Repair Specification will meet or exceed the recommendations of the OEM’s operational specifications, applicable OEM maintenance or overhaul manuals and Customer’s maintenance plan that has been approved by the AAA.
Repair Station    One or more of the repair facilities owned by GE or its affiliates, now or in the future, which are certified by the appropriate AAA to perform the applicable Service hereunder. A list of such repair facilities will be provided to Customer from time to time.
Repairable    Capable of being made Serviceable.
Rotable Part    A new or used Serviceable part drawn from a common pool of parts used to support one or more customers. A Rotable Part replaces a like part removed from an Engine when such removed part requires repair.
Scrapped Parts    Those parts determined by GE to be Unserviceable and BER.
Service(s)    With respect to any item of Equipment, all or any part of those maintenance, repair and overhaul services under this Agreement and the furnishing of parts, materials, labor, facilities, tooling, painting, plating and testing in connection therewith. “Serviced” will be construed accordingly.
Service Bulletin or “SB”    The document issued and identified as a Service Bulletin by an OEM to notify the operator of modifications, substitution of parts, special inspections, special checks, amendment of existing life limits or establishment of first time life limits, or conversion of an Engine from one model to another.
Serviceable    Meeting all OEM and AAA specified standards for airworthiness.
Straight Time    The labor hours charged during an employee’s regular workday that are not subject to overtime compensation in accordance with the applicable law, a collective bargaining agreement or the recognized practice at the relevant GE Repair Station.
Supplemental Work    Any Service provided hereunder that is not covered under the Rate Per EFH Program. Supplemental Work will be performed by GE and invoiced to Customer in accordance with the pricing set forth in Exhibit E
Termination    The ending of this Agreement before the expiration of the Initial Term or extension thereof.

 

RATE PER EFH    GE and AVIANCA PROPRIETARY INFORMATION   

Subject to restrictions on the cover or first page

15


Turn Around Time    The number of Days between Induction and when an Engine is ready to ship as evidenced by placement of the Serviceable Tag, exclusive of Excusable Delay as defined in Exhibit I.
Unserviceable    Not meeting all OEM and AAA specified standards for airworthiness.
Workscope    The document written by GE and approved by Customer describing the prescribed repair or approach to repair of Equipment to meet the requirements of the Repair Specification.
Workscope Planning Guide    The base document which provides an approach for incorporating an “on-condition” maintenance concept for the Engine with the goal of improving the Engine time between shop visits and reducing maintenance costs, while maintaining the reliability of the Engine in service.

 

RATE PER EFH    GE and AVIANCA PROPRIETARY INFORMATION   

Subject to restrictions on the cover or first page

16


EXHIBIT B: EQUIPMENT COVERED

Customer will maintain a spare Engine(s) to installed Engines ratio of not less than eight percent (8%), rounded up to the next whole Engine, during the term of this Agreement. However, GE will work with Customer if the rounding falls slightly less than 8%.

 

Count

  

ESN

  

Date of
delivery to
Customer

  

Time Since
New (TSN)

  

Cycles Since
New (CSN)

  

Time Since
Last Shop
Visit (TSLV)

  

Cycles Since
Last Shop
Visit (CSLV)

  

Date of last
Shop Visit

  

[*]

  

[*]

1

   xxx-xxx    02/01/2008    0    0    0    0    N/A      

2

   xxx-xxx    02/21/2008    0    0    0    0    N/A    CIT    [*]

3

   xxx-xxx    02/21/2008    0    0    0    0    N/A    CIT    [*]

4

   xxx-xxx    04/01/2008    0    0    0    0    N/A    CIT    [*]

5

   xxx-xxx    04/01/2008    0    0    0    0    N/A    CIT    [*]

6

   xxx-xxx    05/01/2008    0    0    0    0    N/A    CIT    [*]

7

   xxx-xxx    05/01/2008    0    0    0    0    N/A    CIT    [*]

8

   xxx-xxx    09/01/2008    0    0    0    0    N/A      

9

   xxx-xxx    09/01/2008    0    0    0    0    N/A      

10

   xxx-xxx    11/01/2008    0    0    0    0    N/A      

11

   xxx-xxx    11/01/2008    0    0    0    0    N/A      

12

   xxx-xxx    10/01/2008    0    0    0    0    N/A      

13

   xxx-xxx    10/01/2008    0    0    0    0    N/A      

14

   xxx-xxx    01/01/2009    0    0    0    0    N/A      

15

   xxx-xxx    08/01/2009    0    0    0    0    N/A      

16

   xxx-xxx    08/01/2009    0    0    0    0    N/A      

17

   xxx-xxx    09/01/2009    0    0    0    0    N/A      

18

   xxx-xxx    09/01/2009    0    0    0    0    N/A      

19

   xxx-xxx    10/01/2009    0    0    0    0    N/A      

20

   xxx-xxx    10/01/2009    0    0    0    0    N/A      

21

   xxx-xxx    01/01/2010    0    0    0    0    N/A      

22

   xxx-xxx    01/01/2010    0    0    0    0    N/A      

23

   xxx-xxx    01/01/2010    0    0    0    0    N/A      

24

   xxx-xxx    01/01/2010    0    0    0    0    N/A      

25

   xxx-xxx    02/01/2010    0    0    0    0    N/A      

26

   xxx-xxx    02/01/2010    0    0    0    0    N/A      

27

   xxx-xxx    02/01/2010    0    0    0    0    N/A      

28

   xxx-xxx    02/01/2010    0    0    0    0    N/A      

29

   xxx-xxx    04/01/2010    0    0    0    0    N/A      

30

   xxx-xxx    04/01/2010    0    0    0    0    N/A      

31

   xxx-xxx    04/01/2010    0    0    0    0    N/A      

32

   xxx-xxx    04/01/2010    0    0    0    0    N/A      

33

   xxx-xxx    05/01/2010    0    0    0    0    N/A      

34

   xxx-xxx    05/01/2010    0    0    0    0    N/A      

35

   xxx-xxx    05/01/2010    0    0    0    0    N/A      

36

   xxx-xxx    05/01/2010    0    0    0    0    N/A      

37

   xxx-xxx    05/01/2010    0    0    0    0    N/A      

38

   xxx-xxx    06/01/2010    0    0    0    0    N/A      

39

   xxx-xxx    06/01/2010    0    0    0    0    N/A      

40

   xxx-xxx    07/01/2010    0    0    0    0    N/A      

41

   xxx-xxx    07/01/2010    0    0    0    0    N/A      

42

   xxx-xxx    08/01/2010    0    0    0    0    N/A      

43

   xxx-xxx    08/01/2010    0    0    0    0    N/A      

 

RATE PER EFH    GE and AVIANCA PROPRIETARY INFORMATION   

Subject to restrictions on the cover or first page

17


44    xxx-xxx    10/01/2010    0    0    0    0    N/A      

45

   xxx-xxx    10/01/2010    0    0    0    0    N/A      

46

   xxx-xxx    11/01/2010    0    0    0    0    N/A      

47

   xxx-xxx    11/01/2010    0    0    0    0    N/A      

48

   xxx-xxx    11/01/2010    0    0    0    0    N/A      

49

   xxx-xxx    01/01/2011    0    0    0    0    N/A      

50

   xxx-xxx    01/01/2011    0    0    0    0    N/A      

51

   xxx-xxx    01/01/2011    0    0    0    0    N/A      

52

   xxx-xxx    01/01/2011    0    0    0    0    N/A      

53

   xxx-xxx    02/01/2011    0    0    0    0    N/A      

54

   xxx-xxx    02/01/2011    0    0    0    0    N/A      

55

   xxx-xxx    02/01/2011    0    0    0    0    N/A      

56

   xxx-xxx    02/01/2011    0    0    0    0    N/A      

57

   xxx-xxx    03/01/2011    0    0    0    0    N/A      

58

   xxx-xxx    03/01/2011    0    0    0    0    N/A      

59

   xxx-xxx    04/01/2011    0    0    0    0    N/A      

60

   xxx-xxx    04/01/2011    0    0    0    0    N/A      

61

   xxx-xxx    04/01/2011    0    0    0    0    N/A      

62

   xxx-xxx    04/01/2011    0    0    0    0    N/A      

63

   xxx-xxx    04/01/2011    0    0    0    0    N/A      

64

   xxx-xxx    05/01/2011    0    0    0    0    N/A      

65

   xxx-xxx    05/01/2011    0    0    0    0    N/A      

66

   xxx-xxx    07/01/2011    0    0    0    0    N/A      

67

   xxx-xxx    07/01/2011    0    0    0    0    N/A      

68

   xxx-xxx    08/01/2011    0    0    0    0    N/A      

69

   xxx-xxx    08/01/2011    0    0    0    0    N/A      

70

   xxx-xxx    09/01/2011    0    0    0    0    N/A      

71

   xxx-xxx    09/01/2011    0    0    0    0    N/A      

72

   xxx-xxx    09/01/2011    0    0    0    0    N/A      

73

   xxx-xxx    09/01/2011    0    0    0    0    N/A      

74

   xxx-xxx    10/01/2011    0    0    0    0    N/A      

75

   xxx-xxx    10/01/2011    0    0    0    0    N/A      

76

   xxx-xxx    10/01/2011    0    0    0    0    N/A      

77

   xxx-xxx    11/01/2011    0    0    0    0    N/A      

78

   xxx-xxx    11/01/2011    0    0    0    0    N/A      

79

   xxx-xxx    01/01/2012    0    0    0    0    N/A      

80

   xxx-xxx    01/01/2012    0    0    0    0    N/A      

81

   xxx-xxx    01/01/2012    0    0    0    0    N/A      

82

   xxx-xxx    02/01/2012    0    0    0    0    N/A      

83

   xxx-xxx    02/01/2012    0    0    0    0    N/A      

84

   xxx-xxx    03/01/2012    0    0    0    0    N/A      

85

   xxx-xxx    03/01/2012    0    0    0    0    N/A      

86

   xxx-xxx    04/01/2012    0    0    0    0    N/A      

87

   xxx-xxx    04/01/2012    0    0    0    0    N/A      

88

   xxx-xxx    05/01/2012    0    0    0    0    N/A      

89

   xxx-xxx    05/01/2012    0    0    0    0    N/A      

90

   xxx-xxx    06/01/2012    0    0    0    0    N/A      

91

   xxx-xxx    06/01/2012    0    0    0    0    N/A      

92

   xxx-xxx    06/01/2012    0    0    0    0    N/A      

93

   xxx-xxx    06/01/2012    0    0    0    0    N/A      

94

   xxx-xxx    07/01/2012    0    0    0    0    N/A      

95

   xxx-xxx    07/01/2012    0    0    0    0    N/A      

96

   xxx-xxx    07/01/2012    0    0    0    0    N/A      

97

   xxx-xxx    08/01/2012    0    0    0    0    N/A      

98

   xxx-xxx    08/01/2012    0    0    0    0    N/A      

99

   xxx-xxx    09/01/2012    0    0    0    0    N/A      

100

   xxx-xxx    09/01/2012    0    0    0    0    N/A      

101

   xxx-xxx    10/01/2012    0    0    0    0    N/A      

102

   xxx-xxx    10/01/2012    0    0    0    0    N/A      

103

   xxx-xxx    11/01/2012    0    0    0    0    N/A      

 

RATE PER EFH    GE and AVIANCA PROPRIETARY INFORMATION   

Subject to restrictions on the cover or first page

18


104    xxx-xxx    11/01/2012    0    0    0    0    N/A      

105

   xxx-xxx    12/01/2012    0    0    0    0    N/A      

106

   xxx-xxx    12/01/2012    0    0    0    0    N/A      

107

   xxx-xxx    12/01/2012    0    0    0    0    N/A      

108

   xxx-xxx    12/01/2012    0    0    0    0    N/A      

 

RATE PER EFH    GE and AVIANCA PROPRIETARY INFORMATION   

Subject to restrictions on the cover or first page

19


EXHIBIT C: ADDITION OF ENGINES

Section 1: For Engines that have not undergone an Engine shop visit (including New Engines)

New Engines are Engines that (a) have not undergone a shop visit, (b) have less than 100 EFH TSN and (c) which contain only OEM approved parts and OEM approved repairs. Such New Engines will enter the Rate Per EFH Program without requiring a Qualifying Shop Visit.

Process for Adding Engines

 

1. Customer will provide Engine serial number, aircraft tail number, previous operator, current owner, TSN, TSLV, CSN, CSLV, historic derate information together with such other reasonable data as GE may request (to the extent available) and thrust rating to be used for the added Engine(s).

 

2. GE will review all of the Engine data set forth above and will calculate the TSN to CSN ratio and take-off derate (assumed to be zero % if not provided) for such Engine.

 

3. The resulting TSN to CSN ratio (expressed as an EFH to cycle ratio) and take-off derate information will be compared to the Base point (in effect immediately prior to the date such Engine is added to the Rate Per EFH program) of the TSV Rate Per EFH Severity Matrix to determine the adjusted Rate Per EFH for such Engine. Such adjusted Rate Per EFH will be multiplied by the EFH incurred prior to the addition of the Engine into the Rate Per EFH program and paid by Customer to GE at the next Shop Visit.

 

4. The Parties will amend Exhibit B accordingly as mutually agreed.

Section 2: For Engines that have undergone a shop visit

Process for Adding Engines

 

1. Customer will provide Engine serial number, aircraft tail number, previous operator, current owner, TSN, TSLV, CSN, CSLV, historic derate information together with such other reasonable data as GE may request (to the extent available) and thrust rating to be used for the added Engine(s). Customer will provide additional reasonable information as requested.

 

2. Unless waived by GE based on an evaluation of operating parameters of the Engine being added and other business considerations, GE will perform or Customer will have performed at a GE approved repair facility a Qualifying Shop Visit.

 

3. The Parties will amend Exhibit B accordingly.

 

4. If an engine proposed to be added hereunder has had a heavy maintenance shop visit performed by a GE repair facility within one hundred hours prior to the proposed inclusion, it will be added without the requirement for any further Qualifying Shop Visit provided proper documentation and inspection (by GE) has occurred verifying that a Qualifying Shop Visit is not required.

Section 3 – [*]

[*]

 

RATE PER EFH    GE and AVIANCA PROPRIETARY INFORMATION   

Subject to restrictions on the cover or first page

20


EXHIBIT D: REMOVAL OF ENGINES

Section 1: All Engines – Conditions For Removal

Customer may remove Engines from this Agreement upon advance written notice, if Customer is no longer operating the Equipment and is no longer responsible for maintenance of the Equipment for the following reasons only:

 

1. Bona fide sale or other bona fide transfer to an unaffiliated third party

 

2. Return to Lessor;

 

3. If GE has reasonably determined the Engine to be BER.

[*]

Section 2: [*]

[*]

Section 3: [*]

[*]

Section 4: Rate Per EFH Adjustment – Remainder of the Fleet

GE will evaluate the effect of any Engine’s removal on the Rate Per EFH and the parties will agree on appropriate adjustments to such Rate Per EFH (and the Monthly Rate Per EFH payment) accordingly. Such adjusted Rate Per EFH and any adjusted Monthly Rate Per EFH will be mutually agreed between GE and Customer and thereafter will be incorporated into the Agreement by way of amendment. Such adjusted Rate Per EFH will take into consideration the effect of such removal on the fleet size, age and condition of the remaining Engines (for example, the nature and extent of the Services to be provided, Engine hardware configuration and number of repairs performed). Customer will pay the Rate Per EFH, as adjusted for such removal, for all EFH incurred by all Engines from the date of the Engine removal.

 

RATE PER EFH    GE and AVIANCA PROPRIETARY INFORMATION   

Subject to restrictions on the cover or first page

21


Exhibit E – PRICING (Unless otherwise stated herein, all rates and prices set forth in this Exhibit E are stated in 2006 U.S. Dollars)

E-1A. A320 RATE PER EFH

 

[*]    Rate Per EFH
   [*]
[*]   

E-2A. A320 Rate Per EFH Operating Parameters & Rate Adjustment (The Rate Per EFH is predicated on the parameters set forth below).

 

[*]    [*]    [*]    [*]    [*]
      [*]      

E-1B. [*]

 

[*]    Rate Per EFH
   [*]
[*]   

E-2B. A319 Rate Per EFH Operating Parameters & Rate Adjustment (The Rate Per EFH is predicated on the parameters set forth below).

 

Engines

Delivered in accordance with the Delivery Schedule set forth in Exhibit B

  

Utilization:

2843 Average EFH Per Year per Aircraft

   [*]    Take-Off Derate:

17 % at a thrust
rating of 23500 lbs

   LLP Minimum
Build:

12000 Cycles

      [*]      

The rate for Engines which incur flight hours while installed on both an A320 and an A319 will be apportioned according to the hours incurred at each thrust level.

[*]

E-3 [*]

[*]

 

RATE PER EFH    GE and AVIANCA PROPRIETARY INFORMATION   

Subject to restrictions on the cover or first page

22


Exhibit E-4 – Rate Per EFH Sensitivity Matrix – to be Provided by GE.

 

* [Two pages have been omitted in accordance with a request for confidential treatment.]

 

RATE PER EFH    GE and AVIANCA PROPRIETARY INFORMATION   

Subject to restrictions on the cover or first page

23


E- 5 [*]

[*]

 

RATE PER EFH    GE and AVIANCA PROPRIETARY INFORMATION   

Subject to restrictions on the cover or first page

24


Exhibit E- 6 – [*]

[*]

 

RATE PER EFH    GE and AVIANCA PROPRIETARY INFORMATION   

Subject to restrictions on the cover or first page

25


Exhibit E- 7 – [*]:

[*]

 

RATE PER EFH    GE and AVIANCA PROPRIETARY INFORMATION   

Subject to restrictions on the cover or first page

26


Exhibit E-8 – Service Credits

[*]

The above issued credits may only be applied by Customer towards the purchase of CFM56-5 initial provisioning equipment.

Such credit amounts are not subject to escalation and are subject to adjustment for any change in the operating parameters (including number and delivery dates of Engines) set forth above. However, if after purchasing the required amount of initial provisioning equipment, Avianca has not used all of the credits, the remaining credits may be used as a credit for any invoices issued by GE under this Agreement. Customer may carry over any unused credits issued in any year, however, all credits must be applied by the end of the term of this Agreement. For the avoidance of doubt, unused credit amounts outstanding at the end of the term of the Agreement will be canceled.

In addition, GE shall issue to Customer spare Engine Service credits, in the amounts set forth below:

[*].

 

RATE PER EFH    GE and AVIANCA PROPRIETARY INFORMATION   

Subject to restrictions on the cover or first page

27


EXHIBIT F – Supplemental Work ON-WING SUPPORT SM – FIELD SERVICE TECHNICAL AND REPAIR SUPPORT RATES)

GE On Wing Support, Inc., will provide on wing support technicians, along with special tooling, to perform flight-line services, on wing and off wing inspection, maintenance, and repair of Engines as specified in a mutually executed workorder by Customer. Such Engine support services may be provided, as designated by Customer and agreed by service provider at Customer’s facilities or at repair facilities owned by GE On Wing Support, Inc. or its affiliates. All Services provided shall be in accordance with its standard commercial quality control policies, procedures, and practices. A turn-time estimate for each workscope for acceptance by Customer prior to beginning of work will be provided.

FIXED WORKSCOPE PRICING

[*]

Other pricing applicable for Engine maintenance provided by GE On Wing Support, Inc

 

A. Workscope Pricing and Deployment

 

  1) If additional workscopes not listed in the fixed price workscope schedule are required, they will be priced and quoted prior to beginning of work. The fixed rate workscope schedule pricing covers all technician repair activity, preparation and deprep requiring normal manpower and tooling in normal work conditions. Reasonable additional charges may apply for unusual engine or work conditions.

[*]

 

B. Material and Subcontractor

GE On Wing Support, Inc. furnished material or subcontracted services required for repair of Customer’s equipment at the direction of Customer shall be charged at acquisition cost plus a ten percent (10%) fee.

 

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EXHIBIT G – LINE REPLACEABLE UNITS

[*]

 

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CFM56-5 LRU Components   

ATA Chapter

Electronic Control Unit    73-2
Hydromechanical Fuel Control    73-2
Fuel Pump    73-1
Fuel Return Valve    73-1
HPTCC Valve    75-2
Air Valve LPTACC Module    75-2
N2 Speed Sensor    77-1
IDG Oil Cooler    73-1
Transfer Gearbox    72-6
VSV Actuator    75-3
Bleed Valve Fuel (Hyd) Gear Motor    75-3
Fuel Flow Transmitter    73-3
Ignition Exciter    74-1
Master Ballscrew Actuator Assembly    75-3
Transient Bleed Air Valve    75-2
No. 1 Bearing Vibration Sensor    77-3
T12 Temperature Sensor    73-2
Lubrication Unit    79-2
Alternator stator    73-2
T25 Temperature Sensor (CIT)    73-2
Burner Modulating Valve    73-1
Ballscrew Actuator Assembly    75-3
Ignition Lead Assembly    74-2
Oil/Fuel Heat Exchanger    79-2
T5 Temperature Sensor    77-2
Oil Tank    79-1
Servo Fuel Heater    73-1
T3 Sensor Compressor Outlet Temperature    77-2
T495 Thermocouple Wiring Harness    77-2
Clogging Indicator Transmitter    79-2
HPTCC Thermocouple    73-2
Bleed Valve Stop Mechanism    75-3
Alternating Current Generator (Rotor)    73-2
Electrical Harness (Jx)    73-2
N1 Speed Sensor    77-1
Fuel Nozzles    73-1
Oil Temperature Sensor    79-3
P25 Sensor Assembly    72-0
Air Turbine Engine Starter    80-1
4.0 Inch Diameter Starter Valve Assembly    80-1

 

Optional Line Replaceable Units*    ATA Chapter
Integrated Drive Generator & Adapter    24-1
Hydraulic Pump    29-1
Valve-Bleed Press, Reg    36-1
HP Regulator Valve    36-1
Valve – I.P, Check    36-1

 

* Customer has until September 30, 2008 to elect coverage of these parts.

 

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EXHIBIT H – Warranty

H-1 – Rate Per EFH Services Warranty

[*]

H- 2 – Supplemental Work Warranty

[*]

H -3 – [*]

[*]

 

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EXHIBIT I GENERAL TERMS AND CONDITIONS

1.0 [*]

1.1 [*] .

[*]

Definition . For the purpose of this Article 1, the term “GE” is deemed to include GE and its parent and affiliated companies, the subcontractors and suppliers of any Services furnished hereunder, and the directors, officers, employees, agents and representatives of each.

2.0 EXCUSABLE DELAY

Excusable Delay . Either Party will be excused from, and will not be liable for, any delay in performance or failure to perform hereunder (except for the obligation to pay money or credit or debit an account which will not be excused hereunder), and will not be deemed to be in default for any delay in or failure of performance hereunder due to causes beyond its reasonable control. Such causes will be conclusively deemed to include, but not be limited to, acts of God, acts (or failure to act) of the other Party, acts (or failure to act) of civil or military authority, government priorities, fires, strikes, labor disputes, work stoppage, floods and other natural catastrophe(s), epidemics, war (declared or undeclared), riot, delays in transportation or inability to obtain on a timely basis necessary labor, materials or components. In the event of any such delay, the time of performance will be extended for a period equal to the time lost due to the delay.

2.2 Continuing Obligations . Section 2.1 will not, however, relieve either Party from using its commercially reasonable efforts to avoid or remove such causes of delay and continue performance with reasonable dispatch when such causes are removed. During the period of an excusable delay, GE will have the right to invoice Customer for Services performed, and Customer will pay all such invoices net thirty (30) Days.

2.3 Extended Delay Termination . If delay resulting from any of the foregoing causes extends for more than six (6) months and the Parties have not agreed upon a revised basis for continuing the Services, including any adjustment of the price, then either Party, upon thirty (30) Days written notice to the other, may terminate the performance of Services with respect to the Equipment for which Services were delayed.

3.0 NOTICES

3.1 Acknowledgment . All notices required or permitted under this Agreement will be in writing and will be delivered personally, via first class return receipt requested mail, by facsimile, by courier service, or by express mail, addressed as follows, or

to such other address as either Party may designate by notice to the other Party from time to time:

 

GE:    Customer:
GE Engine Services, Inc.   

Aerovias del

Continente Americano

S.A.

GE Address   

Centro Administrativo,

Avenida El Dorado,

Bogota, Colombia

Attn:   

Attn: Secretary

General, Elisa Murgas

de Moreno

Phone:   

Phone: (57) 1 457 8662

ext. 2522

Fax:                 Fax: (57) 1 4141 7523

Copy to: Senior

Counsel - GE Engine

Services Inc., MD F-

125, Cincinnati, Ohio

45215

  

3.2 Effect of Notices . Notices will be effective and will be deemed to have been given to (or “received by”) the recipient: (A) upon delivery, if sent by courier, express mail, or delivered personally; (B) on the next business day following receipt, if sent by facsimile; and (C) on the fifth (5th) day after posting (or on actual receipt, if earlier) in the case of a letter sent prepaid first class mail.

4.0 TAXES AND OTHER

4.1 Taxes, Duties or Charges . In addition to the price for the Services, Customer agrees to pay, upon demand (including a reasonably detailed accounting), all taxes (including, without limitation, sales, use, excise, turnover or value added taxes), duties, fees, charges or assessments of any nature (but excluding any taxes measured by the income or sales of GE or any such tax or substitution thereof) (“Taxes”) assessed or levied on the parts, materials or Services provided under this Agreement.

4.2 Right To Protest/Refund . If claim is made against GE for any such Taxes, GE will immediately notify Customer and, if requested by Customer, GE will not pay except under protest, and if payment be made, GE will use all reasonable efforts to obtain a refund thereof. If all or any part of any such Taxes be refunded, GE will repay to Customer such part thereof as Customer will have paid, together with any interest refunded. Customer will pay to GE, upon demand

 

 

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(including a reasonably detailed accounting), all expenses (including penalties, interest and attorney’s fees) incurred by GE in protesting payment and in endeavoring to obtain such refund.

4.3 Withholdings . All payments by Customer to GE under this Agreement will be free of all withholdings of any nature whatsoever except to the extent otherwise required by law, and if any such withholding is so required, Customer will pay an additional amount such that after the deduction of all amounts required to be withheld, the net amount received by GE will equal the amount that GE would have received if such withholding had not been required.

5.0 DISPUTE RESOLUTION, ARBITRATION

5.1 [ *]

5.2 Exception . Either party may at any time, without inconsistency with this Article, seek from a court of competent jurisdiction any equitable, interim, or provisional relief to avoid irreparable harm or injury. This Article will not apply to and will not bar litigation regarding claims related to a party’s proprietary or intellectual property rights, not will this Article be construed to modify or displace the ability of the Parties to effectuate any termination contemplated in Article 13 of the Agreement. In addition, Customer may obtain services from another vendor if GE fails or refuses to provide Services hereunder in a timely fashion for reasons other than Customer’s default under the Agreement.

6.0 NONDISCLOSURE OF PROPRIETARY DATA

6.1 General . Unless otherwise specifically agreed upon in a written proprietary information agreement, any knowledge or information which one Party has disclosed or may hereafter disclose to the other incident to the Service of Engines will be deemed to be confidential or proprietary information and, accordingly, shall not be disclosed without the prior written consent of the disclosing Party. However, if any proprietary information or data is disclosed or received under this Agreement, it may be disclosed for purposes of this Agreement, on a need to know basis, to the other Party’s: corporate parent, affiliate, or subsidiary (as presently or hereafter constituted) and their directors, officers, agents and employees; engineering service provider; or consultants provided that such entities, persons, service providers or consultant are subject to obligations of confidentiality substantially similar to the terms hereunder.

6.2 Non-Disclosure . The existence of this Agreement and its general purpose may not be stated to others by either of the Parties without approval from the other, except, that the terms of this Agreement and any knowledge or information which either Party may disclose to the other with respect to pricing, design, manufacture, sale, use, repair, overhaul or Service of Engines will be deemed to be proprietary information, and will be held in confidence. Such information will not be reproduced, used or

disclosed to others without the disclosing Party’s prior written consent, except to the extent required by government agencies and courts for official purposes. Disclosure to such government agencies and courts will be made only (a) upon thirty (30) Days advance written notice to the disclosing Party of such disclosure, so as to provide the disclosing Party the ability to obtain appropriate protective orders, and (b) with a suitable restrictive legend limiting further disclosure.

6.3 Exceptions . The preceding Section 6.2 will not apply to information which (a) is or becomes part of the general public knowledge or literature otherwise than as a result of breach of Customer’s obligations hereunder, or (b) was, as shown by written records, known to the non-disclosing Party prior to receipt from the disclosing Party, (c) is disclosed without restriction to the non-disclosing Party by a third party having the right to do so or (d) is required to be disclosed by law or court order, subject to the notice requirements set forth in Article 6.2.

6.4 Intellectual Property . Nothing contained in this Agreement will convey to either Party the right to use the trademarks of the other, or convey or grant to Customer any license under any patent owned or controlled by GE.

7.0 [*]

7.1 [*]

7.2 [*]

7.3 [*]

7.4 [*]

8.0 GENERAL PROVISIONS

8.1 [*]

8.2 Governing Law, Waiver of Immunity . The Agreement will be interpreted and applied in accordance with the substantive laws of the State of New York, without giving effect to its choice of law or conflict of law provisions, rules or procedures (except to the extent that the validity, perfection or creation of any lien or security interest hereunder and the exercise of rights or remedies with respect of such lien or security interest for a particular item of equipment are governed by the laws of a jurisdiction other than New York). With respect to any Customer who is incorporated or based outside the United States, to the extent that such Customer or any of its property becomes entitled at any time to any immunity on the grounds of sovereignty or otherwise from any legal action, suit or proceeding of any nature, Customer hereby irrevocably waives the application of such immunity and particularly, the U.S. Foreign Sovereign Immunities Act, 28 U.S.C. 1602, et. seq., insofar as such immunity relates to Customer’s rights and obligations in connection with this Agreement.

 

 

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8.3 Savings Clause . If any portion of this Agreement will be determined to be a violation of or contrary to any controlling law, rule or regulation issued by a court of competent jurisdiction, then that portion will be unenforceable in such jurisdiction. However, the balance of this Agreement will remain in full force and effect.

8.4 Beneficiaries . Except as herein expressly provided to the contrary, the provisions of this Agreement are for the Parties’ mutual benefit and not for the benefit of any third party.

8.5 Controlling Language . The English language will be used in the interpretation and performance of this Agreement. All correspondence and documentation arising out of or connected with this Agreement and any related purchase order(s), including Engine records and Engine logs, will be in the English language.

8.6 Non-Waiver of Rights and Remedies . Any failure or delay in the exercise of rights or remedies hereunder will not operate to waive or impair such rights or remedies. Any waiver given will not be construed to require future or further waivers.

8.7 Titles/Subtitles . The titles and subtitles given to the sections of the Agreement are for convenience. They do not limit or restrict the context of the article or section to which they relate.

8.8 Currency Judgment . This is an international transaction in which the specification of United States Dollars is of the essence. No payments required to be made under this Agreement will be discharged by payments in any currency other than United States Dollars, whether pursuant to a judgment, arbitration award or otherwise.

8.9 No Agency Fees . Customer represents and warrants that no officer, employee, representative or agent of Customer has been or will be paid a fee or otherwise has received or will receive any personal compensation or consideration by or from GE in connection with the obtaining, arranging or negotiation of this Agreement or other documents entered into or executed in connection herewith.

8.10 On-Site Representative . Subject to the following conditions, GE agrees to permit one Designated Representative, from time to time during the term of this Agreement, to enter onto its premises at the Designated Repair Station for the purpose of supporting the Services on Engines. GE will furnish such Designated Representative the use of a non-exclusive workspace, including the use of a local telephone line and parking accommodations. Costs incurred by such Designated Representative, including long distance telephone charges, fax or computer charges will be the responsibility of Customer, and if charged to GE in the first instance, will be invoiced to Customer.

8.11 No Agency . Nothing in this Agreement will be interpreted or construed to create a partnership, agency or joint venture between GE and Customer.

8.12 Entire Agreement . This Agreement, together with all Exhibits , contains and constitutes the entire understanding and agreement between the Parties hereto respecting the subject matter hereof, and supersedes and cancels all previous negotiations, agreements, representations and writings in connection herewith. This Agreement may not be released, discharged, abandoned, supplemented, modified or waived, in whole or in part, in any manner, orally or otherwise, except by a writing of concurrent or subsequent date signed and delivered by an authorized officer or representative of each of the Parties hereto making specific reference to this Agreement and the provisions hereof being released, discharged, abandoned, supplemented, modified or waived.

8.13 Counterparts . This Agreement may be executed in one or more counterparts, all of which counterparts will be treated as the same binding agreement, which will be effective as of the date set forth on the first page hereof, upon execution and delivery by each Party hereto to the other Party of one or more such counterparts.

8.14 Governmental Authorization . Customer will be the importer and/or exporter of record and will be responsible for timely obtaining any import license, export license, exchange permit or other required governmental authorization relating to the Equipment. At Customer’s request and expense, GE will assist Customer in its application for any required U.S. export licenses. GE will not be liable if any authorization is not renewed or is delayed, denied, revoked or restricted, and Customer will not thereby be relieved of its obligation to pay for Services performed by GE. All transported Equipment will be subject to the U.S. Export Administration Regulations and/or International Traffic in Arms Regulations. Customer agrees not to dispose of U.S. origin items provided by GE other than in and to the country of ultimate destination and/or as identified in an approved government license or authorization, except as said laws and regulations may permit.

8.15 Time. Time is of the essence with respect to the performance of each party’s obligations under this agreement.

 

 

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Exhibit J – Warranty and Guarantee Assignment Letter

(Customer Letterhead)

(Date)

(Name and Address of Original Engine Manufacturer)

Attn:

 

Re: Assignment of Third Party Warranty and Guarantees

Dear (Sir/Madam):

(Customer) and the (Original Engine Manufacturer) entered into Agreement Number              dated             , 20    , wherein (Customer) agreed to purchase a specified number of             aircraft engines and (Original Engine Manufacturer) agreed to provide certain warranties and guarantees with regard to said engines to (Customer).

(Customer) and GE Engine Services, Inc. have entered into a separate engine maintenance agreement Number              dated             20    , (“Maintenance Agreement”) for the maintenance, repair and overhaul of said engines. The Maintenance Agreement specifies that (Customer) shall, during the term of the Agreement, assign to GE Engine Services, Inc. the benefit of all warranties and certain guarantees applicable during the Term of the Agreement to the engines covered by the Maintenance Agreement only to the extent that they relate to the repair of the Engines. The guarantees to be assigned are: shop visit rate guarantee, exhaust gas temperature guarantee, extended new module and engine guarantee, extended ultimate life guarantee, extended campaign change guarantee, extended new parts guarantee, and vendor interface warranty.

This letter serves as official notification: 1) to (Original Engine Manufacturer) of Customer’s assignment of the applicable warranties and guarantees under the engine purchase agreement; and 2) to GE Engine Services, Inc. of (Customer)’s fulfillment of this obligation under the Maintenance Agreement.

(Original Engine Manufacturer), please indicate your concurrence with said assignment by signing in the space provided below and returning a copy of this letter to the undersigned.

(Signature Block)

 

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Exhibit 10.17

Note: Certain portions have been omitted from this Agreement in accordance with a request for confidential treatment submitted to the Securities and Exchange Commission. Omitted information has been replaced with an asterisk. Omitted information has been filed separately with the Securities and Exchange Commission.

 

LOGO

 

 

General

Terms

Agreement

No. CFM-1-2887169891

 

 

PROPRIETARY INFORMATION NOTICE The information contained in this document is Proprietary Information and is disclosed in confidence. It is the property of the parties and shall not be used, disclosed to others, or reproduced without the express written consent of both parties. If consent is given for reproduction in whole or in part, this notice and the notice set forth on each page of this document shall appear on any such reproduction. Export control laws may also control the information contained in this document. Unauthorized export or re-export is prohibited.


GENERAL TERMS AGREEMENT NO. CFM-1-2887169891

 

Table of Contents

 

  Agreement           
  SECTION I - DEFINITIONS   
  SECTION II - TERMS AND CONDITIONS   
  ARTICLE 1      -    PRODUCTS   
  ARTICLE 2      -    PRODUCT PRICES   
  ARTICLE 3      -    PRODUCT ORDER PLACEMENT   
  ARTICLE 4      -    DELIVERY, TITLE, TRANSPORTATION, RISK OF LOSS, PACKAGING OF PRODUCTS   
  ARTICLE 5      -    [*]   
  ARTICLE 6      -    TAXES AND DUTIES   
  ARTICLE 7      -    [*]   
  ARTICLE 8      -    EXCUSABLE DELAY   
  ARTICLE 9      -    [*]   
  ARTICLE 10      -    DATA   
  ARTICLE 11      -   

LIMITATION OF LIABILITY

  
  ARTICLE 12      -    GOVERNMENT AUTHORIZATION, EXPORT SHIPMENT   
  ARTICLE 13      -    PERSONAL DATA PROTECTION   
  ARTICLE 14      -    NOTICES   
  ARTICLE 15      -    MISCELLANEOUS   
  Exhibit A - [*]   
  SECTION I      -    [*]   
  SECTION II      -    GENERAL CONDITIONS   
  Exhibit B-1 - Product Support Plan for CFM56-5B Engines   
  SECTION I      -    SPARE PARTS PROVISIONING   
  SECTION II      -    [*]   
  SECTION III      -    [*]   
  SECTION IV      -    CUSTOMER SUPPORT AND SERVICE   
  SECTION V      -    ENGINEERING SUPPORT   
  SECTION VI      -    PERFORMANCE TREND MONITORING   
  SECTION VII      -    GENERAL CONDITIONS - PRODUCT SUPPORT PLAN   
  Exhibit B-2 - Product Support Plan for LEAP-1A Engines   
  SECTION I      -    SPARE PARTS PROVISIONING   
  SECTION II      -    TECHNICAL PUBLICATIONS AND DATA   
  SECTION III      -    TECHNICAL TRAINING   
  SECTION IV      -    CUSTOMER SUPPORT AND SERVICE   

 

 

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  SECTION V      -    ENGINEERING SUPPORT
  SECTION VI      -    PERFORMANCE TREND MONITORING
  SECTION VII      -    LEAP-1A CONTROLS AND ACCESSORIES SUPPLIERS SUPPORT
  SECTION VIII      -    GENERAL CONDITIONS - PRODUCT SUPPORT PLAN
  Exhibit C - [*]
  Exhibit D - [*]
  Exhibit E - Airline Affiliates List

[*]

 

 

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GENERAL TERMS AGREEMENT NO. CFM-1-2887169891

 

THIS GENERAL TERMS AGREEMENT NO. CFM-1-2887169891 (this “ Agreement ”), dated as of the 6 th day of February, 2013, by and between CFM International, Inc. (“ CFM ”),a corporation organized under the laws of the State of Delaware, U.S.A., and jointly owned by General Electric Company (“ GE ”) and Snecma (“ SNECMA ”) and AviancaTaca Holding S.A. , a company duly organized under the laws of Panama having a principal place of business at Av. Calle 26 No. 59-15, Bogotá D.C., Colombia (individually, a “ Party ”; collectively, the “ Parties ”).

WITNESSETH

WHEREAS , Airline has acquired, or is in the process of acquiring a certain number of aircraft equipped with installed Engines (as defined below), and

WHEREAS , CFM and Airline desire to enter into this Agreement to establish the terms and conditions governing the sale by CFM [*], and

NOW, THEREFORE , in consideration of the mutual covenants herein contained, the Parties agree as follows. Defined terms used in this Agreement shall have the meanings specified in Section I (“ Definitions ”) or as otherwise ascribed to them in this Agreement.

SECTION I - DEFINITIONS

These definitions shall apply for all purposes of this Agreement unless the context otherwise requires.

Aircraft ” means the aircraft on which the Engine(s) listed in the applicable Letter Agreement to this Agreement is (are) installed.

Agreement ” means this General Terms Agreement (together with all exhibits, Letter Agreements and attachments) between CFM and Airline.

Airline ” means AviancaTaca Holding, S.A. and its Airline Affiliates (as defined below). The term Airline also shall include the purchaser of new aircraft powered by the Engines who has purchased such Aircraft in a sale/ leaseback transaction for lease to and operation by AviancaTaca Holdings, S.A. or an Airline Affiliate.

Airline Affiliate ” means any legal entity that is a direct or indirect subsidiary or affiliate of Airline that (i) operates Engines and Spare Engines covered under this Agreement, (ii) is, and continues to be subject to the direct or indirect control of Airline by means of Airline or a subsidiary or affiliate of Airline holding an equity interest of at least 25% of the total equity in such legal entity, and (iii) for which Airline or a subsidiary or affiliate of Airline exercises management and operational control. If the national laws governing any such legal entity permit Airline to hold an equity interest that is less than 25% of the total equity in that legal entity, then such legal entity nonetheless will be considered an Airline affiliate if the maximum permitted equity is held by Airline and if the conditions set forth in subclauses (i) and (iii) above also are

 

 

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met. The list of Airline Affiliates at the time of signature of this Agreement is contained in Exhibit E. Any other legal entity that fulfills the requirements established in the current definition will be automatically considered an Airline Affiliate upon written notification from Airline to CFM provided, however, that CFM or its affiliates are not prohibited from doing business with such legal entity.

Airworthiness Directive ” means a requirement for the inspection, repair or modification of the Engine or any portion thereof as issued by the Federal Aviation Administration of the United States Department of Transportation (“ FAA ”) and/or the European Aviation Safety Agency (“ EASA ”), or an airworthiness authority of Columbia Costa Rica, El Salvador, Peru, or other nation that has regulatory authority over Engines operated by Airline or Airline Affiliate

ATA ” means the Air Transport Association of America.

AviancaTaca ” means AviancaTaca Holdings S.A.

Controls and Accessories ” means mechanical, electrical and/or hydraulic units mounted on the external portion of an Engine that are used to control the Engine’s operation or to monitor various Engine parameters. Examples include pumps, actuators, valves, sensors, electronic control units, and coolers. Controls and Accessories are those items contained in ATA groups 73, 74, 75, 77, 79 and 80.

Controls and Accessories Supplier ” means a manufacturer who supplies one or more Controls or Accessories to CFM for delivery on Engines and Spare Engines and thus is committed by means of that supplier relationship to provide to Airline the warranties set forth in Exhibit A, Paragraph F and the product support set forth in Exhibit B-2, Section VII.

Critical Influencing Parts ” means a part that has a direct or indirect influence on the boundary conditions used in the FAA and EASA-approved LLP life system model used to establish a given LLP’s Airworthiness Limitations.

Data ” means all information and data of any type, form or nature (including, but not limited to, designs, drawings, blueprints, tracings, plans, models, layouts, software, specifications, technical publications, electronic transmittals, customer website data and memoranda) which may be furnished or made available to or by Airline, or to or by CFM, directly or indirectly, as the result of this Agreement.

Engine ” means the FAA/EASA certified Engine(s) described in the applicable Letter Agreement(s) to this Agreement or covered under this Agreement pursuant to Article 7 hereof.

Expendable Parts ” means those Parts which must routinely be replaced during inspection, repair, or maintenance, whether or not such Parts have been damaged, and other Parts which are customarily replaced at each such inspection and maintenance period such as filter inserts and other short-lived items which are not dependent on wear out but replaced at predetermined intervals.

 

 

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Failed Parts ” means those Parts and Expendable Parts suffering a Failure, and including Parts suffering Resultant Damage.

Failure ” means the breakage of a Part, failure to function of a Part, or damage to a Part, rendering it not Serviceable and such breakage, failure, or damage is due to causes within CFM’s control including, but not limited to, a defect in design. Failure shall also include any defect in material or workmanship. Failure does not include any such breakage, malfunction or damage that is due to normal wear and tear.

Flight Cycle ” means the complete running of an Engine from start through any condition of flight and ending at Engine shutdown. A “touch and go landing” used during pilot training shall be considered as a “ Flight Cycle .”

Flight Hours ” means the cumulative number of airborne hours in operation of each Engine, computed from the time an aircraft leaves the ground until it touches the ground at the end of a flight.

Foreign Object Damage ” means any damage to an Engine caused by objects that are not part of the Engine and Engine optional equipment.

Labor Allowance ” means a CFM credit calculated by multiplying the established labor rate by man-hours allowed for disassembly, reassembly (when applicable), and for Parts repair. If a Labor Allowance is granted for a repair, it shall not exceed the credit that would have been quoted if the Part had not been repairable. The established labor rate means either (a) the then current labor rate mutually agreed between CFM and Airline if the work has been performed by Airline, or (b) the then current labor rate agreed between CFM and the third party repair and overhaul shop if the work has been performed by such repair and overhaul shop.

LIBOR Rate ” shall have the meaning as defined in Exhibit C hereto.

Module ” means a major sub-assembly of any of the Engines described in the applicable Letter Agreements or covered under this Agreement pursuant to Article 7 hereof.

Part ” means only those FAA/EASA certified Engine and Engine Module Parts which have been sold originally to Airline or any Airline Affiliate by CFM or a CFM approved supplier for commercial use. The term excludes parts that were furnished on new Engines and Modules but are procured directly from suppliers. Such parts are covered by the supplier warranty and the CFM “Supplier Warranty Back Up”. Expendable Parts and customary short-lived items such as igniters and filter inserts also are excluded.

Parts Credit Allowance ” means the credit granted by CFM to Airline, in connection with either a CFM-declared campaign change, service bulletin industry support, commitment letter or the Failure of a Part, based on the price of a replacement Part at the time the Part is removed. This credit may take the form of a replacement Part at CFM’s option.

Part Cycles ” means the total number of Flight Cycles accumulated by a Part.

 

 

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Parts Repair ” means the CFM recommended rework or restoration of Failed Parts to a Serviceable condition.

Part Time ” means the total number of Flight Hours accumulated by a Part.

Performance Restoration Shop Visit ” A shop visit in which, at a minimum, the combustor and high-pressure turbine are exposed and subsequently refurbished.

Product ” means Spare Engines, Modules, Parts, related optional equipment, technical data and other products offered for sale by CFM from time to time.

Purchase Right Aircraft ” means the twenty-one (21) A320neo aircraft for which AviancaTaca has been granted purchase rights by Airbus Industries.

Resultant Damage ” means the damage suffered by a Part in warranty because of a Failure of another Part or Expendable Part within the same Engine, provided the Part or Expendable Part causing the damage was in warranty.

Serviceable ” when used to describe an Engine or Part, means in an airworthy condition within the limits defined in the applicable Engine manuals, specification and/or publications by the type certificate holder.

Scrapped Parts ” means those Parts determined to be un-Serviceable and not repairable by virtue of reliability, performance or repair costs. Airline may be required to submit scrap tags or other documented evidence for such Parts. Such Parts shall be destroyed and disposed of by Airline unless requested by CFM for engineering analysis or otherwise dispositioned, in which event CFM shall be responsible for all handling and shipping expense to return to CFM the relevant requested Parts.

Spare Engine ” means an Engine acquired in support of Airline’s fleet of Aircraft for use as a spare Engine when another Engine in such fleet is unavailable due to damage or is otherwise being repaired or serviced. A Spare Engine shall be delivered with the features further specified in Attachment I-A.

Ultimate Life ” of a Part means the approved limitation on use of a Part, in cumulative Flight Hours or Flight Cycles, which a U.S. government authority establishes as the maximum period of allowed operational time for such Parts in Airline service when the rotating and the Critical Influencing Parts are operated in a CFM approved configuration and maintained in accordance with applicable manuals and regulations.

 

 

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SECTION II - TERMS AND CONDITIONS

ARTICLE 1 - PRODUCTS

 

A. [*]

 

B. [*]

Such CFM Repurchase Offer shall not apply to any sale of a Spare Engine intended to secure sale/leaseback financing in connection therewith, provided that Airline or an Airline Affiliate is thereafter the sole operator. If CFM declines to exercise the CFM Repurchase Offer, or if CFM fails to give notice of its decision to submit a CFM Repurchase Offer within the ten-day period or if CFM timely submits a Repurchase Offer but the offer of CFM is not accepted by Airline, or if the parties do not enter into for any reason an acceptable purchase agreement within five (5) days after such CFM Repurchase Offer is received by Airline, then Airline may thereafter choose to sell the Spare Engine to any third party that is an airline, other aircraft operator, or entity whose primary business is the lease of aircraft or aircraft engines. For the avoidance of doubt, such permitted third party purchaser may not be an entity whose primary business is the acquisition of the Spare Engine for brokerage to third parties or for purposes of disassembly and sale of spare parts therefrom.

ARTICLE 2 - PRODUCT PRICES

 

A. In General . The selling price of Products which are not specifically and separately quoted to Airline will be the respective prices which are quoted in the Spare Parts Price Catalog, as revised from time to time (the “ Spare Parts Catalog ” or “ Catalog ”) or in CFM’s written quotation or proposal from time to time and confirmed in a Letter Agreement for the purchase of Spare Engines or in a valid purchase order placed by Airline. CFM shall quote such prices in U.S. Dollars and Airline shall pay for Products in U.S. Dollars. All Product prices include the cost of CFM’s standard tests, inspection and commercial packaging, and in the case of Engines, shipping stands, containers and engine covers. Transportation costs and costs resulting from special inspection, packaging, testing or other special requirements, requested by Airline, will be paid for by Airline. CFM will advise Airline in writing ninety (90) days in advance of any changes in prices affecting the prices in the Catalog. During such ninety (90) day period, CFM shall not be obligated to accept Airline purchase orders for quantities of spare Parts in excess of up to ninety (90) days of Airline’s normal usage beyond the effective date of the announced price change. When Airline requests Delivery of Products that is less than the turn around time quoted in the Spared Parts Price Catalog, reasonable expedite fees may apply.

 

B. Spare Engines . Spare Engine prices will be as set forth in the applicable Letter Agreement to this Agreement, subject to escalation using the appropriate CFM Engine escalation provisions then in effect as provided in such Letter Agreement. The appropriate CFM escalation provisions will be set forth in each applicable Letter Agreement to this Agreement. If CFM is late in delivering a Spare Engine (whether or not due to Excusable Delay), the Spare Engine price shall not escalate beyond the originally scheduled delivery date.

 

 

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ARTICLE 3 - PRODUCT ORDER PLACEMENT

 

A. The terms and conditions set forth herein shall constitute the terms and conditions applicable to all purchase orders for Products placed by Airline and are in lieu of and shall supersede all printed terms and conditions appearing on Airline’s purchase orders or CFM’s standard Product terms of sale or acceptance or other acknowledgment form.

 

B. Airline shall place purchase orders for Products and CFM’s acknowledgment of each purchase order shall constitute acceptance thereof. CFM shall supply Products under each purchase order placed by Airline consistent with CFM standard lead times unless otherwise agreed by the parties.

ARTICLE 4 - DELIVERY, TITLE, TRANSPORTATION, RISK OF LOSS, PACKAGING OF PRODUCTS

 

A. Shipment of Products shall be from CFM’s facility in Evendale, Ohio, Peebles, Ohio, Erlanger, Kentucky, or point of manufacture, or other facility in a nation other than the United States at CFM’s option.

 

B. Delivery of all Products shall be as follows (hereinafter, “ Delivery ”):

 

  (i) [*]

 

  (ii) [*]

CFM shall bear the risk of loss of Products until delivered to the Delivery location described above. Upon Delivery, title to Products as well as risk of loss thereof or damage thereto shall pass to Airline. Airline shall be responsible for all risk and expense in obtaining any required licenses and carrying out all customs formalities for the importation of goods into Colombia. CFM shall be responsible for all risk and expense in obtaining any required licenses and carryout of all customs formalities for the export of goods hereunder imposed by all other jurisdictions and in accordance with the Article titled “Government Authorization” of this Agreement.

 

C. CFM shall arrange and pay for transportation of such Products from the point of shipment described in Paragraph A of this Article until Delivery in accordance with Paragraph B of this Article.

 

D.

Notwithstanding that Delivery of Products shall be as set forth in Paragraph B of this Article, Airline shall arrange for transportation of such Products from the point of shipment described in Paragraph A of this Article until Delivery in accordance with Paragraph B of this Article. CFM agrees to timely contact Airline’s freight forwarder prior to shipment in order to facilitate the transportation activity. For shipment of major items such as spare Engines which (i) require that the ground transportation carrier enter CFM’s facilities and

 

 

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  (ii) necessitate CFM’s assistance in placing such Products into the hands of the carrier, CFM agrees to contact the carrier directly to arrange the carrier’s scheduled arrival at CFM’s facility. Also, CFM agrees, unless otherwise directed by Airline or Airline’s freight forwarder, to select a carrier who will act as Airline’s agent to transport Products on the initial leg of ground transportation.

 

E. Unless otherwise instructed by Airline, CFM shall ship each Product packaged in accordance with wood packaging certification according to the FAO’s Phytosanitary International Standards (NIMF15 Regulation. More info at www.fao.org). Any penalty / fee, delay or repackaging required as a result of not meeting this international standard will be responsibility of CFM unless packaging is changed for whatever reason by third parties for shipment. Any special boxing or preparation, different than ATA 3000, for shipment specified by Airline shall be for Airline’s account and responsibility.

 

F. Spare Parts purchase orders, excluding Initial Provisioning, may be terminated without penalty if notice is provided greater than the individual Spare Part lead time listed in the spare Parts catalog.

ARTICLE 5 - [*]

[*]

 

 

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ARTICLE 6 - TAXES AND DUTIES

Unless otherwise specified in this Agreement, CFM shall be responsible for and pay directly all corporate and individual taxes measured by income or profit imposed by any governmental authority on CFM, its employees or subcontractors in any way connected with this Agreement (“ CFM Taxes ”). Airline shall be responsible for and pay directly when due and payable all taxes, duties, fees, or other charges of any nature (including, but not limited to, ad valorem, consumption, excise, franchise, import, license, property, sales, stamp, storage, transfer, turnover, use, or value-added taxes, and any and all items of withholding, deficiency, penalty, addition to tax, interest, or assessment related thereto), other than CFM Taxes, imposed by any governmental authority in Colombia, Costa Rica, El Salvador, Peru or any other nation to which Airline specifies delivery on CFM or its employees or subcontractors in any way connected with this Agreement (“ Airline Taxes ”). All payments due and payable to CFM by Airline under this Agreement shall be made without deduction or withholding for Airline Taxes, except that if Airline shall be required by law to deduct or withhold any Airline Taxes from or in respect of any amount payable by it to CFM hereunder, the amount payable by Airline shall be increased by such amount as may be necessary so that after making all required deductions or withholdings (including deductions or withholdings with respect to any additional amounts payable pursuant to this sentence), CFM receives the same amount that it would have received if no such deduction or withholding had been made. If CFM is nevertheless required to pay Airline Taxes, Airline shall, within 30 days of CFM’s invoice for the Airline Taxes, reimburse CFM for the Airline Taxes. Airline shall provide to CFM on a timely basis accurate official receipts for deducted or withheld taxes. All rights to drawback of customs duties paid by CFM to the customs authorities of the country of manufacture of any products shall belong to CFM. Airline agrees to cooperate with CFM to obtain a drawback.

ARTICLE 7 - [*]

[*]

ARTICLE 8 - EXCUSABLE DELAY

Neither Party shall be liable or in breach of its obligations under this Agreement to the extent performance of such obligations is delayed or prevented, directly or indirectly, by causes beyond its reasonable control and without its fault or negligence, including acts of God, fire, terrorism, war (declared or undeclared), severe weather conditions, earthquakes, epidemics, material shortages, insurrection, acts or omissions of Airline or Airline’s suppliers or agents, any act or omission by any governmental authority, strikes, labor disputes, acts or threats of vandalism or terrorism (including disruption of technology resources), transportation shortages, or vendor’s failure to perform (each, an “ Excusable Delay ”). The delivery or performance date shall be extended for a period equal to the time lost by reason of delay, including time to overcome the effect of the delay. The Party experiencing Excusable Delay shall use reasonable efforts to continue performance whenever such causes are removed. In the event an Excusable Delay continues for a period of six (6) months or more beyond the scheduled delivery or performance date, the non-delayed Party may, upon sixty (60) days written notice to the other, cancel the part of this Agreement so delayed and CFM shall return to Airline all payments relative to the canceled part of this Agreement.

 

 

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ARTICLE 9 - [*]

 

A. [*]

 

B. [*]

 

C. [*]

The obligations recited in this Article shall constitute the sole and exclusive liability of CFM to Airline and Airline Affiliates for actual or alleged patent infringement.

ARTICLE 10 - DATA

 

A. All Data is proprietary to and shall remain the property of the Party disclosing it. All Data is provided to or disclosed to the relevant Party in confidence, and shall neither (1) be used by the other Party or be furnished by the other Party to any other person, firm or corporation for the design or manufacture or repair of any products, articles, compositions of matter, or processes, nor (2) be permitted out of the other Party’s possession, or divulged to any other person, firm or corporation, nor (3) shall Airline use CFM’s Data in the creation, manufacture, development, or derivation of any repairs, modifications, spare parts, designs or configuration changes, or to obtain FAA or any other government or regulatory approval of any of the foregoing, nor (4) be used to train non-affiliated third parties. CFM Data shall not be used for the maintenance, repair, or assessment of continued airworthiness of any Products not supplied or covered under this Agreement. If the disclosing Party’s written consent is given for reproduction in whole or in part, any existing notice or legend shall appear in any such reproduction. Nothing in this Agreement shall preclude Airline from using such Data for the repair, overhaul, or maintenance work performed by Airline or its service providers on Products purchased by Airline.

 

B. CFM warrants that it either owns or will secure the right for Airline to use, as set forth in this Paragraph, software delivered as part of an Engine by CFM to Airline under this Agreement. CFM agrees to provide to Airline, as part of the delivered Engines, a copy of all software, in machine readable (object code) format, necessary solely for the operation of Engines provided under this Agreement. Upon execution of service agreements between CFM and Airline with respect to the Engines, CFM also will deliver its machine readable (object code) format software relating to the line maintenance by Airline of the Engines. CFM will provide to Airline and Airline agrees to accept and execute all necessary license agreements, if any, that are required to memorialize such rights to use such software. Airline agrees that it shall have no rights to sublicense, decompile or modify any software provided by CFM without the prior express written consent of the owner of such software. CFM agrees to use reasonable efforts upon Airline’s request to obtain such consent. Airline shall be solely responsible for negotiating any licenses necessary to secure for Airline any additional rights in any software.

 

C. Airline shall establish, maintain and follow a “Technical Data Control Plan” for ensuring that proprietary Data is used solely for the operation and maintenance of Engines acquired under this Agreement. If CFM becomes aware of circumstances that cause CFM to be concerned regarding Airline’s compliance with the Technical Data Control Plan, CFM will notify Airline of the concern and Airline and CFM together will address the matter in a manner satisfactory to CFM, acting in good faith.

 

 

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ARTICLE 11 - LIMITATION OF LIABILITY

The liability of CFM to Airline arising out of, connected with, or resulting from the manufacture, design, sale, possession, use or handling of any Product (including Engines installed on Airline’s owned or leased Aircraft as original equipment and Engines obtained, acquired, leased or operated before or after the execution of the Agreement) or furnishing of services, whether in contract, tort (including, without limitation, negligence, but excluding willful misconduct or gross negligence) or otherwise, shall be as set forth in this Agreement or in Exhibit A or B or in the applicable Letter Agreements to the Agreement and shall not, except as otherwise set forth in this Agreement or in the applicable Letter Agreement to this Agreement, in any event exceed the purchase price (or in the absence of a purchase price, the fair market value) of the Engine, service, Product or other thing giving rise to Airline’s claim. The foregoing shall constitute the sole remedy of Airline and the sole liability of CFM. In no event shall Airline, any Airline Affiliate or CFM be liable for incidental, punitive, special, indirect or consequential damages, including but not limited to, damage to, or loss of use, revenue or profit with respect to any Aircraft, Engine, Part or Product. THE WARRANTIES AND GUARANTEES SET FORTH IN EXHIBIT A AND ANY APPLICABLE LETTER AGREEMENTS ARE EXCLUSIVE AND IN LIEU OF ALL OTHER WARRANTIES AND GUARANTEES WHETHER WRITTEN, STATUTORY, ORAL, OR IMPLIED (INCLUDING WITHOUT LIMITATION ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR ANY IMPLIED WARRANTY ARISING FROM COURSE OF DEALING, COURSE OF PERFORMANCE, OR USAGE OF TRADE).

For the purpose of this Article, the term “ CFM ” shall be deemed to include CFM, GE, SNECMA, and CFM’s subsidiaries, assigns, subcontractors, suppliers, and the respective directors, officers, employees, and agents of each. The foregoing shall apply only as to this Agreement, its Exhibits, and the applicable Letter Agreements to this Agreement.

ARTICLE 12 - GOVERNMENT AUTHORIZATION, EXPORT SHIPMENT

 

A. The Parties agree to comply with all applicable U.S. export control laws and regulations, including but not limited to the requirements of Arms Export Control Act, 22 U.S.C.2751-2794, including the International Traffic in Arms Regulation (ITAR), 22 CFR 120 et seq,; the Export Administration Act, 50 U.S.C. App. 2401-2420, including the Export Administration Regulations, 15 C.F.R. 730-774;] CFM shall be responsible for obtaining any export license or agreement, if applicable, required by the U.S., France or any other country of manufacture. Without limiting the foregoing, Airline agrees that it shall not transfer any export controlled item, data, information or services, to include transfer to foreign persons, including those foreign persons employed by or associated with, or under contract to the receiving Party, without the authority of an applicable export license, agreement, or applicable exemption or exception.

 

B. Export Shipment. Airline agrees that the export shall be treated as a routed transaction pursuant to 15 CFR 748.3(b) and 15 CFR 30.3(e).

(i) Export License Determination. Airline agrees that all provisions of the US EAR, including the end-use and end-user controls found in part 744 of the EAR, and the General Prohibitions found in part 736 of the EAR, apply to this routed export transaction. The Airline (or Airline’s designated agent) shall be the exporter but CFM shall determine licensing authority (License, License Exception, or NLR), and obtain the appropriate license or other authorization (whether required by CFM or Airline). CFM shall be responsible for obtaining any required licenses or any other required governmental authorization and shall be responsible for complying with and advise Airline of all US and foreign government licensing requirements. Airline shall restrict disclosure of all information and data furnished in connection with such authorization and shall ship the subject matter of the authorization to only those destinations that are authorized by the US Government.

 

 

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(ii) Export Reporting. Pursuant to 15 CFR 30.3(e), Airline hereby authorizes CFM, upon request of CFM, (or CFM’s designated agent) to file all required Electronic Export Information (EEI) reports via the U.S. Automated Export System (i.e. “ AES records ”) prior to export from the US. CFM (or CFM’s designated agent) shall retain documentation to support the EEI filed and provide documentation to Airline upon request.

All rights to drawback on customs duties paid by CFM with respect to Products, (or material or components thereof), belong to and shall remain in CFM. If Airline arranges for export shipment, Airline agrees to furnish without charge evidence of exportation or other evidence of tax or duty exemption acceptable to the taxing or customs authorities when requested by CFM.

ARTICLE 13 - PERSONAL DATA PROTECTION

 

A. Personal Data ” is any information relating to an identified or identifiable natural person or to any legal entity if such legal entity is subject to data protection legislation in their country of incorporation (“ Data Subject ”).

 

B. Airline and CFM each agree that any Personal Data obtained from the other Party will be deemed “Data” of the other Party as defined in this Agreement whether or not the Personal Data is publicly available.

 

C. Airline and CFM each represent that in providing Personal Data to one another they will comply with all applicable laws and regulations, including but not limited to providing notices to or obtaining consents from the Data Subjects when required.

 

D. Steps shall be taken to implement and maintain physical, technical and organizational measures to ensure the security and confidentiality of Personal Data in order to prevent accidental, unauthorized or unlawful access, use, modification, disclosure, loss or destruction of Personal Data. The security measures taken shall be in compliance with applicable data protection laws and shall be adapted to the risks represented by the processing and the nature of the personal data to be collected and/or stored.

ARTICLE 14 - NOTICES

Any notices under this Agreement shall become effective upon receipt and shall be in writing and be delivered or sent by mail, courier service, personal service or fax to the respective Parties at the following addresses, which may be changed by written notice:

 

If to:    AviancaTaca Holding, S.A.   If to:    CFM International, Inc.
   Av Calle 26 No. 59-15, Piso 10      One Neumann Way, M.D. Y7
   Bogotá, Colombia      Cincinnati, Ohio 45215-1988 USA
Attn:    Secretary   Attn:    Vice President, Contracts
   Facsimile Number: (57) 1 423 5500, ext. 2522      Facsimile Number: (1) 513-552-3397
   Telephone Number: (57) 1 587 7700, ext. 2522      Telephone Number: (1) 513-552-3351

 

 

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Notice sent by the U.S. mail, postage prepaid, shall be deemed received within seven (7) days after deposit. Wherever words such as “Notice” or “notify” or similar words are used herein, they mean the provision of notice in accordance with this Article 14.

ARTICLE 15 - MISCELLANEOUS

 

A. Assignment of Agreement . Unless otherwise specifically provided in this Agreement, neither Party may assign this Agreement, in whole or in part, without the prior written consent of the other Party; except, that, Airline’s consent shall not be required for substitution of any other company jointly owned by GE and SNECMA in place of CFM as the contracting party and the recipient of any or all payments, and/or for the assignment of CFM’s payment rights to CFM’s suppliers. Notwithstanding the foregoing or anything to the contrary contained herein, Airline shall be entitled to assign any of its rights hereunder at any time to any Airline Affiliate, including, any special purpose vehicle or other entity incorporated or formed by Airline or utilized in connection with the financing of the Aircraft or Engines to provide security for the financing of any pre-delivery payments or in connection with the financing of its obligation to pay the final price of the Aircraft or Engines. It is understood and agreed that, notwithstanding any such assignment of rights by Airline under this Article 15, AviancaTaca will remain fully responsible for the performance of the obligations of Airline, an Airline Affiliate, or an assignee permitted herein as though no such assignment had taken place.

 

B. Applicable Law; Venue . All aspects of this Agreement and the obligations arising hereunder will be governed in accordance with the law of the State of New York, U.S.A.; except, that New York conflict of law rules will not apply if the result would be the application of the laws of another jurisdiction. The United Nations Convention on Contracts for the International Sale of Goods shall not apply to this Agreement.

 

C. Entire Agreement; Modification . This Agreement (together with any amendments, exhibits and Letter Agreements supplemental hereto) contains the entire and only agreement between the Parties, and it supersedes all pre-existing agreements between such Parties, respecting the subject matter hereof. Any representation, promise or condition in connection therewith not stated in this Agreement or in such amendments, exhibits and Letter Agreements or otherwise not incorporated herein shall not be binding upon either Party. No modification or termination of this Agreement or any of the provisions herein contained shall be binding upon the Party against whom enforcement of such modification or termination is sought, unless it is made in writing and signed on behalf of that Party by a duly authorized executive.

 

D.

Confidentiality of Information . This Agreement and Letter Agreements contain information specifically for Airline and CFM, and nothing herein contained shall be divulged by Airline

 

 

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  or CFM to any third person, firm or corporation, without the prior written consent of the Parties, which consent shall not be unreasonably withheld; except (i) that Airline’s consent shall not be required for disclosure by CFM of this Agreement and Letter Agreements, and related information given by Airline to CFM, to an Engine program participant, joint venture participant, engineering service provider or consultant to CFM so as to enable CFM to perform its obligations under this Agreement or Letter Agreements or to build the Engine or to provide informational data; (ii) to the extent required by Government agencies, by law, or to enforce this Agreement; and (iii) to the extent necessary for disclosure to the Parties’ respective insurers, accountants or other professional advisors who must likewise agree to be bound by the provisions of this Article. In the event (i) or (iii) occur, suitable restrictive legends limiting further disclosure shall be applied. In the event this Agreement, or other information or data is required to be disclosed or filed by government agencies by law, or by court order, the disclosing Party shall notify the other Party where possible, at least thirty (30) days in advance of such disclosure or filing and shall cooperate fully with the other Party in seeking confidential treatment of sensitive terms of the Agreement or such information and data. In addition, neither Party will issue any press nor other media release or make any public statement with respect to this GTA or the Letter Agreements without the prior written approval of the other Party, as to the fact and the content of any such media release or public statement.

 

E. Duration of Agreement . This Agreement shall remain in full force and effect until (i) Airline ceases to operate at least one (1) Aircraft powered by Engines, or (ii) less than five (5) aircraft powered by such engines are in commercial airline service globally, or (iii) the occurrence of a material breach of the obligations set forth in Article 10 which is not cured within 30 days’ notice of such breach. Nothing herein shall affect the rights and obligations and limitations set forth in this Agreement as to Products ordered for delivery and work performed prior to termination of this Agreement.

 

F. Survival of Certain Clauses . The rights and obligations of the Parties under the following Articles and related Exhibits shall survive the expiration, termination, completion or cancellation of this Agreement:

Payment for Products

Taxes and Duties

Patents

Data

Limitation of Liability

Governmental Authorization, Export Shipment

Miscellaneous

 

G. Language . This Agreement, orders, Data, notices, shipping invoices, correspondence and other writings furnished hereunder shall be in the English language.

 

H.

Severability . The invalidity or un-enforceability of any part of this Agreement, or the invalidity of its application to a specific situation or circumstance, shall not affect the validity of the remainder of this Agreement, or its application to other situations or

 

 

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  circumstances. In addition, if a part of this Agreement becomes invalid, the Parties will endeavor in good faith to reach agreement on a replacement provision that will reflect, as nearly as possible, the intent of the original provision.

 

I. Waiver . The waiver by any Party of any provision, condition, or requirement of this Agreement, shall not constitute a waiver of any subsequent obligation to comply with such provision, condition, or requirement.

 

J. Dispute Resolution . If any dispute arises relating to this Agreement, the Parties will endeavor to resolve the dispute amicably, including by designating senior managers who will meet and use commercially reasonable efforts to resolve any such dispute. If the Parties’ senior managers do not resolve the dispute within sixty (60) days of first written request, either Party may request that the dispute be settled and finally determined by binding arbitration, in accordance with the Commercial Arbitration Rules of the American Arbitration Association in New York City, New York, by one or more arbitrators appointed in accordance with the AAA Rules. The arbitrator(s) will have no authority to award punitive damages, attorneys’ fees and related costs or any other damages not measured by the prevailing Party’s actual damages, and may not, in any event, make any ruling, finding or award that does not conform to the terms and conditions of the Agreement and applicable law. The award of the arbitrator(s) will be final, binding and non-appealable, and judgment may be entered thereon in any court of competent jurisdiction. All statements made or materials produced in connection with this dispute resolution process and arbitration are confidential and will not be disclosed to any third party except as required by law or subpoena. The Parties intend that the dispute resolution process set forth in this Paragraph will be their exclusive remedy for any dispute arising under or relating to this Agreement or its subject matter. Either Party may at any time, without inconsistency with this Article, seek from a court of competent jurisdiction any equitable, interim, or provisional relief to avoid irreparable harm or injury. This Paragraph will not apply to and will not bar litigation regarding claims related to a party’s proprietary or intellectual property rights, not will this Paragraph be construed to modify or displace the ability of the Parties to effectuate any termination contemplated in this Agreement.

 

K. Waiver of Immunity . With respect to any Airline which is incorporated or based outside the United States, to the extent that such Airline or any of its property becomes entitled at any time to any immunity on the grounds of sovereignty or otherwise from any legal action, suit or proceeding of any nature, Airline hereby irrevocably waives the application of such immunity and particularly, the U.S. Foreign Sovereign Immunities Act, 28 U.S.C. 1602, et. seq., insofar as such immunity relates to Airline’s rights and obligations in connection with this Agreement.

 

L. Electronic Transactions .

 

  (i) CFM may grant Airline access to and use of the Customer Web Center (“ CWC ”) and/or other CFM Web sites (collectively, “ CFM Sites ”). Airline agrees that such access and use shall be governed by the applicable CFM Site Terms and Conditions, provided, however, that in the event of a conflict with the provisions of this Agreement, this Agreement shall govern.

 

  (ii) CFM may permit Airline to place purchase orders for certain Products on the CFM Sites by various electronic methods (“ Electronic POs ”). The Parties agree that such Electronic POs (a) constitute legally valid, binding agreements; (b) have the same force and effect as purchase orders placed in paper format signed by Airline in ink; and (c) are subject to the terms and conditions hereof.

 

  (iii) [*]

 

  (iv) Airline represents and warrants that any employee or representative who places Electronic POs or accesses Data through the CWC is authorized by Airline to do so and has obtained a login name(s) and password(s) through the CFM Site registration process. CFM shall be entitled to rely on the validity of a login name or password unless notified otherwise in writing by Airline.

 

M. Counterparts. This Agreement may be signed by the Parties in separate counterparts, and any single counterpart or set of counterparts, when signed and delivered to the other Party shall together constitute one and the same document and be an original Agreement for all purposes. Delivery of an executed counterpart of a signature page to this Agreement by telecopier or electronic mail in a pdf file shall be as effective as delivery of a manually executed counterpart of this Agreement.

 

 

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IN WITNESS WHEREOF , the Parties hereto have executed this Agreement as of the day and the year first above written.

 

AVIANCATACA HOLDING S.A.     CFM INTERNATIONAL, INC.
By:  

 

    By:  

 

Typed Name:  

 

    Typed Name:  

 

Title:  

 

    Title:  

 

 

 

     

 

 

 

     

 

 

 

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EXHIBIT A

ENGINE WARRANTY PLAN

 

* [Two pages have been omitted in accordance with a request for confidential treatment.].

CFM’s liability to either or both Airline and its assignee shall not be increased, duplicated or multiplied in any way by reason of such assignment. Airline shall provide the assignee a redacted copy of the terms and conditions of this GTA (including a copy of this paragraph) applicable to the Engines Warranties. CFM’s consent to the assignment under the foregoing terms shall be deemed fulfilled, without further action by the CFM, upon receipt by CFM of Airline’s written notice identifying the assignee of the Engine Warranties.

[*]

 

  C. For purposes of this supplier warranty, “Failure” shall mean the defect in material, workmanship and malfunction of or injury to a Product or part thereof rendering it unserviceable, unless the failure was caused by:

 

  1. Improper installation or maintenance (unless such installation or maintenance was performed by, or at the direction of, CFM or Supplier).

 

  2. Operation contrary to applicable in manuals, service bulletins or other regulating requirements current at the time.

 

  3. Failure of Product or part thereof not manufactured by Supplier.

 

  4. Abuse, misuse, neglect or accident.

 

  5. Damage due to contaminated fuel, environmental conditions, overload conditions, or any other condition for which the Product was not designed.

 

  6. Damage due to repairs or alterations by Airline or a third party other than CFM or Supplier’s authorized representative.

 

  7. Wear and tear.

 

  D. [*]

 

  E. [*]

 

  F. [*]. If Supplier has not provided status or disposition of the claim within [*] of receipt, the claim shall be deemed to have been accepted by Supplier.

 

  G. [*]. Supplier shall refund the NFF charges from the first shop visit if the failure is confirmed during the second shop visit.

Airline’s same serial numbered Product, which experiences a minimum of three unscheduled returns to Supplier for the same cause, and are justified returns through substantiating data provided within the Product’s new warranty and deemed by Supplier as No Fault Found (NFF) are hereby defined as rogue units. Supplier shall replace the rogue unit with a new or used equivalent unit at no cost to the Airline or CFM.

 

 

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  F.3. In the event a controls and accessories supplier fails to provide a warranty at least as favorable as the CFM New Engine Warranty (for complete controls and accessories) or New Parts Warranty (for components thereof), or if provided, rejects a proper claim from Airline, CFM will intercede on behalf of Airline to resolve the claim with the supplier. In the event CFM is unable to resolve a valid claim with the supplier, CFM will honor a claim from Airline under the provisions and subject to the limitations of CFM’s New Engine or New Parts Warranty, as applicable. Settlements under Supplier Back-Up Warranty will exclude credits for resultant damage to or from controls and accessories procured directly by Airline from suppliers.

[*]

 

 

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GENERAL TERMS AGREEMENT NO. CFM- CFM-1-2887169891

 

SECTION II - GENERAL CONDITIONS

 

A. Airline will maintain adequate operational and maintenance records and make these available for CFM inspection at reasonable times with reasonable notice.

 

B. CFM will deny a claim under any of the Warranty provisions, and the Warranty provisions will not apply if:

 

  (1) such claim resulted from the subject Engine, Module or any Parts thereof:

 

   

Not being properly installed or maintained by an entity other than CFM, GE, or their affiliates; or

 

   

Being operated contrary to applicable regulatory requirements as contained in applicable manuals, service bulletins, or other regulatory requirements; or

 

   

Being repaired or altered by an entity other than CFM, GE, or any of their affiliates in such a way as to impair its safety of operation or efficiency; or

 

   

Being subjected to misuse, neglect or accident; or

 

   

Being subjected to Foreign Object Damage; or

 

   

Being subjected to any other defect or cause (whether sole or contributory) not within the control of CFM; or

 

   

Being maintained with parts and repairs, where either such parts or repairs are not in the CFM Parts List, the CFM Component Repair Directory, or otherwise not in a list of approved parts or repairs that are mutually agreed by CFM and Airline, each acting reasonably and in commercial good faith (collectively, “ Approved Parts ” and “ Approved Repairs ”). Such exclusion also applies to any Parts that maybe impacted by parts that are not Approved Parts or Parts repaired by processes that is not an Approved Repair ; or

 

   

Not incorporating Service Bulletins categories 1-6 related to the cause or failure within the time specified unless such failure to incorporate such items is the fault of CFM or its repair facilities

 

C.

As provided in Article 11 of this Agreement, the express provisions of the Agreement including Exhibits A, B-1 and B-2 herein set forth the maximum liability of CFM with respect to claims of any kind under this Agreement or Exhibits A, B-1 or B-2 , including, without limitation, negligence arising out of the manufacture, sale, servicing, possession, use or handling of the Products or Parts thereof or therefor, and in no case shall CFM’s liability to Airline exceed the purchase price (or in the absence of a purchase price, the fair market value) of the Engine, service or other thing giving rise to Airline’s claim. In no

 

 

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  event shall Airline, any Airline Affiliate or CFM be liable for incidental, special, punitive or consequential damages. For the purpose of this Section II, the term CFM shall be deemed to include CFM, GE, SNECMA, and CFM’s subsidiaries, assigns, subcontractors, suppliers, Product co-producers, and the respective directors, officers, employees, and agents of each.

 

D. Airline shall apprise CFM of any Failure within sixty (60) days after the discovery of such Failure. Any Part for which a Parts Credit Allowance is requested by Airline shall be returned to CFM upon specific request by CFM and must be accompanied by sufficient information to identify the Part and the reason for its return. In such event, upon return to CFM, such Part shall become the property of CFM unless CFM directs otherwise. Transportation expenses shall be borne by CFM.

 

E. The warranty applicable to a replacement Part provided under the terms of the New Engine Warranty or New Parts Warranty shall be the same as the warranty on the original Part. The unexpired portion of the applicable warranty will apply to Parts repaired under the terms of such warranty.

 

F. Airline will cooperate with CFM in the development of Engine operating practices, repair procedures, and the like with the objective of improving Engine operating costs. Cooperation requested by CFM shall not impact or disturb the revenue operation of any aircraft or Engine or Engine availability and shall not create or impose an incremental maintenance burden for Airline.

 

G. If compensation becomes available to Airline under more than one warranty or other Engine program consideration, Airline will not receive duplicate compensation but will receive the compensation most beneficial to Airline under a single warranty or other program consideration.

 

H. Any Part for which Airline intends to claim the benefit of the relevant warranty must receive CFM’s prior approval of CFM to accomplish the warranty remedial repair. Further, the Parts warranties stated herein will not apply to any Part being maintained with parts and repairs that are not Approved Parts or Approved Repairs,

 

I. Transportation to and from repair facilities shall be paid by CFM.

 

 

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ATTACHMENT I

WARRANTY PARTS LIST *

 

* [Two pages have been omitted in accordance with a request for confidential treatment.]

 

 

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EXHIBIT B-1

PRODUCT SUPPORT PLAN FOR CFM56-5B ENGINES

SECTION I - SPARE PARTS PROVISIONING

 

A. Provisioning Data

In connection with Airline’s initial provisioning of spare Parts, CFM shall furnish Airline at least six months prior to the first Aircraft delivery with data in accordance with ATA Specification 2000 using a revision mutually agreed to in writing by CFM and Airline.

 

B. Return Of Parts

[*]

 

C. [*]

[*]

 

D. Parts of Modified Design

 

  1. CFM shall have the right to make modifications to design or changes in the spare Parts sold to Airline hereunder which improves the quality or performance of the parts without any adverse effect on weight, reliability or maintainability. In case a change in design renders any of Airline stock of Spare Parts unserviceable, CFM will replace them with newly modified parts at no charge to Airline and Airline promptly will return the unserviceable stock of Spare Parts to CFM At CFM’s expense.

 

  2. CFM will from time to time inform Airline in accordance with the means set forth in ATA Specification 2000, when such spare Parts of modified design become available for shipment hereunder.

 

  3. Spare Parts of the modified design will be supplied unless Airline advises CFM in writing of its contrary desire within ninety (90) days of the issuance of the service bulletin specifying the change to the modified Parts. In such event, Airline may negotiate for the continued supply of spare Parts of the pre-modified design at a rate of delivery and price to be agreed upon.

 

E. Spare Parts Availability

 

  1. CFM will maintain a stock of spare Parts to cover Airline’s emergency needs. For purposes of this Paragraph, “emergency” is agreed by CFM and Airline to mean the occurrence of any one of the following conditions:

 

AOG    -            Aircraft on Ground
Critical    -            Imminent AOG or Work Stoppage
Expedite        -            Less than Normal Lead Time

 

 

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In case of an imminent AOG, Airline may acquire CFM Products and Parts from other sources, and any such acquisition shall not represent any violation of this Agreement.

 

  2. Airline will order spare Parts according to lead-time but should Airline’s spare Parts requirements arise as a result of an emergency, Airline can draw such spare Parts from CFM’s stock. A 24-hour Customer Response Center is available to Airline for this purpose. If an emergency does exist, CFM will use its best efforts to ship required spare Part(s) within the time period set forth below following receipt of an acceptable purchase order from Airline:

 

AOG    -            4 Hours
Critical    -            24 Hours
Expedite        -            7 Days

 

  3. Airline will make reasonable efforts to provide CFM with spare Parts provisioning forecasts, updated at least quarterly, specifying projected requirements to cover at least the following twelve (12) months period. Airline agrees to promptly notify CFM in the event the Airline will not achieve such projected requirements. If Airline does not supply such forecast provisioning then CFM may modify the spare Part lead-time currently defined in the Spare Parts Catalog.

 

  4. All Airworthiness Directives (“ AD ”) issued (regardless of the permitted compliance date) by the Federal Aviation Administration of the United States, Colombia Aviation Administration and any other foreign aviation authority having jurisdiction over the operations of Airline or an Airline Affiliate prior to the delivery date of any Engine to Airline or an Airline Affiliate shall be accomplished or performed prior to such delivery date unless the AD states that the necessary actions can be accomplished at the next shop visit, in which case it may be performed at such shop visit.

SECTION II - [*]

[*].

SECTION III - [*]

 

A. [*]

[*]

 

B. Scope

The training furnished under this Agreement shall be as follows:

 

   

[*]

 

 

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[*]

 

   

CFM-5B Courses - detailed in CFM training catalog

 

* Student-Days = the number of students multiplied by the number of class days

The Customer Support Manager, in conjunction with appropriate CFM Training representatives, will be available to conduct a review session with Airline to schedule required training. To assure training availability, such review shall be conducted six (6) to twelve (12) months prior to the delivery date of the first aircraft.

 

C. Training Location

Unless arranged otherwise with CFM concurrence, training shall be provided by CFM in English at one or more of the CFM designated facilities identified in the training catalog.

If an alternate site is desired, CFM will furnish a quotation with following minimum conditions that must be met in order to deliver “equivalent” training at the alternate site.

 

  1. Airline will be responsible for providing acceptable classroom space and equipment – including engines, special tools, and hand tools required to conduct the training.

 

  2. Airline will pay CFM’s travel and reasonable living charges for each CFM instructor for each day, or fraction thereof, such instructor is away from CFM’s designated facility, including travel time.

 

  3. Airline will reimburse reasonable, round-trip transportation fees for CFM’s instructors and shipment of training materials between the designated facility and such alternate training site.

Except as set forth above, there will be no charge to Airline for the training described herein.

 

D. Airline Responsibility

During engine maintenance training at any of the CFM designated facilities, Airline shall be responsible for its personnel’s typical expenses such as:

 

   

Air and ground transportation expenses

 

   

Lodging (hotel accommodations)

 

   

Meals

 

   

All medical - physicians, medication, emergencies, etc.

 

   

Other various and sundry expenses (visits to other businesses, entertainment, etc.).

Airline will be responsible for shipping costs of training materials in all cases.

 

 

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SECTION IV - CUSTOMER SUPPORT AND SERVICE

 

A. Customer Support Manager

CFM shall assign to Airline at no charge, a Customer Support Manager to provide and coordinate appropriate liaison between the Airline and CFM’s factory personnel.

 

B. Field Support

CFM shall make available to Airline on an as-required basis, at no charge, field service representation at Airline’s facility. CFM will provide the level of representation required to ensure that CFM is able to expeditiously and accurately deliver data and support that is required to resolve technical issues.

CFM will also assist with the introduction of new aircraft/Engines into Airline’s fleet, resolution of unscheduled maintenance actions, product scrap approval, and rapid communication between Airline’s maintenance base and CFM’s factory personnel. Throughout the operation of these Engines, the Aviation Operations Center and the Customer Web Center will augment support at no additional charge to Airline.

SECTION V - ENGINEERING SUPPORT

CFM shall make product engineering support available, at no charge, to Airline, for typical powerplant issues on a 24 hour, 7 days a week basis.

SECTION VI - PERFORMANCE TREND MONITORING

CFM will also provide the standard diagnostics services set forth in Exhibit D at no cost to Airline.

SECTION VII - GENERAL CONDITIONS - PRODUCT SUPPORT PLAN

 

A. [*]. The support and Data provided herein may not be utilized for any other purpose, or assigned or otherwise transferred to any third party, without the written consent of CFM, which consent may be exercised by CFM in its sole discretion. The support and Data may be shared with contract service providers as strictly necessary for the performance of its services, provided that such service providers enter into a nondisclosure agreement acceptable to CFM and that CFM has been provided with adequate assurance in CFM’s sole discretion that that such service provider has implemented sufficient process discipline and controls to ensure that Data will be used solely for the maintenance and overhaul of Airline’s Products in a manner fully consistent with CFM’s approved technology solutions. Airline will advise CFM of the identity of the contract service provider with whom the support and Data will be shared. Such service provider must not be an entity with whom, or be in a jurisdiction in which, CFM is not permitted by applicable law or regulation to conduct business including the reexport of its Data. The Data provided by CFM will not support parts and repairs that have not been approved by CFM and that are affected by non-CFM-approved parts and repairs.

 

 

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B. Airline will maintain adequate operational and maintenance records and make these available for CFM inspection during normal business hours and upon reasonable notice. Airline will provide records of performance shop visits including the LLP configuration to the extent not already available to CFM.

 

C. This Product Support Plan is subject to the provisions the Article titled “Limitation of Liability” of the Agreement to which this Exhibit B-1 is attached.

 

D. Airline will cooperate with CFM in the development of Engine operating practices, repair procedures, and the like as proposed either by Airline or CFM with the objective of improving Engine operating costs. Cooperation requested by CFM shall not impact or disturb revenue operation of any aircraft, Engine, or Engine availability and shall not generate a substantial incremental maintenance burden for the operator.

 

E. Except as provided in the Warranty Pass-On provisions in Paragraph E of Exhibit A of the Agreement to which this Exhibit B-1 is attached, this Product Support Plan applies only to the original purchaser of the Engine except that installed Engines supplied to Airline through the aircraft manufacturer, and installed Engines on Aircraft sold and leased back by Airline, shall be considered as original Airline purchases covered by this Product Support Plan.

 

 

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EXHIBIT B-2

PRODUCT SUPPORT PLAN FOR LEAP-1A ENGINES

SECTION I - SPARE PARTS PROVISIONING

 

A. [*]

[*]

 

B. [*]

[*]

 

C. [*]

[*]

 

D. Parts of Modified Design

 

  1. CFM shall have the right to make modifications to design or changes in the spare Parts sold to Airline hereunder which improves the quality or performance of the parts without any adverse effect on weight, reliability or maintainability. In case a change in design renders any Airline stock of Spare Parts unserviceable, CFM will replace them with newly modified parts at no charge to Airline and Airline promptly shall return the stock of unserviceable Spare Parts to CFM at CFM’s expense.

 

  2. CFM will from time to time inform Airline in accordance with the means set forth in ATA Specification 2000, when such spare Parts of modified design become available for shipment hereunder.

 

  3. Spare Parts of the modified design will be supplied unless Airline advises CFM in writing of its contrary desire within ninety (90) days of the issuance of the service bulletin specifying the change to the modified Parts. In such event, Airline may negotiate for the continued supply of spare Parts of the pre-modified design at a rate of delivery and price to be agreed upon.

 

E. Spare Parts Availability

 

  1. CFM will maintain a stock of spare Parts to cover Airline’s emergency needs. For purposes of this Paragraph, “emergency” is agreed by CFM and Airline to mean the occurrence of any one of the following conditions:

 

AOG    -    Aircraft on Ground
Critical    -    Imminent AOG or Work Stoppage
Expedite    -    Less than Normal Lead Time

 

 

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In case of an imminent AOG, Airline may acquire CFM Products and Parts from other sources, and any such acquisition shall not represent any violation of this Agreement.

 

  2. Airline will order spare Parts according to lead-time but should Airline’s spare Parts requirements arise as a result of an emergency, Airline can draw such spare Parts from CFM’s stock. A 24-hour Customer Response Center is available to Airline for this purpose. If an emergency does exist, CFM will use its best efforts to ship required spare Part(s) within the time period set forth below following receipt of an acceptable purchase order from Airline:

 

AOG    -    4 Hours
Critical    -    24 Hours
Expedite    -    7 Days

 

  3. [*]. Airline agrees to promptly notify CFM in the event the Airline will not achieve such projected requirements. If Airline does not supply such forecast provisioning then CFM may modify the spare Part lead-time currently defined in the Spare Parts Catalog.

 

  4. All Airworthiness Directives (“ AD ”) issued (regardless of the permitted compliance date) by the Federal Aviation Administration of the United States, Colombia Aviation Administration and any other foreign aviation authority having jurisdiction over the operations of Airline or an Airline Affiliate prior to the delivery date of any Engine to Airline or an Airline Affiliate shall be accomplished or performed prior to such delivery date unless the AD states that the necessary actions can be accomplished at the next shop visit, in which case it may be performed at such shop visit.

SECTION II - TECHNICAL PUBLICATIONS AND DATA

CFM will furnish, at no additional charge, technical manuals, including revisions thereof, to Airline. Technical manuals and updated revisions thereof shall be furnished by CFM to Airline in mutually agreed upon quantities at no charge. All technical manuals and updated revisions thereof provided by CFM shall be in the English language and in accordance with mutually agreed upon provisions of the ATA Specification.

SECTION III - TECHNICAL TRAINING

 

A. Introduction

CFM shall make technical training available to Airline, at CFM’s designated facilities. Details on scope, quantity, materials, and planning shall be as mutually agreed.

 

 

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B. Scope

The training furnished under this Agreement shall be as follows:

 

   

Product - as previously defined in this Agreement.

 

   

Quantity - 100 Student-Days* at no charge to Airline for 1 st aircraft delivered; 50 Student-Days at no charge to Airline for each additional aircraft.

 

   

LEAP-1A Courses - Standard Line Maintenance Training defined in CFM training catalog.

 

   

LEAP-1A Student - An employee of the Airline, unless written approval received from CFM prior to scheduling the training.

 

* Student-Days = the number of students multiplied by the number of class days

The Customer Support Manager, in conjunction with appropriate CFM Training representatives, will be available to conduct a review session with Airline to schedule required training. To assure training availability, such review shall be conducted six (6) to twelve (12) months prior to the delivery date of the first aircraft.

 

C. Training Location

Unless arranged otherwise with CFM concurrence, training shall be provided by CFM in English at one or more of the CFM designated facilities identified in the training catalog.

If an alternate site is desired, CFM will furnish a quotation with following minimum conditions that must be met in order to deliver “equivalent” training at the alternate site.

 

  1. Airline will be responsible for providing acceptable classroom space and equipment - including engines, special tools, and hand tools required to conduct the training.

 

  2. Airline will pay CFM’s travel and reasonable living charges for each CFM instructor for each day, or fraction thereof, such instructor is away from CFM’s designated facility, including travel time.

 

  3. Airline will reimburse reasonable, round-trip transportation fees for CFM’s instructors and shipment of training materials between the designated facility and such alternate training site.

Except as set forth above, there will be no charge to Airline for the training described herein.

 

D. Airline Responsibility

During engine maintenance training at any of the CFM designated facilities, Airline shall be responsible for its personnel’s typical expenses such as:

 

   

Air and ground transportation expenses

 

 

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Lodging (hotel accommodations)

 

   

Meals

 

   

All Medical - physicians, medication, emergencies, etc.

 

   

Other various and sundry expenses (visits to other businesses, entertainment, etc.).

Airline will be responsible for shipping costs of training materials in all cases.

SECTION IV - CUSTOMER SUPPORT AND SERVICE

 

A. Customer Support Manager

CFM shall assign to Airline at no charge, a Customer Support Manager to provide and coordinate appropriate liaison between the Airline and CFM’s factory personnel.

 

B. Field Support

CFM shall make available to Airline on an as-required basis, at no charge, field service representation at Airline’s facility. CFM will provide the level of representation required to ensure that CFM is able to expeditiously and accurately deliver data and support that is required to resolve technical issues.

CFM will assist with the introduction of new aircraft/Engines into Airline’s fleet, resolution of unscheduled maintenance actions, product scrap approval, and rapid communication between Airline’s maintenance base and CFM’s factory personnel. Throughout Airline’s operation of these Engines, the Aviation Operations Center and the Customer Web Center will augment support at no additional charge to Airline.

CFM will provide engineering line maintenance support to Airline at no additional charge for a period of sixty (60) days after delivery of the first Engine.

SECTION V - ENGINEERING SUPPORT

CFM shall make product engineering support available, at no charge, to Airline, for routine powerplant issues on an as-required basis at any time on a 24 hour, 7 days a week basis.

SECTION VI - PERFORMANCE TREND MONITORING

CFM will also provide the standard diagnostics services set forth in Exhibit D at no cost to Airline.

 

 

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SECTION VII - LEAP-1A CONTROLS AND ACCESSORIES SUPPLIERS SUPPORT

Controls and Accessories Suppliers that support Line Removable Units after purchase of the Engine and directly interface with the Airline will support the Airline as follows:

 

A. Spares Parts Support

 

  1. Initial Provisioning

Upon request, Controls and Accessories Suppliers shall provide initial provisioning data to Airline.

 

  2. Shelf Stock/Lead Time

Catalog lead-time will not exceed 30 days.

 

  3. Spares Parts Delivery

 

  a. Product spare parts will be provided within the catalog specified lead times or as may be otherwise agreed to with Airline.

 

  b. Supplier will maintain a stock of spare Parts to cover Airline’s emergency needs. For purposes of this Paragraph, emergency is understood by Supplier and Airline to mean the occurrence of any one of the following conditions:

 

AOG    -    Aircraft on Ground
Critical    -    Imminent AOG or Work Stoppage
Expedite    -    Less than Normal Lead Time

 

  c. Airline will order spare Parts according to lead-time but should Airline’s spare Parts requirements arise as a result of an emergency, Airline can draw such spare Parts from supplier’s stock or rotable pool. Additional fees may apply. A 24-hour Customer Response Center is available to Airline for this purpose. If an emergency does exist, Supplier will use its best efforts to ship required spare Part(s) within the time period set forth below following receipt of an acceptable purchase order from Airline:

 

AOG    -    4 Hours
Critical    -    24 Hours
Expedite    -    7 Days

 

  d. For Critical or AOG situations, Supplier shall respond within 2 hours following receipt of notice with a full status or hardware availability.

 

B. Training

Controls and Accessories Suppliers will provide, at no charge and upon request, three (3) sessions at Control and Accessories Suppliers facility, or Product familiarization and operation training to Airline Student who is an employee of the Airline. All additional training for Product upgrades, changes, etc., should be directly negotiated with the Controls and Accessories Supplier.

 

 

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C. Tool and Equipment Data

Controls and Accessories Suppliers will provide to Airline, for sole use by the Airline, at no charge and upon request, a complete set of reproducible drawings for all special tools required for flight-line Product removal, installation and troubleshooting with appropriate revisions.

 

D. Regulatory Documents

Controls and Accessories Suppliers shall operate or license one or more repair stations for their products. Repair Stations shall have the following certifications at a minimum: FAR Part 145, EASA Part 145 and CCAR Part 145. Controls and Accessories’ Repair Stations will put in place the necessary approvals and procedures to ship airworthy Product directly to Airline.

 

E. Airline Feedback

In the event a Controls and Accessories Supplier does not appear to be supporting the terms herein, the Airline shall notify CFM with the specific details and work together towards resolution with the Controls and Accessories Supplier. See also Supplier Warranty Back-Up.

SECTION VIII - GENERAL CONDITIONS - PRODUCT SUPPORT PLAN

 

A. All support provided by CFM above, is provided to Airline exclusively for the maintenance and overhaul by Airline of Airline’s Products provided that such Products are operated in the original Engine configuration, or in a modified Engine configuration approved by CFM. The support and Data provided herein may not be utilized for any other purpose, or assigned or otherwise transferred to any third party, without the written consent of CFM, which consent may be exercised by CFM in its sole discretion. The support and Data may be shared with contract service providers as strictly necessary for the performance of its services, provided that such service providers enter into a nondisclosure agreement acceptable to CFM and that CFM has been provided with adequate assurance in CFM’s sole discretion that that such service provider has implemented sufficient process disciplines and controls to ensure that Data will be used solely for the maintenance and overhaul of Airline’s Products in a manner fully consistent with CFM’s approved technology solutions. Airline will advise CFM of the identity of the contract service provider to whom the support and Data will be shared. Such service provider must not be an entity with whom, or in a jurisdiction in which, CFM is not permitted by applicable law or regulation to conduct business, including the reexport of its Data. The Data provided by CFM will not support parts and repairs that have not been approved by CFM and that are affected by non-CFM-approved parts and repairs.

 

B. Airline will maintain adequate operational and maintenance records and make these available for CFM inspection during normal business hours and upon reasonable notice. Airline will provide records of performance shop visits including the LLP configuration.

 

 

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C. This Product Support Plan is subject to the provisions the Article titled “Limitation of Liability” of the Agreement to which this Exhibit B-2 is attached.

 

D. Airline will cooperate with CFM in the development of Engine operating practices, repair procedures, and the like, as proposed either by Airline or CFM, with the objective of improving Airline’s Engine operating costs. Cooperation requested by CFM shall not impact or disturb revenue operation of any aircraft, Engine or Engine availability and shall not generate a substantial incremental maintenance burden for the operator.

 

E. Except as provided in the Warranty Pass-On provisions in Paragraph E of Exhibit A of the Agreement to which this Exhibit B-2 is attached, this Product Support Plan applies only to the original purchaser of the Engine except that installed Engines supplied to Airline through the aircraft manufacturer, and installed Engines on Aircraft sold and leased back by Airline, shall be considered as original Airline purchases covered by this Product Support Plan.

 

 

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EXHIBIT C

 

* [Two pages have been omitted in accordance with a request for confidential treatment.]

 

 

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EXHIBIT D

STANDARD DIAGNOSTICS SERVICES

 

1) [*]

[*]:

(5) CFM will provide training regarding Airline’s implementation of the diagnostics and monitoring software tools furnished hereunder by CFM to Airline.

 

2) AIRLINE’S RESPONSIBILITY UNDER THE DIAGNOSTICS PROGRAM

 

  A) Airline shall:

 

  1) Provide CFM all information and records requested by CFM that are reasonably necessary for CFM to establish and provide the Diagnostic Service (including, but not limited to, avionics specifications, aircraft/engine maintenance history, engine configuration information, etc.). To the extent that such information and records are not owned by Airline, Airline represents and warrants that it has full authorization to disclose such information and records to CFM and that CFM has the right to use such information and records for all of the purposes that they are provided to CFM by Airline, including fulfilling CFM’s obligations under this Agreement.

 

  2) Make available to CFM data used in the monitoring and diagnostics of Engines eligible for coverage. Airline will authorize Airline’s air-to-ground service provider to forward the data directly to the CFM SITA/ARINC address ILNGE7X. If air-to-ground equipment is not available, CFM will work with the Airline to establish means such that the data is provided with minimal manual intervention.

 

  3) Access the Diagnostic Service via the CFM Extranet. A web browser, an internet service provider and a user id/password (supplied by CFM) is required. Such access shall be subject to the then-current CFM Extranet Terms and Condition as provided on the CFM Extranet site.

 

  4) CFM promptly will notify Airline of any Aircraft and Engine Alerts, faults, or adverse trends that are identified by means of the Diagnostic Services. Airline thereafter shall make all maintenance decisions regarding resolution of such Alerts, faults or adverse trends that have been identified. CFM and Airline agree that this allocation of responsibility is reflected in the price of the Diagnostic Service.

 

  B) Airline acknowledges that the Diagnostic Services performed hereunder may be conducted by CFM affiliates outside of the U.S., and that there is no prohibition on CFM’s export of Airline data for such purposes.

 

 

D-1    

CFM PROPRIETARY INFORMATION

(subject to restrictions on cover page)

SGR/10493094.2


GENERAL TERMS AGREEMENT NO. CFM- CFM-1-2887169891

 

3) [*]

 

  A) [*]

 

  B) [*]

 

  C) [*]

 

4) ASSIGNMENT

[*]. System access by a third party service provider pursuant to such authorization shall be limited to the features of entering new flight data, entering engine changes, and creating trend plots of performance parameters. Furthermore, data available for plotting shall be limited to the typical engine health monitoring parameters (exhaust gas temperature, fuel flow, core speed, fan and core vibrations and oil temperature and pressure). In no event shall such third parties have access to other features of the system, including without limitation, real-time viewing, root-cause analysis, customized reporting or alarm configurations. In no event shall any such authorization by Airline and agreement by the third party service provider increase, duplicate or expand CFM’s obligations, liability or any available remedies hereunder.

 

 

D-2    

CFM PROPRIETARY INFORMATION

(subject to restrictions on cover page)


GENERAL TERMS AGREEMENT NO. CFM- CFM-1-2887169891

 

EXHIBIT E

AIRLINE AFFILIATES LIST

Aerolíneas Galápagos S.A. Aerogal

Av. Amazonas 7797 y Juan Holguín

Quito, Ecuador

Tel: (5932) 396 0600 ext. 2430

Aerovías del Continente Americano S.A. Avianca

Avenida Calle 26 No 59-15

Edificio Avianca - Piso 10

Bogotá, Colombia

Tel: (57) 158 77700 ext. 2522

Lineas Aéreas Costarricenses, S.A.

P.O. Box 1531-1000

Edificio LACSA, La Uruca

San José, Costa Rica

Fax: (506) 2242-1259

Taca International Airlines, S.A.

Edificio TACA, Avenida El Espino y Boulevard Sur

Santa Elena, Antiguo Cuscatlán

La Libertad, El Salvador

Fax: (503) 2298-0827

Trans American Airlines, S.A.

Calle Los Sauces 364 Torre Roja, San Isidro

Lima 27, Perú

Tel: (511) 213 6060


GENERAL TERMS AGREEMENT NO. CFM- CFM-1-2887169891

 

ATTACHMENT I-A

 

* [Two pages have been omitted in accordance with a request for confidential treatment.]


GENERAL TERMS AGREEMENT NO. CFM- CFM-1-2887169891

 

ATTACHMENT F.2.A

[*]

LEAP Controls & Accessories

[*]

Exhibit 10.18

Note: Certain portions have been omitted from this Agreement in accordance with a request for confidential treatment submitted to the Securities and Exchange Commission. Omitted information has been replaced with an asterisk. Omitted information has been filed separately with the Securities and Exchange Commission.

 

LOGO

RATE PER FLIGHT HOUR AGREEMENT

FOR

LEAP-1A

ENGINE SHOP MAINTENANCE SERVICES

BETWEEN

CFM INTERNATIONAL, INC.

AND

AVIANCATACA HOLDING S.A.

Service Agreement Number: 1-2887169891

Dated: February 6, 2013

PROPRIETARY INFORMATION NOTICE

The information contained in this document is CFM International, Inc. (“ CFM ”) and AVIANCATACA HOLDING S.A. (“ AVIANCATACA ”) Proprietary Information and is disclosed in confidence. It is the property of the Parties and will not be used, disclosed to others or reproduced without the express written consent of the Parties. If consent is given for reproduction in whole or in part, this notice and the notice set forth on each page of this document will appear in any such reproduction. U.S. export control laws may also control the information contained in this document. Unauthorized export or re-export is prohibited.

SGR/10521962.2


TABLE OF CONTENTS

 

1.0    DEFINITIONS      3   
2.0    SCOPE OF THE SERVICE AGREEMENT      3   
3.0    TERM OF THE SERVICE AGREEMENT      3   
4.0    ENGINES AND OPERATING PARAMETERS      3   
5.0    CFM SERVICE PROGRAM      4   
6.0    [*]      5   
7.0    [*]      7   
8.0    [*]      8   
9.0    [*]      8   
10.0    [*]      8   
11.0    [*]      9   
12.0    [*]      9   
13.0    COMMUNICATION      10   
14.0    GENERAL TERMS AND CONDITIONS      10   

 

2

CFM PROPRIETARY INFORMATION – SUBJECT TO RESTRICTIONS ON THE FIRST PAGE


THIS RATE PER FLIGHT HOUR AGREEMENT FOR ENGINE SHOP MAINTENANCE SERVICES (“ Service Agreement ”) is made this 6 th day of February, 2013, by and between AviancaTaca Holding S.A. , a company duly organized under the laws of Panama having a principal place of business at Centro Administrativo, Avenida El Dorado, Bogota, Colombia (“ AVIANCATACA ”), and CFM International, Inc. , having its principal place of business at 6440 Aviation Way, West Chester, Ohio 45069 USA (“ CFM ”), (each a “ Party ” and collectively referred to herein as “ Parties ”).

WHEREAS , AVIANCATACA desires to enter into the Service Agreement with CFM whereby CFM will perform or cause to be performed the maintenance, repair, and overhaul of certain LEAP-1A engines operated by AVIANCATACA (“ MRO ”).

WHEREAS , CFM agrees to provide or cause to be provided such MRO services.

NOW THEREFORE , in consideration of the mutual covenants herein contained, the Parties agree as follows:

 

1.0 DEFINITIONS

Capitalized terms used in this Service Agreement and not otherwise defined have the meanings set forth in Exhibit A.

 

2.0 SCOPE OF THE SERVICE AGREEMENT

This Service Agreement contains the terms and conditions applicable to the sale by CFM and the purchase by AVIANCATACA of the CFM Service Program.

The Engines covered by this Service Agreement are described in Article 4.

CFM will provide the Covered Services on the basis of a combination of a Popular Rate and a Restored Rate per Engine Flight Hour covering each Engine for a period of fifteen (15) years from the date of each Engine delivery to AVIANCATACA.

[*]

 

   

At the time of a Qualified Shop Visit, by multiplying a Restored Rate per Engine Flight Hour by the Engine Flight Hours accumulated from Entry Into Service or since the last Qualified Shop Visit for that Engine.

During the term of this Service Agreement, CFM shall be the exclusive provider of the CFM Service Program and all Parts installed into Engines for Covered Services.

 

3.0 TERM OF THE SERVICE AGREEMENT

This Service Agreement will commence on the date of execution of this Service Agreement, (the “ Commencement Date ”). Each Engine will be covered by this Service Agreement for the period beginning on the delivery date of such Engine to AVIANCATACA and covered for a period of fifteen (15) years, as specified in Exhibit B.

[*].

 

4.0 ENGINES AND OPERATING PARAMETERS

The Engines covered by this Service Agreement and the base operating parameters are set forth on Exhibit B.

 

3

 

CFM PROPRIETARY INFORMATION – SUBJECT TO RESTRICTIONS ON THE FIRST PAGE


5.0 CFM SERVICE PROGRAM

 

5.1 Covered Services

 

5.1.1 [*]

[*]

An Engine Delivered by AVIANCATACA against or without the advice and consent of the CFM Program Manager or his delegate will not initially be considered a Qualified Shop Visit, and the shop visit will be charged to AVIANCATACA as Supplemental Services, unless it is determined after Delivery that the Engine qualifies. A shop visit will not be considered a Qualified Shop Visit if the Engine has been operated outside of applicable AMM instructions or limits or in conflict with applicable on-wing maintenance manuals, or has not undergone appropriate troubleshooting per CFM’s written recommendations under applicable manuals. Furthermore, for shop visits to be qualified requires AVIANCATACA to comply with CFM’s recommended requirements for a core water wash program as directed by the CFM Program Manager.

[*]:

 

  a. [*]

 

  b. [*]

 

  c. [*]

 

  d. [*]

 

  e. [*]

 

  f. [*]

 

  g. [*]

 

  h. Correction of Major FOD, which shall include all labor, materials and parts necessary to return the Engine to Serviceable condition, where an Engine or module requires Services for, or as a result of Major FOD, up to a maximum amount for each Engine equal to the lesser of any insurance deductible covering such Major FOD event or five hundred thousand U.S. Dollars (U.S. $500,000.00)).

 

  i. For Engines undergoing a shop visit initiated by a requirement for Supplemental Services to be performed, restoration and parts replacement which would have been performed as Covered Services had the event or condition which initiated the requirement for Supplemental Services not occurred, will nevertheless be performed as Covered Services and AVIANCATACA will pay applicable Rates.

 

5.1.2 [*]

 

5.1.3 Engine Management Services and Diagnostic Services

CFM will provide the following diagnostics services:

 

  a. Engine condition data will be automatically processed by diagnostics software 24 hours a day, 7 days a week (“ 24x7 ”) when received at the designated CFM facility. CFM will be responsible for operating and maintaining the diagnostics software and the necessary facilities. AVIANCATACA shall have access to the web-based tools for reviewing Engine condition data and assessing Engine health.

 

  b. Customer Notification Reports (“ CNR ”) for Engine condition monitoring trend shift observation, including engineering review, analysis, and recommendations will be provided to AVIANCATACA, as requested by AVIANCATACA, on a 24x7 basis.

 

  c. Monthly Engine thrust derate report.

 

  d. Access to diagnostics engineers for Engine diagnostic support and consultation as required.

 

  e. Periodic teleconference to review reports and program status.

 

  f. Weekly engine health trend summary and analysis reports.

AVIANCATACA acknowledges and agrees that any such information provided to AVIANCATACA by CFM for use in troubleshooting and managing operations is, for regulatory purposes, advisory only, that CFM is not responsible for line maintenance or other actions or consequences resulting from such advice, and for purpose of compliance with AAA requirements, AVIANCATACA is solely responsible for identifying and resolving any aircraft or Engine faults or adverse trends.

 

4

 

CFM PROPRIETARY INFORMATION – SUBJECT TO RESTRICTIONS ON THE FIRST PAGE


5.1.4 [*]

 

  A. [*]

 

  B. [*]

[*] may be amended from time to time (the “ IATA Master ”) together with a lease agreement substantially in the form of Annex 2 thereto incorporating, subject to the terms and conditions contained in such lease agreement, the terms of the IATA Master.

 

  C. [*]

 

  D. Sole Remedy:

The foregoing provisions of this Paragraph 5.1.4 will constitute the sole remedy of AVIANCATACA and the sole liability of CFM for lease engine availability and resolution of AOG conditions under this Service Agreement.

 

5.2 Additional Services

 

5.2.1 [*]

 

5.2.2 CFM Engineering Support Services

CFM will provide the following engineering support services:

 

  a. Notify AVIANCATACA of any deviations from the configuration specification of Engines Delivered for Service, and request resolution of same.

 

  b. Provide an Engine findings report (which may include photographs identifying damage detected and repairs) accomplished.

 

  c. Consultation on trend reports.

 

  d. Advice covering Engine enhancements.

 

  e. CFM will work with AVIANCATACA in inspection of records for used engines being considered by AVIANCATACA for acquisition and shop visit development for return of leased engines, but AVIANCATACA shall be solely responsible for making the final determination as to the quality of the used engines.

 

5.3 [*]

[*]

 

6.0 [*]

 

6.1 CFM Fulfillment

CFM may in CFM’s sole discretion delegate to or purchase from any CFM Designated Repair Station, provided the applicable CFM Designated Repair Station has been approved by AVIANCATACA and added into AVIANCATACA’s AAA approved maintenance program, such approval and addition not to be unreasonably withheld, part or all of any obligation, right or benefit of CFM for the performance of the CFM Service Program in conformance with the Repair Specification. CFM shall cooperate with AVIANCATACA to minimize the burden and expense of adding and approving such DRS to AVIANCATACA’s approved vendors list, and to provide the information required to obtain approval from the Aviation Authorities.

CFM will provide the requirements of the Repair Specification to the CFM Designated Repair Station and allow AVIANCATACA reasonable access to such facilities to perform its duties as the AVIANCATACA operator certificate holder.

 

5

 

CFM PROPRIETARY INFORMATION – SUBJECT TO RESTRICTIONS ON THE FIRST PAGE


The CFM Designated Repair Station shall be any CFM overhaul facility designated by CFM and listed in Exhibit H and approved by AVIANCATACA as specified above. In the event the CFM Designated Repair Station loses its applicable AAA certifications to perform Services, CFM will direct such DRS to cease work immediately on all AVIANCATACA Equipment until such certification is restored. CFM may designate an alternate CFM Designated Repair Station and transport the Equipment to such alternate DRS at no cost and expense to AVIANCATACA. AVIANCATACA shall maintain approvals and qualifications at both GE Engine Services and Snecma facilities. Should CFM change the DRS, AVIANCATACA’s obligations under this Agreement, including transportation expenses, will be no greater than if such Services were performed at the original DRS.

 

6.2 Procedure

 

  a) AVIANCATACA shall Deliver the Engine to the CFM Designated Repair Station.

 

  b) AVIANCATACA shall issue a purchase order to CFM and CFM shall accept the purchase order to the extent it complied with this Service Agreement, CFM shall process the performance of the Services in accordance with the AVIANCATACA requirements specified in such purchase order, provided that, in any event, any conflicting terms and conditions of this Service Agreement shall take precedence over any terms and conditions set forth on such purchase order or CFM acceptance document.

 

  c) AVIANCATACA shall provide all applicable Engine records, as required by the AAA or as reasonably requested by CFM, and the shop visit data listed in Exhibit C to the extent that the data is not otherwise available to CFM.

 

  d) Following Delivery of each Engine at the CFM Designated Repair Station, together with the documents described in Paragraphs (b), and (c) above, CFM shall diligently perform or cause to be performed the Induction of the Engine and shall proceed with the Services requested by such purchase order in accordance with Paragraph (b) above.

 

  e) CFM will inform AVIANCATACA as to whether the shop visit meets the criteria for a Qualified Shop Visit within a commercially reasonable period of time, not to exceed two (2) weeks after Induction of the Engine.

 

  f) Upon Induction, CFM will notify AVIANCATACA of any components or LRU’s missing from the Engine. CFM will replace such missing items at AVIANCATACA’s expense as Supplemental Services, unless (i) AVIANCATACA notifies CFM in writing within forty eight (48) hours after receiving CFM’s notice that AVIANCATACA wishes to furnish such missing items; and (ii) AVIANCATACA delivers such missing items to the CFM Designated Repair Station within three (3) weeks.

 

  g) CFM shall Redeliver a Serviceable Engine to AVIANCATACA.

 

  h) CFM will prepare and package the Serviceable Engine in shipping stands or containers provided by AVIANCATACA at the time of Delivery in accordance with CFM’s standard commercial practices.

 

  i) CFM shall provide AVIANCATACA with copies of all work records required by AAA as agreed to in writing by CFM and AVIANCATACA.

 

  j) CFM shall use only CFM approved parts, materials and published repairs; CFM may not use any non-OEM repairs without AVIANCA/TACA’s prior approval, which may be withheld for any reason. Any deviations from this requirement will require AVIANCATACA’s approval in advance of fitment to the Engine. For parts that are typically time tracked during the course of an overhaul, no replacement part may have a TSN which exceeds the TSN of the Engine in which it is to be installed or of the part which it is replacing. Any replacement part must have a modification and SB status at least as high as that of the part which it is replacing.

 

6.3 Workscope and Repair Specification

At least thirty (30) Days in advance of the Delivery, for scheduled Shop Visits with a routine Workscope, and upon Induction of the Engine in all other cases, CFM will prepare a preliminary Workscope based on its analysis of such Engine’s trends, AD requirements and any requests from AVIANCATACA, and provide a copy of such Workscope to AVIANCATACA. CFM may recommend amendment to the Repair Specification and recommend inclusion in preliminary Workscopes to include reliability and performance enhancements and AAA-approved repairs during the Term hereof to improve Engine operating characteristics and incorporate OEM-approved repairs, subject to

 

6

 

CFM PROPRIETARY INFORMATION – SUBJECT TO RESTRICTIONS ON THE FIRST PAGE


AVIANCATACA’s comments and approval which, provided there is no cost or operational impact, will not be unreasonably withheld, conditioned or delayed. The final Workscope must be approved in writing by AVIANCATACA before restorative Services commence. Any changes or amendments to the Repair Specification will be mutually agreed by the Parties and may, to the extent requested by AVIANCATACA, result in an adjustment in the pricing set forth in Article 7.

LLP Minimum Build for Performance Restoration Shop Visits will be 8000 cycles for LEAP-1A24, 7000 cycles for LEAP-1A26 and LEAP-1A32, and any LLP which do not meet such minimum build shall be replaced by new Parts.

Engines already qualified for the TRUEngine program that are maintained under this Service Agreement will maintain their TRUEngine status. Other engines added to the Service Agreement will be added to the TRUEngine program upon meeting qualification requirements as the result of Services and inspections performed during this Service Agreement.

CFM may propose, subject to agreement by AVIANCATACA and/or its lessors, to replace an Engine with a new or used engine for either program or commercial reasons. Any such replacement engine shall be in a similar or higher configuration as the removed Engine.

AVIANCATACA acknowledges that CFM does not have information regarding non-CFM approved material and repairs and their design characteristics, manufacturing, material or any potential system effects arising from their use and maintenance. AVIANCATACA further acknowledges that CFM, as the OEM of the Engine, only has knowledge and expertise on the components and repairs CFM has developed within the whole Engine, taking into account the system effects environment and continued airworthiness support.

Accordingly, AVIANCATACA recognizes and agrees that CFM is not able to make technical assessments or recommendations with respect to non-CFM approved material and repairs, nor support or maintain such materials or repairs. The terms and conditions of the Services reflected in the present Service Agreement are predicated on CFM’s capabilities as described above.

 

6.4 [*]

 

6.5 [*]

In the event an Engine is Delivered with parts or components or QEC equipment in addition to the basic configuration, such Engine shall be Redelivered in the same configuration as Delivered, unless otherwise mutually agreed by the Parties. Any work performed to return such parts or components or QEC equipment in a Serviceable condition will be charged to AVIANCATACA as Supplemental Services.

The Engine Redelivered to AVIANCATACA will have incorporated Airworthiness Directives and CFM Service Bulletins as specified in Article 5.1.1.

To the extent allowed under Article 6.2, CFM may elect to use used Rotable Parts, and/or repaired parts in Serviceable condition in Engines Redelivered to AVIANCATACA, and such Rotable Parts, and/or repaired parts will be a CFM part of similar configuration as the parts in the Engine Delivered to CFM.

 

6.6 [*]

 

7.0 [*]

 

7.1 *    [Two pages have been omitted in accordance with a request for confidential treatment.]

 

7

 

CFM PROPRIETARY INFORMATION – SUBJECT TO RESTRICTIONS ON THE FIRST PAGE


7.2 [*]

 

7.3 [*]

In the event of termination of this Service Agreement due to any reason other than the material breach by CFM, such credits will be cancelled and any amount issued and applied as of the time of termination shall be refunded to CFM by AVIANCATACA within thirty (30) Days of termination of this Service Agreement.

 

8.0 [*]

 

8.1 [*]

 

8.2 [*]

 

8.2.1 [*]

 

8.3 [*]

 

9.0 [*]

 

9.1 [*]

 

9.1.1 [*]

 

9.1.2 [*]

 

9.2 [*]

 

9.3 [*]

 

9.4 [*]

 

10.0 [*]

 

10.1 [*].

 

10.2 Packaging

AVIANCATACA is responsible for all packaging, labeling and associated documentation of the Engine at Delivery, in accordance with the International Civil Aviation Organizations (ICAO) Technical Instructions for the Safe Transport of Dangerous Goods by Air, and if the Engine is to be transported over the United States of America, the US Department of Transport Regulations 48 CFR 171-180. If required by applicable law or regulations, AVIANCATACA will further provide a material safety data sheet to CFM at Delivery of the Engine indicating any substances contained within the Engine to be consigned. AVIANCATACA will indemnify, defend and hold harmless CFM from all or any claims, liabilities, damages, judgments, costs, penalties, fines and/or any punitive damages imposed, alleged, or assessed by any third party against CFM and caused by and to the extent of AVIANCATACA’s non-compliance with this Article 10.2.

 

10.3 Shipping Stands

AVIANCATACA will provide and maintain all shipping stands, shipping containers, mounting adapters, inlet plugs and covers, required to package the Engine for Delivery and Redelivery.

 

8

 

CFM PROPRIETARY INFORMATION – SUBJECT TO RESTRICTIONS ON THE FIRST PAGE


10.4 Redelivery

After completion of Services, CFM will prepare and package the Engine for Redelivery to AVIANCATACA and provide a Services records package that complies with AAA regulations.

Redelivery dates are based upon receipt by CFM of all information necessary to permit CFM to proceed with the Services immediately and without interruption.

In the event Redelivery of an Engine cannot occur due to any act or failure to act by AVIANCATACA, CFM may place such Engine into storage. In such event, CFM will notify AVIANCATACA and CFM’s Redelivery obligations will be deemed fulfilled and all risk of loss or damage to the Engine shall pass to AVIANCATACA on the date of such storage. Any amounts payable to CFM upon Redelivery will be payable thirty (30) days after the date of CFM’s invoice. Promptly upon receipt of CFM’s invoice, AVIANCATACA will reimburse CFM for all expenses incurred by CFM, including, but not limited to, preparation for and placement into storage, handling, inspections, preservation and insurance of the Engine. Upon payment of all amounts due hereunder, CFM will assist and cooperate with AVIANCATACA in the removal of Engine that has been placed in storage.

AVIANCATACA will indemnify, defend and hold harmless CFM from all or any claims, liabilities, damages, judgments, costs, penalties, fines and/or any punitive damages imposed, alleged, or assessed by any third party against CFM and caused by and to the extent of AVIANCATACA’s non-compliance with this Article 10.4.

 

11.0 [*]

 

11.1 [*]

 

11.2 [*]

 

11.3 [*]

 

12.0 [*]

 

12.1 [*]

 

12.2 Removal of Engines

AVIANCATACA may remove an Engine from this Service Agreement upon advance written notice, only if AVIANCATACA is no longer operating the Engine and is no longer responsible for maintenance of the Engine for the following reasons:

 

  a. Bona fide sale or other bona fide transfer to an unaffiliated third party;

 

  b. An unplanned return to the lessor; or

 

  c. If the Engine has been reasonably determined to be BER.

In all cases of Engine removal, provided that AVIANCATACA is in compliance with Article 6.6, AVIANCATACA may select which Engine will be removed, provided that the engine(s) being removed is representative of a fleet average engine, unless AVIANCATACA’s lessor dictates otherwise.

Any Engine removal will be subject to the reconciliation provisions set forth below.

 

12.2.1 Reconciliation . The following applies to Engines removed as a result of a removal per Paragraph (a), (b) or (c) above:

 

  a. If a removed Engine has not undergone a Qualified Shop Visit for Covered Services, no penalties nor reconciliation will apply. CFM will retain the Popular Rate billings through the date of removal.

 

9

 

CFM PROPRIETARY INFORMATION – SUBJECT TO RESTRICTIONS ON THE FIRST PAGE


  b. If a removed Engine has undergone at least one (1) Performance Restoration Shop Visit for Covered Services, no penalties nor reconciliation will apply. CFM will retain the Popular Rate billings through the date of removal.

 

  c. If a removed Engine has undergone at least one Qualified Shop Visit for Covered Services, but not a Performance Restoration Shop Visit, CFM will calculate the total cumulative charges for all Covered Services provided for such removed Engine as if such Services were provided on a Supplemental Services basis and the Supplemental Services pricing had applied (“ Supplemental Charges ”). CFM will then compare such Supplemental Charges to the total cumulative Restored Rate Covered Services payments received from AVIANCATACA for such removed Engine. If the Supplemental Charges are greater than the total cumulative Restored Rate Covered Services payments received from AVIANCATACA, CFM will invoice AVIANCATACA for the difference, together with a detailed explanation of the calculations reflected in such invoice. AVIANCATACA will pay such invoice within thirty (30) Days of receipt. If the Supplemental Charges are less than the total cumulative Restored Rate Covered Services payments received from AVIANCATACA, CFM will credit to AVIANCATACA within thirty (30) Days the difference between the total cumulative Restored Rate Covered Services payments received from AVIANCATACA and the Supplemental Charges. CFM will retain the Popular Rate billings through the date of removal.

 

12.2.2 Impact of Removals . CFM will evaluate the effect of the removal from the Service Agreement of more than forty percent (40%) of the Engines from the AVIANCATACA fleet on the Rate Per Flight Hour pricing, taking into consideration effects on the fleet size, age and condition of the Engines. CFM may adjust the Rate Per Flight Hour pricing accordingly if the number of Engines covered by the Service Agreement decreases to less than sixty percent (60%) of the total fleet of Engines operated by AVIANCATACA, without taking into account any engines that are added to the program in accordance with Article 12.1. In such event, the adjusted Rate Per Flight Hour pricing will be mutually agreed and the Service Agreement will be amended accordingly. AVIANCATACA will pay the adjusted Rate Per Flight Hour pricing for all EFH incurred by all Engines that remain covered by the Service Agreement from the date of the Engine removal that triggered the rate adjustment.

In the event the Parties do not agree on the adjusted Rate Per Flight Hour pricing within ninety (90) Days from the date of the Engine removal that triggered the rate adjustment, CFM may terminate this Service Agreement upon written notice to AVIANCATACA.

 

13.0 COMMUNICATION

CFM will assign a program manager who will be the point of contact for AVIANCATACA with respect to implementation of the CFM Service Program (“ CFM Program Manager ”).

AVIANCATACA will also designate a point of contact to communicate with the CFM Program Manager.

The CFM Program Manager will:

 

  a. Draft a Procedures Manual and submit it to AVIANCATACA for mutual approval;

 

  b. Work with the AVIANCATACA, on a monthly basis, to develop a Removal Schedule which will identify by serial number the Engine(s) to be removed during the following six (6) month period, the anticipated reason for removal of each, and the schedule for Delivery.

 

14.0 GENERAL TERMS AND CONDITIONS

General terms and conditions provided in Exhibit I are an integral part of this Service Agreement.

 

10

 

CFM PROPRIETARY INFORMATION – SUBJECT TO RESTRICTIONS ON THE FIRST PAGE


Counterparts: This Service Agreement may be signed by the Parties in separate counterparts, and any single counterpart or set of counterparts, when signed and delivered to the other Parties shall together constitute one and the same document and be an original Service Agreement for all purposes.

IN WITNESS WHEREOF , the Parties hereto have executed this Service Agreement as of the day and the year first above written.

 

CFM INTERNATIONAL, INC.
BY :   

 

 

PRINTED NAME :   

 

 

TITLE:   

 

 

AVIANCATACA HOLDING S.A.
BY :   

 

 

PRINTED NAME :   

 

 

TITLE :   

 

 

 

 

11

 

CFM PROPRIETARY INFORMATION – SUBJECT TO RESTRICTIONS ON THE FIRST PAGE


EXHIBITS

 

EXHIBIT A:    DEFINITIONS
EXHIBIT B:    [*]
EXHIBIT C:    [*]
EXHIBIT D:    [*]
EXHIBIT E:    [*]
EXHIBIT F:    [*]
EXHIBIT G:    [*]
EXHIBIT H:    [*]
EXHIBIT I:    GENERAL TERMS AND CONDITIONS
EXHIBIT J:    [*]

 

12

 

CFM PROPRIETARY INFORMATION – SUBJECT TO RESTRICTIONS ON THE FIRST PAGE


EXHIBIT A: DEFINITIONS

Capitalized terms used herein but not otherwise defined have the following meanings:

Act of God ” - An event that directly and exclusively results from the occurrence of natural causes beyond the reasonable control of the Parties.

Additional Services ” - The Services described in Article 5.2.

Aircraft Accident ” - An occurrence caused by the operation of an aircraft in which any person suffers a fatal injury or serious injury as a result of being in or upon the aircraft or by direct contact with the aircraft or anything attached to the aircraft, or in which the aircraft receives damage or a third party’s property is damaged in any way.

Aircraft Incident ” - An occurrence, other than an Aircraft Accident, caused by the operation of an aircraft that affects or could affect the safety of operations and that is investigated and reported.

Airworthiness Directive ” or “ AD ” - A document issued by the AAA having jurisdiction over the Engines, identifying an unsafe condition relating to such Engines and, as appropriate, prescribing inspections and the conditions and limitations, if any, under which the Engines may continue to operate.

AMM ” - Aircraft Maintenance Manual.

Approved Aviation Authority ” or “ AAA ” - As applicable, the FAA, EASA, the Aeronáutica Civil of Colombia, Dirección General de Aviación Civil of Ecuador, Autoridad de Aviacion Civil of El Salvador, Directorate General of Civil Aviation of Costa Rica or Dirección General de Aeronáutica Civil del Peru.

Beyond Economic Repair ” or “ BER ” - When the cost, calculated on a Supplemental Services basis, to restore an Engine to the requirements of the Repair Specification exceeds sixty five percent (65%) of the fair market value of a comparable Serviceable engine.

CFM Designated Repair Station ” or “ CFM DRS ” or “ DRS ” - The repair facilities designated by CFM, which are certified by the AAA to perform the Services hereunder and where Services are performed on Engines.

CFM Program Manager ” - Has the meaning provided in Article 13.

CFM Service Program ” - All off-wing work required on an Engine to restore the Engine to Serviceable condition in accordance with the Repair Specification, the Workscope and the terms of this Service Agreement, including Supplemental Services.

CLP ” - The manufacturer’s Current catalog or manufacturer’s Current list price pertaining to a new Engine or part thereof.

Commencement Date ” - Has the meaning provided in Article 3.

Contracted Months ” - Has the meaning provided in Article 7.3.

Covered Services ” - The Services described in Article 5.1.

Current ” - As of the time of the applicable Service or determination.

Day ” - Calendar day unless expressly stated otherwise in writing. If performance is due on a public holiday recognized by the CFM DRS, performance will be postponed until the next business day (Monday through Friday).

 

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Delivery ” - The arrival of an Engine together with all applicable records and required data Delivery Duty Paid (“ DDP ”), International Chamber of Commerce, Incoterms 2010, at the CFM Designated Repair Station, whereby AVIANCATACA fulfills the obligations of seller and CFM fulfills the obligations of buyer. “ Deliver ” will mean the act by which AVIANCATACA accomplishes Delivery.

Delivery Point ” - in the case of Flightline LRU Support, means the CFM facility located in Villaroche, France.

Dollars ” or “ U.S. $ ” - The lawful currency of the United States of America.

EASA ” - the European Aviation Safety Authority,

Engine ” - Each bare engine assembly or, as applicable, Engine module, which is covered by this Service Agreement and identified in Exhibit B, including its essential components as described in Exhibit F.

Engine Flight Hour ” or “ EFH ” - Engine flight hour expressed in hourly increments of aircraft flight from wheels up to wheels down.

Entry Into Service ” - The date when the Engine is delivered to AVIANCATACA by the airframer or by CFM, as a New Engine.

FAA ” - Federal Aviation Administration of the United States

FIM ” - Fault Isolation Manual.

Foreign Object Damage ” or “ FOD ” - Damage to any portion of the Engine caused by impact with or ingestion of a non-Engine object such as birds, stones, hail, ice, vehicles, tools or debris. FOD may be further classified as a “ Major FOD ,” which means FOD that causes an out of limit condition per the Aircraft Maintenance Manual, and which, either immediately or over time, requires the Engine to be removed from service or prevents the reinstallation of the Engine.

GTA ” - the General Terms Agreement between CFM and AVIANCATACA, No. CFM-1-2887169891, dated February 6, 2013.

IATA Master ” - Has the meaning provided in Article 5.1.4.

Induction ” - The date work commences on the Engine at the CFM Designated Repair Station when all of the following have taken place: (i) CFM’s receipt of the Engine and required data, (ii) Parties’ approval of the preliminary Workscope, (iii) CFM’s receipt of an acceptable purchase order, (iv) Parties’ agreement on use of the AVIANCATACA furnished equipment; and (v) receiving inspection (including pre-testing if needed).

Life Limited Part ” or “ LLP ” - A part with a limitation on use established by CFM or the AAA, stated in cumulative EFH or cycles.

LLP Minimum Build ” - The minimum quantity of cycles and/or hours that every LLP must have at the completion of a Performance Restoration Shop Visit. The LLP Minimum Build shall be the threshold used to determine which LLP are replaced at a Performance Restoration Shop Visit.

Line Replaceable Unit ” or “ LRU ” - A major control or accessory that is mounted on the external portion of an Engine, as listed in Exhibit F.

MRO ” shall have the meaning provided in the recitals.

New Engine ” - An Engine which has not undergone a shop visit, which has less than one hundred (100) EFH since new and which contains only CFM approved parts and CFM approved repairs.

On-Site Support ” or “ OSS ” - Has the meaning provided in Article 5.2.1.

 

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Part ” - A part originally sold by CFM.

Performance Restoration Shop Visit ” - The Services, performed during a shop visit in which, at a minimum, the following modules are exposed, disassembled and subsequently refurbished: the high-pressure turbine, combustor and the high pressure compressor, if required to retain the performance of the high-pressure compressor. If the LLP core stack is replaced, it is considered a Performance Restoration Shop Visit.

Pool ” - means the collective reference to Serviceable LRU necessary for Standard Exchange as listed in Exhibit J.

Popular Rate ” or “ Popular Rate per Engine Flight Hour ” - The Popular Rate per Engine Flight Hour provided in Article 5.1 and priced in accordance with Article 7.1.

Primary Hub ” - The main airport where AVIANCATACA performs the majority of its engine removal off wing.

Procedures Manual ” - A separate document, not part of this Service Agreement, which provides detailed procedures and guidance for the administration of the Service Agreement. In case of conflict between the Procedures Manual and the Service Agreement, the Service Agreement will prevail.

Qualified Shop Visit ” - Has the meaning provided in Article 5.1.1.

QEC ” - Quick Engine Change.

Rate ” or “ Rate Per Engine Flight Hour ” - The rate for Covered Services or Additional Services as set forth in Article 7.

Redelivery ” - The shipment of a Serviceable Engine with legally required certifications, Ex Works, International Chamber of Commerce, Incoterms 2010, at the CFM Designated Repair Station, whereby AVIANCATACA fulfills the obligations of buyer and CFM fulfills the obligations of seller. “ Redeliver ” will mean the act by which CFM completes Redelivery.

Removal Schedule ” - The schedule jointly developed by CFM and AVIANCATACA for Engine removal off wing for Services or Engine removal from operation.

Repair ” - In the case of Flightline LRU Support, means the disassembly, inspection, repair, reassembly and test when applicable, of an LRU in accordance with the applicable CFM shop manual and/or documents (such as vendor’s CMM) approved and authorized by the EASA or FAA, as applicable.

Repair Specification ” - The AVIANCATACA repair specification which establishes the minimum baseline to which an Engine or part thereof will be inspected, repaired, modified, reassembled and tested to make and Engine Serviceable. Such Repair Specification will meet or exceed the recommendations of CFM’s operational specifications, applicable CFM maintenance or overhaul manuals and AVIANCATACA’s maintenance plan that has been approved by the AAA.

Repairable ” - Capable of being made Serviceable.

Restored Rate per Engine Flight Hour ” or “ Restored Rate ” - Services provided pursuant to Article 5.1 and priced in accordance with Article 7.1.

Rotable Part ” - A new or used Serviceable Part drawn from a common pool of Parts used to support one or more customers. A Rotable Part replaces a similar Part removed from an Engine when such removed Part requires repair.

Service(s) ” - With respect to an Engine or part thereof, all or any part of those maintenance, repair and overhaul services provided under this Service Agreement as either Covered Services or Supplemental Services. “ Serviced ” will be construed accordingly.

 

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Service Agreement ” - This Service Agreement, as the same may be amended or supplemented from time to time, including all its Exhibits.

Service Bulletin ” or “ SB ” - The document as issued by CFM to notify the operator of modifications, substitution of parts, special inspections, special checks, or conversion of an Engine from one model to another.

Service Credit ” - Credits that may be applied towards payment for Services, as described in Article 7.3.

Serviceable ” - Meeting all CFM and AAA specified standards for airworthiness.

Standard Exchange ” - In the case of Flightline LRU Support, means any exchange of Unserviceable equipment with a Serviceable one which is available and fully interchangeable with such Unserviceable equipment.

Supplemental Charges ” - Has the meaning provided in Article 7.2.

Supplemental Services ” - Those Services provided pursuant to Article 5.3.

Term ” - Has the meaning provided in Article 3.

TSM ” - Trouble Shooting Manual.

TSN ” - Time since new

Turn Around Time ” - The number of Days from Induction until the Engine is ready for Redelivery (as evidenced solely by placement of the Serviceable tag or equivalent governing agency compliance tag, on such Engine) exclusive of any Excusable Delays as defined in Exhibit I, Article 4.

Unserviceable ” - Not meeting all CFM and AAA specified standards for airworthiness.

Used Engine ” - An Engine which has undergone a shop visit or which has more than one hundred (100) EFH since new.

Workscope ” - Has the meaning provided in Article 6.3.

Workscope Planning Guide ” - The document published by CFM which describes the “ on condition ” maintenance concept for the Engines. This document communicates the timing and extent of work required to enable operators to achieve reliability, performance, and maintenance cost goals.

 

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EXHIBIT B: [*]

 

* [Two pages have been omitted in accordance with a request for confidential treatment.]

 

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EXHIBIT C: SHOP VISIT DATA

 

 

Engine Operator

 

 

Engine Model

 

 

Engine Serial Number

 

 

Engine Time and Cycles Since New

 

 

Engine Time and Cycles Since last Shop Visit

 

 

Shop Visit Rank

 

 

Reason for Shop Visit

 

   

Prime cause,

 

   

Scheduled/unscheduled,

 

   

More detailed description

 

 

Engine Airworthiness Directive and/or Services Bulletin status

 

 

LLP status

 

 

All Engine information and records, set forth in the Procedures Manual

 

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EXHIBIT D: [*]

 

* [Two pages have been omitted in accordance with a request for confidential treatment.]

 

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EXHIBIT E: [*]

[*]

 

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EXHIBIT F: [*]

[*]

 

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EXHIBIT G: [*]

 

1.  [*]

 

    

2.  All Other Labor Charges Not Specified in Exhibit G

 

      [*]

 

    

3.   Charges For Parts and Material ([*])

 

Type Of Material    Price         Handling Fee

New Parts ([*])

 

   [*]    [*]

New Parts ([*])

 

   [*]    [*]

Rotable Parts

 

   [*]    [*]
    
Type Of Material       Price       Handling Fee
Used Serviceable Parts    [*]    [*]
Subcontracted Services    [*]    [*]
    

4.  Component And Accessories Repair:

      [*]

    

5.  Test Cell Usage Charges

      [*]


EXHIBIT G CONTINUED: [*]

 

    

1.  Basis:

 

      [*]

 

    

2.  [*]

 

      [*]

 

    

3.  [*]

 

      [*]

 


EXHIBIT G CONTINUED: [*]

        [*]


EXHIBIT H: [*]

[*]

CFM reserves the right to make additions or changes to the list of Designated Repair Stations upon written notice to AVIANCATACA. AVIANCATACA shall have the right to approve the alternate Designated Repair Station(s), AVIANCATACA’s approval, not to be unreasonably withheld, conditioned or delayed.

 

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EXHIBIT I: GENERAL TERMS AND CONDITIONS

Table of Contents

 

ARTICLE 1   -   

LIMITATION OF LIABILITY AND INDEMNIFICATION

ARTICLE 2   -   

TERMINATION

ARTICLE 3   -   

TAXES

ARTICLE 4   -   

EXCUSABLE DELAY

ARTICLE 5   -   

PATENTS

ARTICLE 6   -   

INFORMATION AND DATA

ARTICLE 7   -   

GOVERNMENTAL AUTHORIZATION & EXPORT SHIPMENT

ARTICLE 5   -   

WAIVER OF IMMUNITY

ARTICLE 9   -   

NOTICES

ARTICLE 10   -   

LIENS

ARTICLE 11   -   

APPLICABLE LAW - DISPUTE RESOLUTION

ARTICLE 12   -   

MISCELLANEOUS

 

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ARTICLE 1 - LIMITATION OF LIABILITY AND INDEMNIFICATION

 

A. Total Liability . The total liability of CFM for any and all claims, whether in contract, warranty, tort (including negligence but excluding willful misconduct), product liability, patent infringement or otherwise, for any damages arising out of, connected with or resulting from the Service Agreement or the performance or non-performance of any Service or from the manufacture, sale, Redelivery, resale, repair, overhaul, replacement or use of the Engine or any item or part thereof, will not exceed: (i) the price allocable to the repaired or overhauled item, part or Service which gives rise to the claim; or (ii) the value of the Engine which gives rise to the claim, whichever is greater. Notwithstanding the foregoing, in no event will CFM or AVIANCATACA have any liability hereunder, whether as a result of breach of contract, warranty, tort (including negligence but excluding willful misconduct), product liability, patent infringement or otherwise, for any special, consequential, incidental, resultant or indirect damages, (including, without limitation, loss of: use, profit, revenue or goodwill) or punitive or exemplary damages.

In no event will CFM have any liability hereunder, whether as a result of breach of contract, warranty, tort (including negligence but excluding willful misconduct), product liability, patent liability, or otherwise, for the design, material, workmanship, engineering defects or product liability and any damages whatsoever, including damages to personal property and for personal injury or death, caused in any way by the manufacturer of the parts, LRU’s, components or material, thereof, or related thereto, provided that this in no way limits the liability of CFM for third party claims or under any General Terms Agreement or Letter Agreement to which CFM and AVIANCATACA are parties.

In the event AVIANCATACA uses non-CFM parts or non-CFM approved LRU’s, parts or repairs in an Engine and such LRU’s, parts or repairs cause personal injury, death or property damage to third parties, AVIANCATACA shall indemnify and hold harmless CFM from all claims and liabilities associated therewith. The preceding indemnity shall apply whether or not CFM was provided a right under this Service Agreement to remove such LRU’s, parts or repairs, and irrespective of the exercise by CFM of such right.

 

B. Definition . For the purpose of this Article 1, the term “CFM” is deemed to include CFM and its parent and affiliated companies, the subcontractors and suppliers of any Services furnished hereunder, and the directors, officers, employees, agents and representatives of each.

ARTICLE 2 - TERMINATION

 

A. Termination Events . The Service Agreement may be terminated as follows:

Late Payment . In the event that AVIANCATACA fails to make payments to CFM within the time periods specified herein, CFM may terminate all or any portion of this Service Agreement upon thirty (30) days written notice to AVIANCATACA, unless AVIANCATACA cures such failure within such period following receipt of this notice.

Insolvency . Either Party may terminate or suspend performance of all or any portion of this Service Agreement if the other Party: (A) makes any agreement with creditors due to its inability to make timely payments of its debts; (B) enters into bankruptcy or liquidation, whether compulsory or voluntary; (C) becomes insolvent; or (D) becomes subject to the appointment of a receiver of the whole or material part of its assets. If such termination should occur, the defaulting Party will not be relieved of its obligations hereunder.

Material Breach . Either Party may terminate this Service Agreement upon ninety (90) Days written notice to the other for failure to comply with any material provision of this Service Agreement unless the failure has been cured prior to such ninety (90) Days (except for late payment, as described in Paragraph A.1 above).

 

B. Activity After Termination . In the event the Service Agreement is terminated, the following shall cumulatively apply, in addition to any other right or remedy allowable under this Service Agreement or applicable law:

Payment for Services Performed . In the event of termination of this Service Agreement for any reason, AVIANCATACA will pay CFM for all Services or work performed by or caused to be performed by CFM up to the time of such termination under the applicable terms and prices of this Service Agreement including all costs, fees, and charges incurred by CFM in providing support and material under this Service Agreement, including lease engines.

Reconciliation . In addition to the above, the terms of the reconciliation under the removal of Engines provisions of Article 12 of the Service Agreement will apply.

Work in Process, Redelivery of AVIANCATACA’s Engines . Upon the termination or expiration of this Service Agreement, CFM will complete all work in process in a diligent manner and Redeliver all Engines, parts and related documentation, provided that AVIANCATACA (a) has paid in full all charges for all such Services and material, plus all costs, fees and penalties, incurred by CFM in providing support, including any lease engines, and (b) has returned all lease engines provided under this Service Agreement.

ARTICLE 3 - TAXES

 

A. Taxes, Duties, or Charges . In addition to the price for the Services, AVIANCATACA agrees to pay, upon demand, all taxes (including, without limitation, sales, use, excise, turnover or value added taxes), duties, fees, charges or assessments of any nature (but excluding any income taxes) (hereinafter “ Taxes ”) assessed or levied in connection with performance of this Service Agreement.

 

B. Reimbursement/Refund . If payment of any such Taxes is made by CFM (or the applicable affiliated company), AVIANCATACA will reimburse CFM (or the applicable affiliated company) upon demand, such reimbursement excluding, inter alia , penalties and interests which could have been levied against CFM (or the applicable affiliated company). AVIANCATACA will use all reasonable efforts to obtain a refund thereof. If all or any part of any such Taxes is refunded to CFM, CFM (or the applicable affiliated company) will repay to AVIANCATACA such part thereof as CFM (or the applicable affiliated company) refunded.

 

C. Withholdings . All payments by AVIANCATACA to CFM (or the applicable affiliated company) under this Service Agreement will be free of all withholdings of any nature whatsoever, except to the extent otherwise required by law, and if any such withholding is so required, AVIANCATACA will pay an additional amount such that after the deduction of all amounts required to be withheld, the net amount received by CFM (or the applicable affiliated company) will equal the amount that CFM (or the applicable affiliated company) would have received if such withholding had not been required. If the aforementioned mechanism contradicts the law of country United States of America, the Parties shall amend this Service Agreement in order to increase the respective prices and amounts provided for by this Service Agreement so that the initial prices and amounts are preserved.

ARTICLE 4 - EXCUSABLE DELAY

 

A.

Excusable Delay . Either Party will be excused from, and will not be liable for, any delay in performance or failure to perform hereunder (except for the obligation to pay money or credit or debit an account which will not be excused hereunder), and will not be deemed to be in default for any

 

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  delay in or failure of performance hereunder due to causes beyond its reasonable control. Such causes will be conclusively deemed to include, but not be limited to acts of God, fire, terrorism, war (declared or undeclared), severe weather conditions, earthquakes, epidemics, material shortages not caused by any CFM act or failure to act, insurrection, acts or omissions of the other Party, any act or omission by any governmental authority, strikes, labor disputes, acts or threats of vandalism or terrorism (including disruption of technology resources), or transportation shortages (each an “ Excusable Delay ”). The time of performance shall be extended for a period equal to the time lost by reason of delay, including time to overcome the effect of the delay, without discriminating against the non-delayed Party.

 

B. Continuing Obligations . Article 4.A will not, however, relieve either Party from using its commercially reasonable efforts to avoid or remove such causes of delay and continue performance with reasonable dispatch when such causes are removed. During the period of an Excusable Delay, CFM will have the right to invoice AVIANCATACA for Services actually performed.

 

C. Extended Delay Termination . If delay resulting from any of the foregoing causes extends for more than six (6) months and the Parties have not agreed upon a revised basis for continuing the Services, including any adjustment of the price, then either Party, upon thirty (30) Days written notice to the other, may terminate the purchase order that covers the delayed Services.

ARTICLE 5 - [*]

[*]

ARTICLE 6 - NON DISCLOSURE

 

A. Non-Disclosure . Unless the Parties otherwise agree herein or further in writing, any of the terms of the Service Agreement or any knowledge, information or data which the Parties have or may disclose to each other shall be held in confidence and may not be either disclosed or used for any purpose, except:

 

  1. To the extent required by government agencies and courts for official purposes, disclosure may be made to such agencies and courts. In such event, a suitable restrictive legend limiting further disclosure shall be applied.

 

  2. The existence of the Service Agreement and its general purpose only may be stated to others by either of the Parties without approval from the other.

 

  3. CFM may disclose the same to its parents, affiliates, subsidiaries, joint venture participants, engineering service provider, or consultants as needed to perform the Services provided under this Service Agreement.

The preceding clause will not apply to information which (1) is or becomes part of the general public knowledge or literature otherwise than as a result of breach of any confidentiality obligation, or (2) was, as shown by written records, known to the receiving Party prior to receipt from the disclosing Party.

 

B. Intellectual Property . Nothing contained in this Service Agreement will convey to either Party the right to use the trademarks of the other, or convey or grant to either Party any license under any patent owned or controlled by the other Party.

 

C. Press Releases . In addition, neither Party will issue any press nor other media release or make any public statement with respect to this Service Agreement without the prior written approval of the other Party, as to the fact and the content of any such media release or public statement.

 

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ARTICLE 7 - GOVERNMENTAL AUTHORIZATION & EXPORT SHIPMENT

AVIANCATACA shall be the importer and/or exporter of record and shall be responsible for the timely application for, obtaining and maintaining any required authorization, such as export license, import license, exchange permit or any other required governmental authorization relating to the Engine, and shall be responsible for complying with all U.S., French and other foreign government licensing and reporting requirements. At AVIANCATACA’s request and expense, CFM will assist AVIANCATACA in its application for any required U.S. or French export licenses. CFM will not be liable if any authorization is not renewed or is delayed, denied, revoked or restricted, and AVIANCATACA will not thereby be relieved of its obligation to pay for Services performed by CFM. All transported Engines will be subject to the U.S. Export Administration Regulations and/or International Traffic in Arms Regulations and (ii) the French export control regulations. AVIANCATACA agrees not to dispose of U.S. or French origin items provided by CFM other than in and to the country of ultimate destination and/or as identified in an approved government license or authorization, except as said laws and regulations may permit.

ARTICLE 8 - WAIVER OF IMMUNITY

To the extent that AVIANCATACA or any of its property is or becomes entitled at any time to any immunity on the grounds of sovereignty or otherwise from any legal action, suit or proceeding, from set-off or counterclaim, from the jurisdiction of any competent court, from service of process, from attachment prior to judgment, from attachment in aid of execution, or from execution prior to judgment, or other legal process in any jurisdiction, AVIANCATACA hereby irrevocably waives the application of such immunity and particularly, the U.S. Foreign Sovereign Immunities Act, 28 U.S.C. 1602, et. seq., and agrees not to plead or claim, any such immunity with respect to its obligations, liabilities or any other matter under or arising out of or in connection with this Service Agreement or the subject matter hereof. Such agreement shall be irrevocable and not subject to withdrawal in any and all jurisdictions.

ARTICLE 9 - NOTICES

 

A. Acknowledgement . Any notices under this Service Agreement shall be in writing and be delivered or sent by mail, express/shipping service or electronic transmission to the respective Parties at the following addresses, which may be changed by written notice:

 

TO:      
AVIANCATACA Holding S.A.   CFM INTERNATIONAL Inc.
  Av Calle 26 No. 59-15, Piso 10   6440 Aviation Way
  Bogotá, Colombia   West Chester, Ohio 45069 USA
Attn :   Secretary   Attn. : CFM Services General Manager
  Facsimile Number: (57)1 423-5500 ext 2522    
    Telephone Number: (57)15877700 ext 2522      

AND

     
 

Centro Administrativo, Avenida El Dorado,

Bogota, Colombia

   

Att. :

  Engineering Director and Power Plan Manager    

 

B.

Effect of Notices . Notices will be effective and will be deemed to have been given to (or “received by”) the recipient: (A) upon delivery, if sent by courier, express mail, or delivered personally; (B) on the

 

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  next business day following receipt, if sent by facsimile with a receipt of confirmation; or (C) on the fifth (5th) business day after posting (or on actual receipt, if earlier) in the case of a letter sent prepaid first class mail. Whenever the words “notice” or “notify” or similar words are used herein, they mean the provision of formal notice as described in this Article 9. Whenever words such as “advise”. “inform” or similar words are used, they mean the use of informal information provided to lower-level operating managers.

ARTICLE 10 - LIENS

 

A. [*]

 

B. Enforcement . If AVIANCATACA fails to tender any payment owing under this Service Agreement and CFM initiates foreclosure with respect to any Engine pursuant to a mechanic’s lien, then AVIANCATACA agrees to supply to CFM all records, log books and other documentation pertaining to the maintenance condition of the Engine reasonably available to it, and a certificate either (i) certifying that the Engine has not been involved in any Aircraft Accident or Incident or (ii) specifying the date and facts surrounding any Accident or Incident in which the Engine has been involved and the nature and extent of the damage sustained (such records, log books, certificate and other documentation referred to hereinafter as the “ Engine Documents ”). The Parties recognize that the failure by AVIANCATACA to deliver the Engine Documents may have a material, adverse effect on the value of any Engine with respect to which foreclosure has been initiated by CFM and the ability of CFM to sell or lease the Engine, and that the damages CFM may sustain as a result are not readily calculable.

ARTICLE 11 – APPLICABLE LAW – DISPUTE RESOLUTION

 

A. Applicable Law . This Service Agreement shall be construed, interpreted and applied, and the legal relations between the Parties determined, in accordance with the laws of the State of New York (U.S.A.). The United Nations Convention on Contracts for the International Sale of Goods shall not apply to this Service Agreement

 

B. Dispute Resolution . If any dispute arises relating to this Service Agreement, the Parties will endeavor to resolve the dispute amicably, including by designating senior managers who will meet and use commercially reasonable efforts to resolve any such dispute. If the Parties’ senior managers do not resolve the dispute within sixty (60) days of first written request, either Party may request that the dispute be settled and fully and finally determined by binding arbitration, in accordance with the International Chamber of Commerce pursuant to its rules of Conciliation and Arbitration, by one or more arbitrators appointed in accordance with said rules. The place of arbitration and hearings shall be Miami, Florida, USA. The arbitration shall be in English and the opinion shall be rendered in English. The arbitration award shall be final and binding by any Party in any court of competent jurisdiction, and shall waive any claim appeal whatsoever against it. The arbitrators will have no authority to award punitive damages or any other damages not measured by the prevailing Party’s actual damages, and may not, in any event, make any ruling, finding or award that does not conform to the terms and conditions of the Service Agreement. All statements made or materials produced in connection with this dispute resolution process and arbitration are confidential and will not be disclosed to any third party except as required by law or subpoena. The Parties intend that the dispute resolution process set forth in this Article 11 will be their exclusive remedy for any dispute arising under or relating to this Service Agreement or its subject matter.

 

C. Exception . Either Party may at any time, without inconsistency with this Article, seek from a court of competent jurisdiction any equitable, interim or provisional relief to avoid irreparable damage. This Article will not apply to and will not bar litigation regarding claims related to a Party’s proprietary or intellectual property rights, nor will this Article be construed to modify or displace the ability of the Parties to effectuate any termination contemplated in Article 2.

ARTICLE 12 - MISCELLANEOUS

 

A. Assignment of Agreement . This Service Agreement, any related purchase order or any rights or obligations hereunder may not be assigned, in whole or in part, without the prior written consent of the other Party, except that AVIANCATACA’s consent will not be required for an assignment by CFM to one of CFM’s parent companies. In the event of any such assignment, AVIANCATACA will be so advised in writing. Any assignment in contradiction of this clause will be considered null and void.

 

B. Beneficiaries . Except as otherwise expressly provided to the contrary, the rights herein granted and this Service Agreement are for the benefit of the Parties hereto and are not for the benefit of any third person, firm or corporation, except as expressly provided herein with respect to GE and Snecma.

 

C. Survival Of Certain Clauses . The rights and obligations of the Parties under the following Articles of this Service Agreement as amended and related Exhibits shall survive the expiration, termination or completion of this Service Agreement:

 

   

Warranty and Limitation of Liability

 

   

Limitation of Liability and Indemnification

 

   

Taxes

 

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Patents

 

   

Non Disclosure

 

   

Governmental Authorization & Export Shipment

 

   

Waiver of Immunity

 

   

Applicable Law - Dispute Resolution

 

   

Miscellaneous

 

D. General Rules of Contract Interpretation . Article and paragraph headings contained in this Service Agreement are inserted for convenience of reference only and do not limit, affect or restrict in any way the meaning and the interpretation of this Service Agreement. Words used in the singular shall have a comparable meaning when used in the plural and vice versa, unless the contrary intention appears. Words such as “hereunder”, “hereof” and “herein” and other words beginning with “here” refer to the whole of this Service Agreement, including amendments. References to Articles, Sections, Paragraphs or Exhibits will refer to the specified Article, Section, Paragraph or Exhibit of this Service Agreement unless otherwise specified.

 

E. Language . The English language will be used in the interpretation and performance of this Service Agreement. All correspondence and documentation arising out of or connected with this Service Agreement and any related purchase order(s), including Engine records and Engine logs, will be in the English language.

 

F. Severability . The invalidity or unenforceability of any part or provision of this Service Agreement, or the invalidity of its application to a specific situation or circumstance, shall not affect the validity legality and enforceability of the remainder of this Service Agreement, or its application to other situations or circumstances. In addition, if a part of this Service Agreement becomes invalid, the Parties will endeavor in good faith to reach agreement on a replacement provision that will reflect, as nearly as possible, the intent of the original provision.

 

G. Non-Waiver. Any failure or delay in the exercise of rights or remedies hereunder will not operate to waive or impair such rights or remedies. Any waiver given will not be construed to require future or further waivers.

 

H. Currency Judgment . This is an international transaction in which the specification of United States Dollars is of the essence. No payments required to be made under this Service Agreement will be discharged by payments in any currency other than United States Dollars, whether pursuant to a judgment, arbitration award or otherwise.

 

I. No Agency Fees . Each Party represents and warrants to the other that no officer, employee, representative or agent of it has been or will be paid a fee or otherwise has received or will receive any personal compensation or consideration by or from the other Party in connection with the obtaining, arranging or negotiation of this Service Agreement or other documents entered into or executed in connection herewith.

 

J. No Agency . Nothing in this Service Agreement will be interpreted or construed to create a partnership, agency or joint venture between CFM and AVIANCATACA.

 

K. Titles/Subtitles . The titles and subtitles given to the sections of the Service Agreement are for convenience. They do not limit or restrict the context of the article or section to which they relate.

 

L. Entire Agreement ; Modification . This Service Agreement, together with its Exhibits and any amendment (or Letter Agreement relating hereto, if any), contains and constitutes the entire understanding and agreement between the Parties respecting the subject matter hereof, and supersedes and cancels all previous negotiations, pre-existing agreements, commitments and writing in connection herewith. This Service Agreement may not be released, discharged, abandoned, supplemented, modified or waived, in whole or in part, in any manner, orally or otherwise, except by a writing of concurrent or subsequent date signed and delivered by a duly authorized officer or representative of each of the Parties hereto making specific reference to this Service Agreement and the provisions hereof being released, discharged, abandoned, supplemented, modified or waived.

 

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M. Counterparts . This Service Agreement may be executed in one or more counterparts, all of which counterparts will be treated as the same binding agreement, which will be effective as of the date set forth on the first page hereof, upon execution by both Parties and delivery by each Party hereto to the other Party of one or more such counterparts. Delivery of an executed counterpart of a signature page to this Service Agreement by telecopy or electronic mail shall be as effective as delivery of a manually executed counterpart.

 

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EXHIBIT J: [*]

SERVICES

[*]. GE On Wing Support, at their sole discretion, may Subcontract or Assign Services to any provider that is properly certified and rated by the Approved Aviation Authority. All Services provided shall be in accordance with its standard commercial quality control policies, procedures, and practices. A turn-time estimate for each workscope for acceptance by Customer prior to beginning of Services will be provided.

FIXED WORKSCOPE PRICING

[*]

Above pricing does not include consumables.

Other pricing applicable for Engine maintenance provided by GE On Wing Support, Inc

 

A. Workscope Pricing and Deployment

 

  1) Customer signature on quote and Work Authorization is required prior to deployment by GE On Wing Support.

 

  2) If additional workscopes not listed in the fixed price workscope schedule are required, they will be priced and quoted prior to beginning of work. The fixed rate workscope schedule pricing covers all technician repair activity, preparation and deprep requiring normal manpower and tooling in normal work conditions. Reasonable additional charges may apply for unusual engine or work conditions.

 

  3) Customer shall ensure that, if required, the Approved Aviation Authority shall grant us approval equivalent to the terms of approval already granted to us by the FAA to carry out any necessary on-wing repair or other maintenance service. We must receive any such required approval prior to the commencement of Service.

 

  4) For Services performed at a location other than a station owned by GE On Wing Support, Inc. at the direction of Customer, the following deployment charges may be accessed unless a fixed price is agreed for a specific deployment:

 

  a) [*]

 

  5) [*]

 

  6) Engine Unloading/Loading/Prep-To-Ship Fee is applicable to all engines that must be unloaded and prepped for shipment by OWS.

 

  7) [*]

 

  8) Parts ordered for agreed workscope will be per standard Unit Pack Quantity (UPQ); parts not consumed as part of the agreed workscope will be turned over to Customer.

 

  9) When GE OWS agrees to deploy technicians to facilities designated by Customer, it may, at its option, make arrangements to provide security for its and its affiliates’ employees to the extent it views it necessary to meet a potential security threat or situation. Customer agrees to bear all reasonable additional cost for security arrangements.

 

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B. [*]

[*]

 

C. [*]

[*]

 

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Exhibit 10.19

Note: Certain portions have been omitted from this Agreement in accordance with a request for confidential treatment submitted to the Securities and Exchange Commission. Omitted information has been replaced with an asterisk. Omitted information has been filed separately with the Securities and Exchange Commission.

 

AMENDED AND RESTATED

V2500 ®

GENERAL TERMS OF SALE

BETWEEN

IAE INTERNATIONAL AERO ENGINES AG

AND

ATLANTIC AIRCRAFT HOLDINGS LIMITED


INDEX

Commencement

Recitals

 

CLAUSE 1      DEFINITIONS        5   
CLAUSE 2      SALE OF PURCHASED ITEMS        7   
     2.1      Intent     
     2.2      Agreement to Place Orders        7   
     2.3      Type Approval and Changes in Specification        8   
     2.4      Inspection and Acceptance        9   
     2.5      Delivery, Shipping, Title and Risk of Loss or Damage        9   
     2.6      Price        10   
     2.7      Payment        10   
CLAUSE 3      SPARE PARTS PROVISIONS        11   
     3.1      Intent and Term        11   
     3.2      ATA Standards        12   
     3.3      Initial Provisioning        12   
     3.4      Change in Initial Provisioning Data        12   
     3.5      Discontinuance of Initial Provisioning Data - Use of Procurement Data        13   
     3.6      Stocking of Spare Parts by IAE        13   
     3.7      Lead Times        13   
     3.8      Ordering Procedure        14   
     3.9      Modifications to Spare Parts        14   
     3.10      Inspection        15   
     3.11      Delivery and Packing        15   
     3.12      Prices        16   
     3.13      Payment        16   
     3.14      Purchase by AAH from Others        17   
     3.15      Special Tools, Ground Equipment and Consumable Stores        18   
     3.16      Conflict        18   
CLAUSE 4      WARRANTIES, GUARANTEES AND LIABILITIES        19   
CLAUSE 5      PRODUCT SUPPORT        21   

 

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CLAUSE 6      MISCELLANEOUS     
     6.1      Delay in Delivery        21   
     6.2      Patents        23   
     6.3      Credit Reimbursement        24   
     6.4      Non-Disclosure and Non-Use        24   
     6.5      Taxes        25   
     6.6      Amendment        25   
     6.7      Assignment        26   
     6.8      Exhibits        26   
     6.9      Headings        26   
     6.10      Law        26   
     6.11      Notices        27   
     6.12      Exclusion of Other Provisions and Previous Understandings        27   
     6.13      Termination     
     6.14      Severability & Partial Invalidity        28   
     6.15      Counterparts        28   
     6.16      Right of Setoff        28   
     6.17      Conditions Precedent        29   
     6.18      Termination Events        29   
EXHIBIT A      CONTRACT SPECIFICATION        32   
EXHIBIT B      SCHEDULES        51   
     EXHIBIT B1 AIRCRAFT DELIVERY SCHEDULE        51   
     EXHIBIT B2 SPARE ENGINE DELIVERY SCHEDULE        52   
     EXHIBIT B3 ESCALATION FORMULA        53   
EXHIBIT C      PRODUCT SUPPORT PLAN        56   
EXHIBIT D      WARRANTIES, GUARANTEES AND PLANS        80   
     D-1      ENGINE AND PARTS SERVICE POLICY        81   
     D-2      NACELLE AND PARTS SERVICE POLICY        85   
     D-3      NON-INSTALLATION ITEMS WARRANTY        87   
     D-4      V2500 RELIABILITY GUARANTEE        89   
     D-5      V2500 DELAY AND CANCELLATION GUARANTEE        93   
     D-6      V2500 INFLIGHT SHUTDOWN GUARANTEE        98   
     D-7      V2500 FUEL CONSUMPTION RETENTION GUARANTEE        102   
     D-8      V2500 EXHAUST GAS TEMPERATURE GUARANTEE        107   
     D-9      [*]        111   
     D-10      [*]        112   
     D-11      V2500 FIRST RUN RELIABILITY GUARANTEE        113   
     D-12      V2500 REMOTE SITE REMOVAL GUARANTEE        114   
     D-13      [*]        118   

EXHIBIT E4

 

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THIS AMENDED AND RESTATED CONTRACT is made this 18 day of December 2008

BETWEEN

 

IAE INTERNATIONAL AERO ENGINES AG   a joint stock company organized and existing under the laws of
Switzerland, with a place of business at 400 Main Street, M/S
121-10, East Hartford, Connecticut 06108, USA, (hereinafter
called “IAE”) and
ATLANTIC AIRCRAFT HOLDINGS LIMITED   a corporation organized and existing under the laws of The
Bahamas, whose principal place of business is at King & George
Streets, Nassau, Bahamas, its successors and permitted assigns
(hereinafter called “AAH”)

WHEREAS:

 

A. As of the date hereof, AAH has acquired or has firmly ordered an aggregate of [*] aircraft and has options to purchase an additional [*] aircraft, all powered or to be powered by Engines, and

 

B. IAE and AAH entered into that certain agreement with respect to V2500 General Terms of Sale on April 23rd 1999 (the “Original Contract”), and

 

C. IAE and AAH entered into the Omnibus Amendment on March 31st 2005 (the “Omnibus Amendment”), and

 

D. IAE and AAH entered into Side Letter No. 5 to the Original Contract on January 8th 2008 (the “Side Letter”), and

 

E. IAE and AAH entered into a Letter Agreement, referenced Support for Firmed-up AAH Option Aircraft, on October 13th 2008 (the “Letter Agreement”), and

 

F. IAE and AAH hereby agree to amend the terms of the Original Contract and to restate the Original Contract in its entirety to incorporate the provisions of the Omnibus Amendment and the Side Letter, and the Letter Agreement, and

 

G. IAE is prepared to supply to AAH V2500 engines, modules, spare parts, special tools, ground equipment, product support services and consumable stores for the support and operation of the Engines.

(The term, “Contract” as used hereinafter shall mean this Amended and Restated Contract together with all exhibits thereto and all letter agreements, whether currently existing or hereafter entered into, that by their terms constitute part of this Contract, and as this Contract may be amended, modified or supplemented from time to time.)

 

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NOW THEREFORE THE PARTIES AGREE TO AMEND AND RESTATE THE ORIGINAL CONTRACT AS FOLLWS:-

CLAUSE 1 DEFINITIONS

In this Contract unless the context otherwise requires:-

 

1.1 “Aircraft” shall mean the [*] new Airbus A320 family aircraft powered by new Engines firmly ordered by AAH pursuant to the Aircraft Agreement (including [*] A320 family aircraft already delivered by the Aircraft Manufacturer as of the date of the Contract) (the “Firm Aircraft”), and, if converted into firmly ordered aircraft pursuant to the Airbus Agreement, (i) up to [*] additional new Airbus A320 family aircraft powered by new Engines for which AAH has been granted certain purchase rights by the Aircraft Manufacturer pursuant to the Aircraft Agreement (“Rolling Option Aircraft”).

 

1.1A “Aircraft Agreement” shall mean the A320 Family Purchase Agreement dated March 19, 1998 between AAH and the Aircraft Manufacturer (together with all exhibits thereto and all letter agreements currently existing or hereafter entered into that by their terms constitute part of such agreement, and as such agreement may be amended, modified or supplemented from time to time).

 

1.2 “Aircraft Manufacturer” shall mean Airbus SAS (formerly known as Airbus Industrie GIE), a limited liability company organized under the laws of France, and any successor thereto.”

 

1.3 “Basic Contract Price” shall mean the basic price of each of the Spare Engines as specified in Exhibit B-2 to this Contract.

 

1.4 “Certification Authority” shall mean the regulatory authority referred to in Exhibits A-1, A-2, A-3, A-4 and A-5 to this Contract responsible for the type certification of the Engines.”

 

1.5 “Engine(s)” shall mean the IAE V2500 aero engines described in Exhibits A-1, A-2, A-3, A-4 and A-5 to this Contract.”

 

1.6 “Fleet Hour Agreement” or “FHA” shall mean the Amended and Restated Fleet Hour Agreement dated November    , 2008 between AAH and IAE (together with all exhibits thereto and all letter agreements currently existing or hereafter entered into that by their terms constitute part of such agreement, and as such agreement may be amended, modified or supplemented from time to time).”

 

1.7 “Grupo Taca Airline(s)” [*]

 

1.8 “IAE Financing Agreement” shall mean the Financing Letter Agreement No. 1 dated April 23rd, 1999 between AAH and IAE (together with all exhibits thereto and all letter agreements currently existing or hereafter entered into that by their terms constitute part of such financing letter agreement, and as such financing letter agreement may be amended, modified or supplemented from time to time).

 

1.9 “Initial Provisioning” shall mean the establishment by AAH of an initial stock Spare Parts.

 

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1.10 “Initial Provisioning Data” shall mean information supplied by IAE to AAH for Initial Provisioning purposes.

 

1.11 “Initial Provisioning Orders” shall mean orders for Spare Parts for Initial Provisioning purposes.

 

1.12 “Installation Items” shall mean Engines described in the Specification, modules, accessories, exhaust systems, nacelles and all ancillary equipment therefor which are being supplied pursuant to this Contract for installation on the Aircraft.

 

1.13 “Lead Time” shall mean the period specified in the Spare Parts Catalog which represents the minimum time required between acceptance by IAE of an order by AAH for Supplies and commencement of delivery of such Supplies.

 

1.14 “LIBOR” shall mean the average (rounded upward, if necessary, to the nearest 1/16 of 1%) of the offered rates for six-month deposits in United States dollars which appear on Reuters Screen LIBO Page, provided , that if no such rates appear (or in the event of manifest error in the rates appearing on the Reuters Screen LIBO Page) then the average (rounded upward, if necessary to the nearest 1/16 of 1%) of the offered rates for six-month deposits in United States dollars quoed by the principal London offices of three (3) major international commercial banks chosen by IAE in an amount that is representative for a single transaction in the London interbank market at the time.

 

1.15 “Non-Installation Items” shall mean jigs, tools, handling and transportation equipment and all equipment whatsoever to be supplied pursuant to this Contract for use with the Installation Items and not for installation on the Aircraft.

 

1.16 “Other Supplies” shall mean special tools, ground equipment and consumable stores (e.g., oils, greases, dyes and penetrates).

 

1.17 “Procurement Data” shall mean information supplied by IAE to AAH about Spare Parts required to replenish the initial stock.

 

1.18 “Reuters Screen LIBO Page” shall mean the display designated as page “LIBO” on the Reuters Monitor Money Rates Service (or such other page as may replace the LIBO page on the service for the purpose of displaying London interbank offered rates of major banks).

 

1.19 “Service Bulletins” shall mean those service bulletins containing advice and instructions issued by IAE to AAH from time to time in respect of Engines.

 

1.20 “Spare Engines” shall mean spare V2500 Engines.

 

1.21 “Spare Parts” shall mean spare parts for Engines excluding the items listed in the Specification as being items of supply by AAH.

 

1.22 “Spare Parts Catalog” shall mean the catalog published by IAE from time to time providing a description, Lead Time and price for Spare Parts, tools and Vendor Parts available for purchase from IAE.

 

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1.23 “Specification” shall mean IAE Engine Specification Nos. IAE S24 A5/1, S27A5/1, S27E A5/1, S33 A5/1 and S27M A5/2, which form Exhibits A-1, A-2, A-3, A-4 and A-5, respectively, to this Contract.”

 

1.24 “Supplies” shall mean Installation Items, Non-Installation Items, Spare Parts and any other goods or services supplied pursuant to this Contract.

 

1.25 “Vendor Parts” shall mean Spare Parts described in Initial Provisioning Data or Procurement Data which are not manufactured pursuant to the detailed design and direction of IAE.

 

CLAUSE 2   SALE OF PURCHASED ITEMS
2.1   Reserved.
2.2   Agreement to Purchase
  2.2.1   AAH represents and warrants to IAE that (i) AAH and the Aircraft Manufacturer have entered into the Aircraft Agreement, (ii) the Aircraft Agreement covers all of the Firm Aircraft and the Rolling Option Aircraft, and , (iii) the remaining [*] Firm Aircraft are scheduled for delivery in accordance with the schedule set forth on Exhibit B-1 to this Contract, and (iv) the dates by which AAH must exercise its rights to convert into firmly ordered aircraft the Rolling Option Aircraft are set forth on Exhibit B-1 to this Contract.
  2.2.2   AAH hereby places a firm and unconditional order with IAE for the purchase of fifteen (15) new V2500 Spare Engines (including ten (10) Spare Engines which already have been purchased as of the date of the Contract), for delivery according to the schedule set forth in Exhibit B-2 to this Contract.
  2.2.3   AAH agrees to place a firm and unconditional order with IAE for the purchase of sufficient quantities and appropriate thrust ratings of Spare Engines such that a Spare Engine to Installed Engine ratio of a minimum of eight percent (8%) is maintained across the Grupo TACA Airlines fleet.

 

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2.3    Type Approval and Changes in Specification
   2.3.1    Spare Engines will be manufactured to the standards set forth in the Specification. Furthermore, there will be no differences between the Specifications in the Spare Engines and Engines installed on the Aircraft which result in a material difference in operation or performance of Spare Engines and Engines installed on the Aircraft. After the date of this Contract, but subject to the terms and conditions hereof, Spare Engines may be varied from the standards set forth in the Specification and other IAE manufacturing specifications from time to time by Change Orders in writing which shall set forth in detail:
      2.3.1.1    The changes to be made in the Spare Engines; and
      2.3.1.2    The effect (if any) of such changes on the Specification (including but not limited to performance and weight), on interchangeability of the Spare Engines in the airframe, on prices and on dates of delivery of the Spare Engines.
      Change Orders shall not be binding on either party until signed by IAE and AAH but upon being so signed shall constitute amendments to this Contract.
   2.3.2    Subject to the provisions of Clause 2.3.1 above, IAE may make any changes in the Spare Engines which do not adversely affect the Specification, (including but not limited to performance and weight), interchangeability of the Spare Engines on any Aircraft, prices or dates of delivery of the Spare Engines. In the case of such permitted changes, a Change Order shall not be required.
   2.3.3    At the time of delivery of the Spare Engines there is to be in existence a Type Approval Certificate for the Spare Engines in accordance with the provisions of the Specification, as modified pursuant to Clause 2.3.1 and Clause 2.3.2 above.
   2.3.4    The Specification has been drawn with a view to the requirements of the Certification Authority and the official interpretations of such requirements in existence at the date of this Contract (such requirements and interpretations being hereinafter referred to as “Current Rules”). Except as otherwise provided in Clause 2.3.2 above, IAE and AAH agree that they will execute an appropriate Change Order in respect of any change required to the Spare Engines to enable such Spare Engines to conform to the requirements of the Certification Authority and the official interpretations of such requirements in force at the date of delivery of such Spare Engines.
   2.3.5    The price of any Change Order shall be paid:
      2.3.5.1    in the case of changes required to conform to the Current Rules or to enable the Spare Engines to conform to the requirements of this Contract - by IAE; and
      2.3.5.2    in any other case - by AAH.

 

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2.4    Inspection and Acceptance
   2.4.1    Conformance of Spare Engines to the Specification will be assured by IAE through the maintenance of procedures, systems and records approved by the Certification Authority. An Export Certificate of Airworthiness or a Certificate of Conformity (as the case may be) will be issued and signed by personnel authorized for such purposes.
   2.4.2    Upon delivery pursuant to Clause 2.5.1 below and the issue of an Export Certificate of Airworthiness or a Certificate of Conformity pursuant to Clause 2.4.1 above and a duly executed Bill of Sale, AAH shall be deemed to have accepted the Spare Engines and that the Spare Engines conform to the Specification. AAH’s acceptance will in no way prejudice AAH’s warranty and support rights under this Contract and the Fleet Hour Agreement. IAE shall, upon written request from AAH and subject to the permission of the appropriate governmental authorities, as applicable, arrange for AAH to have reasonable access to the appropriate premises in order to examine the Spare Engines prior to the issue of conformance documentation and to witness Engine acceptance tests.
   2.4.3    If AAH is unable to accept, refuses without reasonable cause or otherwise materially hinders delivery, or if IAE at AAH’s written request agrees to delay delivery, of any of the Spare Engines for more than thirty (30) days from the scheduled date of delivery, unless otherwise mutually agreed, AAH shall nevertheless pay or cause IAE to be paid therefor as if, for the purposes of payment and transfer of title only, the Spare Engines had been delivered.
   2.4.4    In any of the cases specified in Clause 2.4.3 above, AAH shall also pay to IAE such reasonable sums as IAE shall incur or reasonably allocate in respect of storage, maintenance and insurance of those Spare Engines. If IAE purchases insurance and title has transferred, AAH shall be named loss payee in such insurance policy.
   2.4.5    If IAE is unable to deliver a Spare Engine in accordance with the terms hereof, or if AAH refuses for reasonable cause to take delivery of any Spare Engine, Clauses 2.4.3 and 2.4.4 shall not apply.
2.5    Delivery, Shipping, Title and Risk of Loss or Damage
   2.5.1    IAE will deliver Spare Engines, at its option, either Ex-Works (INCOTERMS 2000) Connecticut, United States of America, or Ex-Works (INCOTERMS 2000) Derby, England, in accordance with the delivery schedule set out in Exhibit B-2 to this Contract. IAE will make reasonable efforts to deliver AAH’s Spare Engines Ex-Works Connecticut, United States of America, taking into consideration production schedules and other relevant and material factors.
   2.5.2    Upon such delivery, title to and risk of loss of or damage to the Spare Engines shall pass to AAH.
   2.5.3    AAH will notify IAE at least [*] before the scheduled time for delivery of the Spare Engines of its instructions as to the marking and shipping of the Spare Engines.

 

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2.6    Price
   The Purchase Price for each of the Spare Engines shall be the Basic Contract Price, amended pursuant to Clause 2.3.5.2 above, and escalated in accordance with the escalation formula contained in Exhibit B-3 to this Contract.
2.7    Payment
   2.7.1   

AAH will make payment in United States Dollars as follows:

      2.7.1.1    Reserved.
      2.7.1.2    [*] months before the scheduled delivery of each of the Spare Engines, AAH shall pay to IAE a non-refundable deposit of [*] percent ([*]%) of the Estimated Purchase Price of such Spare Engine.
      2.7.1.3    [*] months before the scheduled delivery of each of the Spare Engines, AAH shall pay to IAE a further non-refundable deposit of [*] percent ([*]%) of the Estimated Purchase Price of such Spare Engine.
      2.7.1.4    Immediately prior to the delivery of each of the Spare Engines, AAH shall pay to IAE the balance of the Purchase Price of such Spare Engine.
   2.7.2    IAE shall have the right to require AAH to make additional deposits in respect of price changes arising from the provisions of Clause 2.3 above on a similar basis to that specified in Clause 2.7.l above if the change is requested by AAH.
   2.7.3    AAH undertakes that IAE shall receive the full amount of payments falling due under this Clause 2.7, without any withholding or deduction whatsoever. Notwithstanding the foregoing, AAH may withhold or deduct a sum required by a valid judicial order. In such case, AAH shall advise IAE as soon as practicable of the need to withhold or deduct, and AAH shall cooperate with IAE to remediate the situation.
   2.7.4    All payments under this Clause 2.7 shall be made by cable or telegraphic transfer and shall be deposited not later than the due date of payment with:
        

Bank of America

        

1185 Avenue of the Americas

        

New York, NY 10038-4924

        

Account No.: 385002859903

        

ABA No.: 026009593

        

SWIFT Code: BOFAUS3N

        

CHIPS No: 0959

      or as otherwise notified from time to time by IAE.
   2.7.5    For the purpose of this Clause 2.7 “payment” shall only be deemed to have been made to the extent cleared or good value funds are received in the numbered IAE bank account specified in Clause 2.7.4 above.

 

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2.7.6    If AAH fails to make any payment for any Spare Engines on or before the date when such payment is due, then, without
prejudice to any of IAE’s other rights, IAE will (a) be entitled to charge interest on the overdue amount, at the rate of
[*] percent ([*]%) per month, from the date such payment was due to the date such payment is made and (b) have the right
(but not the obligation) to suspend work on the manufacture of such Spare Engines pending the remedy of such failure and to
reschedule the date of delivery of such Spare Engines following the cure of such failure.
2.7.7    For the purpose of this Clause 2.7, the “Estimated Purchase Price” of any of the Spare Engines shall be calculated in accordance with the following formula.
   [*]
   where:
  

  P is the Estimated Purchase Price

  

  B is the applicable Basic Contract Price

  

  N is the year of scheduled delivery minus the year for which the Basic Contract Price is defined.

2.7.8    Those payments referred to in Clause 2.7.1 above as “non-refundable” shall be refunded to AAH in the event AAH validly exercises its right to cancel the order for the Spare Engine pursuant to Clause 6.1.5 hereunder.

 

CLAUSE 3 SPARE PARTS PROVISIONS
3.1    Intent and Term
   3.1.1    For as long as AAH owns and operates one or more Aircraft in regular commercial service and is not in material breach of any of its obligations to IAE under the Contract, IAE shall provide that reasonably adequate supplies of Spare Parts are available for sale to AAH under this Contract. In consideration thereof, IAE shall sell to AAH and, except as hereinafter provided, AAH shall buy from IAE, AAH’s requirements of the following Spare Parts:
      3.1.1.1    All Spare Parts manufactured pursuant to the detailed design and order of IAE where IAE is the only source from which AAH can purchase such Spare Parts in an unused condition and in quantities sufficient to meet AAH’s requirements; and
      3.1.1.2    Vendor Parts for which direct supply arrangements between the manufacturers of such Vendor Parts and AAH cannot be established. Except for the purposes of Initial Provisioning pursuant to Clause 3.3 below, AAH shall notify IAE in writing not less than twelve (12) months before scheduled delivery requested by AAH that AAH intends to purchase such Vendor Parts from IAE.
   3.1.2    In an emergency or upon reasonable request of AAH, IAE shall sell to AAH Vendor Parts which it is not obliged to sell under this Contract, but which it has in stock or otherwise has reasonably available to it.

 

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3.2    ATA Standards
   The parties to this Contract shall comply with the requirements of ATA Specifications 2000 and 300, provided that any of the parties shall be entitled to negotiate reasonable changes in those procedures or requirements of the said specifications which, if complied with exactly, would result in an undue operating burden or unnecessary economic penalty. In particular, on written notification by AAH to IAE prior to placement of Initial Provisioning orders, IAE would agree to the use of ATA Specification 200 instead of ATA Specification 2000.
3.3    Initial Provisioning
   3.3.1    To assist AAH’s Initial Provisioning, IAE shall supply AAH with Initial Provisioning Data in accordance with ATA Specification 2000, subject to Clause 3.2 above.
   3.3.2    Details of the format and precise nature of the said Initial Provisioning Data, including the applicable revision numbers of ATA Specification 2000, definition of Spare Parts Categories, and Lead Times, and agreement on technical publications shall be agreed between IAE and AAH at a preliminary meeting held for this purpose at a time and place to be agreed.
   3.3.3    The said Initial Provisioning Data shall cover all Spare Parts, including agreed Vendor Parts, which in IAE’s opinion may be reasonably required for AAH’s operation of the Installation Items.
   3.3.4    Before AAH places Initial Provisioning Orders, a conference shall be held for the review of Initial Provisioning Data supplied by IAE under Clause 3.3.1 above. The said conference shall be held as soon as practicable before first Aircraft delivery and shall be attended by the personnel of each party directly responsible for Initial Provisioning.
3.4    Change In Initial Provisioning Data
   [*]

 

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3.5    Discontinuance of Initial Provisioning Data - Use of Procurement Data   

 

   3.5.1    Use of Initial Provisioning Data shall be discontinued on a date to be agreed by the parties hereto, but in any event no later than the date of delivery of the last Aircraft firmly ordered by AAH at the date of this Contract. On or before the said date IAE shall furnish AAH with Procurement Data complying with ATA Specification 2000 and shall revise the said Procurement Data as a matter of routine thereafter.   
   3.5.2    Procurement Data shall be used to enable AAH to continue to order Spare Parts to support the Installation Items.   
3.6    Stocking of Spare Parts   
   Promptly following receipt of IAE’s request, AAH shall provide IAE with information reasonably required to enable IAE to plan and organize the manufacture and stocking of Spare Parts.   
3.7    Lead Times   
   3.7.1    Spare Parts for Initial Provisioning shall be delivered on or before the dates specified in AAH’s orders, provided that the said dates comply with lead times and do not call for delivery more than three (3) months before the scheduled date of delivery of the first Aircraft to AAH and provided further that delivery of the total Initial Provisioning quantity shall be effected in line with AAH’s fleet build up and Aircraft utilization.   
   3.7.2    Except as herein provided, replenishment Spare Parts shall be delivered within the Lead Time specified in the IAE Spare Parts Catalog, except for certain major Spare Parts which shall be designated in Initial Provisioning Data and Procurement Data as being available at prices and lead times to be quoted upon request.   
   3.7.3    If any order for replenishment Spare Parts shall call for a quantity materially in excess of AAH’s normal requirements, IAE shall notify AAH and may request a special delivery schedule. If AAH confirms that the full quantity ordered is required, delivery of the order shall be effected at delivery dates specified by IAE, and with respect to the excess quantity, the Lead Times provided by this Clause shall not apply.   
   3.7.4    In an emergency, IAE shall use its reasonable efforts to deliver Spare Parts, including certain major Spare Parts referred to in Clause 3.7.2 above, within the time limits specified by AAH. The action to be taken on such orders shall be advised as follows within the following time periods from IAE’s receipt of such notice:   
      3.7.4.1    AOG orders - within 4 hours;
      3.7.4.2    other emergency orders - within 24 hours;
      3.7.4.3    orders for items of which AAH is out-of-stock - within 7 days.

 

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3.8    Ordering Procedure
   3.8.1    After receipt of Initial Provisioning Data, AAH shall place its Initial Provisioning Orders in sufficient time to allow IAE to commence delivery prior to delivery of the first Aircraft. AAH shall use its reasonable efforts to give priority to ordering major items designated in the Initial Provisioning Data.
   3.8.2    Subsequent orders for Spare Parts shall be placed by AAH from time to time as may be appropriate. AAH shall give IAE as much notice as reasonably possible of any change in its operation of the Aircraft, including, but not limited to, changes in maintenance or overhaul arrangements affecting its requirements of Spare Parts, including Vendor Parts.
   3.8.3    IAE shall promptly acknowledge receipt of each order for Spare Parts in accordance with ATA Specification 2000 procedure. Unless qualified, such acknowledgment, subject to variation in accordance with Clause 3.7.3 above, shall constitute an acceptance of the order under the terms of this Contract.
   3.8.4    If IAE notifies AAH that certain Spare Parts are packed in standard package quantities (hereinafter called “SPQs”), AAH’s subsequent orders for such Spare Parts shall be for SPQs or multiples thereof.
   3.8.5    Unless AAH shall have specified “Total Quantity Required” on its orders, IAE shall be entitled to consider an order for inexpensive Spare Parts complete if at least 90% of the quantity ordered is delivered. For the purpose of this Clause the term “inexpensive” shall mean a price listed in the IAE Spare Parts Catalog at less than Ten U.S. Dollars ($10) per unit, but shall be subject to reasonable change by IAE from time to time. The invoice for any such order shall reflect the quantity of such Spare Parts actually delivered.
   3.8.6    Not later than the time of placing Initial Provisioning Orders, AAH shall provide IAE in writing with full shipping instructions applicable to both Initial Provisioning Orders and to subsequent standard replenishment orders for Spare Parts to be placed by AAH. Such shipping instructions shall remain applicable until IAE receives written notice from AAH of any change to such shipping instructions.
3.9    Modifications to Spare Parts
   3.9.1    IAE shall be entitled to make modifications or changes to the Spare Parts ordered by AAH hereunder provided that the said modification has received the approval of the Certification Authority. IAE shall promptly inform AAH by means of Initial Provisioning Data, Procurement Data and Service Bulletins when such modified Spare Parts (or Spare Parts introduced by a repair scheme) become available for supply hereunder. Notification of such availability shall be given to AAH before delivery.
   3.9.2    Modified Spare Parts shall be substituted for Spare Parts ordered unless the modifications stated in Service Bulletins, in the recommended or optional category are considered by AAH to be unacceptable and AAH so states in writing to IAE within ninety (90) days of the transmittal date of a Service Bulletin, in which case AAH shall be entitled to place a single order for AAH’s anticipated total requirement of pre-modified Spare Parts, at a price and delivery schedule to be agreed.

 

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     3.9.3    Unless AAH notifies IAE in writing under the provisions of Clause 3.9.2 hereof IAE may supply at the expense of
AAH a modification of any Spare Part ordered (including any additional Spare Part needed to ensure
interchangeability), provided that the said modification has received the approval of the Certification Authority. The
delivery of such Spare Parts shall begin on dates indicated by Service Bulletin. The delivery schedule shall be agreed
at the time when orders for modifications are accepted by IAE.
   3.9.4    If Spare Parts required for incorporation of a modification are not ordered as a kit, AAH’s orders must distinguish them from normal replacement Spare Parts in accordance with ATA Specification 2000.
3.10    Inspection
   3.10.1    Conformance to the Specification of Installation Items will be assured by IAE through the maintenance of procedures, systems and records approved by the Certification Authority. Conformance documentation will be issued and signed by personnel authorized for such purpose.
   3.10.2    Conformance of Non-Installation Items will be assured by IAE conformance documentation.
   3.10.3    Upon the issue of conformance documentation in accordance with Clauses 3.10.1 or 3.10.2 above and provided the same shall not have been manifestly issued in error, AAH shall be deemed to have accepted the Installation Items and Non-Installation Items and that such Items conform to the applicable specification, without prejudice to any of AAH’s warranty and support rights under this Contract.
3.11    Delivery and Packing
   3.11.1    IAE shall deliver Spare Parts and Other Supplies Ex-Works (INCOTERMS 2000), the point of manufacture. Shipping documents and invoices shall be in accordance with ATA Specification 2000 unless otherwise required by law.
   3.11.2    Upon such delivery, title to and risk of loss of or damage to the said Spare Parts and Other Supplies shall pass to AAH.
   3.11.3    In accordance with ATA Specification 2000 requirements, AAH shall advise IAE at time of order of its instructions as to the marking and shipping of the Spare Parts and Other Supplies.
   3.11.4    The packaging of Spare Parts shall normally be in accordance with ATA Specification 300 Category 2 standard and shall be free of charge to AAH. The difference in pricing for Category 1 standard packaging, if required by AAH, shall be paid for by AAH.

 

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3.12

   Prices
   3.12.1    Subject to Clause 3.7.2 above, prices of all Spare Parts shall be quoted in U.S. Dollars, in the IAE Spare Parts Price Catalog, Initial Provisioning Data and Procurement Data. Such prices shall represent net unit prices, Ex-Works (INCOTERMS 1990) the point of manufacture.
   3.12.2    Prices applicable to each order placed by AAH hereunder shall be the prices in effect on the date IAE receives such order, except when delivery of Spare Parts against any order is scheduled to take place after the Lead Time stated in the IAE Spare Parts Price Catalog, in which event the prices for such items shall be those prices in effect [*] prior to the scheduled time for delivery in accordance with Clause 3.12.3 below.
   3.12.3    IAE may adjust its prices for Spare Parts upon not less than [*] notice to AAH, except that prices for Spare Parts quoted in Initial Provisioning Data shall be firm, provided that:
      3.12.3.1    Orders are placed within [*] of receipt by AAH of Initial Provisioning Data, and
      3.12.3.2    Ordered quantities are agreed in good faith by IAE, and
      3.12.3.3    Deliveries are scheduled to be made prior to the scheduled date for delivery of the first Aircraft (as it was scheduled at the date of supply by IAE of Initial Provisioning Data).
      If for any reason orders are placed or subsequently rescheduled to specify delivery more than six (6) months after the date of first Aircraft delivery (as it was scheduled at the date of supply by IAE of Initial Provisioning Data), then the prices for such items shall be those prices in effect [*] prior to the scheduled time for delivery of such items against a schedule commensurate with AAH fleet build up and Aircraft utilization. Notwithstanding the above, individual price errors in the publication of prices may be adjusted without advance notice to AAH.
   3.12.4    On request by AAH, prices of Spare Parts or other materials not included in the Spare Parts Price Catalog shall be quoted within a reasonable time by IAE.

3.13

   Payment
   3.13.1    Payment for all purchases under this Clause 3 shall be made by AAH to IAE within thirty (30) days after the date of delivery [*]. In such event, IAE shall have the right to request payment immediately prior to delivery of Spare Parts and other Supplies which would cause the balance owing to exceed, the aforementioned amount.
   3.13.2    AAH undertakes that IAE shall receive payment in U.S. Dollars of the full amount of payments falling due under this Clause 3.13, without any withholding or deduction whatsoever.

 

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   3.13.3    All payments under this Clause 3.13 shall be made by cable or telegraphic transfer to, and shall be deposited not later than the due date of payment with:
     

Bank of America

     

1185 Avenue of the Americas

     

New York, NY 10038-4924

     

Account No.: 385002859903

     

ABA No.: 026009593

     

SWIFT Code: BOFAUS3N

     

CHIPS No: 0959

      or as otherwise notified from time to time by IAE in writing.
   3.13.4    For the purpose of this Clause 3.13, payment shall only be deemed to have been made to the extent immediately available funds are received in the account specified in sub-clause 3.13.3 above.
   3.13.5    Notwithstanding Clause 3.13.1 above, payments for all purchases shall be due from AAH upon delivery, or at IAE’s option prior to delivery of the purchased items upon the occurrence of any of the following events: (a) a receiver or trustee is appointed of any of AAH’s property, or (b) AAH is adjudicated or voluntarily becomes a bankrupt under any bankruptcy or winding up laws or other similar legislation, or (c) AAH becomes insolvent or makes an assignment for the benefit of creditors, or (d) an execution is issued pursuant to a valid, final judgment rendered against AAH, or (e) AAH is unable or refuses to make payment to IAE in accordance with any of AAH’s obligations to IAE.
   3.13.6    If AAH fails to make any payment for any Spare Parts or Other Supplies on or before the date when such payment is due, then, without prejudice to any other rights set forth herein or under applicable law, IAE will be entitled to charge interest on the overdue amount [*] from the date such payment was due to the date such payment is made.

3.14

   Purchase by AAH from Others
   3.14.1    AAH may purchase from other V2500 operators Spare Parts, which by virtue of Clause 3.1 above are required to be purchased from IAE:
      3.14.1.1    on an occasional basis; or
      3.14.1.2    where the said operator has published details of excessive stock holdings of the Spare Parts concerned; or
      3.14.1.3    pursuant to a pooling arrangement or joint use agreement between any Grupo Taca Airline and the said operator; or
      3.14.1.4    if the other V2500 operator is a Grupo Taca Airline.
   3.14.2    Subject to the conditions specified below, in the following circumstances AAH may obtain from established and approved sources, other than IAE or other V2500 operators, Spare Parts which by virtue of Clause 3.1 above are required to be purchased from IAE:

 

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      3.14.2.1    as a temporary expedient in the event of a failure or material delay by IAE to supply Spare Parts as required herein; or
      3.14.2.2    during any period when IAE is hindered or prevented from delivering Spare Parts due to circumstances beyond its control provided AAH is thereby able to obtain the Spare Parts it requires sooner than IAE is able to supply them, and provided further that AAH will not unreasonably thereby increase its stock of the Spare Parts; or
      3.14.2.3    where IAE identifies a Spare Part as a standard part.
      AAH’s rights under Clause 3.14.2 above are subject to AAH being unable to satisfy its requirements for Spare Parts under the provisions of Clause 3.14.1 above.
   3.14.3    Nothing in this Clause 3.14 shall be deemed to extend the obligations of IAE or to diminish the limitations upon such obligations under the Warranties referred to in Clauses 4.1 and 4.2 below.
   3.14.4    Notwithstanding any extension of the time of delivery in accordance with the provisions of Clause 6.1.1 below, AAH shall be entitled to cancel all or part of any order on IAE for Spare Parts which, pursuant to the terms of Clauses 3.l4.2.l and 3.14.2.2 are purchased from another source by giving reasonable written notice to IAE of cancellation of the said order.
   3.14.5    In the event that AAH purchases Spare Parts under Clause 3.14 from other than a Grupo Taca Airline, AAH shall give written notice to IAE of the extent of such purchase supported by any other technical information which IAE may reasonably require.

3.15

   Special Tools, Ground Equipment and Consumable Stores
   By mutual agreement, IAE may sell Other Supplies to AAH subject to the terms and conditions of this Contract, but the detailed procedures of this Contract with regard to Initial Provisioning, Procurement Data, prices, stocking and Lead Time shall not apply. Technical data for special tools and ground equipment shall be in accordance with ATA Specification 101.

3.16

   Conflict
   In the event of any conflict between the provisions of this Contract and the provisions of ATA Specifications 101, 200, 2000 and 300, the provisions of this Contract shall prevail.

 

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CLAUSE 4 WARRANTIES, GUARANTEES AND LIABILITIES

 

4.1

   IAE warrants to AAH that, at the time of delivery, the Supplies sold hereunder will be free of defects in material and manufacture, and will conform in all material respects to IAE’s applicable specifications and rules and regulations of the Certification Authority. IAE’s liability and AAH’s remedies under this warranty are limited to the repair or replacement, at IAE’s election, of Supplies or portions thereof returned to IAE at the place so instructed by IAE which are shown to IAE’s reasonable satisfaction to have been defective; provided, that written notice of the defect shall have been given by AAH to IAE within ninety (90) days after the first operation or use of such Supplies or within thirty (30) days after the defect has become apparent (or if the Supplies are installed in new Aircraft, within ninety (90) days after acceptance of such Aircraft by its first operator) but in no event later than one (1) year after the date of delivery of such Supplies by IAE. Transportation charges for the return of Supplies to IAE pursuant to this Clause 4.1 and their reshipment to AAH and the risk of loss thereof will be borne by IAE provided the Supplies are returned in accordance with written shipping instructions from IAE and are defective and provided that IAE shall have provided such written shipping instructions promptly.

4.2

   In addition, IAE grants and AAH accepts the following:
   4.2.1    V2500 Engine and Parts Service Policy
   4.2.2    V2500 Nacelle and Parts Service Policy
   4.2.3    V2500 Non-Installation Items Warranty
   4.2.4    V2500 Reliability Guarantee
   4.2.5    V2400 Delay and Cancellation Guarantee
   4.2.6    V2500 Inflight Shutdown Guarantee
   4.2.7    V2500 Fuel Consumption Retention Guarantee
   4.2.8    V2500 Exhaust Gas Temperature Guarantee
   4.2.9    [*]
   4.2.10    [*]
   4.2.11    V2500 First Run Reliability Guarantee
   4.2.12    V2500 Remote Site Removal Guarantee
   The Service Policies, Warranties and Guarantees referred to in this Clause 4.2 are hereinafter called the “Warranties”. The above Service Policies, Warranties and Guarantees together form Exhibit D to this Contract.

4.3

   The parties agree that those Warranties set out in Clauses 4.2.1 and 4.2.2 above shall apply to any equipment including but not limited to any V2500 aero engines and any associated equipment therefor, and any parts for such engines and associated equipment which form part of any aircraft acquired from the Aircraft Manufacturer including Engines installed on Aircraft which falls within the categories of equipment covered by those Warranties, which are manufactured, supplied or inspected by IAE howsoever and whenever (whether before, on or after the date first above written) acquired by AAH from whatsoever source.

 

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4.4

      The Warranties are personal to AAH and to AAH for the benefit of the Grupo Taca Airlines and the obligations of IAE thereunder shall only apply insofar as AAH and/or a Grupo Taca Airline owns and operates the Supplies covered thereunder. IAE agrees, as a minimum, to grant any lessee or purchaser of the Supplies (whether installed on Aircraft or not) a direct warranty agreement as set forth in Exhibit E to this Contract.

4.5

      AAH shall inform any entity to whom it intends to sell, lease, loan or otherwise dispose of any of the Supplies or equipment referred to in Clause 4.3 above that such entity may obtain from IAE and IAE hereby agrees to enter into a direct warranty agreement with any such entity (at no additional charge to AAH or such entity) incorporating those of the Warranties set out in Clauses 4.2.1 and 4.2.2. AAH shall also use its reasonable endeavors to ensure that such entity shall enter into a direct warranty agreement with IAE prior to delivery of any of the Supplies or such equipment to such entity.

4.6

      IAE and AAH agree that the intent of the Warranties provided in Clause 4.2 is to provide specified benefits or remedies as a result of specified events. It is not the intent, however, to duplicate benefits or remedies provided to AAH by IAE or another source (e.g., another equipment manufacturer or lessor) as a result of the same event or cause. Therefore, notwithstanding the terms of the Warranties, AAH agrees that it shall not be eligible to receive benefits or remedies from IAE to the extent it results in AAH or Grupo Taca Airlines receiving duplicative benefits or remedies from IAE or another source as a result of the same event or cause. Furthermore, in no event shall IAE be required to provide duplicate benefits to AAH and any other party such as a leasing company as a result of the same event or cause.
     

[*]:

     

[*]

4.7

      AAH accepts that the Warranties granted to AAH under Clauses 4.1, 4.2 and 4.3 above together with the express remedies provided to AAH in respect of the Supplies in accordance with this Contract are expressly in lieu of, and AAH hereby waives, all other remedies, conditions and warranties, expressed or implied including without limitation, ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, and all other obligations and liabilities whatsoever of IAE and of its shareholders whether in contract or in tort or otherwise for any defect, deficiency, failure, malfunctioning or failure to function of any item of the Supplies or of the equipment referred to in Clause 4.3 above, howsoever and whenever acquired by AAH from whatever sources. AAH agrees that neither IAE nor any of its shareholders shall be liable to AAH upon any claim therefor or upon any claim howsoever arising out of the manufacture or supply or inspection by IAE or any of its shareholders of any item of the Supplies or of such equipment or any other item of whatever nature, whether in contract or in tort or otherwise, except as expressly provided in the said Warranties, and AAH assumes all risk and liability whatsoever not expressly assumed by IAE in the said Warranties.

4.8

      IAE and AAH agree that this Clause 4 has been the subject of discussion and negotiation, is fully understood by the parties and the price of the Supplies and other mutual agreements of the parties set forth in this Contract are arrived at in consideration of:
      4.8.1 the express Warranties of IAE and AAH’s rights thereunder; and

 

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   4.8.2    the exclusions, waivers and limitations set forth in Clause 4.7 above.

4.9

   References in the V2500 Engine and Parts Service Policy and in the V2500 Nacelle and Parts Service Policy to the “standard IAE labor rate letter” (for example in Section III.A.3 of the V2500 Nacelle and Parts Service Policy) shall mean the letter set forth in Exhibit F to the Contract. The labor rate calculated pursuant to the standard IAE labor rate letter may be revised from time to time as described in the letter.

CLAUSE 5 PRODUCT SUPPORT SERVICES

 

5.1

   IAE will make available to AAH the Product Support Services described in Exhibit C to this Contract. Except when identified in such Exhibit C as being at additional cost or as requiring separate contractual arrangements, such Product Support Services shall be supplied at no additional charge to AAH and subject to the provisions of this Contract. IAE may delegate the performance of product support services to an affiliated company or any of IAE’s shareholders.

5.2

   AAH will provide to any IAE customer support representative(s) working at its facility, free of charge:
   (a)    reasonable, secure office accommodation including furniture and office equipment and
   (b)    access to telephone, facsimile and secretarial services and
   (c)    access to such first-aid and emergency assistance as is customarily provided to AAH’s own employees and
   (d)    air travel on the network of Grupo Taca Airlines for travel away from such customer support representative(s)’ normal location at AAH with respect to support provided pursuant to this Contract.
   AAH further agrees that such customer support representative(s) will be entitled at IAE’s cost to all reasonable working benefits allowed pursuant to normal IAE practice, including but not limited to, leaves of absence relating to vacation, holiday and sick time.
   It is expressly agreed that unless specifically agreed to in a writing signed by both parties, IAE customer support representatives shall at no time be considered employees of AAH and that AAH shall not be responsible for the payment of such customer support representatives’ salary or benefits.

CLAUSE 6 MISCELLANEOUS

 

6.1    Delay in Delivery
   6.1.1     
 
 
If IAE is hindered or prevented from performing any obligation hereunder including but not limited to delivering any of
the Supplies within the time for delivery specified in this Contract (as such time may be extended pursuant to the
provisions of this Contract) by reason of:
        6.1.1.1       any cause beyond the reasonable control of IAE, or
        6.1.1.2       fires, industrial disputes or introduction of essential modifications required by the Certification Authority

 

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      subject to the provisions of Clause 6.1.5 hereunder, the time for delivery shall be extended by a period equal to the period for which delivery shall have been so hindered or prevented, and IAE shall not be under any liability whatsoever in respect of such delay.
   6.1.2    If, by reason of any of the causes embraced by Clause 6.1.1 above, IAE is hindered or prevented from or delivering any goods (which are the same as and include the Supplies) to purchasers (including AAH) then IAE shall have the right to allocate such goods, as they become available, at its own discretion among all such purchasers and IAE shall not be under any liability whatsoever to AAH for delay in delivery to AAH resulting from such allocation by IAE and the time for delivery shall be extended by a period equal to the delay resulting from such allocation by IAE.
   6.1.3    Should IAE inexcusably delay performance of any obligation hereunder including but not limited to delivery of any item of the Supplies beyond the time for delivery specified in this Contract (as such time may be extended pursuant to the provisions of this Contract), then in respect of the first [*] of such delay, IAE shall not be under any liability whatsoever and thereafter in respect of any further delay in delivery the damages recoverable by AAH from IAE as AAH’s sole remedy shall be its reasonable actual damages in an amount not to exceed [*] of the purchase price of the item of Supplies so delayed in respect of each month of such further delay (and prorata for any period of less than one month) subject to an overall maximum of [*] of the purchase price of the item of the Supplies so delayed.
   6.1.4    The right of AAH to claim damages pursuant to Clause 6.1.3 above shall be conditional upon the submission of a written claim therefor, within [*] from the date on which IAE notifies AAH that the item of the Supplies so delayed is ready for delivery, or from the date on which AAH exercises the right of cancellation in respect of such item conferred in accordance with Clause 6.1.5 below, whichever date shall first occur.
   6.1.5    Should IAE delay performance of any obligation hereunder including but not limited to delivery of any item of the Supplies beyond [*] from the time for delivery specified in this Contract (as such time may be extended pursuant to the provisions of this Contract) then, in addition to the right of AAH under Clause 6.l.3, AAH shall be entitled to refuse to take delivery of such item on giving IAE notice in writing within one (1) month after the expiration of such period of [*]. Upon receipt of such notice IAE shall be free from any obligation in respect of such item except that IAE shall refund to AAH any deposits made in respect of the purchase price of such item of the Supplies with interest from the date the deposit was received by IAE calculated at the rate of [*].

 

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6.2

   Patents   
   6.2.1    IAE shall, subject to the conditions set out in this Clause and as the sole liability of IAE in respect of any claims for infringement of intellectual property rights, indemnify AAH against any claim that the use of any of the Supplies by AAH within any country to which at the date of such claim the benefits of Article 27 of the Convention on International Civil Aviation of 7th December l944 (The Chicago Convention) and the International Convention for the Protection of Industrial Property apply, infringes any patent, design, or model duly granted or registered provided, however, that IAE shall not be liable to AAH for any consequential damage or any loss of use of the Supplies or of the Aircraft in which the Supplies may be incorporated arising as a result directly or indirectly of any such claim.
   6.2.2    AAH will give prompt notice in writing to IAE of any such claim whereupon IAE shall have the right at its own expense to assume the defense of or to dispose of or to settle such claim in its sole discretion. AAH will give IAE all reasonable assistance and IAE will reimburse AAH for its reasonable out-of-pocket expenses for providing such assistance to IAE. AAH will not by any voluntary act or omission knowingly do anything which may directly or indirectly materially prejudice IAE in this connection.
   6.2.3    IAE shall at its option either: (1) substitute for any infringing Supplies substantially equivalent non-infringing supplies; or (2) procure for AAH the right to use any infringing Supplies; or (3) modify any infringing Supplies so they become non-infringing.
   6.2.4    The indemnity contained in Clause 6.2.1 above shall not apply to claims for infringement in respect of (i) Supplies manufactured to the specific design instructions of AAH; (ii) Supplies not of IAE design (but IAE shall in the event of any claim for infringement pass on to AAH so far as it has the right to do so the benefits of any indemnity given to IAE by the designer, manufacturer or supplier of such Supplies); (iii) the manner or method in which any of the Supplies is installed in the Aircraft; or (iv) any combination of any of the Supplies with any item or items other than Supplies.

 

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6.3

   Credit Reimbursement
   If AAH does not take delivery of the [*] Firm Aircraft, the [*] Firm Spare Engines, and to the extent that Rolling Option Aircraft are acquired, those Rolling Option Aircraft and the required number of Option Spare Engines (each Firm Aircraft, Firm Spare Engine, Rolling Option Aircraft and Option Spare Engine equally a “Firm Item”) in accordance with the schedules described in Exhibits B-1 and B-2 to the Contract (as such may be modified or supplemented pursuant to the terms of the Contract) then, without prejudice to IAE’s other rights and remedies under the Contract or otherwise, the value of each and every credit, benefit and other concession received by AAH pursuant to the Contract (including all Side Letters and amendments thereto) or from IAE via the Aircraft Manufacturer will be adjusted to pro-rata amounts, based on the ratio of the number of Firm Items (whether Aircraft or Spare Engines) purchased in accordance with the schedules described in Exhibits B-1 and B-2 to the Contract to the total number of Firm Items scheduled to have been so purchased. So, for example, if IAE is to issue credits on delivery of each Firm Item and AAH takes delivery of only half the total number of such Firm Items (whether or not with the consent of the Aircraft Manufacturer) the value of each credit to be issued on the Firm Items actually taken and all other credits (if any) will be reduced by half. Following such adjustment, AAH will promptly reimburse IAE in an amount equal to (a) the value of the credits, benefits and other concessions actually provided in excess of the adjusted amounts, plus (b) the interest on such excess amounts calculated from the time each respective amount was applied or value received until reimbursement. Interest will be calculated at [*] in effect at the time each respective amount was applied or value was received. If AAH is in default of any payment obligations under the terms of this Contract, IAE will, without prejudice to any of its other rights be entitled to offset any unused IAE credit in AAH’s account with IAE against such outstanding amount.

6.4

   Non-Disclosure and Non-Use
   6.4.1    Subject to Clause 6.4.3 below, each party agrees not to disclose to any third party (except to professional advisors) any Information which it acquires directly or indirectly from the other and agrees not to use the same other than for the purpose for which it was disclosed or for purposes of enforcement of this Agreement in an arbitration of judicial proceeding without the written approval of the other. The expression “Information” in this Clause 6.4.1 includes but is not limited to all oral or written information, know-how, data, reports, drawings and specifications, and all provisions of this Contract.
   6.4.2    Each party shall be responsible for the observance of the provisions of Clause 6.4.1 above by its employees and professional advisors.
   6.4.3    The provisions of Clause 6.4.1 above shall not apply to information which is or becomes generally known in the aero engine industry nor shall the provisions of Clause 6.4.1 above prevent any necessary disclosure of information to enable the other to operate, maintain or overhaul Supplies, nor to information required to be disclosed by a valid governmental, judicial or regulatory agency order or subpoena.
   6.4.4    AAH shall be responsible for obtaining any required authorization including any export licenses (other than export licenses for the country of manufacture), import licenses, exchange permits or any other governmental authorizations required in connection

 

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          with the transactions contemplated under this Contract. AAH shall restrict disclosure of all information and data
furnished under this Contract in obtaining such licenses, permits, or authorizations. AAH shall only ship the Supplies and
information and data furnished under this Contract to those destinations permitted under such licenses, permits, or
authorizations.
   6.4.5    In the event that any of the Information as described in Clause 6.4.1 is required to be disclosed by either party through a valid governmental, judicial or regulatory agency order, that party agrees to advise the other of the need for disclosure (in advance of such disclosure when possible) and to limit the disclosure to those portions of the Information required to be disclosed by such order, and to maintain the confidentiality of as much of the Information as legally possible in the sole good faith judgment of the party so ordered.
6.5    Taxes
   6.5.1    Subject to Clause 6.5.2 below, IAE shall pay all imposts, duties, fees, taxes and other like charges levied by the governments of the United Kingdom, the United States of America, the Federal Republic of Germany, Japan and any other country where the Supplies or portions thereof are manufactured or delivered or any agency thereof in connection with the Supplies prior to their delivery.
   6.5.2    All amounts stated to be payable by AAH pursuant to this Contract exclude any value added tax, sales tax or other similar tax. In the event that the supply of goods or services under this Contract is subject to any value added tax, sales tax or other similar tax, such tax will be borne by AAH. To ensure so far as possible that AAH is not charged with value added tax (“VAT”) of the European Union or any member country thereof, AAH will within thirty (30) days of signature hereof, inform IAE of its VAT Code (if any) for inclusion on IAE’s invoices. Further, each party agrees to reasonably cooperate with the other to reduce the tax liabilities of the other.
   6.5.3    AAH shall pay all other imposts, duties, fees, taxes and other like charges by whomsoever levied other than (i) taxes on IAE’s gross or net income or gains; (ii) taxes which would not have been imposed but for a connection between IAE and the taxing jurisdiction unrelated to this Agreement; and (iii) taxes which would not have been imposed but for the gross negligence of willful misconduct of or a breach of this Agreement by IAE.
6.6    Amendment
   This Contract shall not be amended in any way other than by written agreement by the parties on or after the date of this Contract, which agreement is expressly stated to amend this Contract.

 

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6.7    Assignment
   Except as provided under Clause 5.1 above, neither party may assign any of its rights or obligations hereunder without the written consent of the other party (except that IAE may assign its rights to receive money hereunder or its rights and obligations, or a portion thereof, to any wholly owned subsidiary of IAE or to any of IAE’s shareholders subject to such subsidiary or shareholders being able to fulfill the obligations being assigned). Any assignment made in violation of this Clause 6.7 shall be null and void.
   IAE understands that AAH may use any of various mechanisms to finance or acquire the Aircraft or to refinance its acquisition of an Aircraft, including a sale leaseback whereby AAH or the Aircraft Manufacturer sells the aircraft to a third party and a Grupo TACA Airline leases the Aircraft from the third party. IAE agrees to reasonably consider AAH’s timely requests that IAE consent to the assignment of AAH’s rights or obligations hereunder to facilitate the financing, acquisition or refinancing of the Aircraft. In respect of the purchase of the Aircraft or a sale leaseback of the Aircraft, IAE agrees that AAH may assign the Contract with respect to the particular affected Aircraft to an affiliated Special Purpose Corporation or the purchaser/lessor in a sale leaseback transaction.
   IAE also understands that AAH is an operating lessor and not an operator of equipment and that Grupo Taca Airlines will be the ultimate users of the Aircraft and Supplies. Furthermore, Grupo Taca Airlines may be the purchasers of the Supplies (with the exception of the Spare Engines). AAH may make an assignment of the relevant portions of the Contract (including but not limited to the relevant portions of Clauses 1, 3, 4 and 6) relating to the purchase of Supplies with recourse to AAH except that IAE shall retain the right to amend Clause 3.13.
6.8    Exhibits
   In the event of any unresolved conflict or discrepancy between the Exhibits (which are hereby expressly made a part of this Contract) and Clauses of this Contract then the Clauses shall prevail.
6.9    Headings
   The Clause headings and the Index do not form a part of this Contract and shall not govern or affect the interpretation of this Contract.
6.10    Governing Law and Forum
   This Contract shall be subject to and interpreted and construed in accordance with the laws of the State of New York, United States of America (excluding its conflicts of law provisions). The parties agree to exclude the application of the United Nations Convention on Contracts for the International Sale of Goods (1980). Any suit, action or proceeding against any of the parties hereto with respect to this Contract and any judgment entered by any court in respect thereof may be brought in the Supreme Court of the State of New York, or in the United States District Court for the State of New York, as each party hereto in its sole discretion may elect, and each party hereto submits to the non-exclusive jurisdiction of such New York courts for purpose of any such suit, action or proceeding.

 

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6.11    Notices
   Any notice to be served pursuant to this Contract shall be in the English language and is to be sent by certified mail, recognized international courier or facsimile (with confirmation copy by any other means) to:
   In the case of IAE:
   IAE International Aero Engines AG
   IAE Building
   400 Main Street, M/S 121-10
   East Hartford, Connecticut 06108
   United States of America
   Facsimile No.: (860) 565-5220
   Attention: Chief Legal Officer
   In the case of AAH:
   Atlantic Aircraft Holdings Limited
   c/o The Winterbotham Trust Company
   Bolam House
   King & George Streets
   Nassau, Bahamas
   Facsimile No.: (242) 356-9432
   Attention: Directors
   with a copy to:
   TACA International Airlines, S.A.
   Avenida El Espino y Boulevard Sur
   Santa Elena, Antiguo Cuscatlan
   La Libertad, El Salvador
   Fax No. + 503 2298 - 0827
   Attention: Senior Vice President and Chief Financial Officer
   or in each case to such other place of business as may be notified from
   time to time by the receiving party.
6.12    Exclusion of Other Provisions and Previous Understandings
   6.12.1    This Contract, including all exhibits and all letter agreements thereto, as amended, contains the only provisions governing the sale and purchase of the Supplies and shall apply to the exclusion of any other provisions on or attached to or otherwise forming part of any order form of AAH, or any acknowledgment or acceptance by IAE, or of any other document which may be issued by either party relating to the sale and purchase of the Supplies.

 

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   6.12.2   The parties agree that neither of them have placed any reliance whatsoever on any representations, agreements, statements or understandings made prior to the signature of this Contract, whether orally or in writing, relating to the Supplies, other than those expressly incorporated in this Contract, which has been negotiated on the basis that its provisions represent their entire agreement relating to the Supplies and shall supersede all such representations, agreements, statements and understandings.
6.13    Severability and Partial Invalidity
   If any provision of this Agreement or the application thereof to either party shall be invalid, illegal or unenforceable to any extent, the remainder of the Agreement and the application thereof shall not be affected and shall be enforceable to the fullest extent permitted by law.
6.14    Counterparts
   This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which shall constitute one and the same instrument.
6.15    Right of Setoff
   IAE shall have the right to set off credits from time to time made available by IAE under the Contract either directly to AAH (or its affiliates) or via the Aircraft Manufacturer or its affiliates, in respect of the failure by AAH (or its affiliates), after any applicable grace period, to cure any payment default under (x) the Contract, (y) the Fleet Hour Agreement, or (z) the IAE Financing Agreement.
6.16    Conditions Precedent
   During the term of this Contract, the obligations of IAE to provide, or cause to be provided Supplies or any other benefits to AAH pursuant to the terms hereof, shall be subject to the non-existence of any of the following events on the date when such Supplies or benefits becomes due, and should any such event then exist and until such event shall have been remedied IAE shall be under no obligation to provide, or cause to be provided any Supplies or any other benefits to AAH:
   (a)   A continuing event of default (taking into account any applicable grace period) by AAH (good faith disputes by AAH of amounts due not constituting a default hereunder) in (x) the payment of [*]U.S. Dollars (US$[*]) or more of other amounts under the Contract (including any exhibits and letter agreements thereto), (y) the payment of [*] U.S. Dollars (US[*]) or more of other amounts under the Fleet Hour Agreement (including any exhibits and letter agreements thereto), or (z) the payment of any scheduled amount of principal, interest, lease rental or other similar payment under any of the financings implemented pursuant to the IAE Financing Agreement; or
   (b)   Any event that is a Termination Event or would be a Termination Event, but for the giving of notice or lapse of time, shall have occurred.

 

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   During the term of this Contract, should IAE be in material default of IAE’s obligations as set forth in the IAE Financing Agreement, and so long as IAE’s default is unrelated to interpretation of the language of the IAE Financing Agreement or the good faith and reasonable application of any particular provision in the IAE Financing Agreement, and so long as AAH is not in default of any of its obligations as set forth in the IAE Financing Agreement, AAH shall not be obligated to acquire further Aircraft and Spare Engines as set forth in this Contract (other than Spare Engines to maintain the ratio of Engines installed on the Aircraft to Spare Engines as set forth in this Contract).
6.17    Termination Events
   IAE shall have the option, at its sole discretion, to terminate this Contract in whole or in part, upon the occurrence of any of the following events (“Termination Events”):
   (i)   AAH commences any case, proceeding or other action with respect to AAH or its property in any jurisdiction relating to bankruptcy, insolvency, reorganization, dissolution, liquidation, winding-up, or relief from, or with respect to, or readjustment of, debts or obligations; or
   (ii)   AAH seeks the appointment of a receiver, trustee, custodian or other similar official for AAH for all or substantially all of its assets, or AAH makes a general assignment for the benefit of its creditors; or
   (iii)   AAH otherwise becomes the object of any case, proceeding or action of the type referred to in the preceding clauses (i) or (ii) which remains unstayed, undismissed or undischarged for a period of sixty (60) days; or
   (iv)   An action is commenced against AAH seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of its assets which remains unstayed, undismissed or undischarged for a period of sixty (60) days; or
   (v)   AAH shall default (taking into account any grace period) on any payment of principal or interest under the IAE Financing Agreement or in the payment of any guarantee or similar obligation in connection therewith (including in each case all Appendices, Exhibits and Letter Agreements thereto) if IAE or any affiliate or assignee of IAE, as the case may be, shall have declared such agreement to be in default (to the extent required thereunder) and shall have commenced the exercise of remedies as a result of such default; or
   (vi)   AAH shall be in material default (taking into account any grace period) of any of its other obligations under the Contract or the IAE Financing Agreement.
   AAH shall have the option, at its sole discretion, to terminate this Contract in whole or in part, upon the occurrence of any of the following events:
   (i)   IAE commences any case, proceeding or other action with respect to IAE or its property in any jurisdiction relating to bankruptcy, insolvency, reorganization, dissolution, liquidation, winding-up, or relief from, or with respect to, or readjustment of, debts or obligations; or

 

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  (ii)    IAE seeks the appointment of a receiver, trustee, custodian or other similar official for IAE for all or substantially all of its assets, or IAE makes a general assignment for the benefit of its creditors; or
  (iii)    IAE otherwise becomes the object of any case, proceeding or action of the type referred to in the preceding clauses (i) or (ii) which remains unstayed, undismissed or undischarged for a period of sixty (60) days; or
  (iv)    An action is commenced against IAE seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of its assets which remains unstayed, undismissed or undischarged for a period of sixty (60) days; or
  (v)    IAE shall be in material default (taking into account any grace period) of any of its obligations under the Contract or the IAE Financing Agreement; or
  (vi)    [*].

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

 

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IN WITNESS WHEREOF the parties hereto have caused this Amended and Restated Contract to be signed on their behalf by the hands of their authorized officers the day and year first before written:

 

For IAE International Aero Engines AG

 

 

 

In the presence of

 

 

 

For Atlantic Aircraft Holdings Limited

 

 

 

In the presence of

 

 

 

 

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EXHIBIT A-1

 

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V2500 TURBOFAN ENGINE MODEL SPECIFICATION

 

FAA Commercial Type Certificate E4ONE    Model V2524 - A5
   Spec. No. IAE S24A5/2

SEA LEVEL STATIC RATINGS

(See General Notes)

 

    Net

Thrust

lb

  
Take-off Rating (5 min)     24,480   
Maximum Continuous Rating     19,200   

DESCRIPTION

Type - Dual rotor, axial flow, high bypass turbofan, single-stage fan, four-stage low compressor, ten-stage high pressure compressor, annular combustor, two-stage high pressure turbine, five-stage low pressure turbine.

Installation Drawing No. 4W6199. The Engine Installation Drawing shows the Engine envelope and provides dimensions and data for the engine installation interfaces.

FUEL AND OIL

 

Fuel - Specification:        MIL-T-5624, MIL-T-83133 or ASTM-D-1655
Oil - Specification:          MIL-L-23699 Type II
Oil Consumption: Maximum (as measured over a 10-hour period) 0.15 U.S. gal/hr

STANDARD EQUIPMENT

(Included in Engine Price)

FUEL SYSTEM AND CONTROL SYSTEM COMPRISING:

LP/HP Fuel Pump, Fuel Filter Element, Fuel Temperature Sensor, Fuel Diverter/Back to Tank Valve, Fuel Distribution Valve, P2T2 Probe, Relay Box, Electronic Engine Control, Dedicated Generator, P4.9 Sensors and Manifold, Woodward Governor Company Fuel Metering Unit, Fuel Supply Pipe.

 

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IGNITION SYSTEM COMPRISING:

Ignition Exciter, Igniter Plug, Ignition Lead (2 each).

AIR SYSTEM COMPRISING:

No. 4 Bearing Compartment Heat Exchanger, HP/LP Active Clearance Control Valve, Active Clearance Control Valve Actuator, LP Compressor Bleed Valve Master Actuator, LP Compressor Bleed Valve Slave Actuator, Variable Stator Vane Actuator, HP Compressor Bleed Valves, HP Compressor Bleed Valve Solenoids.

ENGINE INDICATING SYSTEM COMPRISING:

Exhaust Gas Temperature (EGT) Thermocouples, EGT Harness and Junction Box.

OIL SYSTEM COMPRISING:

Oil Tank, Air Cooled Oil Cooler, Fuel Cooled Oil Cooler, Pressure Oil Filter Element, Air Cooled Oil Cooler Modulating Valve, Scavenge Oil Filter Housing Assembly and Element, No. 4 Bearing Compartment Scavenge Valve, No. 4 Bearing Scavenge Pressure Transducer, IDG Fuel Cooled Oil Cooler.

MISCELLANEOUS:

Electrical EEC Harnesses - Fan and Core, Nose Spinner, PART - Drains, If Intertwined With Engine parts, Airframe Accessory Mounting Pads and Drives, PART - Brackets on Working Flanges for attachment of Aircraft Equipment and EBU, PART - IDG Piping, where Intertwined with Engine Parts.

ADDITIONAL EQUIPMENT

Available at Increased Price

Engine Storage Bag

Engine Transportation Stand

Enhanced Engine Condition Monitoring Instrumentation

Items of ADDITIONAL EQUIPMENT should be ordered at the time of engine procurement in order to assure availability of this equipment at the time of engine shipment.

 

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GENERAL NOTES

The specified Sea Level Static Ratings are ideal and are based on U.S. Standard Atmosphere 1962 conditions, the specified fuel and oil, an ideal inlet pressure recovery, no fan or compressor air bleed or load on accessory drives, a mixed exhaust system having no internal pressure losses and with a mixed primary nozzle velocity coefficient equal to 1.0.

Take-off rating is the maximum thrust certified for take-off operation. Take-off thrust is available at and below ISA + 40 o C (72 o F) ambient temperatures.

Maximum Continuous Rating is the maximum thrust certified for continuous operation. The specified thrust is available at and below ISA + 18 o F (10 o C) ambient temperature.

Maximum Climb Rating is the maximum thrust approved for normal climb operation.

Maximum Cruise Rating is the maximum thrust approved for normal cruise operation.

Unless otherwise specified, engines will be supplied with the STANDARD EQUIPMENT listed.

 

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EXHIBIT A-2

 

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V2500 TURBOFAN ENGINE MODEL SPECIFICATION

 

            FAA Commercial Type Certificate E4ONE    Model V2527 - A5
               Spec. No. IAE S27A5/2

SEA LEVEL STATIC RATINGS

(See General Notes)

 

   Net

Thrust

lb

  
Take-off Rating (5 min)    24,800   
Maximum Continuous Rating    22,240   

DESCRIPTION

Type - Dual rotor, axial flow, high bypass turbofan, single-stage fan, four-stage low compressor, ten-stage high pressure compressor, annular combustor, two-stage high pressure turbine, five-stage low pressure turbine.

Installation Drawing No. 4W6199. The Engine Installation Drawing shows the Engine envelope and provides dimensions and data for the engine installation interfaces.

FUEL AND OIL

 

Fuel - Specification:        MIL-T-5624, MIL-T-83133 or ASTM-D-1655
Oil - Specification:          MIL-L-23699 Type II
Oil Consumption: Maximum (as measured over a 10-hour period) 0.15 U.S. gal/hr

STANDARD EQUIPMENT

(Included in Engine Price)

FUEL SYSTEM AND CONTROL SYSTEM COMPRISING:

LP/HP Fuel Pump, Fuel Filter Element, Fuel Temperature Sensor, Fuel Diverter/Back to Tank Valve, Fuel Distribution Valve, P2T2 Probe, Relay Box, Electronic Engine Control, Dedicated Generator, P4.9 Sensors and Manifold, Woodward Governor Company Fuel Metering Unit, Fuel Supply Pipe.

 

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IGNITION SYSTEM COMPRISING:

Ignition Exciter, Igniter Plug, Ignition Lead (2 each).

AIR SYSTEM COMPRISING:

No. 4 Bearing Compartment Heat Exchanger, HP/LP Active Clearance Control Valve, Active Clearance Control Valve Actuator, LP Compressor Bleed Valve Master Actuator, LP Compressor Bleed Valve Slave Actuator, Variable Stator Vane Actuator, HP Compressor Bleed Valves, HP Compressor Bleed Valve Solenoids.

ENGINE INDICATING SYSTEM COMPRISING:

Exhaust Gas Temperature (EGT) Thermocouples, EGT Harness and Junction Box.

OIL SYSTEM COMPRISING:

Oil Tank, Air Cooled Oil Cooler, Fuel Cooled Oil Cooler, Pressure Oil Filter Element, Air Cooled Oil Cooler Modulating Valve, Scavenge Oil Filter Housing Assembly and Element, No. 4 Bearing Compartment Scavenge Valve, No. 4 Bearing Scavenge Pressure Transducer, IDG Fuel Cooled Oil Cooler.

MISCELLANEOUS:

Electrical EEC Harnesses - Fan and Core, Nose Spinner, PART - Drains, If Intertwined With Engine parts, Airframe Accessory Mounting Pads and Drives, PART - Brackets on Working Flanges for attachment of Aircraft Equipment and EBU, PART - IDG Piping, where Intertwined with Engine Parts.

ADDITIONAL EQUIPMENT

Available at Increased Price

Engine Storage Bag

Engine Transportation Stand

Enhanced Engine Condition Monitoring Instrumentation

Items of ADDITIONAL EQUIPMENT should be ordered at the time of engine procurement in order to assure availability of this equipment at the time of engine shipment.

 

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GENERAL NOTES

The specified Sea Level Static Ratings are ideal and are based on U.S. Standard Atmosphere 1962 conditions, the specified fuel and oil, an ideal inlet pressure recovery, no fan or compressor air bleed or load on accessory drives, a mixed exhaust system having no internal pressure losses and with a mixed primary nozzle velocity coefficient equal to 1.0.

Take-off rating is the maximum thrust certified for take-off operation. Take-off thrust is available at and below ISA + 40°C (72°F) ambient temperatures.

Maximum Continuous Rating is the maximum thrust certified for continuous operation. The specified thrust is available at and below ISA + 18°F (10°C) ambient temperature.

Maximum Climb Rating is the maximum thrust approved for normal climb operation.

Maximum Cruise Rating is the maximum thrust approved for normal cruise operation.

Unless otherwise specified, engines will be supplied with the STANDARD EQUIPMENT listed.

 

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EXHIBIT A-3

 

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V2500 TURBOFAN ENGINE MODEL SPECIFICATION

 

FAA Commercial Type Certificate E4ONE

   Model V2527E - A5   
           Spec. No. IAE S27EA5/2   

SEA LEVEL STATIC RATINGS

(See General Notes)

 

    
 
 
Net
Thrust
lb
  
  
  
  

Take-off Rating (5 min)

     24,800      

Maximum Continuous Rating

     22,240      

DESCRIPTION

Type - Dual rotor, axial flow, high bypass turbofan, single-stage fan, four-stage low compressor, ten-stage high pressure compressor, annular combustor, two-stage high pressure turbine, five-stage low pressure turbine.

Installation Drawing No. 4W6199. The Engine Installation Drawing shows the Engine envelope and provides dimensions and data for the engine installation interfaces.

FUEL AND OIL

 

Fuel -Specification:

          MIL-T-5624, MIL-T-83133 or ASTM-D-1655

Oil - Specification:

          MIL-L-23699 Type II

Oil Consumption:

  Maximum (as measured over a 10-hour period) 0.15 U.S. gal/hr

STANDARD EQUIPMENT

(Included in Engine Price)

FUEL SYSTEM AND CONTROL SYSTEM COMPRISING:

LP/HP Fuel Pump, Fuel Filter Element, Fuel Temperature Sensor, Fuel Diverter/Back to Tank Valve, Fuel Distribution Valve, P2T2 Probe, Relay Box, Electronic Engine Control, Dedicated Generator, P4.9 Sensors and Manifold, Woodward Governor Company Fuel Metering Unit, Fuel Supply Pipe.

 

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IGNITION SYSTEM COMPRISING:

Ignition Exciter, Igniter Plug, Ignition Lead (2 each).

AIR SYSTEM COMPRISING:

No. 4 Bearing Compartment Heat Exchanger, HP/LP Active Clearance Control Valve, Active Clearance Control Valve Actuator,LP Compressor Bleed Valve Master Actuator, LP Compressor Bleed Valve Slave Actuator, Variable Stator Vane Actuator, HP Compressor Bleed Valves, HP Compressor Bleed Valve Solenoids.

ENGINE INDICATING SYSTEM COMPRISING:

Exhaust Gas Temperature (EGT) Thermocouples, EGT Harness and Junction Box.

OIL SYSTEM COMPRISING:

Oil Tank, Air Cooled Oil Cooler, Fuel Cooled Oil Cooler, Pressure Oil Filter Element, Air Cooled Oil Cooler Modulating Valve, Scavenge Oil Filter Housing Assembly and Element, No. 4 Bearing Compartment Scavenge Valve, No. 4 Bearing Scavenge Pressure Transducer, IDG Fuel Cooled Oil Cooler.

MISCELLANEOUS:

Electrical EEC Harnesses - Fan and Core, Nose Spinner, PART - Drains, If Intertwined With Engine parts, Airframe Accessory Mounting Pads and Drives, PART - Brackets on Working Flanges for attachment of Aircraft Equipment and EBU, PART - IDG Piping, where Intertwined with Engine Parts.

ADDITIONAL EQUIPMENT

Available at Increased Price

Engine Storage Bag

Engine Transportation Stand

Enhanced Engine Condition Monitoring Instrumentation

Items of ADDITIONAL EQUIPMENT should be ordered at the time of engine procurement in order to assure availability of this equipment at the time of engine shipment.

 

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GENERAL NOTES

The specified Sea Level Static Ratings are ideal and are based on U.S. Standard Atmosphere 1962 conditions, the specified fuel and oil, an ideal inlet pressure recovery, no fan or compressor air bleed or load on accessory drives, a mixed exhaust system having no internal pressure losses and with a mixed primary nozzle velocity coefficient equal to 1.0.

Take-off rating is the maximum thrust certified for take-off operation. Take-off thrust is available at and below ISA + 40ºC (72ºF) ambient temperatures.

Maximum Continuous Rating is the maximum thrust certified for continuous operation. The specified thrust is available at and below ISA + 18ºF (10ºC) ambient temperature.

Maximum Climb Rating is the maximum thrust approved for normal climb operation.

Maximum Cruise Rating is the maximum thrust approved for normal cruise operation.

Unless otherwise specified, engines will be supplied with the STANDARD EQUIPMENT listed.

 

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EXHIBIT A-4

 

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V2500 TURBOFAN ENGINE MODEL SPECIFICATION

 

FAA Commercial Type Certificate E4ONE

   Model V2533 - A5   
           Spec. No. IAE S33A5/2   

SEA LEVEL STATIC RATINGS

(See General Notes)

 

    
 
 
Net
Thrust
lb
  
  
  
  

Take-off Rating (5 min)

     31,600      

Maximum Continuous Rating

     26,950      

DESCRIPTION

Type - Dual rotor, axial flow, high bypass turbofan, single-stage fan, four-stage low compressor, ten-stage high pressure compressor, annular combustor, two-stage high pressure turbine, five-stage low pressure turbine.

Installation Drawing No. 4W6199. The Engine Installation Drawing shows the Engine envelope and provides dimensions and data for the engine installation interfaces.

FUEL AND OIL

 

Fuel - Specification:

          MIL-T-5624, MIL-T-83133 or ASTM-D-1655

Oil - Specification:

          MIL-L-23699 Type II

Oil Consumption:

  Maximum (as measured over a 10-hour period) 0.15 U.S. gal/hr

STANDARD EQUIPMENT

(Included in Engine Price)

FUEL SYSTEM AND CONTROL SYSTEM COMPRISING:

LP/HP Fuel Pump, Fuel Filter Element, Fuel Temperature Sensor, Fuel Diverter/Back to Tank Valve, Fuel Distribution Valve, P2T2 Probe, Relay Box, Electronic Engine Control, Dedicated Generator, P4.9 Sensors and Manifold, Woodward Governor Company Fuel Metering Unit, Fuel Supply Pipe.

 

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IGNITION SYSTEM COMPRISING:

Ignition Exciter, Igniter Plug, Ignition Lead (2 each).

AIR SYSTEM COMPRISING:

No. 4 Bearing Compartment Heat Exchanger, HP/LP Active Clearance Control Valve, Active Clearance Control Valve Actuator,LP Compressor Bleed Valve Master Actuator, LP Compressor Bleed Valve Slave Actuator, Variable Stator Vane Actuator, HP Compressor Bleed Valves, HP Compressor Bleed Valve Solenoids.

ENGINE INDICATING SYSTEM COMPRISING:

Exhaust Gas Temperature (EGT) Thermocouples, EGT Harness and Junction Box.

OIL SYSTEM COMPRISING:

Oil Tank, Air Cooled Oil Cooler, Fuel Cooled Oil Cooler, Pressure Oil Filter Element, Air Cooled Oil Cooler Modulating Valve, Scavenge Oil Filter Housing Assembly and Element, No. 4 Bearing Compartment Scavenge Valve, No. 4 Bearing Scavenge Pressure Transducer, IDG Fuel Cooled Oil Cooler.

MISCELLANEOUS:

Electrical EEC Harnesses - Fan and Core, Nose Spinner, PART - Drains, If Intertwined With Engine parts, Airframe Accessory Mounting Pads and Drives, PART - Brackets on Working Flanges for attachment of Aircraft Equipment and EBU, PART - IDG Piping, where Intertwined with Engine Parts.

ADDITIONAL EQUIPMENT

Available at Increased Price

Engine Storage Bag

Engine Transportation Stand

Enhanced Engine Condition Monitoring Instrumentation

Items of ADDITIONAL EQUIPMENT should be ordered at the time of engine procurement in order to assure availability of this equipment at the time of engine shipment.

 

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GENERAL NOTES

The specified Sea Level Static Ratings are ideal and are based on U.S. Standard Atmosphere 1962 conditions, the specified fuel and oil, an ideal inlet pressure recovery, no fan or compressor air bleed or load on accessory drives, a mixed exhaust system having no internal pressure losses and with a mixed primary nozzle velocity coefficient equal to 1.0.

Take-off rating is the maximum thrust certified for take-off operation. Take-off thrust is available at and below ISA + 40ºC (72ºF) ambient temperatures.

Maximum Continuous Rating is the maximum thrust certified for continuous operation. The specified thrust is available at and below ISA + 18ºF (10ºC) ambient temperature.

Maximum Climb Rating is the maximum thrust approved for normal climb operation.

Maximum Cruise Rating is the maximum thrust approved for normal cruise operation.

Unless otherwise specified, engines will be supplied with the STANDARD EQUIPMENT listed.

 

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EXHIBIT A-5

 

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V2500 TURBOFAN ENGINE MODEL SPECIFICATION

 

FAA Commercial Type Certificate E40NE

   Model V2527M - A5      
   Spec. No. IAE 27MA5/2

SEA LEVEL STATIC RATINGS

(See General Notes)

 

   Net
   Thrust
   lb

Take-off Rating (5 min)

   24,800

Equivalent take-off thrust at 0.2 Mn

   26,570

Maximum Continuous Rating

   22,240

DESCRIPTION

Type - Dual rotor, axial flow, high bypass turbofan, single-stage fan, four-stage low compressor, ten-stage high pressure compressor, annular combustor, two-stage high pressure turbine, fivestage low pressure turbine.

Installation Drawing No. 4W6199. The Engine Installation Drawing shows the Engine envelope and provides dimensions and data for the engine installation interfaces.

FUEL AND OIL

Fuel - Specification:     MIL-T-5624, MIL-T-83133 or ASTM-D-1655

Oil - Specification:       MIL-L-23699 Type II

Oil Consumption: Maximum (as measured over a 10-hour period) 0.15 U.S. gal/hr

STANDARD EQUIPMENT

(Included in Engine Price)

FUEL SYSTEM AND CONTROL SYSTEM COMPRISING:

LP/HP Fuel Pump, Fuel Filter Element, Fuel Temperature Sensor, Fuel Diverter/Back to Tank Valve, Fuel Distribution Valve, P2T2 Probe, Relay Box, Electronic Engine Control, Dedicated Generator, P4.9 Sensors and Manifold, Woodward Governor Company Fuel Metering Unit, Fuel Supply Pipe.

IGNITION SYSTEM COMPRISING:

Ignition Exciter, Igniter Plug, Ignition Lead (2 each).

AIR SYSTEM COMPRISING:

No. 4 Bearing Compartment Heat Exchanger, HP/LP Active Clearance Control Valve, Active Clearance Control Valve Actuator, LP Compressor Bleed Valve Master Actuator, LP Compressor Bleed Valve Slave Actuator, Variable Stator Vane Actuator, HP Compressor Bleed Valves, HP Compressor Bleed Valve Solenoids.

 

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ENGINE INDICATING SYSTEM COMPRISING:

Exhaust Gas Temperature (EGT) Thermocouples, EGT Harness and Junction Box.

OIL SYSTEM COMPRISING:

Oil Tank, Air Cooled Oil Cooler, Fuel Cooled Oil Cooler, Pressure Oil Filter Element, Air Cooled Oil Cooler Modulating Valve, Scavenge Oil Filter Housing Assembly and Element, No. 4 Bearing Compartment Scavenge Valve, No. 4 Bearing Scavenge Pressure Transducer, IDG Fuel Cooled Oil Cooler.

MISCELLANEOUS:

Electrical EEC Harnesses - Fan and Core, Nose Spinner, PART - Drains, If Intertwined With Engine parts, Airframe Accessory Mounting Pads and Drives, PART - Brackets on Working Flanges for attachment of Aircraft Equipment and EBU, PART - IDG Piping, where Intertwined with Engine Parts.

ADDITIONAL EQUIPMENT

Available at Increased Price

Engine Storage Bag

Engine Transportation Stand

Enhanced Engine Condition Monitoring Instrumentation

Items of ADDITIONAL EQUIPMENT should be ordered at the time of engine procurement in order to assure availability of this equipment at the time of engine shipment.

GENERAL NOTES

The specified Sea Level Static Ratings are ideal and are based on U.S. Standard Atmosphere 1962 conditions, the specified fuel and oil, an ideal inlet pressure recovery, no fan or compressor air bleed or load on accessory drives, a mixed exhaust system having no internal pressure losses and with a mixed primary nozzle velocity coefficient equal to 1.0.

Take-off rating is the maximum thrust certified for take-off operation. Take-off thrust is available at and below ISA + 31oC (56oF) ambient temperatures.

Maximum Continuous Rating is the maximum thrust certified for continuous operation. The specified thrust is available at and below ISA + 10oC (18oF) ambient temperature.

Maximum Climb Rating is the maximum thrust approved for normal climb operation.

Maximum Cruise Rating is the maximum thrust approved for normal cruise operation.

Unless otherwise specified, engines will be supplied with the STANDARD EQUIPMENT listed.

 

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EXHIBIT B-1

 

I. Aircraft Delivery Schedule [*]

 

* [Two pages have been omitted in accordance with a request for confidential treatment]

 

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EXHIBIT B-2

Firm Spare Engine Delivery Schedule

 

[*]

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EXHIBIT B-3

ESCALATION FORMULA

Any unit base price or other sum expressed to be subject to escalation shall be calculated as a two step process: first, calculate base prices to June 2001 using SIC Code AHE 3724 as the labor index point in the escalation formula, and second, escalate from June 2001 to the delivery month using NAICS Code 336411 as the labor index point in the escalation formula.

 

1. Calculation

Step 1: Escalation formula through June 2001

 

[*]

Where:

Pr   =    Base Contract Price or other Sum calculated to June 2001 rounded to the nearest dollar.
Pb   =    The Basic Contract Price or other Sum.
Lo   =    The “Average Hourly Earnings of Aircraft Engine and Engine Parts Production Workers” SIC Code 3724 published by the Bureau of Labor Statistics in the U.S. Department of Labor for the month preceding the Base Month by four months.
L   =    The “Average Hourly Earnings of Aircraft Engine and Engine Parts Production Workers” SIC Code 3724 for the month preceding June 2001 by four months.
Mo   =    The “Producer Price Index, Code 10, For Metals and Metal Products” published by the Bureau of Labor Statistics in the U.S. Department of Labor for the month preceding the Base Month by four months.
M   =    The “Producer Price Index, Code 10, For Metals and Metal Products” for the month preceding June 2001 by four months.
Eo   =    The “Producer Price Index, Code 5, For Fuel and Related Products and Power” published by the Bureau of Labor Statistics in the U.S. Department of Labor for the month preceding the Base Month by four months.
E   =    The “Producer Price Index, Code 5, For Fuel and Related Products and Power” for the month preceding June 2001 by four months,.
  The values of the factors 0.60 L and 0.30 M and 0.10 E
                                          Lo             Mo               Eo
  respectively, shall be determined to the nearest fourth decimal place. If the fifth decimal is five or more, the fourth decimal place shall be raised to the next higher number.

 

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The Basic Contract Prices are subject to escalation as set forth herein from the Base Month of January 1997.

Step 2 – Escalation formula for period post June 2001

 

[*]

Where:

Pi   =    The Invoice price or escalated sum rounded to the nearest dollar.
Pr   =    The calculated June 2001 Basic Contract Price or other escalated Sum, as calculated in Step 1 above.
Lo   =    The “Employment Cost Index (NAICS) Wages and Salaries for Aircraft Manufacturing, (NAICS Code 336411) CIU2023211000000I” published by the Bureau of Labor Statistics in the U.S. Department of Labor for the month preceding June 2001 by four months.
L   =    The “Employment Cost Index (NAICS) Wages and Salaries for Aircraft Manufacturing, (NAICS Code 336411) CIU2023211000000I” for the month preceding the month of delivery or other date of determination by four months.
Mo   =    The “Producer Price Index, Code 10, For Metals and Metal Products” published by the Bureau of Labor Statistics in the U.S. Department of Labor for the month preceding June 2001 by four months.
M   =    The “Producer Price Index, Code 10, For Metals and Metal Products” for the month preceding the month of delivery or other date of determination by four months.
Eo   =    The “Producer Price Index, Code 5, For Fuel and Related Products and Power” published by the Bureau of Labor Statistics in the U.S. Department of Labor for the month preceding June 2001 by four months.
E   =    The “Producer Price Index, Code 5, For Fuel and Related Products and Power” for the month preceding the month of delivery or other date of determination by four months.

 

2. The values of the factors [*]

respectively, shall be determined to the nearest fourth decimal place. If the fifth decimal is five or more, the fourth decimal place shall be raised to the next higher number.

 

3. If the U.S. Department of Labor ceases to publish the above statistics or modifies the basis of their calculation, then IAE may substitute any officially recognized and substantially equivalent statistics.

 

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4. The Basic Contract Prices contained in this Exhibit B-2 are subject to escalation from a Base Month of January 1997 to the month of delivery using Lo, Mo and Eo values for September 1996.

 

5. If the application of the formula contained in this Exhibit B-3 results in a Purchase Price which is lower than the Basic Contract Price, the Basic Contract Price will be deemed to be the Purchase Price for such Supplies.

 

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EXHIBIT C

PRODUCT SUPPORT PLAN

 

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PRODUCT SUPPORT

FOR THE

V2500 ENGINE

IAE INTERNATIONAL AERO ENGINES AG

Issue No. 6

 

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TABLE OF CONTENTS

 

I.    INTRODUCTION    ii
II.    CUSTOMER SUPPORT    1
      Customer Support Manager   
      Customer Support Representatives   
      Customer Training   
      Engine Maintenance Management   
      Operations Monitoring   
      Special Programs   
III.    BUSINESS SUPPORT    6
      Engine Warranty Services   
      Maintenance Center Support   
      Maintenance Facilities Planning Service   
      Engine Reliability and Economic Forecasts   
      Logistics Support Studies   
      Lease Engine Program   
IV.    TECHNICAL SERVICES    9
      Technical Services   
      Powerplant Maintenance   
      Customer Performance   
      Diagnostic Systems   
      Human Factors   
      Flight Operations   
      Repair Services   
      Tooling and Support Equipment Services   
      Product Support Technical Publications   
V.    SPARE PARTS    20
      Spare Parts Support   

 

PRODSUP

   i   

 

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I. INTRODUCTION

IAE International Aero Engines AG (IAE) will make the following support personnel and services available to the V2500 engine customer: Flight Operations, Customer Performance, Customer Support Representatives, Customer Maintenance Support, Technical Services, Powerplant Maintenance, Service Data Analysis, Human Factors, Repair Services, Warranty Administration, Maintenance Facilities Planning, Tooling and Support Equipment Services, Product Support Technical Publications, Customer Training, Spare Parts Support and Maintenance Center Support.

To make these support services readily available to you, our customer, in the most efficient manner, the Customer Support Group has been established and assigned primary responsibility within IAE for customer liaison. A Customer Support Manager is assigned to maintain direct liaison with each individual Customer. A description of the various product support services available to each customer follows.

IAE reserves the right to withdraw or modify individual services described herein at any time at its sole discretion. No such withdrawal or modification shall diminish the level of services and support which the Customer may be entitled to receive with respect to V2500 Engines for which a firm order has been placed with IAE or with respect to Aircraft with installed V2500 Engines for which a firm order has been placed with the Aircraft Manufacturer, prior to the announcement of any such withdrawal or modification. Should IAE retract or diminish the benefits of this Product Support Plan with respect to unexercised Rolling Option Aircraft, AAH shall be entitled to purchase such unexercised Rolling Option Aircraft with non-IAE provided engines.

Unless stated to the contrary elsewhere in the Contract to which this Product Support plan is attached or in this Product Support plan itself, reasonable quantities of the services described herein are provided at no cost to the Customer.

 

PRODSUP

   ii   

 

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II. CUSTOMER SUPPORT

CUSTOMER SUPPORT MANAGER

The Customer Support Manager provides a direct liaison between the airline customer’s Engineering, Maintenance, Operations, Logistics, Commercial and Financial organizations and the corresponding functions within IAE. The Customer Support Manager assigned to each airline is responsible for coordinating and monitoring the effort of the Product Support Department functional organization to achieve timely and responsive support for the airline.

The Customer Support Manager provides the following specific services to the airline customer:

 

   

Readiness Program and planning prior to EIS

 

   

Technical recommendations and information.

 

   

Engine Maintenance Management Plans

 

   

Refurbishment, Modification and Conversion program planning assistance.

 

   

Coordination of customer repair, maintenance and logistics requirements with the appropriate Product Support functional groups.

 

   

Assist with critical engine warranty/service policy claims.

The Customer Support Manager will represent the airline customer in IAE internal discussions to ensure that the best interests of the customer and IAE are considered when making recommendations to initiate a program, implement a change or improvement in the V2500 engine.

CUSTOMER SUPPORT REPRESENTATIVES

IAE Customer Support Representatives provide the following services to the airline customer:

 

   

24 Hour Support

 

   

Maintenance Action Recommendations

 

   

Daily Reporting on Engine Technical Situations

 

   

On-The-Job Training

 

   

Service Policy Preparation Assistance

 

   

Prompt Communication with IAE

ENGINE MAINTENANCE SUPPORT SERVICE

Customer Support Representatives assist airline customer personnel in the necessary preparation for engine operation and maintenance. The Representative, teamed with a Customer Support Manager will work closely with the airplane manufacturer’s support team particularly during the initial period of aircraft operation. Representatives are in frequent contact with the IAE offices on technical matters. Information and guidance received from the home office is transmitted promptly to the airline which allows the airline to share in all related industry experience.

The practice permits immediate use of the most effective procedures and avoidance of unsuccessful techniques. The IAE office contact ensures that IAE Representatives know, in detail, the latest and most effective engine maintenance procedures and equipment being used for maintenance and overhaul of V2500 engines. They offer technical information and recommendations to airline personnel on all aspects of maintenance, repair, assembly, balancing, testing, and spare parts support of IAE.

 

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ON-THE-JOB TRAINING

Customer Support Representatives will conduct on-the-job training for the airline’s maintenance personnel. This training continues until the maintenance personnel have achieved the necessary level of proficiency. Training of new maintenance personnel will be conducted on a continuing basis.

SERVICE POLICY ADMINISTRATION

Customer Support Representatives will provide administrative and technical assistance in the application of the IAE Engine and Parts Service Policy to ensure expeditious and accurate processing of airline customer claims.

CUSTOMER TRAINING

IAE Customer Training offers airline customers the following support:

 

   

Technical Training at Purpose Built Facilities

 

   

On-site Technical Training

 

   

Technical Training Consulting Service

 

   

Training Aids and Materials

TRAINING PROGRAM

The IAE Customer Training Center has an experienced full-time training staff which conducts formal training programs in English for airline customers’ maintenance, training and engineering personnel. The standard training programs are designed to prepare customer personnel, prior to the delivery of the first aircraft, to operate and maintain the installed engines. Standard courses in engine operation, line maintenance, modular maintenance, performance and trouble-shooting are also available throughout the production life of the engine. The courses utilize the latest teaching technology, training aids and student handouts. IAE Customer Support will coordinate the scheduling of specific courses as required. Training at the Customer Training Center is provided to a limit of 50 mandays per Aircraft firmly ordered. This amount can be reviewed periodically to determine if additional no charge training is required. The following is the curriculum of standard courses available. On-site technical training, technical training consulting services and customized courses may be provided upon customer request and subject to separate contractual arrangements or possibly at no cost on a case-by-case basis taking into consideration regional requirements and other factors.

General V2500 Familiarization

This two day course is designed for experienced gas turbine personnel who will be responsible for planning, provisioning and maintenance of the V2500 engine. This course is also designed to appropriately familiarize key staff, supervisory and operations planning personnel and flight crews. Discussions are concentrated in the following subject areas:

 

   

Engine construction features internal and external hardware.

 

   

Engine systems operation, major components accessibility for removal/replacement.

 

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Operational procedures

 

   

Performance characteristics

 

   

Maintenance concepts, repair and replacement requirements and special tooling.

The course is normally conducted in preparation for fleet introductory discussions in the provisioning of spares and tooling, training and line maintenance areas to acquaint the customer with the engine, its systems, operations and procedures.

Line Maintenance and Troubleshooting

This course is designed for key line maintenance and troubleshooting personnel who have not received previous formal training on the V2500 engine. The classroom phases provide the student with the information essential for timely completion of line maintenance activities and the procedures for effective troubleshooting and correction of malfunctions in the V2500 engine systems and the engine/airframe interfaces. Classroom and shop training are provided for in the following areas:

 

   

Engine Description

 

   

Systems Operation

 

   

Applied Performance

 

   

Ground Operations

 

   

Troubleshooting Procedures

 

   

Practical Phase Line Maintenance Tasks

 

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V2500 Familiarization and Modular Maintenance

Provides experienced heavy maintenance personnel with engine modular disassembly and assembly training. The training is concentrated in the following subject areas:

 

   

Engine Description Overview

 

   

Engine Systems Overview

 

   

Heavy Maintenance Tasks *

  *     Course duration and “hands-on” coverage are contingent on the availability of an engine and required tooling.

ENGINE MAINTENANCE MANAGEMENT PLANS

Planning documents, tailored for individual operators, are developed to serve as Engine Maintenance Management Program criteria. These are directed toward the objective of ensuring cost-effective operation with acceptable post-repair test performance, providing engine reliability to achieve maximum time between shop visits, and minimizing the adverse effects to operation of inflight shutdowns and delays/cancellations. Through the institution of specific maintenance recommendations, proper engine performance, durability, and hot section parts lives can be achieved.

OPERATIONS MONITORING

The following information is available to the airline customer from the IAE Product Information Process (IP) 2 Group:

OPERATION EXPERIENCE REPORTS

IAE maintains V2500 Service Data System (SDS) data base from which selected engine operations and reliability summary reports will be developed and made available on a scheduled basis to each airline customer. Data reported by IAE Customer Support Representatives serve as input to this data base. This computerized data maintenance and retrieval system will permit:

 

   

A pooling and exchange of service experience for the benefit of the entire airline industry.

 

   

A common statistical base.

 

   

The selective querying of computer data files for answers to customer inquiries.

In addition to providing operations and reliability reports, SDS serves in-house programs directed at improving engine design and enhancing overall customer support, including spare parts provisioning and warranty administration.

 

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SPECIAL PROGRAMS

ENGINE HARDWARE RETROFIT PROGRAMS

Engine Retrofits are carried out to provide modification of engine hardware configuration when required on delivered engines. This involves assisting in the marshaling of hardware, special tools, manpower and the scheduling of engine and material to modification sites.

CONTROLLED SERVICE USE PROGRAMS AND MATERIAL SUPPORT

IAE shall assume responsibility for the planning, sourcing, scheduling and delivery of Controlled Service Use material, warranty replacement material, service campaign, material and program support material subject to the terms of special contracts with customers.

Urgent customer shipments, both inbound and outbound, are monitored, traced, routed and expedited as required. The receipt and movement of customer owned material returned to IAE is carefully controlled, thus assuring an accurate accounting at all times.

III. BUSINESS SUPPORT

The Business Support Group is dedicated to providing prompt and accurate assistance to you, our V2500 airline customer. This Group provides the following categories of assistance and support to the V2500 airline customer:

 

   

Engine Warranty Services

 

   

Maintenance Support

 

   

Lease Engine Program

 

   

Engine Reliability and Economic Forecasts

 

   

Logistic Support Studies

ENGINE WARRANTY SERVICES

Engine Warranty Services will provide the following support for the V2500 engine airline customer:

 

   

Prompt administration of claims concerning Engine Warranty, Service Policy, other support programs and Guarantee Plans.

 

   

Investigation of part condition and part failure.

 

   

Material provisioning administration for Controlled Service Use programs and other material support.

 

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PROMPT ADMINISTRATION

Each airline customer is assigned a Warranty Analyst whose job is to provide individual attention and obtain prompt and effective settlements of Warranty and Service Policy claims. A typical claim properly submitted is generally settled, including issuance of applicable credit memo, within thirty days. Experience generated by much of the data derived from such claims often enables IAE to monitor trends in operating experience and to address and often eliminate potential problems.

INVESTIGATION AND REPORTS

Parts returned to IAE pursuant to the terms of the Service Policy are investigated in appropriate detail to analyze and evaluate part condition and cause of part failure. A report of findings is prepared and forwarded to the airline customer and to all IAE departments involved. In the case of vendor parts, the vendor is promptly informed. Reports often include recommendations to preclude repetition of the problem.

MAINTENANCE CENTER SUPPORT

IAE has arranged for the establishment of Maintenance Centers which are available to accomplish repairs, modifications and conversions, as well as the complete overhaul of the V2500 engine subject to IAE’s standard terms and conditions for such work.

Through the use of the IAE established Maintenance Centers and their capabilities, an operator can minimize or eliminate the need for investment in engine support areas depending on the level of maintenance he elects the Maintenance Center to perform. Savings in specific engine support areas, such as spare parts inventory, maintenance and test tooling, support equipment and test facilities, can be demonstrated. Use of Maintenance Centers can also minimize the need for off-wing maintenance and test personnel with their associated overhead.

MAINTENANCE FACILITIES PLANNING SERVICE

Maintenance Facilities Planning Service offers the following support to IAE customer:

 

   

General Maintenance Facility Planning Publications

 

   

Customized Facility Plans

 

   

Maintenance Facility and Test Cell Planning Consultation Services

Maintenance Facilities Planning Service provides general and customized facility planning data and consultation services. Facility Planning Manuals for the V2500 engine will present the maintenance tasks, facility equipment and typical departments floor plans showing arrangement of equipment required to accomplish the tasks for all levels of maintenance. The Facility Equipment Manual is a catalog of standard facility equipment such as lathes, process tanks, hoists, cranes, etc., which is suitable for use in the maintenance and testing of IAE engines.

Customized facility planning services and consulting services are offered subject to separate contractual arrangements. Customized facility plans are developed to meet the requirements of customers’ specific fleet sizes, activities and growth plans. The plans identify floor space, facility

 

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equipment, utilities and manpower requirements. On-site surveys are conducted as a part of customized plan development to determine the adaptability of existing facilities and equipment for the desired maintenance program. These plans provide floor plan layouts to show recommended locations for work stations, major equipment, marshaling and storage areas, workflow patterns, and structural and utility requirements to accommodate all the engine models that are maintained in the customer’s shop. The Maintenance Facilities Planning Service also provides consultant services which are specifically related to the development of engine test cells, and the adaptation of existing maintenance facilities to accommodate expanding production requirements and/or new or additional IAE models.

ENGINE RELIABILITY AND ECONOMIC FORECASTS

Engine reliability and economic forecasts in the forms of predicted shop visit rates and maintenance costs will be provided to reflect the airline customers’ operating characteristics. Additionally, various analyses will be conducted to establish life probability profiles of critical engine parts, and to determine optimum part configuration and engine operating procedures. Both will be provided as requested by AAH on a reasonable basis.

LOGISTICS SUPPORT STUDIES

As required, logistics studies are conducted to assist in the planning of engine operational support. Such studies may include spare engine and spare module requirements forecasts, level of maintenance analyses, engine type economic evaluations and life cycle cost estimates.

LEASE ENGINE PROGRAM

An engine lease program will be made available to V2500 Airline Customers subject to IAE’s standard terms and conditions of lease. Pool spares will be stationed at selected locations to assure emergency protection against aircraft-on-ground (AOG) situations or to provide supplemental support during “zero spares” conditions. The lease engines will incorporate the highest maintenance standards and configuration levels. Availability will be subject to prior demand, however, the program logistics will be continually reviewed to assure the most effective deployment of available pool engines.

 

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IV. TECHNICAL SERVICES

The Technical Services Group provides the following categories of technical support to the airline customer:

 

   

Technical Services

 

   

Powerplant Maintenance

 

   

Customer Performance

 

   

Diagnostic Systems

 

   

Human Factors

 

   

Flight Operations

 

   

Repair Services

 

   

Tooling and Support Equipment Services

 

   

Technical Publications

TECHNICAL SERVICES

Technical Services is responsible for the overall technical support to the customers. The following services are provided:

 

   

Technical Problem Identification/Corrective Action Implementation

 

   

Technical Communication

 

   

Engine conversion Program Definition and Management

 

   

Engine Upgrade and Commonality Studies

 

   

Engine Incident Investigation Assistance

TECHNICAL SERVICES

Technical information supplied through IAE Customer Support Representatives, Customer Support Managers, customer correspondence and direct meetings with airlines’ representatives permits assessment of the factors involved in technical problems and their impact on engine reliability and operating costs. Resolution of these problems is coordinated with responsible groups within IAE and the necessary corrective action is defined. In certain situations the corrective action involves the establishment of Service Evaluation programs for proposed modifications, and the establishment of warranty assistance programs in conjunction with the IAE Warranty Administration Group. Technical Services will assist customers in the implementation of recommended corrective action and improvements principally through official IAE technical communications, and direct customer contact.

TECHNICAL COMMUNICATIONS

Technical Services is responsible for the release of technical communications. Primary communication modes involves release of limits and procedures through engine and maintenance manual revisions and the requirements associated with engine upgrade and/or conversion, durability and performance improvements, and problem resolution through Service Bulletins is provided by All Operator Letters and/or wires or direct technical written response to individual customer inquiries.

 

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ENGINE CONVERSION PROGRAMS

Technical Services defines minimum configuration levels for conversion of service engine models. They serve to assist the customer with the implementation of conversion programs into existing fleets by providing preliminary planning cost estimates and technical planning information regarding tooling, material and instructional requirements. Conversion programs are monitored for problem areas and Technical Services initiates and implements corrective action as may be necessary.

ENGINE INCIDENT INVESTIGATION ASSISTANCE

Assistance is provided to an airline in conducting engine incident investigations in responding to the requirements of the appropriate Air Worthiness authority.

LINE MAINTENANCE AND TROUBLESHOOTING

Line Maintenance and Troubleshooting Seminars can be conducted at the IAE Training Center with the objective of improving line maintenance effectiveness fleetwide. Specialized training on V2500 line maintenance and troubleshooting can be provided through on-site workshops by special contractual arrangement or can be part of the Training Programs described above in the CUSTOMER TRAINING section.

Troubleshooting support is provided primarily through powerplant troubleshooting procedures which are published in IAE and airframe manufacturers manuals. When an airline encounters an engine problem and corrective action taken has not been effective, more direct support in troubleshooting and maintenance can also be provided to the customers line maintenance personnel. Instructions on V2500 powerplant troubleshooting and maintenance can also be provided to customers line maintenance personnel.

AIRLINE SHOP MAINTENANCE

Reviews of shop practices and procedures of individual airlines can be conducted to determine the most efficient and cost-effective methods for maintenance and repair of the V2500 in the environment in which the airline must maintain that engine.

 

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POWERPLANT MAINTENANCE

Powerplant Maintenance covers responsibility for maximizing engine maintainability, establishing maintenance concepts and requirements and providing maintenance support plant for IAE. This group provided the following services:

 

   

Definition of Maintenance Tasks and Resource Requirements

 

   

Planning Guides

Powerplant Maintenance conducts design reviews and comprehensive maintenance analysis of new engine designs and engine design changes to maximize engine maintainability consistent with performance, reliability, durability and life cycle cost considerations. Maintenance concepts, requirements and tasks are established to minimize maintenance costs. This group represents the customer’s maintainability interests in internal IAE operations and upon request will assist the customer in resolving specific maintenance task problems.

PROGRESSIVE MAINTENANCE PLANNING

Powerplant Maintenance also provides Planning Guides based upon Maintenance Task Analysis. The guides present engine maintenance requirements, their subordinate tasks and the required resources to accomplish on-aircraft engine maintenance and the off-aircraft repair of engines by modular section/build group replacement. Maintenance requirements are also presented for the refurbishment of modular section/build group by parts replacement, the complete repair of parts, the refurbishment of accessory components and for engine testing. The data in the Planning Guides is presented in a manner that is primarily intended to assist new operators by providing a phased introduction of new engines into their shops and to capitalize on the design maintainability features for the engine when they are developing their maintenance plans.

Powerplant Maintenance Engineering will assist new operators in planning a gradual, technically feasible, and economically acceptable expansion from line maintenance of installed engines through the complete repair of parts and accessory components.

CUSTOMER PERFORMANCE

Customer Performance provides for the following types of technical assistance to the airline customer:

 

   

Engine Performance Analysis Computer Programs for Test Cell Use

 

   

Test Cell Correlation Analysis and Correction Factors

 

   

Engine Stability Procedures and Problem Analysis

Although much of the above support is provided in the form of procedures, data and recommendations in various publications, the group also answers inquiries of a performance nature which are forwarded to IAE by individual customers.

 

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ENGINE PERFORMANCE ANALYSIS

Technical support is provided in a number of areas related to operational suitability including the development of the test requirements and performance limits for the Adjustment and Test Section of the Engine Manual. Computer programs that will assist the operator in analyzing engine performance using test cell data can be provided subject to IAE then current standard license fees and Terms and Conditions.

TEST CELL CORRELATION

Technical assistance is provided to the customer for developing appropriate corrections to be used for specific test configurations at customer owned test cell facilities. Reports are provided presenting correlation analyses and IAE recommended test cell corrections which permit comparison of the performance of customer tested engines with the respective Engine Manual limits and guarantee plan requirements.

ENGINE STABILITY

Technical support is provided to ensure that engine stability and starting reliability are maintained. Service evaluation programs for proposed improvements are initiated and monitored to determine their effectiveness. In addition, problems relating to engine control systems which impact engine stability and performance are analyzed.

DIAGNOSTIC SYSTEMS

Diagnostic Systems is responsible for the technical support of customer acquisition of inflight engine data and the assessment of engine performance through the use of that data. Diagnostic Systems personnel provide the following services:

 

   

Guidance to help customers define their engine monitoring system requirements.

 

   

Development of hardware specifications and computer programs (by separate contractual arrangement) to satisfy engine diagnostic requirements.

 

   

Coordination of all IAE airborne diagnostic support activity.

GUIDANCE IN DEFINING ENGINE MONITORING SYSTEMS REQUIREMENTS

Diagnostic Systems can provide consultation services to assist the customer in defining his engine condition and performance monitoring requirements and in selection of appropriate hardware and software systems to meet those requirements and options between the customer, airframe manufacturer, and Airborne Integrated Data System (AIDS) manufacturer.

DEVELOPMENT AND COORDINATION

Diagnostic Systems personnel can develop hardware specification and make computer software available to accomplish Engine Condition Monitoring (ECM) and performance analysis of engine modules using AIDS data. Engine condition monitoring procedures, of both the manual and computerized variety can also be developed and provided in support of the customer’s selected method of engine condition monitoring. Computer software will be provided to the customer subject to IAE’s then current standard license fees and Terms and Conditions.

 

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Diagnostic Systems personnel also coordinate activities of cognizant functional groups at IAE to provide engine related information to the customer, airframe manufacturer, and AIDS equipment vendor during the planning, installation, and operation of AIDS.

HUMAN FACTORS

Human Factors supplies data on task time and skill requirements necessary for accomplishing maintenance procedures.

Task data provided includes estimates of the man-hours, elapsed time and job skills necessary to accomplish maintenance tasks as described in IAE’s Manual and Service Bulletins. Data is supplied for “on” and “off” aircraft maintenance tasks up to modular disassembly/assembly. Additional selected task data can be supplied on disassembly/assembly to the piece part level and on parts repair. In addition, the group can help solve problems related to skill requirements, body dimensions, or excessive man-hours encountered in accomplishing maintenance tasks.

FLIGHT OPERATIONS

Flight Operations provides the airline customer with the following technical assistance concerning installed engine operations:

 

   

Introduction of new equipment

 

   

Problem resolution and assistance with in-service equipment

 

   

Contractual commitment and development program support

 

   

Publication of engine operations literature and performance aids

NEW EQUIPMENT

In accordance with customer needs, Flight Operations can provide on-site assistance in the training of operations personnel and help in solving engine operational problems that might arise during the initial commercial service period. Such assistance can include participation in initial delivery flights, engine operational reviews, and flight crew training activity.

PROBLEM RESOLUTION - IN-SERVICE EQUIPMENT

In accordance with a mutually agreed upon plan, Flight Operations can perform cockpit observations to identify or resolve engine operating problems and to assess installed engine performance.

CONTRACTUAL SUPPORT AND DEVELOPMENT PROGRAMS

As required, Flight Operations can assist in evaluating installed engine performance relative to contractual commitments and engine improvements which have an impact on engine operations.

 

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PUBLICATION SUPPORT

Flight Operations is responsible for the issuance of Engine Operating Instructions and correspondence pertaining to inflight engine operations. Such material is coordinated with the airframe manufacturers as required. Special Presentations and Reports are also issued, as required, to support the activity described above.

REPAIR SERVICES

Repair Services provides the following support to the airline customers:

 

   

Coordinated Repair Development Activity

 

   

Customer Assistance on Repair Procedures and Techniques

 

   

Qualification of Repair Sources

 

   

Repair Workshops

 

   

Repair Development List

COORDINATION OF REPAIR DEVELOPMENT

Repair Services provide direct contact with all sources that initiate repair schemes. The Group coordinates with representatives of Engineering and Support Services disciplines in identifying repair needs, evaluating various repair options and establishing repair development procedures and schedules. The Group participates in setting repair evaluation and approval requirements. When the repair is approved and substantiating data is documented, Repair Services releases the repair to the Engine Manual.

 

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TECHNICAL ASSISTANCE

Repair Services provides daily communications with airline customers via technical responses to inquiries direct from the airline or through our Customer Support Representative office at the airline facility. In addition, Repair Services make periodic visits to airline repair facilities to discuss new repairs under development, answer specific questions posed by the particular facility and review actual parts awaiting a repair/scrap decision. Occasionally, Repair Services make special visits to customer facilities to assist in training customer personnel in accomplishing particularly complex repairs.

QUALIFICATION OF REPAIR SOURCES

Repair Services coordinates the qualification of repair sources for repairs proprietary to IAE or to an outside repair agency. They also perform a review of the qualifications of repair sources for critical, nonproprietary repairs for which a source demonstration is deemed necessary. The group participates in negotiation of the legal and business agreements associated with these qualification programs.

TOOLING AND SUPPORT EQUIPMENT SERVICES

The Tooling and Support Equipment Services Group assists the customer by providing the following services:

 

   

Support Equipment Manufacturing/Procurement Documentation

 

   

Engine Accessory Test Equipment and Engine Transportation Equipment Specifications

 

   

Support Equipment Logistics Planning Assistance

SUPPORT EQUIPMENT DOCUMENTATION

The tooling and Support Equipment Services Group designs the special support equipment required to disassemble, assemble, inspect, repair and test IAE engines. Special support equipment design drawings and Support Equipment Master Data Sheets, which describe how to use the support equipment, are supplied to customers in the form of 35mm aperture cards. Support equipment designs are kept current with engine growth, and tool Bulletins are issued to customers as part of continuing configuration management service. Updated Design and Master Data Sheets Aperture Cards and Tool Bulletins are periodically distributed to all IAE customers.

 

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ENGINE ACCESSORY TEST EQUIPMENT AND ENGINE TRANSPORTATION EQUIPMENT REQUIREMENTS

Engine accessory test equipment and engine transportation equipment general requirements and specifications are defined and made available to IAE customers. If requested, the Tooling and Support Equipment Group will assist customers in the definition of engine accessory test and engine transportation equipment required for specific IAE needs.

SUPPORT EQUIPMENT LOGISTICS PLANNING ASSISTANCE

The Tooling and Support Equipment Group will provide, at the customer’s request, special support equipment lists which reflect the customer’s unique requirements such as mix of engine models and desired level of maintenance to aid in support equipment requirements planning.

TECHNICAL PUBLICATIONS

IAE and its subcontractors produce publications and maintenance information as described below to support the maintenance and modification requirements of the airline customer. The publications are prepared in general accordance with Air Transport Association of America (ATA) Specification No. 100. The necessary quantities of manuals and media options will be available subject to IAE’s current terms and conditions.

ON-WING MAINTENANCE DATA

IAE supplies the airplane manufacturer with all the necessary information required to perform “On-Aircraft” engine maintenance, troubleshooting, and servicing. This information is developed through close coordination between the airplane manufacturer and IAE and is integrated by the airplane manufacturer into his maintenance publications.

TECHNICAL PUBLICATIONS

Listed and described below are the publications that will be made available to support the airline customer’s maintenance program:

Engine Manual

The Engine Manual is a document which will be structured in accordance with ATA 100 section 2-13-0 with JEMTOSS applied in accordance with section 2-13-14. Potential customer applications will be applied. The manual will provide in one place the technical data requirements for information needed to maintain the engine and the maximum potential number of parts that could, regardless of design responsibility, remain with the engine when it is removed from the airplane. Additionally the manual includes coverage of interrelated parts (e.g. thrust reverser, cowlings, mounts, etc.) that can stay with the airplane when the engine is removed or can be removed for maintenance purpose in lieu of individual component maintenance manuals. Customized Engine Manuals can be prepared to incorporate customer originated material related to data or procedures originated by or peculiar to a specific IAE customer. Such customized Manuals are provided by separate contractual arrangements. Customer material authorized by the appropriate Airworthiness Authorities can be incorporated into customized Manuals and will be identified in the margin by the customer’s initials.

 

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Standard Practices Manual

The Standard Practices Manual supplements the Engine Manual by providing, in a single document, all IAE recommended or approved general procedures covering general torques, riveting, lockwiring, cleaning policy, inspection policy standard repairs, etc., and marking of parts.

Illustrated Parts Catalog

The Illustrated Parts Catalog will be structured in accordance with ATA 2-14-0 and is a document which is used in conjunction with the Engine Manual for the identification and requisitioning of parts and assemblies. Its ATA structure is to be compatible with the Engine Manual Structure. Additionally the manual includes coverage of interrelated parts (e.g. thrust reverser, cowlings, mounts, etc.) that can stay with the airplane when the engine is removed or can be removed for maintenance purpose in lieu of individual component maintenance manuals.

IAE Proprietary Component Maintenance Manuals

These manuals will be structured in accordance with ATA 2-5-0 and will cover data for chapters other than 71, 72, and 78.

Subcontractor Component Maintenance Manuals

These manuals will be structured in accordance with ATA 2-5-0 and are prepared directly by the accessory manufacturers. All accessory data is subject to IAE prepublication review and approval.

Engine and Accessory Component service Bulletins

Each Engine and Accessory Component Service Bulletin will be produced in accordance with ATA 2-7-0. They will cover planning information, engine or component effectivity, reason for Bulletin, recommended compliance, manpower requirements, and tooling information relating to parts repair or modification. Subcontractor prepared Accessory Component Service Bulletins are reviewed by IAE prior to issuance. Alert Service Bulletins will be issued on all matters requiring the urgent attention of the airline customer and will generally be limited to items affecting safety. The Bulletin will contain all the necessary information to accomplish the required action.

 

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Operating Instructions

Engine operating instructions are presented in the form of General Operating Instructions supplemented by V2500 Specific Engine Operating Instructions which provide operating information, procedures, operating curves and engine limits.

Facilities Planning and Facility Equipment Manuals

The Facilities Planning Manual outlines the requirements for engine/component overhaul, maintenance, and test facilities in terms of basic operations, processes, time studies and equipment. The Facility Equipment Manual lists and describes the facility equipment used for engine maintenance, overhaul and repair.

Support Equipment Numerical Index

The Indexes, prepared for each major engine model, provide a listing, in numeric sequence, by maintenance level, of all IAE ground support equipment required to maintain and overhaul the engine. The Listings are cross-indexed to the applicable engine dash model and to the chapter and section of the Engine Manual.

Publications Index

This index contains a listing of available technical manuals covering components of the V2500 Nacelle.

Service Bulletin Index

This index will be in a format and on a revision schedule as determined by IAE.

Computer Software Manual

Data, will be supplied in accordance with ATA 102 revision 2 except where such data are prohibited due to proprietary or Government restrictions.

Vital Statistics Logbook

The VSL provides the following information for each production engine, in an electronic readable format and/or as hard copy printout:

 

   

Identification of major engine and nacelle components by part number, serial number and ATA - location.

 

   

Engine Test Acceptance Certificate.

 

   

List of all incorporated serialized parts by part number, serial number and ATA - Location. This list also includes an Industry Item List to identify specific parts by part number, serial number and ATA - Location which the airline customer may choose to monitor during the engine operational life. The parts listed represent approximately 80% of engine total value.

 

   

List of all incorporated life limited parts by part number, serial number and ATA - location.

 

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List of all Service Bulletins that were incorporated during initial build of each new engine.

 

   

List of all Service Bulletins that were not incorporated.

 

   

List of all saleable pick level engine parts, identifying those parts for which Service Bulletins and service instructions have been issued.

REVISION SERVICES

Regular, temporary, and “as required” revisions to technical publications will be made during the service life of IAE equipment. The utilization of advanced techniques and equipment provides the airline customer with expedited revision service.

DISTRIBUTION MEDIA OPTIONS

The primary medium for available IAE technical publications is roll microfilm at 24:1 reduction or magnetic tape. Media options such as microfilm at 36:1 reduction, microfiche, and two side or one-sided paper copy of reproducible quality will be available for procurement at established prices.

V. SPARE PARTS

SPARE PARTS SUPPORT

The Spare Parts Group provides the following categories of spare parts support to airline customers:

 

   

Individual Customer Account Representatives

 

   

Provisioning

 

   

Planning

 

   

Order Administration

 

   

Spare Parts Inventory

 

   

Effective Expedite Service

 

   

Worldwide Distribution

 

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ACCOUNT REPRESENTATIVE

An Account Representative is assigned to each customer using IAE equipment. This representative provides individualized attention for effective spare parts order administration, and is the customer’s interface on all matters pertaining to new part planning and procurement. Each representative is responsible for monitoring each assigned customer’s requirements and providing effective administrative support. The Account Representatives are thoroughly familiar with each customer’s spare parts ordering policies and procedures and are responsible for ensuring that all customer new parts orders are processed in an effective manner.

SPARE PARTS PROVISIONING PLANNING

Prior to delivery of the first new aircraft to an airline customer, preplanning discussions will be held to determine the aircraft/engine program, and engine spare parts provisioning and order plans. Mutually agreed upon provisioning target dates are then established and on-time completion tracked by the Customer Account Representative with the assistance of logistics specialists in Spare Parts Provisioning and Inventory Management. Meetings are held with airline customers at a mutually agreeable time to review suggested spare parts provisioning lists prepared by spare parts Provisioning. These lists are designed to support each customer’s particular fleet size, route structure and maintenance and overhaul program.

ORDER ADMINISTRATION

IAE subscribes to the general principles of Air Transport Association of America (ATA) Specification No. 200, Integrated Data Processing - Supply. The procedures of Air Transport Association of America (ATA) Specification No. 200 may be used for Initial Provisioning, (Chapter II) Order Administration (either Chapter III or Chapter VI) Invoicing (Chapter IV).

A spare parts supply objective is to maintain a 90 percent on-time shipment performance record to our published lead times. The lead time for replenishment spare parts is identified in the IAE spare Parts Price Catalog. Initial provisioning spare parts orders should be placed at least six months prior to required delivery, while conversions and major modifications require full manufacturing lead times.

The action to be taken on emergency requests will be answered as follows:

 

   

Aircraft-On-Ground (AOG) - within four hours (in these instances every effort is made to ship immediately).

 

   

Critical (Imminent Aircraft-On-Ground (AOG) or Work Stoppage) — Within 24 hours.

 

   

Stock Outage — Within seven working days (these items are shipped as per customer request).

SPARE PARTS INVENTORY

To ensure availability of spare parts in accordance with published lead time, spare parts provisioning maintains a modern, comprehensive requirements planning and inventory management system which is responsive to changes in customer demand, special support programs and engineering design. Organized on an engine model basis, this system is intended to maintain part availability for delivery to customers consistent with published lead times.

 

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A majority of parts in the spare parts inventory are continually controlled by an Automatic Forecasting and Ordering System. Those parts which do not lend themselves to automatic control due to supercedure, unusual usage or conversion requirements are under the direct manual control of Spares Planning personnel. As additional protection against changes in production lead time or unpredicted demand, certain raw materials are also inventoried. Successful inventory management is keyed to accurate requirements planning. In support of the requirements planning effort, a wide ranging data retrieval and analysis program is offered. This program concerns itself both with the customer logistics and technical considerations as follows:

 

   

Forecasts of life limited parts requirements are requested and received semi-annually from major customers.

 

   

Engine technical conferences are held frequently within IAE to assess the impact of technical problems on parts.

 

   

For a selected group of parts a provisioning conference system is offered which considers actual part inventory change, including usage and receipts, as reported monthly by participating customers.

PACKAGING

All material is packaged in general compliance with Air Transport Association of America (ATA) Specification No. 300.

WORLD AIRLINE SUPPLIERS’ GUIDE

IAE subscribes to the supply objectives set forth in the World Airlines Supplier’s Guide published by the Air Transport Association of America (ATA).

IAE requires that its proprietary component vendors also perform in compliance with the precepts of the World Airline Suppliers’ Guide.

 

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EXHIBIT D

WARRANTIES, GUARANTEES AND PLANS

 

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EXHIBIT D-1

V2500 ENGINE AND PARTS SERVICE POLICY

 

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IAE

INTERNATIONAL AERO ENGINES AG

V2500 ENGINE AND PARTS SERVICE POLICY

Issued: October 25, l985

Revised: June, 1996

 

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IAE

INTERNATIONAL AERO ENGINES AG

V2500 ENGINE AND PARTS SERVICE POLICY

This Engine and Parts Service Policy (“Service Policy”) is a statement of the terms and conditions under which IAE International Aero Engines AG (“IAE”) will grant the Operators of new V2500 Engines certain Allowances and adjustments in the event that Parts of such Engines suffer Failure in Commercial Aviation Use, or in the event that a Parts Life Limit is established or reduced. This Service Policy becomes effective for the Operator’s first new V2500 Engine.

This Service Policy is divided into seven sections:

 

Section I    describes the Credit Allowances which will be granted should the Engine suffer a Failure.    Page 1
Section II    describes the Credit Allowances which will be granted should a Primary Part Suffer a Failure.    Page 4
Section III    lists the Class Life for those Primary Parts for which Credit Allowances will be granted.    Page 5
Section IV    describes the Credit Allowances which will be granted when the establishment or reduction of a Parts Life Limit is mandated.    Page 7
Section V    describes the Credit Allowances and adjustments which will be granted when IAE declares a Campaign Change.    Page 9
Section VI    contains the definitions of certain words and terms used throughout this Service Policy. These words and terms are identified in the text of this Service Policy by the use of initial capital letters for such words and terms.    Page 12
Section VII    contains the general conditions governing the application of this Service Policy.    Page 18

 

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* [Twenty-one pages have been omitted in accordance with a request for confidential treatment]

 

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EXHIBIT D-2

V2500 NACELLE AND PARTS SERVICE POLICY

 

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* [Nine pages have been omitted in accordance with a request for confidential treatment.]

1988

 

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EXHIBIT D-3

NON-INSTALLATION ITEMS WARRANTY

 

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EXHIBIT D-3

WARRANTY FOR SPECIAL TOOLS AND GROUND EQUIPMENT

[*]

 

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EXHIBIT D-4

V2500 RELIABILITY GUARANTEE

 

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V2500 RELIABILITY GUARANTEE

 

I INTRODUCTION

IAE assures AAH that by the end of the [*] period commencing with AAH’s first commercial operation of Aircraft powered by V2500 Engines, the cumulative Engine Shop Visit Rate will not exceed a Guaranteed Rate of [*] Eligible Engine flight hours. Under this Guarantee, if the cumulative Engine Shop Visit Rate exceeds the Guaranteed Rate, IAE will credit AAH’s account with IAE an amount of [*] U.S. Dollars for each Eligible Engine Shop Visit determined to have been in excess of the Guaranteed Rate.

 

II GUARANTEE

 

  A. Period of Guarantee

The Period of Guarantee will start on the date AAH initiates commercial operation of its first Aircraft powered by Eligible Engines and will terminate [*] from that date.

 

  B. Eligible Engines

The Engines that will be Eligible under this Guarantee shall be installed and Spare Engines which are owned or operated by AAH during the Period of Guarantee and which have been acquired new pursuant to the Contract to which this Guarantee is attached or that certain Purchase Agreement dated 19 March 1998 between AAH and the Aircraft Manufacturer for delivery of Aircraft (the “Aircraft Purchase Agreement”). The Engines shall remain Eligible provided that AAH or its authorized maintenance facility maintains them in accordance with the IAE instructions and recommendations contained in the applicable IAE publications including the latest V2500 Maintenance Management Plan for AAH.

 

  C. Eligible Shop Visits

Eligible Shop Visits shall comprise the shop visits of Eligible Engines required for the following reasons:

 

  1. a Failure of a Part in such Eligible Engines;

 

  2. foreign object damage caused by the ingestion of birds, hailstones or runway gravel;

 

  3. an Airworthiness Directive issued by the applicable Certification Authority; and

 

  4. maintenance as recommended by IAE.

 

 

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  D. Reporting of Engine Shop Visits and Engine Flight Hours

Eligible Shop Visits shall be reported to IAE by AAH within [*] after the date of such Engine Shop Visit using IAE Form SVR Rev 1. July 95 (or in a substantially similar format) together with such other information as may be needed to determine the Eligibility of the Engine Shop Visit. Each such Form shall be verified by an authorized IAE Representative before submission. Should it be necessary for him to disqualify a reported Engine Shop Visit, supporting information will be furnished.

Flight hours accumulated by Eligible Engines during each month during the Period of Guarantee shall be reported by AAH within [*] after each month’s end to IAE on IAE Form SVR Rev 1. July 95 unless other procedures are established for the reporting of flight hours.

 

  E. Credit Allowance Calculation

A credit of [*] will be granted by IAE for each Eligible Engine Shop Visit determined as calculated below to be in excess of the Guaranteed Rate during the Period of Guarantee. An annual calculation will be made no later than [*] after each yearly anniversary of the commencement of the Period of Guarantee provided that the necessary Engine Shop Visit records and Eligible Engine flight hour information have been reported to IAE.

Each annual calculation will be made using data that will be cumulative from the start of the Period of Guarantee. An interim credit will be granted, if necessary, following the annual calculations for the second year and each subsequent year of the Period of Guarantee. If subsequent annual calculations show that on a cumulative basis, a previous interim credit (or portion thereof) was excessive, such excess amount shall be subject to repayment which will be effected by IAE issuing a debit against AAH’s account with IAE. Credits and debits will be applied to AAH’s account with IAE not later than thirty (30) days following a calculation for the second year and each subsequent year of the Period of Guarantee, as applicable.

Credit Allowance = (AR - GR) x [*]

where:

 

AR     =    Total Eligible Engine Shop Visits during the period of the
calculation.

GR     = [*] x total Engine flight hours accumulated on Eligible

Engines during the period of the calculation.

(NOTE:    GR will be rounded to the nearest whole number.)

 

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III DEFINITIONS AND GENERAL CONDITIONS

All of the Definitions and General Conditions of the V2500 Engine and Parts Service Policy shall apply to this Guarantee. Engines and Engine Shop Visits excluded by the General Conditions of the Policy shall be excluded from this Guarantee except that Engine Shop Visits resulting from ingestion of birds, hailstones or runway gravel shall be included as Eligible under this Guarantee.

 

IV SPECIFIC CONDITIONS

 

  A. The Guaranteed Rate is predicated on the use by AAH of:

[*]

 

  B. IAE and AAH acknowledge that, as of the date of this Contract, the current operations of the Grupo TACA Airlines do not give rise to a material variation in the Specific Conditions upon which the Guaranteed Rate is predicated. However, IAE reserves the right to make appropriate adjustments to the Guarantee Rate if there is, during the Period of Guarantee, a variation from the conditions upon which the Guaranteed Rate is predicated which results in a material change to IAE’s risk. In addition, the Guaranteed Rate shall no longer apply to any Engine that is no longer owned by AAH or operated by a Grupo Taca Airline. The methodology to be used in such case will be similar in all material respects to the methodology used in determining the original Guaranteed Rate [*], will be that generally used by IAE for other operators, and shall not adversely impact nor improve IAE’s risk position from that which was undertaken by IAE with the original Guaranteed Rate.

 

  C. In the event credits are issued under Section II, such credits will first to the extent reasonably required be dedicated to the procurement of Parts identified within a reasonable time aimed at correction of the situations contributing to excess Engine Shop Visits. Accordingly, AAH and IAE will establish jointly the modifications or Parts to be selected, and AAH will incorporate the changes into Eligible Engines. Otherwise, such credits may be used to procure Supplies or services from IAE.

 

V EXCLUSION OF BENEFITS

The intent of this Guarantee is to provide specified benefits to AAH as a result of the failure of Eligible Engines to achieve the reliability level stipulated in the Guarantee. It is not the intent, however, to duplicate benefits provided to AAH from IAE or any third-party. Therefore, the terms and conditions of this Guarantee notwithstanding, if the terms of this Guarantee should make duplicate benefits available to AAH from any third-party, AAH may receive the benefits under this Guarantee or under any of the other benefits described above, but not both.

 

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EXHIBIT D-5

V2500 DELAY AND CANCELLATION GUARANTEE

 

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V2500 DELAY AND CANCELLATION

 

I INTRODUCTION

IAE assures AAH that by the end of the [*] period commencing with AAH’s first commercial operation of Aircraft powered by V2500 Engines, the cumulative Engine-caused Delay and Cancellation Rate will not exceed a Guaranteed Rate of [*] Aircraft departures. Under this Guarantee, if the cumulative Engine-caused Delay and Cancellation Rate is determined to have exceeded the Guaranteed Rate over the Period of Guarantee, IAE will credit AAH’s account with IAE an amount of $[*]U.S. Dollars for each excess Eligible Delay and Cancellation determined to have been in excess of the Guaranteed Rate.

 

II GUARANTEE

 

  A. Period of Guarantee

The Period of Guarantee will start on the date AAH initiates commercial operation of its first Aircraft powered by Eligible Engines and will terminate [*] from that date.

 

  B. Eligible Engines

The Engines that will be Eligible under this Guarantee shall be installed and Spare Engines which are owned or operated by AAH during the Period of Guarantee and which have been acquired new pursuant to the Contract to which this Guarantee is attached or the Aircraft Purchase Agreement. The Engines shall remain Eligible provided that AAH or its authorized maintenance facility maintains them in accordance with the IAE instructions and recommendations contained in the applicable IAE publications including the latest V2500 Maintenance Management Plan for AAH.

 

  C. i) Eligible Delay

An Eligible Delay shall occur when by a Failure of a Part in an Eligible Engine installed in an Aircraft is the sole cause of a delay in the final Departure of that Aircraft by more than [*] after its programmed Departure in either of the following instances:

 

  1) an originating flight departing later than its scheduled Departure time; or

 

  2) a through flight or a turnaround flight remaining on the ground longer than its scheduled ground time.

 

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C. ii) Eligible Cancellation

A single Cancellation shall occur when a Failure of a Part in an Eligible Engine installed in an Aircraft is the sole cause of the elimination of a Departure in either of the following instances:

 

  1) cancellation of a trip comprising a single flight leg; or

 

  2) cancellation of any or all of the flight legs of a multiple leg trip.

C. iii)

A Departure which is canceled after an Eligible Delay shall be an Eligible Cancellation not an Eligible Delay.

C. iv)

Consecutive Delays and Cancellations for the same problem because corrective action had not been taken will be excluded.

 

  D. Departure

A Departure comprises the movement of an Aircraft from the blocks for the purpose of an intended scheduled revenue flight provided that there can be only one Departure for each intended flight leg.

 

  E. Reporting of Eligible Delays and Cancellations

Eligible Delays and Cancellations shall be reported to IAE by AAH within thirty (30) days after the date of such Delay or Cancellation using IAE Form DC Rev 1. July 95 (or in a substantially similar format) together with such other information as may be needed to determine the Eligibility of the Delay or Cancellation. Each such Form shall be verified by an authorized IAE Representative before submission. Should it be necessary for him to disqualify a reported Delay or Cancellation, supporting information will be furnished.

Departures accumulated by Eligible Engines during each month during the Period of Guarantee shall be reported by AAH within thirty (30) days after each month’s end to IAE on IAE Form DC Rev 1. July 95 (or in a substantially similar format) unless other procedures are established for the reporting of Departures.

 

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  F. Credit Allowance Calculation

A credit of [*] will be granted by IAE for each Eligible Delay and Eligible Cancellation determined as calculated below to be in excess of the Guaranteed Rate during the Period of Guarantee. An annual calculation will be made no later than [*] after each yearly anniversary of the commencement of the Period of Guarantee provided that the necessary records of Delays, Cancellation and Departure have been reported to IAE.

Each annual calculation will be made using data that will be cumulative from the start of the Period of Guarantee. An interim credit will be granted, if necessary, following the annual calculations for the second year and each subsequent year of the Period of Guarantee. If subsequent annual calculations show that on a cumulative basis, a previous interim credit (or portion thereof) was excessive, such excess amount shall be subject to repayment which will be effected by IAE issuing a debit against AAH’s account with IAE. Credits and debits will be applied to AAH’s account with IAE not later than thirty (30) days following a calculation for the second year and each subsequent year of the Period of Guarantee, as applicable.

Credit Allowance = (ADC - GDC) x [*]

Where:

 

ADC     =    Total qualifying actual Engine Caused Delays and Cancellations
   claimed and accepted as eligible during the applicable period
   of the calculation.
GDC     =    [*] x total Departures accumulated on Eligible Engines
   during the applicable period of calculation.

 

III DEFINITIONS AND GENERAL CONDITIONS

All of the Definitions and General Conditions of the V2500 Engine and Parts Service Policy shall apply to this Guarantee. Delays and Cancellation excluded by the General Conditions of the Policy shall be excluded from this Guarantee.

 

IV SPECIFIC CONDITIONS

 

  A. The Guaranteed Rate is predicated on the use by AAH of:

1. [*].

 

  B.

IAE and AAH acknowledge that, as of the date of this Contract, the current operations of the Grupo TACA Airlines do not give rise to a material variation in the Specific Conditions upon which the Guaranteed Rate is predicated. However, IAE reserves the right to make appropriate adjustments to the Guarantee Rate if there is, during the Period of Guarantee, a variation from the conditions upon which the Guaranteed Rate is predicated which results in a material change to IAE’s risk. In addition, the Guaranteed Rate shall no longer apply to any Engine that is no longer owned by AAH or operated by a Grupo Taca Airline. The methodology to be used in such case will be

 

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  similar in all material respects to the methodology used in determining the original Guaranteed Rate [*], will be that generally used by IAE for other operators, and shall not adversely impact nor improve IAE’s risk position from that which was undertaken by IAE with the original Guaranteed Rate.

 

  C. In the event credits are issued under Section II, such credits will first to the extent reasonably required be dedicated to the procurement of Parts identified within a reasonable time aimed at correction of the situations contributing to excess Delays and Cancellations. Accordingly, AAH and IAE will establish jointly the modifications or Parts to be selected, and AAH will incorporate the changes into Eligible Engines. Otherwise, such credits may be used to procure Supplies or services from IAE.

 

V EXCLUSION OF BENEFITS

The intent of this Guarantee is to provide specified benefits to AAH as a result of the failure of Eligible Engines to achieve the delay and cancellation level stipulated in the Guarantee. It is not the intent, however, to duplicate benefits provided to AAH from any third-party. Therefore, the terms and conditions of this Guarantee notwithstanding, if the terms of this Guarantee should make duplicate benefits available to AAH from any third-party, AAH may elect to receive the benefits under this Guarantee or under any of the other benefits described above, but not both.

 

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EXHIBIT D-6

V2500 INFLIGHT SHUTDOWN GUARANTEE

 

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V2500 INFLIGHT SHUTDOWN GUARANTEE

 

I INTRODUCTION

IAE assures AAH that by the end of the [*] period commencing with AAH’s first commercial operation of Aircraft powered by V2500 Engines, the cumulative Engine Inflight Shutdown Rate will not exceed a Guaranteed Rate of [*] Eligible Engine flight hours. Under this Guarantee, if the cumulative Eligible Inflight Shutdown Rate is determined to have exceeded the Guaranteed Rate over the Period of Guarantee, IAE will credit AAH’s account with IAE an amount of [*] U.S. Dollars for each Eligible Inflight Shutdown determined to have been in excess of the Guaranteed Rate.

 

II GUARANTEE

 

  A. Period of Guarantee

The Period of Guarantee will start on the date AAH initiates commercial operation of its first Aircraft powered by Eligible Engines and will terminate [*] from that date.

 

  B. Eligible Engines

The Engines that will be Eligible under this Guarantee shall be installed and Spare Engines which are owned or operated by AAH during the Period of Guarantee and which have been acquired new pursuant to the Contract to which this Guarantee is attached or the Aircraft Purchase Agreement. The Engines shall remain Eligible provided that AAH or its authorized maintenance facility maintains them in accordance with the IAE instructions and recommendations contained in the applicable IAE publications including the latest V2500 Maintenance Management Plan for AAH.

 

  C. Eligible Inflight Shutdowns

Eligible Inflight Shutdowns shall comprise the inflight shutdown of an Eligible Engine during a scheduled revenue flight which is determined to have been caused by a Failure of a Part of such Engine. Multiple inflight shutdowns of the same Engine during the same flight leg for the same problem will be counted as one (1) Eligible Inflight Shutdown. A subsequent inflight shutdown on a subsequent flight leg for the same problem because corrective action has not been taken will be excluded.

 

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  D. Reporting of Eligible Inflight Shutdowns

Eligible Inflight Shutdowns shall be reported to IAE by AAH within [*] after the date of such Inflight Shutdown using a FAA Service Difficulty Report together with such other information as may be needed to determine the Eligibility of the Inflight Shutdown. Each such Form shall be verified by an authorized IAE Representative before submission. Should it be necessary for him to disqualify a reported Inflight Shutdown, supporting information will be furnished.

Flight hours accumulated by Eligible Engines during each month during the Period of Guarantee shall be reported by AAH within [*] after each month’s end to IAE on IAE Form TBD or a FAA Service Difficulty Report unless other procedures are established for the reporting of flight hours.

 

  E. Credit Allowance Calculation

A credit of [*] U.S. Dollars will be granted by IAE for each Eligible Inflight Shutdown determined as calculated below to be in excess of the Guaranteed Rate during the Period of Guarantee. An annual calculation will be made no later than sixty (60) days after each yearly anniversary of the commencement of the Period of Guarantee provided that the necessary Inflight Shutdown records and Eligible Engine flight hour information have been reported to IAE.

Each annual calculation will be made using data that will be cumulative from the start of the Period of Guarantee. An interim credit will be granted, if necessary, following the annual calculations for the second year and each subsequent year of the Period of Guarantee. If subsequent annual calculations show that on a cumulative basis, a previous interim credit (or portion thereof) was excessive, such excess amount shall be subject to repayment which will be effected by IAE issuing a debit against AAH’s account with IAE. Credits and debits will be applied to AAH’s account with IAE not later than thirty (30) days following a calculation for the second year and each subsequent year of the Period of Guarantee, as applicable.

The Credit Allowance = (AI - GI) x [*]

Where:

 

AI    =    Total Eligible Inflight Shutdowns during the period of the calculation;
GI    =    [*] x total Engine flight hours accumulated on Eligible Engines during the period of the calculation.
(NOTE:       GI will be rounded to the nearest whole number.)

 

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III DEFINITIONS AND GENERAL CONDITIONS

All of the Definitions and General Conditions of the V2500 Engine and Parts Service Policy shall apply to this Guarantee. Engines and Inflight Shutdowns excluded by the General Conditions of the Policy shall be excluded from this Guarantee.

 

IV SPECIFIC CONDITIONS

 

  A. The Guaranteed Rate is predicated on the use by AAH of:

[*]

 

  B. IAE and AAH acknowledge that, as of the date of this Contract, the current operations of the Grupo TACA Airlines do not give rise to a material variation in the Specific Conditions upon which the Guaranteed Rate is predicated. However, IAE reserves the right to make appropriate adjustments to the Guarantee Rate if there is, during the Period of Guarantee, a variation from the conditions upon which the Guaranteed Rate is predicated which results in a material change to IAE’s risk. In addition, the Guaranteed Rate shall no longer apply to any Engine that is no longer owned by AAH or operated by a Grupo Taca Airline. The methodology to be used in such case will be similar in all material respects to the methodology used in determining the original Guaranteed Rate [*], will be that generally used by IAE for other operators, and shall not adversely impact nor improve IAE’s risk position from that which was undertaken by IAE with the original Guaranteed Rate.

 

  C. In the event credits are issued under Section II, such credits will first to the extent reasonably required be dedicated to the procurement of Parts identified within a reasonable time aimed at correction of the situations contributing to excess Inflight Shutdowns. Accordingly, AAH and IAE will establish jointly the modifications or Parts to be selected, and AAH will incorporate the changes into Eligible Engines. Otherwise, such credits may be used to procure Supplies or services from IAE.

 

V EXCLUSION OF BENEFITS

The intent of this Guarantee is to provide specified benefits to AAH as a result of the failure of Eligible Engines to achieve the inflight shutdown level stipulated in the Guarantee. It is not the intent, however, to duplicate benefits provided to AAH from any third-party. Therefore, the terms and conditions of this Guarantee notwithstanding, if the terms of this Guarantee should make duplicate benefits available to AAH from any third-party, AAH may elect to receive the benefits under this Guarantee or under any of the other benefits described above, but not both.

 

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EXHIBIT D-7

V2500 FUEL CONSUMPTION RETENTION GUARANTEE

 

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V2500-A5 FUEL CONSUMPTION RETENTION GUARANTEE

 

I INTRODUCTION

IAE assures AAH that during the [*] commencing with AAH’s first commercial operation of Aircraft powered by V2500-A5 Engines, the fleet average cruise fuel consumption for Eligible Engines will not have increased by more than a Guaranteed Rate of [*]. Under this Guarantee, if the fleet average cruise fuel consumption for Eligible Engines exceeds the Interim Guaranteed Rate at the end of [*], IAE will credit AAH’s account with IAE an amount in respect of excess fuel consumed for that portion of the Period of the Guarantee that the Guarantee level has been exceeded. If the fleet average Cruise Fuel Consumption for eligible Engines exceeds the guaranteed rate at the end of [*], IAE will credit AAH’s account with IAE an amount in respect of excess fuel consumed minus any interim credit which IAE may have issued at the [*].

 

II GUARANTEE

 

  A. Period of Guarantee

The Period of Guarantee will start on the date AAH initiates commercial operation of its first Aircraft powered by Eligible Engines and will terminate [*] from that date.

 

  B. Eligible Engines

The Engines that will be Eligible under this Guarantee shall be installed and Spare Engines which are owned or operated by AAH during the Period of Guarantee and which have been acquired new pursuant to the Contract to which this Guarantee is attached or the Aircraft Purchase Agreement. The Engines shall remain Eligible provided that AAH or its authorized maintenance facility maintains them in accordance with the IAE instructions and recommendations contained in the applicable IAE publications including the latest V2500 Maintenance Management Plan for AAH.

 

  C. Fuel Consumption Measurement

The inflight data required for administration of this Guarantee will be obtained by AAH during stable cruise conditions using ECM data recordings and the ECM II software available from IAE (requires the ECM sales order option from Airbus Industrie) or such other method as mutually agreed by AAH and IAE.

 

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Provided that:

 

  a) the fuel consumption data for any Eligible Engine on which the engine parameters indicate a possible malfunction (including associated Aircraft systems), other than normal gas path deterioration, that is subsequently confirmed by maintenance action will not be considered acceptable data, and

 

  b) data which is obviously inaccurate under normal engine monitoring practices will not be considered acceptable data; this type of data will be rejected unless AAH validity checks have established that Total Air Temperature, Fuel Flow Aircraft and Engine Bleed Systems and other Aircraft parameters are within normal operating ranges.

 

  D. Periodic Fleet Average Cruise Fuel Consumption Deterioration

The Periodic Fleet Average Cruise Fuel Consumption Deterioration shall be the average of the Cruise Fuel Flow Deterioration for all installed Eligible Engines for a [*] reporting period. This is to be reported to IAE every [*].

 

  E. Fleet Average Cruise Fuel Consumption Deterioration

The Fleet Average Cruise Fuel Consumption Deterioration is the average of the Periodic Fleet Average Cruise Fuel Consumption Deterioration values for all [*] periods during the Period of Calculation (cumulative from start of Period of Guarantee to end of the [*].

 

F. Operational Data

AAH shall provide the following data to IAE as indicated during the Period of the Guarantee:

 

  1. Total quantity of fuel consumed by Eligible Engines during the Period (U.S. Gallons), every [*].

 

  2. Average cost of fuel to AAH over the Period of Guarantee (U.S. Dollars per U.S. Gallon), [*].

 

  3. Aircraft operating hours for each [*] period during the Period of Guarantee

 

  4. Engine maintenance action information, as requested.

Alternatively;

IAE is agreeable to the use of the Airbus performance model to estimate the total fuel consumption during the period of guarantee (using typical AAH A319 Aircraft and A320 Aircraft operating characteristics). Average cost of fuel to be agreed between IAE and AAH based on typical fuel costs in the appropriate area of operation during the period of guarantee. AAH shall notify IAE in writing of its selection prior to the end of the first settlement period.

 

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  G. Excess Fuel Consumption Credit Calculation

If at the end of each Period of Calculation the Fleet Average Fuel Consumption Deterioration exceeds the Guaranteed Rate, IAE will grant AAH a credit in respect to excess fuel consumption calculated in accordance with the following formula:

C = [*]

where:

 

C =    the amount of the credit in U.S. dollars
D =    the Fleet Average Fuel Consumption Deterioration (in percent)
GR =    the Guaranteed Rate
Y =    initial cruise fuel flow of new Eligible Engines expressed in U.S. gallons per hour to be established within [*] of start of operation (per ECM II program)
H =    the total of all flight hours flown by AAH’s Eligible Engines during that portion of the Period of Guarantee that the Guarantee level has been exceeded.
F =    The average net cost to AAH in U.S. Dollars per U.S. Gallon of aviation fuel consumed by AAH during the Period of Guarantee.

Credits, if any, will be issued to AAH’s account with IAE following calculations for the fifth, and tenth year of the Plan. If subsequent calculations show that a previous credit was insufficient, IAE will issue additional credits. In any event, AAH will not pay back any Credits provided under this Plan.

 

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III DEFINITIONS AND GENERAL CONDITIONS

All of the Definitions and General Conditions of the V2500 Engine and Parts Service Policy shall apply to this Guarantee. In the case of conflict between the Definitions and General Conditions of the Service Policy and the terms and conditions of this Plan, this Plan shall govern.

 

IV SPECIFIC CONDITIONS

 

  A. The Guaranteed Rate is predicated on the use by AAH of:

[*]

 

  B. IAE and AAH acknowledge that, as of the date of this Contract, the current operations of the Grupo TACA Airlines do not give rise to a material variation in the Specific Conditions upon which the Guaranteed Rate is predicated. However, IAE reserves the right to make appropriate adjustments to the Guarantee Rate if there is, during the Period of Guarantee, a variation from the conditions upon which the Guaranteed Rate is predicated which results in a material change to IAE’s risk. In addition, the Guaranteed Rate shall no longer apply to any Engine that is no longer owned by AAH or operated by a Grupo Taca Airline. The methodology to be used in such case will be similar in all material respects to the methodology used in determining the original Guaranteed Rate [*], will be that generally used by IAE for other operators, and shall not adversely impact nor improve IAE’s risk position from that which was undertaken by IAE with the original Guaranteed Rate.

 

  C. In the event credits are issued under Section II, such credits will first to the extent reasonably required be dedicated to the procurement of Parts identified within a reasonable time aimed at correction of the situations contributing to excess Fuel Consumption. Accordingly, AAH and IAE will establish jointly the modifications or Parts to be selected, and AAH will incorporate the changes into Eligible Engines. Otherwise, such credits may be used to procure Supplies or services from IAE.

 

V EXCLUSION OF BENEFITS

The intent of this Guarantee is to provide specified benefits to AAH as a result of the failure of Eligible Engines to achieve the fuel consumption retention level stipulated in the Guarantee. It is not the intent, however, to duplicate benefits provided to AAH from any third-party. Therefore, the terms and conditions of this Guarantee notwithstanding, if the terms of this Guarantee should make duplicate benefits available to AAH from any third-party, AAH may elect to receive the benefits under this Guarantee or under any of the other benefits described above, but not both.

 

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EXHIBIT D-8

V2500 EXHAUST GAS TEMPERATURE GUARANTEE

 

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V2500 EXHAUST GAS TEMPERATURE GUARANTEE

 

I INTRODUCTION

IAE assures AAH that during the [*], and during [*] the maximum stabilized takeoff exhaust gas temperature for each Eligible V2500 Engine will not exceed the Certified Limit. Under this Guarantee if it is confirmed that the Certified Limit has been exceeded, IAE will credit AAH’s account with IAE in the amount of [*]. For the purpose of this Guarantee, the Certified Limit is exceeded if the Engine will not achieve the specified engine pressure ratio for takeoff thrust without exceeding the Certified Limit for its Exhaust Gas Temperature.

 

II GUARANTEE

 

  A. Period of Guarantee

The Period of Guarantee for each Eligible Engine will start on the date AAH initiates commercial operation of its first Aircraft powered by such Engine and will terminate when such Engine has completed [*].

 

  B. Eligible Engines

The Engines that will be Eligible under this Guarantee shall be installed and Spare Engines which are owned or operated by AAH which have been acquired new pursuant to the Contract to which this Guarantee is attached or the Aircraft Purchase Agreement. The Engines shall remain Eligible provided that AAH or its authorized maintenance facility maintains them in accordance with the IAE instructions and recommendations contained in the applicable IAE publications including the latest V2500 Maintenance Management Plan for AAH.

 

  C. Restoration of Installed Engine

If during the Period of Guarantee, the maximum stabilized takeoff exhaust gas temperature of an Eligible Engine installed in an Aircraft operated by AAH exceeds the Certified Limit, AAH shall undertake on-wing Engine maintenance recommended by IAE, with technical assistance provided by IAE, to restore the performance of that Engine.

 

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  D. Calibration of Removed Engine

If the performance of an installed Eligible Engine cannot be restored by the maintenance recommended under Section II, Paragraph C, AAH shall promptly remove such Engine from the Aircraft and dispatch it at its cost for calibration in an IAE designated test cell. If such calibration verifies that the exhaust gas temperature of the Engine is not in excess of the Certified Limit or it is established that any excess is due to causes which are excluded by the General Conditions in Section III, then the cost of such test cell calibration and associated transportation will be borne by AAH.

 

  E. Credit Allowance

A credit of [*] will be granted by IAE for each event not meeting the requirements set forth in Section I of this guarantee and as verified by Section II, Paragraph D. above.

 

  F. Qualified Shop Visits

A Qualified Shop Visit is defined as any shop visit after which post-maintenance test results show that the post-repair Engine acceptance criteria, as outlined in the Maintenance Management Plan for AAH, has been met.

 

III. SPECIFIC CONDITIONS

 

  A. The Guaranteed Rate is predicated on the use by AAH of:

[*]

 

  B. IAE and AAH acknowledge that, as of the date of this Contract, the current operations of Grupo TACA Airlines do not give rise to a material variation in the Specific Conditions upon which the Guaranteed Rate is predicated. However, IAE reserves the right to make appropriate adjustments to the Guarantee Rate if there is, during the Period of Guarantee, a variation from the conditions upon which the Guaranteed Rate is predicated which results in a material change to IAE’s risk. In addition, the Guaranteed Rate shall no longer apply to any Engine that is no longer owned by AAH or operated by a Grupo Taca Airline. The methodology to be used in such case will be similar in all material respects to the methodology used in determining the original Guaranteed Rate [*], will be that generally used by IAE for other operators, and shall not adversely impact nor improve IAE’s risk position from that which was undertaken by IAE with the original Guaranteed Rate.

 

  C. In the event credits are issued under Section II, such credits will first to the extent reasonably required be dedicated to the procurement of Parts identified within a reasonable time aimed at correction of the situations contributing to excess Engine Gas Temperature. Accordingly, AAH and IAE will establish jointly the modifications or Parts to be selected, and AAH will incorporate the changes into Eligible Engines. Otherwise, such credits may be used to procure Supplies or services from IAE.

 

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IV DEFINITIONS AND GENERAL CONDITIONS

All of the Definitions and General Conditions of the V2500 Engine and Parts Service Policy shall apply to this Guarantee. Engines excluded by the General Conditions of the Policy shall be excluded from this Guarantee.

 

V EXCLUSION OF BENEFITS

The intent of this Guarantee is to provide specified benefits to AAH as a result of the failure of Eligible Engines to achieve the exhaust gas temperature level stipulated in the Guarantee. It is not the intent, however, to duplicate benefits provided to AAH under any other applicable guarantee, sales warranty, service policy, or any special benefit of any kind as a result of the same failure. Therefore, the terms and conditions of this Guarantee notwithstanding, if the terms of this Guarantee should make duplicate benefits available to AAH from IAE or any third-party, AAH may elect to receive the benefits under this Guarantee or under any of the other benefits described above, but not both.

 

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EXHIBIT D-9

[*]

 

* [Four pages have been omitted in accordance with a request for confidential treatment.]

 

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EXHIBIT D-10

 

* [Four pages have been omitted in accordance with a request for confidential treatment.]

 

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EXHIBIT D-11

V2500 FIRST RUN RELIABILITY GUARANTEE

 

* [Four pages have been omitted in accordance with a request for confidential treatment.]

 

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EXHIBIT D-12

V2500 REMOTE SITE REMOVAL GUARANTEE

 

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V2500 REMOTE SITE REMOVAL GUARANTEE

 

I INTRODUCTION

IAE assures AAH that by the end of the [*] period commencing with AAH’s first commercial operation of Aircraft powered by V2500 Engines, the cumulative Remote Site Removal Rate will not exceed a Guaranteed Rate of [*] Eligible Engine flight hours. Under this Guarantee, if the cumulative Eligible Remote Site Removal Rate is determined to have exceeded the Guaranteed Rate over the Period of Guarantee, IAE will credit AAH’s account with IAE an amount of [*] for each Eligible Remote Site Removal determined to have been in excess of the Guaranteed Rate.

 

II GUARANTEE

 

  A. Period of Guarantee

The Period of Guarantee will start on the date AAH initiates commercial operation of its first Aircraft powered by Eligible Engines and will terminate [*] from that date.

 

  B. Eligible Engines

The Engines that will be Eligible under this Guarantee shall be installed and Spare Engines which are owned or operated by AAH during the Period of Guarantee and which have been acquired new pursuant to the Contract to which this Guarantee is attached or the Aircraft Purchase Agreement. The Engines shall remain Eligible provided that AAH or its authorized maintenance facility maintains them in accordance with the IAE instructions and recommendations contained in the applicable IAE publications including the latest V2500 Maintenance Management Plan for AAH.

 

  C. Eligible Remote Site Removals

Eligible Remote Site Removals shall be the removals of an Eligible Engine from an Aircraft at a Grupo Taca Airline line station, other than a Grupo Taca Airline main base, at which there is no serviceable V2500 Engine, which removal is determined to have been caused by a Failure of a Part of such Engine.

 

  D. Reporting of Remote Site Removals

Eligible Remote Site Removals shall be reported to IAE by AAH within [*] after the date of such Removal using IAE Form RSR Rev. 1. July 95 (or in a substantially similar format) together with such other information as may be needed to determine the Eligibility of the Removal.

Each such Form shall be verified by an authorized IAE Representative before submission. Should it be necessary for him to disqualify a reported Remote Site Removal, supporting information will be furnished.

 

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Flight hours accumulated by Eligible Engines during each month during the Period of Guarantee shall be reported by AAH within [*] after each month’s end to IAE on IAE Form RSR Rev. 1. July 95 unless other procedures are established for the reporting of flight hours.

 

  E. Credit Allowance Calculation

A credit of [*] will be granted by IAE for each Eligible Remote Site Removal determined as calculated below to be in excess of the Guaranteed Rate during the Period of Guarantee. An annual calculation will be made no later than sixty (60) days after each yearly anniversary of the commencement of the Period of Guarantee provided that the necessary Remote Site Removal records and Eligible Engine flight hour information have been reported to IAE.

Each annual calculation will be made using data that will be cumulative from the start of the Period of Guarantee. An interim credit will be granted, if necessary, following the annual calculations for the second year and each subsequent year of the Period of Guarantee. If subsequent annual calculations show that on a cumulative basis, a previous interim credit (or portion thereof) was excessive, such excess amount shall be subject to repayment which will be effected by IAE issuing a debit against AAH’s account with IAE. Credits and debits will be applied to AAH’s account with IAE not later than thirty (30) days following a calculation for the second year and each subsequent year of the Guarantee Period, as applicable.

 

Credit Allowance = [*]
CRSR   = Total Eligible Remote Site Removals during the period of the calculation.
RSR  

= [*] x total Engine flight hours accumulated on Eligible Engines

  during the period of the calculation.

    (Note: RSR will be rounded to the nearest whole number)

 

III DEFINITIONS AND GENERAL CONDITIONS

All of the Definitions and General Conditions of the V2500 Engine and Parts Service Policy shall apply to this Guarantee. Remote Site Removals excluded by the General Conditions of the Policy shall be excluded from this Guarantee.

 

IV SPECIFIC CONDITIONS

 

  A. The Guaranteed Rate is predicated on the use by AAH of:

[*]

 

  B.

IAE and AAH acknowledge that, as of the date of this Contract, the current operations of the Grupo TACA Airlines do not give rise to a material variation in the Specific Conditions upon which the Guaranteed Rate is predicated. However, IAE reserves the right to make appropriate adjustments to the Guarantee Rate if there is, during the Period of Guarantee, a variation from the conditions upon which the Guaranteed Rate

 

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  is predicated which results in a material change to IAE’s risk. In addition, the Guaranteed Rate shall no longer apply to any Engine that is no longer owned by AAH or operated by a Grupo Taca Airline. The methodology to be used in such case will be similar in all material respects to the methodology used in determining the original Guaranteed Rate (the MTBR model provided to AAH), will be that generally used by IAE for other operators, and shall not adversely impact nor improve IAE’s risk position from that which was undertaken by IAE with the original Guaranteed Rate.

 

  C. In the event credits are issued under Section II, such credits will first to the extent reasonably required be dedicated to the procurement of Parts identified within a reasonable time aimed at correction of the situations contributing to excess Remote Site Removals. Accordingly, AAH and IAE will establish jointly the modifications or Parts to be selected, and AAH will incorporate the changes into Eligible Engines. Otherwise, such credits may be used to procure Supplies or services from IAE.

 

V EXCLUSION OF BENEFITS

The intent of this Guarantee is to provide specified benefits to AAH as a result of the failure of Eligible Engines to achieve the remote site removal level stipulated in the Guarantee. It is not the intent, however, to duplicate benefits provided to AAH from any third-party. Therefore, the terms and conditions of this Guarantee notwithstanding, if the terms of this Guarantee should make duplicate benefits available to AAH from any third-party, AAH may elect to receive the benefits under this Guarantee or under any of the other benefits described above, but not both.

 

THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO IAE .

Page 117 of 118


EXHIBIT D-13

 

* [Two pages have been omitted in accordance with a request for confidential treatment.]

 

THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO IAE .

Page 118 of 118

Exhibit 10.19.2

 

* Note: Certain portions have been omitted from this Amended and Restated Side Letter in accordance with a request for confidential treatment submitted to the Securities and Exchange Commission. Omitted information has been replaced with an asterisk. Omitted information has been filed separately with the Securities and Exchange Commission

 

LOGO

400 Main Street

East Hartford, CT 06108 USA

December 17, 2010

Atlantic Aircraft Holding Ltd.

Bolam House

King & George Streets

P. O. Box CB 13.253

Nassau, Bahamas

 

Subject:   

Second Amended and Restated Side Letter No. 1 to the Amended and Restated

V2500 General Terms of Sale between IAE International Aero Engines AG and

Atlantic Aircraft Holding Ltd. dated December 18, 2008

Ladies and Gentlemen:

We refer to the Amended and Restated V2500 General Terms of Sale dated December 18, 2008 between IAE International Aero Engines AG (“IAE”) and Atlantic Aircraft Holding Ltd. (“AAH”), such contract being hereinafter referred to as the “Contract.” Unless expressly stated to the contrary, and to the extent possible, terms used in this Second Amended and Restated Side Letter No. 1 shall have the same meaning given to them in the Contract.

We also refer to the Amended and Restated Side Letter No. 1 dated December 18, 2008, which consolidated and superseded all the terms within Side Letters No. 1 through 4 to the Original Contract all dated April 23 rd 1999 (the “Previous Amended and Restated Side Letter No. 1”).

The Parties agree that this Second Amended and Restated Side Letter No. 1 consolidates and supersedes all the terms within the Previous Amended and Restated Side Letter No. 1.

This Second Amended and Restated Side Letter No. 1 provides for certain financial assistance, Spare Engine assistance, price protection assurances, and Engine support from IAE to AAH in support of the incorporation of the Aircraft into its fleet.

FINANCIAL ASSISTANCE TERMS

 

1. Confirmation of Agreement to Acquire Aircraft and Engines

 

  1.1 Confirmation of Agreement to Purchase Aircraft

AAH confirms to IAE that AAH has entered into the Aircraft Agreement with the Aircraft Manufacturer, and that as of the date of this Second Amended and Restated Side Letter No. 1 the Aircraft Agreement provides for AAH to purchase [*] Firm Aircraft (including [*] Firm Aircraft already delivered by the Aircraft Manufacturer as of the date of the Contract) (the “Firm Aircraft”), and, if converted into firmly ordered aircraft pursuant to the Airbus Agreement, up to twenty-three (23) Rolling Option Aircraft.

 

Page 1 of 14


  1.2 Agreement to Purchase Spare Engines

AAH will purchase, in accordance with and subject to the terms of the Contract as supplemented hereby, Spare Engines in quantities and at appropriate thrust levels sufficient to maintain a minimum [*] ratio of Spare Engines to Engines installed on Aircraft delivered pursuant to the Aircraft Agreement and operated by the Grupo TACA Airlines. For such Spare Engines, AAH agrees to provide IAE [*] months written notice prior to the desired delivery date, specifying the required thrust rating of such Spare Engines.

 

2. Introductory Assistance Credit Firm Aircraft

 

  2.1 To assist AAH with the introduction of certain Firm Aircraft into its fleet, IAE will issue a credit pursuant to Clause 2.5 below in the following amounts for Firm Aircraft [*] through Firm Aircraft [*] inclusive purchased by and delivered to AAH pursuant to Exhibit B-1 hereto:

V2524-A5 [*]

V2527-A5 [*]

V2527E-A5 [*]

V2527M-A5 [*]

V2533-A5 [*]

 

  2.2 Each credit issued pursuant to Clause 2.1 above shall be escalated using the IAE Escalation Formula set forth in Exhibit B-3 to the Contract from a base month of [*], to the earlier of: a) the scheduled delivery date set forth in Exhibit B-1 to the Contract; or b) the actual delivery date of the corresponding Firm Aircraft where such delivery date has been modified pursuant to Clause 4.1 below; provided however that if the delivery date of such Firm Aircraft is delayed solely because of an IAE failure to perform its obligations under the Contract and such failure is not excused pursuant to Clause 6.1 of the Contract, the relevant credit shall be escalated to the actual delivery date.

 

  2.3 To assist AAH with the introduction of Firm Aircraft [*] through Firm Aircraft [*] purchased by and delivered to AAH pursuant to Exhibit B-1 hereto, IAE will issue a credit pursuant to Clause 2.5 below in the following amounts:

V2524-A5 [*]

V2527-A5 [*]

V2527E-A5 [*]

V2527M-A5 [*]

V2533-A5 [*]

 

  2.4 Each credit issued pursuant to Clause 2.3 above shall be escalated using the IAE Escalation Formula set forth in Exhibit B-4 to the Contract from a base month of [*], to the earlier of: a) the scheduled delivery date set forth in Exhibit B-1 to the Contract; or b) the actual delivery date of the corresponding Firm Aircraft where such delivery date has been modified pursuant to Clause 4.1 below; provided however that if the delivery date of such Firm Aircraft is delayed solely because of an IAE failure to perform its obligations under the Contract and such failure is not excused pursuant to Clause 6.1 of the Contract, the relevant credit shall be escalated to the actual delivery date.

 

Page 2 of 14


  2.5 The total amount of such credit for each Aircraft shall be assigned to the Aircraft Manufacturer to reduce the price of the Engines for such Aircraft. AAH agrees that the credit shall not vest in the Aircraft Manufacturer until delivery to and acceptance by AAH of the respective Aircraft. In the event AAH does not accept delivery of the corresponding Aircraft for reasons other than a defect in the Engines, AAH agrees to promptly reimburse to IAE any amounts paid by IAE pursuant to this Clause 2 to the Aircraft Manufacturer, provided, however, that IAE shall reasonably assist and cooperate with AAH in securing reimbursement from the Aircraft Manufacturer of any such sums.

 

  2.6 IAE will not unreasonably withhold its consent to an assignment of the full value of the credits set forth in this Clause 2 by AAH to a financial institution or similar entity to obtain and/or secure pre-delivery payment financing for the respective Aircraft.

 

  2.7 The credits issued pursuant to this Clause 2 shall be subject to reduction by the amounts specified in Clause 8.2 or Clause 8.3, as applicable.

 

3. Fleet Expansion Assistance Credit

 

  3.1 To assist AAH with the introduction of the Rolling Option Aircraft into its fleet, IAE will issue a credit pursuant to Clause 3.3 below in the following amounts for each of the Rolling Option Aircraft purchased by AAH:

V2524-A5 [*]

V2527-A5 [*]

V2527E-A5 [*]

V2527M-A5 [*]

V2533-A5 [*]

 

  3.2 Each such credit shall be escalated using the IAE Escalation Formula set forth in Exhibit B-4 to the Contract from a base month of [*] to the earlier of: (a) the scheduled delivery date set forth in Exhibit B-1 to the Contract; or (b) the actual delivery date of the corresponding Rolling Option Aircraft where such delivery date has been modified pursuant to Clause 4.1 below; provided however that if the delivery date of such Firm Aircraft is delayed solely because of an IAE failure to perform its obligations under the Contract and such failure is not excused pursuant to Clause 6.1 of the Contract, the relevant credit shall be escalated to the actual delivery date.

 

  3.3 The total amount of such credit for each Aircraft shall be assigned to the Aircraft Manufacturer to reduce the price of the Engines for such Aircraft. AAH agrees that the credit shall not vest in the Aircraft Manufacturer until delivery to and acceptance by AAH of the respective Aircraft. In the event AAH does not accept delivery of the corresponding Aircraft for reasons other than a defect in the Engines, AAH agrees to promptly reimburse to IAE any amounts paid by IAE pursuant to this Clause 3 to the Aircraft Manufacturer, provided, however, that IAE shall reasonably assist and cooperate with AAH in securing reimbursement from the Aircraft Manufacturer of any such sums.

 

Page 3 of 14


  3.4 IAE will not unreasonably withhold its consent to an assignment of the full value of the credits set forth in this Clause 3 by AAH to a financial institution or similar entity to obtain and/or secure pre-delivery payment financing for the respective Aircraft.

 

  3.5 The credits issued pursuant to this Clause 3 shall be subject to reduction by the amount specified in subclause iii) of Clause 8.

 

4. Aircraft Delivery Flexibility and Aircraft Flexibility

 

  4.1 To the extent permitted by the Aircraft Manufacturer, IAE agrees to the modification on individual Firm Aircraft delivery dates (and, if converted into firmly ordered aircraft with scheduled delivery dates, the Rolling Option Aircraft delivery dates) provided that: (a) all Aircraft (including Rolling Option Aircraft converted into firmly ordered aircraft) are delivered prior to [*]; and (b) AAH provides IAE written notice of the modification upon the earlier of [*] months prior to the modified delivery date or [*] months prior to the then scheduled delivery date.

 

  4.2 IAE acknowledges that the Aircraft Manufacturer has granted AAH pursuant to the Aircraft Agreement certain rights to purchase Aircraft (the “Purchase Rights”) in respect of which AAH continues to have the option to exercise Purchase Rights in respect of [*] Aircraft (such Aircraft, the “Remaining Purchase Rights Aircraft”). AAH represents that as of the date of this Second Amended and Restated Side Letter No. 1, it has remaining the right to exercise all or part of the Purchase Rights in respect of the Remaining Purchase Rights Aircraft at any time and from time to time for deliveries between [*] months following the Purchase Rights exercise dates. The Purchase Rights in respect of [*] the Remaining Purchase Rights Aircraft shall expire on the last business day of the second week of [*] and the Purchase Rights in respect of the additional [*] of the Remaining Purchase Rights Aircraft shall expire on the last business day of the second week of [*] (as applicable to each of the Purchase Rights in respect of a Remaining Purchase Rights Aircraft, the “Purchase Rights Expiration Date”) if AAH has not exercised such Purchase Rights by giving written notice to the Aircraft Manufacturer prior to the relevant Purchase Rights Expiration Date.

For each Purchase Right, upon receipt of AAH’s notice to the Aircraft Manufacturer, the Aircraft Manufacturer will provide a delivery date for the relevant Purchase Rights Aircraft and, upon confirmation of such delivery date, AAH shall promptly notify IAE of the scheduled delivery date of the relevant Purchase Rights Aircraft. AAH further represents that, as of the date of this Second Amended and Restated Side Letter No. 1, the Aircraft Manufacturer has agreed pursuant to the Aircraft Agreement to grant AAH, at the time of exercise of the Purchase Rights in accordance with the above procedure, certain rights to purchase (the “Replacement Purchase Rights”) [*] (the “Replacement Purchase Rights Aircraft”). The Replacement Purchase Rights are exercisable in accordance with the same procedure as the Purchase Rights; provided that the Purchase Right Expiration Date of each Replacement Purchase Right shall be the second anniversary of the Purchase Right Expiration Date of the Purchase Right with respect to which such Replacement Purchase Right was granted.

 

Page 4 of 14


For clarity, the Purchase Rights Aircraft and the Replacement Purchase Rights Aircraft together make up [*] of the [*] Aircraft, as defined in Clause 1.1 of the Contract.

 

  4.3 For Aircraft scheduled for delivery after January 1, 2006, IAE agrees that AAH may convert A319 Aircraft to A320 Aircraft powered by new Engines or A321 Aircraft powered by new Engines. For Aircraft scheduled for delivery after January 1, 2006, IAE further agrees that AAH may convert A320 Aircraft to A319 Aircraft powered by new Engines or A321 Aircraft powered by new Engines. These conversion rights are subject to the following conditions:

 

  4.3.1 The Aircraft Manufacturer providing AAH similar conversion rights; and

 

  4.3.2 The Aircraft Manufacturer agreeing to the particular conversion; and

 

  4.3.3 These conversion rights being exercised only once per aircraft; and

 

  4.3.4 AAH providing IAE written notice of such conversion at the same time AAH notifies the Aircraft Manufacturer, but in no case later than [*] months prior to the then scheduled delivery date of the applicable Aircraft being converted.

 

  4.4 Of the total number of Spare Engines and Engines installed on Aircraft purchased by AAH, not more than [*] Spare Engines and Engines may be [*] or [*] Engines.

 

5. Escalation Cap

 

  5.1 With respect to Engines installed on Aircraft (“Installed Engines”) which are delivered by IAE to the Aircraft Manufacturer prior to [*], the escalation per annum for the period of [*] applicable to the base price of those Installed Engines will be the lesser of: (a) the per annum amount as determined by the application of the Escalation Formula as set forth in Exhibit B-3 to the Contract; and (b) a cumulative [*] per annum. Subject to the Aircraft Manufacturer providing a similar limitation on escalation to AAH, for Installed Engines delivered after [*], the calculation of the total amount of escalation for such Installed Engines, installed on Firm Aircraft 1 through Firm Aircraft 52 inclusive as listed in Exhibit B-1, will utilize for the years [*] the amount of escalation set forth in this paragraph.

 

  5.2

For the period beginning [*] and ending [*] (the “Cap Period”), IAE agrees to cap escalation of all credits, prices and other items in relation to Engines installed on Firm Aircraft [*] through Firm Aircraft [*] inclusive as listed in Exhibit B-1, delivered to AAH under the Contract after [*] in accordance with the escalation formula in Exhibit B-3 of the Contract, including any applicable Installed Engine Base Price as defined in Clause 13 to this Side Letter No. 1 (“Base Amounts”), at an annual rate of [*], provided that any year in which escalation exceeds [*] over the previous year, all such Base Amounts shall be escalated additionally by [*] of the amount of the escalation in excess of [*]. With respect to the Engines installed on the Firm Aircraft subject to this Clause 5.2, each year during the Cap Period, the lower of

 

Page 5 of 14


  the escalation as calculated in accordance with Exhibit B-3 of the Contract or the escalation as calculated by the formula in Clause 5.4, below, shall be compounded annually and multiplied to the Base Amount pursuant to Clause 5.4 below.

 

  5.3 During the Cap Period, IAE agrees to cap escalation of all credits, prices and other items in relation to Engines installed on Firm Aircraft through Firm Aircraft inclusive as listed in Exhibit B-1 delivered to AAH under the Contract after October 13, 2008 in accordance with the escalation formula in Exhibit B-4 of the Contract, including any applicable Installed Engine Base Price as defined in Clause 13 to this Second Amended and Restated Side Letter No. 1 (“Base Amounts”), at an annual rate of, provided that any year in which escalation exceeds over the previous year, all such Base Amounts shall be escalated additionally by of the amount of the escalation in excess of. With respect to the Engines installed on the Firm Aircraft subject to this Clause 5.3, each year during the Cap Period, the lower of the escalation as calculated in accordance with Exhibit B-4 of the Contract or the escalation as calculated by the formula in Clause 5.4, below, shall be compounded annually and multiplied to the Base Amount pursuant to Clause 5.4 below.

 

  5.4 Pursuant to Clauses 5.2 and 5.3 above, as applicable, the yearly escalation during the Cap Period shall be determined in accordance with this Clause 5.4:

 

  5.4.1 [*]

 

6. Credit Reimbursement

Clause 6.3, Credit Reimbursement , of the Contract is hereby deleted in its entirety and replaced with the following:

 

  “6.3 Credit Reimbursement

If AAH does not take delivery of Firm Aircraft [*] through Firm Aircraft [*] inclusive pursuant to Exhibit B-1 hereto (as such may be modified or supplemented pursuant to the terms of the Contract), IAE shall have the right to adjust the base credits granted on each of such [*] Firm Aircraft acquired by AAH in the amount of [*] dollars, escalated in accordance with Exhibit B-4 and Clause 5.3 to this Second Amended and Restated Side Letter No. 1) per Firm Aircraft not purchased by AAH. However, in no event shall the credits granted to AAH for Aircraft purchased be less than the equivalent of [*], escalated in accordance with Exhibit B-4 and Clause 5.3 to this Second Amended and Restated Side Letter No. 1) for an A320 Aircraft. Following such adjustment, AAH will promptly reimburse IAE in an amount equal to (x) the value of the credits, benefits and other concessions actually provided in excess of the adjusted amounts, plus (y) the interest on such excess amounts calculated from the time each respective amount was applied or value received until reimbursement. Interest will be calculated at six (6) month US$ LIBOR plus [*] per annum. If AAH is in default on any payment obligation under the terms of this Contract, IAE will, without prejudice to any of its other rights, be

 

Page 6 of 14


entitled to set off any unused credit in AAH’s account with IAE in full or partial (as applicable) satisfaction of such outstanding amount. Should AAH firm-up any additional Rolling Option Aircraft the Parties agree to discuss in good faith reasonable credit reimbursement terms for these additional Aircraft.”

 

7. Spare Parts Payment Terms

 

  7.1 Clause 3.13.1 of the Contract is deleted in its entirety and replaced with the following:

 

  “3.13.1     Payment for all purchases under this Clause 3 shall be made by AAH to IAE within [*] after the date of delivery [*]. In such event, IAE shall have the right to request payment immediately prior to delivery of Spare Parts and other Supplies of such amount as would cause the balance owing to exceed the aforementioned amounts.”

 

  7.2 Clause 3.13.6 of the Contract is deleted in its entirety and replaced with the following:

 

  “3.13.6     If AAH fails to make payment for any Spare Parts or Other Supplies within [*] after the date when such payment is due, then, without prejudice to any of IAE’s other rights, IAE will be entitled to charge interest on the overdue amount, at the rate of six (6) month US$ LIBOR [*] per annum, from and including the date such payment was due to but excluding the date such payment is made.”

 

8. Purchase of SelectOne™ Engines

Commencing with the Engines installed on Firm Aircraft 50 as detailed in the Aircraft Delivery Schedule in Exhibit B-1 to the Contract, each Installed Engine and Spare Engine delivered to AAH will be to the SelectOne™ Engine production standard, consisting of a modified High Pressure Compressor, a modified High Pressure Turbine, and a modified Low Pressure Turbine Nozzle Guide Vane. For each Installed Engine and Spare Engine delivered to AAH at the SelectOne TM Engine production standard, AAH shall pay IAE as follows:

 

  8.1 [*];

 

  8.2 [*];

 

  8.3 [*].

SPARE ENGINE TERMS

 

9. Spare Engine Assistance Credit

 

  9.1 To assist AAH with procuring Spare Engines from IAE in support of AAH’s Aircraft, IAE will credit AAH’s account with IAE in an amount equal to [*] of the Basic Contract Price as set forth in Exhibit B-2 of the Contract, escalated from the base month of [*], to the date of delivery in accordance with the escalation formula contained in Exhibit B-3 of the Contract, for each Spare Engine purchased by AAH.

 

Page 7 of 14


  9.2 This Spare Engine assistance credit provided in Clause 9.1 will be applicable to [*] Spare Engines purchased by AAH, consisting of: (a) the [*] Firm Spare Engines listed in Exhibit B-2 to the Contract, and (b) up to [*] Spare Engines, as AAH firms up additional Rolling Option Aircraft, in accordance with the following schedule:

 

[*]    [*]
[*]    [*]
[*]    [*]
[*]    [*]
[*]    [*]
[*]    [*]
[*]    [*]

 

  9.3 Each such credit will be issued upon delivery to and acceptance by AAH of the corresponding Spare Engine. AAH agrees to provide IAE with written notice confirming acceptance of the corresponding Spare Engine promptly after acceptance.

 

  9.4 Each such credit shall be used by AAH toward the final payment of the invoice price of such Spare Engine.

 

  9.5 The credits issued pursuant to this Clause 9 shall be subject to reduction by the amount specified in subclause (i) of Clause 8.

 

10. Spare Engine Payment Terms

 

  10.1 Clause 2.7.1 of the Contract is deleted in its entirety and replaced with the following:

 

  “2.7.1 AAH will make payment in United States Dollars as follows:

 

  2.7.1.1 [*] before scheduled delivery of each Spare Engine, AAH shall pay IAE a non-refundable deposit of [*] the Estimated Purchase Price of the Spare Engine. With respect to Option Spare Engines exercised less than [*] before scheduled delivery and any other Spare Engines ordered less than [*] before scheduled delivery, this payment shall be due at the time of the exercise or placement of the order.

 

  2.7.1.2 [*] before scheduled delivery of each Spare Engine, AAH shall pay to IAE a non-refundable deposit [*] of the Estimated Purchase Price of the Spare Engine.

 

  2.7.1.3 [*] before scheduled delivery of each Spare Engine, AAH shall pay to IAE a non-refundable deposit [*] of the Estimated Purchase Price of the Spare Engine.

 

Page 8 of 14


  2.7.1.4 Immediately prior to the delivery of each of the Spare Engines, AAH shall pay to IAE the balance of the Purchase Price of such Spare Engine.”

 

  10.2 Clause 2.7.6 of the Contract is deleted in its entirety and replaced with the following:

 

  “2.7.6 If AAH fails to make payment for any Spare Engines on or before the date when such payment is due, then, without prejudice to any of IAE’s other rights, IAE will: (a) be entitled to charge interest on the overdue amount, at the rate of six (6) month US$ LIBOR plus [*] per annum, from the date such payment was due to the date such payment is made; and (b) have the right (but not the obligation) to suspend work on the manufacture of such Spare Engines pending the remedy of such failure and to reasonably reschedule the date of delivery of such Spare Engines following the cure of such failure.”

 

11. Ownership and Use of Spare Engines

 

  11.1 In consideration of the benefits provided by IAE to assist AAH in purchasing Spare Engines, AAH agrees that it will retain possession and use (but not ownership in the case of Spare Engines that AAH finances through a sale and lease-back transaction) of each Spare Engine AAH purchases pursuant to the Contract until such Spare Engines have been operated for no less than [*] Engine Flight Hours. Furthermore, AAH agrees not to sell or otherwise dispose of any other Engine if such disposition would have the impact of contravening the spirit and intent of this Clause 11.1 or if the Engine being disposed would be replaced by a Spare Engine. Nothing herein shall be deemed to prevent AAH from selling any such Spare Engine in connection with a sale and lease-back transaction whereby the Spare Engine is placed on a long-term lease to a Grupo TACA Airline.

 

  11.2 [*]

 

  11.2.1 [*]

 

  11.2.2 [*]

 

  11.3 Should AAH decide to sell to a non-Grupo Taca entity any of the Spare Engines covered by Clause 11.1 above (excluding the Spare Engines set forth in Clause 11.2 above) and other than in connection with a sale and lease-back transaction pursuant to which a Grupo TACA Airline takes for a long-term lease such Spare Engine, AAH agrees that it will first offer to IAE the right to purchase such Spare Engine prior to offering such Spare Engine to third-parties. The offer to IAE will be in writing and set forth the Engine Serial Number, hours and cycles of utilization of the Engine, and the price at which AAH is willing to sell the Spare Engine to IAE. IAE will have four (4) business days to respond to AAH’s offer. Should IAE not accept the offer or not advise AAH in writing of the acceptance of the offer, AAH shall be entitled to offer such Spare Engine to third parties at a price equal to or greater than the price at which the Spare Engine was offered by AAH to IAE. In the event AAH decides to try to dispose of the Spare Engine at a price less than the offer made to IAE, AAH will first offer the Spare Engine to IAE at such lower price. In all instances where IAE does not accept an offer from AAH as set forth in this Clause 11, IAE agrees that the price at which the Spare Engine was offered to IAE shall be subject to the non-disclosure obligations set forth in Clause 10.4 of the Contract.

 

Page 9 of 14


12. Engine Storage Bag and Engine Transportation Stand

Unless other arrangements are notified to IAE six (6) months prior to the date of scheduled delivery of each Spare Engine, AAH agrees to purchase from IAE an Engine Storage Bag and a Low Profile Engine Transportation Stand for delivery with each Spare Engine. [*] using the IAE Escalation Formula set forth in Exhibit B-3 to the Contract. The cost for these items will be included in the invoice for the respective Spare Engine, and payment for these items shall be due immediately prior to delivery of the Spare Engine.

PRICE PROTECTION TERMS

 

13. Engine Base Price Assurance

 

  13.1

Subject to the Aircraft Manufacturer providing similar price assurances for the Aircraft price, IAE will provide AAH an additional credit equal to any increase from the base price in effect on [*] for Engines installed on Aircraft which are delivered between [*]. This Engine base price assurance shall be applicable to Engines installed on not more than [*] delivered to and accepted by AAH. The SelectOne™ Engine Charge shall be considered an agreed increase in the base price for each SelectOne TM production standard Engine installed on an Aircraft; provided, however, that IAE has not charged the Aircraft Manufacturer with the SelectOne TM Engine Charge for that Engine.

 

  13.2 Notwithstanding the provisions of this Clause 13, if the Engines installed on Aircraft after the date of this Second Amended and Restated Side Letter No. 1 include significant improvements from those Engines available on the date of this Second Amended and Restated Side Letter No. 1, which provide additional benefits to AAH and which involve additional costs to IAE, the parties agree to negotiate in good faith an equitable adjustment to be paid to IAE.

 

  13.3 For the purposes of administering this base price assurance provision, the Engine base price in effect on [*] for the two (2) Engines installed on each Aircraft shall be deemed to be the following (the “Installed Engine Base Price”):

 

Aircraft

  Engine
Type
  Base Price for Firm
Aircraft 1 through 52
(Jan 2006 US$)
  Base Price for Firm
Aircraft  53 through 67
(Jan 2006 US$)
A319   V2524-A5   [*]   [*]
A320   V2527-A5   [*]   [*]
A320   V2527E-A5   [*]   [*]
A320   V2527M-A5   [*]   [*]
A321   V2533-A5   [*]   [*]

 

Page 10 of 14


14. Spare Engine Base Price Protection

 

  14.1

IAE will provide AAH an additional credit equal to any increase from the base price in effect as of [*] for Spare Engines ordered by and delivered to AAH between [*]. This Spare Engine base price assurance shall be applicable to a quantity of up to [*] Spare Engines. The SelectOne™ Engine Charge shall be considered an agreed increase in the base price for each Spare Engine delivered to AAH at the SelectOne TM production standard.

 

  14.2 Notwithstanding the provisions of this Clause 14, should the spare Engines delivered [*] include significant improvements from those spare Engines available at the time of the execution of this Second Amended and Restated Side Letter No. 1 which provide additional benefits to AAH and which involve additional costs to IAE, the parties agree to negotiate in good faith an equitable adjustment to be paid to IAE.

PRODUCT SUPPORT SERVICES

 

15. V2500-A5 Miami Support Facility

 

  15.1 A V2500-A5 Spare Parts and line replaceable unit support facility has been established in the Miami, Florida, USA area. This facility, enables AAH to maintain a reduced V2500-A5 spare parts inventory provided that AAH has: (a) at least [*] spare Engine in full engine build unit (“EBU”) and quick engine change (“QEC”) configuration; and (b) purchased and maintained in its fleet a minimum of [*] ratio of Spare Engines to Engines installed on the Aircraft as required by the Contract; and (c) purchases and maintains a reasonable amount of Initial Provisioning Spare Parts based on recommendations (which take into account the existence of the Miami Support Facility) from the Initial Provisioning conference between IAE and AAH.

 

  15.2 For Spare Parts with prices listed in the V2500 Engine Spare Parts Price Catalog, the price for such Spare Parts from the Miami facility will be no greater than the price listed in the then current V2500 Engine Spare Parts Price Catalog.

 

16. Customer Support Representative

IAE will continue to provide, at no additional charge to AAH, a customer support representative to assist AAH on site at AAH’s home base in San Salvador for as long as AAH owns and operates at least [*] V2500 powered aircraft in regular commercial service. Clause 5.2 of the Contract will be applicable to this representative.

 

17. Alternative Guarantees

[*]

 

18. Operation by Grupo Taca Airlines

[*]

 

Page 11 of 14


19. Engine Interchangeability and Thrust Rating Flexibility

 

  19.1 The Engines being supplied by IAE to the Aircraft Manufacturer for installation on the Aircraft and the Spare Engines provided to AAH pursuant to the Contract are interchangeable amongst each other with changes or modifications which can be undertaken at normal airline maintenance facilities (such as installing the appropriate data plate, data entry plug changes, and accessory component changes) in compliance with i) the engine manual, ii) V2500 Service Bulletin V2500-72-0285 Rev 5 dated 29 March 2002, and iii) regulations of the airworthiness authorities.

 

  19.2 Subject to:

 

  (1) AAH purchasing, maintaining, and operating in its fleet a minimum ratio of [*] Spare Engines to Engines installed on the Aircraft as required by the Contract; and

 

  (2) the ratio of thrust levels of Spare Engines purchased by AAH pursuant to the Contract being approximately the same as the ratio of thrust levels of Engines installed on the Aircraft,

the IAE Customer Support Representative at AAH will provide AAH with access to an adequate quantity of appropriate data plates and data entry plugs which allow AAH to utilize the Engines installed on the Aircraft and Spare Engines interchangeably in the AAH fleet so as to achieve maximum flexibility in AAH’s operations.

 

  19.3 In no event shall AAH operate at any given point in time a greater number of higher thrust Engines than purchased by AAH from the Aircraft Manufacturer and IAE. For example, if AAH has purchased ten (10) V2533-A5 rated Engines, then AAH may not operate any more than ten (10) V2533-A5 rated Engines at any one point in time; the same rationale applies at each respective thrust rating.

 

  19.4 The thrust flexibility as provided under this Clause 19 is personal to AAH and may not be transferred or assigned by AAH. Prior to selling, transferring or otherwise disposing [including lease return] of any Engine, other than a sale leaseback transaction following which AAH continues to operate the Engine, AAH shall revert such Engine to the thrust rating at which IAE originally delivered the Engine (the “Original Thrust Rating”) through the removal of the multi-rated data plate and the replacement of the original single rated plate.

 

  19.5 If AAH sells, transfers or otherwise disposes of any Engine after October 31, 2008 (other than a sale leaseback transaction following which AAH continues to operate the Engine) without restoring the Engine to its Original Thrust Rating and returning any multi-rated data plate to IAE prior to such sale, transfer or disposal, AAH shall pay to IAE the difference between the then current price of the Engine at the Original Thrust Rating and the then current price of a V2533-A5 rated engine; provided that if the workscope for the last maintenance shop visit prior to AAH selling, transferring or otherwise disposing of an Engine includes the removal of the multi-rated data plate and the replacement of the original single rated data plate, but such task is not performed by the maintenance shop, then AAH shall have no obligation to pay such amount to IAE.

 

Page 12 of 14


  19.6 If AAH transferred, sold or otherwised disposed of any Engine before October 31, 2008, without restoring the Engine to its Original Thrust Rating and returning any multi-rate data plate to IAE, the Parties agree to work together to ensure that such engine is fitted with the original single rated data plate.

 

20. Data Collection Methodology for Guarantee Administration

At AAH’s request, IAE will provide assistance in creating an appropriate data acquisition methodology for the collection of data needed for the administration of the Guarantees set forth in the Contract.

 

21. Acquisition of Engines by AAH Affiliates

The Parties to this Contract acknowledge that AAH may desire that an entity controlled by AAH or by Grupo TACA Holding Ltd. take title to any Engine hereunder in lieu of AAH and that such Engine shall be operated by a Grupo TACA Airline. If any further modifications become necessary under the Contract to affect the intent of the foregoing sentence, the Parties agree to negotiate such modification in good faith; provided however that any such modification shall not (a) release AAH from any obligation under the Contract or (b) have an adverse impact on IAE.

 

22. Conflicts

In the event of any conflicts between the terms contained in the Contract and the terms contained in this Second Amended and Restated Side Letter No. 1, the terms of this Second Amended and Restated Side Letter No. 1 shall prevail.

[THE REMAINDER OF THIS PAGE HAS INTENTIONALLY BEEN LEFT BLANK]

 

Page 13 of 14


Except as expressly amended by this Second Amended and Restated Side Letter No. 1, all provisions of the Contract remain in full force and effect.

 

Very truly yours,      Agreed to and Accepted on behalf of:   
IAE International Aero Engines AG      Atlantic Aircraft Holding Ltd.   

 

    

 

  
Signature      Signature   

 

    

 

  
Name      Name   

 

    

 

  
Title      Title   

 

    

 

  
Date      Date   

 

Page 14 of 14

Exhibit 10.20

Note: Certain portions have been omitted from this Agreement in accordance with a request for confidential treatment submitted to the Securities and Exchange Commission. Omitted information has been replaced with an asterisk. Omitted information has been filed separately with the Securities and Exchange Commission.

 

 

AMENDED AND RESTATED

V2500-A5

FLEET HOUR AGREEMENT

BETWEEN

IAE INTERNATIONAL AERO ENGINES AG

AND

ATLANTIC AIRCRAFT HOLDINGS LIMITED

THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO IAE

 

Page 1


CONFIDENTIAL

INDEX

RECITALS

CLAUSE 1

   DEFINITIONS      4   

CLAUSE 2

   RESPONSIBILITIES OF THE PARTIES      5   

CLAUSE 3

   STANDARDS, SPECIFICATIONS AND BENIFITS      9   

CLAUSE 4

   ENGINE MAINTENANCE SERVICES, THE FHA SERVICE CHARGE AND OFF-WING RESTORATION CHARGE      10   

CLAUSE 5

   TITLE      11   

CLAUSE 6

   PRICE      12   

CLAUSE 7

   FHA OPTIONS      13   

CLAUSE 8

   PAYMENT      13   

CLAUSE 9

   TAXES AND LEVIES      14   

CLAUSE 10

   PERIOD OF FHA      15   

CLAUSE 11

   WARRANTIES      15   

CLAUSE 12

   EXCUSABLE DELAYS      17   

CLAUSE 13

   AMENDMENT      17   

CLAUSE 14

   ASSIGNMENT      17   

CLAUSE 15

   EXHIBITS      18   

CLAUSE 16

   HEADINGS      18   

CLAUSE 17

   NOTICES      18   

CLAUSE 18

   EXCLUSION OF OTHER PROVISIONS AND PREVIOUS UNDERSTANDINGS      19   

CLAUSE 19

   TERMINATION      19   

CLAUSE 20

   NEGATION OF WAIVER      19   

CLAUSE 21

   SEVERABILITY AND PARTIAL INVALIDITY      19   

CLAUSE 22

   GOVERNING LAW      20   

CLAUSE 23

   LIMITATION OF LIABILITY      20   

CLAUSE 24

   CONFIDENTIALITY      20   

CLAUSE 25

   ELIGIBLE ENGINE OPERATION BY GRUPO TACA AIRLINES      20   

CLAUSE 26

   ADDITION AND DELETION OF ELIGIBLE ENGINES      20   

EXHIBIT 1

   RESERVED      22   

EXHIBIT 2

   ESCALATION FORMULA      23   

EXHIBIT 3

   MONTHLY STATEMENT OF THRUST USAGE AND HOUR/CYCLE UTILIZATION      25   

EXHIBIT 4

   ENGINE MAINTENANCE PLAN      26   

THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO IAE

 

Page 2


THIS AMENDED AND RESTATED V2500-A5 FLEET HOUR AGREEMENT (“FHA”) is made this December 18, 2008,

 

BETWEEN   
IAE INTERNATIONAL AERO ENGINES AG    a joint stock company organized and existing under the laws of Switzerland, with an office and place of business at 400 Main Street, M/S 121-10, East Hartford, Connecticut, 06108 USA (hereinafter called “IAE”), and
ATLANTIC AIRCRAFT HOLDINGS LIMITED    a corporation organized and existing under the laws of The Bahamas, whose principal place of business is at King & George Streets, Nassau, Bahamas (hereinafter called “AAH”).
WHEREAS:   

 

  A. As of the date hereof, (i) AAH has acquired or has firmly ordered an aggregate of [*] new Airbus A320 family aircraft and has options to purchase an additional [*] A320 family aircraft, all powered or to be powered by IAE V2500 aero engines and (ii) AAH has acquired or has firmly ordered an aggregate of [*] new V2500 spare engines, all of which will be operated by the Grupo Taca Airlines; and

 

  B. AAH and IAE have entered into an amended and restated V2500 General Terms of Sale dated December 18, 2008 which addresses the support of said V2500 aero engines; and

 

  C.

IAE and AAH entered into that certain V2500-A5 Fleet Hour Agreement on April 23 rd 1999 (the “Original FHA”); and

 

  D.

IAE and AAH entered into the Omnibus Amendment on March 31 st 2005 (the “Omnibus Amendment”), and

 

  E.

IAE and AAH entered into Amendment No. 2 to the Original FHA on August 19 th 2003 (the “FHA Amendment”), and

 

  F.

IAE and AAH entered into Side Letter No. 1 to the Original FHA on June 12 th 2007 (the “FHA Side Letter”), and

 

  G. IAE and AAH hereby agree to amend the terms of the Original FHA and to restate the Original FHA in its entirety to incorporate the provisions of the Omnibus Amendment, the FHA Amendment and the FHA Side Letter, and

 

  H. IAE and AAH now wish to agree terms whereby IAE will arrange for, manage and subcontract certain off-wing maintenance of the Eligible Engines.

 

THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO IAE
Page 3


NOW THEREFORE THE PARTIES AGREE TO AMEND AND RESTATE THE ORIGINAL FHA AS FOLLOWS:

 

CLAUSE 1 DEFINITIONS

 

  1.1. “Aircraft” shall mean the fleet of Airbus A320 family Aircraft powered by Eligible Engines.

 

  1.2. “Eligible Engine” shall mean (i) each Engine installed at delivery on an Aircraft delivered by the Aircraft Manufacturer pursuant to the Aircraft Agreement (as defined in the Support Contract) and (ii) each Spare Engine, in each case so long as such Engine is operated by a Grupo TACA Airline.

 

  1.3. “Eligible Engine Removal” shall mean those removals of Eligible Engines from an Aircraft for a Shop Visit which are determined by IAE’s and AAH’s mutual agreement to be necessary.

 

  1.4. “Eligible Shop Visit” shall mean those Shop Visits of Eligible Engines to Maintenance Center(s) which are determined by IAE’s and AAH’s mutual agreement to be necessary.

 

  1.5. “Engine(s)” shall mean the IAE V2500 Aircraft engines described in the Engine Contract Specification(s).

 

  1.6. “Engine Contract Specification(s)” shall mean the applicable Specification(s) set forth in the Support Contract and which specifications are incorporated herein by reference.

 

  1.7. “Engine Maintenance Service Charge” shall mean the price to be paid from time to time by AAH to IAE for services other than Excess Work and which shall be calculated in accordance with Clause 6 below.

 

  1.8. “Excess Work” shall mean work and the provision of goods and services undertaken by Maintenance Center(s) as described in Sections 4.2 and 4.3 hereof and any other work or provision of goods and services expressly stated herein to constitute Excess Work.

 

  1.9. “Grupo Taca Airline(s)” shall mean any or all airlines of which not less than [*].

 

  1.10 “Life Limited Parts” shall mean the Parts identified in Chapter 5 of the V2500 Engine Manual as having specific life limits.

 

  1.11. “Line Replaceable Units” and “LRU” shall mean all items which can be removed from an Engine without demounting such Engine from the Aircraft except for : Inlet Cowl; Common Nozzle Assembly; Tail Plug; C-Ducts and Actuators; Hydraulic Control Unit; Anti-Icing valves, ducting and clamps; Environmental Control System ducting, clamps and seals; Fan Cowl Doors; and all items of Airbus supply.

 

  1.12 “Maintenance Center(s)” shall mean the United States Federal Aviation Administration (FAA) approved Maintenance Center(s) as mutually agreed by IAE and AAH as the sole provider(s) of maintenance services pursuant to the terms of this FHA.

 

THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO IAE
Page 4


  1.13 “Maintenance Service Rate” and “MSR” shall mean the rate to be applied to Eligible Engine flight hours to calculate the FHA Service Charge.

 

  1.14 “Repair Order” shall mean a written repair request from AAH, with IAE’s input, to the Maintenance Center(s), which shall (a) authorize the Maintenance Center(s) to undertake work on Eligible Engines, as directed by IAE, under the terms of IAE’s contract with the Maintenance Center(s); and (b) which shall be adequate to satisfy all customs and AAH’s insurance requirements. IAE will notify AAH of the date and reference of the appropriate contract with the Maintenance Center(s).

 

  1.15 “Shop Visit” shall mean a visit to the Maintenance Center(s) where the maintenance performed on an Eligible Engine includes either of the following:

 

  1.15.1. separation of pairs of major mating engine flanges (except for the purpose of shipment without subsequent internal maintenance of the engine); or

 

  1.15.2. removal of a disk, hub or spool.

 

  1.16. “IATA” shall mean the IATA Short Term Engine Lease Agreement as provided to AAH at the time of this FHA.

 

  1.17. “Support Contract” shall mean the Amended and Restated V2500 General Terms of Sale dated             , 2008 between IAE and AAH including all Exhibits and Side Letters thereto for the benefit of AAH and Grupo Taca Airlines, as such Support Contract may be amended or modified from time to time, and such other V2500 Support Contracts specifically referenced with respect to a particular Eligible Engine in the list of Eligible Engines.

Capitalized terms not specifically defined in this FHA shall have the meaning assigned to them in the Support Contract as required to reflect the intention of the parties.

 

CLAUSE 2. RESPONSIBILITIES OF THE PARTIES

 

CLAUSE 2A RESPONSIBILITIES OF IAE

Provided that AAH is not in material breach (beyond any applicable grace period) of any of its obligations to IAE under this FHA, IAE agrees to fulfill the following responsibilities and/or perform the following tasks to arrange for, manage and subcontract certain off wing maintenance of Eligible Engines, as far as is possible, in consultation with and in accordance with operational requirements of Grupo Taca Airlines. IAE will:

 

  2A.1 provide the following engineering support services for Eligible Engines in conjunction with the Maintenance
Center(s):

 

  2A.1.1 the dissemination of periodic engineering updates which are applicable to the Eligible Engines;

 

  2A1.2 the analysis of IAE Service Bulletins to determine those which are applicable to the Eligible Engines;

 

  2A.1.3 the provision to AAH of required documentation including but not limited to: FAA Form 337, V2500 Life Limited Parts Status Report (based on data provided by AAH), Engine test logs and Serviceable Tags;

 

THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO IAE
Page 5


  2A.1.4 the provision of a written report stating any damage detected and repair(s) accomplished, including any technical conclusions as to the cause of such damage;

 

  2A.1.5 where applicable and requested by AAH, the provision of accident and damage disassembly reports and pictures; and

 

  2A.1.6 the provision of advice on Airworthiness Directives and appropriate documentation indicating that the Maintenance Center(s) has complied with applicable Airworthiness Directives.

 

  2A.2 designate an FHA manager (based at IAE’s offices) who will be the point of contact for AAH in respect of services described in this FHA.

 

  2A.3 work with AAH to develop a mutually acceptable removal schedule that utilizes the entire calendar year in order to level load the engine removal schedule during years of heavy removal requirements and will reasonably assist AAH to minimize engine removals during peak operating seasons;

 

  2A.4 determine in good faith and on a non-discriminatory basis the work to be undertaken by the Maintenance Center(s) for all planned and unplanned removals of Eligible Engines after consultation with AAH and advise the Maintenance Center(s) of the work required through a Repair Order;

 

  2A.5 arrange and be responsible for transportation of Eligible Engines between Miami, Florida, USA (or any other location as mutually agreed) and the Maintenance Center(s) should AAH select the transportation option set forth in Clause 7.1 below;

 

  2A.6 cause the Maintenance Center(s) to complete a Shop Visit report in respect of each Eligible Shop Visit during the term of this FHA in accordance with the standards and specifications established in this FHA and to provide such shop visit report to AAH in a timely manner;

 

  2A.7 pay to the Maintenance Center(s) all charges incurred as the result of each such Eligible Shop Visit excluding charges incurred as a result of Excess Work; and

 

  2A.8 exert its commercially reasonable efforts to obtain agreement from the Maintenance Center(s) to the following estimated maximum turnaround times (which shall exclude the time required to (a) transport the Eligible Engine, (b) achieve a testable engine as set forth in Clause 2B.12 below, and (c) resolve Excess Work issues in good faith and in a timely fashion), which turnaround times are provided to assist AAH in its scheduling of its V2500 Engines. Actual turnaround time will vary depending upon the actual condition of the Eligible Engine received by the Maintenance Center(s).

 

       Calendar Days

A. Major Engine Disassembly and Repair

   [*]

B. Hot Section Inspection and Combustion Area Repairs

   [*]

 

THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO IAE
Page 6


IAE will require the Maintenance Center(s) to: (a) exercise all reasonable efforts to complete the turnaround of any given Engine within the turnaround time shown above and (b) give consideration to AAH’s scheduling requirements for Eligible Engines.

[*]

IAE shall maintain insurance and contractually require the Maintenance Center(s) to insure for loss of or damage to the Engines for an amount equal to the Engines’ replacement value, and to maintain liability insurance for an amount not less than [*]. This insurance shall cover the Engines while they are in the care, custody and control of IAE or the Maintenance Center (s). [*]

The Maintenance Center(s) will, at all times, be properly certificated and otherwise authorized to perform all maintenance work to be performed by it/them and at all times maintain sufficient parts, inventory, materials and personnel to perform and complete all such maintenance work on a timely and proper basis.

 

  2A.9 recommend the designated Maintenance Center(s). The Maintenance Center(s) used shall be determined by the mutual agreement of IAE and AAH. In the event IAE and AAH do not mutually agree upon a Maintenance Center(s), this FHA shall, at such time, terminate without any further obligation (other than payment obligations which arise prior to the time of termination) to either party.

 

  2.A.10 assist TACA in the management of in the maintenance of Eligible Engines in accordance with the ENGINE MANAGEMENT PLAN set forth in Exhibit 4 to this FHA.

 

CLAUSE 2B RESPONSIBILITIES OF AAH

AAH agrees to fulfill the following responsibilities and/or perform the following tasks and to reasonably cooperate with IAE in the performance of IAE’s responsibilities hereunder. AAH shall:

 

  2B.1. prior to an unplanned Eligible Engine Removal, make commercially reasonable efforts in accordance with standard industry practice (including without limitation complying with the Trouble Shooting Manual), taking into consideration the Grupo Taca Airline’s scheduling and route requirement, to correct the problem leading to the potential unplanned Eligible Engine Removal. If the problem cannot be corrected on-wing, the Eligible Engine shall be removed and shall be forwarded to the Maintenance Center(s) together with available data from the EEC/aircraft system interrogations. AAH will ensure that all data reasonably required by IAE to facilitate the correction of any problem causing such unplanned Eligible Engine Removal is made available to IAE as soon as practicable;

 

  2B.2. provide for use under this FHA and maintain in a serviceable condition a minimum number of transportation stands to enable each Eligible Engine being sent to the Maintenance Center to be shipped on its own transportation stand and for such stand to remain at the Maintenance Center to be used to return the Eligible Engine to AAH, and such minimum number taking into consideration removal projections;

 

  2B.3. at the time of an Eligible Engine Removal, remove the Eligible Engine from the Aircraft, mount it on a transportation stand and prepare such Eligible Engine for shipment;

 

THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO IAE
Page 7


  2B.4. make Eligible Engines available for shipment following (a) planned Eligible Engine Removals in accordance with the schedule defined by and mutually agreed by IAE and AAH and (b) unplanned Eligible Engine Removals. AAH shall ensure that each Eligible Engine which is sent to the Maintenance Center(s) for repair is accompanied by a Repair Order which will include Engine and Life Limited Parts total time, date of Engine removal, and reason for removal;

 

  2B.5 be responsible for delivering Eligible Engines to and receiving Eligible Engines from the Maintenance Center(s), or if AAH selects the transportation option set forth in Clause 7.1 below, to and from Miami, Florida, USA or any other location as mutually agreed, using transportation stands provided by AAH pursuant to Clause 2B.2 above;

 

  2B.6. maintain records in form and detail reasonably sufficient for the accurate and expeditious administration of the terms of the FHA and shall permit IAE Customer Support Representatives access to such records for inspection and audit at reasonable intervals and at reasonable times, provided such inspection does not unreasonably interfere with AAH’s operations or business. The form to be used for the monthly reporting of the required data by AAH is included as Exhibit 3 hereto, and may be modified or changed as mutually agreed;

 

  2B.7. operate and maintain a minimum number of V2500 Engines in support of its operation of the Firm Aircraft such that the ratio of spare Engines to installed Engines is a minimum [*];

 

  2B.8. maintain insurance covering loss or damage to Aircraft and Engines (hull, war risks and spare parts insurance), as well as aircraft third-party and airline legal liability insurance (covering passengers, cargo, baggage and mail, bodily injury and property damage) with a minimum coverage of U.S.$[*]. IAE and the Maintenance Center(s) will be named as additional insureds in those policies;

 

  2B.9. cooperate with IAE to fulfill any reasonable administrative or other reasonable requirements of the Maintenance Center(s) provided no such requirements will result in significant cost to AAH; and

 

  2B.10 operate the Eligible Engines in a manner consistent with standard industry practice and the V2500 Maintenance Management Plan for Grupo Taca Airlines as agreed by AAH and IAE, and adhere to any IAE special instructions provided that such instructions are (i) reasonable with reference to industry standards and (ii) apply generally to and are applied generally (on a non-discriminatory basis) to V2500 engines and operators operating under similar conditions.

 

  2B.11 maintain performance trend monitoring data on each Eligible Engine. The actual cost of any induction performance test on an Eligible Engine required due to the lack of historical trend monitoring data will be charged to AAH as Excess Work; and

 

  2B.12 Eligible Engines shipped to Maintenance Center(s) or if AAH selects the transportation option set forth in Clause 7.1 below, to and from Miami, Florida, USA or any other location as mutually agreed, by AAH shall be in a testable configuration, i.e., no unserviceable tags on LRUs and accessories. If the Maintenance Center(s) is required to use their own units to make AAH’s Engine testable, the man-hours required to achieve the testable configuration and remove such units will be charged to AAH as Excess Work.

 

THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO IAE
Page 8


CLAUSE 3 STANDARDS, SPECIFICATIONS, AND BENEFITS

 

  3.1. Eligible Engines will be repaired, modified, inspected and tested in accordance with the manufacturer’s applicable Engine Manuals, the Maintenance Center V2500 Maintenance and Build Standard Manual, Service Bulletins, Airworthiness Directives and other approved maintenance procedures then in effect at the Maintenance Center(s) including the V2500 Maintenance Management Plan for Grupo Taca Airlines.

 

  3.2. AAH and IAE agree that it is not the intention to provide duplicate benefits under the terms of this FHA and the Support Contract or under any other arrangement between IAE or IAE’s suppliers or the Aircraft Manufacturer and the Grupo Taca Airlines. In the event of any such duplication of benefits, except as provided in the Support Contract the Grupo Taca Airline may, at the relevant time in respect of the relevant circumstances opt to receive any one such benefit to the exclusion of all other duplicate benefits.

 

THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO IAE
Page 9


CLAUSE 4 ENGINE MAINTENANCE SERVICES, THE FHA SERVICE CHARGE AND THE OFF-WING RESTORATION CHARGE

 

  4.1. The Engine maintenance services to be covered by the FHA Service Charge and the Off-Wing Restoration Charge shall be limited to the following when performed by the Maintenance Center(s) on Eligible Engines removed from service during the term of the FHA:

 

  4.1.1 Labor, material and material handling charges (excluding such charges for Life Limited Parts which have not prematurely failed and for LRU’s), including the cost of Engine material replaced on wing and any vendor fees required to:

 

  (a) Perform Engine reconditioning, overhaul and repair to make the Engine serviceable to the specifications established in accordance with the provisions of Clauses 2A.4 and 3.1 [*].

 

  (b) Inspect, repair or replace Engine Parts as required by Airworthiness Directives issued by the U.S. Federal Aviation Administration; except that inspections forming part of normal line maintenance and on wing adjustments shall not be covered.

 

  (c) Incorporate IAE Service Bulletins, as agreed between AAH and IAE having Compliance Codes [*] in accordance with the recommendation in the applicable Service Bulletin. (These Service Bulletins are designated as Target Service Bulletins in the V2500 Maintenance Management Plan for AAH or Grupo Taca Airlines. Service Bulletins which will alleviate repetitive Airworthiness Directive on-wing inspections shall be considered Target Service Bulletins.) Incorporation of IAE Service Bulletins having Compliance Codes [*] shall be considered on a case-by-case basis in a non-discriminatory manner.

 

  4.1.2. Labor and test cell fees to perform the required Engine testing and retesting where required due to Maintenance Center or IAE actions or inaction.

 

  4.1.3. Fuel and oil consumed at Engine test.

 

       [*]

 

  4.2 All services not specifically included in Clause 4.1 above, are excluded from coverage under the FHA Service Charge and the Off-Wing Restoration Charge and will be accomplished as Excess Work, subject to the rates and charges in effect at the Maintenance Center(s) at such time as such Excess Work is performed (or subject to any rates negotiated by AAH or Grupo Taca Airlines with the Maintenance Center). In particular, if AAH requests the Maintenance Center(s), without IAE’s prior written approval (or verbal approval in the case of an AOG, followed by a written confirmation), to dispatch to Grupo Taca Airlines’ line stations personnel to assist a Grupo Taca Airline with its Engine maintenance requirements, such on-site assistance shall be deemed to be Excess Work.

To the extent that Excess Work can be determined prior to induction of an Eligible Engine into the Maintenance Center(s), charges for such Excess Work shall be billed directly to AAH by the Maintenance Center(s).

 

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To the extent that Excess Work is only determined after induction of an Eligible Engine into the Maintenance Center(s), charges for such Excess Work shall be invoiced to AAH by IAE as set forth in Clause 8.4 below and AAH shall pay such Excess Work charges in full to IAE in addition to the FHA Service Charge and Off-Wing Restoration Charge. Excess work will be invoiced to AAH at the actual cost to IAE.

 

  4.3 Labor, material and other charges related to Maintenance Center(s) performance of maintenance services described in Clause 4.1 above, will be identified as Excess Work to the extent that the Engine:

 

  4.3.1. Requires repairs for recoverable insured inflight and/or ground accident damage, to the extent of the amounts recoverable, except for FOD as described in Clause 4.1.1(a) above; or

 

  4.3.2. Was not maintained and operated in accordance (in all material respects) with (a) V2500 Maintenance Management Plan for Grupo Taca Airlines, (b) operating and maintenance instructions and recommendations authorized or issued by IAE or Airbus Industrie via manual updates or temporary revisions to manuals, (c) maintenance recommendations included in the Engine Manuals and Operating Instructions and (d) any other written recommendations made from time to time by IAE or Airbus Industrie which impact Engine operability, parts life or safety; or

 

  4.3.3. Has been subjected to misuse, neglect, accident or maintenance error (other than any maintenance error attributable to any act, or failure to act or omissions of IAE or the Maintenance Center(s)) by any party other than IAE or the Maintenance Center(s); or

 

  4.3.4. Has been adversely affected by a part not originally supplied by a Maintenance Center(s), IAE or another source approved by IAE (except if such part has been identified by IAE as a Standard Part and has been acquired from an FAA approved source); or

 

  4.3.5. Has been adversely affected by occurrences outside the course of Grupo Taca Airlines’ normal business activities as civil commercial airlines including, but not limited to, acts of God, use by government agencies (other than in the normal or customary course of business of Grupo Taca Airlines), acts of war, rebellion, seizure or other belligerent acts.

 

CLAUSE 5 TITLE

 

  5.1. IAE shall ensure that title to Parts incorporated into Eligible Engines by the Maintenance Center(s) shall pass to the owner of such Eligible Engines free and clear of all security interests and rights of IAE, the Maintenance Center and all other third parties (other than such security interests and rights created by AAH or the owner of the Eligible Engines or the Maintenance Center mechanics lien for a period no longer than forty (40) days).

 

  5.2. Title to Parts removed from Eligible Engines by the Maintenance Center(s) shall pass to IAE free and clear of all security interests and rights of the owner of such Eligible Engines at the time and provided that title to the replacement Part passes to the owner of such Eligible Engines pursuant to Clause 5.1 above.

 

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CLAUSE 6 PRICE

 

  6.1 The charge for FHA Service and miscellaneous shop visits as described in Clause 4 above (the “FHA Service Charge”) will be calculated using a MSR base rate (“MSRb”) equal to $[*] per Eligible Engine Flight Hour escalated in accordance with the escalation formula set forth in Exhibit 2 hereto.

 

  6.2 The FHA Service Charge for each month shall be equal to the sum of the verified hours of flight operation of each Eligible Engine in such month (rounded to the nearest one-tenth of an hour) multiplied by the MSRb for such month. AAH shall, within twenty (20) days after the end of the month, report to IAE the hours flown by each Engine during the preceding month.

 

  6.3 The charge for off-wing hot section restoration as described in Clause 4 above (the “Off-Wing Restoration Charge”) will be calculated using the appropriate base hourly rate from the table in Clause 6.5 below (set forth in [*] dollars) escalated in accordance with the escalation formula set forth in Exhibit 2 hereto.

 

  6.4 The Off-Wing Restoration Charge payable to IAE at the time any Eligible Engine enters the Maintenance Center(s) for off-wing hot section restoration shall be determined using the thrust rating(s) at which the Eligible Engine was operated since the last Eligible Shop Visit or since new, as applicable, and shall be equal to the sum of the verified hours of flight operation of the Eligible Engine at each such thrust rating multiplied by the hourly Off-Wing Restoration Charge for each such thrust rating, as determined pursuant to Clause 6.5.

 

  6.5 The Off-Wing Restoration Charge ([*] dollars) shall be as follows (“Base Rates”):

 

   V2524-A5   V2527-A5   V2533-A5

[*]

   [*]   [*]   [*]

[*]

   [*]   [*]   [*]

[*]

   [*]   [*]   [*]

[*]

   [*]   [*]   [*]

[*]

      

 

  6.6 IAE and AAH will mutually agree, based on the teardown report received from the Maintenance Center, whether an Eligible Shop Visit is a miscellaneous shop visit, a restoration shop visit, or both. The time required to arrive at the mutual agreement shall not be considered when calculating turnaround times in this FHA.

 

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  6.7 The charge of any Eligible Shop Visit solely to change life expired Life Limited Parts (“Life Limited Parts Shop Visit”) will be [*] ([*]) escalated in accordance with the escalation formula set forth in Exhibit 2 hereto. This amount excludes the actual costs of the replacement Life Limited Parts, and will be paid to IAE at the time the applicable Eligible Engine enters the Maintenance Center.

 

  6.8 [*]

 

  6.9 [*]

 

CLAUSE 7 FHA OPTIONS

The following optional coverages are available to provide additional maintenance coverage under this FHA. AAH may elect to take all, some, any or none of these optional coverages. AAH shall advise IAE in writing of the optional coverages selected at the time that AAH advises IAE that it elects this FHA from the various alternatives granted AAH in the Support Contract (i.e., Parts Cost Plan or Maintenance Cost Guarantee or Fleet Hour Agreement).

 

  7.1 Engine transportation to/from Miami (or such other location as mutually agreed) and Maintenance Center(s). The [*] base rate for this Transportation option is [*] per Eligible Engine Flight Hour escalated in accordance with the escalation formula set forth in Exhibit 2 hereto.

 

  7.2 [*]

 

  7.3 Should AAH choose any or all of the options set forth in Clauses 7.1 and 7.2 above, the charges for each option for each month shall be equal to the sum of the verified hours of flight operation (rounded to the nearest one-tenth of an hour) of all Eligible Engines operating in such month multiplied by the appropriate price calculated for each month in accordance with the escalation formula set forth in Exhibit 2 hereto.

 

  7.4 All overhaul and shop maintenance done at Goodrich, round trip transportation costs, Thrust Reverser Rotables to be held by Goodrich, Line and Shop Replacement Parts, Shop Maintenance Labor and Vendor Accessories. [*]

 

  7.5 Should AAH choose the option set forth in Clause 7.4 above, the charges for each month shall be equal to the sum of the verified hours of flight operation (rounded to the nearest one-tenth of an hour) of all Eligible Engines operating in such month multiplied by the price calculated for each month in accordance with the Goodrich escalation formula.

 

  7.6 For clarity, as of the date of this Amended and Restated FHA, AAH have elected to take the services detailed in Clause 7.1 and 7.2 above.

 

CLAUSE 8 PAYMENT

 

  8.1 IAE will invoice AAH monthly in arrears for the FHA Service Charge and for any options selected in Clause 7 above.

 

  8.2. IAE will invoice AAH for Off-Wing Restoration Charges and Life Limited Parts Shop Visits at the time the Eligible Engine is inducted into the Maintenance Center(s).

 

  8.3. IAE may invoice AAH its reasonable estimate of the cost of any Excess Work prior to commencement of, or during the execution of, such Excess Work. IAE will invoice AAH for the balance of the cost of any Excess Work upon receipt of the corresponding invoice from the Maintenance Center(s) (or refund by electronic transfer within [*], any excess payment received).

 

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  8.4. AAH will pay the FHA Service Charge within [*] of the end of the applicable month. AAH will pay all other invoices submitted by IAE pursuant to this FHA within [*] of receipt thereof. AAH undertakes that IAE shall receive the full amount of payments falling due under this Clause 8, without any withholding or deduction whatsoever.

 

  8.5. All payments under this Clause 8 shall be made by electronic transfer and shall be deposited not later than the due date of payment with:

Bank of America

1185 Avenue of the Americas

New York, NY 10038-4924

Account No.: 385002859903

ABA No.: 026009593

SWIFT Code: BOFAUS3N

CHIPS No.: 0959

or to such other account as IAE may from time to time designates in writing, which designation shall be effective upon receipt by AAH of such notice.

 

  8.6 Should AAH fail to make payment to IAE as set forth in this Clause 8, then, notwithstanding any rights which IAE may have in contract or in law, IAE reserves the right to (a) assess interest on such late payment at the rate [*] per annum on the outstanding amount from the date the payment was due to be made until the date such payment is received by IAE and (b) stop all work on any and all Eligible Engines then currently at the Maintenance Center(s) pursuant to this FHA when any such late payment is [*] or more past due.

“LIBOR” shall mean the average (rounded upward, if necessary, to the nearest [*] of the offered rates for six-month deposits in United States dollars which appear on Reuters Screen LIBO Page, provided , that if no such rates appear (or in the event of manifest error in the rates appearing on the Reuters Screen LIBO Page) then the average (rounded upward, if necessary to the nearest [*] of the offered rates for six-month deposits in United States dollars quoted by the principal London offices of three major international commercial banks chosen by IAE in an amount that is representative for a single transaction in the London interbank market at the time.

 

CLAUSE 9 TAXES AND LEVIES

In addition to amounts stated to be payable by AAH pursuant to this FHA, AAH shall pay:

 

  9.1 any and all taxes (excluding any income, gains, or excess profit, franchise and similar taxes, and taxes which would not have been imposed had IAE not through its gross negligence or willful misconduct failed to comply with applicable regulations or filing requirements, hereinafter referred to as “Excluded Taxes”) which may be imposed by any taxing authority arising from IAE’s performance under this FHA;

 

  9.2 any and all taxes (other than Excluded Taxes) payable by IAE in connection with contracts for goods and/or work with Maintenance Center(s) for or in connection with Eligible Engines;

 

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  9.3 any and all taxes (other than Excluded Taxes) payable by IAE pursuant to contracts for services with repair vendors for or in connection with Eligible Engines.

 

CLAUSE 10 PERIOD OF FHA

 

  10.1

This FHA became effective on April 23 rd 1999 and will remain in effect for the following coverage periods commencing from the date of entry into service of each Eligible Engine:

For twenty-two (22) Eligible Engines: Sixteen (16) Years
For forty (40) Eligible Engines: Twelve (12) Years
For up to one hundred forty seven (147) Eligible Engines: Ten (10) Years

The coverage period for each Eligible Engine shall be determined as follows:

 

  (a) At or before the later of (i) the time the Eligible Engine enters a Maintenance Center for its second off-wing hot section restoration, or (ii) the eighth anniversary of the date of entry into service of the Eligible Engine, AAH shall designate whether the Eligible Engine shall be covered under the FHA either for (A) a period of ten years (a “Ten-Year Engine”) or (B) a period longer than ten years. If at the time of such designation, AAH determines that an Eligible Engine shall be covered under the FHA for a period longer than ten years, AAH may, but need not, designate whether the Eligible Engine will be covered under the FHA for twelve years (a “Twelve-Year Engine”) or sixteen years (a “Sixteen-Year Engine”).

 

  (b) If AAH has not designated an Eligible Engine as a Ten-Year Engine, a Twelve-Year Engine or a Sixteen-Year Engine pursuant to clause (a) above, then at or before the eleventh anniversary of the date of entry into service of the Eligible Engine, AAH shall designate whether the Eligible Engine shall be a Twelve-Year Engine or a Sixteen-Year Engine.

 

  (c) Notwithstanding anything hereinabove to the contrary, (i) any Eligible Engine that is no longer operated by a Grupo TACA Airline on the tenth anniversary of the date of entry into service of such Eligible Engine shall automatically be deemed to be a Ten-Year Engine, and (ii) any Eligible Engine that (A) was not previously designated by AAH as a Ten-Year Engine, and (B) is no longer operated by a Grupo TACA Airline on the twelfth anniversary of the date of entry into service of such Eligible Engine shall automatically be deemed to be a Twelve-Year Engine.

 

CLAUSE 11 WARRANTIES

 

  11.1. If IAE fails to comply with the performance criteria specified in Clause 3.1 above, IAE will, as its sole responsibility for such failure, undertake, at its sole cost and expense, all work necessary to enable the corresponding Eligible Engine to meet such criteria.

 

  11.2.

IAE shall warrant Excess Work to AAH and Grupo Taca Airlines to the same extent that the Maintenance Center(s) warrants the same to IAE. Transportation charges for the return of defectively serviced goods to IAE or the Maintenance Center(s) (or, if AAH selects the transportation option, to Miami, Florida USA or such other location as mutually agreed) and their reshipment to AAH and risk of loss thereof

 

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  will be borne by IAE only if such goods are returned in accordance with written shipping instructions from IAE provided that IAE shall have provided such written shipping instructions in a timely manner.

 

  11.3. IAE warrants to AAH and the Grupo Taca Airlines that so long as AAH complies with its obligations hereunder, that IAE will convey good and clear title to the new Parts sold hereunder. IAE’s liability and the airlines’ remedy under this warranty are limited to the removal of any title defect or, at the election of IAE, to the replacement of the new 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 Clause 11.5 below.

 

  11.4 [*]

 

  11.5 IAE shall, subject to the conditions set out in this Clause and as the sole liability of IAE in respect of any claims for infringement of intellectual property rights, indemnify AAH and the Grupo Taca Airlines against any claim that the use of any of the Supplies by Grupo Taca Airlines within any country to which at the date of such claim the benefits of Article 27 of the Convention on International Civil Aviation of 7th December l944 (The Chicago Convention) and/or the International Convention for the Protection of Industrial Property apply, infringes any patent, design, or model duly granted or registered provided, however, that IAE shall not be liable to Grupo Taca Airlines for any consequential damage or any loss of use of the Supplies or of the Aircraft in which the Supplies may be incorporated arising as a result directly or indirectly of any such claim.

 

  11.5.1 Grupo Taca Airlines will give prompt notice in writing to IAE of any such claim whereupon IAE shall have the right at its own expense to assume the defense of or to dispose of or to settle such claim in its sole discretion. Grupo Taca Airlines will give IAE all reasonable assistance and IAE will reimburse Grupo Taca Airlines for its reasonable out-of-pocket expenses for providing such assistance to IAE. Grupo Taca Airlines will not by any voluntary act or omission knowingly do anything which may directly or indirectly materially prejudice IAE in this connection.

 

  11.5.2 IAE shall at its option either: (1) substitute for any infringing Supplies substantially equivalent non-infringing supplies; or (2) procure for Grupo Taca Airlines the right to use any infringing Supplies; or (3) modify any infringing Supplies so they become non-infringing.

 

  11.5.3 The indemnity contained in this Clause 11.5 above shall not apply to claims for infringement in respect of (i) Supplies manufactured to the specific design instructions of Grupo Taca Airlines; (ii) Supplies not of IAE design (but IAE shall in the event of any claim for infringement pass on to AAH or Grupo Taca Airlines so far as it has the right to do so the benefits of any indemnity given to IAE by the designer, manufacturer or supplier of such Supplies); (iii) the manner or method in which any of the Supplies is installed in the Aircraft; or (iv) the result of any combination of any of the Supplies with any item or items other than Supplies.

 

  11.6 EXCLUSIVE WARRANTIES AND REMEDIES

AAH and the Grupo Taca Airlines accept that the Warranties granted to AAH and the Grupo Taca Airlines in this Clause 11 are expressly in lieu of, and AAH and the Grupo

 

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Taca Airlines hereby waive, all other remedies, conditions and warranties, expressed or implied including without limitation, ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, and all other obligations and liabilities whatsoever of IAE and of its shareholders whether in contract or in tort or otherwise for any defect, deficiency, failure, malfunctioning or failure to function of any Eligible Engine, or any service or Supplies provided hereunder. AAH and the Grupo Taca Airlines agree that neither IAE nor any of its shareholders shall be liable to AAH upon any claim therefor or upon any claim howsoever arising out of this FHA, whether in contract or in tort or otherwise, except as expressly provided in the said Warranties, and AAH and the Grupo Taca Airlines assume all risk and liability whatsoever arising out of this FHA not expressly assumed by IAE in the said Warranties.

The remedies of AAH and the Grupo Taca Airlines shall be limited to those provided herein to the exclusion of any and all other remedies including, without limitation, incidental or consequential damages. No agreement varying or extending the foregoing warranties, remedies or this limitation will be binding upon IAE unless in writing, signed by a duly authorized officer of IAE.

Except as otherwise expressly stated in this FHA, notwithstanding the foregoing, nothing herein shall be deemed to limit the warranties given by IAE to AAH or the Grupo Taca Airlines in the Support Contract and, without duplication, the warranties set forth herein are in addition to those set forth therein.

 

CLAUSE 12 EXCUSABLE DELAYS

IAE shall not be charged with any liability for delay in the performance of any of its obligations when such delay is caused by 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, any cause beyond the reasonable control of IAE or delays of suppliers caused by the same. To the extent that such causes actually delay performance on the part of IAE, the time for the performance shall be extended for as many days as are required to obtain removal of such causes. This provision shall not, however, relieve IAE from using its efforts to avoid or remove such causes and continue performance with reasonable dispatch whenever such causes are removed.

Should an excusable delay exceed [*] in duration, AAH shall have right to terminate this FHA (with no right of reinstatement). Should AAH elect this option, either the Maintenance Cost Guarantee set forth in the Support Contract or the Parts Cost Guarantee set forth in the Support Contract shall be effective retroactive as if the Guarantee were selected instead of the FHA.

 

CLAUSE 13 AMENDMENT

This FHA shall not be amended, changed, or modified in any way other than by agreement in writing, signed by the parties hereto after the date of this FHA, which is expressly stated to amend this FHA.

 

CLAUSE 14 ASSIGNMENT

Neither party may assign any of its rights or obligations hereunder without the written consent of the other party, except that IAE may assign any or all of its rights and/or obligations hereunder to any wholly owned subsidiary of IAE or any of IAE’s shareholders. Any assignment made in violation of this Clause 14 shall be null and void.

 

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Notwithstanding the foregoing, the parties agree to negotiate in good faith the potential assignment of this FHA taking into consideration each parties’ respective interests and needs. IAE understands that AAH desires this FHA be assigned to a special purpose corporation. IAE agrees not to unreasonably withhold or delay its consent to any potential assignment.

 

CLAUSE 15 EXHIBITS

In the event of any conflict or discrepancy between the Exhibits (which are hereby incorporated by reference as part of this FHA) and the Clauses of this FHA, the Clauses of this FHA shall prevail.

 

CLAUSE 16 HEADINGS

Captions, clause headings, and the index are for convenience of reference only and shall not be deemed or construed in any way as forming a part of this FHA, nor shall they govern or affect the interpretation of the language or provisions of this FHA.

 

CLAUSE 17 NOTICES

Any notice to be served pursuant to this FHA shall be in the English language and will be sent by registered mail, recognized international courier, or by facsimile (with the original notice sent by registered mail or internationally recognized overnight courier) to:

In the case of IAE:

IAE International Aero Engines AG

IAE Building

400 Main Street, M/S 121-10

East Hartford, Connecticut 06108

United States of America

Facsimile No.: (860) 565-5220

Attention: Chief Legal Officer

In the case of AAH:

Atlantic Aircraft Holdings Limited

c/o The Winterbotham Trust Company

Bolam House

King & George Streets

Nassau, Bahamas

Facsimile No.: (242) 356-9432

Attention: Directors

with a copy to:

TACA International Airlines, S.A.

Avenida El Espino y Boulevard Sur

Santa Elena, Antiguo Cuscatlan

La Libertad, El Salvador

Fax No. + 503 2298 - 0827

 

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Attention: Senior Vice President and Chief Financial Officer

with a copy to:

Aeromantenimiento, S.A.

Aeropuerto Internacional El Salvador

San Luis Talpa

La Paz, El Salvador

Facsimile No.: +503-339-9092

Attention: Director of Quality Control and Technical Services

or in each case to such other place of business as may be notified from time to time by the receiving party.

 

CLAUSE 18 EXCLUSION OF OTHER PROVISIONS AND PREVIOUS UNDERSTANDINGS

 

  18.1. This FHA is the sole and entire agreement of the parties with respect to the subject matter hereof and shall apply to the exclusion of any other provisions on or attached to or otherwise forming part of any order form of a Grupo Taca Airline, or any acknowledgment or acceptance by IAE, or of any other document which may be issued by either party relating to such services.

 

  18.2. The parties agree that neither of them have placed any reliance whatsoever on any representations, agreements, statements or understandings made prior to the signature of this FHA, whether orally or in writing, relating to such services, other than those expressly incorporated in this FHA, which has been negotiated on the basis that its provisions represent their entire agreement relating to such services and shall supersede all such representations, agreements, statements and understandings.

 

CLAUSE 19 TERMINATION

Each party shall have the option, at its sole discretion, to terminate this FHA upon the occurrence of any of the following events: (a) a receiver or trustee is appointed for any of the other party’s property, or (b) the other party is adjudicated or voluntarily becomes a bankrupt under any bankruptcy or winding up laws or other similar legislation, or (c) the other party becomes insolvent or makes an assignment for the benefit of creditors.

Should IAE be in material default of its obligations hereunder, AAH shall have the rights set forth in Clause 11.4 above.

 

CLAUSE 20 NEGATION OF WAIVER

Failure by either party to enforce any term of this FHA shall not constitute a waiver of such term.

 

CLAUSE 21 SEVERABILITY AND PARTIAL INVALIDITY

If any provision of this FHA or the application thereof to either party shall be invalid, illegal or unenforceable to any extent, the remainder of the FHA and the application thereof shall not be affected and shall be enforceable to the fullest extent permitted by law.

 

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CLAUSE 22 GOVERNING LAW

This FHA shall be construed and the performance thereof determined in accordance with the laws of the State of New York, U.S.A. (except for its conflict of laws provisions). The parties agree to exclude the application of the United Nations Convention on Contracts for the International Sale of Goods.

 

CLAUSE 23 LIMITATION OF LIABILITY

In no event shall either party be liable or otherwise responsible for any incidental, consequential or secondary damages or for any similar cost, damage or expense in connection with any enforcement proceeding or action hereunder.

 

CLAUSE 24 CONFIDENTIALITY

Each of IAE, AAH and the Grupo Taca Airlines acknowledge and understand that certain commercial and financial information contained in or provided in connection with this FHA is considered by the other to be confidential. IAE and AAH each hereby agree, for the benefit of the other, that it will treat the content of this FHA as confidential and will not, without the prior written consent of the other, disclose or cause to be disclosed the terms hereof to any person except to its legal and financial advisors and auditors, or except as may be required by applicable law or governmental regulation, including federal and state securities laws, or pursuant to an order issued by any court or governmental authority having jurisdiction over AAH, the Grupo Taca Airlines or IAE as the case may be.

 

CLAUSE 25 ELIGIBLE ENGINE OPERATION BY GRUPO TACA AIRLINES

IAE and AAH agree that Eligible Engines may be operated by any one of the Grupo Taca Airlines. Irrespective of the Grupo Taca Airline operating any Eligible Engine, for purposes of this FHA, all Eligible Engines shall be treated as if operated by AAH.

 

CLAUSE 26 ADDITION AND DELETION OF ELIGIBLE ENGINES

IAE and AAH agree that any V2500-A5 engine other than Eligible Engines operated by any one of the Grupo Taca Airlines may become an Eligible Engine within this FHA at charges and conditions which shall be mutually agreed by the parties. IAE agrees to determine the charges using the same methodology used in determining the charges for the other Eligible Engines.

Such engines shall be incorporated into this FHA by a written and signed Side Letter to this FHA. The amendment shall include the engine serial number, charges, any other conditions, and the applicable V2500 Support Contract covering the respective engine. In the event that the applicable V2500 Support Contract is not already included in the definition of “Support Contract” set forth in Clause 1.17 of this FHA, that definition shall be automatically amended to include the applicable V2500 Support Contract.

Eligible Engines which are not operated by one of the Grupo Taca Airlines shall not be covered by this FHA unless IAE shall agree otherwise in writing, which agreement shall not be unreasonably withheld. Engines operated on aircraft which are wet-leased (leased to another entity with a Grupo Taca Airline crew) shall be deemed to be operated by a Grupo Taca Airline.

 

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IN WITNESS WHEREOF the parties hereto have caused this Amended and Restated FHA to be signed on their behalf by the hands of their authorized officers the day and year first before written:

 

For IAE International Aero Engines, AG       For Atlantic Aircraft Holdings Limited

 

     

 

Name       Name

 

     

 

Title       Title

 

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EXHIBIT 1

RESERVED

 

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EXHIBIT 2

ESCALATION FORMULA

Any unit base price or other sum expressed to be subject to escalation shall be calculated as a two step process: first, calculate base prices to June 2001 using SIC Code AHE 3724 as the labor index point in the escalation formula, and second, escalate from June 2001 to the delivery month using NAICS Code 336411 as the labor index point in the escalation formula.

 

1. Calculation

Step 1: Escalation formula through June 2001

 

Pr    =    Pb [*]
Where:
Pr    =    Base Contract Price or other Sum calculated to June 2001 rounded to the nearest dollar.
Pb    =    The Basic Contract Price or other Sum.
Lo    =    The “Average Hourly Earnings of Aircraft Engine and Engine Parts Production Workers” SIC Code 3724 published by the Bureau of Labor Statistics in the U.S. Department of Labor for the month preceding the Base Month by four months.
L    =    The “Average Hourly Earnings of Aircraft Engine and Engine Parts Production Workers” SIC Code 3724 for the month preceding June 2001 by four months.
Mo    =    The “Producer Price Index, Code 10, For Metals and Metal Products” published by the Bureau of Labor Statistics in the U.S. Department of Labor for the month preceding the Base Month by four months.
M    =    The “Producer Price Index, Code 10, For Metals and Metal Products” for the month preceding June 2001 by four months.
Eo    =    The “Producer Price Index, Code 5, For Fuel and Related Products and Power” published by the Bureau of Labor Statistics in the U.S. Department of Labor for the month preceding the Base Month by four months.
E    =    The “Producer Price Index, Code 5, For Fuel and Related Products and Power” for the month preceding June 2001 by four months,.
   The values of the factors [*]
Lo            Mo             Eo
   respectively, shall be determined to the nearest fourth decimal place. If the fifth decimal is five or more, the fourth decimal place shall be raised to the next higher number.

The Basic Contract Prices are subject to escalation as set forth herein from the Base Month of January 1997.

 

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Step 2 – Escalation formula for period post June 2001

 

Pi    =    Pr [*]
      Lo            Mo             Eo
Where:
Pi    =    The Invoice price or escalated sum rounded to the nearest dollar.
Pr    =    The calculated June 2001 Basic Contract Price or other escalated Sum, as calculated in Step 1 above.
Lo    =    The “Employment Cost Index (NAICS) Wages and Salaries for Aircraft Manufacturing, (NAICS Code 336411) CIU2023211000000I” published by the Bureau of Labor Statistics in the U.S. Department of Labor for the month preceding June 2001 by four months.
L    =    The “Employment Cost Index (NAICS) Wages and Salaries for Aircraft Manufacturing, (NAICS Code 336411) CIU2023211000000I” for the month preceding the month of delivery or other date of determination by four months.
Mo    =    The “Producer Price Index, Code 10, For Metals and Metal Products” published by the Bureau of Labor Statistics in the U.S. Department of Labor for the month preceding June 2001 by four months.
M    =    The “Producer Price Index, Code 10, For Metals and Metal Products” for the month preceding the month of delivery or other date of determination by four months.
Eo    =    The “Producer Price Index, Code 5, For Fuel and Related Products and Power” published by the Bureau of Labor Statistics in the U.S. Department of Labor for the month preceding June 2001 by four months.
E    =    The “Producer Price Index, Code 5, For Fuel and Related Products and Power” for the month preceding the month of delivery or other date of determination by four months.

 

2. The values of the factors [*]

Lo            Mo             Eo

respectively, shall be determined to the nearest fourth decimal place. If the fifth decimal is five or more, the fourth decimal place shall be raised to the next higher number.

 

3. If the U.S. Department of Labor ceases to publish the above statistics or modifies the basis of their calculation, then IAE may substitute any officially recognized and substantially equivalent statistics.

 

4. The Basic Contract Prices contained in this Exhibit B-2 are subject to escalation from a Base Month of January 1997 to the month of delivery using Lo, Mo and Eo values for September 1996.

 

5. If the application of the formula contained in this Exhibit B-3 results in a Purchase Price which is lower than the Basic Contract Price, the Basic Contract Price will be deemed to be the Purchase Price for such Supplies.

 

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EXHIBIT 3

MONTHLY STATEMENT OF THRUST

USAGE AND HOUR/CYCLE UTILIZATION

 

TACA

         V2500 Engines

Engine Operating Perameters

   FHA    DATE

ESN

  

A/C

Reg/Pos

   Derate %
Monthly Average
   EGT Margin (oC)
5 first
   EGT Margin (oC)
5 last
   TAT
Monthly Average
   ISA + ___
Monthly Average
                 
                 
                 

 

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EXHIBIT 4

ENGINE MANAGEMENT PLAN

In addition to the responsibilities stated in Clauses 2A.3 and 2A.4 of the FHA, IAE will provide AAH commercially reasonable assistance in all material aspects of the management of maintenance for Eligible Engines including, but not limited to, establishing: (i) an engine removal schedule; (ii) shop visit workscopes; and (iii) an LLP Management Plan.

 

1. Engine Removal Schedule

 

  1.1. The goals of the engine removal schedule will be to: (i) maximize the time on-wing of Eligible Engines; (ii) optimize the time interval between shop visits in order to assist IAE in managing its subcontractors’ shopload, to reduce the Grupo TACA Airlines’ short-term need for spare and leased engines, and to minimize cash flow demands; (iii) reasonably assist the Grupo TACA Airlines in meeting redelivery conditions for Eligible Engines installed on Aircraft subject to operating leases; (iv) reasonably assist the Grupo TACA Airlines in minimizing planned Eligible Engine removals during peak operating seasons; and (v) include stagger of serviceable engines between thrust ratings in order to match LLP life and material life.

 

  1.2. The engine removal schedule will be based on a reasonable target MTBR which shall be substantiated by IAE (the “Target MTBR”). The Target MTBR will be reviewed annually to adjust engine removal forecasts.

 

  1.3. The engine removal schedule will be reviewed quarterly and will be adjusted to accommodate any IAE fleet campaigns and special programs.

 

  1.4. AAH will inform IAE of the redelivery dates of Eligible Engines installed on Aircraft subject to operating leases.

 

  1.5. If an engine that is in a serviceable condition is removed for off-wing hot section restoration solely to meet return conditions, AAH will pay the Off-Wing Restoration Charge for the actual hours used plus any remaining hours to the then-established Target MTBR. If the operating parameters of any such engine materially differ from AAH’s fleet averages, the Target MTBR of such engine for such purposes will be calculated based on the actual operating parameters of such engine.

 

2. Shop Visit Workscopes

 

  2.1. The goals of establishing the shop visit workscopes will be to: (i) optimize the cost per engine flown hour; and (ii) reasonably assist the Grupo TACA Airlines in meeting redelivery conditions for Eligible Engines installed on Aircraft subject to operating leases; provided, however, such redelivery conditions are not materially different than the maintenance that would have been normally performed under the FHA. Any work performed to meet redelivery conditions that is reasonably determined by IAE to be in excess of work normally undertaken pursuant to the FHA will be considered Excess Work.

 

  2.2. AAH will inform IAE from time to time of the redelivery conditions for Eligible Engines installed on Aircraft that are the subject of operating leases and the expected redelivery dates of such Eligible Engines.

 

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3. LLP Management Plan

 

  3.1. The goal of the LLP Management Plan will be to minimize costs associated with satisfying redelivery conditions for Eligible Engines installed on Aircraft that are the subject of operating leases.

 

  3.2. AAH shall inform IAE from time to time of the expected lease return dates for Eligible Engines installed on Aircraft that are the subject of operating leases and the relevant LLP return conditions and build standard requirements agreed upon by the Grupo TACA Airline(s) and lessor.

 

  3.3. Subject in all events to the obligations of the Grupo TACA Airlines lessee under any operating lease to which an Eligible Engine is subject, whenever reasonably possible, AAH will allow IAE to install used LLP’s in Eligible Engines installed on Aircraft subject to operating leases at shop visits made pursuant to the FHA. AAH is responsible for providing LLP’s to IAE at no charge to IAE. All used LLP’s that are installed in Eligible Engines shall be in serviceable condition and shall be furnished to IAE with complete “back to birth” records. IAE will make all commercially reasonable efforts to identify sources of used LLP’s to AAH for use in the LLP Management Plan.

 

  3.4. The LLP Management Plan will be reviewed at least annually.

 

THIS DOCUMENT CONTAINS INFORMATION PROPRIETARY TO IAE
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