þ
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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38-1747023
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(State or Other Jurisdiction of
Incorporation or Organization)
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(I.R.S. Employer
Identification No.)
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2800 Executive Way
Miramar, Florida
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33025
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(Address of Principal Executive Offices)
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(Zip Code)
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Class
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Number of Shares
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Common Stock, $0.0001 par value
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72,670,673
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SPIRIT AIRLINES, INC.
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Date: February 20, 2014
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By:
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/s/ B. Ben Baldanza
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B. Ben Baldanza
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President and Chief Executive Officer
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IAE INTERNATIONAL AERO ENGINES AG
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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
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SPIRIT AIRLINES, INC.
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a corporation organized and existing under the laws of Delaware, whose principal place of business is at 2800 Executive Way, Miramar, Florida 33025 (hereinafter called “
Spirit
”).
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A.
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As of the date hereof, (i) Spirit has acquired or has firmly ordered an aggregate of forty (40) new Airbus A320 family aircraft, all powered by, or to be powered by, V2500-A5 engines, (ii) Spirit has acquired or firmly ordered an aggregate of eleven (11) new V2500-A5 spare engines from IAE all of which are or will be operated by Spirit and (iii) Spirit has the option to purchase four (4) additional new V2500-A5 spare engines from IAE
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B.
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IAE and Spirit have entered into a V2500
®
General Terms of Sale dated March 1, 2005, as amended from time to time, including all side letters and amendments thereto, for the provision of V2500-A5 engines, modules, spare parts, tools, equipment, and product support services for the support and operation of certain V2500-A5 engines (the “
2005 GTA
”);
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C.
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Spirit and IAE subsequently signed the V2500 Propulsion System and FHA Proposal dated October 27, 2006, as amended from time to time, including all side letters and amendments thereto, which outlines the financial support and support services for Spirit’s then-incremental order for A320 family aircraft powered by V2500-A5 engines and order for V2500-A5 spare engines (the “
2006 Proposal
”);
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D.
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IAE and Spirit have entered into a V-Services
SM
Fleet Hour Agreement dated October 1, 2013 for the provision of certain off-wing maintenance for the V2500-A5 engines operated by Spirit (the “
Fleet Hour Agreement
”);
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E.
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IAE and Spirit hereby agree to amend and restate the 2005 GTA in its entirety to incorporate the provisions contained in the 2006 Proposal; and
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F.
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IAE and Spirit now wish to agree upon terms whereby IAE will supply to Spirit V2500 engines, modules, spare parts, special tools, ground equipment, and product support services for the support and operation of the V2500 Engines.
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1.
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Definitions
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1.1
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“Aircraft” shall mean the forty (40) new Airbus A320 family aircraft powered by new Engines firmly ordered (including nineteen (19) A320 family aircraft already delivered as of the date of the Contract) and being acquired by Spirit from Airbus for delivery as set forth in Exhibit B-1 to this Contract.
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1.2
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“
Airbus
” shall mean Airbus SAS, with its principal place of business at 1, Rond Point Maurice Bellonte, 31707 Blagnac Cedex, France, together with its successors and assigns.
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1.3
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“
Certification Authority
” shall mean the United States Federal Aviation Administration.
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1.4
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“
Change Order
” shall have the meaning set forth in Section 2.3.1 hereto.
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1.5
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“
Engine(s)
” shall mean the IAE V2500 aero engine described in the applicable Specification(s).
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1.6
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“
Initial Provisioning
” shall mean the establishment by Spirit of an initial stock of Spare Parts, Support Equipment, and Vendor Parts.
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1.7
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“
Initial Provisioning Data
” shall mean information supplied by IAE to Spirit for Initial Provisioning purposes.
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1.8
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“
Initial Provisioning Orders
” shall mean orders for Spare Parts and Support Equipment for the purpose of Initial Provisioning.
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1.9
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“
Lead Time
” shall mean the period specified in the Spare Parts Catalog that represents the minimum time required between acceptance by IAE of an order by Spirit for Spare Parts and commencement of delivery of such Spare Parts.
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1.10
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“
Service Bulletins
” shall mean those service bulletins containing advice and instructions issued by IAE to Spirit from time to time in respect of Engines.
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1.11
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“
Spare Engines
” shall mean the Firm Spare Engines as defined in Section 2.2.1 and any additional new Spare Engines to be purchased in accordance with Section 2.2.2.
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1.12
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“
Spare Parts
” shall mean spare parts for Engines as identified in the Spare Parts Catalog, excluding the items listed in the Specification as being items of supply by Spirit.
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1.13
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“
Spare Parts Catalog
” shall mean the catalog published by IAE from time to time providing a description, Lead Time and price for Spare Parts available for purchase from IAE.
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1.14
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“
Specification(s)”
shall mean the IAE Engine Specification(s) set forth in Exhibit A to this Contract, as the same may be amended, supplemented and/or updated from time to time.
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1.15
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“
Supplies
” shall mean V2500 engines, Spare Parts, Vendor Parts, and Support Equipment.
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1.16
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“
Support Equipment
” shall mean tools, and all equipment (including handling, transportation and ground equipment) to be supplied pursuant to this Contract for use with the Aircraft and not for installation on the Aircraft. Support Equipment does not constitute Spare Parts.
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1.17
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“
Vendor Parts
” shall mean parts not manufactured by IAE, including accessories, described as “Vendor Parts” in Initial Provisioning Data. Vendor Parts do not constitute Spare Parts
.
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2.
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Installed and Spare Engine Purchase Commitments
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2.1
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Agreement to Purchase Aircraft from Airbus
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2.2
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Agreement to Purchase Spare Engines from IAE
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2.2.1
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Spirit hereby places a firm order with IAE for the purchase of eleven (11) new spare Engines (including eight (8) new spare Engines that have already been delivered as of the date of the Contract) (the “Firm Spare Engines”) for delivery according to the schedule set forth in Exhibit B-2 to this Contract, as the same may be amended, supplemented and/or updated from time to time.
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2.2.2
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Spirit, at its option, may also purchase and place up to four (4) additional new Spare Engines (the “Option Spare Engines”) on firm order with IAE, provided that Spirit gives written notice to IAE at least ***** prior to the delivery date for each such Option Spare Engine as set forth in Exhibit B-2, as the same may be amended, supplemented and/or updated from time to time. IAE and Spirit shall promptly amend this Contract to revise Exhibit B-2 to reflect the firm order of Option Spare Engines from IAE.
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2.2.3
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Except as otherwise set forth in the following paragraph, Spirit agrees to purchase an Engine storage bag and transportation stand from IAE for delivery with each Spare Engine. The prices for such equipment are set forth in Exhibit B-2.
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2.3
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Type Approval and Changes in Specification
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2.3.1
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The Spare Engines will be manufactured to the standards set forth in the Specification. After the date of this Contract, the Spare Engines may be varied from the standards set forth in the Specification and other IAE manufacturing specifications from time to time by written change orders (each a “Change Order”), which shall set forth in detail:
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(a)
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The changes to be made in the Spare Engines; and
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(b)
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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.
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2.3.2
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IAE may make any changes in the Spare Engines that do not adversely affect the Specification (including but not limited to performance and weight), interchangeability of the Spare Engines in the airframe, prices or dates of delivery of the Spare Engines. In the case of such permitted changes, a Change Order shall not be required or if issued shall not be binding until signed by IAE and Spirit.
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2.3.3
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At the time of delivery of the Spare Engines there is to be in existence an FAA-issued “Type Approval Certificate” for the Spare Engines in accordance with the provisions of the Specification.
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2.3.4
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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”). Subject to Section 2.3.2 above, IAE and Spirit 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.
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2.3.5
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The price of any Change Order is to be paid by IAE in the case of changes required to conform to the Current Rules and by Spirit in any other case.
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2.4
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Inspection and Acceptance
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2.4.1
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IAE shall ensure that Spare Engines conform to the Specification through the maintenance of procedures, systems and records approved by the Certification Authority. An FAA-issued “Authorized Release Certificate” (FAA Form 8130-3, Airworthiness Approval Tag) or “Certificate of Conformity” (as the case may be) will be issued and signed by personnel authorized for such purposes.
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2.4.2
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Upon delivery pursuant to Section 2.5.1 below and the issue of an “Authorized Release Certificate” (FAA Form 8130-3, Airworthiness Approval Tag) or a Certificate of Conformity pursuant to Section 2.4.1 above and IAE’s representation that the Engine storage bag and transportation stand, if purchased, conforms to the applicable purchase order, Spirit shall be deemed to have accepted the Spare Engines (and Engine storage bag and transportation stand, if purchased from IAE), and that the Spare Engines conform to the Specification. Spirit’s acceptance will, however, in no way prejudice its valid warranties and support rights under this Contract or the Fleet Hour Agreement. IAE shall, upon written request from Spirit and subject to the permission of the appropriate governmental authorities, arrange for Spirit 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.
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2.4.3
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If Spirit refuses, is unable to accept, or otherwise hinders delivery of any Spare Engine that satisfies the requirements set forth herein, Spirit shall nevertheless pay or cause IAE to be paid therefore as if, for the purposes of payment only, the Spare Engines had been delivered.
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2.4.4
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In any of the cases specified in Section 2.4.3 above, Spirit shall also pay to IAE such reasonable sum as IAE shall require in respect of storage, maintenance and insurance of those Spare Engines.
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2.5
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Delivery, Shipping, Title and Risk of Loss or Damage
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2.5.1
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Provided Spirit has made payment in accordance with Section 2.7 below, IAE will deliver the Spare Engines (and Engine storage bag and transportation stand, if purchased from IAE), at its option, either Ex-Works (INCOTERMS 2000) Connecticut, United States of America or Ex-Works (INCOTERMS 2000) Dahlewitz, Germany, in accordance with the delivery schedule set out in Exhibit B-2 to this Contract.
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2.5.2
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Upon such delivery, title to and risk of loss of or damage to the Spare Engines (and Engine storage bag and transportation stand, if purchased from IAE) shall pass to Spirit.
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2.5.3
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Spirit will notify IAE at least thirty (30) days 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
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Price
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2.7
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Payment
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2.7.1
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Spirit will make payment for Spare Engines (and Engine storage bag and transportation stand, if purchased from IAE) in United States Dollars as follows:
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(a)
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*****
before the scheduled delivery of each of the Spare Engines, Spirit shall pay to IAE a non-refundable payment of
*****
of the Estimated Purchase Price of such Spare Engine.
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(b)
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*****
before the scheduled delivery of each of the Spare Engines, Spirit shall pay to IAE a non-refundable payment of
*****
of the Estimated Purchase Price of such Spare Engine.
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(c)
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Immediately prior to the delivery of each of the Spare Engines, Spirit shall pay to IAE the balance of the escalated purchase price of such Spare Engine, plus the purchase price of the Engine storage bag and transportation stand, if purchased from IAE.
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2.7.2
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IAE shall have the right to require Spirit to make additional payments in respect of price changes arising from the provisions of Section 2.3 above on a similar basis to that specified in Section 2.7.1 above.
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2.7.3
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Spirit shall pay the full amount of payments falling due under this Section 2.7, without any withholding or deduction whatsoever.
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2.7.4
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All payments under this Section 2.7 shall be made by wire transfer and shall be deposited not later than the due date of payment with:
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2.7.5
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For the purpose of this Section 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 Section 2.7.4 above or as otherwise notified to Spirit in writing by IAE.
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2.7.6
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If Spirit fails to make any payment pursuant to this Section 2 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 equal to the greater of ***** per annum or the New York Citibank prime rate 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 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. Notwithstanding the foregoing, Spirit shall not be liable for interest in respect of any overdue amount which is being contested in good faith.
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2.7.7
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For the purpose of this Section 2.7, the “Estimated Purchase Price” of any of the Spare Engines shall be calculated in accordance with the following formula:
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3.
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Spare Parts Provisions
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3.1
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Intent and Term
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3.1.1
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For as long as Spirit owns and operates one or more Aircraft in regular commercial service and is not in breach of any material obligation to IAE under this Contract, IAE shall use commercially reasonable efforts to make available adequate supplies of Spare Parts for sale to Spirit under this Contract. In consideration thereof, except as otherwise provided under Section 3.1.2 below, Spirit shall buy from IAE, and IAE shall sell to Spirit, all of Spirit's requirements of the following:
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(a)
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Spare Parts and Support Equipment necessary to support Spirit’s operation of the Aircraft; and
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(b)
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Vendor Parts for which direct supply arrangements between the manufacturers of such Vendor Parts and Spirit cannot be reasonably established. Spirit shall notify IAE in writing not less than the greater of (i) the lead time of the vendor as specified in the respective vendor manual or (ii) three (3) months before scheduled delivery requested by Spirit that Spirit intends to purchase such Vendor Parts from IAE.
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3.1.2
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Purchase by Spirit from Others
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3.2
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ATA Standards
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3.3
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Stocking of Spare Parts
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3.4
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Lead Times
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3.4.1
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IAE shall endeavor to deliver replenishment Spare Parts within the Lead Time specified in the IAE Spare Parts Catalog, except for certain major Spare Parts that are designated in the Spare Parts Catalog as being available at prices and lead times to be quoted upon request. Support Equipment and Vendor Parts are available at prices and lead times to be quoted upon request.
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3.4.2
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If any order for replenishment Spare Parts shall call for a quantity materially in excess of Spirit's normal requirements, IAE shall notify Spirit and may request a special delivery schedule. If Spirit confirms that the full quantity ordered is required, delivery of the order shall be effected at delivery dates mutually acceptable to IAE and Spirit and the Lead Times provided by this Section shall not apply.
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3.4.3
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In an emergency, IAE shall use its reasonable efforts to deliver all Spare Parts within the time limits specified by Spirit. IAE will provide notice of the action to be taken on such orders within the following time periods from IAE's receipt of such notice and based on the type of order:
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(a)
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AOG (Aircraft on Ground) orders - within 4 hours;
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(b)
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Critical (imminent AOG or work stoppage) - within 24 hours;
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(c)
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Expedited (less than published or quoted lead time) - within 7 days.
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3.5
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Ordering Procedure
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3.5.1
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Orders for Spare Parts and Support Equipment may be placed by Spirit from time to time on an as-needed basis. Spirit shall give IAE as much notice as practicable of any change in its operation, including, but not limited to, changes in maintenance or overhaul arrangements affecting its requirements of Spare Parts, Support Equipment and including Vendor Parts.
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3.5.2
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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 Section 3.4.2 above, shall constitute an acceptance of the order under the terms of this Contract.
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3.5.3
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Standard package quantities shall be delivered and packed in accordance with the Spare Parts Catalog.
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3.6.1
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IAE shall be entitled to make modifications or changes to the Spare Parts ordered by Spirit hereunder provided that the modification has received the approval of the Certification Authority and modified Spare Parts shall be substituted for Spare Parts ordered. IAE shall promptly inform Spirit by means of 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 Spirit before delivery.
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3.6.2
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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 Spirit to be unacceptable and Spirit so states in writing to IAE within ninety (90) days of the transmittal date of the applicable Service Bulletin, in which case Spirit shall be entitled to place a single order for Spirit’s anticipated total requirement of pre-modified Spare Parts, at a price and delivery schedule to be agreed.
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3.6.3
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Unless Spirit notifies IAE in writing under the provisions of Section 3.6.2 above, IAE may supply at the expense of Spirit a modification of any Spare Part ordered (including any additional Spare Part needed to ensure interchangeability), provided that the modification has received the approval of the Certification Authority. The delivery of such Spare Parts shall begin on dates indicated by the applicable Service Bulletin. The delivery schedule shall be agreed at the time when orders for modifications are accepted by IAE.
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3.7
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Inspection
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3.7.1
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Conformance to the Specification of Spare Parts purchased hereunder will be assured by IAE through the maintenance of procedures, systems and records approved by the Certification Authority. Conformance documentation will be issued by IAE to Spirit and signed by IAE personnel authorized for such purpose.
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3.7.2
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Conformance of Support Equipment and Vendor Parts purchased pursuant to this Section 3 will be assured by IAE conformance documentation and/or Vendor conformance documentation, as applicable.
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3.7.3
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Upon the issuance of conformance documentation in accordance with Sections 3.7.1 or 3.7.2 above and delivery in accordance with Section 3.8.1 below, Spirit shall be deemed to have accepted the applicable Spare Parts, Support Equipment, and Vendor Parts, and that they conform to the applicable specification without prejudice to any of Spirit’s warranty and support rights under this Contract or any other right of Spirit under applicable law.
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3.8
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Delivery and Packing
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3.8.1
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IAE shall deliver Spare Parts, Support Equipment and Vendor Parts if such parts are purchased from IAE pursuant to this Section 3, Ex-Works (INCOTERMS 2000) the point of manufacture. Shipping documents and invoices shall be in accordance with ATA Specification 2000.
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3.8.2
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Upon such delivery as described in Section 3.8.1, title to and risk of loss of or damage to the Spare Parts, Support Equipment, and Vendor Parts shall pass to Spirit.
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3.8.3
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In accordance with ATA Specification 2000 requirements, Spirit shall advise IAE at time of order of its instructions as to the marking and shipping of the Spare Parts, Support Equipment and Vendor Parts.
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3.8.4
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The packaging of Spare Parts, Support Equipment, and Vendor Parts shall be in accordance with ATA Specification 300 Category 2 standard, unless deviations are otherwise agreed pursuant to Section 3.2 and shall be free of charge to Spirit. Category 1 standard packaging, if required by Spirit, shall be paid for by Spirit.
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3.9
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Prices
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3.9.1
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Prices of all Spare Parts, Support Equipment, and Vendor Parts shall be quoted in U.S. Dollars, in the Spare Parts Price Catalog, or Initial Provisioning Data, or in individual quotations. Such prices shall represent net unit prices, Ex-Works (INCOTERMS 2000), IAE point of manufacture according to Section 3.8.1 above.
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3.9.2
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Prices applicable to each order placed by Spirit hereunder shall be the prices in effect at the time of such order according to the terms of the Spare Parts Price Catalog.
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3.9.3
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IAE may from time to time adjust its prices for Spare Parts and Support Equipment upon not less than ninety (90) days prior written notice to Spirit. Any individual price errors in the calculation of prices may be corrected in good faith without advance notice to Spirit.
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3.9.4
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On request by Spirit, prices of Spare Parts, Support Equipment, or other materials not included in the Spare Parts Price Catalog shall be quoted within a reasonable time by IAE.
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3.10
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Payment
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3.10.1
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Payment for all purchases of Spare Parts, Support Equipment, and Vendor Parts under this Section 3 shall be made by Spirit to IAE *****. Payment for any other invoices arising under this Contract shall be made by Spirit to IAE *****.
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3.10.2
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Spirit undertakes that IAE shall receive payment in U.S. Dollars of the full amount of payments falling due under this Section 3.10, without any withholding or deduction whatsoever.
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3.10.3
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All payments under this Section 3.10 shall be made by wire transfer to, and shall be deposited not later than the due date of payment with:
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3.10.4
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For the purpose of this Section 3.10, payment shall only be deemed to have been made to the extent immediately available funds are received in the account specified in sub-Section 3.10.3 above or as otherwise notified by IAE in accordance with the terms of this Contract.
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3.10.5
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Notwithstanding Section 3.10.1 above, payments for all purchases of Spare Parts, Support Equipment and Vendor Parts shall be due from Spirit upon delivery, or at IAE's option prior to delivery of such items upon the occurrence of any of the following events: (a) a receiver or trustee is appointed for any of Spirit's property, or (b) Spirit is adjudicated or voluntarily becomes a bankrupt under any bankruptcy or winding up laws or other similar legislation, or (c) Spirit becomes insolvent or makes an assignment for the benefit of creditors, or (d) Spirit fails to make payment to IAE in accordance with any of Spirit's material obligations to IAE under this Contract or any other agreement with IAE, or (e) is in material default under any section of this Contract after receipt of written notice of such default and the expiration of any applicable cure period in respect thereof.
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3.10.6
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If Spirit fails to make any payment for any Spare Parts, Support Equipment, or Vendor Parts 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, at the rate of the greater of ***** or the New York Citibank prime rate plus ***** per annum, from the date such payment was due to the date such payment is made.
Notwithstanding the foregoing, Spirit shall not be liable for interest in respect of any overdue amount which is being contested in good faith.
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3.11
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Conflict
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4.
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Warranties, Guarantees and Liabilities
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4.1
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I
AE warrants to Spirit that, at the time of delivery, the Supplies sold hereunder will be free of defects in material and manufacture, and will conform substantially to applicable specifications and the rules and regulations of the Certificating Authority. IAE's liability and
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4.2
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In addition, IAE grants and Spirit accepts the following (all as set forth in Exhibit D, the “Warranties”):
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4.3
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IAE also grants and Spirit accepts the following (all as set forth in Exhibit E, the “Guarantees”):
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4.4
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The parties agree that the Warranties shall apply to any equipment that falls within the type 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 Spirit from whatsoever source including but not limited to any V2500 aero engines and any associated equipment therefor, and any parts for such engines and associated equipment that form part of any aircraft acquired from the manufacturer.
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4.5
|
***** It is not the intent, however, to duplicate benefits or remedies provided to Spirit 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 and Guarantees, Spirit agrees that it shall not be eligible to receive benefits or remedies from IAE if it stands to receive or has received duplicate 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 Spirit and any other party (such as a leasing company) as a result of the same event or cause.
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4.6
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IAE and Spirit agree that the following provisions shall apply to each of the Guarantees, unless otherwise expressly set forth therein.
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4.6.1
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Definitions and General Conditions
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4.6.2
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Specific Conditions
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(a)
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The rates and remedies in the Guarantees are predicated upon Spirit operating its Aircraft powered by Engines in accordance with the following operating conditions:
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(i)
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An annual average flight cycle of:
*****
hours for V2524-A5 powered Aircraft,
*****
hours for V2527-A5 powered Aircraft, and
*****
hours
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(ii)
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An annual average utilization of
*****
hours per V2524-A5 powered Aircraft,
*****
hours per V2527-A5 powered Aircraft, and
*****
hours per V2533-A5 powered Aircraft;
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(iii)
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An average engine thrust derate of:
*****
for V2524-A5 powered Aircraft,
*****
for V2527-A5 powered Aircraft, and
*****
for V2533-A5 powered Aircraft, all relative to the name plate thrust rating;
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(iv)
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An average ambient temperature for take-off no greater than:
*****
for V2524-A5 powered Aircraft,
*****
for V2527-A5 powered Aircraft, and
*****
for V2533-A5 powered Aircraft;
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(v)
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Spirit’s main base will be located at Fort Lauderdale, Florida, USA;
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(vi)
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Spirit acquiring all of the Aircraft and Firm Spare Engines as set forth in Exhibit B-1 and Exhibit B-2, as amended, supplemented and/or updated from time to time;
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(vii)
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Spirit maintaining a minimum ratio of
*****
Spare Engines to installed Engines for its Aircraft fleet;
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(viii)
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Spirit owning, operating, and maintaining the Aircraft and Engines in regular and frequent airline operation for the duration of the Guarantee period(s), in accordance with Airbus’, IAE’s, and other applicable OEM’s technical manuals and the MMP (including Engine rebuild requirements);
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(ix)
|
*****
; and
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(x)
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Spirit acquiring from IAE or other sources sufficient components, Spare Parts, and spare Engines at the levels mutually agreed by IAE and Spirit to maintain proper support of the Engines and Aircraft.
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(b)
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Should any of the above operating conditions not be met or if Spirit takes Option Aircraft or Option Spare Engines, IAE, acting in good faith and in consultation with Spirit, may make reasonable and appropriate adjustments to the Guarantees, with appropriate retroactive application, to address any deviations from such operating conditions.
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4.7
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SPIRIT ACCEPTS THAT THE WARRANTIES AND GUARANTEES GRANTED TO SPIRIT
UNDER SECTIONS 4.1 THROUGH 4.4 ABOVE, TOGETHER WITH THE EXPRESS REMEDIES PROVIDED TO SPIRIT
IN RESPECT OF THE SUPPLIES IN ACCORDANCE WITH THIS CONTRACT, ARE EXCLUSIVE AND ARE GIVEN BY IAE IN LIEU OF (A) ANY AND ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE; AND (B) ANY OBLIGATION, LIABILITY, RIGHT, CLAIM, OR REMEDY IN STATUTE, CONTRACT, TORT OR STRICT LIABILITY AGAINST OEM OR
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4.8
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*****
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4.9
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*****
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4.10
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*****
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4.11
|
IAE and Spirit agree that credits issued to Spirit’s account with IAE pursuant to any of the Warranties or Guarantees may be utilized for the purposes identified in the applicable Warranty or Guarantee for up to ***** after the date of issuance. Within ***** after such date, Spirit may request in writing that the period for such use be extended by IAE for up to an additional ***** period, which request for extension IAE shall not unreasonably deny. After the expiration of the applicable time period, such credits shall expire.
|
5.
|
Product Support Services
|
5.1
|
IAE will make available to Spirit 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 Spirit. IAE may delegate the performance of product support services to an affiliated company or any of IAE’s shareholders.
|
5.2
|
Spirit will provide to any IAE customer support representative(s) working at its facility, free of charge:
|
5.2.1
|
reasonable, secure office accommodation including furniture and office equipment and
|
5.2.2
|
access to telephone, facsimile and secretarial services and
|
5.2.3
|
access to such first-aid and emergency assistance as is customarily provided to Spirit's own employees and
|
5.2.4
|
reasonable airfare, accommodations, and subsistence during any period in which the customer support representative(s) is required by Spirit to travel away from such customer support representative(s)' normal location at Spirit.
|
6.
|
Miscellaneous
|
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:
|
(a)
|
any cause beyond the reasonable control of IAE, or
|
(b)
|
fires, industrial disputes or introduction of essential modifications required by the Certification Authority, or
|
(c)
|
compliance in good faith with any applicable foreign or domestic governmental regulation or order whether or not it proves to be invalid, except to the extent that the delay is caused by IAE’s failure to act in conformity with applicable deadlines set forth in such governmental regulation or order;
|
6.1.2
|
If, by reason of any of the Excusable Delays embraced by Section 6.1.1 above, IAE is hindered or prevented from delivering any goods (that are the same as and include the Supplies) to purchasers (including Spirit) then IAE shall have the right to allocate in good faith such goods, as they become available, at its own discretion among all such purchasers and IAE shall not be under any liability whatsoever to Spirit for delay in delivery to Spirit 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
|
*****
|
6.1.4
|
The right of Spirit to claim damages shall be conditional upon Spirit (i) notifying IAE of the its claim in writing within ***** from the Claim Start Date, and (ii) submitting a written claim therefor within ***** from the Claim Start Date.
|
6.1.5
|
Should IAE delay performance of any obligation for a reason other than an Excusable Delay 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 Spirit under Section 6.1.3, Spirit shall be entitled to terminate the order with respect to the affected item on giving IAE notice in writing. Upon receipt of such notice IAE shall be free from any obligation in respect of such item except that IAE shall refund to Spirit any deposits made in respect of the purchase price of such item of the Supplies.
|
6.2
|
Patents
|
6.2.1
|
IAE shall, subject to the conditions set out in this Section and as the sole liability of IAE in respect of any claims for infringement of industrial property rights, indemnify and hold Spirit harmless from and against any damages, costs and expenses including legal costs resulting from claim that the use of any of the Supplies by Spirit 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 1944 (The Chicago Convention) apply, infringes any patent, design, or model duly granted or registered provided, however, that IAE shall not be liable to Spirit 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
|
Spirit will, as soon as reasonably practicable give 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 reasonable discretion and Spirit will give IAE all reasonable assistance and will not by any act or omission do anything that may directly or indirectly prejudice IAE in this connection, provided that IAE shall not agree to any settlement pursuant to which any fault is attributed to Spirit, without the prior written consent of Spirit.
|
6.2.3
|
IAE shall have the right to substitute for any allegedly infringing Supplies substantially equivalent non-infringing supplies.
|
6.2.4
|
Should Spirit be prevented from using any of the Supplies due to a claim of infringement of property rights by valid judgment or by settlement between Spirit, IAE and the claimant IAE will, at its expense as soon as possible but in no event more than ninety (90) days from the date of entry of such judgment or settlement either: (a) obtain for Spirit the right to use the respective Supply or Supplies free of charge or (b) replace the respective Supply or Supplies with a substantially equivalent non-infringing substitute, if available.
|
6.2.5
|
The indemnity contained in Section 6.2.1 above shall not apply to claims for infringement in respect of (i) Supplies manufactured to the specific design instructions of Spirit; (ii) Supplies not of IAE design (but IAE shall in the event of any claim for infringement pass on to Spirit 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.
|
6.3
|
(RESERVED)
|
6.4
|
Non-Disclosure and Non-Use
|
6.4.1
|
The terms and conditions of this Contract and any technical information provided in connection with it are confidential and proprietary to IAE and Spirit. Each Party agrees to: (a) limit disclosures of such confidential information only to persons who have a need to know within their organizations; (b) keep such information confidential; and (c) not disclose to any third party other than (i) as required by applicable law or legal process; (ii) in connection with the disclosure requirements of any applicable government authority or exchange; (iii) to its legal, financial, tax or other advisors who are bound by an obligation of confidentiality or to the
|
6.5
|
Taxes
|
6.5.1
|
Subject to Section 6.5.2 below, IAE shall pay all imposts, duties, fees, taxes and other like charges levied by any tax authority or any agency thereof in connection with the Supplies prior to their delivery.
|
6.5.2
|
All amounts stated to be payable by Spirit pursuant to this Contract exclude any value added tax, sales tax or similar such tax. In the event that the supply of goods or services under this Contract is chargeable to any value added tax, sales tax or similar such tax will be borne by Spirit. To ensure so far as possible that Spirit is not charged with European Community value added tax (“VAT”), Spirit will within 30 days of signature hereof, inform IAE of its VAT Code (if any) for inclusion on IAE's invoices.
|
6.5.3
|
Spirit shall pay all other imposts, duties, fees, taxes and other like charges by whomsoever levied.
|
6.5.4
|
Notwithstanding the foregoing, Spirit shall have no liability to IAE for any tax or taxes levied on IAE in connection with its gross income, or any franchise, turn-over or other similar tax or any tax levied on IAE relating to its business activities generally and not specifically arising out of or in connection with the transactions contemplated hereby.
|
6.5.5
|
In addition to the foregoing, IAE agrees to cooperate with Spirit in order to minimize the impact of any tax liability arising from the transactions hereunder.
|
6.6
|
Amendment
|
6.8
|
Exhibits
|
6.9
|
Headings
|
6.10
|
Governing Law and Forum
|
6.11
|
Compliance with All Applicable Laws and Regulations
|
6.11.1
|
Export/Import
Spirit agrees that it will not, directly or indirectly, sell, export, re-export, transfer, divert, or otherwise dispose of any IAE goods, software, technical data (including products derived from or based on such technical data), or services received directly or indirectly from IAE to any Prohibited Party without obtaining prior authorization from the relevant government authorities as required pursuant to Export Laws. Failure to do so will result in IAE invoking its rights to terminate this Contract per the provisions of Sections 6.15 and 6.16 below.
|
6.11.2
|
“Prohibited Parties”
means, collectively, those countries, and persons to whom the sale, export, re-export, transfer, diversion or other disposition of any IAE goods, software, technical data or services is prohibited by the applicable export laws and related regulations of the United States, German, British, Japanese, or European Union Governments.
|
6.11.3
|
Other Laws and Regulations
Each Party agrees that it will not, by act or omission, violate any applicable law or regulation of the United States or any political subdivision thereof where the violation thereof would result in the other Party being deemed to be in violation of such law or regulation or would otherwise result in a criminal or an un-indemnified civil penalty on the part of such other Party.
|
6.12
|
Notices
|
6.13
|
Exclusion of Other Provisions and Previous Understandings
|
6.13.1
|
This Contract contains the only provisions governing the sale and purchase of the Supplies and shall apply to the exclusion of any prior provisions on or attached to or otherwise forming part of any order form of Spirit, or any acknowledgment or acceptance by IAE, or of any other document that may be issued by either party relating to the sale and purchase of the Supplies.
|
6.13.2
|
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.
|
6.14
|
Conditions Precedent
|
6.14.1
|
A continuing event of default (taking into account any applicable grace period) by Spirit in (a) any payment due under the Contract (including any exhibits and letter agreements thereto), or *****; or
|
6.14.2
|
Any event that is a Termination Event or would be a Termination Event, but for lapse of time, shall have occurred.
|
6.15
|
Termination Events
|
6.15.1
|
Any of the following shall constitute a “Termination Event” under this Contract:
|
(a)
|
Spirit commences any case, proceeding or other action with respect to Spirit 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
|
(b)
|
Spirit seeks the appointment of a receiver, trustee, custodian or other similar official for Spirit for all or substantially all of its assets, or Spirit makes a general assignment for the benefit of its creditors; or
|
(c)
|
Spirit otherwise becomes the object of any case, proceeding or action of the type referred to in the preceding Sections 6.15.1(a) or 6.15.1(b) that remains unstayed, undismissed or undischarged for a period of sixty (60) days; or
|
(d)
|
An action is commenced against Spirit seeking issuance of a warrant of attachment, execution, distraint or similar process against all or substantially all of its assets that remains unstayed, undismissed or undischarged for a period of sixty (60) days; or
|
(e)
|
A continuing event of default (taking into account any applicable grace period) by Spirit on any payment of principal or interest on any indebtedness hereunder or in the payment of any guarantee obligation hereunder
*****
.
|
(f)
|
Failure to take the Aircraft and Spare Engines in accordance with the delivery schedule set forth in Exhibit B, as amended, supplemented or modified from time to time.
|
6.15.2
|
In the event of the occurrence of a Termination Event, Spirit shall be deemed to be in material breach of this Contract, and IAE shall at its option have the right to resort to any remedy under applicable law, including, without limitation, the right by written notice, effective immediately, to terminate this Contract; provided that, no such notice need be delivered, and this Contract shall automatically terminate upon the occurrence of a Termination Event specified in Section 6.15.1(a), 6.15.1(b), or 6.15.1(c)
|
6.15.3
|
Spirit 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:
|
(a)
|
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, debt or obligations;
|
(b)
|
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;
|
(c)
|
IAE otherwise becomes the object of any case, proceeding or action of the type referred to in the preceding clauses (a) or (b) which remains unstayed, undismissed or undischarged for a period of sixty (60) days;
|
(d)
|
An action is commenced against IAE seeking issuance of a warrant of attachment, execution, distraint or similar process against all or substantially all of its assets which remains unstayed, undismissed, or undischarged for a period of sixty (60) days;
|
(e)
|
A continuing event of default (taking into account any applicable grace period) by IAE on any payment of principal or interest on any indebtedness hereunder or in the payment of any guarantee obligation hereunder
*****
.
|
Agreed to and accepted on behalf of:
IAE International Aero Engines AG
|
|
Agreed to and accepted on behalf of:
Spirit Airlines, Inc.
|
||
By:
|
/s/ Rick Deurloo
|
|
By:
|
/s/ Charles A. Rue
|
Name:
|
Rick Deurloo
|
|
Name:
|
Charles A. Rue
|
Title:
|
SVP Sales
|
|
Title:
|
VP Supply Chain
|
In the presence of:
|
|
In the presence of:
|
||
By:
|
/s/ Daniel Kirk
|
|
By:
|
/s/ Edward Christie
|
Name:
|
Daniel Kirk
|
|
Name:
|
Edward Christie
|
Title:
|
Sales Director
|
|
Title:
|
SVP & CFO
|
Aircraft No.
|
Aircraft Type
|
Engine Model
|
Scheduled Delivery Date
|
MSN
|
ESN 1
|
ESN 2
|
1
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
2
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
3
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
4
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
5
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
6
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
7
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
8
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
9
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
10
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
11
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
12
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
13
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
14
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
15
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
16
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
17
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
18
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
19
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
20
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
21
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
22
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
23
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
24
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
25
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
26
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
27
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
28
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
29
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
30
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
31
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
32
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
33
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
34
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
35
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
36
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
37
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
38
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
39
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
40
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
Spare Engines
|
No.
|
Base Price (Jan-06$)
|
Engine Model
|
Scheduled Delivery Date
|
ESN
|
Firm Spare Engines
|
1
|
*****
|
*****
|
*****
|
*****
|
2
|
*****
|
*****
|
*****
|
*****
|
|
3
|
*****
|
*****
|
*****
|
*****
|
|
4
|
*****
|
*****
|
*****
|
*****
|
|
5
|
*****
|
*****
|
*****
|
*****
|
|
6
|
*****
|
*****
|
*****
|
*****
|
|
7
|
*****
|
*****
|
*****
|
*****
|
|
8
|
*****
|
*****
|
*****
|
*****
|
|
9
|
*****
|
*****
|
*****
|
*****
|
|
10
|
*****
|
*****
|
*****
|
*****
|
|
11
|
*****
|
*****
|
*****
|
*****
|
|
|
|
|
|
|
|
Option Spare Engines
|
1
|
*****
|
*****
|
*****
|
*****
|
2
|
*****
|
*****
|
*****
|
*****
|
|
3
|
*****
|
*****
|
*****
|
*****
|
|
4
|
*****
|
*****
|
*****
|
*****
|
Equipment
|
Base Price (Jan-06 US$)
|
Engine Storage Bag
|
*****
|
Engine Transportation Stand
|
*****
|
1.
|
Any unit base price or other sum expressed to be subject to escalation from the Base Month (as defined below) to month of delivery or other date of determination in accordance with the IAE Escalation Formula will be subject to escalation in accordance with the following formula:
|
•
|
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.
|
•
|
24 Hour Support
|
•
|
Maintenance Action Recommendations
|
•
|
Daily Reporting on Engine Technical Situations
|
•
|
On-The-Job Training
|
•
|
Service Policy Preparation Assistance
|
•
|
Prompt Communication with IAE
|
•
|
Technical Training at Purpose Built Facilities
|
•
|
On-site Technical Training
|
•
|
Technical Training Consulting Service
|
•
|
Training Aids and Materials
|
•
|
Engine construction features internal and external hardware.
|
•
|
Engine systems operation, major components accessibility for removal/replacement.
|
•
|
Operational procedures
|
•
|
Performance characteristics
|
•
|
Maintenance concepts, repair and replacement requirements and special tooling.
|
•
|
Engine Description
|
•
|
Systems Operation
|
•
|
Applied Performance
|
•
|
Ground Operations
|
•
|
Troubleshooting Procedures
|
•
|
Practical Phase Line Maintenance Tasks
|
•
|
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.
|
•
|
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 Spirit’s inquiries.
|
•
|
Engine Warranty Services
|
•
|
Maintenance Support
|
•
|
Lease Engine Program
|
•
|
Engine Reliability and Economic Forecasts
|
•
|
Logistic Support Studies
|
•
|
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.
|
•
|
- General Maintenance Facility Planning Publications
|
•
|
- Customized Facility Plans
|
•
|
- Maintenance Facility and Test Cell Planning Consultation Services
|
•
|
Technical Services
|
•
|
Powerplant Maintenance
|
•
|
Customer Performance
|
•
|
Diagnostic Systems
|
•
|
Human Factors
|
•
|
Flight Operations
|
•
|
Repair Services
|
•
|
Tooling and Support Equipment Services
|
•
|
Technical Publications
|
•
|
Technical Problem Identification/Corrective Action
|
•
|
Implementation
|
•
|
Technical Communication
|
•
|
Engine Conversion Program Definition and Management
|
•
|
Engine Upgrade and Commonality Studies
|
•
|
Engine Incident Investigation Assistance
|
•
|
Definition of Maintenance Tasks and Resource Requirements
|
•
|
Planning Guides
|
•
|
Engine Performance Analysis Computer Programs for Test Cell Use
|
•
|
Test Cell Correlation Analysis and Correction Factors
|
•
|
Engine Stability Procedures and Problem Analysis
|
•
|
Guidance to help Spirit 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.
|
•
|
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
|
•
|
Coordinated Repair Development Activity
|
•
|
Customer Assistance on Repair Procedures and Techniques
|
•
|
Qualification of Repair Sources
|
•
|
Repair Workshops
|
•
|
Repair Development List
|
•
|
Support Equipment Manufacturing/Procurement Documentation
|
•
|
Engine Accessory Test Equipment and Engine Transportation Equipment Specifications
|
•
|
Support Equipment Logistics Planning Assistance
|
4.8.2
|
Engine Accessory Test Equipment and Engine Transportation Equipment Requirements:
|
4.9
|
TECHNICAL PUBLICATIONS
|
•
|
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.
|
•
|
List of all Service Bulletins that were incorporated during initial build of each new engine.
|
•
|
- Individual Customer Account Representatives
|
•
|
- Provisioning
|
•
|
- Planning
|
•
|
- Order Administration
|
•
|
- Spare Parts Inventory
|
•
|
- Effective Expedite Service
|
•
|
- Worldwide Distribution
|
•
|
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 Spirit’s request).
|
•
|
Forecasts of life limited parts requirements are requested and received semi-annually from major customers. Based on the size of Spirit’s order, Spirit shall be considered a major customer.
|
•
|
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.
|
Subject:
|
Side Letter No. 1 to the Amended and Restated V2500-A5 General Terms of Sale between IAE International Aero Engines AG and Spirit Airlines, Inc., October 1, 2013
|
A.
|
IAE and Spirit previously entered into the 2005 GTA, and subsequently entered into the 2006 Proposal, both of which have been superseded by the Contract; and
|
B.
|
This Side Letter No. 1 amends the Contract so as to provide certain financial and technical assistance to Spirit in support of Spirit’s selection of the V2500 engine to power its Aircraft, and in support of the integration of the Aircraft into its fleet.
|
1.
|
Fleet Introductory Assistance Credits
|
1.1
|
In consideration of Spirit’s agreement to purchase Aircraft No. 20 through Aircraft No. 40 inclusive, in accordance with the Contract, and to assist Spirit with the introduction of the Aircraft into its fleet, IAE shall issue credit notes to Spirit’s account with IAE in the following amounts (each a “
Standard FIA Credit
”):
|
Aircraft Type
|
Credit
(Jan-06 US$)
|
Issued at Delivery & Acceptance of:
|
A319 (V2524-A5)
|
*****
|
Each A319 Aircraft
|
A320 (V2527-A5)
|
*****
|
Each A320 Aircraft
|
A321 (V2533-A5)
|
*****
|
Each A321 Aircraft
|
1.2
|
*****
|
1.3
|
*****
|
1.4
|
*****
|
2.
|
Spare Engine Credits
|
2.1
|
In consideration of Spirit agreeing to purchase the Spare Engines in accordance with the Contract, and to assist Spirit with such purchase, IAE shall credit Spirit‘s account in accordance with the following values for the corresponding Spare Engines (each a “
Spare Engine Credit
”):
|
Engine Type
|
Credit
(Jan-06 US$)
|
Issued on Delivery & Acceptance of:
|
V2524-A5
|
*****
|
Each Firm Spare Engine
|
V2527-A5
|
*****
|
Each Firm Spare Engine
|
V2533-A5
|
*****
|
Each Firm Spare Engine
|
V2524-A5
|
*****
|
Each Option Spare Engine
|
2.2
|
*****
|
2.3
|
Each Spare Engine Credit ***** shall be issued upon delivery to Spirit of the corresponding Firm or Option Spare Engine. Spirit agrees to provide IAE with written notice confirming acceptance of the corresponding Firm or Option Spare Engine promptly after acceptance.
|
2.4
|
Each Spare Engine Credit ***** shall be used by Spirit for payment against the corresponding spare Engine invoice.
|
3.
|
Credit and Engine Pricing Escalation
|
3.1
|
The FIA Credits and Spare Engine Credits, referenced in Sections 1and 2above, are subject to escalation in accordance with the IAE Escalation Formula set forth in Exhibit B-3 to the Contract, and shall be escalated from a base month of January 2006 (the “
Base Month
”) to the earlier of the scheduled delivery date as set forth in Exhibit B-1 (and B-2 if applicable) of the Contract or the actual delivery date of the applicable Aircraft or Spare Engine (the “
Base Escalated Credit
”).
|
3.2
|
*****
|
3.3
|
*****
|
3.4
|
*****
|
3.5
|
Upon delivery of each Aircraft, IAE will, as of the respective dates of delivery of each of the Aircraft delivered to Spirit, calculate the difference (if any) between:
|
(a)
|
The Deemed Shipset Price (as defined below) escalated in accordance with Section 3.1 above; minus
|
(b)
|
The Deemed Shipset Price escalated in accordance with Section 3.1 above and capped in accordance with Section 3.2 above.
|
Aircraft Type
|
Deemed Shipset Price (Jan-06 US$)
|
A319 (V2524-A5)
|
*****
|
A320 (V2527-A5)
|
*****
|
A321 (V2533-A5)
|
*****
|
4.
|
*****
|
5.
|
*****
|
5.1
|
Clause 6.3 of the Contract, *****, is deleted in its entirety and replaced with the following:
|
6.3.1
|
*****
|
6.3.2
|
*****
|
6.3.3
|
IAE shall have the right to set off credits from time to time made available by IAE under the Contract either directly to Spirit or via Airbus or its subsidiaries and affiliates, in respect of the failure by Spirit, after any applicable grace period, to cure any payment default under (i) the Contract or (ii) *****, or (iii) the Fleet Hour Agreement.”
|
6.
|
*****
|
7.
|
Customer Support
|
7.1
|
Customer Support Manager
|
7.2
|
Customer Support Representative
|
(a)
|
Reasonable office accommodation including access to telephone, fax, and internet; and
|
(b)
|
Access to such first-aid and emergency assistance as in customarily supplied to Spirit’s own employees.
|
8.
|
Customer Training
|
8.1
|
IAE shall provide, subject to availability, Spirit ***** formal training programs covering courses ***** for a maximum of ***** for qualified Spirit personnel (of which ***** have been used as of the date of this Side Letter No. 1), for a period of ***** from entry-into-service of the first Aircraft, for so long as Spirit operates one or more Aircraft in commercial service.
|
8.2
|
*****
|
9.
|
*****
|
10.
|
Assignment
|
10.1
|
Clause 6.7 of the Contract,
Assignment
, is deleted in its entirety and replaced with the following:
|
“6.7.1
|
Except as otherwise agreed herein, Spirit may not assign in whole or part any of its rights or obligations under the Contract without the written consent of IAE (such consent not to be unreasonably withheld).
|
6.7.2
|
*****
|
6.7.3
|
*****
|
6.7.4
|
*****
|
6.7.5
|
*****
|
6.7.6
|
IAE may, without recourse, assign its rights and/or delegate its obligations under this Agreement to any subsidiary or affiliate of IAE or United
|
11.
|
Miscellaneous
|
11.1
|
Entire Agreement; Conflicts
|
11.2
|
Amendment
|
11.3
|
Proprietary Information
|
11.4
|
Governing Law
|
11.5
|
Counterparts
|
Agreed to and accepted on behalf of:
IAE International Aero Engines AG
|
|
Agreed to and accepted on behalf of:
Spirit Airlines, Inc.
|
||
By:
|
/s/ Rick Deurloo
|
|
By:
|
/s/ Charles A. Rue
|
Name:
|
Rick Deurloo
|
|
Name:
|
Charles A. Rue
|
Title:
|
SVP Sales
|
|
Title:
|
VP Supply Chain
|
Date:
|
10/2/13
|
|
Date:
|
10/1/13
|
Exhibit A Aircraft and Spare Engine Delivery Schedules
|
23
|
Exhibit B FHA Escalation Formula
|
26
|
Exhibit C Accessories
|
27
|
Exhibit D V2500 Turbofan Engine Model Specifications
|
28
|
Exhibit E Powerplant Description
|
29
|
Exhibit F Addresses
|
31
|
Exhibit G Engine Monitoring Services
|
32
|
Exhibit H Excess Work Rates
|
35
|
Exhibit I FHA Rate Adjustment Tables
|
36
|
A.
|
Spirit has firmly ordered (i) thirty (30) new A320 family aircraft from Airbus all to be powered by IAE V2500-A5 engines and (ii) four (4) new V2500-A5 spare engines from IAE all of which will be operated by Spirit (the “
New Engine Fleet
”);
|
B.
|
IAE and Spirit have entered into a V2500
®
General Terms of Sale dated October 1, 2013, as amended from time to time, including all exhibits, schedules, appendices, side letters and amendments thereto (collectively, the “
New Engine Fleet GTA
”) for the provision of V2500-A5 engines, modules, spare parts, tools, equipment, and product support services for the support and operation of the New Engine Fleet;
|
C.
|
IAE and Spirit previously entered into the Amended and Restated V2500® General Terms of Sale dated October 1, 2013 for sale and support of certain V2500-powered Airbus A320 family aircraft and V2500 spare engines already in operation with Spirit (the “
Existing Fleet GTA
”);
|
D.
|
IAE and Spirit have also previously entered into an Amended and Restated V-Services
SM
Fleet Hour Agreement dated October 1, 2013 for the provision of certain off-wing maintenance for certain V2500-A5 engines already in operation with Spirit (the “
Existing Fleet FHA
”)
|
E.
|
IAE and Spirit now wish to agree upon terms whereby IAE shall arrange for, manage and subcontract certain maintenance of the Eligible Engines as defined herein.
|
1.
|
Definitions
|
1.1
|
“
Accessory
” or “
Accessories
” includes those items listed in Exhibit C to this Agreement.
|
1.2
|
“
Airbus
” shall mean Airbus SAS.
|
1.3
|
“
Aircraft
” shall mean all or each of the thirty (30) A320 family aircraft powered by V2500-A5 engines to be delivered in accordance with the schedule set forth in Exhibit A hereto, as amended, supplemented or otherwise modified from time to time in accordance with the provisions hereof and of the New Fleet GTA.
|
1.4
|
“
Aircraft Maintenance Manual
” or “
AMM
” means the aircraft maintenance manual published by Airbus for the Aircraft.
|
1.5
|
“
Airworthiness Directive
” shall mean any applicable airworthiness directive issued by the Aviation Authority based on certification rules current as of the date of this Agreement.
|
1.6
|
“
Aviation Authority
” shall mean the FAA.
|
1.7
|
“
Beyond Economic Repair
” shall mean wear, tear or damage to an item of Eligible Equipment beyond economic repair.
|
1.8
|
“
BFE Item
” shall mean those items listed as such in Exhibit E of this Agreement.
|
1.9
|
“
Business Day(s)
” shall mean a day other than a Saturday, Sunday or holiday scheduled by law for commercial banking institutions in the City of New York, New York, United States.
|
1.10
|
“
Day
” means a calendar day.
|
1.11
|
“
EBU Item
” shall mean those items listed as such in Exhibit E to this Agreement originally installed on the Eligible Engines or acquired new and dedicated solely for the support of Eligible Engines.
|
1.12
|
“
Eligible Engine(s)
” shall mean the new Engines originally installed on the Aircraft and the Spare Engines. Exhibit A to this Agreement identifies the Eligible Engines by serial number and will be updated from time to time to: (i) add Eligible Engines and serial numbers as Spirit takes delivery of the Aircraft and the Spare Engines and (ii) to remove Eligible Engines in accordance with Section 11 hereto.
|
1.13
|
“
Eligible Engine Flight Cycles
” shall mean *****.
|
1.14
|
“
Eligible Engine Flight Hours
” shall mean *****.
|
1.15
|
“
Eligible Equipment
” shall mean Eligible Engines.
|
1.16
|
“
Eligible Removal
” shall mean *****.
|
1.17
|
“
Engine(s)
” shall mean the basic IAE V2500-A5 turbofan engine, described in the V2500 Turbofan Engine Model Specification(s) set forth in Exhibit D of the Agreement, and which excludes Accessories, EBU Items, QEC Items and Nacelle Items.
|
1.18
|
“
Engine Manual
” shall mean the IAE document which sets forth the requirements for Engine off-wing repair.
|
1.19
|
“
Excess Work
” shall mean work undertaken by the Maintenance Center during a Shop Visit pursuant to this Agreement, which is further described in Section
8
of this Agreement.
|
1.20
|
“
FAA
” shall mean the United States Federal Aviation Administration.
|
1.21
|
“Failure” shall mean *****.
|
1.22
|
“
FHA
” shall mean this Fleet Hour Agreement.
|
1.23
|
“
FHA Administration Manual
” means the logistical plan and instructions described in Section
7
of this Agreement.
|
1.24
|
“
FHA Manager
” shall mean the manager provided by IAE for the support of the operation of this Agreement in accordance with the provisions of Section 7.3 of this Agreement.
|
1.25
|
“
FHA Rate(s)
” shall mean the rate(s) collectively as set forth in Section 10 below.
|
1.26
|
“
Foreign Object Damage
” shall mean *****.
|
1.27
|
“
Line Maintenance
” shall mean any work required to be carried out on an Engine in accordance with the appropriate Aircraft Maintenance Manuals and which can be accomplished either on-wing or off-wing without requiring the induction of such Engine into a Maintenance Center.
|
1.28
|
“
Life Limited Parts
” or “
LLPs
” shall mean the Parts identified in Chapter 5 of the V2500-A5 Engine Manual as having specific life limits.
|
1.29
|
“
Maintenance Center
” shall mean the IAE shareholder maintenance center designated by IAE in consultation with Spirit, from time to time to perform services under this Agreement and which is approved by the Aviation Authority as a certified repair station.
|
1.30
|
“
Maintenance Management Plan
”, “
MMP
” or “
eMMP”
shall mean the then-current V2500 engine maintenance planning document described in Section
7
of this Agreement.
|
1.31
|
“
Miscellaneous Shop Visit
” shall mean *****.
|
1.32
|
“
Nacelle Items
” shall mean those items listed in Exhibit E as “DPP” (demountable power plant) items or “PP” (positionalized power plant) items originally installed on the Eligible Engines or acquired new and dedicated solely for the support of Eligible Engines.
|
1.33
|
“
Part(s)
” shall mean *****.
|
1.34
|
“
Period of Cover
” shall mean the period in which IAE agrees to provide the services pursuant to this Agreement, as set out in Section
3
of this Agreement.
|
1.35
|
“
QEC Item
” shall mean those items listed as such in Exhibit E to this Agreement originally installed on the Eligible Engines or acquired new and dedicated solely for the support of Eligible Engines.
|
1.36
|
“
Restoration Shop Visit
” or “
RSV
” shall mean *****.
|
1.37
|
“
Service Bulletin(s)
” shall mean those V2500 service bulletins issued by IAE with categories 1 to 6 that are designated as “target” service bulletins in the MMP.
|
1.38
|
“
Shop Visit
” shall mean a Restoration Shop Visit or a Miscellaneous Shop Visit.
|
1.39
|
“
Spare Engine(s)
” shall mean all or each of the four (4) new V2500-A5 firmly ordered spare Engines either purchased or to be purchased by Spirit from IAE to be delivered in accordance with the schedule set forth in Exhibit A of this Agreement.
|
1.40
|
“
Testable Engine
” shall mean *****.
|
1.41
|
“
Transportation Coverage
” shall mean the services provided to Spirit under Section
6
of this Agreement.
|
1.42
|
“
Workscope
” shall mean an IAE written repair request to the Maintenance Center(s) compliant with the MMP, approved by Spirit, such approval not to be unreasonably withheld, that authorizes the Maintenance Center(s) to undertake work on Eligible Equipment.
|
2.
|
FHA Services
|
2.1
|
Engine Shop Visit Coverage in accordance with the terms of Section 4
|
2.2
|
Lease Engine Coverage in accordance with the terms of Section
5
.
|
2.3
|
Transportation Coverage in accordance with the terms of Section
6
.
|
2.4
|
General FHA Services in accordance with the terms of Section 7.
|
2.5
|
Excess Work as required in accordance with the terms of Section 8.
|
3.
|
Period of Cover
|
4.
|
Shop Visit Coverage
|
4.1
|
*****
|
4.2
|
IAE will use commercially reasonable efforts to provide the following documentation to Spirit following the release of an Eligible Engine from a Maintenance Center following a Restoration Shop Visit:
|
4.2.1
|
*****;
|
4.2.2
|
*****; and
|
4.2.3
|
provide an invoice for any Excess Work arising from such Eligible Engine’s Restoration Shop Visit as soon as practicable but no later than *****, if applicable.
|
4.3
|
IAE’s obligations for an Engine Shop Visit caused by Foreign Object Damage shall be limited to the provision of repair work and Parts provided through the Maintenance Center to a maximum of ***** per event *****.
|
4.4
|
*****
|
4.5
|
*****
|
5.
|
Lease Engine Support
|
5.1
|
IAE or its designee will maintain a worldwide fleet of spare Engines available for lease by Spirit on an as needed basis. Should Spirit require a spare Engine (a “
Lease Engine
”) from IAE or its designee, IAE or its designee will make such Leased Engine available to Spirit under IAE or its designee’s then-current standard short term engine lease agreement for V2500 Engines (IATA Master Short Term Lease Agreement, form 5016 00 (“
IATA Agreement
”), provided that Spirit acquires and continues to operate and maintain the recommended number of Spare Engines for its Aircraft fleet.
|
5.2
|
*****
|
5.3
|
*****
|
5.4
|
*****
|
5.5
|
Unless otherwise determined by the FHA Manager, acting reasonably, Spirit is to return each Lease Engine within ***** the need for such Lease Engine is alleviated.
|
6.
|
Transportation
|
6.1
|
Spirit shall deliver Eligible Engines to IAE in a Testable Engine configuration for each Shop Visit and the Accessories related to such Eligible Engines shall be in a serviceable condition.
|
6.2
|
*****
|
6.3
|
*****
|
6.4
|
*****
|
6.5
|
*****
|
6.6
|
*****
|
6.7
|
Transportation coverage as set forth in this Section
6
, is subject to a cap of ***** per Eligible Shop Visit, escalated in accordance with Section 10.1.6.
|
7.
|
General Fleet Hour Agreement Services
|
7.1
|
IAE shall supply Spirit with a V2500-A5 electronic Maintenance Management Plan that shall establish the maintenance requirements including LLP management, incorporation of applicable Service Bulletins and Aviation Authority Airworthiness Directive requirements and Eligible Engine removal planning (“
MMP
”). The MMP shall be consistent with the relevant provisions of this Agreement and shall be revised and updated at least once a year, taking into account Spirit’s then-current operation in consultation with Spirit and fleet-wide operational experience, among other considerations. Additionally, an FHA Administration Manual may be mutually agreed between the parties, which shall establish a logistical plan and instructions for Spirit to facilitate performance by Spirit and IAE under this Agreement.
|
7.2
|
Engine monitoring data program services set forth in Exhibit G;
|
7.3
|
an FHA Manager based at IAE's offices who shall be the point of contact for Spirit, twenty four (24) hours per day seven (7) days per week, in respect of the services described in this Agreement. The following responsibilities of IAE shall normally be undertaken by the FHA Manager:
|
8.
|
Excess Work
|
8.1
|
Any costs incurred by IAE or the Maintenance Center not covered under this Agreement shall be Excess Work and shall be paid for by Spirit in accordance with Section 10.2 of this Agreement. Excess Work shall include any labor, material and other charges for Eligible Engines that arise from the following:
|
8.2
|
In the event IAE, following consultation with Spirit, determines that an Eligible Engine requires a Shop Visit that will be considered entirely to be Excess Work, then the IAE FHA Manager shall so notify Spirit and IAE shall perform such work.
|
8.3
|
*****
|
8.4
|
*****
|
8.5
|
*****
|
8.6
|
*****
|
8.7
|
*****
|
8.8
|
*****
|
9.
|
Obligations of Spirit
|
9.1
|
Data and Procedures
|
9.1.1
|
maintain, collect and provide to IAE performance trend monitoring data on each Eligible Engine in accordance with Exhibit G, maintain timely records in form and detail sufficient for the accurate and expeditious administration of the terms of this Agreement including the assessment of operating conditions relative to those set out in Section 10.4 of this Agreement;
|
9.1.2
|
make available, and provide access to IAE’s provider of electronic condition monitoring data analysis, all data collected in accordance with 9.1.1 above in an electronic format agreed to by IAE, as required for the operation and administration of this Agreement;
|
9.1.3
|
implement and follow the IAE reasonable recommendations resulting from analysis of the performance trend monitoring data;
|
9.1.4
|
within ten (10) Business Days after the end of each month during the Period of Cover, report to IAE, in an electronic format agreed to by IAE, the hours and cycles flown, take off derate, and day temperature for each flight by each Eligible Engine during the preceding month;
|
9.1.5
|
ensure that all data reasonably required by IAE (including borescope reports) to facilitate the correction of any problem causing an Eligible Engine Removal is promptly made available to IAE;
|
9.1.6
|
provide for each Eligible Engine, no later than two (2) Business Days following Eligible Removal, a removal report containing the following information with respect to the Eligible Engine:
|
(a)
|
a record of Eligible Engine total time and cycles;
|
(b)
|
position on the aircraft, aircraft number, and date of Eligible Engine removal;
|
(c)
|
reason for removal, flight and ground indications prior to and related to removal;
|
(d)
|
module rework history with time since new, time since overhaul and time since repair provided such module was serviced outside of this Agreement;
|
(e)
|
any borescope reports detailing any open discrepancies;
|
(f)
|
total LLP time, LLP part numbers, serial numbers, cycle limits, time since new, cycles since new, remaining cycles, and take-off bump cycles, if applicable;
|
(g)
|
latest build standard record;
|
(h)
|
records with respect to any Accessories, including part numbers, serial numbers, time and cycles since new, overhaul, Repair, or bench test, and a description of prior work performed for each item unless Spirit directs IAE where to send such Accessories;
|
(i)
|
if applicable, a non-incident certification in customary form that the Eligible Engine and all parts installed thereon:
|
(i)
|
have been operated and maintained in accordance with applicable IAE and Airbus instructions and manuals;
|
(ii)
|
have not been operated by any government or military service except as civil aircraft on the civil register; and
|
(iii)
|
have not been installed on any engine or module that was subject to any incident, accident, major failure, fire, extreme stress, over temperature outside normal operation, or over-speed; and
|
(j)
|
any other data reasonably requested by IAE.
|
9.1.7
|
provide the Engine serial numbers within thirty (30) Business Days of acceptance by Spirit of each applicable Aircraft covered under this Agreement as described in Exhibit A of this Agreement, as amended, supplemented or otherwise modified from time to time; and
|
9.1.8
|
ensure Eligible Engines are available for FHA services in a Testable Engine configuration (when inducted at the Maintenance Center).
|
9.2
|
Engine Preparation for Transportation
|
9.2.1
|
make Eligible Engines available for shipment at Spirit’s Main Base no later than ten (10) days prior to their scheduled induction date;
|
9.2.2
|
maintain in a serviceable condition one (1) IAE approved transportation stand per spare Eligible Engine plus an additional serviceable IAE approved transportation stand;
|
9.2.3
|
at the time of an Eligible Engine Removal, remove the Eligible Engine from the Aircraft, mount it on an IAE approved transportation stand and prepare such Eligible Engine for shipment, all in accordance with the procedures specified in the applicable IAE manuals; and
|
9.2.4
|
ensure that it does not remove from the Maintenance Center the IAE approved transportation stand on which the Eligible Engine was transported to the Maintenance Center so that such stand is available at the Maintenance Center on the day such Eligible Engine undergoes testing, to enable efficient movement of such Eligible Engine to the test cell and return transportation of such Eligible Engine to Spirit.
|
9.3
|
Operation, Maintenance and Troubleshooting of Eligible Equipment
|
9.4
|
Administration
|
9.4.1
|
Spirit shall cooperate with IAE to fulfill any reasonable administrative or other requirements of the Maintenance Center, including endorsement of Workscopes for Aviation Authority requirements within three (3) Business Days of receipt from IAE. If Spirit fails to respond, within five (5) Business Days, the Workscope will be deemed to be accepted.
|
9.4.2
|
Spirit shall accomplish quality audits and obtain certifications required by the Aviation Authority and IAE for accomplishment of work on the Eligible Engines at the Maintenance Center(s).
|
9.5
|
One Time Concessions
|
9.6
|
Payment
|
9.7
|
Records and Audit
|
9.7.1
|
The Parties shall maintain adequate records as required to meet their respective obligations and compliance with the applicable provisions of this FHA.
|
9.7.2
|
A Party shall not unreasonably condition or deny the other Party access to such adequate and applicable records for the administration of this Agreement. IAE shall allow or cause the Maintenance Center to allow reasonable access to work areas and Eligible Engine records for inspection by Spirit and, at the request of Spirit and subject to the reasonable rules and regulations of the relevant Maintenance Center, any relevant owner, Lessor or their respective designees. Spirit shall be permitted to perform reasonable quality control inspections of each Maintenance Center.
|
9.7.3
|
If IAE or its nominee requires access to the premises of Spirit under this FHA it shall provide reasonable written notice to Spirit and such visit or inspection will be at a time mutually agreeable to the Parties.
|
9.7.4
|
Each Party will comply and ensure that its personnel comply with the other Party’s conduct policies, rules, regulations and directions governing the conduct of visitors upon their premises.
|
9.8
|
Acceptance and Operation
|
9.9
|
Provision of Serviceable Accessories
|
10.
|
FHA Rates and Payment
|
10.1
|
FHA Rates
|
10.1.1
|
The FHA Rate for Restoration Shop Visit Coverage for Eligible Engines during the Period of Cover shall be as follows:
|
(a)
|
For V2524-A5 rated Eligible Engines ***** per Eligible Engine Flight Hour;
|
(b)
|
For V2527-A5 rated Eligible Engines ***** per Eligible Engine Flight Hour; and
|
(c)
|
For V2533-A5 rated Eligible Engines ***** per Eligible Engine Flight Hour.
|
10.1.2
|
*****
|
10.1.3
|
The FHA Rate for Miscellaneous Shop Visit Coverage for Eligible Engines for the first ***** of each Eligible Engine’s Period of Cover shall be ***** per Eligible Engine Flight Hour.
|
10.1.4
|
The FHA Rate for Miscellaneous Shop Visit Coverage for Eligible Engines each year commencing with the ***** for each Eligible Engine during the Period of Cover shall be ***** per Eligible Engine Flight Hour.
|
10.1.5
|
*****
|
10.1.6
|
*****
|
10.2
|
Excess Work Invoices
|
10.2.1
|
Charges for Excess Work shall be invoiced to Spirit by IAE as such Excess Work is performed in accordance with rates identified in Exhibit H.
|
10.2.2
|
In the event IAE determines that an Eligible Engine requires a Shop Visit that will be considered entirely to be Excess Work, and the Workscope for such Shop Visit is equal to or greater than a level of work that would be performed at a Restoration Shop Visit, then:
|
(a)
|
IAE may invoice Spirit its reasonable estimate of the cost of any Excess Work prior to commencement, or during the execution, of such Excess Work. IAE shall invoice Spirit for the balance of the cost of any Excess Work upon receipt of the corresponding invoice from the Maintenance Center (or promptly issue a credit to Spirit’s account with IAE for any excess payment received from Spirit); and
|
(b)
|
Spirit shall pay ***** of the estimated Excess Work invoice prior to induction of the Eligible Engine into the Maintenance Center and (ii) the entire remaining invoice balance (if any) within ***** of Spirit’s receipt of the final invoice from IAE.
|
10.3
|
*****
|
10.4
|
*****
|
10.5
|
General Conditions
|
10.5.1
|
The FHA Rates are predicated upon Spirit:
|
(a)
|
maintaining within its fleet of Aircraft an annual average flight cycle of: ***** hours for V2524-A5 powered Aircraft, ***** hours for V2527-A5 powered Aircraft, and ***** hours for V2533-A5 powered Aircraft (each calculated from the moment the wheels of an Aircraft, on which any Eligible Engine is installed, leave the ground on take-off to the moment when the wheels of such Aircraft touch the ground on landing);
|
(b)
|
maintaining an annual average utilization of ***** hours per V2524-A5 powered Aircraft, ***** hours per V2527-A5 powered Aircraft, and ***** hours per V2533-A5 powered Aircraft;
|
(c)
|
maintaining an average engine thrust derate of: ***** for V2524-A5 powered Aircraft, ***** for V2527-A5 powered Aircraft, and ***** for V2533-A5 powered Aircraft, all relative to the name plate thrust rating;
|
(d)
|
maintaining an average ambient temperature for take-off no greater than: ***** for V2524-A5 powered Aircraft, ***** for V2527-A5 powered Aircraft, and ***** for V2533-A5 powered Aircraft;
|
(e)
|
having its main base located at Fort Lauderdale, FL, Detroit, MI, Atlantic City, NJ, or Dallas, TX;
|
(f)
|
Spirit operating each Eligible Engine at its originally installed thrust rating (unless otherwise agreed by the Parties);
|
(g)
|
acquiring all of the Aircraft and Spare Engines as set forth in Section 9.8;
|
(h)
|
after taking delivery of the Spare Engines in accordance with Exhibit A, maintaining a minimum ratio of ***** Spare Engines to installed Engines for its Aircraft fleet;
|
(i)
|
operating and maintaining the Aircraft and Eligible Engines in accordance with Airbus’, IAE’s, and other applicable OEM’s technical manuals and the eMMP (including Engine rebuild requirements) for the duration of the Period of Cover;
|
(j)
|
subject to the provisions of Section 11, operating, and maintaining the Aircraft and Eligible Engines in regular commercial airline operation for the duration of the Period of Cover;
|
(k)
|
*****
|
(l)
|
acquiring from IAE or its approved sources reasonably sufficient components, parts, and spare Engines at the levels mutually agreed by IAE and Spirit to maintain proper support of the Eligible Engines and Aircraft; and
|
(m)
|
*****.
|
10.5.2
|
In the event Spirit operates the Eligible Engines contrary to the preceding conditions, then IAE may make reasonable and appropriate adjustments to the FHA Rates for Restoration Shop Visit Coverage, as listed in Section 10.1.1 above, in accordance with the FHA Rate adjustment matrices set forth in Exhibit I (the “
FHA Rate Adjustment Matrices
”), which detail the effects of variations in derate, stage length, annual average utilization, and temperature on such FHA Rates. The FHA Rate Adjustment Matrices will be applied on an engine-by-engine basis at RSV induction. *****
|
10.5.3
|
If Spirit acquires additional aircraft powered by V2500-A5 engines or additional V2500-A5 spare engines, then at Spirit’s option, IAE and Spirit shall use good faith efforts to negotiate appropriate pricing and conditions to include such additional engines under this Agreement.
|
10.5.4
|
In the event that an Eligible Engine leaves this Agreement for reasons beyond the control of Spirit, for example, an Eligible Engine is deemed damaged Beyond Economic Repair and is replaced by Spirit with another Engine, subject to prior written agreement by IAE (not to be unreasonably withheld, conditioned or delayed), the FHA Rates for that Engine and not for all Eligible Engines, will be adjusted.
|
10.6
|
Payment
|
10.6.1
|
*****
|
10.6.2
|
Subject to Section
10.6.1
above, Spirit shall pay all invoices submitted by IAE under this Section 10 within ***** of receipt by Spirit.
|
10.6.3
|
Spirit undertakes that IAE shall receive the full undisputed amount of payments falling due under this Section 10, without any withholding or deduction whatsoever. If Spirit has a reasonable dispute with an Excess Work charge from IAE, Spirit will promptly notify IAE of such dispute in writing detailing the grounds for such dispute, but not later than fifteen (15) Business Days after receipt of such Excess Work charge. The Parties agree to use their reasonable, diligent and good faith efforts to reach a final resolution of the disputed Excess Work charge including, if necessary, elevation of the issue to each Party’s senior management at the request of the other Party.
|
10.6.4
|
All payments under this Section 10 shall be made by electronic transfer and shall be deposited not later than the due date of payment with:
|
10.6.5
|
Should Spirit fail to make any material payments to IAE required as set forth in this Section 10 or should Spirit fail to make any material payments to IAE when due under any other agreement between IAE and Spirit and such amount is not subject to a good faith dispute between the Parties, 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 of the greater of ***** or the New York Citibank prime rate plus ***** per annum from the date the payment was due to be made until the date such payment is received by IAE, (b) suspend all work on any and all Eligible Engines then currently at the Maintenance Center pursuant to this FHA and/or (c) hold Eligible Engines in IAE’s possession or control.
|
10.7
|
Taxes and Other Like Charges
|
10.7.1
|
In addition to amounts stated to be payable by Spirit pursuant to this Agreement, Spirit shall pay any and all imposts, taxes, duties, levies, fees, assessments or other like charges (excluding any income, gains, or excess profit, franchise and similar taxes levied on the part of IAE, any Maintenance Center or their respective Affiliates and subcontractors,) which may be imposed by any government or taxing agency thereof arising from performance by IAE or its subcontractors in connection with this Agreement.
|
10.7.2
|
All amounts stated to be payable by Spirit pursuant to this Agreement exclude any value added tax, sales tax or similar such tax. In the event that the supply of goods or services under this Agreement is chargeable to any value added tax, sales tax or similar tax, such tax will be borne by Spirit, subject to the receipt of any appropriate documentation that may be required to enable or assist Spirit to
|
10.7.3
|
If either IAE or Spirit becomes aware of any taxes set forth in Sections 10.7.1 and 10.7.2 above, the relevant Party shall promptly notify the other Party, and both parties agree to cooperate, consult in good faith and take such other reasonable steps in order to mitigate to the full extent permitted by law, any such tax.
|
10.8
|
*****
|
11.
|
*****
|
12.
|
Maintenance Center Requirements
|
12.1
|
Certification and Approval
|
12.1.1
|
IAE shall ensure that each Maintenance Center must be certificated by FAA or EASA, as applicable.
|
12.1.2
|
Each Maintenance Center utilized for Eligible Shop Visits under this Agreement shall be approved in writing by Spirit, such approval not to be unreasonably conditioned, delayed or withheld.
|
12.1.3
|
While performing services under this Agreement, IAE shall maintain and cause the Maintenance Center to maintain facilities for services hereunder on Eligible Engines, modules and Parts in accordance with the Engine Manual and IAE’s other applicable requirements.
|
12.1.4
|
*****
|
12.2
|
*****
|
12.3
|
Other Requirements
|
12.3.1
|
The terms and obligations set forth herein shall apply regardless of the Maintenance Center utilized for services performed hereunder.
|
12.3.2
|
*****
|
13.
|
Insurance
|
13.1
|
IAE shall at its own cost and expense procure and maintain (or cause its subcontractors to procure and maintain) in full force and effect during the Period of Cover policies of insurance of the types and in the minimum amounts as stated below:
|
13.2
|
*****
|
14.
|
Warranties; Limitation of Liability
|
14.1
|
IAE warrants the work performed by a Maintenance Center at the final Shop Visit for each Eligible Engine under this Agreement shall be free from defects in materials and workmanship as follows: If Spirit demonstrates to the reasonable satisfaction of IAE that a defect in the work performed on a Part has caused damage to such Part or any other Part, and Spirit provides written notice to IAE of such damage within ***** or within ***** after installation of the corresponding Eligible Engine on an Aircraft, or if not installed on an Aircraft, within ***** after delivery of the Eligible Engine from the applicable Shop Visit, whichever occurs first, IAE shall, as its sole responsibility for such defect, repair such damage at IAE’s own cost and expense. Transportation charges for the return of defectively serviced goods to IAE or the Maintenance Center, and their reshipment to Spirit and risk of loss thereof shall be borne by IAE only if such goods are returned in accordance with reasonable written shipping instructions from IAE.
|
14.2
|
IAE warrants to Spirit that it shall convey good title to the new Parts sold hereunder. IAE's liability and Spirit’s 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.
|
14.3
|
THE WARRANTIES SET FORTH HEREIN AND/OR IN THE NEW ENGINE FLEET GTA TOGETHER WITH THE EXPRESS REMEDIES PROVIDED TO SPIRIT IN ACCORDANCE WITH THIS AGREEMENT AND/OR SUCH NEW ENGINE FLEET GTA, ARE EXCLUSIVE AND ARE GIVEN BY IAE IN LIEU OF (A) ANY AND ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE; AND (B) ANY OBLIGATION, LIABILITY, RIGHT, CLAIM, OR REMEDY IN STATUTE, CONTRACT, TORT OR STRICT LIABILITY AGAINST OEM OR ITS AFFILIATES, WHETHER OR NOT ARISING FROM THE NEGLIGENCE, ACTUAL OR IMPUTED (BUT NOT GROSS NEGLIGENCE OR WILLFUL MISCONDUCT), OF IAE OR ITS AFFILIATES, STOCKHOLDERS, DIRECTORS, OFFICERS, EMPLOYEES, PERMITTED ASSIGNS AND AGENTS.
|
14.4
|
*****
|
14.5
|
For purpose of this Section 12, “
IAE
” shall be deemed to include IAE International Aero Engines AG, Pratt and Whitney, a division of United Technologies Corporation, Pratt & Whitney Aero Engines International GmbH, Japanese Aero Engine Corporation, MTU Aero Engines GmbH, and the respective directors, officers, employees and agents of each.
|
15.
|
Delays
|
15.1
|
Excusable Delays
|
16.
|
Duplicate Benefits
|
17.
|
Intellectual Property
|
17.1
|
In the event any suit, claim or action is brought against Spirit (or a person expressly indemnified by Spirit) alleging that, without further combination, Spirit’s use or resale of
(a)
goods
(b)
a part made by or under IAE’s control and in accordance with the specification or design provided by IAE or
(c)
a process embodied in the goods delivered to Spirit by IAE infringes any patents, IAE will, at its own expense, conduct the entire defense including any and all necessary court action, settlements, and appeals. IAE will either settle such claim or pay all damages and costs awarded in a non-appealable judgment, excluding indirect, incidental, special, consequential, and punitive damages. If the use or resale of such goods or part(s) is finally enjoined, IAE will, at its option:
(a)
procure for Spirit the right to use or resell such goods or parts;
(b)
replace such goods or parts with equivalent non-infringing parts;
(c)
modify such goods or parts so they become non-infringing but equivalent; or
(d)
remove such goods or part(s) and refund the purchase price (less a reasonable allowance for use, damage or obsolescence).
|
17.2
|
The preceding provision is applicable only if the following conditions are met:
(a)
the goods, part(s), services, or process involved in the suit, claim, or action must have been provided under this Agreement during Maintenance Services in accordance with this Agreement, as applicable;
(b)
the alleged infringement must be an infringement of any patents of the nation in which Spirit’s principal place of business is located or a jurisdiction within which the relevant Supplies were manufactured or delivered to Spirit;
(c)
Spirit must provide IAE with timely notice of such suit, claim, or action and the full opportunity to assume the entire defense thereof; and
(d)
Spirit must provide IAE with all information available to Spirit and other defendants pertaining to the alleged infringement.
|
17.3
|
For the avoidance of doubt, this provision will not apply to
(a)
any alleged patent infringement in any nation other than as specified above;
(b)
any Spirit-furnished specification or design or the performance of a process not recommended in writing by IAE;
(c)
any goods or parts or components thereof manufactured according to a non-IAE specification or design;
(d)
the use or sale of goods or parts delivered hereunder in combination with other goods not delivered to Spirit by IAE; or
(e)
any instance not specified in the preceding paragraphs. In such instances, Spirit will indemnify and hold IAE harmless.
|
18.
|
Amendment
|
19.
|
Assignment
|
19.1
|
Except as otherwise agreed herein, Spirit may not assign in whole or part any of its rights or obligations under this Agreement without the written consent of IAE (such consent not to be unreasonably withheld).
|
19.2
|
*****
|
19.3
|
*****
|
19.4
|
IAE may, without recourse, assign its rights and/or delegate its obligations under this Agreement to any subsidiary or affiliate of IAE or United Technologies Corporation, or in connection with a merger, consolidation, reorganization, or voluntary sale or transfer of its assets; provided that such assignee/delegate is: (i) solvent at the time of such transfer and (ii) authorized by the applicable regulatory authorities, as necessary, to perform or procure the performance of all obligations being delegated/assigned; and (iii) able, in IAE’s sole, reasonable discretion, to make all payments required by IAE to be made to Spirit under this Agreement.
|
20.
|
Notices
|
21.
|
Exclusion of Other Provisions and Previous Understandings
|
21.1
|
This Agreement and the New Engine Fleet GTA constitute the entire agreement of the Parties with respect to the Eligible Engines and 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 Spirit, or any acknowledgment or acceptance by IAE, or of any other document which may be issued by either Party relating to such services and the Eligible Engines.
|
21.2
|
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 Agreement, whether orally or in writing, relating to such 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 such services and shall supersede all such representations, agreements, statements and understandings.
|
22.
|
Termination, Expiration and Events of Default
|
22.1
|
Bankruptcy Insolvency
|
22.2
|
Failure to Make Payments or to Meet Obligations
|
22.2.1
|
If Spirit fails to make any payment of a material amount, due and owing to IAE as set forth in Section 10 of this Agreement or any other agreement between the Parties (including any late interest due thereon) and such amount is not the subject of a good faith dispute or fails to meet any other material obligation under this Agreement or any other agreement between the Parties, then, after notice to Spirit and the expiration of a ***** cure period, and without prejudice to any of IAE’s other rights which IAE may have in contract, at law, or in equity, IAE shall have the right to not to induct, to suspend all work on, or not to release from the Maintenance Center(s) any Eligible Engine until full payment is made by Spirit to IAE or such failure is corrected, as the case may be.
|
22.2.2
|
If Spirit fails to take delivery of all of the Aircraft and Eligible Engines in accordance with the schedule set forth in Exhibit A to this Agreement, as amended, supplemented or otherwise modified from time to time, or fails to operate the Aircraft and Eligible Engines in regular commercial service as contemplated by Section 10.5 for the duration of the Period of Cover (subject to the fleet flexibility granted in Section 11), in addition to any other rights which IAE may have in contract, at law, or in equity, IAE shall be entitled to make reasonable adjustments to the FHA Rates as appropriate based on the method of calculation used to derive the FHA Rates.
|
22.2.3
|
Spirit shall have the right to terminate this Agreement in the event that IAE fails to: (i) pay or provide any credit payable hereunder when due and such failure is not cured within ***** or (ii) perform a material obligation in accordance with the terms hereof and such failure continues unremedied for a period in excess of ***** or such failure reoccurs in at least ***** consecutive shop visits after IAE was first given written notice of such failure by Spirit, provided however that in no event shall IAE have fewer than ***** to cure such failure.
|
22.3
|
Expiration
|
22.4
|
Effect of Termination or Expiration
|
22.4.1
|
Upon any termination or expiration of this Agreement, all liabilities and obligations (including payment obligations) that have accrued prior to such termination or expiration (including payment due for Excess Work) shall survive.
|
22.4.2
|
Spirit shall pay to IAE the cost of any and all services which have been or are in the process of being carried out under the terms of this Agreement which have not been covered by payments made by Spirit under this Agreement plus a surcharge of the lesser of (i) ***** and (ii) the maximum amount allowed by law. Should Spirit terminate this Agreement under Section 20.1 or Section 20.2.3 above, IAE shall return any
|
23.
|
Negation of Waiver
|
24.
|
Severability and Partial Invalidity
|
25.
|
Governing Law
|
26.
|
Publicity
|
27.
|
Confidentiality
|
28.
|
Compliance with All Applicable Laws and Regulations
|
28.1
|
Export/Import. Spirit agrees that it will not, directly or indirectly, sell, export, re-export, transfer, divert, or otherwise dispose of any IAE goods, software, technical data (including products derived from or based on such technical data), or services received directly or indirectly from IAE to any Prohibited Party without obtaining prior authorization from the relevant government authorities as required pursuant to Export Laws.
|
28.2
|
Other Laws and Regulations
. Each Party agrees that it will not, by act or omission, violate any applicable law or regulation of the United States or any political subdivision thereof where the violation thereof would result in the other Party being deemed to be in violation of such law or regulation or would otherwise result in a criminal or an un-indemnified civil penalty on the part of such other Party
|
29.
|
No Construction Against Drafter
|
30.
|
Damages
|
Agreed to and accepted on behalf of:
IAE International Aero Engines AG
|
|
Agreed to and accepted on behalf of:
Spirit Airlines, Inc.
|
||
By:
|
/s/ Rick Deurloo
|
|
By:
|
/s/ Charles A. Rue
|
Name:
|
Rick Deurloo
|
|
Name:
|
Charles A. Rue
|
Title:
|
SVP Sales
|
|
Title:
|
VP Supply Chain
|
Aircraft No.
|
Aircraft Model
|
Engine Model
|
Scheduled Delivery Date
|
1
|
*****
|
*****
|
*****
|
2
|
*****
|
*****
|
*****
|
3
|
*****
|
*****
|
*****
|
4
|
*****
|
*****
|
*****
|
5
|
*****
|
*****
|
*****
|
6
|
*****
|
*****
|
*****
|
7
|
*****
|
*****
|
*****
|
8
|
*****
|
*****
|
*****
|
9
|
*****
|
*****
|
*****
|
10
|
*****
|
*****
|
*****
|
11
|
*****
|
*****
|
*****
|
12
|
*****
|
*****
|
*****
|
13
|
*****
|
*****
|
*****
|
14
|
*****
|
*****
|
*****
|
15
|
*****
|
*****
|
*****
|
16
|
*****
|
*****
|
*****
|
17
|
*****
|
*****
|
*****
|
18
|
*****
|
*****
|
*****
|
19
|
*****
|
*****
|
*****
|
20
|
*****
|
*****
|
*****
|
21
|
*****
|
*****
|
*****
|
22
|
*****
|
*****
|
*****
|
23
|
*****
|
*****
|
*****
|
24
|
*****
|
*****
|
*****
|
25
|
*****
|
*****
|
*****
|
26
|
*****
|
*****
|
*****
|
27
|
*****
|
*****
|
*****
|
28
|
*****
|
*****
|
*****
|
29
|
*****
|
*****
|
*****
|
30
|
*****
|
*****
|
*****
|
Spare Engine No.
|
Quantity
|
Engine Model
|
Scheduled Delivery Date
|
1
|
1
|
*****
|
*****
|
2
|
1
|
*****
|
*****
|
3
|
1
|
*****
|
*****
|
4
|
1
|
*****
|
*****
|
1.
|
FHA Rates will be subject to annual escalation in accordance with the formula set forth below:
|
ATA code
|
Description
|
Units Per Engine
|
OEM
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
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*****
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1.
|
SPIRIT ADDRESSES
|
(a)
|
Address for Notices:
|
(b)
|
Address for Invoices:
|
2.
|
IAE ADDRESSES
|
(a)
|
Address for Notices:
|
(b)
|
Address for Invoices:
|
(c)
|
Address for all Other FHA Matters:
|
1.
|
IAE will provide the following Engine health monitoring services (“
Services
”) through the ADEM system:
|
(i)
|
Provide processing of in-flight engine data received from Operator into IAE’s EHM database as provided per the data input and transmission requirements set forth in Section
3
herein. All processed data will be provided to the Operator via IAE’s web portal. Daily updates require web portal access described in Section
1
(b) herein.
|
(ii)
|
Provide automated mechanical exceedance reporting for those Aircraft that are equipped with required on-board hardware and software.
|
(iii)
|
Provide technical analysis of EHM Eligible Engines’ performance data and report anomalies indicated by such data to designated Operator personnel as required.
|
(iv)
|
Provide access to monthly EHM Eligible Engine operating trend analysis report covering post EHM Commencement Date operations to assist Operator in the planning and scheduling of EHM Eligible Engines for shop visits.
|
(v)
|
Provide automated alert notification of parameters that have exceeded level and rate change limits.
|
(vi)
|
Provide access to alert details reports that identify Aircraft and Eligible Engines by serial number and provide the date, time, magnitude and details of occurrences when such Eligible Engine exceeds specific performance parameters and provide the ability to store comments associated with a given alert.
|
(vii)
|
Provide exhaust gas temperature (subject to data availability) Watch-Lists, updated monthly utilizing data received from Operator to assist Operator in scheduling Eligible Engine removals for maintenance purposes. The Watch-Lists provide an engine ranking and predicted removal date for a given Eligible Engine based on the measured parameter and deterioration rate to assist with proactive on-wing management and maintenance planning.
|
(viii)
|
Provide access to the following engine performance parameter trend plots that are updated real-time as new in-flight engine data is received from Operator:
|
(ix)
|
Upon special request, raw in-flight engine data can be supplied to the Operator.
|
(x)
|
Input data files and d individually processed records will be stored for a minimum period of five (5) years.
|
(i)
|
Provide twenty-four (24) hour per day access to reports and processed information, provided to under Section
1
herein, through a secure web portal created and maintained by IAE. Such web portal access shall be created and provided to Operator approximately thirty (30) days from the execution of this Agreement. Operator must meet IAE defined requirements for access as detailed in Section
2
herein. IAE will use all reasonable efforts to ensure a service availability target of 96% when measured on an annual basis and that down time of the system is no longer than one (1) business day for any one incident.
|
(ii)
|
IAE shall provide Services under the terms of this Agreement contingent upon the timely receipt of data required by IAE from Operator. It is understood between the parties that the ability of IAE to provide timely and accurate reports and processed information through these web-based services is dependent upon the quality and timeliness of the data received from Operator.
|
(iii)
|
If Email, or pager or cell phone alert notifications are required by the Operator, the Operator shall be responsible for acquiring and maintaining the required pager and cell phone hardware and software and pay any associated communications fees. It is the Operator’s responsibility to establish an alert notification contact list and advise IAE of any changes.
|
(a)
|
To facilitate internet portal access, Operator is required to maintain the following: (i) internet access; (ii) Internet Explorer version 5.5 or higher; (iii) 128 bit Secure Socket Layer (“SSL”) encryption capability; and (iv) a minimum internet speed of 56K bits per second to access the internet portal.
|
(b)
|
All information being transmitted through the Internet portal will be protected using SSL encryption. In addition, each user of the Internet portal will be authenticated at logon with a unique user identification and password. Once authenticated to the Internet portal, Operator will only be allowed to access the information that Operator and IAE mutually agree a specific user may review. IAE shall review security requirements for web portal access from time to time to ensure an appropriate level of data protection. Updated security requirements shall be communicated to Operator on a timely basis.
|
(a)
|
Operator shall provide all data requested by IAE in order to perform the Services, including but not limited to the date and time the data was recorded, aircraft and engine number, engine position, altitude and mach (or air speed), total air temperature, engine pressure ratio, rotor speeds, fuel flow, oil temperature, oil pressure, mechanical exceedances and pertinent maintenance actions (EHM Eligible Engine changes, sensor changes, other items that may impact engine performance). Operator shall electronically transmit engine condition monitoring data to IAE’s designated ground station via air-to-ground service providers (e.g., ARINC and SITA) or via such other routing as the parties mutually agree.
|
(b)
|
Using the facilities available within IAE’s V2500 engine monitoring program services, the Operator shall provide feedback of on-wing maintenance actions taken as a result of an alert notification as provided in accordance with Section 1(a)(v) herein.
|
Item
|
Basis
|
Rates/Fees
|
*****
|
*****
|
*****
(3)
|
*****
(4)
|
*****
|
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|
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|
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|
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|
*****
(2)
|
*****
(3)
|
*****
|
*****
|
*****
(3)
|
1.
|
*****
|
2.
|
Where units per Engine quantities listed in Exhibit C are greater than *****, a single ***** fee per ATA line item shall still apply. This charge will also cover the packing, one-way transportation and coordination of Accessories removed and sent for vendor repair.
|
3.
|
The above rates and fees are expressed in United States Dollars and are subject to escalation from the base month of January 2013 in accordance with the formula set forth in Exhibit B.
|
4.
|
*****
|
Subject:
|
Side Letter No. 1 to the V2500-A5 Fleet Hour Agreement between IAE International Aero Engines AG and Spirit Airlines, Inc., dated October 1, 2013
|
1.
|
New Fleet – Aircraft Delivery Schedule
|
2.
|
New Fleet – Spare Engine Delivery Schedule
|
Agreed to and accepted on behalf of:
IAE International Aero Engines AG
|
|
Agreed to and accepted on behalf of:
Spirit Airlines, Inc.
|
||
By:
|
/s/ Rick Deurloo
|
|
By:
|
/s/ Edward Christie
|
Name:
|
Rick Deurloo
|
|
Name:
|
Edward Christie
|
Title:
|
SVP Sales
|
|
Title:
|
SVP & CFO
|
Date:
|
10/2/13
|
|
Date:
|
10/2/13
|
Aircraft No.
|
Aircraft Model
|
Engine Model
|
Scheduled Delivery Date
|
1
|
*****
|
*****
|
*****
|
2
|
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3
|
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4
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5
|
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6
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7
|
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8
|
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9
|
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10
|
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11
|
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12
|
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13
|
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14
|
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15
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37
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38
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39
|
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40
|
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41
|
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42
|
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43
|
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44
|
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|
45
|
*****
|
*****
|
*****
|
Firm Spare Engine Delivery Schedule
|
|||
Spare Engine No.
|
Quantity
|
Engine Model
|
Scheduled Delivery Date
|
1
|
1
|
*****
|
*****
|
2
|
1
|
*****
|
*****
|
3
|
1
|
*****
|
*****
|
4
|
1
|
*****
|
*****
|
Option Spare Engine Delivery Schedule
|
|||
Spare Engine No.
|
Quantity
|
Engine Model
|
Scheduled Delivery Date
|
1
|
1
|
*****
|
*****
|
1
|
1
|
*****
|
*****
|
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
|
SPIRIT AIRLINES, INC.
|
a corporation organized and existing under the laws of Delaware, whose principal place of business is at 2800 Executive Way, Miramar, Florida 33025 (hereinafter called “
Spirit
”).
|
A.
|
Spirit has firmly ordered (i) thirty (30) new A320 family aircraft from Airbus all to be powered by IAE V2500-A5 engines and (ii) four (4) new V2500-A5 spare engines from IAE all of which will, subject to Spirit’s rights hereunder, be operated by Spirit (the “
New Engine Fleet
”);
|
B.
|
IAE and Spirit have entered into a V-Services
SM
Fleet Hour Agreement dated October 1, 2013 for the provision of certain off-wing maintenance for the New Engine Fleet (the “
New Engine Fleet FHA
”);
|
C.
|
IAE and Spirit previously entered into the Amended and Restated V2500® General Terms of Sale dated October 1, 2013 for sale and support of certain V2500-powered Airbus A320 family aircraft and V2500 spare engines already in operation with Spirit (the “
Existing Fleet GTA
”);
|
D.
|
IAE and Spirit have also previously entered into an Amended and Restated V-Services
SM
Fleet Hour Agreement dated October 1, 2013 for the provision of certain off-wing maintenance for certain V2500-A5 engines already in operation with Spirit (the “
Existing Fleet FHA
”); and
|
E.
|
IAE and Spirit now wish to agree upon terms whereby IAE will supply to Spirit V2500 engines, modules, spare parts, special tools, ground equipment, and product support services for the support and operation of the New Engine Fleet.
|
1.
|
Definitions
|
1.1
|
“
Aircraft
” shall mean the thirty (30) new Airbus A320 family aircraft powered by new Engines firmly ordered and being acquired by Spirit from Airbus for delivery as set forth in Exhibit B-1
to this New Fleet Contract, as the same may be amended from time to time in accordance herewith.
|
1.2
|
“
Airbus
” shall mean Airbus SAS, with its principal place of business at 1, Rond Point Maurice Bellonte, 31707 Blagnac Cedex, France, together with its successors and assigns.
|
1.3
|
“
Certification Authority
” shall mean the United States Federal Aviation Administration.
|
1.4
|
“
Change Order
” shall have the meaning set forth in Section 2.3.1 hereto.
|
1.5
|
“
Engine(s)
” shall mean the IAE V2500 aero engine described in the applicable Specification(s).
|
1.6
|
“
Initial Provisioning
” shall mean the establishment by Spirit of an initial stock of Spare Parts, Support Equipment, and Vendor Parts.
|
1.7
|
“
Initial Provisioning Data
” shall mean information supplied by IAE to Spirit for Initial Provisioning purposes.
|
1.8
|
“
Initial Provisioning Orders
” shall mean orders for Spare Parts and Support Equipment for the purpose of Initial Provisioning.
|
1.9
|
“
Lead Time
” shall mean the period specified in the Spare Parts Catalog that represents the minimum time required between acceptance by IAE of an order by Spirit for Spare Parts and commencement of delivery of such Spare Parts.
|
1.10
|
“
Service Bulletins
” shall mean those service bulletins containing advice and instructions issued by IAE to Spirit from time to time in respect of Engines.
|
1.11
|
“
Spare Engines
” shall mean the Firm Spare Engines as defined in Section 2.2.1.
|
1.12
|
“
Spare Parts
” shall mean spare parts for Engines as identified in the Spare Parts Catalog, excluding the items listed in the Specification as being items of supply by Spirit.
|
1.13
|
“
Spare Parts Catalog
” shall mean the catalog published by IAE from time to time providing a description, Lead Time and price for Spare Parts available for purchase from IAE.
|
1.14
|
“
Specification(s)
” shall mean the IAE Engine Specification(s) set forth in Exhibit A
to this New Fleet Contract, as the same may be amended, supplemented and/or updated from time to time.
|
1.15
|
“
Supplies
” shall mean V2500 engines (including installed Engines and Spare Engines), Spare Parts, Vendor Parts, and Support Equipment.
|
1.16
|
“
Support Equipment
” shall mean tools, and all equipment (including handling, transportation and ground equipment) to be supplied pursuant to this New Fleet Contract for use with the Aircraft and/or Spare Engines and not for installation on the Aircraft. Support Equipment does not constitute Spare Parts.
|
1.17
|
“
Vendor Parts
” shall mean parts not manufactured by IAE, including accessories, described as “
Vendor Parts
” in Initial Provisioning Data. Vendor Parts do not constitute Spare Parts
.
|
2.
|
Installed and Spare Engine Purchase Commitments
|
2.1
|
Agreement to Purchase Aircraft from Airbus
|
2.2
|
Agreement to Purchase Spare Engines from IAE
|
2.2.1
|
Subject to the terms and conditions of this Agreement, Spirit hereby places a firm order with IAE for the purchase of four (4) new spare Engines (the “
Spare Engines
”) for delivery according to the schedule set forth in Exhibit B-2
to this New Fleet Contract, as the same may be amended, supplemented and/or updated from time to time.
|
2.2.2
|
Except as otherwise set forth in the following paragraph, Spirit shall purchase an Engine storage bag and transportation stand from IAE for delivery with each Spare Engine. The prices for such equipment shall be the then-current price as set forth in the IAE spare parts catalog.
|
2.3
|
Type Approval and Changes in Specification
|
2.3.1
|
Each of the Spare Engines will be manufactured to the standards set forth in the applicable Specification. After the date of this New Fleet Contract, the Spare Engines may be varied from the standards set forth in the Specification and other IAE manufacturing specifications from time to time by written change orders (each a “
Change Order
”), which shall set forth in detail:
|
(a)
|
The changes to be made in the Spare Engines; and
|
(b)
|
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.
|
2.3.2
|
IAE may make any changes in the Spare Engines that do not adversely affect the Specification (including but not limited to performance and weight), interchangeability of the Spare Engines in the airframe, prices or dates of delivery of the Spare Engines. In the case of such permitted changes, a Change Order shall not be required or if issued shall not be binding until signed by IAE and Spirit.
|
2.3.3
|
At the time of delivery of the Spare Engines there is to be in existence an FAA-issued “Type Approval Certificate” for the Spare Engines in accordance with the provisions of the Specification.
|
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 New Fleet Contract (such requirements and interpretations being hereinafter referred to as “
Current Rules
”). Subject to Section 2.3.2 above, IAE and Spirit 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 is to be paid by IAE in the case of changes required to conform to the Current Rules and by Spirit in any other case.
|
2.4
|
Inspection and Acceptance
|
2.4.1
|
IAE shall ensure that each Spare Engine delivered to Airlines is new and conforms to the applicable Specification through the maintenance of procedures, systems and records approved by the airworthiness authority. An FAA-issued “
Authorized Release Certificate
” (FAA Form 8130-3, Airworthiness Approval Tag) or “
Certificate of Conformity
” (as the case may be) will be issued and signed by personnel authorized for such purposes.
|
2.4.2
|
Subject to its rights under Section 2.4.4 below, upon delivery of a Spare Engine pursuant to Section 2.5.1 below for and the issuance of an Authorized Release Certificate or a Certificate of Conformity (as the case may be), Spirit shall be deemed to have accepted the relevant Spare Engine (and Engine storage bag and transportation stand, if purchased from IAE), and that the relevant Spare Engine conforms to the applicable Specification. IAE shall, upon written request from Spirit and subject to the permission of the appropriate governmental authorities, arrange for Spirit’s personnel 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
|
Spirit’s acceptance or deemed acceptance will, however, in no way prejudice its warranties and support rights under this New Fleet Contract or the New Fleet FHA.
|
2.4.4
|
Notwithstanding the foregoing, upon delivery of a Spare Engine, Spirit shall have the right to inspect (including a borescope inspection) such Engine. In the event that Spirit finds a non-conformance with the requirements set forth herein, Spirit shall report such non-conformance in writing to IAE upon or within ***** of delivery provided that IAE will use reasonable efforts to resolve such non-conformance in a reasonable timeframe to be agreed by the Parties. If Spirit does not report a non-conformance within ***** of delivery, the relevant Spare Engine will be deemed to have been accepted. If IAE is unable to resolve such non-conformance within the agreed reasonable timeframe, then Spirit may reject such Spare Engine.
|
2.4.5
|
If Spirit refuses, is unable to accept, or otherwise hinders delivery of any Spare Engine that satisfies the requirements and conditions set forth herein, Spirit shall nevertheless pay or cause IAE to be paid therefore as if, for the purposes of payment only, the Spare Engines had been delivered.
|
2.4.6
|
In any of the cases specified in Section 2.4.5 above, Spirit shall also pay to IAE such reasonable sum as IAE shall require in respect of storage, maintenance and insurance of those Spare Engines.
|
2.5
|
Delivery, Shipping, Title and Risk of Loss or Damage
|
2.5.1
|
Provided Spirit has made payment in accordance with Section 2.7 below, IAE will deliver each Spare Engine (and Engine storage bag and transportation stand, if purchased from IAE) in accordance with the delivery schedule set out in Exhibit B-2 to this New Fleet Contract. IAE will provide one-way transportation, including risk of loss, for each Spare Engine from IAE’s facilities to Spirit’s main base and deliver the same to Spirit at such location.
|
2.5.2
|
Upon such delivery, title to and risk of loss of or damage to the relevant Spare Engine (and Engine storage bag and transportation stand, if purchased from IAE) shall pass to Spirit.
|
2.5.3
|
Spirit will notify IAE at least thirty (30) days before the scheduled time for delivery of each of the Spare Engines of its instructions as to the marking and shipping of each of the Spare Engines.
|
2.6
|
Price
|
2.7
|
Payment
|
2.7.1
|
Spirit will make payment for each Spare Engine (and Engine storage bag and transportation stand, if purchased from IAE) in United States Dollars as follows:
|
(a)
|
***** before the scheduled delivery of each of the Spare Engines, Spirit shall pay to IAE a non-refundable (unless the relevant Spare Engine shall not be delivered to Spirit as a result of any breach by IAE of this Agreement) pre-delivery payment of ***** of the Estimated Purchase Price of such Spare Engine; and
|
(b)
|
At the time of delivery of each of the Spare Engines, Spirit shall pay to IAE the balance of the net purchase price of such Spare Engine (net of all applicable credits), plus the purchase price of the Engine storage bag and transportation stand, if purchased from IAE.
|
2.7.2
|
IAE shall have the right to require Spirit to make additional payments in respect of price changes arising from the provisions of Section 2.3 above on a similar basis to that specified in Section 2.7.1 above.
|
2.7.3
|
Spirit shall pay the full amount of payments falling due under this Section 2.7, without any withholding or deduction whatsoever.
|
2.7.4
|
All payments under this Section 2.7 shall be made by wire transfer and shall be deposited not later than the due date of payment with:
|
2.7.5
|
For the purpose of this Section 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 Section 2.7.4 above or as otherwise notified to Spirit in writing by IAE.
|
2.7.6
|
If Spirit fails to make any payment pursuant to this Section 2 on or before the date when such payment is due, then, without prejudice to any of IAE's other rights, IAE
|
2.7.7
|
For the purpose of this Section 2.7, the “
Estimated Purchase Price
” of any of the Spare Engines shall be calculated in accordance with the following formula:
|
3.
|
Spare Parts Provisions
|
3.1
|
Intent and Term
|
3.1.1
|
For as long as Spirit owns and operates one or more Aircraft in regular commercial service and is not in breach of any material obligation to IAE under this New Fleet Contract, IAE shall use commercially reasonable efforts to make available adequate supplies of Spare Parts for sale to Spirit under this New Fleet Contract. In consideration thereof, except as otherwise provided under Section 3.1.2 below, Spirit shall buy from IAE, and IAE shall sell to Spirit, all of Spirit's requirements of the following:
|
(a)
|
Spare Parts and Support Equipment necessary to support Spirit’s operation of the Aircraft and/or use of the Spare Engines; and
|
(b)
|
Vendor Parts for which direct supply arrangements between the manufacturers of such Vendor Parts and Spirit cannot be reasonably established. Spirit shall notify IAE in writing not less than the greater of (i) the lead time of the vendor as specified in the respective vendor manual or (ii) three (3) months before scheduled delivery requested by Spirit that Spirit intends to purchase such Vendor Parts from IAE.
|
3.1.2
|
Purchase by Spirit from Others
|
3.2
|
ATA Standards
|
3.3
|
Stocking of Spare Parts
|
3.4
|
Lead Times
|
3.4.1
|
IAE shall endeavor to deliver replenishment Spare Parts within the Lead Time specified in the IAE Spare Parts Catalog, except for certain major Spare Parts that are designated in the Spare Parts Catalog as being available at prices and lead times to be quoted upon request. Support Equipment and Vendor Parts are available at prices and Lead Times to be quoted upon request and IAE shall endeavor to deliver any such Support Agreement or Vendor Parts within such Lead Times as quoted.
|
3.4.2
|
If any order for replenishment Spare Parts shall call for a quantity materially in excess of Spirit's normal requirements, IAE shall notify Spirit and may request a special delivery schedule. If Spirit confirms that the full quantity ordered is required, delivery of the order shall be effected at delivery dates mutually acceptable to IAE and Spirit and the Lead Times provided by this Section shall not apply.
|
3.4.3
|
In an emergency, IAE shall use its reasonable efforts to deliver all Spare Parts within the time limits specified by Spirit. IAE will provide notice of the action to be taken on such orders within the following time periods from IAE's receipt of such notice and based on the type of order:
|
(a)
|
AOG (Aircraft on Ground) orders - within 4 hours;
|
(b)
|
Critical (imminent AOG or work stoppage) - within 24 hours;
|
(c)
|
Expedited (less than published or quoted lead time) - within 7 days.
|
3.5
|
Ordering Procedure
|
3.5.1
|
Orders for Spare Parts and Support Equipment may be placed by Spirit from time to time on an as-needed basis. Spirit shall give IAE as much notice as practicable of any change in its operation, including, but not limited to, changes in maintenance or overhaul arrangements affecting its requirements of Spare Parts, Support Equipment and including Vendor Parts.
|
3.5.2
|
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 Section 3.4.2 above, shall constitute an acceptance of the order under the terms of this New Fleet Contract.
|
3.5.3
|
Standard package quantities shall be delivered and packed in accordance with the Spare Parts Catalog.
|
3.6
|
Modifications to Spare Parts
|
3.6.1
|
IAE shall be entitled to make modifications or changes to the Spare Parts ordered by Spirit hereunder provided that the modification has received the approval of the Certification Authority and modified Spare Parts shall be substituted for Spare Parts ordered. IAE shall promptly inform Spirit by means of 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 Spirit before delivery.
|
3.6.2
|
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 Spirit to be unacceptable and Spirit so states in writing to IAE within ninety (90) days of the transmittal date of the applicable Service Bulletin, in which case Spirit shall be entitled to place a single order for Spirit’s anticipated total requirement of pre-modified Spare Parts, at a price and delivery schedule to be agreed.
|
3.6.3
|
Unless Spirit notifies IAE in writing under the provisions of Section 3.6.2 above, IAE may supply at the expense of Spirit a modification of any Spare Part ordered (including any additional Spare Part needed to ensure interchangeability), provided that the modification has received the approval of the Certification Authority. The delivery of such Spare Parts shall begin on dates indicated by the applicable Service Bulletin. The delivery schedule shall be agreed at the time when orders for modifications are accepted by IAE.
|
3.7
|
Inspection
|
3.7.1
|
Conformance to the Specification of Spare Parts purchased hereunder will be assured by IAE through the maintenance of procedures, systems and records approved by the Certification Authority. Conformance documentation will be issued by IAE to Spirit and signed by IAE personnel authorized for such purpose.
|
3.7.2
|
Conformance of Support Equipment and Vendor Parts purchased pursuant to this Section 3 will be assured by IAE conformance documentation and/or Vendor conformance documentation, as applicable.
|
3.7.3
|
Upon the issuance of conformance documentation in accordance with Sections 3.7.1 or 3.7.2 above and delivery in accordance with Section 3.9.1 below Spirit shall be deemed to have accepted the applicable Spare Parts, Support Equipment, or Vendor Parts, and that such Spare Parts, Support Equipment or Vendor Parts conform to the applicable specification without prejudice to any of Spirit’s warranty and support rights under this New Fleet Contract or any other right of Spirit under applicable law.
|
3.8
|
Delivery and Packing
|
3.8.1
|
IAE shall deliver Spare Parts, Support Equipment and Vendor Parts if such parts are purchased from IAE pursuant to this Section 3, Ex-Works (INCOTERMS 2000) the point of manufacture. Shipping documents and invoices shall be in accordance with ATA Specification 2000.
|
3.8.2
|
Upon such delivery as described in Section 3.8.1, title to and risk of loss of or damage to the Spare Parts, Support Equipment, and Vendor Parts shall pass to Spirit.
|
3.8.3
|
In accordance with ATA Specification 2000 requirements, Spirit shall advise IAE at time of order of its instructions as to the marking and shipping of the Spare Parts, Support Equipment and Vendor Parts.
|
3.8.4
|
The packaging of Spare Parts, Support Equipment, and Vendor Parts shall be in accordance with ATA Specification 300 Category 2 standard, unless deviations are otherwise agreed pursuant to Section 3.2 and shall be free of charge to Spirit. Category 1 standard packaging, if required by Spirit, shall be paid for by Spirit.
|
3.9
|
Prices
|
3.9.1
|
Prices of all Spare Parts, Support Equipment, and Vendor Parts shall be quoted in U.S. Dollars, in the Spare Parts Price Catalog, or Initial Provisioning Data, or in individual quotations. Such prices shall represent net unit prices, Ex-Works (INCOTERMS 2000), IAE point of manufacture according to Section 3.8.1 above.
|
3.9.2
|
Prices applicable to each order placed by Spirit hereunder shall be the prices in effect at the time of such order according to the terms of the Spare Parts Price Catalog. IAE will honor the Spare Parts Catalog price or the quoted price (within the applicable quote validity period) at the time of each purchase order. If Spirit makes an error in its purchase order, the price at the time of the corrected purchase order will be applicable.
|
3.9.3
|
IAE may from time to time adjust its prices for Spare Parts and Support Equipment upon not less than ninety (90) days prior written notice to Spirit. Any individual price errors in the calculation of prices may be corrected in good faith without advance notice to Spirit.
|
3.9.4
|
On request by Spirit, prices of Spare Parts, Support Equipment, or other materials not included in the Spare Parts Price Catalog shall be quoted within a reasonable time by IAE.
|
3.10
|
Payment
|
3.10.1
|
Payment for all purchases of Spare Parts, Support Equipment, and Vendor Parts under this Section 3 shall be made by Spirit to IAE *****. Payment for any other invoices arising under this New Fleet Contract shall be made by Spirit to IAE *****.
|
3.10.2
|
Spirit undertakes that IAE shall receive payment in U.S. Dollars of the full amount of payments falling due under this Section 3.10, without any withholding or deduction whatsoever.
|
3.10.3
|
All payments under this Section 3.10 shall be made by wire transfer to, and shall be deposited not later than the due date of payment with:
|
3.10.4
|
For the purpose of this Section 3.10, payment shall only be deemed to have been made to the extent immediately available funds are received in the account specified in sub-Section 3.10.3 above or as otherwise notified by IAE in accordance with the terms of this New Fleet Contract.
|
3.10.5
|
Notwithstanding Section 3.10.1 above, payments for all purchases of Spare Parts, Support Equipment and Vendor Parts may, at IAE's option become payable prior to delivery of such items upon the occurrence and during the continuance of any of the following events: (a) a receiver or trustee is appointed for all or a substantial part
of Spirit's property, or (b) Spirit is adjudicated or voluntarily becomes a bankrupt under any bankruptcy or winding up laws or other similar legislation, or (c) Spirit becomes insolvent or makes an assignment for the benefit of creditors, or (d) Spirit is in default of any payments obligation under this New Fleet Contract, the New Fleet FHA, the Existing Fleet GTA, the Existing Fleet FHA, or *****, or (e) is in material default under any section of this New Fleet Contract after receipt of written notice of such payment or material default and the expiration of any applicable cure period in respect thereof. Notwithstanding the foregoing, Spirit shall not be deemed to be in default of any payment obligation if the validity or amount of the same is being contested by Spirit in good faith.
|
3.10.6
|
If Spirit fails to make any payment for any Spare Parts, Support Equipment, or Vendor Parts 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, at the rate of the lesser of ***** or the New York Citibank prime rate plus ***** per annum, from the date such payment was due to the date such payment is made. Notwithstanding the foregoing, Spirit shall not be liable for interest in respect of any overdue amount which is being contested in good faith.
|
3.11
|
Conflict
|
4.
|
Warranties, Guarantees and Liabilities
|
4.1
|
IAE warrants to Spirit that, at the time of delivery, the Supplies sold hereunder will be free of defects in material and manufacture, and will conform substantially to applicable specifications and the rules and regulations of the Certification Authority. IAE's liability and Spirit's remedies under this warranty are limited to the repair or replacement, at IAE's election, of Supplies or parts thereof returned to the place of manufacture in accordance with IAE’s written shipping instructions and which are shown to IAE's reasonable satisfaction to have been defective; provided, that written notice of the defect shall have been given by Spirit to IAE within ***** after the first operation or use of the relevant Supplies (or if the Supplies are installed in Spirit Aircraft, *****) after the date of delivery of such Supplies by IAE to Spirit. Transportation charges for the return of Supplies to IAE pursuant to this Section 4.1 and their reshipment to Spirit and the risk of loss thereof will be borne by IAE only if the Supplies are returned in accordance with reasonable written shipping instructions from IAE and judged by IAE, acting reasonably, to have been defective at the time of delivery to Spirit.
|
4.2
|
IAE warrants to Spirit that it shall convey good and marketable title to all Spare Engines, Parts and other goods sold to Spirit hereunder, free and clear of all liens, claims, encumbrances and other rights of third parties.
|
4.3
|
In addition, IAE grants and Spirit accepts the following (all as set forth in Exhibit D, the “
Warranties
”):
|
4.4
|
IAE also grants and Spirit accepts the following (all as set forth in Exhibit E, the “
Guarantees
”):
|
4.5
|
The parties agree that the Warranties shall apply to any equipment that falls within the type 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 Spirit from whatsoever source including but not limited to any V2500 aero engines and any associated equipment therefor, and any parts for such engines and associated equipment that form part of any aircraft acquired from the manufacturer.
|
4.5
|
***** It is not the intent, however, to duplicate benefits or remedies provided to Spirit 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 and Guarantees, Spirit agrees that it shall not be eligible to receive benefits or remedies from IAE if it stands to receive or has received duplicate 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 Spirit and any other party (such as a leasing company) as a result of the same event or cause.
|
4.6
|
IAE and Spirit agree that the following provisions shall apply to each of the Guarantees, unless otherwise expressly set forth therein.
|
(a)
|
The rates and remedies in the Guarantees are predicated upon Spirit operating its Aircraft powered by Engines in accordance with the following operating conditions:
|
(i)
|
An annual average flight cycle of: ***** hours for V2524-A5 powered Aircraft, ***** hours for V2527-A5 powered Aircraft, and ***** hours for V2533-A5 powered Aircraft (each calculated from the moment the wheels of an Aircraft, on which an Engine is installed, leave the ground on take-off to the moment when the wheels of such Aircraft touch the ground on landing);
|
(ii)
|
An annual average utilization of ***** hours per V2524-A5 powered Aircraft, ***** hours per V2527-A5 powered Aircraft, and ***** hours per V2533-A5 powered Aircraft;
|
(iii)
|
An average engine thrust derate of: ***** for V2524-A5 powered Aircraft, ***** for V2527-A5 powered Aircraft, and ***** for V2533-A5 powered Aircraft, all relative to the name plate thrust rating;
|
(iv)
|
An average ambient temperature for take-off no greater than: ***** for V2524-A5 powered Aircraft, ***** for V2527-A5 powered Aircraft, and ***** for V2533-A5 powered Aircraft;
|
(v)
|
Spirit’s main bases are located at Fort Lauderdale, Florida, Detroit, MI, Atlantic City, NJ, Dallas, TX, USA;
|
(vi)
|
Spirit acquiring all of the Aircraft and Firm Spare Engines as set forth in Exhibit B-1 and Exhibit B-2, as amended, supplemented and/or updated from time to time;
|
(vii)
|
After taking delivery of all the Firm Spare Engines as set forth in Exhibit B-2, Spirit maintaining a minimum ratio of ***** Spare Engines to installed Engines for its Aircraft fleet;
|
(viii)
|
Spirit owning, operating, and maintaining the Aircraft and Engines in regular and frequent airline operation for the duration of the Guarantee period(s), in accordance with Airbus’, IAE’s, and other applicable OEM’s technical manuals, the MMP (including Engine rebuild requirements) and the New Fleet FHA, as applicable;
|
(ix)
|
*****
|
(x)
|
Spirit acquiring from IAE or IAE’s approved sources sufficient accessories, components, Spare Parts, and spare Engines at the levels recommended by IAE, to maintain proper support of the New Engine Fleet; and
|
(xi)
|
Spirit operating each Engine at its originally installed or delivered thrust rating, except as otherwise mutually agreed by the Parties.
|
(b)
|
Should any of the above operating conditions not be met or if Spirit takes delivery of additional aircraft powered by V2500 engines that the Parties agree to include such engines under this New Fleet Contract, IAE, acting in good faith and in consultation with Spirit, may make reasonable and appropriate adjustments to the Guarantees, with appropriate retroactive application, to address any deviations from such operating conditions.
|
(c)
|
Subject to Section 4.6.2(b) above, IAE agrees that, so long as Spirit does not vary the specific conditions for Engines listed in Sections 4.6.2(a)(i), 4.6.2(a)(ii), , 4.6.2(a)(iii) and 4.6.2(a)(iv) by more than ***** from their stated levels, Guarantee Rates for each Guarantee shall not be modified for such variation unless expressly stated to the contrary in such Guarantee.
|
(d)
|
Where Guarantee Rates are delineated by the applicable Engine model, such Guarantee Rates reflect the assumption that all Aircraft are delivered with the corresponding V2500-A5 Engine model. IAE agrees that the actual Guarantee Rate for Engines under such Guarantees shall fall between the highest and lowest rates, irrespective of the actual Aircraft model mix,
|
4.7
|
THE WARRANTIES AND GUARANTEES GRANTED TO SPIRIT
UNDER
THIS NEW FLEET CONTRACT AND/OR THE NEW ENGINE FLEET FHA, ARE EXCLUSIVE AND ARE GIVEN BY IAE IN LIEU OF (A) ANY AND ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE; AND (B) ANY OBLIGATION, LIABILITY, RIGHT, CLAIM, OR REMEDY IN STATUTE, CONTRACT, TORT OR STRICT LIABILITY AGAINST IAE OR ITS AFFILIATES, WHETHER OR NOT ARISING FROM THE NEGLIGENCE, ACTUAL OR IMPUTED (BUT NOT GROSS NEGLIGENCE OR WILLFUL MISCONDUCT), OF IAE OR ITS AFFILIATES, STOCKHOLDERS, DIRECTORS, OFFICERS, EMPLOYEES, PERMITTED ASSIGNS AND AGENTS.
|
4.8
|
*****
|
4.9
|
*****
|
4.10
|
*****
|
4.11
|
IAE and Spirit agree that credits issued to Spirit’s account with IAE pursuant to any of the Warranties or Guarantees may be utilized for the purchase of goods and/or services from IAE. Notwithstanding the foregoing, Spirit may request IAE to pay credits issued under the Guarantees in cash, subject to:
|
5.
|
Product Support Services
|
5.1
|
IAE will make available to Spirit the Product Support Services described in Exhibit C to this New Fleet 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 Spirit. IAE may delegate the performance of product support services to an affiliated company or any of IAE’s shareholders.
|
5.2
|
Spirit will provide to any IAE customer support representative(s) working at its facility, free of charge:
|
5.2.1
|
reasonable, secure office accommodation including furniture and office equipment and
|
5.2.2
|
access to telephone, facsimile and secretarial services and
|
5.2.3
|
access to such first-aid and emergency assistance as is customarily provided to Spirit's own employees and
|
5.2.4
|
reasonable airfare, accommodations, and subsistence during any period in which the customer support representative(s) is required by Spirit to travel away from such customer support representative(s)' normal location at Spirit.
|
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 New Fleet Contract (as such time may be extended pursuant to the provisions of this New Fleet Contract) by reason of:
|
(a)
|
any cause beyond the reasonable control of IAE;
|
(b)
|
fires, industrial disputes or introduction of essential modifications required by the Certification Authority;
|
(c)
|
compliance in good faith with any applicable foreign or domestic governmental regulation or order whether or not it proves to be invalid, except to the extent that the delay is caused by IAE’s failure to act in conformity with applicable deadlines set forth in such governmental regulation or order;
|
6.1.2
|
If, by reason of any of the Excusable Delays embraced by Section 6.1.1 above, IAE is hindered or prevented from delivering any goods (that are the same as and include the Supplies) to purchasers (including Spirit) then IAE shall have the right to allocate in good faith such goods, as they become available, at its own discretion among all such purchasers and IAE shall not be under any liability whatsoever to Spirit for delay in delivery to Spirit resulting from such allocation by IAE and the time for
|
6.1.3
|
*****
|
6.1.4
|
The right of Spirit to claim damages shall be conditional upon Spirit (i) notifying IAE of its claim in writing within ***** from the Claim Start Date, and (ii) submitting a written claim therefor within ***** from the Claim Start Date.
|
6.1.5
|
Should IAE delay performance of any obligation for a reason other than an Excusable Delay hereunder including but not limited to delivery of any item of the Supplies beyond ***** from the time for delivery specified in this New Fleet Contract (as such time may be extended pursuant to the provisions of this New Fleet Contract) then, in addition to the right of Spirit under Section 6.1.3, Spirit shall be entitled to terminate the order with respect to the affected item on giving IAE notice in writing. Upon receipt of such notice IAE shall be free from any obligation in respect of such item except that IAE shall refund to Spirit any deposits made in respect of the purchase price of such item of the Supplies.
|
6.1.6
|
No escalation shall apply during any period of delay unless such period of delay is caused by any of the causes specified in Clause 6.1.1
.
|
6.2
|
Intellectual Property
|
6.2.1
|
In the event any suit, claim or action is brought against Spirit (or a person expressly indemnified by Spirit) alleging that, without further combination, Spirit’s use or resale of
(a)
goods
(b)
a part made by or under IAE’s control and in accordance with the specification or design provided by IAE or
(c)
a process embodied in the goods delivered to Spirit by IAE infringes any patents, IAE will, at its own expense, conduct the entire defense including any and all necessary court action, settlements, and appeals. IAE will either settle such claim or pay all damages and costs awarded in a non-appealable judgment, excluding indirect, incidental, special, consequential, and punitive damages. If the use or resale of such goods or part(s) is finally enjoined, IAE will, at its option:
(a)
procure for Spirit the right to use or resell such goods or parts;
(b)
replace such goods or parts with equivalent non-infringing parts;
(c)
modify such goods or parts so they become non-infringing but equivalent; or
(d)
remove such goods or part(s) and refund the purchase price (less a reasonable allowance for use, damage or obsolescence).
|
6.2.2
|
The preceding provision is applicable only if the following conditions are met:
(a)
the goods, part(s), services, or process involved in the suit, claim, or action must have been provided under this New Fleet Contract or during maintenance services in accordance with this New Fleet Contract or the New Engine Fleet FHA, as applicable;
(b)
the alleged infringement must be an infringement of any patents of the nation in which Spirit’s principal place of business is located or a jurisdiction within which the relevant Supplies were manufactured or delivered to Spirit;
(c)
Spirit must provide IAE with timely notice of such suit, claim, or action and the full opportunity to assume the entire defense thereof; and
(d)
Spirit must provide IAE
|
6.2.3
|
For the avoidance of doubt, this provision will not apply to
(a)
any alleged patent infringement in any nation other than as specified above;
(b)
any Spirit-furnished specification or design or the performance of a process not recommended in writing by IAE;
(c)
any goods or parts or components thereof manufactured according to a non-IAE specification or design;
(d)
the use or sale of goods or parts delivered hereunder in combination with other goods not delivered to Spirit by IAE; or
(e)
any instance not specified in the preceding paragraphs. In such instances, Spirit will indemnify and hold IAE harmless.
|
6.3
|
*****
|
6.4
|
Confidentiality
|
6.5
|
Taxes
|
6.5.1
|
Subject to Section 6.5.2 below, IAE shall pay all imposts, duties, fees, taxes and other like charges levied by any tax authority or any agency thereof in connection with the Supplies prior to their delivery.
|
6.5.2
|
All amounts stated to be payable by Spirit pursuant to this New Fleet Contract exclude any value added tax, sales tax or similar such tax. In the event that the supply of goods or services under this New Fleet Contract is chargeable to any value added tax, sales tax or similar tax, such tax will be borne by Spirit. To ensure so far as possible that Spirit is not charged with European Community value added tax (“
VAT
”), Spirit will within 30 days of signature hereof, inform IAE of its VAT Code (if any) for inclusion on IAE's invoices.
|
6.5.3
|
Spirit shall pay all other imposts, duties, fees, taxes and other like charges by whomsoever levied.
|
6.5.4
|
Notwithstanding the foregoing, Spirit shall have no liability to IAE for any tax or taxes levied on IAE in connection with its gross income, or any franchise, turn-over or other similar tax or any tax levied on IAE relating to its business activities generally and not specifically arising out of or in connection with the transactions contemplated hereby and any taxes to the extent the same would not have been imposed but for
|
6.5.5
|
If either IAE or Spirit becomes aware of any taxes set forth in this Section 6.5, the relevant Party shall promptly notify the other Party, and both parties agree to cooperate, consult in good faith and take such other reasonable steps in order to mitigate to the full extent permitted by law, any such tax
.
.
|
6.6
|
Amendment
|
6.7
|
Assignment
|
6.8
|
Insurance
|
6.8.1
|
IAE shall at its own cost and expense procure and maintain (or cause its subcontractors to procure and maintain) in full force and effect during the Period of Cover policies of insurance of the types and in the minimum amounts as stated below: *****
|
6.8.2
|
*****
|
6.9
|
Exhibits
|
6.10
|
Headings
|
6.11
|
Governing Law and Forum
|
6.11.1
|
This New Fleet Contract shall be subject to and interpreted and construed in accordance with the laws of the City of New York, Borough of Manhattan, State of New York, United States of America, without regard to its conflict of laws provisions other than Sections 5-1401 and 5-1402 of the New York General Obligations Law. The parties agree to exclude the application of the United Nations Convention on Contracts for the International Sale of Goods (1980).
|
6.11.2
|
The parties irrevocably submit to the exclusive jurisdiction of the state and federal courts sitting in the State of New York, United States of America, in connection with any suit, action or proceeding arising out of or relating to this Agreement and irrevocably waive to the fullest extent permitted by law, any objection to the laying of venue of any such suit, action or proceeding in any such court or any claim that any suit, action or proceeding has been brought in an inconvenient forum. Further,
|
6.12
|
Compliance with All Applicable Laws and Regulations
|
6.12.1
|
Export/Import
Spirit agrees that it will not, directly or indirectly, sell, export, re-export, transfer, divert, or otherwise dispose of any IAE goods, software, technical data (including products derived from or based on such technical data), or services received directly or indirectly from IAE to any Prohibited Party without obtaining prior authorization from the relevant government authorities as required pursuant to Export Laws. Failure to do so will result in IAE invoking its rights to terminate this New Fleet Contract per the provisions of Sections 6.15 and 6.16 below.
|
6.12.2
|
“
Prohibited Parties
” means, collectively, those countries, and persons to whom the sale, export, re-export, transfer, diversion or other disposition of any IAE goods, software, technical data or services is prohibited by the applicable export laws and related regulations of the United States, German, British, Japanese, or European Union Governments.
|
6.12.3
|
Other Laws and Regulations
Each party agrees that it will not, by act or omission, violate any applicable law or regulation of the United States or any political subdivision thereof where the violation thereof would result in the other party being deemed to be in violation of such law or regulation or would otherwise result in a criminal or an un-indemnified civil penalty on the part of such other party.
|
6.13
|
Notices
|
6.14
|
Exclusion of Other Provisions and Previous Understandings
|
6.14.1
|
This New Fleet Contract (including all exhibits, schedules and appendices) together with the FHA and any Side Letter(s) contains the only provisions governing the sale and purchase of the Supplies and shall apply to the exclusion of any prior provisions on or attached to or otherwise forming part of any order form of Spirit, or any acknowledgment or acceptance by IAE, or of any other document that may be issued by either party relating to the sale and purchase of the Supplies.
|
6.14.2
|
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 New Fleet Contract, whether orally or in writing, relating to the Supplies, other than those expressly incorporated in this New Fleet 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.
|
6.15
|
Conditions Precedent
|
6.15.1
|
A continuing event of default (taking into account any applicable grace period) by Spirit in (a) any payment due under this New Fleet Contract (including any exhibits and letter agreements thereto), or *****; or
|
6.15.2
|
Any event that is a Termination Event or would be a Termination Event, but for lapse of time, shall have occurred and be continuing.
|
6.16
|
Termination Events
|
6.16.1
|
Any of the following shall constitute a “
Termination Event
” under this New Fleet Contract:
|
(a)
|
Spirit commences any case, proceeding or other action with respect to Spirit 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
|
(b)
|
Spirit seeks the appointment of a receiver, trustee, custodian or other similar official for Spirit for all or substantially all of its assets, or Spirit makes a general assignment for the benefit of its creditors; or
|
(c)
|
Spirit otherwise becomes the object of any case, proceeding or action of the type referred to in the preceding Sections 6.16.1(a) or 6.16.1(b) that remains unstayed, undismissed or undischarged for a period of sixty (60) days; or
|
(d)
|
An action is commenced against Spirit seeking issuance of a warrant of attachment, execution, distraint or similar process against all or
|
(e)
|
A continuing event of default (taking into account any applicable grace period) by Spirit on any payment of principal or interest on any indebtedness hereunder or in the payment of any guarantee obligation hereunder *****.
|
(f)
|
Failure to take delivery of all of the Aircraft and Spare Engines in accordance with the delivery schedule set forth in Exhibit B, as amended, supplemented or modified from time to time.
|
6.16.2
|
Spirit shall have the option, at its sole discretion, to terminate this New Fleet Contract in whole or in part, upon the occurrence of any of the following events:
|
(a)
|
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, debt or obligations;
|
(b)
|
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;
|
(c)
|
IAE otherwise becomes the object of any case, proceeding or action of the type referred to in the preceding clauses (a) or (b) which remains unstayed, undismissed or undischarged for a period of sixty (60) days;
|
(d)
|
An action is commenced against IAE seeking issuance of a warrant of attachment, execution, distraint or similar process against all or substantially all of its assets which remains unstayed, undismissed, or undischarged for a period of sixty (60) days;
|
(e)
|
A continuing event of default (taking into account any applicable grace period) by IAE on any payment of principal or interest on any indebtedness hereunder or in the payment of any guarantee obligation hereunder or under any Spirit financing agreement with IAE for the Aircraft, *****.
|
6.17
|
Effect of Termination
|
6.18
|
No Construction Against Drafter
|
6.19
|
Damages
|
Agreed to and accepted on behalf of:
IAE International Aero Engines AG
|
|
Agreed to and accepted on behalf of:
Spirit Airlines, Inc.
|
||
By:
|
/s/ Rick Deurloo
|
|
By:
|
/s/ Charles A. Rue
|
Name:
|
Rick Deurloo
|
|
Name:
|
Charles A. Rue
|
Title:
|
SVP Sales
|
|
Title:
|
VP Supply Chain
|
In the presence of:
|
|
In the presence of:
|
||
By:
|
/s/ Daniel Kirk
|
|
By:
|
/s/ Edward Christie
|
Name:
|
Daniel Kirk
|
|
Name:
|
Edward Christie
|
Title:
|
Sales Director
|
|
Title:
|
SVP & CFO
|
Aircraft No.
|
Aircraft Model
|
Engine Model
|
Scheduled Delivery Date
|
1
|
*****
|
*****
|
*****
|
2
|
*****
|
*****
|
*****
|
3
|
*****
|
*****
|
*****
|
4
|
*****
|
*****
|
*****
|
5
|
*****
|
*****
|
*****
|
6
|
*****
|
*****
|
*****
|
7
|
*****
|
*****
|
*****
|
8
|
*****
|
*****
|
*****
|
9
|
*****
|
*****
|
*****
|
10
|
*****
|
*****
|
*****
|
11
|
*****
|
*****
|
*****
|
12
|
*****
|
*****
|
*****
|
13
|
*****
|
*****
|
*****
|
14
|
*****
|
*****
|
*****
|
15
|
*****
|
*****
|
*****
|
16
|
*****
|
*****
|
*****
|
17
|
*****
|
*****
|
*****
|
18
|
*****
|
*****
|
*****
|
19
|
*****
|
*****
|
*****
|
20
|
*****
|
*****
|
*****
|
21
|
*****
|
*****
|
*****
|
22
|
*****
|
*****
|
*****
|
23
|
*****
|
*****
|
*****
|
24
|
*****
|
*****
|
*****
|
25
|
*****
|
*****
|
*****
|
26
|
*****
|
*****
|
*****
|
27
|
*****
|
*****
|
*****
|
28
|
*****
|
*****
|
*****
|
29
|
*****
|
*****
|
*****
|
30
|
*****
|
*****
|
*****
|
Spare Engine No.
|
Quantity
|
Engine Model
|
Scheduled Delivery Date
|
1
|
1
|
*****
|
*****
|
2
|
1
|
*****
|
*****
|
3
|
1
|
*****
|
*****
|
4
|
1
|
*****
|
*****
|
1.
|
Any unit base price or other sum expressed to be subject to escalation from the Base Month (as defined below) to month of delivery or other date of determination in accordance with the IAE Escalation Formula will be subject to escalation in accordance with the following formula:
|
•
|
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.
|
•
|
24 Hour Support
|
•
|
Maintenance Action Recommendations
|
•
|
Daily Reporting on Engine Technical Situations
|
•
|
On-The-Job Training
|
•
|
Service Policy Preparation Assistance
|
•
|
Prompt Communication with IAE
|
•
|
Technical Training at Purpose Built Facilities
|
•
|
On-site Technical Training
|
•
|
Technical Training Consulting Service
|
•
|
Training Aids and Materials
|
•
|
Engine construction features internal and external hardware.
|
•
|
Engine systems operation, major components accessibility for removal/replacement.
|
•
|
Operational procedures
|
•
|
Performance characteristics
|
•
|
Maintenance concepts, repair and replacement requirements and special tooling.
|
•
|
Engine Description
|
•
|
Systems Operation
|
•
|
Applied Performance
|
•
|
Ground Operations
|
•
|
Troubleshooting Procedures
|
•
|
Practical Phase Line Maintenance Tasks
|
•
|
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.
|
•
|
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 Spirit’s inquiries.
|
•
|
Engine Warranty Services
|
•
|
Maintenance Support
|
•
|
Lease Engine Program
|
•
|
Engine Reliability and Economic Forecasts
|
•
|
Logistic Support Studies
|
•
|
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.
|
•
|
- General Maintenance Facility Planning Publications
|
•
|
- Customized Facility Plans
|
•
|
- Maintenance Facility and Test Cell Planning Consultation Services
|
•
|
Technical Services
|
•
|
Powerplant Maintenance
|
•
|
Customer Performance
|
•
|
Diagnostic Systems
|
•
|
Human Factors
|
•
|
Flight Operations
|
•
|
Repair Services
|
•
|
Tooling and Support Equipment Services
|
•
|
Technical Publications
|
•
|
Technical Problem Identification/Corrective Action
|
•
|
Implementation
|
•
|
Technical Communication
|
•
|
Engine Conversion Program Definition and Management
|
•
|
Engine Upgrade and Commonality Studies
|
•
|
Engine Incident Investigation Assistance
|
•
|
Definition of Maintenance Tasks and Resource Requirements
|
•
|
Planning Guides
|
•
|
Engine Performance Analysis Computer Programs for Test Cell Use
|
•
|
Test Cell Correlation Analysis and Correction Factors
|
•
|
Engine Stability Procedures and Problem Analysis
|
•
|
Guidance to help Spirit 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.
|
•
|
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
|
•
|
Coordinated Repair Development Activity
|
•
|
Customer Assistance on Repair Procedures and Techniques
|
•
|
Qualification of Repair Sources
|
•
|
Repair Workshops
|
•
|
Repair Development List
|
•
|
Support Equipment Manufacturing/Procurement Documentation
|
•
|
Engine Accessory Test Equipment and Engine Transportation Equipment Specifications
|
•
|
Support Equipment Logistics Planning Assistance
|
4.8.2
|
Engine Accessory Test Equipment and Engine Transportation Equipment Requirements:
|
4.9
|
TECHNICAL PUBLICATIONS
|
•
|
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.
|
•
|
List of all Service Bulletins that were incorporated during initial build of each new engine.
|
•
|
- Individual Customer Account Representatives
|
•
|
- Provisioning
|
•
|
- Planning
|
•
|
- Order Administration
|
•
|
- Spare Parts Inventory
|
•
|
- Effective Expedite Service
|
•
|
- Worldwide Distribution
|
•
|
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 Spirit’s request).
|
•
|
Forecasts of life limited parts requirements are requested and received semi-annually from major customers. Based on the size of Spirit’s order, Spirit shall be considered a major customer.
|
•
|
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.
|
SUBJECT:
|
SIDE LETTER NO. 1 TO THE V2500-A5 GENERAL TERMS OF SALE BETWEEN IAE INTERNATIONAL AERO ENGINES AG AND SPIRIT AIRLINES, INC., DATED OCTOBER 1, 2013
|
A.
|
Spirit has entered into a purchase agreement with Airbus to acquire thirty (30) new A320 aircraft powered by new V2500-A5 engines (the “
Aircraft
”);
|
B.
|
Spirit has entered into the New Fleet Contract with IAE in support of Spirit’s agreement to acquire the Aircraft and to purchase V2500 spare parts and the Spare Engines in support of its operation of the Aircraft; and
|
C.
|
The Parties desire to amend, supplement or replace certain provisions of the New Fleet Contract and agree to the terms hereof pursuant to which IAE shall provide certain financial and technical assistance to Spirit in support of Spirit’s selection of the V2500 engine to power its Aircraft, and in support of the integration of the Aircraft into its fleet and pursuant to which certain provisions of the New Fleet Contract are amended, supplemented or replaced in accordance with the provisions hereof.
|
1.
|
Fleet Introductory Assistance Credits
|
1.1
|
In consideration of Spirit’s agreement to purchase the Aircraft and to assist Spirit with the introduction of the Aircraft into its fleet, IAE shall issue credit notes to Spirit’s account with IAE in the following amounts (each an “
FIA Credit
”):
|
Aircraft Type
|
Credit
(Jan-12 US$)
|
Issued at Delivery & Acceptance of:
|
A319 (V2524-A5)
|
*****
|
Each V2524-A5 powered Aircraft
|
A320 (V2527-A5)
|
*****
|
Each V2527-A5 powered Aircraft
|
A321 (V2533-A5)
|
*****
|
Each V2533-A5 powered Aircraft
|
1.2
|
Each FIA Credit will be issued upon delivery to Spirit of the corresponding Aircraft. Spirit agrees to provide IAE with written notice confirming acceptance of the corresponding Aircraft promptly after acceptance.
|
1.3
|
Spirit agrees that IAE will assign all of the applicable FIA Credit to Airbus, to be applied toward the payment for the Engines for the corresponding Aircraft. Application of the applicable FIA Credit from IAE by Airbus on behalf of Spirit prior to or simultaneously with delivery of the corresponding Aircraft shall, for the purposes of this Side Letter No. 1, be deemed confirmation of Spirit’s acceptance of that Aircraft. In the event any FIA Credit or portion thereof under this Section 1 is assigned to Airbus, Spirit agrees that the applicable FIA Credit shall not vest in Airbus until delivery to Spirit of the respective Aircraft. In the event Spirit does not accept delivery of the corresponding Aircraft, Spirit agrees to promptly reimburse or cause Airbus to reimburse to IAE any amounts paid by IAE to Airbus on behalf of Spirit.
|
2.
|
Spare Engine Pricing Credits
|
2.1
|
In consideration of Spirit’s purchase of the Spare Engines in accordance with the New Fleet Contract, and to assist Spirit with such purchase, IAE shall credit Spirit‘s account in accordance with the following amount for the corresponding Spare Engine (each a “
Spare Engine Credit
”):
|
Engine Type
|
Credit
(Jan-12 US$)
|
Issued on Delivery & Acceptance of:
|
V2524-A5
|
*****
|
Each V2524-A5 Spare Engine
|
V2527-A5
|
*****
|
Each V2527-A5 Spare Engine
|
V2533-A5
|
*****
|
Each V2533-A5 Spare Engine
|
2.2
|
*****
|
2.3
|
Each Spare Engine Credit ***** shall be issued upon delivery to Spirit of the corresponding Spare Engine. Spirit agrees to provide IAE with written notice confirming acceptance of the corresponding Spare Engine promptly after acceptance.
|
2.4
|
Each Spare Engine Credit shall be used by Spirit for payment against the corresponding spare Engine invoice. *****.
|
2.5
|
*****
|
2.6
|
Upon written notice from Spirit, IAE will issue all or part of a Spare Engine Credit directly to Spirit as a cash payment provided that IAE has received full payment for the relevant Spare Engine.
|
3.
|
Spare Parts and Tooling Credits
|
3.1
|
To assist Spirit with the procurement of V2500 spare Parts in support of the Aircraft, IAE shall credit Spirit‘s account with IAE in the fixed amount of ***** (the “
Spare Parts and Tooling Credit
”).
|
3.2
|
The Spare Parts and Tooling Credit will be issued upon delivery to and acceptance by Spirit of the first Aircraft. Spirit agrees to provide IAE with written notice confirming acceptance of the corresponding Aircraft promptly after acceptance.
|
3.3
|
The Spare Parts and Tooling Credit shall be used by Spirit for the payment of IAE invoices for V2500 Spare Parts, Modules, and tooling from IAE.
|
4.
|
Credit and Engine Pricing Escalation
|
4.1
|
The FIA Credits, Spare Engine Credits *****, referenced in Sections 2 and 3 above, are subject to escalation in accordance with the IAE Escalation Formula set forth in Exhibit B-3 to the New Fleet Contract, and shall be escalated from a base month of January 2012 (the “
Base Month
”) to the earlier of the applicable scheduled delivery date as set forth in Exhibit B-1 (and B-2 if applicable) of the New Fleet Contract or the actual delivery date of the applicable Aircraft or Spare Engine (the “
Base Escalated Credit
”). *****
|
4.2
|
*****
|
4.3
|
*****
|
4.4
|
*****
|
4.5
|
Upon delivery of each Aircraft, IAE will, as of the respective dates of delivery of each of the Aircraft delivered to Spirit, calculate the difference (if any) between:
|
(a)
|
The Deemed Shipset Price (as defined below) escalated in accordance with Section 4.1 above; minus
|
(b)
|
The Deemed Shipset Price escalated in accordance with Section 4.1 above and capped in accordance with Section 5.2 above.
|
Aircraft Type
|
Deemed Shipset Price (Jan-12 US$)
|
A319 (V2524-A5)
|
*****
|
A320 (V2527-A5)
|
*****
|
A321 (V2533-A5)
|
*****
|
4.6
|
IAE agrees that the credits provided to herein Spirit shall not expire provided that: (i) the New Fleet Contract remains in full force and effect, (ii) the credits have not been applied to overdue amounts arising under the New Fleet Contract or the New Fleet FHA under rights of set off and (iii) Spirit continues to operate at least one (1) Aircraft.
|
5.
|
Aircraft Type *****
|
5.1
|
The financial support described in this Side Letter No.1 is predicated upon delivery to Spirit of the specific quantities and models of Aircraft and Spare Engines as listed in the delivery schedule set forth as Exhibit B-1 of the New Fleet Contract, as the same may be modified from time to time.
|
5.2
|
*****
|
5.3
|
*****
|
6.
|
*****
|
7.
|
*****
|
8.
|
*****
|
8.1
|
Clause 6.3 of the New Fleet Contract, *****, is deleted in its entirety and replaced with the following:
|
“6.3
|
*****
|
6.3.1.
|
*****
|
6.3.2.
|
*****
|
6.3.3
|
*****
|
6.3.4
|
*****
|
6.3.2
|
For the avoidance of doubt, IAE’s rights under this paragraph are in addition to all other rights and remedies IAE may have available under this New Fleet Contract or under law with regard to any failure to take delivery of the Firm Items in accordance with the schedules described in to the Contract, as amended, supplemented or modified from time to time.
|
6.3.3
|
IAE shall have the right to set off credits from time to time made available by IAE under the New Fleet Contract either directly to Spirit or via Airbus or its subsidiaries and affiliates, in respect of the failure by Spirit, after any applicable grace period, to cure any payment default which is continuing under (i) the New Fleet Contract or *****, or (iii) the Fleet Hour Agreement.”
|
9.
|
*****
|
10.
|
*****
|
11.
|
Thrust Rating Flexibility
|
11.1
|
*****
|
11.2
|
*****
|
11.3
|
The thrust flexibility as provided under this Section 11.3 is personal to Spirit and may not be transferred or assigned by Spirit. Prior to selling, transferring or otherwise disposing (including lease return) of any V2500 Engine, other than a sale leaseback transaction following which Spirit continues to operate the Engine, Spirit 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.
|
11.4
|
If Spirit sells, transfers or otherwise disposes of any V2500 Engine (other than a sale leaseback or similar transaction following which Spirit continues to operate the V2500 Engine) without restoring such Engine to its Original Thrust Rating and returning any multi-rated data plate to IAE. Spirit shall pay to IAE *****.
|
11.5
|
IAE and Spirit agree to make reasonable adjustments to the Existing Fleet FHA to account for the V2500 Engine thrust flexibility set forth in this Section 11.
|
12.
|
Customer Support
|
12.1
|
Training
|
12.2
|
Technical Publications
|
12.3
|
Customer Support Manager
|
(a)
|
Readiness Program and planning prior to EIS;
|
(b)
|
Technical recommendations and information;
|
(c)
|
Engine Maintenance Management Plans;
|
(d)
|
Refurbishment, Modification and Conversion program planning assistance;
|
(e)
|
Coordination of customer repair, maintenance and logistics requirements with the appropriate Product Support functional groups; and
|
(f)
|
Assist with critical engine warranty/service policy claims.
|
12.4
|
Customer Support Representative
|
(a)
|
24 Hour Support;
|
(b)
|
Maintenance Action Recommendations;
|
(c)
|
Daily Reporting on Engine Technical Situations;
|
(d)
|
On-The-Job Training;
|
(e)
|
Service Policy Preparation Assistance; and
|
(f)
|
Prompt Communication with OEM
|
13.
|
Assignment
|
13.1
|
Clause 6.7 of the New Fleet Contract,
Assignment
, is deleted in its entirety and replaced with the following:
|
“6.7.1
|
Except as otherwise agreed herein, Spirit may not assign in whole or part any of its rights or obligations under the New Fleet Contract without the written consent of IAE (such consent not to be unreasonably withheld).
|
6.7.2
|
*****
|
6.7.3
|
*****
|
6.7.4
|
*****
|
6.7.5
|
*****
|
6.7.6
|
IAE may, without recourse, assign its rights and/or delegate its obligations under this Agreement to any subsidiary or affiliate of IAE or United Technologies Corporation, or in connection with a merger, consolidation, reorganization, or voluntary sale or transfer of its assets; provided that such assignee/delegate is: (i) solvent at the time of such transfer and (ii) authorized by the applicable regulatory authorities, as necessary, to perform or procure the performance of all obligations being delegated/assigned; and (iii) able, in IAE’s sole, reasonable discretion, to make all payments required by IAE to be made to Spirit under the New Fleet Contract.”
|
14.
|
Miscellaneous
|
14.1
|
Entire Agreement; Conflicts
|
14.2
|
Amendment
|
14.3
|
Proprietary Information
|
14.4
|
Governing Law
|
14.5
|
Counterparts
|
Agreed to and accepted on behalf of:
IAE International Aero Engines AG
|
|
Agreed to and accepted on behalf of:
Spirit Airlines, Inc.
|
||
By:
|
/s/ Rick Deurloo
|
|
By:
|
/s/ Edward Christie
|
Name:
|
Rick Deurloo
|
|
Name:
|
Edward Christie
|
Title:
|
SVP Sales
|
|
Title:
|
SVP & CFO
|
Date:
|
10/2/13
|
|
Date:
|
10/1/13
|
SUBJECT:
|
SIDE LETTER NO. 2 TO THE V2500-A5 GENERAL TERMS OF SALE BETWEEN IAE INTERNATIONAL AERO ENGINES AG AND SPIRIT AIRLINES, INC., DATED OCTOBER 1, 2013
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A.
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Spirit has entered into a purchase agreement with Airbus to acquire fifteen (15) new A321 aircraft powered by new V2500-A5 engines (the “
Incremental
Aircraft
”), incremental to the thirty (30) A320 aircraft powered by new V2500-A5 engines that Spirit ordered under the New Fleet Contract (the “
Original
Aircraft
”); and
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B.
|
To support the Incremental Aircraft, Spirit shall acquire, by purchase or lease from IAE, two (2) new V2533-A5 Spare Engines (the “Incremental Spare Engines”) that are incremental to the four (4) Firm Spare Engines that Spirit ordered under the New Fleet Contract (the “Original Spare Engines”); and
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C.
|
The Parties desire to enter into an agreement on the Incremental Aircraft and the Incremental Spare Engines (if Spirit elects to purchase, rather than lease, the Incremental Spare Engines), on similar terms to those relating to the Original Aircraft and Original Spare Engines; and
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D.
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The Parties desire to amend, supplement or replace certain provisions of the New Fleet Contract and agree to the terms hereof pursuant to which IAE shall provide certain financial and technical assistance to Spirit in support of Spirit’s selection of the V2500 engine to power its Incremental Aircraft, and in support of the integration of the Aircraft into its fleet and pursuant to which certain provisions of the New Fleet Contract are amended, supplemented or replaced in accordance with the provisions hereof.
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1.
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Definitions
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“1.11
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“Spare Engine” shall mean the Firm Spare Engines as defined in Section 2.2.1 and any additional new Spare Engines to be purchased in accordance with Section 2.2.2.”
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2.
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Fleet Introductory Assistance Credits
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3.
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Credit and Engine Pricing Escalation
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4.
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Spare Engines
|
“2.2.2
|
Spirit, at its option, may also purchase up to two (2) additional new V2533-A5 Spare Engines (the “
Option Spare Engines
”) on firm order with IAE, provided that Spirit gives written notice to IAE at least ***** prior to the delivery date for each such Option Spare Engine as set forth in Exhibit B-2, as the same may be amended, supplemented and/or updated from time to time. IAE and Spirit shall promptly amend this Contract to revise Exhibit B-2 to reflect the firm order of Option Spare Engines from IAE.”
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5.
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Enhanced Service Policy
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6.
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Aircraft Cancellation, Credit Reimbursement and Right of Set-Off
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7.
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Engine Upgrades and Post Delivery Improvements
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8.
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*****
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9.
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Thrust Rating Flexibility
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10.
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New Fleet – Aircraft and Spare Engine Delivery Schedule
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11.
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New Fleet – Spare Engine Delivery Schedule
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12.
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Miscellaneous
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12.1
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Entire Agreement; Conflicts
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12.2
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Amendment
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12.3
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Proprietary Information
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12.4
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Governing Law
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12.5
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Counterparts
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Agreed to and accepted on behalf of:
IAE International Aero Engines AG
|
|
Agreed to and accepted on behalf of:
Spirit Airlines, Inc.
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||
By:
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/s/ Rick Deurloo
|
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By:
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/s/ Edward Christie
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Name:
|
Rick Deurloo
|
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Name:
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Edward Christie
|
Title:
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SVP Sales
|
|
Title:
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SVP & CFO
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Date:
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10/2/13
|
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Date:
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10/2/13
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Aircraft No.
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Aircraft Model
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Engine Model
|
Scheduled Delivery Date
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1
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*****
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*****
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*****
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2
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*****
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*****
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*****
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3
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*****
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*****
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*****
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4
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*****
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*****
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*****
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5
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*****
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*****
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*****
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6
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*****
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*****
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*****
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7
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*****
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*****
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*****
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8
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*****
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*****
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*****
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9
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*****
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*****
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*****
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10
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*****
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*****
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*****
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11
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*****
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*****
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*****
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12
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*****
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*****
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*****
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13
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*****
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*****
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*****
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14
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*****
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*****
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*****
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15
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*****
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*****
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*****
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16
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*****
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*****
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*****
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17
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*****
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*****
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*****
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18
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*****
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*****
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*****
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19
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*****
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*****
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*****
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20
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*****
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*****
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*****
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21
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*****
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*****
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*****
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22
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*****
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*****
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*****
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23
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*****
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*****
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*****
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24
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*****
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*****
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*****
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25
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*****
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*****
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*****
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26
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*****
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*****
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*****
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27
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*****
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*****
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*****
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28
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*****
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*****
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*****
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29
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*****
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*****
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*****
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30
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*****
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*****
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*****
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31
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*****
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*****
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*****
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32
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*****
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*****
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*****
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33
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*****
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*****
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*****
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34
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*****
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*****
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*****
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35
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*****
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*****
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*****
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36
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*****
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*****
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*****
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37
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*****
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*****
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*****
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38
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*****
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*****
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*****
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39
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*****
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*****
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*****
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40
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*****
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*****
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*****
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41
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*****
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*****
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*****
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42
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*****
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*****
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*****
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43
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*****
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*****
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*****
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44
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*****
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*****
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*****
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45
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*****
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*****
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*****
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Firm Spare Engines
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|||
Spare Engine No.
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Quantity
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Engine Model
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Scheduled Delivery Date
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1
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1
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*****
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*****
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2
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1
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*****
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*****
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3
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1
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*****
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*****
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4
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1
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*****
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*****
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Option Spare Engines
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|||
Option Spare Engine No.
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Quantity
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Engine Model
|
Scheduled Delivery Date
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1
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1
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*****
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*****
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1
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1
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*****
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*****
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Exhibit A Aircraft and Spare Engine Delivery Schedules
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23
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Exhibit B FHA Escalation Formula
|
27
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Exhibit C Accessories
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28
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Exhibit D V2500 Turbofan Engine Model Specifications
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29
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Exhibit E Powerplant Description
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30
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Exhibit F Addresses
|
32
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Exhibit G Engine Monitoring Services
|
33
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Exhibit H Excess Work Rates
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36
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Exhibit I FHA Rate Adjustment Tables
|
37
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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, CT 06108 (hereinafter called “
IAE
”).
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AND
|
|
SPIRIT AIRLINES, INC.
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A corporation organized and existing under the laws of Delaware, with a place of business at 2800 Executive Way, Miramar, Florida 33025 (hereinafter called “
Spirit
”).
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Each a “
Party
” and together the “
Parties
”.
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A.
|
As of the date hereof, (i) Spirit has acquired, leased or firmly ordered an aggregate of sixty-eight (68) new Airbus A320 family aircraft as described in Exhibit A, all powered by, or to be powered by, V2500-A5 engines, (ii) Spirit has acquired or firmly ordered an aggregate of eleven (11) new V2500-A5 spare engines from IAE all of which are or will be operated by Spirit and (iii) Spirit has the option to purchase a further four (4) new V2500-A5 spare engines from IAE;
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B.
|
IAE and Spirit have entered into a Fleet Hour Agreement dated April 11, 2005 for the provision of certain off-wing maintenance for the V2500-A5 engines operated by Spirit (the “
2005 FHA
”);
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C.
|
Spirit and IAE subsequently signed the V2500 Propulsion System and FHA Proposal dated October 27, 2006, as amended from time to time, which outlines the financial support and support services for Spirit’s incremental order for A320 family aircraft powered by V2500-A5 engines and order for V2500-A5 spare engines (the “
2006 Proposal
”);
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D.
|
IAE and Spirit have entered an Amended and Restated V2500
®
General Terms of Sale dated October 1, 2013, as amended from time to time, including all side letters and amendments thereto, for the provision of V2500-A5 engines, modules, spare parts, tools, equipment, and product support services for the support and operation of certain V2500-A5 engines (the “Existing Fleet
GTA
”)
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E.
|
IAE and Spirit hereby agree to replace in its entirety the 2005 FHA with this Agreement, which shall incorporate the applicable terms and conditions for off-wing maintenance support contained in the 2006 Proposal; and
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F.
|
IAE and Spirit now wish to agree upon terms whereby IAE shall arrange for, manage and subcontract certain maintenance of the Eligible Engines as defined herein.
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1.
|
Definitions
|
1.1
|
“
Accessory
” or “
Accessories
” includes those items listed in Exhibit C to this Agreement.
|
1.2
|
“
Airbus
” shall mean Airbus SAS.
|
1.3
|
“
Aircraft
” shall mean all or each of the: (i) forty (40) A320 family aircraft powered by V2500-A5 engines in-service in Spirit’s fleet as of the date of this Agreement already delivered as described in the schedule set forth in Exhibit Ahereto (the “
Existing Aircraft
”) and (ii) twenty-eight (28) new Airbus 320 family aircraft powered by V2500-A5 engines to be delivered in accordance with the schedule set forth in Exhibit A hereto, as may be mutually agreed to be amended, supplemented or otherwise modified from time to time (the “
Firm Aircraft
”).
|
1.4
|
“
Aircraft Maintenance Manual
” or “
AMM
” means the aircraft maintenance manual published by Airbus for the Aircraft.
|
1.5
|
“
Airworthiness Directive
” shall mean any applicable airworthiness directive issued by the Aviation Authority based on certification rules current as of the date of this Agreement.
|
1.6
|
“
Aviation Authority
” shall mean the FAA.
|
1.7
|
“
Beyond Economic Repair
” shall mean wear, tear or damage to an item of Eligible Equipment beyond economic repair.
|
1.8
|
“
BFE Item
” shall mean those items listed as such in Exhibit E of this Agreement.
|
1.9
|
“
Business Day(s)
” shall mean a day other than a Saturday, Sunday or holiday scheduled by law for commercial banking institutions in the city of New York, New York, United States.
|
1.10
|
“
Day
” means a calendar day.
|
1.11
|
“
EBU Item
” shall mean those items listed as such in Exhibit E to this Agreement originally installed on the Eligible Engines or acquired new and dedicated solely for the support of Eligible Engines.
|
1.12
|
“
Eligible Engine(s)
” shall mean the new Engines originally installed on the Aircraft and the Spare Engines. Exhibit A to this Agreement identifies the Eligible Engines by serial number and will be updated from time to time to: (i) add Eligible Engines and serial numbers as Spirit takes delivery of the Aircraft and the Spare Engines and (ii) to remove Eligible Engines in accordance with Section 11 hereto.
|
1.13
|
“
Eligible Engine Flight Cycles
” *****.
|
1.14
|
“
Eligible Engine Flight Hours
” *****.
|
1.15
|
“
Eligible Equipment
” shall mean Eligible Engines.
|
1.16
|
“
Eligible Removal
” shall mean *****.
|
1.17
|
“
Engine(s)
” shall mean the basic IAE V2500-A5 turbofan engine, described in the V2500 Turbofan Engine Model Specification(s) set forth in Exhibit D of the Agreement, and which excludes Accessories, EBU Items, QEC Items and Nacelle Items.
|
1.18
|
“
Engine Manual
” shall mean the IAE document which sets forth the requirements for Engine off-wing repair.
|
1.19
|
“
Excess Work
” shall mean work undertaken by the Maintenance Center during a Shop Visit pursuant to this Agreement, which is further described in Section
8
of this Agreement.
|
1.20
|
“
FAA
” shall mean the United States Federal Aviation Administration.
|
1.21
|
“Failure” shall mean *****.
|
1.22
|
“
FHA
” shall mean this Fleet Hour Agreement.
|
1.23
|
“
FHA Administration Manual
” means the logistical plan and instructions described in Section
7
of this Agreement.
|
1.24
|
“
FHA Manager
” shall mean the manager provided by IAE for the support of the operation of this Agreement in accordance with the provisions of Section 7.3 of this Agreement.
|
1.25
|
“
FHA Rate(s)
” shall mean the rate(s) collectively as set forth in Section 10 below.
|
1.26
|
“
Foreign Object Damage
” shall mean*****.
|
1.27
|
“
Line Maintenance
” shall mean any work required to be carried out on an Engine in accordance with the appropriate Aircraft Maintenance Manuals and which can be accomplished either on-wing or off-wing without requiring the induction of such Engine into a Maintenance Center.
|
1.28
|
“
Life Limited Parts
” or “
LLPs
” shall mean the Parts identified in Chapter 5 of the V2500-A5 Engine Manual as having specific life limits.
|
1.29
|
“
Maintenance Center
” shall mean the IAE shareholder maintenance center designated by IAE in consultation with Spirit, from time to time to perform services under this Agreement and which is approved by the Aviation Authority as a certified repair station.
|
1.30
|
“
Maintenance Management Plan
”, “
MMP
” or “
eMMP”
shall mean the then-current V2500 engine maintenance planning document described in Section
7
of this Agreement.
|
1.31
|
“
Miscellaneous Shop Visit
” shall mean *****.
|
1.32
|
“
Nacelle Items
” shall mean those items listed in Exhibit E as “DPP” (demountable power plant) items or “PP” (positionalized power plant) items originally installed on the Eligible Engines or acquired new and dedicated solely for the support of Eligible Engines.
|
1.33
|
“
Part(s)
” shall mean *****.
|
1.34
|
“
Period of Cover
” shall mean the period in which IAE agrees to provide the services pursuant to this Agreement, as set out in Section
3
of this Agreement.
|
1.35
|
“
QEC Item
” shall mean those items listed as such in Exhibit E to this Agreement originally installed on the Eligible Engines or acquired new and dedicated solely for the support of Eligible Engines.
|
1.36
|
“
Restoration Shop Visit
” or “
RSV
” shall mean *****.
|
1.37
|
“
Service Bulletin(s)
” shall mean those V2500 service bulletins issued by IAE that are designated as “target” service bulletins in the MMP.
|
1.38
|
“
Shop Visit
” shall mean a Restoration Shop Visit or a Miscellaneous Shop Visit.
|
1.39
|
“
Spare Engine(s)
” shall mean all or each of the eleven (11) new V2500-A5 firmly ordered spare Engines either purchased or to be purchased by Spirit from IAE and the four (4) option spare Engines which Spirit has the right to purchase from IAE, already delivered or to be delivered in accordance with the schedule set forth in Exhibit A of this Agreement.
|
1.40
|
“
Testable Engine
” shall mean *****.
|
1.41
|
“
Transportation Coverage
” shall mean the services provided to Spirit under Section
6
of this Agreement.
|
1.42
|
“
Workscope
” shall mean an IAE written repair request to the Maintenance Center(s) compliant with the MMP, approved by Spirit, such approval not to be unreasonably withheld, that authorizes the Maintenance Center(s) to undertake work on Eligible Equipment.
|
2.
|
FHA Services
|
2.1
|
Engine Shop Visit Coverage in accordance with the terms of Section 4
|
2.2
|
Lease Engine Coverage in accordance with the terms of Section
5
.
|
2.3
|
Transportation Coverage in accordance with the terms of Section
6
.
|
2.4
|
General FHA Services in accordance with the terms of Section 7
.
|
2.5
|
Excess Work as required in accordance with the terms of Section 8.
|
3.
|
Period of Cover
|
4.
|
Shop Visit Coverage
|
4.1
|
*****.
|
4.2
|
IAE will use commercially reasonable efforts to provide the following documentation to Spirit following the release of an Eligible Engine from a Maintenance Center following a Restoration Shop Visit:
|
4.2.1
|
*****;
|
4.2.2
|
*****; and
|
4.2.3
|
any Excess Work invoices arising from such Eligible Engine’s Restoration Shop Visit as soon as practicable but no later than *****, if applicable.
|
4.3
|
IAE’s obligations for an Engine Shop Visit caused by Foreign Object Damage shall be limited to the provision of repair work and Parts provided through the Maintenance Center to a maximum of ***** per event *****.
|
5.
|
Lease Engine Support
|
5.1
|
IAE agrees to provide a serviceable lease Engine (in the QEC configuration as defined in the lease Engine technical records which are made available to Spirit at the time of lease Engine offer) for use by Spirit in the event that (i) an Eligible Shop Visit occurs, and (ii) Spirit’s Spare Engines are unavailable due to support of another Eligible Shop Visit and no other Eligible Engines are available for such support. IAE will identify a lease Engine and use its reasonable endeavors to dispatch such Engine within 24 hours of notification of the requirement, but in any event shall endeavor to dispatch the Engine as soon as possible. Such Engine(s) will be provided subject to IAE’s standard short term engine lease agreement for V2500 Engines (IATA Master Short Term Lease Agreement, form 5016 00 (“
IATA Agreement
”)), except that the daily fee for such lease Engine will be waived. Should Spirit require a spare Engine to support a non-Eligible Shop Visit or that does not otherwise meet the above conditions, all terms of the IATA Agreement, including all applicable rates, charges and fees, shall apply. In the event IAE cannot provide an Engine as set forth herein Spirit shall have the right to lease an Engine from a third party. In such case, IAE shall reimburse Spirit for the direct and actual reasonable daily lease charges for such Engine lease up to maximum of ***** of the then current applicable IAE daily fee for lease Engines.
|
5.2
|
*****
|
5.3
|
Unless otherwise determined by the FHA manager, acting reasonably, Spirit is to return the IAE lease Engine within ***** after Spirit‘s Engine is returned to Spirit in accordance with Section 6.2 and such Engine is available for installation at Spirit’s facilities. Also, in the event that Spirit has leased an Engine from a third party as set forth in Section 5.1 above, IAE’s obligation to reimburse Spirit for the direct and actual reasonable cost for such Engine lease shall terminate ***** after
Spirit’s Engine is returned to Spirit in accordance with Section 6.2 and such Engine is available for installation at Spirit’s facilities.
|
6.
|
Transportation
|
6.1
|
Spirit shall deliver Eligible Engines to IAE in a Testable Engine configuration and the Accessories related to such Eligible Engines shall be in a serviceable condition.
|
6.2
|
*****
|
6.3
|
*****
|
6.4
|
*****
|
6.5
|
*****
|
6.6
|
*****
|
7.
|
General Fleet Hour Agreement Services
|
7.1
|
IAE shall supply Spirit with a V2500-A5 electronic Maintenance Management Plan that shall establish the maintenance requirements including LLP management, incorporation of applicable Service Bulletins and Aviation Authority Airworthiness Directive requirements and Eligible Engine removal planning (“
MMP
”). The MMP shall be revised and updated at least once a year, taking into account Spirit’s then-current operation in consultation with Spirit and fleet-wide operational experience, among other considerations. Additionally, an FHA Administration Manual may be mutually agreed between the parties, which shall establish a logistical plan and instructions for Spirit to facilitate performance by Spirit and IAE under this Agreement.
|
7.2
|
Engine monitoring data program services set forth in Exhibit G;
|
7.3
|
an FHA Manager based at IAE's offices who shall be the point of contact for Spirit, twenty four (24) hours per day seven (7) days per week, in respect of the services described in this Agreement. The following responsibilities of IAE shall normally be undertaken by the FHA Manager:
|
8.
|
Excess Work
|
8.1
|
Any costs incurred by IAE or the Maintenance Center not covered under this Agreement shall be Excess Work and shall be paid for by Spirit in accordance with Section 10.4 of this Agreement. Excess Work shall include any labor, material and other charges for Eligible Engines that arise from the following:
|
8.2
|
In the event IAE, following consultation with Spirit, determines that an Eligible Engine requires a Shop Visit that will be considered entirely to be Excess Work, then the IAE FHA Manager shall so notify Spirit and IAE shall perform such work.
|
8.1
|
*****
|
8.2
|
*****
|
8.3
|
*****
|
9.
|
Obligations of Spirit
|
9.1
|
Data and Procedures
|
9.1.1
|
maintain, collect and provide to IAE performance trend monitoring data on each Eligible Engine in accordance with Exhibit G, maintain timely records in form and detail sufficient for the accurate and expeditious administration of the terms of this Agreement including the assessment of operating conditions relative to those set out in Section 10.6 of this Agreement;
|
9.1.2
|
make available, and provide access to IAE’s provider of electronic condition monitoring data analysis, all data collected in accordance with 9.1.1 above in an electronic format agreed to by IAE, as required for the operation and administration of this Agreement;
|
9.1.3
|
implement and follow the IAE reasonable recommendations resulting from analysis of the performance trend monitoring data;
|
9.1.4
|
within ten (10) Business Days after the end of each month during the Period of Cover, report to IAE, in an electronic format agreed to by IAE, the hours and cycles flown, take off derate, and day temperature for each flight by each Eligible Engine during the preceding month;
|
9.1.5
|
ensure that all data reasonably required by IAE (including borescope reports) to facilitate the correction of any problem causing an Eligible Engine Removal is promptly made available to IAE;
|
9.1.6
|
provide for each Eligible Engine, no later than two (2) Business Days following Eligible Removal, a removal report containing the following information with respect to the Eligible Engine:
|
(a)
|
a record of Eligible Engine total time and cycles;
|
(b)
|
position on the aircraft, aircraft number, and date of Eligible Engine removal;
|
(c)
|
reason for removal, flight and ground indications prior to and related to removal;
|
(d)
|
module rework history with time since new, time since overhaul and time since repair provided such module was serviced outside of this Agreement;
|
(e)
|
any borescope reports detailing any open discrepancies;
|
(f)
|
total LLP time, LLP part numbers, serial numbers, cycle limits, time since new, cycles since new, remaining cycles, and take-off bump cycles, if applicable;
|
(g)
|
latest build standard record;
|
(h)
|
records with respect to any Accessories, including part numbers, serial numbers, time and cycles since new, overhaul, Repair, or bench test, and a description of prior work performed for each item unless Spirit directs IAE where to send such Accessories;
|
(i)
|
if applicable, a non-incident certification in customary form that the Eligible Engine and all parts installed thereon:
|
(i)
|
have been operated and maintained in accordance with applicable IAE and Airbus instructions and manuals;
|
(ii)
|
have not been operated by any government or military service except as civil aircraft on the civil register; and
|
(iii)
|
have not been installed on any engine or module that was subject to any incident, accident, major failure, fire, extreme stress, over temperature outside normal operation, or over-speed; and
|
(j)
|
any other data reasonably requested by IAE.
|
9.1.7
|
provide the Engine serial numbers within thirty (30) Business Days of acceptance by Spirit of each applicable Aircraft covered under this Agreement as described in Exhibit A of this Agreement, as amended, supplemented or otherwise modified from time to time; and
|
9.1.8
|
ensure Eligible Engines are available for FHA services in a Testable Engine configuration (when inducted at the Maintenance Center).
|
9.2
|
Engine Preparation for Transportation
|
9.2.1
|
make Eligible Engines available for shipment at Spirit’s main base no later than ten (10) days prior to their scheduled induction date;
|
9.2.2
|
maintain in a serviceable condition one (1) IAE approved transportation stand per spare Eligible Engine plus an additional serviceable IAE approved transportation stand;
|
9.2.3
|
at the time of an Eligible Engine Removal, remove the Eligible Engine from the Aircraft, mount it on an IAE approved transportation stand and prepare such Eligible Engine for shipment, all in accordance with the procedures specified in the applicable IAE manuals; and
|
9.2.4
|
ensure that it does not remove from the Maintenance Center the IAE approved transportation stand on which the Eligible Engine was transported to the Maintenance Center so that such stand is available at the Maintenance Center on the day such Eligible Engine undergoes testing, to enable efficient movement of such Eligible Engine to the test cell and return transportation of such Eligible Engine to Spirit.
|
9.3
|
Operation, Maintenance and Troubleshooting of Eligible Equipment
|
9.4
|
Administration
|
9.4.1
|
Spirit shall cooperate with IAE to fulfill any reasonable administrative or other requirements of the Maintenance Center, including endorsement of Workscopes for Aviation Authority requirements within three (3) Business Days of receipt from IAE. If Spirit fails to respond, within five (5) Business Days, the Workscope will be deemed to be accepted.
|
9.4.2
|
Spirit shall accomplish quality audits and obtain certifications required by the Aviation Authority and IAE for accomplishment of work on the Eligible Engines at the Maintenance Center(s).
|
9.5
|
One Time Concessions
|
9.6
|
Payment
|
9.7
|
Records and Audit
|
9.8
|
Acceptance and Operation
|
9.9
|
Provision of Serviceable Accessories
|
10.
|
FHA Rates and Payment
|
10.1
|
FHA Rates
|
10.1.1
|
The FHA Rate for Restoration Shop Visit Coverage for Eligible Engines during the Period of Cover shall be as follows:
|
(a)
|
For V2524-A5 rated Eligible Engines ***** per Eligible Engine Flight Hour;
|
(b)
|
For V2527-A5 rated Eligible Engines ***** per Eligible Engine Flight Hour; and
|
(c)
|
For V2533-A5 rated Eligible Engines ***** per Eligible Engine Flight Hour.
|
10.1.2
|
*****
|
10.1.3
|
The FHA Rate for Miscellaneous Shop Visit Coverage for Eligible Engines for the first ***** of each Eligible Engine’s Period of Cover shall be ***** per Eligible Engine Flight Hour.
|
10.1.4
|
The FHA Rate for Miscellaneous Shop Visit Coverage for Eligible Engines each year commencing with the ***** for each Eligible Engine during the Period of Cover shall be as follows:
|
(a)
|
For V2524-A5 rated Eligible Engines ***** per Eligible Engine Flight Hour;
|
(b)
|
For V2527-A5 rated Eligible Engines ***** per Eligible Engine Flight Hour; and
|
(c)
|
For V2533-A5 rated Eligible Engines ***** per Eligible Engine Flight Hour;
|
10.1.5
|
*****
|
10.1.7
|
*****
|
10.2
|
*****
|
10.3
|
*****
|
10.4
|
Excess Work Invoices
|
10.4.1
|
Charges for Excess Work shall be invoiced to Spirit by IAE as such Excess Work is performed in accordance with rates identified in Exhibit H.
|
10.4.2
|
In the event IAE determines that an Eligible Engine requires a Shop Visit that will be considered entirely to be Excess Work, and the Workscope for such Shop Visit is equal to or greater than a level of work that would be performed at a Restoration Shop Visit, then:
|
(a)
|
IAE may invoice Spirit its reasonable estimate of the cost of any Excess Work prior to commencement, or during the execution, of such Excess Work. IAE shall invoice Spirit for the balance of the cost of any Excess Work upon receipt of the corresponding invoice from the Maintenance Center (or promptly issue a credit to Spirit’s account with IAE for any excess payment received from Spirit); and
|
(b)
|
the payment terms as set forth in Section
10.7.1
shall apply.
|
10.5
|
*****
|
10.6
|
General Conditions
|
10.6.1
|
The FHA Rates are predicated upon Spirit:
|
(a)
|
maintaining within its fleet of Aircraft an annual average flight cycle of: ***** hours for V2524-A5 powered Aircraft, ***** hours for V2527-A5 powered Aircraft, and ***** hours for V2533-A5 powered Aircraft (each calculated from the moment the wheels of an Aircraft, on which any Eligible Engine is installed, leave the ground on take-off to the moment when the wheels of such Aircraft touch the ground on landing);
|
(b)
|
maintaining an annual average utilization of ***** hours per V2524-A5 powered Aircraft, ***** hours per V2527-A5 powered Aircraft, and ***** hours per V2533-A5 powered Aircraft;
|
(c)
|
maintaining an average engine thrust derate of: ***** for V2524-A5 powered Aircraft, ***** for V2527-A5 powered Aircraft, and ***** for V2533-A5 powered Aircraft, all relative to the name plate thrust rating;
|
(d)
|
maintaining an average ambient temperature for take-off no greater than: ***** for V2524-A5 powered Aircraft, ***** for V2527-A5 powered Aircraft, and ***** for V2533-A5 powered Aircraft;
|
(e)
|
having its main base located at Fort Lauderdale, Florida, USA;
|
(f)
|
Spirit operating each Eligible Engine at its originally installed thrust rating (unless otherwise agreed by the Parties);
|
(g)
|
acquiring all of the Firm Aircraft and Firm Spare Engines as set forth in Section 9.8;
|
(h)
|
after taking delivery of the Spare Engines in accordance with Exhibit A, maintaining a minimum ratio of ***** Spare Engines to installed Engines for its Aircraft fleet; operating and maintaining the Aircraft and Eligible Engines in accordance with Airbus’, IAE’s, and other applicable OEM’s technical manuals and the eMMP (including Engine rebuild requirements) for the duration of the Period of Cover;
|
(i)
|
owning, operating, and maintaining the Aircraft and Eligible Engines in regular commercial airline operation for the duration of the Period of Cover;
|
(j)
|
*****; and
|
(k)
|
acquiring from IAE or its approved sources reasonably sufficient components, parts, and spare Engines at the levels mutually agreed by IAE and Spirit to maintain proper support of the Eligible Engines and Aircraft.
|
10.6.2
|
In the event Spirit: (i) operates the Eligible Engines contrary to the preceding conditions, or (ii) wishes to include additional aircraft powered by V2500-A5 engines or additional V2500-A5 spare engines under this Agreement, then IAE, acting in good faith and in consultation with Spirit, may make reasonable and appropriate adjustments to the FHA Rates in accordance with the FHA Rate adjustment matrices set forth in Exhibit I (the “
FHA Rate Adjustment Matrices
”), which detail the effects of variations in derate, stage length, annual average utilization, and temperature on such FHA Rates. The FHA Rate Adjustment Matrices will be applied on an engine-by-engine basis at RSV induction.
|
10.6.3
|
In the event that an Eligible Engine leaves this Agreement for reasons beyond the control of Spirit, for example, an Eligible Engine is deemed damaged Beyond Economic Repair and is replaced by Spirit with another Engine, subject to prior written agreement by IAE (not to be unreasonably withheld, conditioned or delayed), the FHA Rates for that Engine and not for all Eligible Engines, will be adjusted.
|
10.7
|
Payment
|
10.7.1
|
*****
|
10.7.2
|
Subject to Section 10.7.1 above, Spirit shall pay all invoices submitted by IAE under this Section 10 within ***** of receipt by Spirit.
|
10.7.3
|
Spirit undertakes that IAE shall receive the full undisputed amount of payments falling due under this Section 10, without any withholding or deduction whatsoever. If Spirit has a reasonable, good faith dispute with an Excess Work charge from IAE, Spirit will promptly notify IAE of such dispute in writing detailing the grounds for such dispute, but not later than fifteen (15) Business Days after receipt of such Excess Work charge. The Parties agree to use their reasonable, diligent and good faith efforts to reach a mutually agreeable resolution to such dispute.. The Parties agree to use their reasonable, diligent and good faith efforts to reach a final
|
10.7.4
|
All payments under this Section 10 shall be made by electronic transfer and shall be deposited not later than the due date of payment with:
|
10.7.5
|
Should Spirit fail to make any material payments to IAE required as set forth in this Section 10 or should Spirit fail to make any material payments to IAE when due under any other agreement between IAE and Spirit and such amount is not subject to a good faith dispute between the Parties, 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 of the greater of ***** or the New York Citibank prime rate plus ***** per annum from the date the payment was due to be made until the date such payment is received by IAE, (b) suspend all work on any and all Eligible Engines then currently at the Maintenance Center pursuant to this FHA and/or (c) hold Eligible Engines in IAE’s possession or control.
|
10.8
|
Taxes and Other Like Charges
|
10.8.1
|
In addition to amounts stated to be payable by Spirit pursuant to this Agreement, Spirit shall pay any and all imposts, taxes, duties, levies, fees, assessments or other like charges (excluding any income, gains, or excess profit, franchise and similar taxes levied on the part of IAE, any Maintenance Center or their respective Affiliates and subcontractors,) which may be imposed by any government or taxing agency thereof arising from performance by IAE or its subcontractors in connection with this Agreement.
|
10.8.2
|
All amounts stated to be payable by Spirit pursuant to this Agreement exclude any value added tax, sales tax or similar such tax. In the event that the supply of goods or services under this Agreement is chargeable to any value added tax, sales tax or similar such tax will be borne by Spirit, subject to the receipt of any appropriate documentation that may be required to enable or assist Spirit to claim or verify any tax credit, set off, rebate or refund in respect of such taxes paid or payable in connection with supplies under this Agreement.
|
10.8.3
|
If either IAE or Spirit becomes aware of any taxes set forth in Sections 10.8.1 and 10.8.2 above, the relevant Party shall promptly notify the other Party, and both parties agree to consult in good faith and take such other reasonable steps in order to mitigate the tax in question.
|
11.
|
*****
|
12.
|
Warranties; Limitation of Liability
|
12.1
|
IAE warrants the work performed by a Maintenance Center at the final Shop Visit for each Eligible Engine under this Agreement shall be free from defects in materials and workmanship as follows: If Spirit demonstrates to the reasonable satisfaction of IAE that a
|
12.2
|
IAE warrants to Spirit that it shall convey good title to the new Parts sold hereunder. IAE's liability and Spirit’s 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 Section 15 of this Agreement.
|
12.3
|
THE FOREGOING WARRANTIES TOGETHER WITH THE EXPRESS REMEDIES PROVIDED TO SPIRIT IN ACCORDANCE WITH THIS AGREEMENT, ARE EXCLUSIVE AND ARE GIVEN BY IAE IN LIEU OF (A) ANY AND ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE; AND (B) ANY OBLIGATION, LIABILITY, RIGHT, CLAIM, OR REMEDY IN STATUTE, CONTRACT, TORT OR STRICT LIABILITY AGAINST OEM OR ITS AFFILIATES, WHETHER OR NOT ARISING FROM THE NEGLIGENCE, ACTUAL OR IMPUTED (BUT NOT GROSS NEGLIGENCE OR WILLFUL MISCONDUCT), OF IAE OR ITS AFFILIATES, STOCKHOLDERS, DIRECTORS, OFFICERS, EMPLOYEES, PERMITTED ASSIGNS AND AGENTS.
|
12.4
|
*****
|
12.5
|
For purpose of this Section 12, “
IAE
” shall be deemed to include IAE International Aero Engines AG, Pratt and Whitney, a division of United Technologies Corporation, Pratt & Whitney Aero Engines International GmbH, Japanese Aero Engine Corporation, MTU Aero Engines GmbH, and the respective directors, officers, employees and agents of each.
|
13.
|
Delays
|
13.1
|
Excusable Delays
|
14.
|
Duplicate Benefits
|
15.
|
Intellectual Property
|
15.1
|
IAE shall conduct, at its own expense, the entire defense of any claim, suit or action alleging that, without further combination, the use or resale by Spirit or any subsequent purchaser or user of the Parts delivered hereunder directly infringes any United States patent or any patent of any other country that is a signatory to Article 27 of the Convention of International Aviation signed by the United States at Chicago on December 7, 1944, in which Spirit is authorized to operate, but only on the condition that:
|
15.1.1
|
IAE receives prompt written notice of such claim, suit or action and has full opportunity and authority to assume the sole defense thereof, including settlement and appeals, and all information available to Spirit or subsequent purchaser or user for such defense; provided, however, IAE shall not agree to any settlement pursuant to which any fault is attributed to Spirit, without the prior written consent of Spirit;
|
15.1.2
|
such new Parts are made according to a specification or design furnished by IAE or, if a process patent is involved, the process performed with such Parts if recommended in writing by IAE; and
|
15.1.3
|
the claim, suit or action is brought against Spirit.
|
15.2
|
Provided all of the foregoing conditions have been met, IAE shall, at its own expense, either settle said claim, suit or action or shall pay all damages, excluding consequential damages and costs awarded by the court thereon, and, if the use or resale of such new Parts is finally enjoined, IAE shall, at IAE’s option:
|
15.2.1
|
procure for Spirit the right to use and resell the new Parts,
|
15.2.2
|
replace them with equivalent non-infringing Parts,
|
15.2.3
|
modify them so they become non-infringing but equivalent, or
|
15.2.4
|
remove them and refund the purchase price and any additional amount necessary to replace the same with equivalent, non-infringing Parts (less a reasonable allowance for use, damage and obsolescence).
|
15.3
|
If a claim, suit or action is based on a design or specification furnished by Spirit or on the performance of a process not recommended or approved in writing by IAE, or on the use
|
16.
|
Amendment
|
17.
|
Assignment
|
17.1
|
Except as other agreed herein, Spirit may not assign in whole or part any of its rights or obligations under this Agreement without the written consent of IAE (such consent not to be unreasonably withheld).
|
17.2
|
*****
|
17.3
|
*****
|
17.4
|
IAE may, without recourse, assign its rights and/or delegate its obligations under this Agreement to any subsidiary or affiliate of IAE or United Technologies Corporation, or in connection with a merger, consolidation, reorganization, or voluntary sale or transfer of its assets; provided that such assignee/delegate is: (i) solvent at the time of such transfer and (ii) authorized by the applicable regulatory authorities, as necessary, to perform or procure the performance of all obligations being delegated/assigned; and (iii) able, in IAE’s sole, reasonable discretion, to make all payments required by IAE to be made to Spirit under this Agreement.
|
18.
|
Notices
|
19.
|
Exclusion of Other Provisions and Previous Understandings
|
19.1
|
This Agreement is the sole and entire agreement of the Parties with respect to the Eligible Engines and 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 Spirit, or any acknowledgment or acceptance by IAE, or of any other document which may be issued by either Party relating to such services and the Eligible Engines.
|
19.2
|
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 Agreement, whether orally or in writing, relating to such 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 such services and shall supersede all such representations, agreements, statements and understandings.
|
20.
|
Termination, Expiration and Events of Default
|
20.1
|
Bankruptcy Insolvency
|
20.2
|
Failure to Make Payments or to Meet Obligations
|
20.2.1
|
If Spirit fails to make any payment of a material amount, due and owing to IAE as set forth in Section 10 of this Agreement or any other agreement between the Parties (including any late interest due thereon) and such amount is not the subject of a good faith dispute or fails to meet any other material obligation under this Agreement or any other agreement between the Parties, then, after notice to Spirit and the expiration of a ***** cure period, and without prejudice to any of IAE’s other rights which IAE may have in contract, at law, or in equity, IAE shall have the right to not to induct, to suspend all work on, or not to release from the Maintenance Center(s) any Eligible Engine until full payment is made by Spirit to IAE or such failure is corrected, as the case may be.
|
20.2.2
|
If Spirit fails to take delivery of all of the Aircraft and Eligible Engines in accordance with the schedule set forth in Exhibit A to this Agreement, as amended, supplemented or otherwise modified from time to time, or fails to operate the Aircraft and Eligible Engines in regular commercial service as contemplated by Section 10.6 for the duration of the Period of Cover, in addition to any other rights which IAE may have in contract, at law, or in equity, IAE shall be entitled to make reasonable adjustments to the FHA Rates as appropriate based on the method of calculation used to derive the FHA Rates.
|
20.2.3
|
A non-defaulting Party shall have the right to declare an event of default and terminate this Agreement: (i) if any default shall occur in the payment by the defaulting party of any material amount hereunder when and as the same becomes due and payable and such default continues, after notice from the non-defaulting Party for a period of ***** or more and is not the subject of a good faith dispute between the Parties, or (ii) for a failure by the defaulting Party to meet any other material obligation under this Agreement, and such failure has not been fully corrected within ***** after the non-defaulting Party has given notice of such failure to the defaulting Party and is not the subject of a good faith dispute between the Parties.
|
20.3
|
Expiration
|
20.4
|
Effect of Termination or Expiration
|
20.4.1
|
Upon any termination or expiration of this Agreement, all liabilities and obligations (including payment obligations) that have accrued prior to such termination or expiration (including payment due for Excess Work) shall survive.
|
20.4.2
|
Spirit shall pay to IAE the cost of any and all services which have been or are in the process of being carried out under the terms of this Agreement which have not been covered by payments made by Spirit under this Agreement plus a surcharge of the lesser of (i) ***** and (ii) the maximum amount allowed by law. Should Spirit terminate this Agreement under Section 20.1 or Section 20.2.3 above, IAE shall return any excess payments for services paid for, but not rendered. Such calculation shall be performed by IAE within sixty (60) Business Days of termination, shall be mutually approved by IAE and Spirit and shall be immediately due and payable by Spirit or IAE, as the case may be, upon receipt thereof.
|
21.
|
Negation of Waiver
|
22.
|
Severability and Partial Invalidity
|
23.
|
Governing Law
|
24.
|
Publicity
|
25.
|
Confidentiality
|
26.
|
Compliance with All Applicable Laws and Regulations
|
26.1
|
Export/Import. Spirit agrees that it will not, directly or indirectly, sell, export, re-export, transfer, divert, or otherwise dispose of any IAE goods, software, technical data (including products derived from or based on such technical data), or services received directly or indirectly from IAE to any Prohibited Party without obtaining prior authorization from the relevant government authorities as required pursuant to Export Laws.
|
26.2
|
Other Laws and Regulations. Spirit agrees that it will abide by all applicable laws and regulations.
|
26.3
|
Spirit shall indicate its compliance with the above on or before execution of this Agreement by completing and signing the End Use/End User Certificate form provided by IAE.
|
27.
|
No Construction Against Drafter
|
28.
|
Damages
|
Agreed to and accepted on behalf of:
IAE International Aero Engines AG
|
|
Agreed to and accepted on behalf of:
Spirit Airlines, Inc.
|
||
By:
|
/s/ Rick Deurloo
|
|
By:
|
/s/ Charles A. Rue
|
Name:
|
Rick Deurloo
|
|
Name:
|
Charles A. Rue
|
Title:
|
SVP Sales
|
|
Title:
|
VP Supply Chain
|
Existing Aircraft No.
|
Aircraft Type
|
Engine Model
|
Delivery Date
|
Aircraft MSN
|
ESN 1
|
ESN 2
|
1
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
2
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
3
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
4
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
5
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
6
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
7
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
8
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
9
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
10
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
11
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
12
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
13
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
14
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
15
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
16
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
17
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
18
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
19
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
20
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
21
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
22
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
23
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
24
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
25
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
26
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
27
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
28
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
29
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
30
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
31
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
32
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
33
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
34
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
35
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
36
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
37
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
38
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
39
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
40
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
41
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
42
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
43
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
44
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
45
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
46
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
47
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
Existing Aircraft No.
|
Aircraft Type
|
Engine Model
|
Delivery Date
|
Aircraft MSN
|
ESN 1
|
ESN 2
|
1
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
2
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
3
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
4
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
5
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
6
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
7
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
8
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
9
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
10
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
11
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
12
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
13
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
14
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
15
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
16
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
17
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
18
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
19
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
20
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
21
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
Spare Engines
|
No.
|
Engine Model
|
Delivery Date
|
ESN
|
Firm Spare Engines
|
1
|
*****
|
*****
|
*****
|
2
|
*****
|
*****
|
*****
|
|
3
|
*****
|
*****
|
*****
|
|
4
|
*****
|
*****
|
*****
|
|
5
|
*****
|
*****
|
*****
|
|
6
|
*****
|
*****
|
*****
|
|
7
|
*****
|
*****
|
*****
|
|
8
|
*****
|
*****
|
*****
|
|
9
|
*****
|
*****
|
*****
|
|
10
|
*****
|
*****
|
*****
|
|
11
|
*****
|
*****
|
*****
|
|
|
|
|
|
|
Option Spare Engines
|
1
|
*****
|
*****
|
*****
|
2
|
*****
|
*****
|
*****
|
|
3
|
*****
|
*****
|
*****
|
|
4
|
*****
|
*****
|
*****
|
1.
|
FHA Rates will be subject to annual escalation in accordance with the formula set forth below:
|
ATA code
|
Description
|
Units Per Engine
|
OEM
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
1.
|
SPIRIT ADDRESSES
|
(a)
|
Address for Notices:
|
(b)
|
Address for Invoices:
|
2.
|
IAE ADDRESSES
|
(a)
|
Address for Notices:
|
(b)
|
Address for Invoices:
|
(c)
|
Address for all Other FHA Matters:
|
1.
|
IAE will provide the following Engine health monitoring services (“
Services
”) through the ADEM system:
|
(a)
|
ENGINE TREND MONITORING
|
(i)
|
Provide processing of in-flight engine data received from Operator into IAE’s EHM database as provided per the data input and transmission requirements set forth in Section
3
herein. All processed data will be provided to the Operator via IAE’s web portal. Daily updates require web portal access described in Section
1
(b) herein.
|
(ii)
|
Provide automated mechanical exceedance reporting for those Aircraft that are equipped with required on-board hardware and software.
|
(iii)
|
Provide technical analysis of EHM Eligible Engines’ performance data and report anomalies indicated by such data to designated Operator personnel as required.
|
(iv)
|
Provide access to monthly EHM Eligible Engine operating trend analysis report covering post EHM Commencement Date operations to assist Operator in the planning and scheduling of EHM Eligible Engines for shop visits.
|
(v)
|
Provide automated alert notification of parameters that have exceeded level and rate change limits.
|
(vi)
|
Provide access to alert details reports that identify Aircraft and Eligible Engines by serial number and provide the date, time, magnitude and details of occurrences when such Eligible Engine exceeds specific performance parameters and provide the ability to store comments associated with a given alert.
|
(vii)
|
Provide exhaust gas temperature (subject to data availability) Watch-Lists, updated monthly utilizing data received from Operator to assist Operator in scheduling Eligible Engine removals for maintenance purposes. The Watch-Lists provide an engine ranking and predicted removal date for a given Eligible Engine based on the measured parameter and deterioration rate to assist with proactive on-wing management and maintenance planning.
|
(viii)
|
Provide access to the following engine performance parameter trend plots that are updated real-time as new in-flight engine data is received from Operator:
|
(ix)
|
Upon special request, raw in-flight engine data can be supplied to the Operator.
|
(x)
|
Input data files and d individually processed records will be stored for a minimum period of five (5) years.
|
(b)
|
WEB PORTAL ACCESS
|
(i)
|
Provide twenty-four (24) hour per day access to reports and processed information, provided to under Section
1
herein, through a secure web portal created and maintained by IAE. Such web portal access shall be created and provided to Operator approximately thirty (30) days from the execution of this Agreement. Operator must meet IAE defined requirements for access as detailed in Section
2
herein. IAE will use all reasonable efforts to ensure a service availability target of 96% when measured on an annual basis and that down time of the system is no longer than one (1) business day for any one incident.
|
(ii)
|
IAE shall provide Services under the terms of this Agreement contingent upon the timely receipt of data required by IAE from Operator. It is understood between the parties that the ability of IAE to provide timely and accurate reports and processed information through these web-based services is dependent upon the quality and timeliness of the data received from Operator.
|
(iii)
|
If Email, or pager or cell phone alert notifications are required by the Operator, the Operator shall be responsible for acquiring and maintaining the required pager and cell phone hardware and software and pay any associated communications fees. It is the Operator’s responsibility to establish an alert notification contact list and advise IAE of any changes.
|
2.
|
ACCESSIBILITY
|
(a)
|
To facilitate internet portal access, Operator is required to maintain the following:
(i)
internet access;
(ii)
Internet Explorer version 5.5 or higher; (
iii
) 128 bit Secure Socket Layer (“SSL”) encryption capability; and
(iv)
a minimum internet speed of 56K bits per second to access the internet portal.
|
(b)
|
All information being transmitted through the Internet portal will be protected using SSL encryption. In addition, each user of the Internet portal will be authenticated at logon with a unique user identification and password. Once authenticated to the Internet portal, Operator will only be allowed to access the information that Operator and IAE mutually agree a specific user may review. IAE shall review security requirements for web portal access from time to time to ensure an appropriate level of data protection. Updated security requirements shall be communicated to Operator on a timely basis.
|
3.
|
TRANSMISSION OF DATA BY OPERATOR
|
(a)
|
Operator shall provide all data requested by IAE in order to perform the Services, including but not limited to the date and time the data was recorded, aircraft and engine number, engine position, altitude and mach (or air speed), total air temperature, engine pressure ratio, rotor speeds, fuel flow, oil temperature, oil pressure, mechanical exceedances and pertinent maintenance actions (EHM Eligible Engine changes, sensor changes, other items that may impact engine performance). Operator shall electronically transmit engine condition monitoring data to IAE’s designated ground station via air-to-ground service providers (e.g., ARINC and SITA) or via such other routing as the parties mutually agree.
|
(b)
|
Using the facilities available within IAE’s V2500 engine monitoring program services, the Operator shall provide feedback of on-wing maintenance actions taken as a result of an alert notification as provided in accordance with Section 1(a)(v) herein.
|
4.
|
LIMITATION OF LIABILITY
|
Item
|
Basis
|
Rates/Fees
|
*****
|
*****
|
*****
(4)
|
*****
|
*****
|
*****
|
*****
|
*****
(1)
|
*****
(2)
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
(3)
|
*****
(4)
|
*****
|
*****
|
*****
(4)
|
1.
|
*****
|
2.
|
*****
|
3.
|
Where units per Engine quantities listed in Exhibit C are greater than *****, a single ***** fee per ATA line item shall still apply. This charge will also cover the packing, one-way transportation and coordination of Accessories removed and sent for vendor repair.
|
4.
|
The above rates and fees are expressed in United States Dollars and are subject to escalation from the base month of January 2012 in accordance with the formula set forth in Exhibit B.
|
Subject:
|
Side Letter No. 1 to the Amended and Restated V2500-A5 Fleet Hour Agreement between IAE International Aero Engines AG and Spirit Airlines, Inc., dated October 1, 2013
|
1.
|
Existing Fleet – *****
|
Agreed to and accepted on behalf of:
IAE International Aero Engines AG
|
|
Agreed to and accepted on behalf of:
Spirit Airlines, Inc.
|
||
By:
|
/s/ Rick Deurloo
|
|
By:
|
/s/ Edward Christie
|
Name:
|
Rick Deurloo
|
|
Name:
|
Edward Christie
|
Title:
|
SVP Sales
|
|
Title:
|
SVP & CFO
|
Date:
|
10/2/13
|
|
Date:
|
10/2/13
|
Date: February 20, 2014
|
/s/ B. Ben Baldanza
|
|
B. Ben Baldanza
|
|
President and Chief Executive Officer
|
Date: February 20, 2014
|
/s/ Edward M. Christie
|
|
Edward M. Christie
|
|
Senior Vice President and
|
|
Chief Financial Officer
|