1
EXHIBIT 10.116
GE Aircraft Engines
--------------------------------------------------------------------------------
6-9810
General
Terms
Agreement
ATLAS AIR, INC.
Portions of this document have been redacted and confidential treatment
has been requested for these portions from the Securities and Exchange
Commission. Redacted portions are indicated by "***".
This document contains information prepared specifically for presentation to the
airline described herein and should not be divulged to others without permission
of General Electric Company.
2
GENERAL TERMS AGREEMENT NO. 6-9810
Table of Contents
o Agreement
ARTICLE I - PRODUCTS
ARTICLE II - PRICES
ARTICLE III - ORDER PLACEMENT
ARTICLE IV - DELIVERY, TITLE, TRANSPORTATION, RISK OF LOSS, PACKAGING
ARTICLE V - PAYMENT
ARTICLE VI - TAXES
ARTICLE VII - WARRANTIES AND CF6-80C2 PRODUCT SUPPORT PLAN
ARTICLE VIII - EXCUSABLE DELAY
ARTICLE IX - PATENTS
ARTICLE X - INFORMATION AND DATA
ARTICLE XI - FAA CERTIFICATION REQUIREMENTS
ARTICLE XII - TERMINATION FOR INSOLVENCY
ARTICLE XIII - LIMITATION OF LIABILITY
ARTICLE XIV - EXPORT SHIPMENT
ARTICLE XV - GOVERNMENTAL AUTHORIZATION
ARTICLE XVI - NOTICES
ARTICLE XVII - MISCELLANEOUS
o Exhibit A - Products
o Exhibit B - CF6-80C2 Product Support Plan
SECTION I - DEFINITIONS
SECTION II - WARRANTIES AND SPECIAL GUARANTEES
SECTION III - SPARE PARTS PROVISIONING
SECTION IV - TECHNICAL DATA
SECTION V - TECHNICAL TRAINING
SECTION VI - CUSTOMER FACTORY AND FIELD SUPPORT
SECTION VII - PRODUCT SUPPORT ENGINEERING
SECTION VIII - OPERATIONS ENGINEERING
SECTION IX - GROUND SUPPORT EQUIPMENT
SECTION X - GENERAL CONDITIONS - CF6-80C2 PRODUCT SUPPORT PLAN
o Exhibit C - Escalation
o Exhibit D - Payment
3
--------------------------------------------------------------------------------
This Agreement contains information specifically developed for Atlas Air,
Inc. by GE. Accordingly, Atlas Air, Inc. will not disclose all or any part
of this Agreement to any Third Party except as permitted by Article XVII.E.
--------------------------------------------------------------------------------
THIS GENERAL TERMS AGREEMENT NO. 6-9810 (hereinafter referred to as this
"Agreement"), dated as of the ______ day of June, 1997, by and between General
Electric Company, a corporation organized under the law of the State of New
York, U.S.A., (including it's successors and assigns), acting through its GE
Aircraft Engine Group located in Evendale, Ohio, U.S.A. (hereinafter referred to
as "GE"), and Atlas Air, Inc., a corporation organized under the laws of
Delaware (hereinafter referred to as "Atlas" or "Airline"). Airline and GE are
also referred to in this Agreement as the "Parties" or individually as a
"Party".
WITNESSETH
WHEREAS, Airline has acquired, or is in the process of acquiring a certain
number of wide-body aircraft equipped with GE installed engines, and
WHEREAS, the Parties desire to enter into this Agreement for the sale and
support by GE and the purchase by Airline from GE of spare Engines, related
equipment and spare Parts therefor.
NOW, THEREFORE, in consideration of the mutual covenants herein contained, the
parties hereto agree as follows. Capitalized terms used herein that are
otherwise undefined shall have the meanings ascribed to them in Section I
("Definitions") of Exhibit B, unless the context requires otherwise.
ARTICLE I - PRODUCTS
GE shall sell and Airline shall purchase, under the terms and subject to the
conditions hereafter set forth, the items and equipment identified as Products
in the attached Exhibit A (hereinafter referred to as "Product(s)"), together
with certain services related thereto as hereinafter provided.
ARTICLE II - PRICES
A. IN GENERAL. The selling prices of all Products will be the prices quoted
in (i) GE's Engine Spare Parts Price Catalog, as revised by GE from time
to time (the "Spare Parts Catalog" or "Catalog"), or in procurement data
issued by GE in
-1
4
accordance with Airline ATA Specification 2000 (as the same may be revised
or superseded from time to time, the "Procurement Data") or (ii) GE's
written quotation or proposal, as applicable, and as confirmed in the
purchase order accepted by GE. GE shall quote prices in U.S. Dollars, and
Airline shall pay for Products in U.S. Dollars in accordance with the
payment provisions described in Article V and Exhibit D hereto. All
Product prices include the cost of GE's standard tests, inspection and
commercial packaging. Transportation costs and costs resulting from
special inspection, packaging, testing, or other special requirements,
requested by Airline, will be paid for by Airline.
B. SPARE PARTS AVAILABLE THROUGH CATALOG. The selling price of Spare Parts,
will be set forth in the most current Catalog or in Procurement Data
issued by GE. The price of a new Spare Part which is first listed by GE in
Procurement Data, may be changed by GE in subsequent Procurement Data
revisions until such time as the Part is included in the Catalog. GE will
advise Airline in writing ninety (90) days in advance of any changes in
prices affecting a significant portion of the prices in the Catalog.
During such ninety (90) day period, GE shall not be obligated to accept
Airline purchase orders for quantities of Spare Parts in excess of up to
ninety (90) days normal usage beyond the effective date of the announced
price change.
C. NON-CATALOG PRODUCTS
The prices of Products (other than Spare Parts listed in the Catalog or
Procurement Data described in paragraph B above) will be the prices quoted
to Airline by GE in a written quotation or proposal escalated as nearly as
practicable to the date of such quotation or proposal. All prices will be
quoted as Base Prices, subject to escalation using the appropriate GE
escalation provisions then in effect. Prices for Products are established
at the time of delivery. A copy of GE's current escalation formula is set
forth in Attachment C hereto. No change to such escalation provisions will
apply to Airline until GE provides Airline at least ninety days prior
written notice.
ARTICLE III - ORDER PLACEMENT
A. This Agreement shall constitute the terms and conditions applicable to all
purchase orders which may hereafter be placed by Airline and accepted by
GE for Products in lieu of all printed terms and conditions appearing on
Airline's purchase orders; except, that, the description of Products,
price, quantity, delivery dates and shipping instructions shall be as set
forth on each purchase order accepted by GE.
-2
5
B. Airline shall place purchase orders for Products quoted by GE, in
accordance with GE's quotation for such Products.
C. Airline may place purchase orders for Spare Parts using any of the
following methods: telephone, facsimile transmission, ARINC or SITA
utilizing ATA Specification 2000 (chapter 3 format) or Airline purchase
order as prescribed in the Catalog or GE's quotation.
D. Airline shall place purchase orders for initial provisioning quantities of
Spare Parts as provided in the attached Exhibit B within one hundred
eighty days (180) following receipt from GE of initial Provisioning Data
relating thereto.
E. GE's acknowledgment of each purchase order shall constitute acceptance
thereof.
ARTICLE IV - DELIVERY, TITLE, TRANSPORTATION, RISK OF LOSS, PACKAGING
A. GE shall deliver Products under each purchase order placed by Airline and
accepted by GE, on a mutually agreed upon schedule consistent with GE's
lead times and as set forth in each such purchase order. Delivery dates
are subject to (1) prompt receipt by GE of all information necessary to
permit GE to proceed with work immediately and without interruption, and
(2) Airline's compliance with the payment terms set forth herein.
B. Delivery of all Products shall be: (1) to the common carrier designated by
Airline, Ex Works (Incoterms, 1990), Evendale, Ohio, U.S.A., or point of
manufacture, at GE's option; or (2) to storage, in the event shipment
cannot be made for reasons set forth in Paragraph C of this Article IV.
Title to and risk of loss or damage shall pass to Airline upon delivery.
All transportation costs, in-transit insurance and any other shipment
expenses for Products will be paid for by Airline. GE shall, however,
following delivery to Airline, provide transportation free of charge to
the Greater Cincinnati International Airport for any Spare Parts for which
Airline requests air shipment.
C. If any Product cannot be delivered when ready due to any cause specified
in Article VIII (Excusable Delay), GE may make delivery by placing such
Product in storage. In such event, (1) all expenses incurred by GE for
activities such as, but not limited to, preparation for and placement into
storage and handling, storage, inspection, preservation and insurance
shall be paid by Airline upon presentation of GE's invoices, and (2) GE
shall assist and cooperate with Airline in any reasonable manner with
respect to the removal of any such Product from storage.
-3
6
D. Unless otherwise instructed by Airline, GE shall deliver each Product,
except for Spare Parts, packaged in accordance with GE's normal standards
for domestic shipment or export shipment. Any special boxing or
preparation for shipment specified by Airline shall be for Airline's
account and responsibility. The price of any re-usable shipping stand or
container is not included in the price of the Product, however, the price
of any re-usable shipping stand or container will be invoiced by GE to
Airline at time of shipment. In the event any such shipping stand or
container is returned by Airline to the original point of shipment, in
reusable condition within ninety (90) days after shipment, GE will refund
to Airline the price of such shipping stand or container paid by Airline.
E. GE shall deliver Spare Parts packaged and labeled in accordance with ATA
Specification ▇▇. ▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇. ▇▇, or to a revision mutually agreed
in writing between GE and Airline. GE shall notify Airline, where
applicable, that certain Spare Parts are packed in unit package quantities
("UPQ's"), or multiples thereof.
ARTICLE V - PAYMENT
Airline shall pay GE with respect to Products purchased hereunder as set forth
in the attached Exhibit D.
ARTICLE VI - TAXES
1. The selling prices include and GE shall be responsible for the payment of
any imposts, duties, fees, taxes, dues or any charges whatsoever imposed
or levied in connection with Products prior to their delivery.
2. Upon delivery, Airline shall be responsible for the payment of all other
imposts, duties, taxes, dues or any other charges whatsoever imposed or
levied in connection with such Products and Airline shall pay to GE, upon
demand, or furnish to GE evidence of exemption therefrom, any taxes
(including without limitation, sales, use, excise, turnover or value added
tax) duties, fees, charges or assessments of any nature (but excluding any
taxes in the nature of income taxes), legally assessed or levied by any
governmental authority against GE or its employees, its subsidiaries or
their employees as a result of any sale, delivery, transfer, use, export,
import or possession of such Product, or otherwise in connection with this
Agreement. If claim is made against GE for any such duties, fees, charges,
or assessments, GE shall immediately notify Airline and, if requested by
Airline, GE shall not pay except under protest, and if payment be made,
shall use all reasonable effort to obtain a refund thereof. If all or any
part of any such taxes, duties, fees, charges or
-4
7
assessments be refunded, GE shall repay to Airline such part thereof as
Airline shall have paid. Airline shall pay to GE, upon demand, all
expenses (including penalties and interest) incurred by GE in protesting
payment and in endeavoring to obtain such refund.
ARTICLE VII - WARRANTY AND CF6-80C2 PRODUCT SUPPORT PLAN
The CF6 product support plan for Airline's operation of Products including
warranties relating to CF6 Products either purchased by Airline directly from GE
or installed on Airline's aircraft as Original Equipment is set forth in
Sections II through X of Exhibit B to this Agreement (the CF6 Product Support
Plan).
ARTICLE VIII - EXCUSABLE DELAY
GE shall not be liable for delays in delivery or failure to perform due to (1)
causes beyond its reasonable control, or (2) acts of God, acts of Airline, acts
of civil or military authority, fires, strikes, floods, epidemics, war, civil
disorder, riot, delays in transportation, or (3) inability due to causes beyond
its reasonable control to obtain necessary labor, material, or components. In
the event of any such delay, the date of delivery shall be extended for a period
equal to the time lost by reason of the delay. This provision shall not,
however, relieve GE from using reasonable efforts to continue performance
whenever such causes are removed. GE shall promptly notify Airline when such
delays occur or impending delays are likely to occur and shall continue to
advise it of new shipping schedules and changes thereto. In the event an
excusable delay continues for a period of six months or more beyond the
scheduled delivery date, Airline or GE may, upon thirty days written notice to
the other, cancel the part of any purchase order so delayed and GE shall return
to Airline all payments relative to the canceled part of the order and Airline
shall pay GE its reasonable cancellation charges.
ARTICLE IX - PATENTS
A. GE shall handle all claims and defend any suit or proceeding brought
against Airline insofar as based on a claim that without further
combination, any Product furnished under this Agreement constitutes an
infringement of any patent of the United States or of any patent of any
other country that is signatory to Article 27 of the Convention on
International Civil Aviation signed by the United States at Chicago on
December 7, 1944, in which Airline is authorized to operate or in which
another airline pursuant to lawful interchange, lease or similar
arrangement, operates aircraft of Airline. This paragraph shall apply only
to Products manufactured to GE's design.
-5
8
B. GE's liability hereunder is conditioned upon Airline promptly notifying GE
in writing and giving GE authority, information and assistance (at GE's
expense) for the defense of any suit or proceeding. In case such Product
is held in such suit or proceeding to constitute infringement and the use
of said Product is enjoined, GE shall expeditiously, at its own expense
and at its option, either (1) procure for Airline the right to continue
using said Product; (2) replace same with satisfactory and noninfringing
Product; or (3) modify same so it becomes satisfactory and noninfringing.
GE shall not be responsible to Airline or to said other airline, for
incidental or consequential damages, including, but not limited to, costs,
expenses, liabilities and loss of profits resulting from loss of use under
this Article IX.
C. The remedies described in paragraphs A and B above do not apply to any
Product or Part (1) not purchased by Airline from GE (except for Products
or Parts installed as Original Equipment on aircraft owned, leased or
operated by Airline); (2) that was changed, modified, or not used for its
intended purpose; or (3) that was manufactured by GE to Airline's unique
specifications or directions. GE assumes no liability for patent
infringement as to such items.
The obligations recited in this Article IX shall constitute the sole and
exclusive remedies of Airline (and any other operator of Airline's GE Engine
powered aircraft) and the sole and exclusive liability of GE and GE's
wholly-owned affiliate, GE Engine Services Distribution, L.L.D., for actual and
alleged patent infringement.
ARTICLE X - INFORMATION AND DATA
A. All information and data, including, but not limited to, all repair
processes and procedures, manuals, designs, drawings, blueprints,
tracings, plans, models, layouts, specifications, and memoranda, (the
"Information and Data") which may be furnished or made available to
Airline, directly or indirectly, as the result of this Agreement shall
remain the property of GE. All Information and Data is proprietary to GE
and shall neither be used by Airline nor furnished by Airline to any other
person, firm or corporation for any purpose nor permitted out of Airline's
possession nor divulged to any other person, firm or corporation, except
as otherwise agreed in writing. *** Airline shall take all steps
reasonably necessary to insure compliance by its employees, agents, and
subcontractors with this Article X.
B. Nothing in this Agreement shall convey to Airline the right to reproduce
or cause the reproduction of any Product of a design identical or similar
to that of the Product purchased hereunder or give to Airline a license
under any patents or rights owned or controlled by GE.
-6
9
C. Airline acquires no ownership rights in any of the computer software that
may be provided to Airline by GE under this Agreement. Airline shall only
be licensed to use such computer software under the terms and conditions
of separate written agreements between the Airline and the appropriate
owner of such software.
ARTICLE XI - FAA CERTIFICATION REQUIREMENTS
A. All Products, when required by the U.S. Government, shall, at time of
delivery:
1. Conform to a Type Certificate issued by the FAA.
2. Conform to applicable regulations issued by the FAA, provided such
regulations are promulgated prior to the date of Airline's purchase
order issued under this Agreement for such Products .
B. If, subsequent to the date of acceptance of the purchase order for such
Products but prior to their delivery by GE to Airline, the FAA issues
changes in regulations covering Products sold under this Agreement and
such changes in regulations are promulgated after the date of Airline
purchase orders for such Products, then all costs associated with any
Product modifications necessitated thereby will be shared equally by GE
and Airline; provided however, that costs associated with any
modifications to the airframe required by such Product modifications shall
not be borne by GE.
C. Any delay occasioned by complying with such regulations set forth in
Paragraph B above shall be deemed an Excusable Delay under Article VIII
hereof, and, in addition, appropriate adjustments shall be made in the
specifications to reflect the effect of compliance with such regulations.
ARTICLE XII - TERMINATION FOR INSOLVENCY
A. Upon the commencement of any bankruptcy or reorganization proceeding by or
against either party hereto (the "Defaulting Party"), the other Party
hereto may, upon written notice to the Defaulting Party, cease to perform
any and all of its obligations under this Agreement and the purchase
orders hereunder (including, without limitation, continuing work in
progress and making deliveries or progress payments or downpayments)
unless the Defaulting Party shall provide adequate assurance, in the
opinion of the other Party hereto, that the Defaulting Party will continue
to perform all of its obligations under this Agreement and the purchase
orders hereunder in accordance with the terms hereof, and will promptly
compensate the other Party hereto for any actual pecuniary loss resulting
from the Defaulting Party
-7
10
being unable to perform in full its obligations hereunder and under the
purchase orders. If the Defaulting Party or the trustee thereof shall fail
to promptly provide such adequate assurance, upon notice to the Defaulting
Party by the other Party hereto, this Agreement and all purchase orders
hereunder shall be canceled.
B. Either Party, at its option, may cancel this Agreement or any purchase
order hereunder with respect to any or all of the Products to be furnished
hereunder which are undelivered or not furnished on the effective date of
such cancellation by giving the other Party written notice, as hereinafter
provided, at any time after a receiver of the other's assets is appointed
on account of insolvency, or the other makes a general assignment for the
benefit of its creditors and such appointment of a receiver shall remain
in force undismissed, unvacated or unstayed for a period of sixty days
thereafter. Such notice of cancellation shall be given thirty days prior
to the effective date of cancellation, except that, in the case of a
voluntary general assignment for the benefit of creditors, such notice
need not precede the effective date of cancellation.
ARTICLE XIII - LIMITATION OF LIABILITY
***
ARTICLE XIV - EXPORT SHIPMENT
If GE agrees in writing upon Airline's written request, to assist Airline to
arrange for export shipment of Products, Airline shall pay GE for all fees and
expenses including, but not limited to, those covering preparation of consular
invoices, freight, storage, and warehouse to warehouse (including war risk)
insurance, upon submission of GE's invoices. In such event, GE will assist
Airline in applying for any required export license and in preparing consular
documents according to Airline's instructions or in the absence thereof,
according to its best judgment but without liability for error or incorrect
declarations including, but not limited to, liability for fines or other
charges.
ARTICLE XV - GOVERNMENTAL AUTHORIZATION
Airline shall be responsible for obtaining any required authorization such as
export licenses, import licenses, exchange permits or any other required
governmental authorization. Airline shall restrict disclosure of all information
and data furnished thereto under this Agreement and shall ship the direct
product of such information and data to only those destinations which are
authorized by the U.S. Government. At the request of Airline, GE will provide
Airline with a list of such authorized destinations. GE shall not be liable if
any authorization is delayed, denied, revoked, restricted or not renewed and
Airline shall not be relieved of its obligation to pay GE hereunder.
-8
11
ARTICLE XVI- NOTICES
Any notices under this Agreement shall become effective upon receipt and shall
be in writing and be delivered or sent by mail or electronic transmission to the
respective parties at the following addresses, which may be changed by written
notice:
If to: Atlas Air, Inc. If to: General Electric Company
▇▇▇▇. ▇▇ GE Aircraft Engines
JFK International Airport ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ - ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ ▇▇▇
Attention: Attention: Director, Commercial Contracts
Facsimile Number: ______________ Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone Number: _____________ Telephone Number: (▇▇▇) ▇▇▇-▇▇▇▇
Notice sent by the U.S. mail, postage prepaid, shall be deemed received within
seven days after deposit.
ARTICLE XVII - MISCELLANEOUS
A. Assignment of Agreement. This Agreement may not be assigned, in whole or
in part, by either Party without the prior written consent of the other
Party; except, that (i) Airline's consent shall not be required for the
assignment by GE of all or a portion of the Agreement to a subsidiary of
GE, including without limitation, GE Services Distribution, L.L.C, a
wholly owned affiliate of GE that will perform the Spare Parts sales and
distribution obligations discussed in Articles I through IV above; and
(ii) in accordance with Section II.E of Exhibit B, warranties relating to
Engines and Parts may be assigned in connection with any equipment trust,
conditional sale, lien, leaseback or other arrangement for the financing
or leasing by Airline of the Engines that are the subject matter of this
Agreement. Any other purported assignment will be void.
B. Exclusivity of Agreement. Except as otherwise expressly provided to the
contrary, the rights herein granted and this Agreement are for the benefit
of the Parties hereto and are not for the benefit of any Third Person,
firm or corporation, and nothing herein contained shall be construed to
create any rights in any Third Party under, as the result of, or in
connection with this Agreement.
C. Applicable Law; Venue. All aspects of this Agreement and the obligations
arising hereunder will be governed in accordance with the law of the State
of New York, U.S.A.; except, that New York conflict of law rules will not
apply if the result would
-9
12
be the application of the laws of another jurisdiction. The United Nations
Convention on Contracts for the International Sale of Goods shall not
apply to this Agreement. In the event of an unresolved dispute, each of
the Parties hereby irrevocably agree to submit to the non-exclusive
jurisdiction of the state and federal courts (as appropriate) of New York,
U.S.A. The Parties hereby waive any objection that such courts lack
personal jurisdiction or are an inconvenient forum.
D. Entire Agreement; Modification. This Agreement contains the entire and
only agreement between the parties, and it supersedes all pre-existing
agreements between such parties, respecting the subject matter hereof; and
any representation, promise or condition in connection therewith not
incorporated herein shall not be binding upon either Party. No
modification, renewal, extension, waiver, or termination of this Agreement
or any of the provisions herein contained shall be binding upon the Party
against whom enforcement of such modification, renewal, extension, waiver
or termination (except as provided in Article XII hereof) is sought,
unless it is made in writing and signed on behalf of GE and Airline by
duly authorized representatives.
E. Confidentiality of Information. This Agreement contains information
specifically for Airline and GE and nothing herein contained shall be
divulged by Airline or GE to any Third Party without the consent of the
other Party, which consent shall not be unreasonably withheld; except,
that, consent shall not be required for disclosure to the respective
insurers and professional advisors of the Parties who must likewise agree
to be bound by this confidentiality clause. Airline's consent shall not be
required for GE to divulge to its partners information from, or with
respect to this Agreement, it being understood that each such partner will
also be bound by the provisions of this ARTICLE XVII - E.
F. Duration of Agreement. This Agreement shall remain in full force and
effect until (1) Airline ceases to operate at least one aircraft powered
by Products set forth herein, (2) less than five aircraft powered by such
Products are in commercial airline service, (3) this Agreement is
terminated in whole or in part under either the provisions of Article
VIII. (Excusable Delay) or Article XII. (Termination for Insolvency)
hereof, or (4) by mutual consent of the parties, whichever occurs first.
Nothing herein shall affect the rights and obligations and limitations set
forth in this Agreement as to Products ordered for delivery and work
performed prior to termination of this Agreement.
G. Survival Of Certain Clauses. The rights and obligations of the Parties
under the following Articles, as amended, and related Exhibits shall
survive the expiration, termination, completion or cancellation of this
Agreement:
-10
13
Article V Payment
Article VI Taxes
Article X Information and Data
Article XIII Limitation of Liability
Article XV Governmental Authorization
Article XVII Miscellaneous, paragraphs C. and E.
H. General Rules of Contract Interpretation. Article and paragraph headings
contained in this Agreement are inserted for convenience of reference only
and do not limit or restrict the interpretation of this Agreement. Words
used in the singular shall have a comparable meaning when used in the
plural and vice versa, unless the contrary intention appears. Words such
as "hereunder", "hereof" and "herein" and other words beginning with
"here" refer to the whole of this Agreement, including Amendments, and not
to any particular Article. References to Articles, paragraphs, Attachments
or Exhibits will refer to the specified Article, paragraph, Attachment or
Exhibit of this Agreement unless otherwise specified.
I. Language. This Agreement, order, Data, notices, shipping invoices,
correspondence and other writings furnished hereunder shall be in the
English language.
J. Severability. The invalidity or unenforceability of any part of this
Agreement or the invalidity of its application to a specific situation or
circumstance shall not effect the validity of the remainder of this
Agreement, or its application to other situations or circumstances. In
addition, if a part of this Agreement becomes invalid, the Parties will
endeavor in good faith to reach agreement on a replacement provision which
will reflect, as nearly as possible, the intent of the original provision.
K. Waiver. The failure at any time of either Party to enforce any of the
provisions of this Agreement or to require performance by the other Party
of any of its provisions shall in no way affect the validity of this
Agreement or the right of the other Party thereafter to enforce each and
every such provision. The express waiver by either Party of any provision,
condition, or requirement of this Agreement, shall not constitute a waiver
of any subsequent obligation to comply with such provision, condition, or
requirement.
Counterparts: This Agreement may be signed by the Parties in separate
counterparts, and any single counterpart or set of counterparts, when signed and
delivered to the other Party shall together constitute one and the same document
and be an original Agreement for all purposes.
-11
14
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and the year first above written.
ATLAS AIR, INC. GENERAL ELECTRIC COMPANY
By: By:
---------------------------------- --------------------------------
Typed Name: Typed Name:
-------------------------- ------------------------
Title: Title:
------------------------------- -----------------------------
Date: Date:
-------------------------------- ------------------------------
-12
15
EXHIBIT A
CF6-80C2 SERIES PRODUCTS APPLICABLE TO
AIRLINE'S TYPE 747-400F AIRCRAFT
I. Model CF6-80C2B1F Turbofan Engines as certified by the U.S. Federal
Aviation Administration ("FAA") and as specified in the applicable
purchase order.
II. Related Optional Equipment for the above Engines.
III. Engine Modules
A. Fan Module
B. Core Module (HPC - Combustor - 1st Stage HPT Nozzle)
C. High Pressure Turbine ("HPT") Module
D. Low Pressure Turbine ("LPT") Module
E. Accessory Gearbox
IV. Spare Parts for I. above (sold and supplied by GE Engine Services
Distribution, L.L.C.).
V. Special tools and test equipment including ground support equipment.
VI. Other CF6-80 Products as may be offered for sale by GE from time to time.
VII. Technical Data, training or other thing furnished by GE under this
Agreement.
***
16
EXHIBIT B
CF6-80C2 PRODUCT SUPPORT PLAN
SECTION I - DEFINITIONS
These definitions shall apply for all purposes of this Agreement, unless the
context requires otherwise. The meanings shall be equally applicable to both the
singular and the plural forms of the terms defined, unless the context requires
otherwise.
1. "Agreement" means the General Terms Agreement between GE and Airline to
which this Exhibit B is attached.
2. "Article" means an Article of this Agreement.
3. "ATA" means the Aviation Transportation Association.
4. "Base Price" means the price established in the GE proposal, quotation or
purchase order (as applicable) for a specific Product which corresponds to
an appropriate Base Composite Price Index in such proposal, quotation or
purchase order (as applicable).
5. "Base Composite Price Index" means the index stated in the published
prices announced by GE from time to time which corresponds to the Base
Price.
6. "Catalog" means GE's most recent Engine Spare Parts Price Catalog for the
appropriate engine model which describes the selling price and delivery
lead time for identified Spare Parts.
7. "Data" includes, but is not limited to, Product information in any form or
medium, such as technical information, technology, printed or computer
aided designs, drawings, blueprints, tracings, plans, models, movies,
pictures, layouts, specifications, Product manufacturing or Product repair
procedures or techniques, reports, financial information, technical data
furnished in accordance with Section IV of Exhibit B to this Agreement,
and other Product related Information or memoranda furnished under this
Agreement.
8. "Engine" means the Engine described in Exhibit A.
9. "Ex Works" has the meaning accorded thereto in Incoterms, 1990 edition.
10. "Exhibit" means an exhibit to this Agreement, including all modifications
and amendments thereto.
B-1
17
11. "Expendable Parts" means those Parts which must routinely be replaced
during Inspection, repair, or maintenance, whether or not such Parts have
been damaged and other Parts which are customarily replaced at each such
inspection and maintenance period such as filter inserts and other
short-lived items which are not dependent on wear out but replaced at
predetermined intervals.
12. "FAA" means the Federal Aviation Administration of the Department of
Transportation of the United States, and any successor agency thereof.
13. "Failed Parts"
***
14. "Failure"
***
15. "Flight Cycle" means the complete running of an Engine from start through
any condition of flight and ending at Engine shutdown. A "touch and go
landing" used during pilot training shall be considered as a "Flight
Cycle."
16. "Flight Hours" means the cumulative number of airborne hours in operation
of each Engine computed from the time an aircraft leaves the ground until
it touches the ground at the end of a flight.
17. "Foreign Object Damage" means any damage to the Engine caused by objects
which are not part of the Engine and Engine Optional Equipment.
18. GEES" means GE Engine Services Distribution, L.L.C., a Delaware company
that is a wholly-owned affiliate of GE, with its principal place of
business at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇, ▇▇-▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇, ▇.▇.▇.
19. Incoterms" means International Chamber of Commerce Incoterms, 1990
Edition.
20. "Inspection" means an observation of an Engine or Parts thereof, through
disassembly or other means, for the purpose of determining serviceability.
21. "Labor Allowance"
***
22. Module"" means a the appropriate major serialized subassembly of the
Engine described on Exhibit A of this Agreement.
23. "Original Equipment" means the installed Engines or Products supplied to
Airline through the aircraft manufacturer as part of Airline's new
Aircraft.
24. "Part" means only those Engine and Module Parts which have been sold
originally to Airline by GE or GEES for commercial use. The term excludes
parts which were furnished on new Engines and Modules but are procured
directly from vendors. Such parts are covered by the Vendor Warranty and
the General Electric "Vendor Warranty
B-2
18
Back Up" described in Section II of Exhibit B of this Agreement. Also
excluded are Expendable Parts and customary short-lived items such as
filter inserts.
25. "Part Time" means the total number of Flight Hours flown by a Part since
delivery to Airline.
26. "Parts Credit Allowance"
***
27. "Parts Cycles" means the total number of Flight Cycles accumulated by a
Part since its delivery to Airline.
28. "Parts Repair" means the GE recommended rework or restoration of Failed
Parts to a serviceable condition, excluding repair of normal wear and tear
and deterioration.
29. "Scheduled Inspection" means the Inspection of an Engine conducted when an
Engine has approximately completed a planned operating interval.
30. "Scrapped Parts" means those Parts determined to be unserviceable and not
repairable by virtue of reliability, performance or repair costs. Such
Parts shall be disposed of by Airline unless requested by GE for
engineering analysis, in which event any handling and shipping shall be at
GE's expense.
31. "Spare Engine" means an Engine, except installed Engines, which is
purchased by Airline from GE for commercial use.
32. "Spare Parts"- see Part.
33. "Third Party" means any individual, firm, company, corporation,
partnership, joint venture, association, trust, unincorporated
organization or body, or any country, state, jurisdiction or government,
or any agency, authority, instrumentality or political subdivision
thereof, in each case whether having a distinct legal personality or not,
other than GE, GE Engine Services Distribution, L.L.C., and Airline.
34. "Ultimate Life" of a Part means the approved limitation on use of a Part,
in cumulative Flight Hours or Flight Cycles, which either GE or a U.S.
Government authority establishes as the maximum period of allowed
operational time for such Parts in Airline service, with periodic repair
and restoration. The term does not include individual Failure from wear
and tear or other cause not related to the total usage capability of all
such Parts in Airline service.
SECTION II - WARRANTIES AND SPECIAL GUARANTEES
A. New Engine Warranty
B-3
19
1. GE warrants each new Engine and Module against Failure for the
initial *** Flight Hours as follows:
a. Parts Credit Allowance will be granted for any Failed Parts.
b. Labor Allowance for disassembly, reassembly, test and Parts
Repair of any new Engine part will be granted for replacement
of Failed Parts.
c. Such Parts Credit Allowance, test and Labor Allowance will be:
100% from new to *** Flight Hours and decreasing pro rata from
100% at *** Flight Hours to zero percent at *** Flight Hours.
2. As an alternative to the above allowances, GE shall upon request of
Airline:
a. Arrange to have failed Engines and Modules repaired as
appropriate, at a facility designated by GE at no charge to
Airline for the first *** Flight Hours and at a charge to
Airline increasing pro rata from zero percent of GE's repair
costs at *** Flight Hours to 100% of such GE repair costs at
***Flight Hours.
b. ***
B. New Parts Warranty
In addition to the warranty granted for new Engines and Modules GE
warrants Engine and Module Parts as follows:
1. During the first *** Flight Hours for such Parts and Expendable
Parts, GE will grant 100% Parts Credit Allowance or Labor Allowance
for repair labor for failed Parts.
2. GE will grant a pro rata Parts Credit Allowance for Scrapped Parts
decreasing from 100% at *** Flight Hours Part Time to zero percent
at the applicable hours designated in Table 1.
C. Ultimate Life Warranty
1. GE warrants Ultimate Life limits on the following parts:
a. ***
b. ***
c. ***
d. ***
e. ***
f. ***
B-4
20
2. GE will grant a pro rata Parts Credit Allowance of 100% when new to
*** Flight Cycles, and a credit allowance decreasing pro rata from
100% at *** Flight Cycles to zero percent at *** Flight Cycles.
Credit will be granted only when such Parts are permanently removed
from service by a GE or U.S. Government imposed Ultimate Life
Limitation of less than *** Flight Cycles.
D. Campaign Change Warranty
1. *** GE will grant the following Parts Credit Allowances:
Engines and Modules
(i) *** For Parts in inventory or removed from service when
new or with *** Flight Hours or less total Part Time.
(ii) Pro rata for Parts in inventory or removed from service
decreasing pro rata from *** at *** Flight Hours to ***
at *** Flight Hours.
(iii) *** For Parts in inventory or removed from service with
over *** Flight Hours since new, regardless of warranty
status.
2. Labor Allowance - GE will grant *** Labor Allowance for *** or ***
of GE-supplied Engines, Modules or Parts therefor when such action
is required to comply with a mandatory time compliance GE Service
Bulletin or FAA Airworthiness Directive. A Labor Allowance will be
granted by GE for other GE issued Service Bulletins if so specified
in such Service Bulletins.
3. Life Controlled Rotating Parts retired by Ultimate Life limits
including FAA Airworthiness Directive, are excluded from Campaign
Change Warranty.
E. Warranty Pass-On
If requested by Airline and agreed to by GE in writing, GE will extend
warranty support for Engines sold by Airline to commercial airline
operators, or to other aircraft operators. Such warranty support will be
limited to the New Engine Warranty, New Parts Warranty, Ultimate Life
Warranty and Campaign Change Warranty and will require such operator(s) to
agree in writing to be bound by and comply with all the terms and
conditions, including the limitations, applicable to such warranties as
set forth in this Agreement.
F. Vendor Back-Up Warranty
1. GE controls and accessories vendors provide a warranty on their
products used on GE Engines. This warranty applies to controls and
accessories sold to GE for
B-5
21
delivery on installed or spare Engines and controls and accessories
sold by the vendor to the airlines on a direct purchase basis. In
the event the controls and accessories suffer a failure during the
vendor's warranty period, Airline will submit a claim directly to
the vendor in accordance with the terms and conditions of the
vendor's warranty.
2. In the event a controls and accessories vendor fails to provide a
warranty at least as favorable as the GE New Engine Warranty (for
complete controls and accessories) or New Parts Warranty (for
components thereof), or if provided, rejects a proper claim from
Airline, GE will intercede on behalf of Airline to resolve the claim
with the vendor. In the event GE is unable to resolve a proper claim
with the vendor, GE will honor a claim from Airline under the
provisions and subject to the limitations of GE's New Engine or New
Parts Warranty, as applicable. Settlements under Vendor Back-Up
Warranty will exclude credits for resultant damage to or from
controls and accessories procured directly by Airline from vendors.
G. Vendor Interface Warranty
Should any CF6 control or accessory, for which GE is responsible, develop
a problem due to its environment or interface with other controls and
accessories or with an Engine, Module or equipment supplied by the
aircraft manufacturer, GE will be responsible for initiating corrective
action. If the vendor disclaims warranty responsibility for Parts
requiring replacement, GE will apply the provisions of its New Parts
Warranty to such Part whether it was purchased originally from GE or
directly from the vendor.
H. Condition Monitoring Warranty
1. GE warrants CF6 Condition Monitoring Equipment, installed on new
Engines, in accordance with the provisions of its New Engine
Warranty as heretofore set forth, except that no Labor Allowance
will be granted for *** of any new Engine component due to
inoperative or malfunctioning Condition Monitoring Equipment.
2. GE warrants CF6 condition monitoring equipment, purchased as Spare
Parts, in accordance with the provisions of its New Parts Warranty
as heretofore set forth.
I. Special Tools and Test Equipment Warranty
1. GE warrants to Airline that the special tools and test equipment
sold hereunder will, *** be free from defects in material,
workmanship and title.
2. If it appears within *** from the date of shipment by GE that any
special tool or test equipment delivered hereunder does not meet the
warranties specified in
B-6
22
Paragraph 1. above and the Airline so notifies GE in writing prior
to the expiration of, *** GE shall, at its option, upon Airline's
satisfactory demonstration that such special tool or test equipment
was defective at the time of delivery, correct any such defects
either by repairing the defective item or by making available a
repair or replacement item, Ex Works, GE's plant, or by refunding
the purchase price of such item. At the request of GE, Airline, at
its expense, shall ship the defective item to a location on the
Airline's system designated by GE.
3. GE reserves the right to make changes in design and add improvements
without incurring any obligation to make, at GE's expense, the same
on other special tools or test equipment previously sold by GE.
4. This Special Tools and Test Equipment Warranty is applicable only if
the special tools and test equipment are operated, handled, used,
maintained, and repaired in accordance with GE's then-current
recommendations as stated in its manuals, bulletins, or other
written instructions.
J. Special Guarantees
GE will provide the following CF6-80C2B1F special guarantees which have
been tailored to the fleet average flight conditions of the Airline. The basis
for and conditions applicable to these guarantees are described in Attachment I
hereto.
1. In-Flight Shutdown (IFSD) Rate Guarantee
***
2. Delay and Cancellation Rate Guarantee
***
Delays and cancellations are defined in Attachment III.
3. Remote Site Removal Rate Guarantee
***
4. Performance Retention Guarantee
***
K. THE WARRANTIES AND SPECIAL GUARANTEES SET FORTH IN THIS PRODUCT SUPPORT
PLAN ARE EXCLUSIVE AND IN LIEU OF ALL OTHER WARRANTIES AND GUARANTEES,
WHETHER WRITTEN, STATUTORY, ORAL, OR IMPLIED (INCLUDING, WITHOUT
LIMITATION, ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE OR ANY IMPLIED WARRANTY ARISING FROM COURSE OF DEALING, COURSE OF
PERFORMANCE, OR USAGE OF TRADE). THESE WARRANTIES AND GUARANTEES ARE
SUBJECT TO THE GENERAL CONDITIONS SET FORTH IN SECTION X OF THIS EXHIBIT
B.
B-7
23
SECTION III - SPARE PARTS PROVISIONING
A. Provisioning Data
1. In connection with Airline's initial provisioning of Spare Parts, GE
shall furnish Airline with data in accordance with ATA 2000
Specification using Revision No. 20, or a revision mutually agreed
to in writing by GE and Airline.
2. It is the intention of the parties hereto to comply with the
requirements of the ATA 2000 Specification and any future changes
thereto, except that neither party shall deny the other the right to
negotiate reasonable changes in the procedures or requirements of
the Specification which procedures or requirements, if complied with
exactly, would result in an undue operating burden or unnecessary
economic penalty.
The data to be provided by GE to Airline shall encompass all Parts
listed in GE's Illustrated Parts Catalogs. GE further agrees to
become total supplier of Initial Provisioning Data for all vendor
Spare Parts in accordance with Paragraph 1. above.
3. Beginning on a date no earlier than eighteen (18) months and no
later than twelve (12) months prior to delivery of Airline's first
aircraft, or as mutually agreed, GE shall provide to Airline a
complete set of Initial Provisioning Data and shall progressively
revise this data until ninety (90) days after delivery of the first
aircraft or as mutually agreed. A status report will be issued
periodically. Provisioning data will be reinstituted for subsequent
spare Engines reflecting the latest modification status. GE will
make available a list of major suppliers as requested by Airline. GE
will provide, or cause to be provided on behalf of its vendors, the
same service detailed in this clause.
B. Pre-Provisioning Conference
A pre-provisioning conference, attended by the GE and Airline personnel
directly responsible for initial provisioning of Spare Parts hereunder,
will be held at a mutually agreed time and place prior to the placing by
Airline of initial provisioning orders. The purpose of this conference is
to discuss systems, procedures and documents available to the Airline for
the initial provisioning cycle of the Products.
C. Changes
GE shall have the right to make corrections and changes in the Initial
Provisioning Data in accordance with Chapter 2 (Initial Provisioning) of
ATA 2000 Specification entitled "Integrated Data Processing Supply" using
Revision No. 20, or a revision mutually agreed to in writing by GE and
Airline. *** GE will progressively revise
B-8
24
Airline's Procurement Data tape in accordance with Chapter 3 (Order
Administration) of ATA 2000 Specification entitled "Integrated Data
Processing Supply" using Revision No. 20, or a revision mutually agreed to
in writing by GE and Airline.
D. Return Of Parts
Airline shall have the right to return to GE, *** any new or unused Part
which has been shipped in excess of the quantity ordered or which is not
the part number ordered or which is in a discrepant condition except for
damage in transit.
E. Parts Buy-Back
***
F. Parts of Modified Design
1. GE shall have the right to make modifications to design or changes
in the Spare Parts sold to Airline hereunder.
2. GE will from time to time inform Airline in accordance with the
means set forth in ATA 2000 Specification, when such Spare Parts of
modified design become available for shipment hereunder.
3. Spare Parts of the modified design will be supplied unless Airline
advises GE in writing of its contrary desire within ninety (90) days
of the issuance of the Service Bulletin specifying the change to the
modified Parts. In such event, Airline may negotiate for the
continued supply of Spare Parts of the premodified design at a rate
of delivery and price to be agreed upon.
G. Spare Parts Availability
1. GE will ship reasonable quantities (three months normal usage) of
Spare Parts which are included in GE's Spare Parts Catalog within 30
business day lead time following receipt of an acceptable purchase
order from Airline.
Lead time for Spare Parts and other material which are not included
in GE's Spare Parts Catalog will be shipped as quoted by GE.
2. GE will maintain a stock of Spare Parts to cover Airline's emergency
needs. For purposes of this Paragraph, emergency is understood by GE
and Airline to mean the occurrence of any one of the following
conditions.
AOG - Aircraft on Ground
Critical - Imminent AOG or Work Stoppage
Expedite - Less than Normal Lead Time
B-9
25
Airline will order Spare Parts according to lead time as provided in
Paragraph 1. above, but should Airline's Spare Parts requirements
arise as a result of an emergency, Airline can draw such Spare Parts
from GE's stock. A 24-hour telephone service is available to Airline
for this purpose. If an emergency does exist, GE will use its best
efforts to ship required Spare Part(s) within the time period set
forth below following receipt of an acceptable purchase order from
Airline.
AOG - ***
Critical - ***
Expedite - ***
SECTION IV - TECHNICAL DATA
A. GE shall, as it may from time to time determine to be appropriate and
necessary, furnish certain technical information or data, including
revisions thereof, as may be needed by Airline in support of maintenance
of the Products owned or operated by Airline under this Agreement.
Examples of such technical information or data include:
Component Maintenance Manual(s)
Engine Illustrated Parts Catalog
Engine Manual
Ground Support Equipment Manual(s)
Illustrated Tool and Equipment Manual
Nondestructive Testing Manual
Operating Instruction Manual
Service Bulletins
Service Bulletin Index
Standard Practices Manual
Technical Manual Index
Power Plant Build-up Manual
Structural Repair Manual
Such technical information or data shall be furnished by GE to Airline in
mutually agreed reasonable quantities, at a time and to a location as
likewise mutually agreed. The technical information or data shall be
prepared by GE in accordance with the applicable ATA Specifications. If
Airline requires GE to furnish such technical information or data in a
form different from that normally furnished by GE pursuant to ATA
Specification 100, GE will, upon request from Airline, furnish Airline
with a written quotation for furnishing such other form of technical
information or data.
Revisions to the above technical information or data shall be furnished by
GE to Airline for as long as Airline operates one CF6-80C2-powered
aircraft and there is a total of five CF6-80C2-powered aircraft in
commercial airline service.
B-10
26
GE shall incorporate in the Engine Illustrated Parts Catalog and the
Engine Manual all appropriate GE Service Bulletins for as long as Airline
receives revisions to technical information or data. Premodified and
postmodified configurations shall be included by GE unless Airline informs
GE that a configuration is no longer required.
B. In addition to the above technical information or data to be furnished by
GE to Airline, GE will have available with its Field Service
Representatives, where appropriate, one set of 35MM aperture cards, or
equivalent, of each Part and/or assembly drawing. GE will also supply to
Airline, on request, in 35MM aperture card format, one copy of each
special tool and equipment drawing.
C. GE will require each vendor to furnish, as may be appropriate, technical
information or data. Such vendor publications shall be furnished to
Airline by GE, or the vendor in accordance with, and subject to the same
provisions as, those set forth in Paragraph A. above.
GE will also require its ground support equipment vendors, where
appropriate, to furnish to Airline technical information or data as
determined by GE to be necessary for Airline to maintain, overhaul and
calibrate special tools and test equipment. Such vendor-furnished
technical information or data shall be furnished in accordance with, and
subject to the same provisions as, those set forth in Paragraph A. above,
except that it shall be prepared in accordance with the applicable
provisions of ATA Specification 101, as the same may be revised from time
to time.
D. All technical information or data furnished to Airline hereunder by GE or
GE's vendors shall be printed in the English language. All technical
information or data furnished to Airline hereunder by GE shall be subject
to the provisions of Article X (Information and Data) and Article XVI
(Governmental Authorization) of this Agreement.
SECTION V - TECHNICAL TRAINING
A. General
This general provision describes the current maintenance training to be
provided by GE at GE's training facilities in Springdale, Ohio. GE will
provide, at no charge to Airline, except as otherwise provided herein, a
number of student days* for maintenance training as defined hereunder:
- ***
- ***
* Student Days = number of students X number of class days
B-11
27
Such days will be applied against courses selected from the list set forth
in paragraph C (Standard Maintenance Training) listed on the next page.
*** It is necessary for Airline to use such maintenance training days
prior to delivery of the first aircraft, unless the parties have otherwise
agreed in writing.
All instruction, examinations and materials shall be prepared and
presented in the English language and in the units of measure used by GE.
Airline will provide interpreters, if required, for Airline's personnel.
Airline will be responsible for the living and medical expenses of
Airline's personnel during maintenance training. For maintenance training
provided at Springdale, Ohio, GE will assist Airline's personnel in making
arrangements for hotels and transportation between selected lodging and
the training facility.
B. Maintenance Training Conference
No later than twelve months prior to delivery of Airline's first
CF6-80C2-powered aircraft, GE and Airline will conduct a maintenance
training conference call in order to schedule and discuss the maintenance
training. Alternatively, Airline is welcome to visit GE's training
facilities and discuss such training. During such maintenance conference
call or visit, Airline will indicate the courses selected and arrange a
mutually acceptable schedule.
C. Standard Maintenance Training
Standard maintenance training will consist of computer-based training in
classroom presentations supported by training materials and, when
applicable, hands-on practice. Training material will be based on ATA
Specification 104 guidelines.
ATA104-Level I - General Familiarization
ATA104-Level II - Ramp and Transit
ATA104-Level III - Line and Base Maintenance
ATA104-Level IV - Specialized Training:
Borescope Inspection
Fan Trim Balance
Major Module Replacement
Module Replacement
D. Optional Maintenance Training
Non-standard maintenance training courses are described in the current GE
Training Course Syllabus ***.
B-12
28
E. Training at a Facility Other Than GE's Facilities
If requested prior to the conclusion of the maintenance training planning
conference call or visit, GE will conduct the classroom training described
in paragraph C (Standard Maintenance Training) at a mutually acceptable
alternate training site, subject to the following conditions:
1. Airline will be responsible for providing acceptable classroom space
and training equipment required to present the GE courseware.
2. Airline will pay GE's travel and living charges for each GE
instructor for each day, or fraction thereof, that such instructor
is away from Springdale, Ohio, including travel time.
3. Airline will reimburse GE for round-trip transportation for GE's
instructors and training materials between Springdale, Ohio, and
such alternate training site.
4. Those portions of the training that require use of GE's training
devices shall be conducted at GE designated facilities.
F. Supplier Training
The standard maintenance training includes sufficient information on the
location, operation and servicing of Engine equipment, accessories and
parts provided by suppliers to support line maintenance functions.
If Airline requires additional maintenance training with respect to any
supplier-provided equipment, accessories or parts, Airline will schedule
such training directly with the supplier.
G. Student Training Material
1. Manuals
When required, GE will provide at the beginning of each maintenance
training course, one set of training manuals, or equivalent, for
each student attending such course.
2. Line Maintenance
GE will provide one set of the following training material, per
course, as applicable:
B-13
29
2.1 Video Tapes - GE will loan to Airline a set of video tapes on
3/4 inch U-matic or 1/2 inch VHS cassettes in NTSC, PAL or
SECAM standard, as selected by Airline.
2.2 Computer-Based Training (CBT) - GE will provide CBT courseware
and instructions for courseware installation and operation.
3. Courses Other Than Line Maintenance
GE will provide one set of the following training material, per
course, as applicable.
3.1 Video Tapes - GE will loan to Airline a set of video tapes on
3/4 inch U-matic or 1/2 inch VHS cassettes in NTSC, PAL or
SECAM standard, as selected by Airline.
3.2 Computer-Based Training (CBT) - GE will provide CBT courseware
and instructions for courseware installation and operation.
SECTION VI - CUSTOMER FACTORY AND FIELD SUPPORT
GE shall make available to Airline *** field service representative as GE's
representative at Airline's main base plus a Shop Specialist to be assigned by
GE to the engine shop facility selected by Airline. These specialists will
assist Airline in areas of unscheduled maintenance action and Product scrap
approval and will provide rapid communication between Airline's maintenance base
and GE's factory personnel.
SECTION VII - PRODUCT SUPPORT ENGINEERING
Factory based engineers who are specialized in powerplant engineering problems
will make visits to Airline, *** when problems are encountered. These engineers
will coordinate with the CF6 Engine design engineers and Airline's powerplant
engineering group. Where specific design problems require a better understanding
of Airline's experience, design engineers will work directly with Airline's
powerplant engineering personnel to solve the problem.
SECTION VIII - OPERATIONS ENGINEERING
Flight operations engineering personnel will be available, *** for consultation
with respect to recommended operating practices to enhance Engine reliability,
safety, and operations costs. Consultations may be in the form of teleconference
messages, or on-site seminars and surveys.
B-14
30
SECTION IX - GROUND SUPPORT EQUIPMENT
GE will provide to Airline, *** maintenance and repair tooling and fixture
drawings it has designed, including complete specifications for the special test
equipment which is developed. Tooling, fixtures, lifting devices, transportation
devices, and accessory or component stands will be offered for sale to Airline
if they would prefer not to make this equipment.
SECTION X - GENERAL CONDITIONS - CF6-80C2 PRODUCT SUPPORT PLAN
A. Airline will maintain adequate operational and maintenance records and
make these available for GE inspection.
B. The warranty and guarantee provisions of this CF6-80C2 Product Support
Plan will not apply to any Product if it has been reasonably determined by
GE that the Engine, Module or any Parts thereof:
o ***
o ***
o ***
o ***
o ***
o ***
C. The express provisions of this CF6-80C2 Product Support Plan set forth the
maximum liability of GE with respect to claims of any kind, including,
without limitation, negligence arising out of the manufacture, sale,
possession, use or handling of the Products or Parts thereof or therefor,
and in no case shall GE's liability to Airline exceed ***. For the purpose
of this Article X, the term "GE" means General Electric Company, GE Engine
Services Distribution, L.L.C., their subsidiaries, assigns,
subcontractors, suppliers, Product co-producers, and the respective
directors, officers, employees, and agents of each.
D. Except as provided in the Vendor Back-up Warranty provisions in Paragraph
F. of Section II hereof, no Parts Credit Allowance will be granted and no
claim for loss or liability will be recognized by GE for Parts of the
Engine, whether original, repair, replacement, or otherwise, unless sold
originally by GE or GEES to Airline for commercial use.
E. Airline shall apprise GE of any Failure subject to the conditions of this
CF6 Product Support Plan within sixty (60) days after the discovery of
such Failure. Any Part for which a Parts Credit Allowance is requested by
Airline shall be returned to GE upon specific request by GE. Upon return
to GE, such Part shall become the property of GE unless GE directs
otherwise. Transportation expenses shall be borne by GE.
▇-▇▇
▇▇
▇. The warranty applicable to a replacement Part provided under the terms of
the New Engine Warranty or New Parts Warranty shall be the same as the
warranty on the original Part. The unexpired portion of the applicable
warranty will apply to Parts repaired under the terms of such warranty.
G. Airline will cooperate with GE in the development of Engine operating
practices, repair procedures, and the like with the objective of improving
Engine operating costs.
H. Except as provided in the Warranty Pass-On provisions in Paragraph E. of
Section II hereof, this Product Support Plan applies only to the original
purchaser of the CF6-80C2 Engine except that installed Engines supplied to
Airline through the aircraft manufacturer shall be considered as original
Airline purchases covered by this Product Support Plan.
I. Airline will provide GE a report identifying serialized rotating parts
which have been scrapped by Airline. Format and frequency of reporting
will be mutually agreed to by Airline and GE.
*** Rest of page intentionally left blank. ***
▇-▇▇
▇▇
▇▇▇▇▇ ▇
▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇▇ PARTS LIST
-----------------------------------------
FLIGHT HOURS
-----------------------------------------
*** *** *** ***
-------------------------------------------------------------------------------
Fan Rotor
-------------------------------------------------------------------------------
Blade, 1st Stage ***
---------------------------------------------------------------------------
Blade, Booster Stages 2-5 ***
---------------------------------------------------------------------------
Disk, 1st Stage ***
---------------------------------------------------------------------------
Spool, Booster Stages ***
---------------------------------------------------------------------------
Forward Fan Shaft ***
---------------------------------------------------------------------------
Spinner ***
---------------------------------------------------------------------------
Mid-Shaft ***
-------------------------------------------------------------------------------
Fan Stator
-------------------------------------------------------------------------------
Casing incl. Containment ***
---------------------------------------------------------------------------
Stator Vane Stages ***
---------------------------------------------------------------------------
Booster Cases ***
---------------------------------------------------------------------------
Outlet Guide Vane (OGV), Support ***
---------------------------------------------------------------------------
Noise Attenuation Panels ***
---------------------------------------------------------------------------
Bleed Valve System ***
---------------------------------------------------------------------------
Aft Case ***
-------------------------------------------------------------------------------
Compressor Rotor
-------------------------------------------------------------------------------
Blades ***
---------------------------------------------------------------------------
Disks and Spools ***
---------------------------------------------------------------------------
Shaft, Aft ***
-------------------------------------------------------------------------------
Compressor Stator
-------------------------------------------------------------------------------
Case ***
---------------------------------------------------------------------------
Shrouds ***
---------------------------------------------------------------------------
Vanes ***
---------------------------------------------------------------------------
Variable Stator Actuating Rings ***
-------------------------------------------------------------------------------
Combustor
-------------------------------------------------------------------------------
Inner/Outer Liners & Dome ***
---------------------------------------------------------------------------
▇-▇▇
▇▇
▇▇▇▇▇ ▇
▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇▇ PARTS LIST
continued
-----------------------------------------------
FLIGHT HOURS
-----------------------------------------------
*** *** *** ***
-------------------------------------------------------------------------------
HPT Rotor
-------------------------------------------------------------------------------
Blades ***
---------------------------------------------------------------------------
Retaining Rings ***
---------------------------------------------------------------------------
Shaft, Forward and Aft ***
---------------------------------------------------------------------------
Disks ***
---------------------------------------------------------------------------
Thermal Shield ***
---------------------------------------------------------------------------
Spacer/Impeller ***
-------------------------------------------------------------------------------
HPT Stator
-------------------------------------------------------------------------------
Vane Assemblies ***
---------------------------------------------------------------------------
Vane Support ***
---------------------------------------------------------------------------
Interstage Seal ***
---------------------------------------------------------------------------
Shrouds ***
---------------------------------------------------------------------------
Shroud Support ***
-------------------------------------------------------------------------------
LPT Rotor
-------------------------------------------------------------------------------
Blades ***
---------------------------------------------------------------------------
Interstage Seals ***
---------------------------------------------------------------------------
Disks ***
---------------------------------------------------------------------------
LP Shaft ***
-------------------------------------------------------------------------------
LPT Stator
-------------------------------------------------------------------------------
Case ***
---------------------------------------------------------------------------
Vane Assemblies ***
---------------------------------------------------------------------------
Interstage Seals ***
---------------------------------------------------------------------------
Shrouds ***
-------------------------------------------------------------------------------
Fan Frame
-------------------------------------------------------------------------------
Mid Frame and Struts ***
---------------------------------------------------------------------------
All Supports ***
---------------------------------------------------------------------------
Fwd. Engine Mount ***
---------------------------------------------------------------------------
Fairings ***
-------------------------------------------------------------------------------
Compressor Rear Frame
-------------------------------------------------------------------------------
Case ***
---------------------------------------------------------------------------
"B" Sump ***
-------------------------------------------------------------------------------
Condition Monitoring Equipment ***
-------------------------------------------------------------------------------
▇-▇▇
▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇
▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇▇ PARTS LIST
continued
------------------------------------------
FLIGHT HOURS
-------------------------------------------
*** *** *** ***
-------------------------------------------------------------------------------
Turbine Rear Frame
-------------------------------------------------------------------------------
Frame ***
---------------------------------------------------------------------------
Liner ***
---------------------------------------------------------------------------
Bearing Supports ***
---------------------------------------------------------------------------
"C/D" Sump ***
-------------------------------------------------------------------------------
Main Engine Bearings ***
-------------------------------------------------------------------------------
Gearboxes
-------------------------------------------------------------------------------
Cases ***
---------------------------------------------------------------------------
Shafts, Drive ***
---------------------------------------------------------------------------
Gears ***
---------------------------------------------------------------------------
Bearings ***
---------------------------------------------------------------------------
Plug-in Adapters ***
-------------------------------------------------------------------------------
Rotor Tubes and Baffles ***
-------------------------------------------------------------------------------
Sump Air and Oil Seals ***
-------------------------------------------------------------------------------
Oil Tank ***
-------------------------------------------------------------------------------
Controls & Accessories-Engine
-------------------------------------------------------------------------------
Starter and Valve ***
---------------------------------------------------------------------------
Lube and Scavenge Pump ***
---------------------------------------------------------------------------
Scavenge Filter ***
---------------------------------------------------------------------------
Fuel/Oil Heat Exchanger ***
---------------------------------------------------------------------------
Main Fuel Pump ***
---------------------------------------------------------------------------
Fuel Filter ***
---------------------------------------------------------------------------
Pressurizing Valve ***
---------------------------------------------------------------------------
Hydro Mechanical Unit ***
---------------------------------------------------------------------------
Compressor Inlet Temperature
Sensor ***
---------------------------------------------------------------------------
Variable Stator Actuator ***
---------------------------------------------------------------------------
Thermocouple Harness ***
---------------------------------------------------------------------------
▇-▇▇
▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇
▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇▇ PARTS LIST
continued
-----------------------------------------------
FLIGHT HOURS
-----------------------------------------------
*** *** *** ***
---------------------------------------------------------------------------
Tachometer Generator-Fan ***
---------------------------------------------------------------------------
Anti-Icing Valve ***
---------------------------------------------------------------------------
Ignition Unit ***
---------------------------------------------------------------------------
Electronic Control Unit ***
---------------------------------------------------------------------------
Fuel Nozzle ***
---------------------------------------------------------------------------
Power Alternator ***
---------------------------------------------------------------------------
*** Rest of page intentionally left blank. ***
B-20
36
ATTACHMENT I
BASIS AND CONDITIONS FOR SPECIAL GUARANTEES
A. General Conditions
The special guarantees offered in this proposal have been developed
specifically for Airline's new installed and spare CF6-80C2B1F engines
(hereinafter referred to as the 'Engines'). They are offered to Airline
contingent upon:
1. Airline accepting delivery of a minimum of *** CF6-80C2B1F-powered
747-400F aircraft in accordance with the following delivery
schedule:
FIRM AIRCRAFT DELIVERY SCHEDULE
Aircraft Engine Model Year Quantity of Aircraft
-------- ------------ ---- --------------------
747-400F CF6-80C2B1F 1998 ***
" " 1999 ***
" " 2000 ***
" " 2001 ***
2. ***
3. Airline's Engines being identified and maintained separately from
other operators' engines at the repair agency;
4. Agreement between Airline and GE regarding administration of the
guarantees;
5. Airline operating Aircraft (i) an average flight leg of *** hours or
greater, (ii) an average takeoff thrust derate of *** percent or
greater, and (iii) an average Aircraft utilization of *** hours per
year maximum. Change in Aircraft or Engine quantity, Aircraft or
Engine model, or Aircraft delivery schedule from that described
above, ***
I-1
EXHIBIT B
37
ATTACHMENT I
BASIS AND CONDITIONS FOR SPECIAL GUARANTEES
(continued)
6. Airline and GE agreement upon the engine restoration workscope
necessary during each shop visit;
7. Available on-wing maintenance and performance restoration procedures
are used to avoid unnecessary shop visits; and
8. Service bulletins agreed to between Airline and GE are incorporated
in a timely manner.
B. Exclusions
The guarantees shall not apply to repairs that are due to negligence,
accidents, and/or improper operation and maintenance or if the Engines are
employed in power-back Aircraft operation.
C. Administration
These guarantees commence with delivery of Airline's first
CF6-80C2B1F-powered Aircraft ***. The guarantees are not transferable.
*** If a guarantee is exceeded on a cumulative basis, then GE will pay
Airline the amount described in the specific guarantee. If in a subsequent
reconciliation the guarantee is met or under run, then Airline will pay GE
the amount of any excess credit previously paid by GE. Such repayments of
credits will not exceed the amount paid to Airline by GE. If compensation
becomes available to Airline under more than one specific guarantee,
warranty or other engine program consideration, Airline will not receive
duplicate compensation but will receive the compensation most beneficial
to Airline under a single guarantee, warranty or other program
consideration. Unless otherwise stated, the guarantee compensation will be
in the form of credits for the purchase of spare Engines, Parts, and/or
services from GE.
D. Miscellaneous
The General Conditions described in Section X of Exhibit B (the CF6-80C2
Product Support Plan) to this Agreement apply to these guarantees.
I-2
EXHIBIT B
38
ATTACHMENT II
PERFORMANCE RETENTION GUARANTEE - METHOD OF MEASUREMENT
1. ***
2. ***
3. ***
4. ***
5. ***
a. ***
b. ***
6. ***
7. ***
EXHIBIT B
39
ATTACHMENT III
DELAY AND CANCELLATION DEFINITIONS FOR GUARANTEE
Delay
***
1. ***
2. ***
3. ***
NOTE:
A cancellation supersedes a delay (i.e., a flight which is canceled after
having been delayed is considered to be a cancellation only - not a delay
and a cancellation).
Cancellation
Elimination of a scheduled trip because of a known or reasonably suspected
malfunction and/or defect.
NOTE:
Cancellation of any or all of the flight legs of multi-leg trip
constitutes only one cancellation.
EXHIBIT B
40
EXHIBIT C
ESCALATION
***
C-5
41
EXHIBIT D
PAYMENT TERMS
A. Airline shall pay GE with respect to each purchase order hereunder, the
following amounts in United States Dollars and in immediately available
funds. Payment will be effective upon receipt thereof.
1. For all Products other than Spare Parts and special tools and test
equipment:
a. *** Of the total purchase order base price shall be paid
within *** following the date of the order;
b. *** Of the base price of each item shall be paid *** months
prior to scheduled delivery date thereof;
c. *** Of the base price of each item shall be paid *** prior to
scheduled delivery date thereof; and
d. Payment of the balance, including escalation, if any, shall be
made at ***.
e. Any payment following the first payment in subparagraph a.
above which is due prior to or at the time of purchase order
placement will be made at the time of purchase order
placement.
2. For Spare Parts, payment of the selling price shall be made ***.
3. For special tools and test equipment, payment of the selling price
shall be made ***.
B. All invoicing and payments (including payment details) hereunder shall be
transmitted electronically to GE's bank account as notified by GE on its
invoices..
C. If delivery hereunder is delayed by Airline, payment shall be made based
on the delivery schedule set forth in the purchase order as accepted by
GE.
D. ***
E. If Airline fails to make any of the foregoing payments when due, Airline
will also pay to GE, without prejudice to any other rights available to GE
under this Agreement, interest on any late payment, calculated from the
payment due date to the date of actual remittance. Interest will be
computed at, *** but in no event will the rate of interest be greater than
the highest interest rate then permitted under applicable law.
C-6
42
_____________________________________GE Aircraft Engines
LETTER AGREEMENT ▇▇. ▇
▇▇▇▇ ▇, ▇▇▇▇
▇▇▇▇▇ ▇▇▇, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Chairman, CEO and President
WHEREAS, General Electric Company acting through its GE Aircraft Engine Group,
located in Evendale, Ohio, U.S.A. (hereinafter referred to as "GE") and Atlas
Air, Inc. ("Atlas" or "Airline") have entered into General Terms Agreement No.
6-9810, dated as of June ____, 1997, as the same may be amended, supplemented or
otherwise modified from time to time in accordance with the terms thereof (the
"Agreement"); and
WHEREAS, Atlas has entered into, or will in the near future enter into, a
purchase agreement (the "Boeing Purchase Agreement") with The Boeing Company
("Boeing") for the purchase of (i) *** firm 747-400F aircraft equipped with
CF6-80C2B1F installed engines for delivery in the May 1998 through April 2001
time period, and (ii) up to *** option 747-400F aircraft equipped with
CF6-80C2B1F installed engines for delivery in the ***, all such aircraft as more
particularly described in Attachment A-1 hereto (such aircraft may be
individually referred to as an "Aircraft" or collectively referred to as the
"Aircraft" depending upon the context). GE has no knowledge of the contents of
the Boeing Purchase Agreement and any reference to such purchase agreement is
only for the convenience of Atlas.
NOW, THEREFORE, in consideration of the mutual promises described herein and for
other consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows. Capitalized terms used in
this Letter Agreement No. 1 that are otherwise undefined shall have the meanings
ascribed to such terms in the Agreement.
I. DELIVERY AND ACCEPTANCE OF FIRM AIRCRAFT
Airline agrees to purchase and accept delivery of the *** firm CF6-80C2B1F
powered 747-400F Aircraft in accordance with the delivery schedule set
forth in Attachment A-1 hereto (the "Aircraft Delivery Schedule") which is
incorporated herein by this reference.
43
LETTER AGREEMENT NO. 1
Atlas Air, Inc.
Page 2
II. DELIVERY AND ACCEPTANCE OF OPTION AIRCRAFT
To the extent that Airline agrees to purchase one or more of the ***
option 747-400F powered Aircraft (as more specifically described in the
Aircraft Delivery Schedule) Airline agrees to equip any and all such
Aircraft with new CF6-80C2B1F engines ("Engines").
III. DELIVERY AND ACCEPTANCE OF SPARE ENGINES
Airline agrees to purchase *** spare CF6-80C2B1F engines to support the
*** firm Aircraft and accept delivery of such spare engines in accordance
with the Spare Engine Delivery Schedule set forth in Attachment A-2 hereto
(the "Five Spare Engines").
IV. ENGINE CHARACTERISTICS AND PRICES
Spare Engines sold by GE to Airline will conform to the specifications for
installed Engines contained in GE's agreement with Boeing. Current Base
Prices for CF6-80C2BIF Spare Engines, optional equipment and Modules are
summarized in Attachment B hereto.
V. SPECIAL ALLOWANCES 747-400F AIRCRAFT
Provided that Atlas purchases and accepts delivery of a minimum of ***
firm CF6-80C2B1F powered 747-400F aircraft in accordance with the Aircraft
Delivery Schedule and places a purchase order with GE and accepts delivery
of the *** Spare Engines in accordance with the Spare Engine Delivery
Schedule, GE offers the following special allowances subject to the
conditions set forth in Attachment C.
A. Per-Aircraft Introductory Allowance for *** Aircraft
GE will provide Atlas a per Aircraft allowance of *** for each of
the *** Aircraft of which Airline takes delivery in accordance with
the Aircraft Delivery Schedule.
B. Introductory Allowance for Additional Aircraft
GE will provide Atlas an allowance of US *** for each of up to ***
additional Aircraft beyond the *** Aircraft described in the
preceding paragraph taken in accordance with the Aircraft Delivery
Schedule.
44
LETTER AGREEMENT NO. 1
Atlas Air, Inc.
Page 4
C. Allowance for Aircraft Progress Payments
GE will provide Atlas an allowance in the amount of *** for each of
up to *** firm Aircraft to assist in the cost of financing that
portion of advanced progress payments not deferred by Boeing for
such Aircraft.
D. Engine Thrust
***
1. Such *** are used exclusively by Airline to support Airline's
Aircraft;
2. Airline purchases from GE the *** Spare Engines;
3. ***
4. ***
5. ***
GE will make the above-described available to Airline on a reasonable time
schedule to be mutually agreed to by the parties.
VI. CANCELLATION OR DELAY OF AIRCRAFT WITH INSTALLED ENGINES; CANCELLATION OR
DELAY OF SPARE ENGINES
Delay and cancellation provisions for installed and spare Engines are set
forth in Attachment C hereto
VII CONFIDENTIALITY OF INFORMATION
This Letter Agreement No. 1 contains information specifically for Airline
and GE and nothing herein contained shall be divulged by Airline or GE to
any third person, firm or corporation, without the prior written consent
of the other party, which consent shall not be unreasonably withheld,
except that consent shall not be required for disclosure to the respective
insurers and professional advisors of the parties who must likewise agree
to be bound by this confidentiality clause, and, Airline's consent shall
not be required for GE to divulge to its co-production partners
information from, or with respect to this Agreement, it being understood
that each such partner will also be bound by the provisions of this
Agreement.
45
LETTER AGREEMENT NO. 1
Atlas Air, Inc.
Page 4
The obligations set forth in this Letter Agreement No. 1 are in addition to and
form part of the obligations set forth in the Agreement.
Counterparts: This Letter Agreement No. 1 may be executed by the parties hereto
in two counterparts, each of which shall be deemed to be an original but all of
which when taken together shall constitute one and the same document.
Please indicate your agreement with the foregoing by signing as provided below
and returning the same to the undersigned by June 15, 1997, whereby this Letter
Agreement No. 1 shall become effective as of the date first above indicated.
Very truly yours,
ATLAS AIR, INC. GENERAL ELECTRIC COMPANY
By: By:
-------------------------------- --------------------------------
Typed Name: Typed Name:
------------------------ ------------------------
Title: Title:
----------------------------- -----------------------------
46
ATTACHMENT A-1
Aircraft Delivery Schedule
The following Aircraft Delivery Schedule is subject only to (i) Excusable Delays
(as defined in paragraph 7 of Attachment C) and (ii) delays of up to in effect
as of the date hereof and without regard to any waiver or consent or amendment
therein contained unless agreed by GE. It is understood that option exercise
shall be 18 months prior to the first day of the scheduled option Aircraft
delivery month.
----------------------------------------------------------------------------
FIRM AIRCRAFT DELIVERY SCHEDULE
----------------------------------------------------------------------------
Aircraft Engine Month/ Quantity of
Model Model Year Aircraft
----------------------------------------------------------------------------
*** *** *** ***
--------------------------------
*** *** *** ***
--------------------------------
*** *** *** ***
--------------------------------
*** *** *** ***
--------------------------------
*** *** *** ***
--------------------------------
*** *** *** ***
--------------------------------
*** *** *** ***
--------------------------------
*** *** *** ***
--------------------------------
*** *** *** ***
--------------------------------
*** *** *** ***
----------------------------------------------------------------------------
Total: ***Firm Aircraft
----------------------------------------------------------------------------
OPTION AIRCRAFT DELIVERY SCHEDULE
----------------------------------------------------------------------------
Aircraft Engine Month Quantity of
Model Model Year Aircraft
----------------------------------------------------------------------------
*** *** *** ***
--------------------------------
*** *** *** ***
--------------------------------
*** *** *** ***
--------------------------------
*** *** *** ***
--------------------------------
*** *** *** ***
--------------------------------
*** *** *** ***
--------------------------------
*** *** *** ***
--------------------------------
*** *** *** ***
--------------------------------
*** *** *** ***
--------------------------------
*** *** *** ***
----------------------------------------------------------------------------
Total: *** Option Aircraft
----------------------------------------------------------------------------
LETTER AGREEMENT NO. 1 TO GTA NO. 6-9810
Atlas Air, Inc.
47
ATTACHMENT A-2
Spare Engine Delivery Schedule
The following Spare Engine Delivery Schedule reflects GE's recommended number
and delivery schedule of spare Engines (*** spare Engine to installed Engine
ratio) necessary to support the *** firm Aircraft that are described in
Attachment A-1 hereto. The delivery schedule set forth below is subject only to
(i) Excusable Delays (as defined in paragraph 7 of Attachment C) and (ii)
permitted delays as described in the next sentence.
To provide Airline with reasonable flexibility as to the timing of the delivery
of spare Engines, GE agrees, that for the purpose of qualifying for the special
allowances described in this Letter Agreement No. 1, to permit an aggregate
delay of ***for the ***Spare Engines (of which GE has been provided notice of
such delay a minimum of *** months prior to scheduled delivery) unless otherwise
agreed by GE.
-------------------------------------------------------------------
SPARE ENGINE DELIVERY SCHEDULE
in support of Firm Aircraft
-------------------------------------------------------------------
Engine Quarter/ Quantity of
Model Year Engines
-------------------------------------------------------------------
*** *** ***
----------------------------
*** *** ***
----------------------------
*** *** ***
----------------------------
*** *** ***
----------------------------
*** *** ***
-------------------------------------------------------------------
Rest of page intentionally left blank
***
LETTER AGREEMENT NO. 1 TO GTA NO. 6-9810
Atlas Air, Inc.
48
ATTACHMENT B
BASE PRICES FOR CF6-80C2B1F
SPARE ENGINES AND ASSOCIATED EQUIPMENT
Prices applicable to deliveries through 2001 and 2003.
--------------------------------------------------------------------------------
-----------------------------------------------------------------
Base Price
July 1995 US
Dollars
Item CPI=131.16
-----------------------------------------------------------------
1. Basic Engine inc. FADEC - CF6-80C2B1F ***
2. Engine Optional Equipment ***
FADEC Optional Condition Monitoring
System ***
3. Engine Modules with Controls and Accessories ***
Fan ***
Core ***
High Pressure Turbine ***
Low Pressure Turbine ***
Gearbox ***
-----------------------------------------------------------------
--------------------------------------------------------------------------------
A. ***
B. ***
C. ***
D. ***
--------------------------------------------------------------------------------
LETTER AGREEMENT NO. 1 TO GTA NO. 6-9810
Atlas Air, Inc.
49
ATTACHMENT B-2
BASE PRICES FOR CF6-80C2B5F
SPARE ENGINES AND ASSOCIATED EQUIPMENT
--------------------------------------------------------------------------------
-----------------------------------------------------------------
Base Price
July 1995 US
Dollars
Item CPI=131.16
-----------------------------------------------------------------
1. Basic Engine inc. FADEC - CF6-80C2B5F ***
2. Engine Optional Equipment ***
FADEC Optional Condition Monitoring
System ***
3. Engine Modules with Controls and Accessories ***
Fan ***
Core ***
High Pressure Turbine ***
Low Pressure Turbine ***
Gearbox ***
-----------------------------------------------------------------
--------------------------------------------------------------------------------
A. ***
B. ***
C. ***
D. ***
--------------------------------------------------------------------------------
LETTER AGREEMENT NO. 1 TO GTA NO. 6-9810
Atlas Air, Inc.
50
ATTACHMENT C
CONDITIONS FOR SPECIAL ALLOWANCES/DELAY/CANCELLATION
1. Allowance for Initial Aircraft Sale Only
Any allowance described in this Letter Agreement No. 1 applies only to new
CF6-80C2B1F powered Aircraft purchased by Airline directly from Boeing. The
allowances do not apply to an aircraft equipped with buyer-furnished engines, an
aircraft that has been the subject of a previous GE proposal or offer, or, to an
aircraft that has been previously sold (except in connection with Aircraft
financing for Airline) or otherwise acquired through resale, lease, transfer,
trade, or exchange.
2. Allowance Not Paid
Allowances described in this Letter Agreement No. 1 with respect to a
particular Aircraft will become unearned and will not be paid if Engines have
been delivered to Boeing for installation in such Aircraft and, thereafter, for
any reason, Airline's purchase order with Boeing for such Aircraft is
terminated, canceled, or revoked, or for any reason delivery of such Aircraft
will be prevented or delayed beyond the end of the calendar year following the
year the Engines for such Aircraft were delivered by GE to Boeing; provided,
however, GE agrees that such allowance will be reinstated and paid to Airline if
such Aircraft is subsequently delivered in accordance with the Aircraft Delivery
Schedule.
3. Earning and Payment of Allowances
The per-Aircraft allowances described herein will be earned by Atlas, on a
pro rata basis, upon delivery of each shipset of CF6-80C2B1F engines to Boeing
for installation on the corresponding Aircraft for Atlas. Each per-Aircraft
allowance will be available, as a credit against purchases from or services
performed by GE, within two working days following receipt of written notice
from Atlas that it has taken delivery of each Aircraft in accordance with its
purchase agreement with Boeing. However, with the agreement of Boeing and upon a
minimum of three business days written notice from Atlas to GE requesting the
same, GE will arrange to wire transfer the allowance to Boeing at the time of
delivery of such Aircraft for application to the purchase price of the Aircraft.
The Parties acknowledge that all necessary wire transfer addresses and
instructions must be received by GE no later than 3 business days prior to
delivery of the Aircraft for GE to make the necessary arrangements and to
prepare the appropriate escrow instructions.
4. ***
LETTER AGREEMENT NO. 1 TO GTA NO. 6-9810
Atlas Air, Inc.
51
ATTACHMENT C
CONDITIONS FOR SPECIAL ALLOWANCES/DELAY/CANCELLATION
(continued)
A. ***
------------------------------------------------------
No. of Aircraft deliveries
taken in accordance with Adjusted Per Aircraft
the Aircraft Delivery Introductory
Schedule Allowance
------------------------------------------------------
*** ***
------------------------------------------------------
*** ***
------------------------------------------------------
*** ***
------------------------------------------------------
*** ***
------------------------------------------------------
*** ***
------------------------------------------------------
*** ***
------------------------------------------------------
*** ***
------------------------------------------------------
*** ***
------------------------------------------------------
*** ***
------------------------------------------------------
*** ***
------------------------------------------------------
B. ***
LETTER AGREEMENT NO. 1 TO GTA NO. 6-9810
Atlas Air, Inc.
52
ATTACHMENT C
CONDITIONS FOR SPECIAL ALLOWANCES/DELAY/CANCELLATION
(continued)
5. Assignability of Allowance
Any allowance described herein is exclusively for the benefit of Airline
and may not be assigned without GE's consent, however it is understood that GE
will permit Airline to assign its Special Allowances and other rights (described
in this Letter Agreement No. 1) in connection with any equipment trust,
conditional sale, lien, leaseback or other arrangement for the financing by
Airline of the Aircraft or Engines that are the subject matter of this Letter
Agreement No. 1: provided, that the assignee is a financing institution that is
financing the Aircraft for the use and operation of Airline, and, in exercising
any rights or making any claims hereunder such assignee shall be bound by the
terms and conditions hereof to the same extent as Airline, and Airline shall
remain fully and entirely liable and responsible in accordance with the terms
and conditions of this Letter Agreement No. 1 for all obligations and
liabilities of Airline.
6. Planned Aircraft Not Owned for Planned Period
If within the *** following delivery of each Aircraft for which a special
allowance was provided by GE under this Letter Agreement No. 1, Airline sells
such Aircraft, the special allowances earned and/or paid on such Aircraft will
be proportionately reduced. Airline will reimburse GE an amount equal to the
proportionate share of the special allowances earned and/or paid with respect to
such Aircraft, (based on the percentage of the *** minimum period the Aircraft
was owned by Airline), with interest on such amount. The special allowance
reimbursement is due no later than 30 days from the time Airline ceases to own
such Aircraft. Interest will be calculated, *** from the time of initial
allowance payment on such Aircraft until the time of full reimbursement.
7. Excusable Delay
"Excusable Delay" with respect to an installed Engine as used in this
Attachment C means a delay in delivery of an Aircraft not attributable to a
failure of Airline to timely perform its obligations under the Boeing Purchase
Agreement (without giving effect to any supplement, modification or waiver
thereto which directly or indirectly results in a permitted delay of the
scheduled delivery of an Aircraft unless GE shall have consented thereto),
including any event of force majeure or a default by Boeing; provided, that
Airline accepts such Aircraft promptly when tendered by Boeing.
"Excusable Delay" with respect to a spare Engine as used in this
Attachment C means a delay in delivery of a spare Engine not attributable to a
failure of Airline to timely perform its obligations under the purchase
agreement between Airline and GE, including any event of default by GE or any
event of force majeure; provided, that Airline accepts such spare Engine
promptly when tendered by GE after an event of force majeure.
LETTER AGREEMENT NO. 1 TO GTA NO. 6-9810
Atlas Air, Inc.
53
ATTACHMENT C
CONDITIONS FOR SPECIAL ALLOWANCES/DELAY/CANCELLATION
(continued)
8. Cancellation of GE Spare Engines or Aircraft Equipped with GE Engines
***
9. Deemed Cancellations
If Airline delays the scheduled delivery date of a spare Engine***, or
causes the delay of the scheduled delivery date of an Aircraft equipped with
installed Engines, for which GE has received a purchase order (from either the
aircraft manufacturer or Airline, as appropriate), for a period, or cumulative
period, of more than *** from the original , such delay shall be considered a
cancellation and the cancellation provisions described in the two preceding
paragraphs shall apply.
LETTER AGREEMENT NO. 1 TO GTA NO. 6-9810
Atlas Air, Inc.