Exhibit 10.10
GENERAL TERMS AGREEMENT
BETWEEN
GENERAL ELECTRIC COMPANY
AND
MIDWAY AIRLINES CORPORATION
AGREEMENT NO.
CF34-0897-065
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TABLE OF CONTENTS
ARTICLE I PRODUCTS 3
ARTICLE II ORDER PLACEMENT 3
ARTICLE III PRICES 4
ARTICLE IV DELIVERY 4
ARTICLE V VARIATION IN QUANTITY 5
ARTICLE VI PAYMENT 5
ARTICLE VII TAXES 5
ARTICLE VIII INSPECTION AND TEST 6
ARTICLE IX EXCUSABLE DELAY 6
ARTICLE X PATENTS 7
ARTICLE XI INFORMATION AND DATA 7
ARTICLE XII FAA CERTIFICATION REQUIREMENTS 8
ARTICLE XIII TERMINATION FOR INSOLVENCY 9
ARTICLE XIV LIMITATION OF LIABILITY 9
ARTICLE XV NOTICES 10
ARTICLE XVI GOVERNMENTAL AUTHORIZATION 10
ARTICLE XVII RESERVED 10
ARTICLE XVIII WARRANTY 10
ARTICLE XIX PRODUCT SUPPORT PLAN 11
ARTICLE XX SURVIVORSHIP 11
ARTICLE XXI MISCELLANEOUS 11
EXHIBIT A PRODUCT DEFINITION
EXHIBIT B WARRANTY AND SPECIAL ENGINE SERVICE POLICY
EXHIBIT C PAYMENT
EXHIBIT D SPECIAL GUARANTEES
EXHIBIT E PRODUCT SUPPORT SERVICES
EXHIBIT F ESCALATION
EXHIBIT G SPARES SUPPORT AND SPECIAL CONCESSIONS
ATTACHMENT 1 INITIAL PROVISIONING RECOMMENDATION
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THIS GENERAL TERMS AGREEMENT (hereinafter referred to as this "Agreement" or
"GTA") is entered into by and between General Electric Company (hereinafter
referred to as "GE" or "General Electric"), a corporation organized under the
law of the State of New York, U.S.A., acting through its GE Aircraft Engines
having offices in Lynn, Massachusetts, U.S.A., and Midway Airlines Corporation
(hereinafter referred to as "Airline" or "Midway Airlines"), a corporation
organized under the law of the State of Delaware, U.S.A., having offices in
Durham, North Carolina, U.S.A.
WITNESSETH
WHEREAS, Airline has acquired certain aircraft equipped with GE CF34-3B1
installed engines, and
WHEREAS, the parties hereto desire to enter into this Agreement for the support
of such engines and sale and support 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:
ARTICLE I - PRODUCTS
GE shall sell and Airline shall purchase, under the terms and subject to the
conditions hereafter set forth, the equipment identified as Products in the
attached Exhibit A, and hereinafter referred to as "Product(s)."
ARTICLE II - ORDER PLACEMENT
Except as otherwise agreed in writing by the parties hereto, the terms and
conditions of this GTA together with any special provisions set forth in GE's
proposal or spare parts price catalogs, together with any special provisions set
forth in GE's spare parts catalogs or GE's individual proposals for spare parts
to be ordered by Airline hereunder, shall be the only terms and conditions
applicable to the sale of GE's Products, as defined herein. Such terms and
conditions shall be in lieu of all terms and conditions contained in or
referenced by any purchase order submitted by Airline, except that the
identification of Products, price, quantity, delivery dates and shipping
instructions shall be as set forth in any purchase order accepted by GE
("Order"). Any additional provisions agreed to by the parties shall be set forth
as a special provision in Airline's purchase order or GE's acknowledgment.
A. GE may issue spare parts price catalogs ("Catalogs") periodically for
certain engine models. The following ordering procedures shall apply
unless otherwise stated in the Catalogs. Procurement of Products listed in
the Catalogs shall be initiated by Airline by issuing a purchase order at
the price listed. Within thirty
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(30) days after receipt of such purchase order, GE shall issue a written
acknowledgment and specify the delivery date(s).
B. Upon request by Airline, GE may issue a proposal for those Products which
are not listed in the Catalogs. All proposals of GE are subject to change
at any time prior to acceptance of an order and expire at the end of the
validity period stated in such proposals. If Airline decides to purchase
the Products proposed by GE, Airline shall issue a purchase order to GE.
Each purchase order issued by Airline shall list the Products to be
supplied thereunder, shall show the applicable prices and delivery dates
in accordance with GE's proposal, complete shipping and marking
instructions and shall be subject to written acknowledgment by GE.
C. GE's written acknowledgment of Airline's purchase order shall constitute
acceptance thereof.
D. Address, phone numbers and facsimile numbers to be used in issuing
Purchase Orders to GE for CF34-3B1 Engine Products are as follows:
GE Company
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇
Attn: Customer Support Manager
Mail Drop: 34017
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
ARTICLE III - PRICES
A. The prices of Products shall be as quoted in GE's Catalogs or proposals
and as set forth in an Order. All prices are in U.S. Dollars and include
the cost of GE's usual factory tests, inspection, and commercial packing.
All transportation costs as well as costs resulting from any additional
factory testing and/or inspection and packing requirements of Airline
shall be paid by Airline.
B. The prices shall be subject to adjustment for escalation (if applicable)
as described in GE's Catalogs, proposal or Order. If applicable,
escalation shall be in accordance with the escalation methodology
described in Exhibit F, hereto.
ARTICLE IV - DELIVERY
A. GE shall deliver the Products in accordance with a mutually agreed upon
schedule as set forth in the Order. Partial and advance deliveries shall
be permitted.
B. Delivery dates are based upon (i) receipt by GE of all information
necessary to permit GE to proceed with the work immediately and without
interruption; and (ii)
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Airline's compliance with the applicable payment terms.
C. Delivery of all Products shall be: (i) Ex Works (Incoterms 1990), GE's
Factory, Lynn, Massachusetts, U.S.A., or point of manufacture, at GE's
option; or (ii) to storage (see Art. IV.D below). Title to and risk of
loss or damage shall pass to Airline upon delivery.
D. If for any reason Airline cannot accept delivery of Products on scheduled
delivery dates, GE may make delivery by placing such items in storage. In
such event, (i) 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 submission of GE's invoices; and (ii) GE shall assist and cooperate
with Airline in any reasonable manner with respect to the removal of any
such Product from storage.
ARTICLE V-VARIATION IN QUANTITY
With respect to any Product which has a unit selling price of $50 or less,
Airline agrees to accept delivery of quantities greater or less than the
quantity specified in an Order, provided that any such variation shall not
exceed five percent (5%) of the quantity originally specified. GE shall not be
required to give notice of any such variations other than in the applicable
shipping notice and invoice.
ARTICLE VI- PAYMENT
Airline shall pay GE with respect to Products purchased hereunder as set forth
in the attached Exhibit C.
ARTICLE VII - TAXES
A. The selling prices include and GE shall be responsible for the payment of
any imposts, duties, fees, taxes, or any charges whatsoever imposed or
levied by a taxing authority located in the United States in connection
with Products prior to or as a result of their sale and delivery other
than taxes from which exemptions may ordinarily be secured by means of
export. Unless GE arranges for export shipment, Airline agrees to furnish
without charge evidence of exportation or other evidence of tax or duty
exemption acceptable to the taxing or customs authorities when requested
by GE, failing which the amount of any U.S.A. taxes or duties imposed on
GE in connection with the transaction shall be promptly reimbursed in U.S.
Dollars to GE by Airline upon submission of GE's invoices therefor.
B. Any other taxes (including stamp and turnover or value-added taxes),
duties, fees, charges or assessments of any nature levied in connection
with this transaction, whether levied against Airline, against GE or
its employees or against any of GE's subcontractors or their employees,
shall be the responsibility of the
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Airline and shall be paid directly by Airline to the governmental
authority concerned. If GE or its subcontractors or the employees of
either, are required to pay any such levies and/or fines, penalties, or
assessments in the first instance, or as a result of Airline's failure to
comply with any applicable laws or regulation governing the payment of
such levies by Airline, the amount of any payments so made, plus the
expense of currency conversion, shall be promptly reimbursed in U.S.
Dollars by Airline upon submission of GE's invoices therefor.
ARTICLE VIII - INSPECTION AND TEST
A. All quality control exercised in the manufacture of the Products shall be
in accordance with GE's normal quality control policies, procedures and
practices. GE shall deliver the Products with evidence of inspection by
GE's quality control representative.
B. The Memorandum of Shipment signed by GE's quality control representative
shall constitute final acceptance of the Products and acknowledgment that
the Products comply with the applicable requirements of the Order.
However, notwithstanding such final acceptance, Airline shall have the
right to subsequently inspect such Products and require correction under
the Exhibit B Warranty. GE's obligations for failures of the Products to
conform to an Order's requirements discovered subsequent to final
acceptance shall be limited to those stated in Exhibit B, Warranty and
Exhibit D, Special Guarantees.
ARTICLE IX - EXCUSABLE DELAY
A. GE shall not be liable for any delays in delivery or failure to perform
due to: (i) causes beyond its reasonable control; (ii) acts of God, acts
or failure to act) of Airline or a civil or military authority,
governmental priorities, fires, strikes, floods, epidemics, war (declared
or undeclared), civil disorder, riot, delays in transportation; or (iii)
inability due to causes beyond its reasonable control to obtain on a
timely basis necessary labor, materials, fuels 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.
B. This Article IX shall not relieve GE from the obligation to use reasonable
efforts to avoid or remove such causes and continue performance with
reasonable speed 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/or
changes thereto.
C. 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
(30) days written notice to the other, cancel the part of any 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
mutually agreeable cancellation charges.
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ARTICLE X - 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. This
paragraph shall apply only to any Product manufactured to GE's design.
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 as may be reasonably
necessary. 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 non-infringing Product; or (3) modify same so it becomes
satisfactory and non-infringing. GE shall not be responsible to Airline
for incidental, consequential, indirect, special, exemplary or punitive
damages, including, but not limited to, costs, expenses, liabilities
and/or loss of profits resulting from loss of use contemplated by this
Article X.
The foregoing shall constitute the sole remedy of Airline and the sole
liability of GE for patent infringement.
ARTICLE XI - INFORMATION AND DATA
A. All information and data (including, but not limited to, designs,
drawings, blueprints, tracings, plans, models, layouts, specifications,
and memoranda) which may be furnished or made available to Airline
directly or indirectly as the result of this Agreement shall remain the
property of GE. This information, data and software is proprietary to GE
and shall neither be used by Airline nor furnished by Airline to any other
person, firm or corporation for the design or manufacture of any Product
nor permitted out of Airline's possession nor divulged to any other
person, firm or corporation, except as herein provided. Nothing in this
Agreement shall preclude Airline from using or furnishing to others
information and data necessary to effect any contract or arrangement under
which there is to be performed for Airline, by others, modification,
overhaul, or maintenance work on the Products, subject to the same
limitations set forth above and provided that before the information and
data is furnished to such others, they agree in writing to be bound by the
same limitations as set forth in this Article XI with respect to Airline.
The instrument by which Airline transfers any Product may permit the use
of such information and data by its transferee, subject to the same
limitation set forth above, and shall preserve to GE the right to enforce
such limitation.
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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.
C. GE shall not be obligated to supply any software hereunder. As between GE
and Airline, title to any software supplied hereunder shall belong to GE.
Prior to supplying any software under this contract, Airline agrees to
enter into license agreements protecting GE's rights and interests in such
software and to execute any license agreement which GE reasonably believes
to be necessary to protect the interests of GE. Where all or a portion of
any software supplied hereunder is owned by any third party, Airline
further agrees to execute any license agreement required by such third
party prior to receiving such software.
D. Breach of this Article XI by Airline shall not negate Airline's rights
under the Article XVII Warranty.
ARTICLE XII - FAA CERTIFICATION REQUIREMENTS
A. All Products, shall, at time of delivery:
1. Conform to a Type Certificate issued by the FAA.
2. Conform to applicable Engine regulations mandated by the FAA
to ensure safety, provided such regulations are issued 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 mandating safety changes to 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 XII.B above shall be deemed an Excusable Delay under Article IX
hereof, and, in addition, appropriate adjustments shall be made in the
specifications to reflect the effect of compliance with such regulations.
D. Repair and replacement of defective Products shall be handled under
Article XVIII, Warranty.
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ARTICLE XIII - 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 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 XIV - LIMITATION OF LIABILITY
A. The liability of GE, including its subcontractors, suppliers or
co-producers, to GE arising out of, connected with, or resulting from the
design, manufacture, sale, delivery, repair, replacement, support,
operation, use or handling of the product (including engines installed as
original equipment on aircraft owned, leased or operated by Airline),
whether in contract, warranty, tort (including negligence and strict
liability) or otherwise, shall be as set forth in Exhibit B, Warranty, and
Exhibit D, Special Guarantees, and Article X, Patents, hereof. The
foregoing shall constitute the sole and exclusive remedy of Airline and
the sole and exclusive liability of GE. Airline hereby waives, releases,
and renounces all other rights, claims, and remedies against GE. In no
event shall GE be liable for any special, incidental, or consequential
damages. Except as stated in Article X, Patents, the warranties and
guarantees set forth in Exhibit B and D are exclusive and in lieu of all
other warrantees and/or guarantees, whether written, statutory, oral or
implied (including without limitation any warranties of merchantability or
fitness for particular purposes or any implied warranty arising from
course of dealing, course
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of performance or usage of trade).
B. In no event shall the liability of GE, however founded, exceed the price
allocable to the Product that initially gives rise to the claim.
C. If Airline furnishes or transfers any product to any third party
("Transferee") by contract, Airline shall obtain from any such Transferee
a provision affording GE the protection of this Article XIV. If Airline
fails to obtain such an agreement from Transferee, Airline shall indemnify
GE from all claims made by such Transferee.
ARTICLE XV - 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:
To: GE Company To: Midway Airlines Corporation
GE Aircraft Engines ▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇., ▇▇▇▇ ▇▇.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Manager, Contracts Attention: Vice President-Maintenance
Mail Drop: 34005
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇ Tel: (▇▇▇) ▇▇▇-▇▇▇▇
ARTICLE XVI - GOVERNMENTAL AUTHORIZATION
A. Airline shall be responsible for the timely obtaining and maintaining of
any required export or import license or other required governmental
authorization. Airline and GE shall assist each other in every manner
reasonably possible in securing and complying with such authorizations as
may be required. Airline agrees to comply with all U.S. export control
laws and regulations and any amendments thereto.
B. GE shall not be liable if any governmental authorization is delayed,
denied, revoked, restricted, or not renewed.
ARTICLE XVII- RESERVED
ARTICLE XVIII- WARRANTY
GE's warranty shall be as stated in Exhibit B of this Agreement.
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ARTICLE XIX - PRODUCT SUPPORT SERVICES
The Product Support Plan for Airline's operation of Products, either purchased
by Airline from GE or installed on Airline's aircraft as original equipment, is
set forth in the attached Exhibit E.
ARTICLE XX - SURVIVORSHIP
The following clauses and exhibits shall survive the expiration or termination
of this Agreement:
Article VI - Payment
Article VII - Taxes
Article X - Patents
Article XI - Information and Data
Article XIV - Limitation of Liability
Exhibit B - Warranty
Exhibit C - Payment
Exhibit D - Special Guarantees
ARTICLE XXI- MISCELLANEOUS
A. 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
Airline's consent shall not be required for the assignment by GE to a
subsidiary or affiliate of GE.
B. 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 parties under, as the result of, or in connection with
this Agreement.
C. This Agreement shall be construed, interpreted and applied in accordance
with the law of the State of New York except that the conflict of laws
rules shall not be applied in order to apply the laws of another
jurisdiction. The 1980 United Nations Convention on Contracts for the
International Sale of Goods shall not apply.
D. This Agreement and all letter Agreements relating thereto contain 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 executives.
E. This Agreement 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
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shall not be unreasonably withheld, except that consent shall not be
required for disclosure to the respective professional advisors and
insurers of the parties who must likewise agree to be bound by this
confidentiality clause and consent shall not be required if disclosure is
required by law or to enforce this Agreement and except that 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 Article XXI - E.
F. 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 worldwide, (3) this Agreement is terminated in
whole or in part under either the provisions of Excusable Delay or
Termination for Insolvency herein, or (4) by mutual consent of the
parties, whichever occurs first. Nothing in this Paragraph F shall affect:
(a) the rights and obligations and limitations set forth in this Agreement
as to Products ordered for delivery prior to termination of this
Agreement, or (b) the provisions of Article XX above.
G. The invalidity of any part of this Agreement shall not affect the validity
or enforceability of the remainder.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and the year last below written.
Midway Airlines Corporation General Electric Company
By: By:
--------------------------- -----------------------------
Name: Name:
------------------------- ---------------------------
Title: Title:
------------------------ --------------------------
Date: Date:
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