CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT
Exhibit 10.31
g
GE ENGINE SERVICES
CFM56-7
MAINTENANCE COST PER HOUR(SM)
ENGINE SERVICE AGREEMENT
("MCPH" (SM))
BETWEEN
COMPANIA PANAMENA DE AVIACION, S.A.
AND
GE ENGINE SERVICES, INC.
REFERENCE NUMBER ESI-01-0417M
DATED MARCH 5, 2003
THIS PROPOSAL SHALL REMAIN VALID THROUGH MARCH 15, 2003
PROPRIETARY INFORMATION NOTICE
The information contained in this document is GE Engine Services, Inc. ("GE")
Proprietary Information and is disclosed in confidence. It is the property
of GE and shall not be used, disclosed to others or reproduced without the
express written consent of GE. If consent is given for reproduction in whole
or in part, this notice and the notice set forth on each page of this document
shall appear in any such reproduction. U.S. export control laws may also
control the information contained in this document. Unauthorized export
or re-export is prohibited.
TABLE OF CONTENTS
ARTICLE SUBJECT PAGE
1 Definitions 3
2 Term 6
3 Maintenance Cost Per Hour Program Procedures 7
4 Supplemental Work 11
5 Copa Obligations 13
6 Delivery, Redelivery, and Governmental Authorization 15
7 Parts Replacement Procedures 16
8 Repair Stations and Subcontracted Services 17
9 Pricing 17
10 Invoices and Payment 17
11 Limitation of Liability, Indemnification, and Insurance 19
12 Excusable Delay 21
13 Notices 21
14 Taxes and Other Charges 22
15 Dispute Resolution, Arbitration 22
16 Termination 23
17 Non Disclosure of Proprietary Data 24
18 Warranty 24
19 General Provisions 26
Signatures 27
EXHIBITS
Exhibit A **Material Redacted**
Schedule 1 **Material Redacted**
Schedule 2 **Material Redacted**
Schedule 3 **Material Redacted**
Exhibit B **Material Redacted**
Exhibit C **Material Redacted**
Exhibit D **Material Redacted**
Exhibit E **Material Redacted**
2
CFM56-7 MAINTENANCE COST PER HOUR(SM) ("MCPH" (SM))
ENGINE SERVICE AGREEMENT
THIS ENGINE SERVICE AGREEMENT is made as of the 1st day of January, 2003
("Effective Date"), by and between Compania Panamena De Aviacion, S.A., a
corporation organized under the law of Panama, whose principal address is
Aeropuerto Int. ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇. ▇▇▇▇ ▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇ ("Copa") and GE Engine
Services, Inc., a corporation organized under the law of the State of Delaware,
whose principal address is ▇ ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ("GE"), (both
of which may be hereinafter collectively referred to as the "Parties").
RECITALS
WHEREAS, GE maintains and operates Repair Stations for the servicing, repair,
maintenance, and functional testing of aircraft engines, and engine modules,
assemblies, subassemblies, controls and accessories, and parts thereof;
WHEREAS, Copa requires repair, overhaul or servicing of CFM56-7 aircraft
Engines, and engine modules, assemblies, subassemblies, controls and
accessories, and parts thereof on a cost per hour basis; and
WHEREAS, GE agrees to provide certain Services on Copa's equipment, as defined
below, subject to the terms of this Agreement.
NOW, THEREFORE, and in consideration of the mutual promises and covenants herein
contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
ARTICLE 1 - DEFINITIONS
Definitions. Capitalized terms used in the recitals and elsewhere in the
Agreement but not otherwise defined in this Agreement shall have the following
meanings:
"Agreement" shall mean this Engine Service Agreement, as the same may be
amended or supplemented from time to time.
"Airworthiness Directive" or "AD" shall mean a document issued by the
Approved Aviation Authority having jurisdiction over the Engine,
identifying an unsafe condition relating to such Engine and, as
appropriate, prescribing inspections and the conditions and limitations,
if any, under which the Engine may continue to operate.
"Approved Aviation Authority" shall mean, as applicable, the Federal
Aviation Administration of the United States ("FAA"), or, as identified by
Copa and agreed in writing by GE, the European Joint Aviation Authority
("JAA"), Panamanian DAC or such other equivalent foreign aviation
authority having jurisdiction over the performance of Services provided
hereunder.
"Base Price" shall mean the applicable MCPH Rate stated in Base Year
(2003) Dollars.
"Base Year" shall mean the contract year in which the Base Price is
applicable and is the baseline from which adjustment for fluctuation in
the economy is made.
"Bench Stock" shall mean those expendable or consumable items routinely
replaced during the inspection, repair or maintenance of Engine, whether
or not such items have been damaged, and other items that are customarily
replaced at each inspection or maintenance period.
3
"Catastrophic Failure" shall mean an Engine shop visit caused by failure
of an internal Engine part **Material Redacted**.
"CLP" shall mean the manufacturer's current catalog or manufacturer's
current list price pertaining to a new part or new item of equipment. The
term "current" as used in this definition means as of the time of the
applicable Service.
"Copa's Fleet" shall mean all B737-700 and B737-800 aircraft, operated by
Copa and powered by CFM56-7B Engines. The currently fleet is list on
Exhibit B which exhibit shall be amended by the Parties from time to time
in accordance.
"Delivery" shall, subject to the terms of Section 3.4.7 below, mean, in
respect of any item of equipment, the occurrence of the arrival of the
Engine, together with all applicable records and required data (as
described in Paragraph 5.1.8 below), Delivered Duty Paid ("DDP") to the
Designated Repair Station pursuant to the International Chamber of
Commerce "Incoterms" (2000 Edition), whereby Copa shall fulfill the
obligations of seller and GE of buyer. "Deliver" shall mean the act by
which Copa accomplishes Delivery.
"Designated Repair Station" shall mean the GE affiliate Repair Station
specified for each shop visit.
"Dollars" and "$" shall mean the lawful currency of the United States of
America.
"Engine" shall mean, each bare CFM56-7B22, CFM56-7B24, and CFM56-7B26
engine assembly, identified by serial number in Exhibit B including its
essential controls, accessories, and parts as described in Exhibit E.
Exhibit B shall be amended by mutual agreement of the Parties from time to
time as set forth herein, to reflect changes in the Copa fleet.
"Engine Year" shall mean the year of Engine operation measured in twelve
(12) consecutive month periods, with the first Engine year measured from
the date of aircraft acceptance by Copa for installed Engines or the date
of first installation of Spare Engines. For purposes of invoicing MCPH
payments, the date of aircraft acceptance, or the date of the first
installation for Spare Engines, will be deemed to have occurred on the
first day of the month following the actual acceptance or installation if
the date of the actual acceptance or installation falls on or before the
15th day of that month. The date of aircraft acceptance, or the date of
first installation for Spare Engines, will be deemed to have occurred on
the first of the month following the actual acceptance or installation if
the date of actual acceptance or installation falls after the 15th day of
that month.
"Foreign Object Damage" or "FOD" shall mean damage to any portion of the
Engine caused by impact or ingestion of an outside object such as birds,
vehicles, stones, hail, or debris. FOD shall be further defined as
follows:
"Major FOD" shall mean impact damage to an Engine or Engine part
caused by the a foreign object which requires the Engine to be
immediately removed from service, or subsequently removed due to an
out of limit condition per Copa's Aircraft Maintenance Manual as
reviewed and accepted by mutual agreement between the parties.
"Other FOD" shall mean foreign object damage to an Engine or Engine
Part detected during routine maintenance which is determined to be
FOD other than Major FOD.
"Life Limited Part" or "LLP" shall mean a part with an approved limitation
on use in cumulative hours or cycles, established by the OEM or the
Approved Aviation Authority.
"Line Replaceable Unit" or "LRU" shall mean one or more major accessories
of the external portion of an Engine which can be changed on wing and is
identified as an LRU in Exhibit E.
4
"MCPH" shall mean maintenance cost per hour.
"MCPH Program" shall mean the program consisting of the repair,
maintenance, and management of the Engines provided to Copa by GE on an
MCPH fixed rate basis, pursuant to the terms hereof.
"MCPH Rate" shall have the meaning set forth in Exhibit A.
"MCPH Shop Visit(s)" shall mean a Repair Station visit (scheduled or
unscheduled) during which off-wing repair and maintenance covered under
the MCPH fixed rate pricing is performed on equipment that meets the MCPH
eligibility requirements of Clause 3.2.2 below.
"Original Equipment Manufacturer" or "OEM" shall mean the original
manufacturer of any item of equipment.
"Performance Restoration" shall mean the Services performed during an
Engine shop visit in which, at a minimum, the compressor, combuster and
high pressure turbine are exposed and subsequently refurbished, consistent
with the workscope utilized for MCPH.
"Procedure Manual" shall mean the document, prepared by GE and approved by
Copa, based upon the requirements of this Agreement which provides
detailed procedures and guidance for the administration of the MCPH
Program. In case of conflict between the Procedure Manual and the
Agreement, the Agreement will prevail.
"Qualifying Shop Visit" shall mean the Repair Station visit during which
the initial Performance Restoration required for any Engine that does not
meet the MCPH eligibility requirements, as set forth in Clause 3.1, is
performed on the Engine. The Qualifying Shop Visit shall be performed at
Copa's expense in accordance with the Supplemental Work pricing set forth
in Exhibit A.
"Redelivery" shall, subject to the terms of Section 3.4.7 below, mean the
occurrence of the return of the Engine for Copa's acceptance Ex Works,
GE's Designated Repair Station, pursuant to the International Chamber of
Commerce "Incoterms" (2000 Edition), whereby Copa shall fulfill the
obligations of buyer and GE of seller. "Redeliver" shall mean the act by
which GE accomplishes Redelivery.
"Removal Schedule" or "RS" shall mean the schedule for Engine removal from
the aircraft for maintenance as jointly developed by GE and Copa.
"Repair Specification" shall mean the Copa repair specification number
___________, dated ____________ as may be amended by Copa (upon written
agreement by GE, such agreement not to be unreasonably withheld,
conditioned or delayed) from time to time, which shall identify the
minimum baseline to which Copa's equipment will be inspected, repaired,
modified, reassembled and tested hereunder. Unless otherwise agreed by the
Parties, such Repair Specification shall meet or exceed the
recommendations of the OEM's operational specifications and applicable
Engine maintenance or overhaul manuals and Copa's maintenance plan as
agreed to by Copa and GE and approved by the Approved Aviation Authority.
"Repair Station" shall mean one or more of the repair facilities owned by
GE or its affiliates, now or in the future, which are certified by the
Approved Aviation Authority to perform the applicable Service hereunder.
"Repairable" shall mean capable of being made Serviceable.
"Rotable Part" shall mean a new or used Serviceable part drawn from a
common pool of parts used to support multiple customers, which replaces a
like part requiring repair.
5
"Scrapped Parts" shall mean those parts determined by GE (or Copa if in
connection with a Supplemental Work Shop Visit) to be unserviceable and
beyond economic repair for reliability, performance or economic reasons.
**Material Redacted**
"Service" or "Services" shall mean, with respect to any Engine, all or any
part of those services requested by Copa which GE agrees to perform under
this Agreement, as more particularly described in the Workscope for such
Engine, including, without limitation, the furnishing of parts and
materials, labor, facilities, tooling, painting, plating, and testing
devices required in the performance of repair and maintenance in
connection with the Engine. "Serviced" shall be construed accordingly.
"Service Bulletin" or "SB" shall mean the document issued by an OEM to
notify the operator of modifications, substitution of parts, special
inspections, special checks, amendment of existing life limits or
establishment of first time life limits, or conversion of Engine from one
model to another.
"Serviceable" means an item of equipment that meets all OEM and Approved
Aviation Authority specified standards for airworthiness, and has no known
defects which would render it unfit for service in accordance with the
Repair Specification.
"Serviceable Condition" shall mean, with respect to an item, a repaired,
calibrated, or inspected item in an airworthy condition which can be used
for the same purpose as a newly manufactured item.
"Supplemental Work" shall mean any Service provided hereunder which is not
covered under the MCPH Program. All Supplemental Work shall be at Copa's
expense, in accordance with the pricing set forth in Exhibit A.
"Straight Time" shall mean the first eight (8) hours charged per person
each day, Monday through Friday (except local holidays observed by the
Designated Repair Station), provided that a minimum of eight (8) hours
break has occurred since the last time charged.
"Turn Time" shall mean the number of calendar days between Delivery and
Redelivery of an Engine, exclusive of public holidays observed by the
Designated Repair Station.
"Workscope" shall mean the document written and approved by GE's
engineering staff and approved in writing by Copa, which approval shall
not be unreasonably delayed, conditioned or denied, describing the
prescribed repair or approach to repair of identified equipment to meet
the requirements of the Repair Specification for the Engine.
ARTICLE 2 - TERM
2.1 Term of Agreement. This Agreement shall commence upon the Effective Date
and, unless sooner terminated pursuant to Article 16 herein, shall remain
in effect through December 31, 2014 (the "Initial Term").
2.2 Exclusive Agreement. This Agreement, insofar as it relates to the
maintenance, repair or overhaul of the Engines, including, without
limitation, Supplemental Work, shall be exclusive, and Copa shall not
enter into any other arrangement with a third party for such services with
respect to the Engines during the term hereof, except to the extent
provided in Article 12 herein and subject to provisions of Article 16
hereof
2.3 Renewal Beyond Initial Term. If Copa desires to extend the term of this
Agreement beyond the Initial Term, Copa shall give GE written notice of
its desire to extend at least one hundred twenty (120) days prior to the
expiration date of the Initial Term. Upon GE's proposal for pricing for
such extended term and mutual agreement of the parties, the term of the
Agreement shall be extended for a period of sixty (60) months. Should the
term be extended as described herein, Copa shall have an option for an
additional extension of sixty (60) month term on the same basis.
6
ARTICLE 3 MAINTENANCE COST PER HOUR PROGRAM PROCEDURES
3.1 MCPH Eligibility. Commencing on the Effective Date, GE shall provide
Services, as further described in this Article 3, and Copa shall pay the
MCPH Rate, for all of Copa's Engines listed by Engine serial number in
Exhibit B on a MCPH basis upon eligibility of each Engine as follows:
3.1.1 Engines listed on Exhibit B as of the Effective Date shall be
eligible for the MCPH Program as of the Effective Date and shall be
charged at the applicable Base Price per Engine Flying Hour ("EFH")
as set forth in Exhibit A.
3.1.2 New Engines (Serviceable Engines with less than one hundred (100)
operating hours since manufacture), or as otherwise agreed by the
Parties, shall be eligible for MCPH coverage as of the date of
aircraft or spare Engine acceptance and shall be charged the Base
Price Per Engine Flying Hour ("EFH") for the applicable Engine Year
as set forth in Exhibit A.
3.1.3 After the Effective Date and with GE's written consent, Copa may add
additional used CFM56-7 engines (which may be eligible or ineligible
at the time of such addition) to this Agreement for the remaining
term hereunder as specified in Exhibit A hereto. As a condition to
GE's consent to add such an Engine, Customer shall disclose whether
or not such additional Engine has had any non-OEM approved part or
repair installed or performed. All non-OEM parts or repairs shall be
removed by GE or Customer at Customer's expense prior to eligibility
of such additional Engine. On the date of such addition, Copa shall
begin paying the applicable, adjusted and escalated MCPH Rate for
each such Engine based upon its Engine Year. Upon meeting the
eligibility requirements, which may require completing a Qualifying
Shop Visit, the added Engine shall be eligible for MCPH Shop Visits
and all other MCPH Services, subject to then-current terms and
conditions. Any such addition shall be documented by amending
Exhibit B accordingly. All MCPH charges paid by Copa for such an
Engine, to the point such Engine meets the MCPH Program's
eligibility requirements, shall be credited up to the amount of the
Supplemental Work invoice for the Qualifying Shop Visit.
3.2 Scope of MCPH
3.2.1 Qualifying Shop Visits. Copa will Deliver all used Engines that are
inducted into Copa's Fleet after execution of this Agreement and
which are to be covered under this Agreement to GE for an initial
Performance Restoration Shop Visit on a Supplemental Work basis. All
non-OEM parts or repairs shall be removed by GE as Supplemental Work
prior to eligibility of such additional Engine. Following such
Performance Restoration Shop Visit, a used Engine will enter the
MCPH Program in accordance with Paragraph 3.1.3 above.
3.2.2 **Material Redacted**
3.3 Workscope and Repair Specification. Upon input of Engines for Service, GE
shall prepare a Workscope which specifies inspections, upgrades,
improvements, and repairs required to return the Engine to Serviceable
Condition and provide a copy of such Workscope to Copa for approval, such
approval not to be unreasonably delayed, conditioned, or denied. Should
Copa fail to provide approval of the Workscope within two (2) business
days of receipt, the calendar days beyond that time shall be an excusable
delay. Such Workscope may include reliability and performance enhancements
and Approved Aviation Authority approved repairs. GE shall repair the
Engines and, as defined in Exhibit E, LRU's in accordance with the Repair
Specification and Approved Aviation Authority regulations. GE may request
that Copa amend the Repair Specification during the term hereof to improve
reliability, enhance Engine operating
7
characteristics, and incorporate Designated Engineering Representative
approved repairs or repairs not contained in the OEM manual, subject to
Copa's written approval, which approval shall not be unreasonably delayed,
conditioned or denied. Any changes or amendments requested by Copa or
requested or made by any regulatory agency to the Workscope or Repair
Specification shall be mutually agreed by the Parties hereto and may be
subject to an adjustment in the pricing described in Exhibit A. The
Procedures Manual will delineate the procedures to be followed when
processing Engines in the Repair Station.
3.4 MCPH Program Services Provided. Services to be provided by GE under the
MCPH Program are:
3.4.1 Provide, either at a Repair Station, a subcontractor (if an entire
Engine is subcontracted, Copa's prior written approval is required),
or such other location as agreed by Copa and GE, all labor,
materials, and parts (new or used Serviceable, including use of GE
Rotable Parts) necessary to return the Engine to a Serviceable
Condition.
3.4.2 Repair or replace LLP.
3.4.3 Repair LRUs, as specified in Exhibit E, received with an Engine for
a MCPH Shop Visit and which were installed on the Engine when it was
removed from the aircraft for the shop visit, as evidenced by
records provided in accordance with Paragraph 5.1.8 of this
Agreement.
3.4.4 Notwithstanding Section 3.4.1.above, comply with Airworthiness
Directives ("AD"), issued by the Approved Aviation Authority, and
Service Bulletins designated by the OEM as mandatory (Categories
3-6) and which are performed during an MCPH Shop Visit, **Material
Redacted**.
3.4.5 With Copa's written approval, perform repairs at a location other
than that of GE or a GE affiliate, which may otherwise require a
shop visit, without unduly disrupting Copa's operation.
3.4.6 Test Engine in accordance with the Repair Specification and provide
all associated labor and material, including fuel and oil, for MCPH
Shop Visits, including slave test equipment.
3.4.7 **Material Redacted**
3.4.8 Assign a Program Manager who will be the point of contact for Copa
with respect to Services specified in this Agreement and support
this Agreement as set forth in Paragraphs 3.4.8.1 through 3.4.8.6
below.
3.4.8.1 Coordinating the work to be accomplished for each MCPH
Shop Visit or Qualifying Shop Visit, consistent with the
Procedure Manual.
3.4.8.2 Assist Copa with Supplemental Work requirements to be
performed in accordance with Article 4 below.
3.4.8.3 Maintain the necessary liaison between GE and Copa.
3.4.8.4 Provide Copa's authorized personnel with immediate
access to Copa's maintenance records. If immediate
access would create an undue burden for GE, GE shall
provide access as soon as reasonably possible.
3.4.8.5 Develop with Copa, on a monthly basis, an RS for the
Engines forecast for Delivery. The RS shall identify by
serial number the Engine(s) to be Delivered during the
following six (6) month period and the anticipated
reason for removal of each.
3.4.8.6 Ensure that all routine correspondence from GE to Copa
relative to the administration of the Agreement, except
for formal notices issued under Article 13 of this
Agreement, shall be directed to the attention of the
appropriate person at Copa's facility as designated by
Copa.
3.4.9 Engineering Support. GE will provide engineering support services
for Engines as follows:
8
3.4.9.1 Develop a plan for removal and shop input of Engines at
the Designated Repair Station as outlined in the
Procedure Manual.
3.4.9.2 Maintain current files on published CFM56-7 Service
Bulletins, engineering specifications, and applicable
repair documents as well as their application and
introduction to Copa's equipment. The parties will meet
quarterly to determine the incorporation of Service
Bulletins and the economic impact thereof.
3.4.9.3 Notify Copa of any deviations from the configuration
specification, provided by Copa pursuant to Paragraph
5.1.8, on equipment Delivered for Service and request
disposition of same.
3.4.9.4 Provide Engine test logs and Service Bulletin
introduction status for each Engine Redelivered to Copa.
3.4.9.5 Provide a findings report identifying any damage
detected and repair(s) accomplished, including any
photographs of same.
3.4.10 Documentation. GE shall provide Copa with a records package in
connection with Services performed on each Engine, at Redelivery
and shall retain a copy of such records.
3.4.10.1 Major Repair/Alteration Certification FAA No. 337 (or
equivalent foreign agency equivalent) including AD
compliance;
3.4.10.2 FAA Form 8130-3 (or Approved Aviation Authority
equivalent) for accessories;
3.4.10.3 Cycle limited parts log;
3.4.10.4 Serviceable tag for Serviceable equipment;
3.4.10.5 Original records and related documentation furnished by
Copa;
3.4.10.6 Incoming inspection report;
3.4.10.7 Off/On log; and,
3.4.10.8 Service Bulletin status report.
3.4.10.9 Findings Report.
3.4.11 Spare Engines. **Material Redacted**:
3.4.11.1 The parties have established a mutually agreeable
Removal Schedule; and
3.4.11.2 Customer has shipped Engines for MCPH Shop Visits within
forty-eight (48) hours following removal from the
aircraft unless prevented by any circumstance directed
by GE; and
3.4.11.3 Customer is in compliance with the requirements of
Paragraphs 5.1.8 and 5.1.11 below; and
3.4.11.4 Customer, concurrent with execution of this Agreement,
has executed a General Equipment Lease Agreement
("GELA") with GE, or a GE affiliate for the benefit of
9
and enforceable by GE, the terms of which shall govern
the lease and operation of any Lease Engine(s) required
to support this Agreement.
3.4.11.5 Customer shall redeliver DDP (Incoterms 2000) the Lease
Engine to GE at the Housekeeping facility or other
mutually agreed location as soon as practicable but in
no case later than ten (10) calendar days following
Redelivery of an MCPH Engine provided that such
Redelivery corrects the zero (0) spare Engine condition.
Daily rental fees and hourly restoration charges shall
be waived during such ten (10) day period. Customer
shall commence paying the applicable daily rental fees
and hourly restoration charges on the eleventh (11th)
day following correction of the zero (0) spare engine
condition. In addition, Customer shall continue to pay
the applicable MCPH Rate for EFH incurred by the Lease
Engine., plus LLP fees per flight cycle.
3.4.11.6 In the event a Copa operated aircraft is in an AOG
situation as a sole and direct result of GE's failure to
provide spare engine in accordance with the provisions
above, then GE shall be obligated to credit Copa an
amount equal to 2.5 times the then current daily lease
rates for such spare engine for each AOG, commencing in
the first day of such AOG situation, for each day the
AOG situation continues thru the 10th day of such AOG
situation. Should the AOG situation continues past the
10th day of such AOG situation, senior executives of
each party, so designated by each party, shall meet
within 5 calendar days to negotiate an equitable
solution.
3.4.11.7 the foregoing shall constitute the sole remedy of Copa
and the sole liability of GE for Spare Engine
availability under this Agreement.
3.4.12 Implement remote diagnostics services known as "Tier One" to
identify and diagnose trend shifts in accordance with the following
requirements ("Remote Diagnostics") as follows:
3.4.12.1 Twenty-four (24) hours a day, seven (7) days a week ("24
X 7") automated processing of Engine performance and
other data using Remote Diagnostics expanded tool set
when received at the Designated Repair Station.
3.4.12.2 Customer Notification Reports ("CNR"), for Engine
condition monitoring trend shift observation, including
engineering review, analysis, and recommendations based
on trend shift observations and other available
information. CNRs will be provided to Customer as
required on a 24 X 7 basis.
3.4.12.3 Monthly Performance Summary Report.
3.4.12.4 GE shall review that portion of data and messages
delivered to GE by Customer that are relative to GE's
implementation of Remote Diagnostics.
3.4.12.5 The parties understand that any information provided to
Customer by GE for use in troubleshooting and managing
operations is advisory only. GE is not responsible for
Line Maintenance or other actions resulting from such
advice. GE will use commercially reasonable efforts to
identify and notify Customer of Engine and aircraft
fault data. Customer is responsible to conclusively
identify and resolve any aircraft or Engine faults or
adverse trend
3.4.13 If Copa's spare Engine availability reaches zero (0) as a sole and
direct result of SV for Supplemental Work per Article 4, GE shall
deliver a Lease Engine to Copa at Copa's expense as provided in the
GELA agreement. If not possible to provide an engine, GE will
endeavor, using its diligent commercial efforts, to locate and
deliver a spare engine from other resources.
10
ARTICLE 4 SUPPLEMENTAL WORK
4.1 Supplemental Work At Shop Visits. Any and all Services not specifically
included in the MCPH Program pursuant to Paragraph 3.4, above shall be
performed by GE in accordance with the Supplemental Work pricing
provisions of Exhibit A. Supplemental Work shall include, but not be
limited to:
4.1.1 Any shop visit not described in Paragraph 3.2.2 of this Agreement.
4.1.2 Further, Services described in Paragraph 3.4 of this Agreement,
shall be identified as Supplemental Work if it has been determined
to GE's reasonable satisfaction, based on reasonable technical
substantiation provided to Copa including, without limitation,
engineering reports and metallurgical analysis, that such Engine or
module requires Service for, or as a result of the following while
the equipment was in Copa's care, custody, or control:
4.1.2.1 An accident.
4.1.2.2. FOD that is not covered under 3.2.2.5 above. GE will
provide reasonable assistance, which may include
independent metallurgical analysis as required, to Copa,
in substantiation of FOD events in support of processing
insurance claims for same.
4.1.2.3 The incorporation, at Copa's request, of Service
Bulletins other than those described in Paragraph 3.4.4
of this Agreement.
4.1.2.4 Military action or terrorist activity.
4.1.2.5 An act of God.
4.1.2.6 Improper or negligent installation, operation or
maintenance of Copa's equipment not in conformance with
OEM manuals, unless performed by GE.
4.1.2.7 Experimental test applied to the equipment, unless
performed by GE.
4.1.2.8 Use of non-conforming parts, components or modules,
except those installed by GE.
4.1.2.9 Repairs resulting from failure of a PMA part not
installed by GE (for GE or CFMI Engine lines).
4.1.2.10 Engine upgrade programs or conversion to another thrust
rating.
4.1.2.11 Operation beyond OEM removal guidelines.
4.1.2.12 Service required to comply with or resulting from lease
return conditions.
4.1.2.13 Catastrophic Failure, unless due to defects in material
or GE workmanship.
4.1.2.14 Repair or replacement of buyer furnished equipment and
LRU's not defined in Exhibit E.
4.1.2.15 Replacement of scrapped LRU's or QEC items.
11
4.2 Work Accomplished at Copa's Facility. Copa shall be responsible for all
repairs that may be accomplished without a MCPH Shop Visit, consistent
with Copa's historical maintenance practices, except for Services that GE
decides to perform on-wing that would otherwise be performed under the
MCPH Program.
4.3 On-Wing Support. GE shall provide, at Copa's request, twenty-four (24)
hour field service support for on-wing Services at rates specified in
Schedule 3 of Exhibit A.
4.4 Additional/Changed Engine Removals. Should Copa elect to remove an Engine
notwithstanding advice to the contrary from GE's onsite Service
Representative (Reference Paragraph 3.2.2.4 above) such shop visit shall
be deemed Supplemental Work, unless, during that shop visit, it is
demonstrated that the removal meets the requirements to be considered a
MCPH Shop Visit.
4.5 Pre-Existing Warranty. Copa agrees that any requested Engine repairs that
are covered under a warranty from an entity other than GE shall be
performed directly by that entity at no expense to GE or, at GE's option,
such warranties shall be, for the duration of the term hereof, assigned to
GE to the extent assignable. A list of such equipment under pre-existing
warranties shall be developed by Copa and GE within thirty (30) calendar
days of execution of this Agreement. Copa agrees to execute the warranty
assignment letter, attached hereto as Exhibit D, as required by paragraph
5.1.7 below.
4.6 Transportation Stands and Containers. Maintenance services, as required,
for Copa's Engine transportation stands and containers while at GE's
facility in connection with Supplemental Work shall be charged as
Supplemental Work.
4.7 **Material Redacted**
4.8 **Material Redacted**
ARTICLE 5 - COPA OBLIGATIONS
5.1 During the term of this Agreement, Copa shall:
5.1.1 Provide to GE's authorized personnel immediate, reasonable, access
to the Engines when such Engines are in Copa's possession, as well
as to all operating and maintenance records related to the Engines
which are maintained by Copa, in a manner which does not cause undue
interruption to Copa's operations.
5.1.2 Make every reasonable effort to provide incoming transportation
information in writing to GE (A) within forty-eight (48) hours prior
to the availability of an Engine for Delivery, (B) within
twenty-four (24) hours following commencement of an unscheduled
removal, when either occurs within or outside the forty-eight (48)
contiguous United States.
5.1.3 Designate in writing one (1) or more of its employees as a
representative during the term of this Agreement. Such
representative(s) shall be Copa's point of contact for matters
hereunder.
5.1.4 Develop with GE, on a monthly basis, an RS of Engines forecast for
Delivery to GE for Service hereunder. The RS shall identify by
serial number the Engine(s) to be Delivered during the following six
(6) month period and the anticipated reason for removal of each.
However, actual removals shall occur as specified in the Procedures
Manual.
5.1.5 Provide all line maintenance and line station support.
5.1.6 Copa shall use commercially reasonable efforts to troubleshoot in
accordance with the Engine's OEM or aircraft maintenance manuals, as
applicable. Copa shall, with GE's concurrence, to the extent that it
is practicable to obtain GE's concurrence, determine prior to
removal from the aircraft
12
whether any Engine requires off-wing repairs considering the impact
the off-wing maintenance may have on Copa flight operations.
5.1.7 Execute the Warranty Assignment Letter, attached hereto as Exhibit D
stating that Copa agrees to assign to GE the benefits of all
off-wing maintenance related guarantees (but, excluding the CFMI
Shop Visit Rate Guarantee), warranties or other remedies (including
campaign service bulletin benefits) Copa is entitled to assign, and
which directly relate to Services covered by MCPH charges. If these
guarantees, warranties or other remedies cannot be assigned, Copa
will raise claims under said non-assigned guarantees, warranties or
other remedies. Copa agrees to support GE in the enforcement of any
assigned rights as described in this Paragraph 5.1.7. It is agreed
that any remaining benefits of such warranties and guarantees shall
be re-assigned to Copa by GE upon expiration or termination of this
Agreement.
5.1.8 No later than the time of Delivery of the equipment, provide GE all
information and records necessary for GE to establish the nature and
extent of the Services required to be performed on the equipment and
to perform such Services. Such information and records include, but
are not limited to:
5.1.8.1 The cause of Engine removal (reason for this shop
visit);
5.1.8.2 Applicable information as typically received in Engine
log books detailing work performed at last shop visit,
any reported defects or incidents during operation since
last shop visit, with description of action taken, and
significant operational characteristics experienced
during last flight prior to shop visit;
5.1.8.3 SB and AD status/requirements;
5.1.8.4 Total engine operating time since new ("TSN") for each
Engine;
5.1.8.5 Time since last shop visit ("TSLV") for each Engine,
module, component and accessory;
5.1.8.6 Flight cycles since new ("CSN");
5.1.8.7 Flight cycles since last visit ("CSLV");
5.1.8.8 Record of change of parts during operating period prior
to this shop visit (these records are limited to the
previous ninety (90) days);
5.1.8.9 TSN, CSN, TSLV, CSLV time since overhaul ("TSO") and
cycles since overhaul ("CSO") for each thrust rating
utilized on all LLP;
5.1.8.10 Back to birth history certificate indicating history
from zero TSN/CSN on all LLPs;
5.1.8.11 Copa inventory of equipment "as shipped", including
(when applicable) a description of the external Engine
configuration;
5.1.8.12 Engine oil used (for Engines);
5.1.8.13 Historical log (for parts and accessories);
5.1.8.14 Module log cards (if applicable); and
5.1.8.15 Engine on-wing performance trend data generated
utilizing trend monitoring programs such as ADEPT or
SAGE (if available). Copa's failure to furnish necessary
information and records shall result in an excusable
delay in induction of the Engine for Service, and GE's
obligation to provide a lease Engine, as specified in
Paragraph 3.4.12, shall be suspended on a day for day
basis for that shop visit delay, and may necessitate
premature LLP replacement as described in Paragraph
7.2.2, below, at Copa's expense. However, prior to
replacing such LLP, and if data remains unavailable for
three (3) calendar days, GE will first advise Copa that
certain records are missing and allow Copa five (5)
working days to acknowledge and forward such records to
GE.
5.1.8.16 Non-OEM approved parts or repairs installed by other
than GE in such Engine.
5.1.8.17 Standard Form ATA-106 (non-incident statement) or
equivalent for the Engine since its last certification
as airworthy.
5.1.9 Provide to GE an external equipment configuration specification for
any Engine to be Delivered for Service.
13
5.1.10 Ensure that adequate non-exclusive workspace, parking, and local
telephone and facsimile access are available for the GE technical
representative assigned to the Copa facility, as applicable. Costs
incurred by such GE technical representative, including without
limitation, long distance telephone charges, fax, or computer
charges, shall be the responsibility of GE.
5.1.11 Provide a minimum quantity of spare Engines, as required in Exhibit
B, for the term of the Agreement.
5.1.12 Provide automated transfer of Engine trend and maintenance data
from in-flight data acquisition systems and/or ground based computer
systems via electronic medium.
5.1.13 **Material Redacted**
ARTICLE 6 - DELIVERY, REDELIVERY, AND GOVERNMENTAL AUTHORIZATION
6.1 DELIVERY. ALL ENGINES FROM COPA'S FLEET, AS SPECIFIED IN EXHIBIT B, TO BE
SERVICED SHALL BE DELIVERED BY COPA TO GE. SUCH ENGINES SHALL BE READY FOR
SHIPMENT WITHIN FORTY-EIGHT (48) HOURS, FROM LOCATIONS WITHIN THE
FORTY-EIGHT (48) CONTIGUOUS UNITED STATES, AND WITHIN ONE HUNDRED TWENTY
(120) HOURS FROM LOCATIONS OUTSIDE OF THE FORTY-EIGHT (48) CONTIGUOUS
UNITED STATES, FOLLOWING REMOVAL FROM THE AIRCRAFT. HOWEVER, GE SHALL HAVE
THE OPTION TO PERFORM REPAIRS WITH A FIELD TEAM AT LOCATIONS OTHER THAN
ITS FACILITIES.
6.2 Redelivery. After completion of Services, GE shall Redeliver the Engine to
Copa. In the event Redelivery of the Engine cannot occur due to any cause
referred to in Article 12, "Excusable Delay" below, or at Copa request, GE
may place such Engine into storage (which may be at a Repair Station). In
such event, GE shall notify Copa of such storage, GE's Redelivery
obligations shall be deemed fulfilled, except that GE shall retain all
risk of loss or damage to the Engine until they are in Copa's care,
custody and control, and any amounts payable to GE upon Redelivery shall
be payable Upon presentation of GE's invoice. Such Engines in storage
shall be considered available spare Engines for purposes of Paragraph
5.1.11 above. Upon payment of all amounts due hereunder, GE shall assist
and cooperate with Copa in the removal of Engines placed in storage.
6.3 Governmental Authorization. Copa shall be the importer and/or exporter of
record outside of the U.S. and shall be responsible for timely obtaining
any import license, export license, exchange permit, or other required
governmental authorization relating to the Engines. GE shall be importer
and/or exporter of record in the U.S. GE will not be liable if any
authorization is not renewed or is delayed, denied, revoked, or
restricted, and Copa shall not thereby be relieved of its obligation to
pay for Services performed by GE. All items and equipment delivered
hereunder shall at all times be subject to the U.S. Export Administration
Regulations and/or International Traffic in Arms Regulations of the U.S.A.
and any amendments thereto. Copa agrees not to dispose of U.S. origin
items provided by GE other than in and to the country of ultimate
destination specified in Copa's purchase order and/or approved government
license or authorization, except as said laws and regulations may permit.
ARTICLE 7 - PARTS REPLACEMENT PROCEDURES
7.1 Missing or Damaged Parts. GE shall, within one hundred twenty (120) hours
of Delivery, notify Copa in writing, or by alternate mutually agreed
electronic communication, of any components or LRUs damaged or missing
from an Engine when received at the Designated Repair Station. GE shall
replace such missing or damaged items at Copa's expense unless Copa
notifies GE in writing within two (2) business days of receiving GE's
notice that Copa wishes to furnish such missing or damaged items within a
period of time specified by GE. If such damage or loss occurred after
Delivery, GE shall be responsible for repairing or replacing such item.
14
7.2 Parts Replacement. GE shall determine which parts are required to
accomplish the Services associated with a MCPH Shop Visit and shall
provide all parts and materials required to accomplish the Services.
7.2.1 Rotable Parts. GE may issue compatible parts from GE's Rotable Parts
inventory to replace Copa's parts requiring repair. Copa agrees to
accept compatible Rotable Parts that are updated to the then-current
Service Bulletin baseline used by the majority of GE's customers.
Repairable parts removed from the Engine and replaced by GE's
Rotable Parts inventory will be repaired by GE or a third party, at
GE's option. Any Rotable Part which replaces a Copa part shall meet
or exceed the modification standard of the Copa part.
7.2.2 Life Limited Parts. LLP received by GE without the necessary records
required in Paragraph 5.1.8 above that relate to LLP, shall be
replaced by GE at Copa's expense as stated therein, following the
time period allowed for Copa to provide such records, as stated
herein.
7.3 Title to Parts. GE furnished parts and material incorporated into an
Engine shall be deemed to have been sold to Copa and title to such GE
furnished parts and material shall pass to Copa upon incorporation into
such Engine. Risk of loss or damage to such parts and material shall pass
to Copa upon Redelivery of the Engine. Title to any parts removed from the
Engine, which are replaced by other parts, shall pass to GE upon
incorporation into the Engine of the replacement part, unless such removed
parts are scrapped.
7.4 Title to Scrapped Parts. Title to Scrapped Parts shall pass to GE upon
review and disposition by Copa, only to the extent required to comply with
FAA requirements. Title to Scrapped Parts as result of a Supplemental Shop
Visit shall pass to GE only upon confirmation of scrap status by Copa.
7.5 Scrapped Parts. GE shall, at its sole expense and without any further
adjustment to Copa, dispose of all Scrapped Parts, except for Supplemental
Work Scrap Parts which shall be subject to Copa's disposition instructions
(delays in such disposition instruction shall not prevent GE from
continuing performance on the Engine, including replacement of the
Scrapped Part). Copa shall prior to the end of each calendar quarter
elect, at its option, either to witness destruction of Scrapped Parts or
receive a certificate of destruction, in a format to be set forth in the
Procedures Manual, during the subsequent quarter.
ARTICLE 8 - REPAIR STATIONS AND SUBCONTRACTED SERVICES
8.1 GE Repair Stations. GE may have any of the Services within the scope of
this Agreement performed at any facility of GE or any GE affiliated repair
station, with prior Copa written approval, such approval not to be
unreasonably withheld, delayed or denied.
8.2 Subcontracted Services. GE may subcontract any portion of the Services to
be performed on the Engines. Any subcontracted Services shall be performed
in accordance with the requirements of this Agreement. Copa shall, at its
sole expense, have the right to review GE's audit report(s) for such
subcontractor(s). Subcontracting of any Services hereunder shall not
relieve GE of its performance obligations set forth in this Agreement.
ARTICLE 9 - PRICING
In consideration of Services provided under this Agreement, Copa agrees to pay
GE for labor, material, subcontractor Services, testing, and all other services
furnished hereunder in accordance with the prices set forth in Exhibit A. All
prices are stated in ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Dollars, and are subject to adjustment
as described in Exhibit A.
15
ARTICLE 10 -INVOICES AND PAYMENT
10.1 MCPH Payments. Copa shall remit to GE, on the fifteenth (15th) day of each
month of performance under this Agreement, an amount equal to the actual
EFH incurred by all of the Engines for that preceding month multiplied by
the applicable adjusted and escalated MCPH Rate.
10.2 Supplemental Work Payments.
10.2.1 Supplemental Work invoices shall be net of any warranty applicable
to the equipment which GE receives.
10.2.2 Application of Payments
Payments by Copa for Supplemental Work shall be applied to the
oldest outstanding invoices, less any disputed amounts, in order of
succession.
10.2.3 Invoice(s)
10.2.3.1 Interim Invoices. GE shall issue an interim invoice at
terms of net thirty (30) days, following incoming
inspection of Engines into GE's Designated Repair
Station, for GE's cost estimate for that shop visit.
10.2.3.2 Final Invoice. GE shall issue a final invoice for
Services as soon as practicable, not later than 6 months
following Redelivery of the Engine. The final invoice
shall reflect the total charges owed by Copa and credits
due Copa and shall reflect any additional charges and/or
credits to the interim invoice(s) incurred, based on
actual charges to complete the Services. Such invoice
shall be reconciled with any interim invoice(s).
10.2.3.3 Payment Terms. Copa shall pay, in full, the unpaid
balance of any final invoice for Services within thirty
(30) days after Redelivery of the Engine. If any payment
date falls on a day that is not a business day, the
payment that is otherwise due shall instead be due the
next business day. Subject to GE's then current credit
and collection status for Copa, or in the event Copa's
account becomes delinquent, GE reserves the right to
require different terms of payment or other commercially
acceptable assurances of payment until such delinquency
has been cured.
10.2.3.4 All Invoices shall include the following information:
- Cover sheet to include general transaction data.
- Labor summary.
- Material listing by source. (Includes PN, IIN,
Noun, reason for replacement, price, quantity and
total price.)
- Subcontractor charges, including supporting
documentation.
- Any other applicable charges.
10.2.4 Invoice Dispute Resolution Process
In the event Copa has a legitimate, substantiated reason(s) to
believe that an error(s) has been made in a GE invoice for
Supplemental Work, the following resolution process shall apply:
10.2.4.1 Copa shall provide written notice to GE which states
both the amount and nature of the alleged error(s)
within thirty (30) working days of the applicable
invoice date;
16
10.2.4.2 Copa shall deduct the amount(s) being disputed from the
invoice total, without penalty, pending an investigation
by GE of the alleged error(s); however, Copa shall pay
all non-disputed charges in accordance with Paragraph
10.2.1, above;
10.2.4.3 GE shall conduct an investigation of the disputed
amount(s) and notify Copa of the findings of such
investigation within ten (10) working days of receipt of
notification. Upon mutual agreement of such resolution,
Copa shall pay any and all amounts still owed to GE or
GE shall credit Copa, as applicable and as promptly as
possible, but in no event later than thirty (30) days
following such resolution.
10.2.5 All MCPH charges paid by Copa for an ineligible Engine, to the
point such Engine qualifies under the MCPH Program's eligibility
requirements in 3.1.3 above, shall be credited up to the
Supplemental Work charges for the Qualifying Shop Visit.
10.2.6 In the event that Copa requires a Supplemental Work shop visit
which includes a Full Performance Restoration Workscope, GE shall
invoice all of the Services performed during that shop visit as
Supplemental Work and credit Copa's Supplemental Work invoice for
ninety percent (90%) of Copa's MCPH payments actually paid to GE
for EFH incurred by the applicable Engine since its last shop visit
or since new, whichever occurred last.
10.3 Late Payment. Should Copa fail to make payment for non-disputed charges
within the specified time, then it is agreed that GE may charge interest
for late payment at a rate equal to the then current one (1) year London
InterBank Offered Rate ("LIBOR") for U.S. Dollar deposits, as published in
the Wall Street Journal, plus two hundred (200) basis points, compounded
daily on any unpaid balance commencing on the next calendar day after the
payment due date until such time as the payment plus the late payment
charges are received by GE. Payments by Copa shall be applied to the
oldest outstanding amounts owing to GE in order of succession. GE's
obligation to provide a lease Engine as specified in Paragraph 3.4.11 will
be suspended during any period Copa fails to make payment within the
specified time, except for amounts disputed pursuant to 10.2.4.
10.4 Payment Instruction. All payments under this Agreement shall be made in
United States Dollars, immediately available for use, without any right of
set-off or deduction, except as permitted by this Agreement, via wire
transfer by Copa to the bank account and address designated below:
GE Engine Services, Inc.
Account No. 1010933861
ABA # ▇▇▇▇▇▇▇▇▇
Pittsburgh National Bank
▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
10.5 Mechanic's Lien/Security Interest. To the extent permissible under any
applicable Lease of Copa aircraft and Copa's rights under applicable law
in the respective Engine operated by Copa, Copa shall properly execute and
deliver all documentation as reasonably requested by GE to effect GE's
rights to a mechanic's, material man's, FAA or other statutory or common
law lien under applicable state, federal or foreign laws.
ARTICLE 11 - LIMITATION OF LIABILITY, INDEMNIFICATION AND INSURANCE
11.1 Total Liability. The total liability of GE or Copa for any and all claims,
whether in contract, warranty, tort (including negligence but excluding
willful misconduct or gross negligence), product liability, patent
infringement, or otherwise for any damages arising out of, connected with,
or resulting from the performance or non-performance of any Service or
Services provided hereunder or from the manufacture, sale, Redelivery,
resale, repair, overhaul, replacement or use of any Engine shall not
exceed the then current fair market value of that certain Engine which
gives rise to the claim, on a per occurrence basis.
17
11.2 Damages. Except for indemnification obligations for third party claims
under Paragraph 11.3 or as otherwise provided herein, in no event, whether
as a result of breach of contract, warranty, tort (including negligence
but excluding willful misconduct or recklessness), product liability,
patent infringement, or otherwise, shall GE be liable for any special,
consequential, incidental, resultant (except resultant physical damage to
any Engine), indirect, punitive or exemplary damages (including, without
limitation, loss of use, loss of profit or loss of revenue in connection
with the Engine).
11.3 GE and Copa shall each release the other party from, and shall indemnify,
defend and hold the other party harmless from and against any and all
claims, liabilities and losses whatsoever of any nature or kind on account
of or by any reason of injury to or death of any employee or
representative of that other party or any third party or damage to or loss
of property, including infringement of intellectual property rights, of
that other party or any third party, arising out of, in connection with or
resulting from performance hereunder or operation of the Aircraft on which
an Engine is installed, whether in contract, warranty, tort, product
liability, patent infringement or otherwise, except to the extent such
injury, death or damage arose directly out of the gross negligence or
willful misconduct of an indemnified party.
11.4 Definition. For the purpose of this Article 11, the term "GE" or "Copa" is
deemed to include such party and its affiliated companies, the
subcontractors and suppliers of any Services furnished hereunder, and the
directors, officers, employees, servants, and representatives of each.
11.5 Insurance. GE shall maintain, at its own cost and expense, during the term
of this Agreement, policies of insurance of the types and in the amounts
not less than those stipulated in the terms of this Agreement:
11.5.1 Comprehensive General Liability with combined single limits not
less than $2,500,000.00 per occurrence.
11.5.2 Aircraft Products and Completed Operations liability, for bodily
injury and property damage with limits of not less than
$500,000,000.00 combined single limit per occurrence and in the
aggregate where applicable.
11.5.3 Workers' Compensation to statutory limits and Employer's Liability
with limits of not less than $1,000,000.00 per occurrence and
including occupational disease coverage.
11.5.4 GE shall cause the aforesaid liability insurance policies to be
duly and properly endorsed by GE's insurance underwriters to:
11.5.4.1 Contain a standard cross liability/severability of
interest clause.
11.5.4.2 Provide that said insurance shall be primary in all
instances with respect to Copa's insurance which shall
be secondary or excess at all times.
11.5.4.3 Provide blanket contractual liability coverage for the
liability, indemnity and hold harmless obligations
assumed under the terms of this Agreement.
11.5.4.4 Provide a waiver of subrogation rights in favor of Copa.
11.5.4.5 Provide thirty (30) days prior written notice of
cancellation or adverse material change in coverage.
11.5.4.6 Provide that Copa is endorsed as an additional insured.
18
11.5.5 Within ten (10) days after the execution of this Agreement, GE
shall supply Copa with certificates of insurance evidencing the
coverages and endorsements referenced above with Copa listed as an
additional insured.
ARTICLE 12 - EXCUSABLE DELAY
12.1 Excusable Delays. GE and Copa shall be excused from, and shall not be
liable for, any delays in its performance or failure to perform hereunder,
and shall not be deemed to be in default for any delay in or failure of
performance hereunder due to causes beyond its reasonable control. Such
causes shall be conclusively deemed to include, but not be limited to,
acts of God, acts (or failure to act) of the other party, acts (or failure
to act) of civil or military authority, government priorities, fires,
strikes, labor disputes, work stoppage, floods and other natural
catastrophe(s), epidemics, war (declared or undeclared), riot, or delays
in transportation. In the event of any such delay, the time of performance
shall be extended for a period equal to the time lost by reason of the
delay.
12.2 Continuing Obligations. Paragraph 12.1 shall not, however, relieve either
party from using its best commercial efforts to avoid or remove such
causes of delay and continue performance with reasonable dispatch when
such causes are removed. If, within fourteen (14) calendar days of the
event causing the excusable delay, GE has not provided Copa evidence of
GE's ability to continue providing Services under the Agreement or
providing such Services through a third party, Copa shall have the right
to have any of the Services performed by a mutually agreeable third party.
In such event, GE shall, with respect to any Engine sent to a third party,
reimburse Copa the MCPH Rates paid since the last MCPH Shop Visit.
12.3 Extended Delay - Termination. If delay resulting from any of the foregoing
causes extends for more than six (6) months and the parties have not
agreed upon a revised basis for continuing the Services, including any
adjustment of the price, then either party, upon thirty (30) calendar days
written notice to the other, may terminate the performance of Services
with respect to any Engine for which Services were delayed, whereupon Copa
shall pay GE amounts due upon receipt of GE's invoice(s).
ARTICLE 13 - NOTICES
13.1 Acknowledgment. All notices required or permitted under this Agreement
shall be in writing and shall be delivered personally, or sent via first
class mail, return receipt requested, facsimile, courier service, or
express mail, addressed as follows or such other address as either party
may designate in writing to the other party from time to time:
GE: COPA:
GE Engine Services, Inc. Compania Panamena De Aviacion, S.A
▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ Int'l Airport
M/D F-103 ▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇
Attn: President & CEO Attn: VP Purchasing & Material Services
Copy to: GE Engine Services, Inc Tel.: (▇▇▇) ▇▇▇-▇▇▇▇
▇ ▇▇▇▇▇▇▇ ▇▇▇ Fax: (▇▇▇) ▇▇▇-▇▇▇▇
M/D F-120
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ Copy to: Chief Financial Officer
19
Attn: Manager, Fleet Management Operation
13.2 Effect of Notices. Notices shall be effective and shall be deemed to have
been given when received by the recipient (A) if sent by courier, express
mail, or delivered personally, upon delivery; (B) if sent by facsimile,
upon receipt; and (C) in the case of a letter sent prepaid first class
mail, on the fifth (5th) day after posting (or on actual receipt, if
earlier).
ARTICLE 14 - TAXES AND OTHER CHARGES
14.1 Taxes, Duties or Charges. In addition to the price for the Services, Copa
shall pay to GE, upon demand, any taxes (including without limitation,
sales, use, ad valorem, excise, turnover or value added taxes), duties,
fees, charges, imposts, tariffs, or assessments of any nature (but
excluding income taxes) ("Taxes"), assessed or levied in connection with
GE's performance under this Agreement.
14.2 Right To Protest/Refund. If claim is made against GE for any such Taxes,
GE shall immediately notify Copa and, if requested by Copa, GE shall not
pay except under protest, and if payment be made, GE shall use all
reasonable efforts to obtain a refund thereof. If all or any part of any
such Taxes be refunded, GE shall repay to Copa such part thereof as Copa
shall have paid. Copa shall pay to GE, upon demand, all expenses
(including penalties, interest and attorney's fees) incurred by GE in
protesting payment and in endeavoring to obtain such refund at Copa's
request.
ARTICLE 15 - DISPUTE RESOLUTION, ARBITRATION
15.1 Resolution by Senior Management. If a dispute arises relating to this
Agreement and related damages, if any, (the "Dispute") either party shall
give written notice to the other party requesting that senior management
attempt to resolve the Dispute. Within fifteen (15) days after receipt of
such notice, the receiving party shall submit a written response. The
notice and the response shall include a statement of the applicable
party's position and a summary of reasons supporting that position. The
parties shall cause senior management to meet within thirty (30) days
after delivery of the notice, at a mutually acceptable time and place, and
thereafter as often as they reasonably deem necessary, to use commercially
reasonable efforts to resolve the Dispute.
15.2 Arbitration. If the parties' senior management do not resolve the Dispute
by means of the process described above within one hundred twenty (120)
calendar days after delivery of the disputing party's notice, then either
party may request that the Dispute be settled and finally determined by
binding arbitration in New York, New York, USA, or any other location the
parties may agree, in accordance with the Commercial Arbitration Rules of
the American Arbitration Association (then in effect) ("AAA").
15.3 Arbitration Procedure. The arbitration will be conducted by a single
arbitrator chosen by agreement of the parties. In the event that they are
unable to reach agreement within thirty (30) calendar days of the demand
for arbitration, the parties may request the AAA to appoint the neutral
arbitrator. The arbitrator may hold pre-hearing conferences or adopt other
procedures. The Agreement shall be interpreted and applied in accordance
with the substantive laws of the State of New York, without giving effect
to its conflict of law provisions, rules or procedures (except to the
extent that the validity, perfection, or creation of any lien or security
interest hereunder and the exercise of rights or remedies with respect of
such lien or security interest for a particular item of equipment are
governed by the laws of a jurisdiction other than New York).
Reasonable examination of opposing witnesses in oral hearing will be
permitted. Each party will bear its own cost of presenting or defending
its position in the arbitration. The award of the arbitrator shall be
final, binding and non-appealable and judgment may be entered thereon in
any court having jurisdiction
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thereof. If a party is found to be in default hereunder, the
non-defaulting party's reasonably incurred costs associated with the
arbitration, including reasonable attorneys' fees, shall be paid by the
defaulting party.
15.4 **Material Redacted**
15.5 Exception. Either party may at any time, without inconsistency with this
Article 15, seek from a court of competent jurisdiction any equitable,
interim, or provisional relief to avoid irreparable harm or injury. This
Article 15 shall not be construed to modify or displace the ability of the
parties to effectuate any termination contemplated in Article 16 below.
ARTICLE 16 - TERMINATION
16.1 Failure to Pay/Insolvency. Either party may, at its option, immediately
cancel all or any portion of this Agreement if the other party: (A) fails
to make any of the required payments or credits when due, unless cured
within ten (10) calendar days of such payment due date; (B) makes any
agreement with creditors due to its inability to make timely payments of
its debts; (C) enters into bankruptcy or liquidation whether involuntary
or voluntary (provided, in the event of an involuntary proceeding, the
same shall not have been dismissed within 60 days); (D) becomes insolvent;
or (E) becomes subject to the appointment of a receiver of the whole or
material part of its assets. If such cancellation should occur, Copa shall
not be relieved of its payment obligation for Services rendered hereunder
prior to such cancellation.
16.2 Material Provisions. Without limiting the provisions of Paragraph 16.1
above and excluding any other remedies provided elsewhere in this
Agreement, either party may cancel this Agreement upon sixty (60) calendar
days written notice to the other for failure to comply with any material
provision of this Agreement, unless the failure shall have been cured or
the party in breach has substantially effected all acts required to cure
the failure prior to such ninety (690) calendar days.
16.3 Work in Process. Upon the expiration or cancellation of this Agreement, GE
shall complete all work in process in a diligent manner under the terms of
this Agreement provided that Copa has deposited sufficient monies with GE
to pay the estimated charges for all such work, in accordance with the
prices set forth in Exhibit A.
16.4 GE shall, upon receipt of Copa's written request, promptly deliver all
Copa's Engines, parts and related documentation to Copa.
16.5 Reconciliation of MCPH Payments. In the event this Agreement is
terminated, GE will calculate reconciliation for each Engine covered by
this Agreement as set forth in Paragraph 1.3.1.2 of Exhibit A to this
Agreement. Based on this calculation and at its option, GE shall invoice
Copa an amount to be paid by Copa within thirty (30) days of the date of
invoice.
16.6 **Material Redacted**
16.7 Survival. Termination of this Agreement shall not terminate the rights and
obligations of the parties accruing prior to such termination. The
provisions of Articles 11, 17 and 18 shall survive termination of this
Agreement.
ARTICLE 17 - NONDISCLOSURE OF PROPRIETARY DATA
17.1 Non-Disclosure. The existence of this Agreement and its general purpose
may be stated to others by either of the parties without approval from the
other, except, that the terms of this Agreement and any knowledge or
information which either party may disclose to the other party with
respect to pricing,
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design, manufacture, sale, use, repair, overhaul or Service of Engines,
shall be deemed to be proprietary information, and shall be held in
confidence by the receiving party. Such information shall not be
reproduced, used or disclosed to others by receiving party without the
disclosing party's prior written consent, except to the extent required by
government agencies and courts for official purposes. Disclosure to such
government agencies and courts shall be made only (A) upon thirty (30)
calendar days advance written notice by the receiving party to the other
party of such disclosure, so as to provide that other party the ability to
obtain appropriate protective orders, and (B) with a suitable restrictive
legend limiting further disclosure.
17.2 Exceptions. The preceding Paragraph 17.1 shall not apply to information
which (A) is or becomes part of the general public knowledge or literature
otherwise than as a result of breach of the receiving party's obligations
hereunder, or (B) was, as shown by written records, known to the receiving
party prior to receipt from other party, or (C) is disclosed without
restriction to the receiving party by a third party having the right to do
so.
17.3 Trademarks. Nothing contained in this Agreement shall convey to either
party the right to use the trademarks of the other, or convey or grant to
either Party any license under any patent owned or controlled by the other
party.
ARTICLE 18 - WARRANTY
18.1 **Material Redacted**
18.2 **Material Redacted**
18.3 **Material Redacted**
18.4 **Material Redacted**
18.5 **Material Redacted**
18.6 **Material Redacted**
18.7 **Material Redacted**
ARTICLE 19 - GENERAL PROVISIONS
19.1 Assignment. The assignment of all or any portion of this Agreement or any
purchase order or any right or obligation hereunder, by either party,
without the prior written consent of the other party, shall be void;
except that Copa's consent shall not be required for the substitution of
an affiliated company of GE in place of GE as the contracting party and/or
the recipient of payments pertaining to all or any portion of this
Agreement or any purchase order in connection with this Agreement. In the
event of any such substitution, Copa shall be so advised in writing.
19.2 Governing Law, Waiver of Immunity. The Agreement shall be interpreted and
applied in accordance with the substantive laws of the State of New York,
without giving effect to its conflicts or choice of law provisions, rules
or procedures. To the extent that Copa or any of its property becomes
entitled at any time to any immunity on the grounds of sovereignty or
otherwise from any legal action, suit, or proceeding of any nature, Copa
hereby irrevocably waives the application of such immunity and
particularly, the U.S. Foreign Sovereign Immunities Act, 28 U.S.C. 1602,
et. seq. insofar as such immunity relates to Copa's rights
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and obligations in connection with this Agreement.
19.3 Savings Clause. If any portion of this Agreement shall be determined to be
a violation of or contrary to any controlling law, rule or regulation
issued by a court of competent jurisdiction, then that portion shall be
unenforceable and deleted from this Agreement. However, the balance of
this Agreement shall remain in full force and effect.
19.4 Beneficiaries. Except as herein expressly provided to the contrary, the
provisions of the document are for the benefit of the parties hereto and
not for the benefit of any third party.
19.5 Controlling Language. The English language shall be used in the
interpretation and performance of this Agreement. All correspondence and
documentation arising out of or connected with this Agreement and any
related purchase order(s), including but not limited to Engine records and
Engine logs shall be in the English language.
19.6 Non-Waiver of Rights and Remedies. Any failure or delay in the exercise of
rights or remedies hereunder shall not operate to waive or impair such
rights or remedies. Any waiver given shall not be construed to require
future or further waivers.
19.7 Titles/Subtitles. The titles and subtitles given to the sections of the
Agreement are for convenience only and shall not in any manner be deemed
to limit or restrict the context of the article or section to which they
relate. The words "herein", "hereof", "hereunder", "herewith", and similar
terms are not to be deemed restrictive and refer to the entire Agreement,
including all Exhibits.
19.8 Currency Judgment. This is an international transaction in which the
specification of United States Dollars is of the essence. No payments
required to be made under this Agreement shall be discharged by payments
in any currency other than United States Dollars, whether pursuant to a
judgment, arbitration award, or otherwise.
19.9 No Agency Fees. Copa represents and warrants that no officer, employee,
representative, or agent of Copa has been or will be paid a fee or
otherwise has received or will receive any personal compensation or
consideration by or from GE in connection with the obtaining, arranging or
negotiation of this Agreement or other documents entered into or executed
in connection herewith. GE represents that, unless otherwise disclosed in
writing prior to the execution of this Agreement and approved by Copa's
duly authorized representative, GE has not and will not enter into any
agreement with any third party for the purpose of facilitating, assisting,
or coordinating, in any way, shape or form, any aspect of this Agreement
(except in the case of attorneys or other counselors whose function is to
review and advise GE on the terms of this Agreement), including but not
limited to the initial meetings which led to the negotiation of this
Agreement.
19.10 On-Site Representative. Subject to the following conditions, GE agrees to
ensure that adequate non-exclusive workspace, parking, and local telephone
and facsimile access are available for Copa's on-site representative
assigned to the Designated Repair Station. Costs incurred by such on-site
representative, including without limitation, long distance telephone
charges, fax, or computer charges, shall be the responsibility of Copa,
and if charged to GE in the first instance, shall be invoiced to Copa.
19.11 No Agency. Nothing in this Agreement shall be interpreted or construed to
create a partnership, agency, or joint venture between GE and Copa.
19.12 Entire Agreement. This Agreement, together with Exhibits A through E,
contains and constitutes the entire understanding and agreement between
the Parties hereto respecting the subject matter hereof, and supersedes
and cancels all previous negotiations, agreements, commitments, and
writings in connection herewith. This Agreement may not be released,
discharged, abandoned, supplemented, changed, or modified in any manner,
orally or otherwise, except by a writing of concurrent or subsequent date
signed
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and delivered by a duly authorized officer or representative of each of
the parties hereto making specific reference to this Agreement and the
provisions hereof being released, discharged, abandoned, supplemented,
changed, or modified.
19.13 Counterparts. This Agreement may be executed in one or more counterparts,
all of which counterparts shall be treated as the same binding agreement,
which shall be effective as of the date set forth on the first page
hereof, upon execution and delivery by each party hereto to the other
party of one or more such counterparts.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized officer or representatives who represent to each other and
both parties that each is employed in the capacity indicated below and has the
unequivocal authority to execute and deliver this Agreement, which shall be
effective as of the date first above written.
GE ENGINE SERVICES, INC. COMPANIA PANAMENA DE AVIACION, S.A
BY: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ BY: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------- ---------------------------------
PRINTED NAME: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ PRINTED NAME: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
TITLE: GM, Sales, Latin America TITLE: CEO
DATE: 3/6/03 DATE: 3/6/03
24
EXHIBIT A
**Material Redacted**
**5 pages**
25
SCHEDULE 1
TO
EXHIBIT A
**Material Redacted**
**2 pages**
26
SCHEDULE 2
TO
EXHIBIT A
**Material Redacted**
**2 pages**
27
SCHEDULE 3
TO
EXHIBIT A
**Material Redacted**
28
EXHIBIT B
**Material Redacted**
29
EXHIBIT C
**Material Redacted**
**2 pages**
30
EXHIBIT D
**Material Redacted**
31
EXHIBIT E
**Material Redacted**
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