Exhibit 10.6
Page 1 of 12
* Confidential treatment has been requested for portions of this exhibit. The
copy filed herewith omits the information subject to the confidentiality
request. Omissions are designiated as "*". A complete version of this exhibit
has been filed separately with the Securities and Exchange Commission.
Novation and Amendment Agreement
between
Rolls-Royce Brazil Ltda.
and
MTU Aero Engines GmbH
and
TAM Linhas Aereas S.A.
Page 2 of 12
THIS NOVATION AND AMENDMENT AGREEMENT (the "Agreement") is made the 8th day of
November 2001
BETWEEN:
A. MTU Aero Engines GmbH (formerly: MTU Motoren- und Turbinen-Union Munchen
GmbH) of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ("MTU");
B. Rolls-Royce Brazil Ltda. of Rua Dr. Cincinato Braga ▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇, ▇▇▇▇▇▇ ("Rolls Royce Brazil"); and
▇. ▇▇▇ Linhas Aereas S.A. (as successor to TAM - Transportes Aereos Regionais
S.A.) of Av Jurandir 856, ▇▇▇▇▇▇ ▇▇▇▇, Sao Paolo - SP - CEP 04072-000 Sao
Paulo, Brazil ("TAM");
hereinafter individually referred to as a "Party" and collectively as the
"Parties"
1 Recitals
1.1 This novation and amendment agreement is supplemental both to an
agreement dated 14 September 2000 and made between MTU and TAM (the
"Contract") a copy of which is set out in Exhibit 1 to this Agreement
and to an agreement of even date herewith between MTU and Rolls-Royce
plc for the transfer of MTU's business as set out in the Contract to
Rolls Royce Brazil.
1.2 MTU has subcontracted some or all of the Services (as defined in the
Contract) to third parties including Rolls Royce Brazil.
1.3 MTU wishes to be released and discharged from the Contract and TAM has
agreed to release and discharge MTU upon Rolls Royce Brazil's
undertaking to perform the Contract and to be bound by the terms of
the Contract in place of MTU and the provisions of this Agreement.
1.4 Certain Services are presently being performed pursuant to the
Contract by MTU and/or its subcontractors. As a result certain
Engines, Modules or Parts are at the date hereof in the custody of
Rolls Royce Brazil pursuant to subcontract arrangements between MTU
and Rolls Royce Brazil. That state of affairs is expected to remain
the case on the Effective Date.
1.5 The Parties do not wish accrued rights, obligations and liabilities
under the Contract immediately prior to the Effective Date to be
affected by the present novation and amendment but wish Rolls Royce
Brazil effectively to assume the obligations of MTU (subject to the
amendments provided herein) for the purposes of Services commenced on
or after the Effective Date.
NOW IT IS AGREED as follows:
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1 Effective Date
This Agreement shall become effective immediately upon the satisfaction of
the conditions referred to in Exhibit 3 (the "Effective Date"). Promptly
after the occurrence of the Effective Date, MTU shall notify in writing
each of the Parties to this Agreement of such occurrence.
2 Novation
In consideration of the sum of US$1.00 paid by each of Rolls Royce Brazil
and MTU to TAM, the receipt whereof is hereby acknowledged, and for other
good and valuable consideration (the receipt and adequacy of which is
hereby acknowledged), each of the Parties agrees that with effect from the
Effective Date:
(a) Rolls Royce Brazil agrees to be substituted for MTU as a party to the
Contract and in that capacity to perform all future obligations and to
assume all future duties and liabilities of MTU under the Contract (as
amended pursuant to Clause 3 below (the "Amended Contract")) subject
to the terms and conditions of this Agreement;
(b) MTU hereby agrees to transfer to Rolls Royce Brazil all its future
rights and obligations in, to and under the Amended Contract subject
to the terms and conditions of this Agreement;
(c) subject to Clauses 4 and 5 below, MTU releases and discharges TAM from
all its obligations, duties and liabilities to MTU under the Amended
Contract;
(d) subject to Clauses 4 and 5 below, TAM hereby releases and discharges
MTU from all its obligations, duties and liabilities to TAM under the
Amended Contract;
(e) TAM hereby agrees to perform in favour of Rolls Royce Brazil all of
its obligations, and assume all of its duties and liabilities under
the Amended Contract on and after the Effective Date and to perform
and assume those obligations, duties and liabilities of "the Operator"
under the Amended Contract; and
(f) TAM consents to and accepts the assumption by Rolls Royce Brazil of
MTU's future rights and obligations, duties and liabilities under the
Amended Contract and its agreement to perform the obligations of
"MTU-M", "MTU-H" and "MTU" under the Amended Contract.
3. Amendment
With effect from the Effective Date the Contract will be amended as set out
in Exhibit 2 to this Agreement and the Parties confirm the terms of the
Amended Contract for the purposes of Services to be commenced on or after
the Effective
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Date. Except as expressly set out in this Agreement, the Contract shall
remain in full force and effect in accordance with its terms for the
purposes of Services performed in whole or in part prior to the Effective
Date.
4. Simultaneous Events
Each of the events described in Clauses 2 and 3 above shall occur
simultaneously.
5. Preservation of existing rights and liabilities
Notwithstanding the provisions of this Agreement and of Clause 2.1 in
particular, the respective rights, obligations and liabilities of TAM and
MTU as against each other under the Contract immediately prior to the
Effective Date in respect of any Services (as defined in the Contract)
whether previously performed and invoiced or in progress at the Effective
Date shall not be affected by this Agreement or the occurrence of the
Effective Date. The rights, duties and obligations of TAM and MTU with
respect to Services performed in whole or in part prior to the Effective
Date remain governed by the Contract until completion of all such Services.
Neither Rolls Royce Brazil nor any member of the Rolls-Royce plc group of
companies assumes any liability under the Contract or under the Amended
Contract for any Services performed in whole or in part prior to the
Effective Date, or for any default, neglect or failure in the performance
or purported performance of such Services, whether or not apparent at the
Effective Date, or for breach of any other obligation associated with the
Contract including without limitation the payment of any sums due or the
return of Supplies (as defined in the Contract) or any other property upon
completion of any such Services. This Clause operates without prejudice to
any right any party may have to seek relief, recourse or indemnity against
any other party under any existing contractual or sub-contractual
arrangement or under the general law.
6. Representations and Warranties
Each of the Parties acknowledges that the other parties have entered into
this Agreement in full reliance on representations by it in the following
terms and it now warrants to each of the other Parties that the following
statements are, at the date hereof, true and accurate:
(a) It is a limited liability company duly constituted and validly
existing under the laws of its country of incorporation, its
obligations under and pursuant to this Agreement constitute its legal,
valid, binding and enforceable obligations (save to the extent that
enforcement may be limited by applicable bankruptcy, insolvency,
moratorium or other laws for the protection of creditors and debtors
generally and general principles of equity) and that this Agreement
has been duly executed by it;
(b) The execution and delivery by it of this Agreement, the consummation
by it of any of the transactions contemplated hereby compliance by it
with any of
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the terms and conditions hereof do not require any consent of any
trustee or holder of any indebtedness or other obligation of it,
violate any term or condition of its constitutive documents,
contravene any provision of or constitute or will constitute a default
under or pursuant to or result in any breach of or the creation of any
lien (other than as contemplated under this Agreement) on or over any
of its assets or any other agreement or instrument to which it is a
party or by which it is bound;
(c) No consent of, giving of notice to, registration with or taking of any
other action in respect of any government entity in its country of
incorporation is required for the execution by it of this Agreement.
7. Acknowledgement
Rolls Royce Brazil acknowledges and agrees for the benefit of TAM that the
transfer and novation contemplated by this Agreement shall not diminish any
rights of TAM under the Amended Contract (as novated hereunder) and TAM
shall not be under any greater financial obligation under the Amended
Contract (as novated hereunder) than, on the basis of law and regulation in
effect on the Effective Date, it would have been under had the transfer and
novation contemplated herein not taken place.
8. Expenses
MTU agrees with TAM that MTU shall pay or reimburse TAM for all reasonable
legal costs and expenses incurred by TAM with ▇▇▇▇▇▇▇▇ Chance in London in
connection with the negotiation and execution of this Agreement and in
taking any action required pursuant to this Agreement.
9. Miscellaneous
9.1 Severability, Amendment, Construction and Applicable Law. Any provision of
this Agreement which is prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction. No term or provision of this Agreement may be
changed, waived, discharged or terminated orally, but only by a written
instrument signed by the party against which the enforcement of the change,
waiver, discharge or termination is sought. The captions in this Agreement
are for convenience of reference only and shall not define or limit any of
the terms or provisions hereof.
9.2 Governing Law. THIS AGREEMENT SHALL IN ALL RESPECTS BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH. THE LAWS OF ENGLAND INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE.
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9.3 Notices. Each notice, request, direction or other communication under this
Agreement shall:
(a) be in writing delivered personally or by first-class prepaid letter
(airmail if available) or facsimile;
(b) be deemed to have been given:
(i) in the case of a facsimile, on confirmation by the recipient of
actual receipt or, if earlier, on actual or deemed receipt by the
recipient of a confirmation letter; and
(ii) in the case of a letter when delivered personally or upon actual
receipt if sent by post; and
(c) be sent:
(i) to MTU:
MTU Aero Engines GmbH
Attn: General Counsel
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
Tel: +49-89-1489 3815
Fax: +49-89-1489 5814
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇
With copy to:
MTU Maintenance Hannover GmbH
Attn: General Counsel
Munchner ▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇-▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇-▇▇-▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
(ii) to Rolls Royce Brazil:
Rolls-Royce Brasil
Rua Dr. Cincinato Braga ▇▇,
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇
Tel: ▇▇ ▇▇ ▇▇▇▇-▇▇▇▇
Fax: ▇▇ ▇▇ ▇▇▇▇-▇▇▇▇
Attn: Customer Business Director
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(iii) to TAM:
TAM-Linhas Aereas S.A.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇
▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇
▇▇▇ 04072-000
▇▇▇▇▇▇ ▇▇▇▇
Sao Paulo-SP
Brazil
Tel: ▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇
Fax: ▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇ Maluf, Contracts Director
or to such other address or facsimile number for a party as is notified from
time to time by such party hereto to the other Parties hereto.
All communications and documents must be in English.
9.4 Counterparts. At least four counterparts of this Agreement have been
executed by the Parties hereto, each of which shall be deemed to be an
original but all of which take together shall constitute a single
agreement.
9.5 Submission to Jurisdiction; Waiver of Immunities; Service of Process.
(a) The courts of England are to have jurisdiction to settle any disputes
(including claims for set-off and counterclaims) which may arise in
connection with the legal relationships established by this Agreement
or otherwise arising in connection with this Agreement. Rolls Royce
Brazil and MTU shall not be prevented from taking proceedings relating
to any dispute as aforesaid in any courts with jurisdiction including,
without limitation, the courts of any jurisdiction where TAM maintains
its headquarters (City of Sao Paulo, State of Sao Paulo, Central
Courthouse).
(b) All parties irrevocably waive any objection on the grounds of venue or
forum non conveniens, lis alibi pendens or similar grounds, and
consent to service of process by mail or in any other manner permitted
by applicable law.
(c) Each party hereto irrevocably and unconditionally:
(i) agrees that if any other party brings legal proceedings against
it or its assets in relation to this Agreement, no immunity from
such legal proceedings (which will be deemed to include, without
limitation, suit, attachment prior to judgment, other attachment,
the obtaining of judgment, execution or other enforcement) will
be claimed by or on behalf of itself or with respect to its
assets;
Page 8 of 12
(ii) waives any such right of immunity which it or its assets now has
or may in the future acquire; and
(iii) submits to the jurisdiction of the English Courts for any matter
relating to this Agreement.
(d) MTU and TAM shall at all times maintain an agent for service of
process in England. Such agent shall be, in the case of MTU, C & C
Legal Services Limited of ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇ (any such
process to be marked for the attention of ▇▇▇▇▇▇ ▇▇▇▇▇▇ and/or ▇▇▇▇▇▇
▇▇▇▇▇▇) and shall be, in the case of ▇▇▇, ▇▇▇▇▇▇▇▇ Chance Secretaries
Limited currently at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇.
Rolls Royce Brazil hereby irrevocably agrees that any writ, judgment
or other notice of legal process shall be sufficiently served on Rolls
Royce Brazil if delivered to the registered office for the time being
of Rolls Royce plc and marked for the attention of the Company
Secretary and with copy to Rolls Royce Brazil, for the attention of
the Customer Business Director, at Rua Dr. Cincinato Braga, 47, Sao
▇▇▇▇▇▇▇▇ do ▇▇▇▇▇ - SP, ▇▇▇▇▇-▇▇▇ ▇▇▇▇▇▇. Any writ, judgment or other
notice of legal process shall be sufficiently served on MTU or, as the
case may be, TAM if delivered to its agent specified above at its
address for the time being. MTU and TAM undertake not to revoke the
authority of their agent specified above and if for any reason such
agent no longer serves as its agent to receive service of process,
that party shall promptly appoint another such agent and advice the
other parties thereof.
9.6 Further Assurances. Each party hereto shall promptly and duly execute and
deliver to the other parties such further documents and promptly take such
further action not inconsistent with the terms hereof as any other party
may from time to time reasonably request in order to more effectively carry
out the intent and purpose of this Agreement or to perfect and protect the
rights created or intended to be created hereunder.
9.7 Successors. This Agreement shall be binding on and shall inure to the
benefit Rolls Royce Brazil, MTU and TAM and their respective successors and
permitted assigns.
9.8 Language. While this Agreement may be translated into another language, the
English language version shall govern in all respects.
9.9 Third Parties. Nothing in this Agreement is intended to confer on any
person any right to enforce any term of this Agreement which that person
would not have had but for the Contract (Rights of Third Parties) ▇▇▇ ▇▇▇▇.
IN WITNESS whereof the parties, acting through their duly authorised
representatives, have caused this Agreement to be signed in their respective
names on the date first written above.
Exhibit 1 to Schedule A / page 1 of 1
EXHIBIT 1
TAY ENGINE MAINTENANCE AGREEMENT DATED 14 SEPTEMBER 2000
EXHIBIT 2
AMENDED CONTRACT
With effect from the Effective Date the Contract as set out in Exhibit 1 above
is amended as follows in respect of Services commenced on or after the Effective
Date:
1. any reference therein in whatever terms to the Contract shall be
construed as a reference to the Contract as novated and amended by
this Agreement;
2. any references therein to "MTU-M", "MTU-H", "MTU Maintenance do Brasil
Ltda." or "MTU Brasil" shall be construed as a reference to
"Rolls-Royce Brazil Ltda.", otherwise abbreviated to "RRB";
3. any references therein to "TAM-Transportes Aereos Regionais S.A." or
"TAM- Regionais S.A." shall be construed as a reference to "TAM-Linhas
Aereas S.A.";
4. the second sentence of Clause 2.8 shall be deleted in its entirety;
5. Clause 2.9 shall be deleted in its entirety and shall be replaced by
the words "Intentionally Left Blank";
6. Clause 4.1 shall be deleted in its entirety and replaced with the
following:
"4.1 Rolls Royce Brazil shall at its own cost and expense be the
importer/exporter of record of all Engines, Modules, Parts and
other items imported into/exported from Brazil under this
Agreement subject to the adjustments specified in Clause 10.2.
Delivery of Engines, Modules, Parts and other items requiring
Work to Rolls Royce Brazil shall be the obligation of the
Operator."
7. reference in Clause 5.7(iii) to "Germany" shall be deleted and
replaced by the words "United Kingdom";
8. In Clause 9.2 the words "US Dollars" shall be deleted and replaced
with "Brazilian national currency (Reais)";
9. At Clause 9.3, the bank account details are deleted and replaced by;
Bank: *
Branch office number: *
Current Account number: *
City: *
10. the fourth paragraph of Clause 9.3 commencing "Operator shall promptly
furnish..." shall be deleted and replaced with the following:
"Operator shall promptly furnish copies of the documents evidencing
wire transfer of all such payments to the attention of Director of
Finance and Administration."
11. A new Clause 9.3.1 shall be inserted at the end of Clause 9.3 as
follows:
"9.3.1 The currency exchange rate applicable to the invoice
preparation shall be the rate at the *
12. Clause 10.1 shall be deleted, and replaced with the words
"Intentionally left blank".
13. The first two paragraphs of Clause 10.2 shall be deleted in their
entirety and shall be replaced with the following:
"10.2.1 Each of the Operator and Rolls Royce Brazil agree and
acknowledge that the Fixed Price for Midlife Inspection and
the Fixed Price for Overhaul specified in Appendix B are
calculated on the basis of * per Flight Hour which *
In circumstances where:
10.2.2 (a) new taxes (other than the Relevant Taxes) are imposed in
Brazil after November 2001, in respect of the
performance of the Services by Rolls Royce Brazil; or
(b) the rate at which any of the Relevant Taxes are imposed,
increases after November 2001; or
(c) the rate at which any of the Relevant Taxes are imposed,
is reduced after November 2001;
then each of the Operator and Rolls Royce Brazil agree that
the rate of * shall:
(i) in the case of Clause 10.2.2 (a) or (b), be increased
with effect from the date of imposition such new tax or
increased tax rate to reflect the increased tax
liability of Rolls Royce Brazil as a consequence
thereof; and
(ii) in the case of Clause 10.2.2 (c), be reduced with effect
from the date of the reduction of such tax rate, to
reflect the reduced tax liability of Rolls Royce Brazil
as a consequence thereof.
14. Clause 10.4 shall be deleted in its entirety.
15. Clause 13.5 shall be deleted in its entirety and shall be replaced by
the following:
"For the purposes of this Clause 13, the term "Indemnified Parties"
shall also include the companies of the Rolls-Royce plc group of
companies";
16. Clause 15.4 shall be deleted in its entirety;
17. paragraphs 3 and 4 of Clause 18 shall be deleted and shall be replaced
by the following:
"For Rolls-Royce Brazil Ltda.:
Rolls-Royce Brazil Ltda.
Attn: Customer Business Director
Address: Rolls Royce Brazil
Rua Dr. Cincinato Braga 47
Sao ▇▇▇▇▇▇▇▇ do ▇▇▇▇▇
Brazil
Phone: + ▇▇ ▇▇ ▇▇▇▇-▇▇▇▇
Fax: + ▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇
E-mail: [____________________]"
18. The second paragraph of Clause 1.3 of Appendix B shall be amended by
adding the following sentence at the end of each such paragraph:
*
*
19. The first paragraph of Clause 2 of Appendix B shall be deleted. The
second paragraph of Clause 2 of Appendix shall be deleted in its
entirety and shall be replaced with the following:
*"RRB shall invoice to the Operator (in addition to the Fixed Price
for Overhaul) in respect of each Engine sent by the Operator to RRB
for the performance of an Overhaul (but not in respect of Midlife
Inspections) *
20. *In Appendix C "Escalation Formulae", paragraphs 2 (Material Price
Escalation) and 3.1, "Fixed Price Escalation" (in the definition of
the term M1), references to [ * ] are deleted and replaced by [ * ]
EXHIBIT 3
CONDITIONS PRECEDENT
1. Confirmation in writing from each of TAM and Rolls Royce Brazil that the
lease terms in respect of 8 engine finance leases entered into between TAM
and Rolls Royce Partners Finance Limited have been extended for a period of
three years.
2. Execution of the Assignment, Assumption and Amendment Agreement relating to
certain spare engine lease agreements to be entered into between MTU, TAM
and Rolls Royce Leasing Limited.
3. Execution of the Agreement for Sale of Engine Maintenance Contract to be
entered into between MTU and Rolls-Royce plc.