<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10 - Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended...............June 30, 1996...........
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from .................... to ..............
Commission file number ................ 0-11350
INTERNATIONAL LEASE FINANCE CORPORATION
(Exact name of registrant as specified in its charter)
CALIFORNIA 22-3059110
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1999 AVENUE OF THE STARS LOS ANGELES, CALIFORNIA 90067
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code
(310) 788-1999
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
------------ ------------
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at July 30, 1996
----- ----------------------------
COMMON STOCK, NO PAR VALUE 35,818,122
<PAGE>
INTERNATIONAL LEASE FINANCE CORPORATION AND SUBSIDIARIES
INDEX
<TABLE>
<CAPTION>
Part I. Financial Information: Page No.
<S> <C>
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets
June 30, 1996 and December 31, 1995............................. 3
Condensed Consolidated Statements of Income
Three Months Ended June 30, 1996 and 1995....................... 4
Condensed Consolidated Statements of Income
Six Months Ended June 30, 1996 and 1995......................... 5
Condensed Consolidated Statements of Cash Flows
Six Months Ended June 30, 1996 and 1995......................... 6
Note to Condensed Consolidated Financial Statements................. 8
Item 2. Management's Discussion and Analysis of the
Financial Condition and Results of Operations................ 9
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K............................. 12
Signatures.......................................................... 13
Index to Exhibits................................................... 14
</TABLE>
<PAGE>
INTERNATIONAL LEASE FINANCE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
----------- ------------
(Unaudited)
<S> <C> <C>
ASSETS
Cash, including interest bearing accounts
of $27,417 (1996) and $59,624 (1995) $ 33,513 $ 87,097
Current income taxes receivable 51,739 30,803
Notes receivable 536,633 423,799
Net investment in finance and sales-
type leases 83,193 86,237
Flight equipment under operating leases 13,442,095 12,015,308
Less accumulated depreciation 1,384,891 1,252,438
----------- -----------
12,057,204 10,762,870
----------- -----------
Deposits on flight equipment purchases 983,263 805,570
Accrued interest, other receivables
and other assets 82,716 87,991
Investments 17,796 17,311
Deferred debt issue costs-less
accumulated amortization of $37,272
(1996) and $30,778 (1995) 25,640 27,504
----------- -----------
$13,871,697 $12,329,182
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Accrued interest and other payables $ 173,225 $ 196,676
Debt financing, net of deferred debt
discount of $21,899 (1996) and $15,692
(1995) 9,129,786 7,804,210
Capital lease obligations 1,042,148 1,088,424
Security & other deposits on flight
equipment 591,054 498,016
Rentals received in advance 85,554 80,811
Deferred income taxes 750,101 660,938
SHAREHOLDERS' EQUITY
Preferred stock--no par value; 20,000,000
authorized shares
Market Auction Preferred Stock, $100,000 per
share liquidation value; Series A,B,C,D,E
F,G and H (1996 and 1995) each having 500
shares issued and outstanding 400,000 400,000
Common stock--no par value; 100,000,000
authorized shares, 35,818,122 (1996
and 1995) issued and outstanding 3,582 3,582
Additional paid-in capital 579,988 580,085
Retained earnings 1,116,259 1,016,440
----------- -----------
2,099,829 2,000,107
----------- -----------
$13,871,697 $12,329,182
=========== ===========
</TABLE>
SEE NOTE TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
-3-
<PAGE>
INTERNATIONAL LEASE FINANCE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED JUNE 30, 1996 AND 1995
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
1996 1995
-------- --------
(Unaudited)
<S> <C> <C>
REVENUES:
Rentals of flight equipment $356,697 $305,497
Flight equipment marketing 46,455 50,057
Interest and other 12,465 11,777
-------- --------
415,617 367,331
-------- --------
EXPENSES:
Interest 145,461 136,511
Depreciation 120,930 103,888
Rent expense 10,314 2,234
Provision for overhaul 20,047 17,869
Selling, general & administrative 9,132 8,272
-------- --------
305,884 268,774
-------- --------
INCOME BEFORE INCOME TAXES 109,733 98,557
Provision for income taxes 41,137 39,118
-------- --------
NET INCOME $ 68,596 $ 59,439
======== ========
</TABLE>
SEE NOTE TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
-4-
<PAGE>
INTERNATIONAL LEASE FINANCE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND 1995
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
1996 1995
-------- --------
(Unaudited)
<S> <C> <C>
REVENUES:
Rentals of flight equipment $693,870 $585,912
Flight equipment marketing 69,618 62,502
Interest and other 23,340 22,823
-------- --------
786,828 671,237
-------- --------
EXPENSES:
Interest 280,551 253,827
Depreciation 233,834 202,175
Rent expense 20,828 3,024
Provision for overhaul 39,323 31,321
Selling, general & administrative 19,110 16,448
-------- --------
593,646 506,795
-------- --------
INCOME BEFORE INCOME TAXES 193,182 164,442
Provision for income taxes 71,683 63,351
-------- --------
NET INCOME $121,499 $101,091
======== ========
</TABLE>
SEE NOTE TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
-5-
<PAGE>
INTERNATIONAL LEASE FINANCE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND 1995
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
1996 1995
----------- -----------
(Unaudited)
<S> <C> <C>
OPERATING ACTIVITIES:
Net Income $ 121,499 $ 101,091
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation of flight equipment 233,834 202,175
Deferred income taxes 89,163 94,388
Amortization of deferred debt
issue costs 4,620 5,164
Gain on sale of flight equipment
included in amount financed (2,262) (24,933)
Increase in notes receivable (59,836) (8,553)
Equity in net (income) loss of affiliates (485) 69
Changes in operating assets and liabilities:
(Increase) decrease in accrued interest,
other receivables and other assets 5,275 (3,050)
Increase in current income taxes receivable (20,936) (33,979)
Increase (decrease) in accrued interest and
other payables (23,451) 25,145
Increase in rentals received in advance 4,743 14,181
----------- -----------
Net cash provided by operating activities 352,164 371,698
----------- -----------
INVESTING ACTIVITIES:
Acquisition of flight equipment
for operating leases (1,941,942) (2,556,741)
(Increase) decrease in deposits and
progress payments (177,693) 158,675
Proceeds from disposal of flight
equipment-net of gain 335,646 141,047
Collections on notes receivable 27,392 32,000
Advances on notes receivable (3,300)
Collections on finance and sales-type leases 3,044 2,645
----------- -----------
Net cash used in investing activities (1,753,553) (2,225,674)
----------- -----------
FINANCING ACTIVITIES:
Proceeds from debt financing 2,826,327 4,219,654
Payments in reduction of debt financing (1,540,820) (2,418,686)
Proceeds from sale of MAPS preferred stock
(net of issue costs) 98,476
Debt issue costs (2,853) (12,965)
Change in unamortized debt discount (6,207) (8,097)
Increase (decrease) in customer deposits 93,038 (10,888)
Payment of common and preferred dividends (21,680) (15,791)
----------- -----------
Net cash provided by financing activities 1,347,805 1,851,703
----------- -----------
Decrease in cash (53,584) (2,273)
Cash at beginning of period 87,097 52,891
----------- -----------
Cash at end of period $ 33,513 $ 50,618
=========== ===========
</TABLE>
-6-
<PAGE>
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
<TABLE>
<CAPTION>
1996 1995
------- -------
(Dollars in thousands)
(Unaudited)
<S> <C> <C>
Cash paid during the period for:
Interest (net of amount capitalized
$24,643 (1996)and $27,286 (1995)) $ 274,683 $ 223,909
Income taxes 3,456 2,942
</TABLE>
1996:
Notes in the amount of $80,390 were received as partial payment in exchange
for flight equipment sold with a book value of $78,128.
1995:
Notes in the amount of $134,600 were received as partial payment in
exchange for flight equipment sold with a book value of $109,667. Flight
equipment was received in exchange for notes receivable in the amount of
$64,576.
SEE NOTE TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
-7-
<PAGE>
INTERNATIONAL LEASE FINANCE CORPORATION AND SUBSIDIARIES
NOTE TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1996
(UNAUDITED)
A. The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles
for interim financial information and in accordance with the instructions to
Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include
all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, all adjustments (consisting only of normal recurring accruals)
considered necessary for a fair presentation have been included. Certain
reclassifications have been made to the 1995 condensed consolidated
financial statements to conform to the 1996 presentation. Operating results
for the three and six month periods ended June 30, 1996 are not necessarily
indicative of the results that may be expected for the year ended December
31, 1996. For further information, refer to the consolidated financial
statements and footnotes thereto included in the Company's annual report on
Form 10-K for the year ended December 31, 1995.
-8-
<PAGE>
INTERNATIONAL LEASE FINANCE CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FINANCIAL CONDITION
The Company borrows funds for the purchase of flight equipment, including
the making of progress payments during the construction phase, principally on an
unsecured basis from various sources. The Company's debt financing was comprised
of the following at the following dates:
<TABLE>
<CAPTION>
Dec. 31, June 30,
1995 1996
---------- -----------
(Dollars in thousands)
<S> <C> <C>
Public term debt with single
maturities $3,550,000 $ 3,550,000
Public medium-term notes with
varying maturities 2,403,770 2,494,070
Capital lease obligations 1,088,424 1,042,148
Bank and other term debt 22,502
---------- ----------
Total term debt 7,064,696 7,086,218
Commercial paper 1,843,630 2,899,615
Bank lines of credit 208,000
Less: Deferred debt discount (15,692) (21,899)
---------- -----------
Total Debt Financing $8,892,634 $10,171,934
========== ===========
Composite interest rate 6.47% 6.22%
Percentage of total debt at fixed rates 75.59% 66.58%
Composite interest rate on fixed rate
debt 6.66% 6.64%
Bank prime rate 8.50% 8.25%
</TABLE>
The interest on substantially all the public debt (exclusive of the
commercial paper) is fixed for the term of the note. The Company has committed
revolving loans and lines of credit with 42 banks aggregating $2.4 billion and
uncommitted lines of credit with three banks aggregating $200 million. Bank debt
principally provides for interest rates that vary according to the pricing
option then in effect and range from prime, .25% to .30% over LIBOR or .395%
over CD rates, at the Company's option. Bank financings are subject to facility
fees of up to .10% of amounts available.
The Company has an effective shelf registration with respect to $2.11
billion of debt securities, under which $500 million of notes were sold through
June 30, 1996. Additionally, a $750 million Medium Term Note Program has been
implemented under the shelf registration, under which $284 million has been sold
through June 30, 1996.
The Company has an option to enter into an export credit lease facility in
the amount of $379 million which provides ten year, amortizing loans in the form
of capital lease obligations. The interest rate on 62.5% of the financing
available is 6.55%, the interest rate on 22.5% of the financing available varies
between 6.18% and 6.89%. The remaining 15% of the financing available provides
for LIBOR based pricing.
The Company believes that the combination of internally generated funds and
debt financing currently available to the Company will allow the Company to meet
its capital requirements for at least the next 12 months.
-9-
<PAGE>
INTERNATIONAL LEASE FINANCE CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS-Three months ended June 30, 1996 versus 1995.
- ---------------------
The increase in revenues from the rentals of flight equipment from $305.5
million in 1995 to $356.7 million in 1996, a 17% increase, is attributable, in
part, to the increase in the size of the fleet of leased flight equipment
subject to operating leases from 290 at June 30, 1995 to 302 at June 30, 1996, a
4% increase. The increase is also attributable to the increase in the relative
cost of the fleet.
In addition to its leasing operations, the Company actively engages in the
marketing of flight equipment from its own portfolio as well as on a principal
and commission basis. Revenue from such flight equipment marketing decreased
from $50.1 million in 1995 to $46.5 million in 1996 as a result of the nature of
the related flight equipment marketed. Flight equipment marketing revenue
consisted of the following number of transactions in each period:
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Sales of flight equipment 1 2
Commissions 2 2
Disposition of leased flight equipment 15 20
</TABLE>
Expenses as a percentage of total revenues increased to 73.6% in the second
quarter of 1996 compared to 73.2% in the second quarter of 1995. Interest
expense increased from $136.5 million in 1995 to $145.5 million in 1996
primarily as a result of an increase in gross debt outstanding at quarter end
from $9.4 billion at 1995 to $10.2 billion at 1996 to finance aircraft
acquisitions. In addition, the Company's composite borrowing rate fluctuated as
follows:
<TABLE>
<CAPTION>
1996 1995 (Decrease)
---- ---- ----------
<S> <C> <C> <C>
Beginning of Quarter 6.31% 6.69% (.38%)
End of Quarter 6.22% 6.59% (.37%)
---- ---- ----
Average 6.27% 6.64% (.37%)
</TABLE>
Depreciation of flight equipment increased from $103.9 million in 1995 to
$120.9 million in 1996 due to the addition of aircraft.
Rent expense increased from $2.2 million in 1995 to $10.3 million in 1996
as a result of a sale-leaseback transaction for seven aircraft completed in
December 1995.
Provision for overhauls increased from $17.9 million in 1995 to $20.0
million in 1996 due to an increase in the number of aircraft from which the
Company collects overhaul reserves and, therefore, an increase in the total
number of hours flown for which an overhaul reserve is provided.
-10-
<PAGE>
INTERNATIONAL LEASE FINANCE CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS-Six months ended June 30, 1996 versus 1995.
- ---------------------
The increase in revenues from the rentals of flight equipment from $585.9
million in 1995 to $693.9 million in 1996, an 18% increase, is attributable, in
part, to the increase in the size of the fleet of leased flight equipment
subject to operating lease from 290 at June 30, 1995 to 302 at June 30, 1996, a
4% increase. The increase is also attributable to the increase in the relative
cost of the fleet.
In addition to its leasing operations, the Company actively engages in the
marketing of flight equipment from its own portfolio as well as on a principal
and commission basis. Revenue from such flight equipment marketing increased
from $62.5 million in 1995 to $69.6 million in 1996 as a result of the nature of
the related flight equipment marketed. Flight equipment marketing revenue
consisted of the following number of transactions in each period:
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Sales of flight equipment 1 2
Commissions 8 2
Disposition of leased flight equipment 21 29
</TABLE>
Expenses as a percentage of total revenues decreased to 75.4% in the first
six months of 1996 compared to 75.5% in the first six months of 1995. Interest
expense increased from $253.8 million in 1995 to $280.6 million in 1996,
primarily as a result of an increase in gross debt outstanding at the six months
ended from $9.4 billion at 1995 to $10.2 billion at 1996 to finance aircraft
acquisitions. In addition, the Company's composite borrowing rate fluctuated as
follows:
<TABLE>
<CAPTION>
Increase/
1996 1995 (Decrease)
---- ---- --------
<S> <C> <C> <C>
Beginning of Six months 6.47% 6.41% .06%
End of Six months 6.22% 6.59% (.37%)
---- ---- ----
Average 6.35% 6.50% (.15%)
</TABLE>
Depreciation of flight equipment increased from $202.2 million in 1995 to
$233.8 million in 1996 due to the addition of aircraft.
Rent expense increased from $3.0 million in 1995 to $20.8 million in 1996
as a result of a sale-leaseback transaction for seven aircraft completed in
December 1995.
Provision for overhauls increased from $31.3 million in 1995 to $39.3
million in 1996 due to an increase in the number of aircraft on which the
Company collects overhaul reserves and therefore an increase in the number of
hours flown for which an overhaul reserve is provided.
-11-
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits:
10. Purchase Agreement No. 1916, dated as of June 24, 1996,
between the Company and The Boeing Company, including
Letter Agreements relating thereto (confidential treatment
requested)
12. Computation of Ratios of Earnings
27. Financial Data Schedule
b) Reports on Form 8-K:
1. Form 8-K, event date June 14, 1996 (Item 7)
-12-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
INTERNATIONAL LEASE FINANCE CORPORATION
August 12, 1996 /s/ Leslie L. Gonda
-------------------------
LESLIE L. GONDA
Chairman of the Board
August 12, 1996 /s/ Pamela S. Hendry
-------------------------
PAMELA S. HENDRY
Vice President
and Treasurer
-13-
<PAGE>
INTERNATIONAL LEASE FINANCE CORPORATION AND SUBSIDIARIES
INDEX TO EXHIBITS
Exhibit No.
10 Purchase Agreement No. 1916, dated as of June 24, 1996,
between the Company and The Boeing Company, including
Letter Agreements relating thereto (confidential treatment
requested)
12 Computation of Ratios of Earnings
27 Financial Data Schedule
-14-
<PAGE>
EXHIBIT 10
PURCHASE AGREEMENT
between
THE BOEING COMPANY
and
INTERNATIONAL LEASE FINANCE CORPORATION
Relating to Boeing Model 777 Aircraft
Purchase Agreement Number 1916
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page SA
ARTICLES Number Number
- -------- ------- ------
<S> <C> <C>
1. Subject Matter of Sale............................ 1-1
2. Delivery, Title and Risk of Loss.................. 2-1
3. Price of Aircraft................................. 3-1
4. Taxes............................................. 4-1
5. Payment........................................... 5-1
6. Excusable Delay................................... 6-1
7. Changes to the Detail Specification............... 7-1
8. Federal Aviation Requirements and
Certificates and Export License................... 8-1
9. Representatives, Inspection,
Flights and Test Data............................. 9-1
10. Assignment, Resale or Lease....................... 10-1
11. Termination for Certain Events.................... 11-1
12. Product Assurance; Disclaimer and
Release; Exclusion of Liabilities;
Customer Support; Indemnification and
Insurance......................................... 12-1
13. Buyer Furnished Equipment and Spare Parts......... 13-1
14. Contractual Notices and Requests.................. 14-1
15. Miscellaneous..................................... 15-1
TABLES
- ------
1. Aircraft Deliveries and Descriptions.............. S-1
</TABLE>
i
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
SA
Number
------
<S> <C>
EXHIBITS
- --------
A Aircraft Configuration.........................
B Product Assurance Document.....................
C Customer Support Document......................
D Price Adjustments Due to
Economic Fluctuations -
Airframe and Engines...........................
E Buyer Furnished Equipment
Provisions Document............................
F Defined Terms Document.........................
LETTER AGREEMENTS
- -----------------
1916-1 Disclosure of Confidential
Information....................................
1916-2 Waiver of Aircraft Demonstration Flights.......
1916-3 Seller Purchased Equipment.....................
1916-4 Spare Parts Support for Flight Training........
1916-5 Promotional Support............................
1916-6 Configuration Decision Matters.................
1916-7 Price Adjustment on Rolls-Royce Engines........
</TABLE>
ii
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
SA
Number
------
<S> <C>
RESTRICTED LETTER AGREEMENTS
- ----------------------------
6-1162-JDR-266 Aircraft Performance Guarantees..............
6-1162-JDR-267 Certain Contractual Matters..................
6-1162-JDR-268 Advance Payment Matters......................
6-1162-JDR-269 Aircraft Configuration Matters...............
6-1162-JDR-270 Lessee Matters...............................
6-1162-JDR-271 * Operator Matters...........................
6-1162-JDR-272 Delivery Schedule Matters....................
6-1162-JDR-273 * Matters....................................
6-1162-JDR-274 Miscellaneous Matters........................
6-1162-JDR-275 Option Aircraft..............................
6-1162-JDR-276 Assignment of Rights, * and * Matters........
</TABLE>
* Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and
has been filed separately with the Securities and Exchange Commission.
iii
<PAGE>
PURCHASE AGREEMENT NO. 1916
Relating to
BOEING MODEL 777-200IGW AIRCRAFT
--------------------------
This Agreement is entered into as of June 24, 1996 by and between The
Boeing Company, a Delaware corporation, with its principal office in Seattle,
Washington (Boeing), and International Lease Finance Corporation, a California
corporation, with its principal office in the City of Los Angeles, State of
California (Buyer).
Accordingly, Boeing and Buyer agree as follows:
1
<PAGE>
ARTICLE 1. Subject Matter of Sale.
1.1 The Aircraft. Boeing will manufacture and deliver to Buyer and
------------
Buyer will purchase and accept delivery from Boeing of eighteen (18) Boeing
Model 777-200IGW aircraft (the Aircraft) manufactured in accordance with Boeing
detail specification described for each applicable engine in Exhibit A, as
modified from time to time in accordance with this Agreement (Detail
Specification).
1.2 Additional Goods and Services. In connection with the sale of
-----------------------------
the Aircraft, Boeing will also provide to Buyer certain other things under this
Agreement, including data, documents, training and services, all as described in
this Agreement.
1.3 Performance Guarantees. Any performance guarantees applicable to
----------------------
the Aircraft will be expressly included in this Agreement. Where performance
guarantees are included in this Agreement other than within the Detail
Specification, such guarantees will be treated as being incorporated in the
Detail Specification by this reference.
1.4 Defined Terms. For ease of use, certain terms are treated as
-------------
defined terms in this Agreement. Such terms are identified with a capital
letter and set forth and/or defined in Exhibit F.
1-1
<PAGE>
ARTICLE 2. Delivery, Title and Risk of Loss.
---------------------------------
2.1 Time of Delivery. The Aircraft will be delivered to Buyer by
----------------
Boeing, and Buyer will accept delivery of the Aircraft, in accordance with the
schedule set forth in Table 1.
2.2 Notice of Target Delivery Date. Boeing will give Buyer notice of
------------------------------
the Target Delivery Date of the Aircraft approximately 30 days prior to the
scheduled month of delivery.
2.3 Notice of Delivery Date. Boeing will give Buyer at least 7 days'
-----------------------
notice of the delivery date of the Aircraft. If an Aircraft delivery is delayed
beyond such delivery date due to the responsibility of Buyer, Buyer will
reimburse Boeing for all costs incurred by Boeing as a result of such delay,
including amounts for storage, insurance, Taxes, preservation or protection of
the Aircraft and interest on payments due.
2.4 Place of Delivery. The Aircraft will be delivered at a facility
-----------------
selected by Boeing in the State of Washington, unless mutually agreed otherwise.
2.5 Title and Risk of Loss. Title to and risk of loss of an Aircraft
----------------------
will pass from Boeing to Buyer upon delivery of such Aircraft, but not prior
thereto.
2.6 Bill of Sale. Upon delivery of an Aircraft Boeing will deliver
------------
to Buyer a bill of sale conveying good title to such Aircraft, free of any
encumbrances.
2-1
<PAGE>
ARTICLE 3. Price of Aircraft.
-----------------
3.1 Definitions.
------------
3.1.1 Special Features are the features incorporated in Exhibit
A which have been selected by Buyer.
3.1.2 Base Airframe Price is the Aircraft Basic Price excluding
the price of Special Features and Engines.
3.1.3 Engine Price is the price established by the Engine
manufacturer for the Engines installed on the Aircraft including all
accessories, equipment and parts set forth in Exhibit D.
3.1.4 Aircraft Basic Price is comprised of the Base Airframe
Price, the Engine Price and the price of the Special Features.
3.1.5 Economic Price Adjustment is the adjustment to the
Aircraft Basic Price (Base Airframe, Engine and Special Features) as calculated
pursuant to Exhibit D.
3.1.6 Aircraft Price is the total amount Buyer is to pay for
the Aircraft at the time of delivery.
3.2 Aircraft Basic Price.
--------------------
The Aircraft Basic Price is set forth in Table 1.
3.3 Aircraft Price. The Aircraft Price will be established at the
--------------
time of delivery of such Aircraft to Buyer and will be the sum of:
3.3.1 the Aircraft Basic Price, set forth in Table 1; plus
3.3.2 the Economic Price Adjustments for the Aircraft Basic
Price, as calculated pursuant to the formulas set forth in Exhibit D (Price
Adjustments Due to Economic Fluctuations - Airframe and Engine); plus
3.3.3 other price adjustments made pursuant to this Agreement or
other written agreements executed by Boeing and Buyer.
3-1
<PAGE>
3.4 Advance Payment Base Price.
--------------------------
3.4.1 Advance Payment Base Price. For advance payment
--------------------------
purposes, the estimated delivery prices of the Aircraft have been established,
using currently available forecasts of the escalation factors used by Boeing as
of the date of signing this Agreement. The Advance Payment Base Price of each
Aircraft is set forth in Table 1.
3.4.2 Adjustment of Advance Payment Base Prices - Long-Lead
-----------------------------------------------------
Aircraft. For Aircraft scheduled for delivery more than 36 months after the
- --------
date of this Agreement, the Advance Payment Base Prices appearing in Article
3.4.1 will be used to determine the amount of the first advance payment to be
made by Buyer on the Aircraft. No later than 25 months before the scheduled
month of delivery of each affected Aircraft, Boeing will increase or decrease
the Advance Payment Base Price of such Aircraft as required to reflect the
effects of (i) any adjustments in the Aircraft Basic Price pursuant to this
Agreement and (ii) the then-current forecasted escalation factors used by
Boeing. Boeing will provide the adjusted Advance Payment Base Prices for each
affected Aircraft to Buyer, and the advance payment schedule will be considered
amended to substitute such adjusted Advance Payment Base Prices.
3-2
<PAGE>
ARTICLE 4. Taxes.
-----
4.1 Taxes. In addition to the Aircraft Price, Buyer shall pay to
-----
Boeing upon demand the amount of any sales, use, value added or other similar
transfer taxes, together with any penalties, fines or interest thereon (other
than any such penalties, fines or interest resulting from the failure of Boeing
seasonably to pay any such tax which it has reason to believe is applicable,
unless such nonpayment is directed by Buyer) imposed by any federal, state or
local taxing authority within the United States and the amount of all taxes
imposed by any taxing authority outside the United States, required to be paid
by Boeing as a result of any sale, use, delivery, storage or transfer of any
Aircraft, accessory, equipment, part, Buyer Furnished Equipment (as defined in
Exhibit E), services, instructions or data furnished or delivered under this
Agreement, except U.S. federal income taxes and Washington State business and
occupation tax imposed on Boeing (defined as "Taxes"). If Boeing has reason to
believe that any such tax is applicable, Boeing shall separately state the
amount of such tax in its invoice. If claim is made against Boeing for any such
tax, Boeing shall promptly notify Buyer. If seasonably requested by Buyer in
writing, Boeing shall, at Buyer's expense, take such action as Buyer may
reasonably direct with respect to such claim, and any payment by Boeing of such
tax shall be made under protest, if protest is necessary and proper. If payment
is made, Boeing shall, at Buyer's expense, take such action as Buyer may
reasonably direct to recover such payment and shall, if requested, permit Buyer
in Boeing's name to file a claim or prosecute an action to recover such payment.
4.2 Taxes Relating to Buyer Furnished Equipment. Buyer is
-------------------------------------------
responsible for the proper filing of all tax returns, reports and declarations
and payment of all taxes related to or imposed on Buyer Furnished Equipment.
4-1
<PAGE>
ARTICLE 5. Payment.
-------
5.1 Advance Payment Schedule. Advance payment for each Aircraft will
------------------------
be made to Boeing by Buyer as follows:
Due Date of Payment Amount Due per Aircraft
- ------------------- -----------------------
(Percentage times
Advance Payment Base Price)
Upon signing the Agreement 1% (less the
Deposit)
24 months prior to the first 4%
day of the scheduled delivery
month of the Aircraft
21 months prior to the first 5%
day of the scheduled delivery
month of the Aircraft
18 months prior to the first 5%
day of the scheduled delivery
month of the Aircraft
15 months prior to the first 5%
day of the scheduled delivery
month of the Aircraft
12 months prior to the first 5%
day of the scheduled delivery
month of the Aircraft
9 months prior to the first 5%
day of the scheduled delivery
month of the Aircraft
6 months prior to the first 5%
day of the scheduled delivery
month of the Aircraft ___
Total 35%
5.2 Advance Payment Adjustment. For each Aircraft scheduled for
--------------------------
delivery more than 36 months after the date of this Agreement and for which the
Advance Payment Base Price is adjusted, Buyer will:
5.2.1 pay the advance payment due 24 months prior to the
scheduled month of delivery for each affected Aircraft in an amount equal to 5%
of an amount equal to the
5-1
<PAGE>
adjusted Advance Payment Base Price of such Aircraft, after subtracting the
total amount of all Deposits and advance payments for such Aircraft previously
paid to Boeing, and
5.2.2 use the adjusted Advance Payment Base Price in determining
the amount of remaining advance payments due Boeing for such Aircraft.
5.3 Payment at Delivery. The Aircraft Price, less Advance Payments
-------------------
received by Boeing, is due on delivery of such Aircraft to Buyer.
5.4 Form of Payments. All payments due hereunder will be made by
----------------
Buyer to Boeing by unconditional deposit in a bank account in the United States
designated by Boeing or in other immediately available funds. All prices and
payments set forth in this Agreement are in United States Dollars.
5.5 Monetary and Government Regulations. Buyer will be responsible
-----------------------------------
for complying with all monetary control regulations and for obtaining necessary
governmental authorizations related to payments hereunder.
5-2
<PAGE>
ARTICLE 6. Excusable Delay.
----------------
6.1 General. Boeing will not be liable for or be deemed to be in
-------
default under this Agreement on account of any delay in delivery of any Aircraft
or other performance hereunder arising out of causes such as: acts of God; war,
armed hostilities, riots, fires, floods, earthquakes or serious accidents;
governmental acts or failures to act affecting materials, facilities or
Aircraft; strikes or labor troubles causing cessation, slowdown or interruption
of work; damage to an Aircraft; failure of or delay in transportation; or
inability, after due and timely diligence, to procure materials, systems,
accessories, equipment or parts; or arising out of any other cause to the extent
it is beyond Boeing's control or not occasioned by Boeing's fault or negligence.
A delay resulting from such causes is referred to as an "Excusable Delay".
6.2 Excusable Delay of 12 Months.
----------------------------
6.2.1 Anticipated Delay. If Boeing concludes, based on its
-----------------
appraisal of the facts and normal scheduling procedures, that due to an
Excusable Delay, delivery of an Aircraft will be delayed more than 12 months
beyond the month in which delivery is scheduled, Boeing will promptly so notify
Buyer in writing and either party may then terminate this Agreement with respect
to such Aircraft by giving written notice to the other within 15 days after
receipt by Buyer of Boeing's notice. Failure of a party to terminate the
purchase of an Aircraft for an Excusable Delay pursuant to this paragraph
results in a waiver of that party's right to terminate the purchase of such
Aircraft for any delay in delivery caused by such Excusable Delay.
6.2.2 Actual Delay. If, due to an Excusable Delay, delivery
------------
of an Aircraft is delayed for more than 12 months beyond the month in which
delivery is scheduled, and such right to terminate has not been waived under
paragraph 6.2.1, either party may terminate this Agreement with respect to such
Aircraft by giving written notice to the other within 15 days after the
expiration of such 12-month period.
6.3 Aircraft Damaged Beyond Repair. If, prior to delivery, an
------------------------------
Aircraft is destroyed or damaged beyond economic repair due to any cause, Boeing
will promptly notify Buyer in writing and either party may then terminate this
Agreement with respect to such Aircraft. If Boeing does not so terminate this
Agreement with respect to such Aircraft, such notice will specify the earliest
date
6-1
<PAGE>
reasonably possible, consistent with Boeing's other contractual commitments and
production capabilities, by which Boeing will deliver a replacement for such
Aircraft. This Agreement will thereupon terminate as to such Aircraft, unless
Buyer gives Boeing written notice, within 30 days after receipt of Boeing's
notice, that Buyer desires the proposed replacement for such Aircraft.
6.4 Agreement Revision. If an Aircraft is delayed, or destroyed or
------------------
damaged beyond economic repair, and this Agreement is not terminated pursuant to
this Article, this Agreement will be appropriately revised.
6.5 Agreement Termination.
---------------------
6.5.1 Termination under this Article will discharge all
obligations and liabilities of Boeing and Buyer hereunder with respect to
terminated Aircraft and all related undelivered items and services, except that
Boeing will return to Buyer, without interest, all advance payments related to
such Aircraft,
6.5.2 If either party terminates this Agreement as to any
Aircraft pursuant to this Article, Boeing may, upon written notice to Buyer
within 30 days after such termination and with Buyer's consent, purchase from
Buyer any Buyer Furnished Equipment related to such Aircraft, at the invoice
prices paid, or contracted to be paid, by Buyer.
6.6 Exclusive Rights. The termination rights set forth in this
----------------
Article are in substitution for any and all other rights of termination or
contract lapse or any other claim arising by operation of law by virtue of
delays in performance covered by this Article.
6-2
<PAGE>
ARTICLE 7. Changes to the Detail Specification.
------------------------------------
7.1 Development Changes. Boeing may, at its own expense and without
-------------------
Buyer's consent, incorporate Development Changes in the Detail Specification and
the Aircraft prior to delivery to Buyer. Development Changes are defined as
changes to the basic specification for Model 777-200 aircraft that do not affect
the Aircraft Purchase Price or adversely affect Aircraft delivery, guaranteed
weight, guaranteed performance or compliance with the interchangeability or
replaceability requirements set forth in the Detail Specification. If Boeing
makes changes pursuant to this paragraph, Boeing will promptly notify Buyer of
such changes.
7.2 Change Orders. The Detail Specification and associated
-------------
provisions of this Agreement may be amended by Change Order or other written
agreement between Boeing and Buyer, which will state the particular changes to
be made and any effect on design, performance, weight, balance, time of
delivery, Aircraft Basic Price and Advance Payment Base Price.
7-1
<PAGE>
ARTICLE 8. Federal Aviation Requirements and Certificates and Export
---------------------------------------------------------
License.
-------
8.1 FAA Certificates.
----------------
8.1.1 Boeing will obtain from the Federal Aviation
Administration (FAA) a Type Certificate (transport category) issued pursuant to
Part 21 of the Federal Aviation Regulations for the type of aircraft covered by
this Agreement, and, based upon registration requirements, will provide to Buyer
at time of delivery either (i) a Standard Airworthiness Certificate for each
Aircraft issued pursuant to Part 21 of the Federal Aviation Regulations, if such
Aircraft is a Domestic Aircraft or (ii) an Export Certificate of Airworthiness
for each Aircraft issued pursuant to Part 21 of the Federal Aviation
Regulations, if such Aircraft is an Export Aircraft.
8.1.2 Boeing will not be obligated to obtain any other
certificates or approvals for the Aircraft.
8.1.3 If the use of either FAA certificate is discontinued prior
to delivery of an Aircraft, references in this Agreement to such discontinued
certificate will be deemed references to its superseding FAA certificate. If
the FAA does not issue a superseding certificate, Boeing's only obligation under
this paragraph will be to comply with the Detail Specification and the
Performance Guarantees.
8.2 FAA Manufacturer Changes.
------------------------
8.2.1 Changes Applicable to Domestic Aircraft. If the FAA, or
---------------------------------------
any other governmental agency having jurisdiction, requires any change to the
Aircraft, data relating to the Aircraft, or testing of the Aircraft in order to
obtain the Standard Airworthiness Certificate (Manufacturer Change), such
Manufacturer Change will be made prior to delivery of such Aircraft. If prior
to Aircraft delivery a Manufacturer Change is required to be incorporated in an
Aircraft, it will be incorporated at no charge to Buyer, unless the requirement
is promulgated subsequent to the date of this Agreement, in which case Buyer
will pay Boeing's reasonable charge only for Aircraft scheduled for delivery to
Buyer (a) 18 months or more after the date of this Agreement or (b) after the
date of Boeing's receipt of the Type Certificate for the Model 777-200IGW,
whichever is later.
8-1
<PAGE>
8.2.2 Changes Applicable to Export Aircraft. If the FAA, or any
-------------------------------------
other governmental agency having jurisdiction, requires any change to the
Aircraft, data relating to the Aircraft, or testing of the Aircraft in order to
obtain the Export Certificate of Airworthiness (Manufacturer Change), such
Manufacturer Change will be made prior to delivery of such Aircraft. If prior
to Aircraft delivery a Manufacturer Change is required to be incorporated in an
Aircraft, it will be incorporated at no charge to Buyer unless the requirement
for such Manufacturer Change is (i) solely necessary to comply with a
requirement of the country of import and/or registration, in which case Buyer
will pay Boeing's reasonable charge therefor, or (ii) promulgated subsequent to
the date of this Agreement, in which case Buyer will pay Boeing's reasonable
charge only for Aircraft scheduled for delivery to Buyer (a) 18 months or more
after the date of this Agreement or (b) after the date of Boeing's receipt of
the Type Certificate for the Model 777-200IGW, whichever is later. Buyer will
pay Boeing's applicable charge for validation of the Aircraft for export to the
country of import as may be required by any governmental agency of such country
of import and any charges by such agency therewith.
8.3 FAA Operator Changes.
--------------------
8.3.1 Boeing will deliver each Aircraft with the changes in
equipment incorporated (or, after timely notice to Buyer, with suitable
provisions for the incorporation of such equipment) that is required by Federal
Aviation Regulations which (i) are generally applicable with respect to
transport category aircraft to be used in United States certified air carriage
and (ii) have to be complied with on or before the date of delivery of such
Aircraft (Operator Changes).
8.3.2 If Operator Changes are incorporated in an Aircraft, Buyer
will pay Boeing's reasonable charge applicable to such Aircraft.
8.4 Delays; Changes to this Agreement. If delivery of an Aircraft is
---------------------------------
delayed due to the incorporation of a Manufacturer Change or an Operator Change,
the delivery of the Aircraft will be appropriately revised to reflect such
delay. This Agreement will also be revised to reflect appropriate changes in
the Aircraft Price, design, performance, weight and balance due to the
incorporation of a Manufacturer Change or an Operator Change.
8-2
<PAGE>
8.5 Export License. If an export license is required by United
--------------
States law or regulation for an Aircraft, it is Buyer's obligation to obtain
such license; however, Boeing will apply on behalf of Buyer for such export
license and/or licenses for installed equipment. Buyer will supply, in a timely
manner, all documents and certifications required in support of such
applications.
8-3
<PAGE>
ARTICLE 9. Representatives, Inspection,
----------------------------
Flights and Test Data.
---------------------
9.1 Office Space at Boeing. Commencing with the date of this
----------------------
Agreement, and until the delivery of the last Aircraft, Boeing will furnish,
without additional charge, suitable office space and equipment in or
conveniently located near its plant in Seattle for the accommodation of up to
three (3) personnel of Buyer.
9.2 Inspection by Buyer. Designated representatives of Buyer may
-------------------
inspect the manufacturing of the Aircraft at all reasonable times. However, if
access to any part of Boeing's plant is restricted by the United States
Government, Boeing will be allowed a reasonable time to arrange for inspection
elsewhere. All inspections by Buyer's representatives will be performed so as
not to hinder manufacture or performance by Boeing.
9.3 Aircraft Flight. Prior to delivery, each Aircraft will be flown
---------------
by Boeing for such periods as may be required to demonstrate to Buyer the
function of the Aircraft and its equipment in accordance with Boeing's
production flight test procedures (commonly referred to as "C" flights). The
aggregate duration of such flights will be not less than 1-1/2 hours or more
than 4 hours. Five persons designated by Buyer may participate in such flights
as observers.
9.4 Test Data. Boeing will furnish to Buyer, as soon as practicable,
---------
flight test data obtained on an aircraft of the type purchased hereunder,
certified as correct by Boeing, to evidence compliance with any performance
guarantees set forth in this Agreement. Any Performance Guarantee will be
deemed to be met if reasonable engineering interpretations and calculations
based on such flight test data establish that the Aircraft would, if actually
flown, comply with such guarantee.
9.5 Special Aircraft Test Requirements. Boeing may use the Aircraft
----------------------------------
for flight and ground tests prior to delivery to Buyer, without reduction in the
Aircraft Purchase Price, if such tests are deemed necessary by Boeing to:
9.5.1 obtain or maintain the Type Certificate, Standard
Airworthiness Certificate or Export Certificate of Airworthiness for the
Aircraft (commonly referred to as "B" flights); or
9-1
<PAGE>
9.5.2 subject to the prior written consent of Buyer, evaluate
aircraft improvement changes that may be offered for production or retrofit
incorporation in any aircraft.
9.6 Indemnity. Boeing will indemnify and hold harmless Buyer and
---------
Buyer's observers from and against all claims and liabilities, including costs
and expenses (including attorneys' fees) incident thereto, for injury to or
death of any person or persons, including employees of Boeing but excluding
employees, officers or agents of Buyer, or for loss of or damage to any
property, arising out of or in connection with the operation of the Aircraft
during all demonstration and test flights conducted under the provisions of this
Article, whether or not arising in tort or occasioned in whole or in part by the
negligence of Buyer or any of Buyer's observers, whether active, passive or
imputed.
9-2
<PAGE>
ARTICLE 10. Assignment, Resale or Lease.
----------------------------
10.1 Assignment. This Agreement will inure to the benefit of and be
----------
binding upon each of the parties hereto and their respective successors and
assigns. Neither the rights nor the duties of either party under this Agreement
may be assigned or delegated, or contracted to be assigned or delegated, in
whole or part, without the prior written consent of the other party, except
that:
10.1.1 Either party may assign its interest to a corporation
that (i) results from any merger or reorganization of such party or (ii)
acquires substantially all the assets of such party;
10.1.2 Boeing may assign its rights to receive money; and
10.1.3 Boeing may assign all or any part of its rights and
obligations under this Agreement to any wholly owned subsidiary of Boeing,
provided that Boeing will remain fully and solely responsible to Buyer for all
obligations and liabilities as the seller of the Aircraft, and Buyer will
continue to deal exclusively with Boeing.
10.2 Transfer by Buyer at Delivery. Buyer may, and at Buyer's request
-----------------------------
Boeing will, take any action reasonably required for the purpose of causing an
Aircraft, at time of delivery, to be subjected to an equipment trust,
conditional sale, lien or other arrangement for the financing by Buyer of such
Aircraft. No action taken by either party pursuant to this paragraph, however,
will require Boeing to divest itself of title to or possession of such Aircraft
until delivery and payment therefor pursuant to this Agreement.
10.3 Sale by Buyer After Delivery. If, following delivery of any
----------------------------
Aircraft, Buyer sells such Aircraft (including any sale for financing purposes),
then all of Buyer's rights with respect to such Aircraft under this Agreement
will inure to the benefit of the purchaser of such Aircraft, effective upon
Boeing's receipt of such purchaser's express written agreement, in form
satisfactory to Boeing, to be bound by and to comply with all applicable terms,
conditions and limitations of this Agreement.
10.4 Lease by Buyer After Delivery. If, following delivery of any
-----------------------------
Aircraft, Buyer leases such Aircraft, Buyer will not assign to the lessee of
such Aircraft any rights under this Agreement without Boeing's prior written
consent, which consent will not be unreasonably withheld.
10-1
<PAGE>
10.5 No Increase in Boeing Liability. No action taken by Buyer or
-------------------------------
Boeing relating to the assignment, resale or lease of any Aircraft or this
Agreement will subject Boeing to any liability beyond that in this Agreement or
modify in any way Boeing's obligations under this Agreement.
10.6 Exculpatory or Indemnity Clause in Post-Delivery Sale or Lease.
--------------------------------------------------------------
If, following delivery of an Aircraft, Buyer sells or leases such Aircraft and
obtains from the transferee an exculpatory or indemnity clause protecting Buyer,
Buyer will include the same protection for Boeing.
10-2
<PAGE>
ARTICLE 11. Termination for Certain Events.
-------------------------------
11.1 Termination. This Agreement may be terminated at any time with
-----------
regard to undelivered Aircraft and items and unperformed services by notice in
writing by either party hereto if the other party:
11.1.1 Ceases doing business as a going concern, suspends all or
substantially all its business operations, makes an assignment for the benefit
of creditors, is insolvent, or generally does not pay its debts, or admits in
writing its inability to pay its debts; or
11.1.2 Petitions for or acquiesces in the appointment of any
receiver, trustee or similar officer to liquidate or conserve its business or
any substantial part of its assets; commences any legal proceeding such as
insolvency, bankruptcy, reorganization, readjustment of debt, dissolution or
liquidation available for the relief of financially distressed debtors; or
becomes the object of any such proceeding, unless such proceeding is dismissed
or stayed within a reasonable period, not to exceed 60 days.
11.2 Repayment of Advance Payments. If this Agreement is terminated
-----------------------------
with regard to any Aircraft by Buyer under this Article, Boeing will repay to
Buyer, without interest, any advance payments received by Boeing from Buyer with
respect to such Aircraft.
11-1
<PAGE>
ARTICLE 12. Product Assurance; Disclaimer and Release;
------------------------------------------
Exclusion of Liabilities; Customer Support;
-------------------------------------------
Indemnification and Insurance.
-----------------------------
12.1 Product Assurance. Boeing and Buyer are bound by the provisions
-----------------
of Exhibit B hereto (Product Assurance Document).
12.2 DISCLAIMER AND RELEASE. THE WARRANTIES, OBLIGATIONS AND
----------------------
LIABILITIES OF BOEING AND THE REMEDIES OF BUYER SET FORTH IN THE PRODUCT
ASSURANCE DOCUMENT ARE EXCLUSIVE AND IN SUBSTITUTION FOR, AND BUYER HEREBY
WAIVES, RELEASES AND RENOUNCES, ALL OTHER WARRANTIES, OBLIGATIONS AND
LIABILITIES OF BOEING AND ALL OTHER RIGHTS, CLAIMS AND REMEDIES OF BUYER AGAINST
BOEING, EXPRESS OR IMPLIED, ARISING BY LAW OR OTHERWISE, WITH RESPECT TO ANY
NONCONFORMANCE OR DEFECT IN ANY AIRCRAFT OR OTHER THING PROVIDED UNDER THIS
AGREEMENT, INCLUDING, BUT NOT LIMITED TO:
(A) ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS;
(B) ANY IMPLIED WARRANTY ARISING FROM COURSE OF PERFORMANCE,
COURSE OF DEALING OR USAGE OF TRADE;
(C) ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY IN TORT,
WHETHER OR NOT ARISING FROM THE NEGLIGENCE OF BOEING
(WHETHER ACTIVE, PASSIVE OR IMPUTED); AND
(D) ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY FOR LOSS
OF OR DAMAGE TO ANY AIRCRAFT.
12.3 EXCLUSION OF CONSEQUENTIAL AND OTHER DAMAGES. BOEING WILL HAVE
--------------------------------------------
NO OBLIGATION OR LIABILITY, WHETHER ARISING IN CONTRACT (INCLUDING WARRANTY),
TORT (INCLUDING ACTIVE, PASSIVE OR IMPUTED NEGLIGENCE) OR OTHERWISE, FOR LOSS OF
USE, REVENUE OR PROFIT, OR FOR ANY OTHER INCIDENTAL OR CONSEQUENTIAL DAMAGES
WITH RESPECT TO ANY NONCONFORMANCE OR DEFECT IN ANY AIRCRAFT OR OTHER THING
PROVIDED UNDER THIS AGREEMENT.
12.4 Definitions. For the purposes of this Article, the term "BOEING"
-----------
means The Boeing Company, its divisions, subsidiaries and affiliates, the
assignees of each, and their directors, officers, employees and agents.
12-1
<PAGE>
12.5 Customer Support and Indemnification; Insurance. Boeing and
-----------------------------------------------
Buyer are bound by the provisions of Exhibit C hereto (Customer Support
Document), which includes indemnification and insurance requirements related to
the use of Customer Support Services.
12-2
<PAGE>
ARTICLE 13. Buyer Furnished Equipment and Spare Parts.
------------------------------------------
13.1 Buyer Furnished Equipment. Boeing and Buyer are bound by the
-------------------------
provisions of Exhibit E (Buyer Furnished Equipment Document), which includes
indemnification requirements related to Buyer Furnished Equipment.
13.2 Purchase of Boeing Spare Parts. Boeing will sell to Buyer and
------------------------------
Buyer will purchase from Boeing materials, spare parts, assemblies, tools and
items of equipment relating to the Aircraft pursuant to Spare Parts General
Terms Agreement No. Q8 or, when executed, Customer Services General Terms
Agreement No. Q8.
13-1
<PAGE>
ARTICLE 14. Contractual Notices and Requests.
---------------------------------
All notices and requests relating to this Agreement will be in
English, and may be transmitted by any customary means of written communication
addressed as follows:
Buyer: International Lease Finance Corporation
1999 Avenue of the Stars, 39th Floor
Los Angeles, California 90067
Attention: Office of the President
Boeing: Boeing Commercial Airplane Group
P.O. Box 3707
Seattle, Washington 98124-2207
U.S.A.
Attention: Vice President - Contracts
Mail Stop 75-38
or to such other address as specified elsewhere herein or as otherwise directed
in writing by either party. The effective date of any such notice or request
will be the date on which it is received by the addressee.
14-1
<PAGE>
ARTICLE 15. Miscellaneous.
---------------
15.1 Government Approval. Boeing and Buyer will use their best
-------------------
reasonable efforts to assist each other in obtaining any United States
Governmental agency consents or approvals necessary or appropriate to effect
certification and sale of the Aircraft under this Agreement.
15.2 Headings. Article and paragraph headings used in this Agreement
--------
are for convenient reference only and are not intended to affect the
interpretation of this Agreement.
15.3 Entire Agreement; Amendments. This Agreement contains the
----------------------------
entire agreement between the parties concerning the subject matter hereof and
supersedes all previous proposals, understandings, commitments or
representations whatsoever, oral or written. This Agreement may be changed only
in writing signed by authorized representatives of Boeing and Buyer, except in
the case of certain changes permitted or required by this Agreement.
15.4 GOVERNING LAW. THIS AGREEMENT WILL BE GOVERNED BY THE LAW OF
-------------
THE STATE OF WASHINGTON, U.S.A., EXCLUSIVE OF WASHINGTON'S CONFLICTS OF LAWS
RULES.
15.5 Negotiated Agreement. This Agreement, including the provisions
--------------------
of Article 12 relating to DISCLAIMER AND RELEASE, the Exclusion of Consequential
and Other Damages, and the provisions relating to indemnification and insurance
set forth in this Agreement, has been the subject of discussion and negotiation
and is fully understood by the parties; the Aircraft Purchase Price and other
agreements of the parties set forth in this Agreement were arrived at in
consideration of such provisions.
*************************
INTERNATIONAL LEASE FINANCE THE BOEING COMPANY
CORPORATION
By /s/ Steven R. Adams By /s/ J.D. Robinson
------------------------ --------------------------
Its Steven R. Adams Its Attorney-in-Fact
----------------------- -------------------------
Vice President
15-1
<PAGE>
Table 1 to
Purchase Agreement 1916
Aircraft Deliveries and Descriptions
Model 777 Aircraft
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Base Article 3.2 Article 3.4
Quantity/ Detail Airframe Special Aircraft Advance
Month/Year Model Specification Exhibit Price Features Engine Price Basic Price Payment
of Delivery Aircraft No. and Date Number (*) (*) (*) (*) Base Price
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
* One (1)/ D019W004-ILF- A-2 * * * * *
777-200 2, Rev New PW
- ------------------------------------------------------------------------------------------------------------------------------------
* One (1)/ D019W004-ILF- A-3 * * * * *
777-200 3, Rev New RR
- ------------------------------------------------------------------------------------------------------------------------------------
* One (1)/ D019W004-ILF- A-3 * * * * *
777-200 3, Rev New RR
- ------------------------------------------------------------------------------------------------------------------------------------
* One (1)/ D019W004-ILF- A-2 * * * * *
777-200 2, Rev New PW
- ------------------------------------------------------------------------------------------------------------------------------------
* One (1)/ D019W004-ILF- A-1 * * * * *
777-200 1, Rev New GE
- ------------------------------------------------------------------------------------------------------------------------------------
* One (1)/ D019W004-ILF- A-1 * * * * *
777-200 1, Rev New GE
- ------------------------------------------------------------------------------------------------------------------------------------
* One (1)/ D019W004-ILF- A-2 * * * * *
777-200 2, Rev New PW
- ------------------------------------------------------------------------------------------------------------------------------------
* One (1)/ D019W004-ILF- A-1 * * * * *
777-200 1, Rev New GE
- ------------------------------------------------------------------------------------------------------------------------------------
* One (1)/ D019W004-ILF- A-1 * * * * *
777-200 1, Rev New GE
- ------------------------------------------------------------------------------------------------------------------------------------
* One (1)/ D019W004-ILF- A-3 * * * * *
777-200 3, Rev New RR
- ------------------------------------------------------------------------------------------------------------------------------------
* One (1)/ D019W004-ILF- A-1 * * * * *
777-200 1, Rev New GE
- ------------------------------------------------------------------------------------------------------------------------------------
* One (1)/ D019W004-ILF- A-1 * * * * *
777-200 1, Rev New GE
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and
has been filed separately with the Securities and Exchange Commission.
T-1
<PAGE>
Table 1 to
Purchase Agreement 1916
Aircraft Deliveries and Descriptions
Model 777 Aircraft
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
* One (1)/ D019W004-ILF- A-2 * * * * *
777-200 2, Rev New PW
- ------------------------------------------------------------------------------------------------------------------------------------
* One (1)/ D019W004-ILF- A-1 * * * * *
777-200 1, Rev New GE
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and
has been filed separately with the Securities and Exchange Commission.
T-2
<PAGE>
Table 1 to
Purchase Agreement 1916
Aircraft Deliveries and Descriptions
Model 777 Aricraft
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------------
Quantity Base Article 3.2 Article 3.4
/Type Detail Airframe Special Aircraft Advance
Month/Year of Specification Exhibit Price Features Engine Price Basic Price Payment
of Delivery Aircraft No. and Date Number (*) (*) (*) (*) Base Price
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
* One (1)/ D019W004-ILF- A-1 * * * * *
777-200 1, Rev New GE
- ------------------------------------------------------------------------------------------------------------------------------------
* One (1)/ D019W004-ILF- A-3 * * * * *
777-200 3, Rev New RR
- ------------------------------------------------------------------------------------------------------------------------------------
* One (1)/ D019W004-ILF- A-1 * * * * *
777-200 1, Rev New GE
- ------------------------------------------------------------------------------------------------------------------------------------
* One (1)/ D019W004-ILF- A-1 * * * * *
777-200 1, Rev New GE
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and
has been filed separately with the Securities and Exchange Commission.
T-3
<PAGE>
AIRCRAFT CONFIGURATION
between
THE BOEING COMPANY
and
INTERNATIONAL LEASE FINANCE CORPORATION
Exhibit A-1 to Purchase Agreement Number 1916
A-1
<PAGE>
AIRCRAFT CONFIGURATION
Dated June 24, 1996
-------------
relating to
BOEING MODEL 777-200 AIRCRAFT
GENERAL ELECTRIC ENGINES
The Detail Specification is Boeing Detail Specification D019W004-ILF-1
dated as of even date herewith. Such Detail Specification will be comprised of
Boeing Configuration Specification D019W004, Revision A, dated February 29, 1996
as amended to incorporate the applicable specification language to reflect the
effect of the changes set forth in the Change Requests listed below, including
the effects of such changes on Manufacturer's Empty Weight (MEW) and Operating
Empty Weight (OEW). Such Change Requests are set forth in Boeing Document
D019WCR4-ILF-1. As soon as practicable, Boeing will furnish to Buyer copies of
the Detail Specification, which copies will reflect the effect of such changes.
The Aircraft Basic Price reflects and includes all effects of such changes of
price, except such Aircraft Basic Price does not include the price effects of
Change Requests changing Buyer Furnished Equipment to Seller Purchased
Equipment.
It is understood and agreed that the Aircraft Basic Price, as set forth in
Article 3.2 of this Agreement, reflects and includes an estimate of * for
special features for Model 777-200IGW Aircraft expected to be installed in the
Aircraft at time of delivery. Boeing has granted Buyer additional time for
selection of certain Change Requests required to complete the Aircraft
configuration definition in accordance with Letter Agreement 1916-6.
* Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and
has been filed separately with the Securities and Exchange Commission.
A-1-1
<PAGE>
Exhibit A-1 to
Purchase Agreement No. 1916
Page 2
<TABLE>
<CAPTION>
PRICE
PER A/P
CR / TITLE *
======================================================== ========
<S> <C>
0130CG7207 *
THREE-CLASS PASSENGER AIRPLANE WITH
7-ABREAST BUSINESS CLASS AND 9-ABREAST
ECONOMY CLASS SEATING (305
PASSENGERS)
7200CG7012 *
GE AIRCRAFT ENGINES (GEAE) -
GE90-85B ENGINES
</TABLE>
* Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and
has been filed separately with the Securities and Exchange Commission.
A-1-2
<PAGE>
AIRCRAFT CONFIGURATION
between
THE BOEING COMPANY
and
INTERNATIONAL LEASE FINANCE CORPORATION
Exhibit A-2 to Purchase Agreement Number 1916
A-2
<PAGE>
AIRCRAFT CONFIGURATION
Dated June 24, 1996
-----------------
relating to
BOEING MODEL 777-200 AIRCRAFT
PRATT AND WHITNEY ENGINES
The Detail Specification is Boeing Detail Specification D019W004-ILF-2
dated as of even date herewith. Such Detail Specification will be comprised of
Boeing Configuration Specification D019W004, Revision A, dated February 29, 1996
as amended to incorporate the applicable specification language to reflect the
effect of the changes set forth in the Change Requests listed below, including
the effects of such changes on Manufacturer's Empty Weight (MEW) and Operating
Empty Weight (OEW). Such Change Requests are set forth in Boeing Document
D019WCR4-ILF-2. As soon as practicable, Boeing will furnish to Buyer copies of
the Detail Specification, which copies will reflect the effect of such changes.
The Aircraft Basic Price reflects and includes all effects of such changes of
price, except such Aircraft Basic Price does not include the price effects of
Change Requests changing Buyer Furnished Equipment to Seller Purchased
Equipment.
It is understood and agreed that the Aircraft Basic Price, as set forth in
Article 3.2 of this Agreement, reflects and includes an estimate of * for
special features for Model 777-200IGW Aircraft expected to be installed in the
Aircraft at time of delivery. Boeing has granted Buyer additional time for
selection of certain Change Requests required to complete the Aircraft
configuration definition in accordance with Letter Agreement 1916-6.
* Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and
has been filed separately with the Securities and Exchange Commission.
A-2-1
<PAGE>
Exhibit A-2 to
Purchase Agreement No. 1916
Page 2
<TABLE>
<CAPTION>
PRICE
PER A/P
CR / TITLE *
=============================================== ==============
<S> <C>
0130CG7207 *
THREE-CLASS PASSENGER AIRPLANE WITH
7-ABREAST BUSINESS CLASS AND 9-ABREAST
ECONOMY CLASS SEATING (305
PASSENGERS)
7200CG7010 *
PRATT & WHITNEY - PW4084 ENGINES
</TABLE>
* Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and
has been filed separately with the Securities and Exchange Commission.
A-2-2
<PAGE>
AIRCRAFT CONFIGURATION
between
THE BOEING COMPANY
and
INTERNATIONAL LEASE FINANCE CORPORATION
Exhibit A-3 to Purchase Agreement Number 1916
A-3-2
<PAGE>
AIRCRAFT CONFIGURATION
Dated June 24, 1996
-------------
relating to
BOEING MODEL 777-200 AIRCRAFT
ROLLS-ROYCE ENGINES
The Detail Specification is Boeing Detail Specification D019W004-ILF-3
dated as of even date herewith. Such Detail Specification will be comprised of
Boeing Configuration Specification D019W004, Revision A, dated February 29, 1996
as amended to incorporate the applicable specification language to reflect the
effect of the changes set forth in the Change Requests listed below, including
the effects of such changes on Manufacturer's Empty Weight (MEW) and Operating
Empty Weight (OEW). Such Change Requests are set forth in Boeing Document
D019WCR4-ILF-3. As soon as practicable, Boeing will furnish to Buyer copies of
the Detail Specification, which copies will reflect the effect of such changes.
The Aircraft Basic Price reflects and includes all effects of such changes of
price, except such Aircraft Basic Price does not include the price effects of
Change Requests changing Buyer Furnished Equipment to Seller Purchased
Equipment.
It is understood and agreed that the Aircraft Basic Price, as set forth in
Article 3.2 of this Agreement, reflects and includes an estimate of * for
special features for Model 777-200IGW Aircraft expected to be installed in the
Aircraft at time of delivery. Boeing has granted Buyer additional time for
selection of certain Change Requests required to complete the Aircraft
configuration definition in accordance with Letter Agreement 1916-6.
* Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and
has been filed separately with the Securities and Exchange Commission.
A-3-1
<PAGE>
Exhibit A-3 to
Purchase Agreement No. 1916
Page 2
<TABLE>
<CAPTION>
PRICE
PER A/P
CR / TITLE *
======================================================= ==========
<S> <C>
0130CG7207
THREE-CLASS PASSENGER AIRPLANE WITH *
7-ABREAST BUSINESS CLASS AND 9-ABREAST
ECONOMY CLASS SEATING (305
PASSENGERS)
7200CG7015
ROLLS ROYCE - RB211-TRENT-884 ENGINES *
</TABLE>
* Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and
has been filed separately with the Securities and Exchange Commission.
A-3-2
<PAGE>
PRODUCT ASSURANCE DOCUMENT
between
THE BOEING COMPANY
and
INTERNATIONAL LEASE FINANCE CORPORATION
Exhibit B to Purchase Agreement Number 1916
B
<PAGE>
PRODUCT ASSURANCE DOCUMENT NO. 1916
Dated June 24, 1996
-------------
Relating to
BOEING MODEL 777 AIRCRAFT
--------------------
This Product Assurance Document is Exhibit B to and forms a part of
Purchase Agreement No. 1916 between The Boeing Company (Boeing) and
International Lease Finance Corporation (Buyer) relating to the purchase of
Boeing Model 777 aircraft. This Product Assurance Document consists of the
following parts:
PART A Boeing Warranty
PART B Warranty Repairs and Modifications by Buyer
PART C Boeing Service Life Policy
PART D Boeing Indemnity Against Patent Infringement
PART D-1 Boeing Indemnity Against Copyright Infringement
PART E Supplier Warranties and Patent Indemnities
PART F Engine Manufacturer Warranties
PART G Boeing Interface Commitment
PART H General
Part I Supplier Component Reliability (MTBUR/MTBF) Commitments and
System Reliability (MTBMA) Commitments
Part J Component Reliability (MTBUR/MTBF) Program for Specified
Components Manufactured to Boeing's Detailed Design
B
I
<PAGE>
PART A
BOEING WARRANTY
---------------
1. Warranties.
----------
Subject to the exceptions set forth herein, Boeing warrants that, at
the time of delivery, each Aircraft, including all installed systems,
accessories, equipment and parts, will:
1.1 conform to the Detail Specification, as it may be changed
pursuant to this Agreement, except such portions stated to be estimates,
approximations, design objectives, or design criteria, or described as not
guaranteed;
1.2 be free from defects in material and workmanship, including
process of manufacture; and
1.3 be free from defects in design, including selection of (i)
materials and (ii) process of manufacture, in view of the state of the art at
the time of design.
For purposes of this Boeing Warranty, nonconformance with the Detail
Specification, defects in material or workmanship and defects in design may
hereinafter be called "defects" or a "defect", and the term "system",
"accessory", "equipment" or "part" may hereinafter be called "item" or "items."
2. Exceptions.
----------
The warranties above will not apply to BFE. The warranty above
covering material and workmanship and the warranty above covering design will
not apply to Engines or to any other item purchased by Boeing but not
manufactured to Boeing's detailed design. However, any defect in the Boeing
workmanship installing such BFE, Engines or other items in an Aircraft will
constitute a defect in workmanship.
3. Survival of Warranties.
----------------------
Neither the warranty of conformance to the Detail Specification
applicable to Engines and other items purchased by Boeing but not manufactured
to Boeing's detailed design, nor any Performance Guarantees, will
B
A-1
<PAGE>
survive delivery of the Aircraft. The remaining warranties set forth herein
will survive delivery of the Aircraft, subject to the limitations and conditions
set forth herein.
4. Warranty Periods and Claims.
---------------------------
4.1 The warranty periods are:
4.1.1 As to a defect in conformance to the Detail Specification,
48 months after delivery of each Aircraft, and
4.1.2 As to a defect in material, workmanship or design in any
item, 48 months after delivery of each Aircraft in which such item was initially
installed.
4.2 Boeing's Product Assurance Regional Manager at Renton, Washington
must receive the warranty claim in writing at the earliest practicable time
after the defect becomes apparent but in no event later than 90 days after
expiration of the applicable warranty period.
4.3 Such warranty claim must include the data set forth below and, if
requested by Boeing, reasonable evidence that the claimed defect did not result
from any act or omission of Buyer.
4.3.1 Identity of the item or Aircraft involved, including
Boeing part number, serial number if applicable, nomenclature and the quantity
claimed to be defective;
4.3.2 Identity of the Aircraft on which the claimed item was
installed as original equipment;
4.3.3 Date the claimed defect became apparent which will be the
date such defect was discovered by Buyer or the warranty date set forth in a
Boeing service bulletin or service letter, whichever date occurs first; and
4.3.4 Description of the claimed defect and circumstances,
including Boeing service bulletin or Boeing service letter number if claim
involves a service bulletin or letter.
4.4 Upon completion of Boeing's warranty claim investigation,
including examination of any item or Aircraft returned to Boeing, Boeing will
provide a written disposition of its warranty claim findings to Buyer. In the
event Boeing must reject Buyer's warranty claim, Boeing will
B
A-2
<PAGE>
provide reasonable substantiation of such rejection in its disposition.
5. Remedies.
--------
Buyer's remedies under this Boeing Warranty are as follows:
5.1 As to a defect in conformance to the Detail Specification, (i)
the correction at Boeing's expense of such defect or (ii) for defects which
reflect omission of a Buyer requested change or part of a Buyer requested change
purchased by Buyer, at Buyer's option, the issuance by Boeing of a credit
memorandum to reimburse Buyer for the price paid by Buyer, with interest, for
that portion of the Buyer requested change which was omitted; provided, however,
that Boeing will not be obligated to correct any defect that Boeing and Buyer
agree has no material adverse effect on the maintenance, use or operation of the
Aircraft. The warranty period for the corrected item will be the unexpired
warranty period for the defective item.
5.2 As to a defect in material or workmanship, (i) the repair at
Boeing's expense of such defect or, (ii) the replacement of such item with a
similar item free from defect or, if applicable, the issuance of a credit
memorandum to reimburse Buyer for a spare part previously purchased from Boeing
as the replacement for such defective item. The warranty period for either
correction will be the unexpired warranty period for the defective item.
5.3 As to a defect in design, the correction at Boeing's expense of
such defect. The warranty period for such correction is 18 months from receipt
by Buyer of corrective material or the end of the original design warranty
period for the defective item, whichever is later.
5.4 Boeing will issue a credit memorandum to reimburse Buyer at the
Warranty Labor Rate for the direct labor hours required for accessing the
defective item, removal from the Aircraft of a defective item and the
reinstallation in the Aircraft of the corrected item.
6. Returned Items.
--------------
Unless otherwise provided in this Agreement, the Aircraft or item
claimed to be defective must be returned to Boeing as soon as practicable.
Buyer may also provide specific technical repair or correction instructions with
such return. The absence of such instructions will evidence
B
A-3
<PAGE>
Buyer's authorization for Boeing to proceed using Boeing information and data.
The following criteria will apply with respect to return of Aircraft or items to
Boeing:
6.1 As to Aircraft:
6.1.1 An Aircraft may be returned only if
6.1.1.1 substantially all the work to be performed by
Boeing is covered by this Boeing Warranty, and
6.1.1.2 Buyer does not have the capability to perform,
nor is it practical for Boeing personnel to perform, the warranty work away from
Boeing's facilities.
6.1.2 All warranty work will be performed at Boeing's expense,
with reasonable efforts to minimize Aircraft out-of-service time. In addition,
Boeing will reimburse Buyer by issuing a credit memorandum for the cost of fuel,
oil and landing fees incurred in ferrying the Aircraft to Boeing's facilities
and in ferrying the Aircraft back to Buyer's facilities. Buyer will minimize the
length of both ferry flights.
6.1.3 Any nonwarranty work performed by Boeing will be
authorized by Buyer and paid for by Buyer at Boeing's then-standard rates.
6.1.4 A separate agreement based on Boeing's then-standard form
will be entered into to cover the return of and work on such Aircraft.
6.2 As to any system, accessory, equipment or part:
6.2.1 All warranty work will be performed at Boeing's expense,
with reasonable efforts to minimize item out-of-service time for items returned.
6.2.2 Boeing's turnaround-time objectives for repair or
replacement are: 10 working days for avionic and electronic items and 30 working
days for other items when corrected at Boeing's facilities, or 40 working days
when corrected at the facilities of a Boeing subcontractor. Turnaround time
starts the date Boeing receives the returned item, together with Buyer's
warranty claim describing the work, and ends the date of shipment by Boeing of
such item. If a turnaround-time objective is not achieved and a
B
A-4
<PAGE>
resultant critical parts shortage is experienced by Buyer, and Buyer has
procured spare parts for such item in accordance with the Boeing Recommended
Spare Parts List, Boeing will, upon request from Buyer, either:
6.2.2.1 expedite repair or replacement of the item or
6.2.2.2 provide a similar item on a no-charge loan or no-
charge lease basis until the repaired or replaced item is provided to Buyer.
6.2.3 The freight charge for shipment to Boeing of any item will
be paid by Buyer; however, Boeing will reimburse Buyer by issuing a credit
memorandum for such charge for any item determined to be defective under this
Boeing Warranty. The freight charge for the return shipment to Buyer of any such
defective item which has been repaired, replaced or corrected pursuant to this
Boeing Warranty will be paid by Boeing.
6.3 Title to and risk of loss of any Aircraft or item returned to
Boeing will at all times remain with Buyer and/or any other owner of such
Aircraft or item, except that at the time Boeing ships a replacement item to
Buyer, title to and risk of loss (i) for the returned item will pass to Boeing
and (ii) for the replacement item will pass to Buyer. While Boeing has care,
custody and control of an Aircraft or item, Boeing will have only such
liabilities as a bailee for mutual benefit would have, but will not be liable
for loss of use.
7. Nonrepairable Items.
-------------------
Buyer may scrap any defective nonrepairable item having a then-current
Boeing spare part selling price of $2,000 or less and make a claim for a
replacement item. For a defective nonrepairable item having a then-current
Boeing spare part selling price greater than $2,000, an authorized Boeing
representative must confirm the nonrepairability of any such item. Buyer's
claim for an item with a spare part selling price exceeding $2,000 must include
such confirmation.
8. Reimbursement for Certain Inspection Labor Costs.
------------------------------------------------
8.1 In addition to the remedies set forth in this Boeing Warranty,
Boeing will reimburse Buyer by issuing a credit memorandum at the Warranty Labor
Rate for the direct labor hours expended by Buyer in performing inspections of
B
A-5
<PAGE>
the Aircraft to determine whether or not a covered defect exists in any system,
accessory, equipment or part manufactured to Boeing's detailed design, provided
that:
8.1.1 such inspections are recommended by a Boeing service
bulletin or service letter issued by Boeing within 48 months after delivery of
such Aircraft, and
8.1.2 such reimbursement will not apply to any inspections
performed as an alternative to accomplishing corrective action when such
corrective action is available to Buyer at the time such inspections are
performed.
8.2 If a covered defect is determined to exist as a result of the
foregoing inspections, the remedies under this Boeing warranty will apply to
Aircraft in warranty as of the warranty date set forth in the applicable Boeing
service bulletin or service letter or the date the defect was discovered by
Buyer, whichever date occurs first.
9. Wear and Tear.
-------------
Normal wear and tear and the need for regular maintenance and overhaul
will not constitute a defect.
10. Disclaimer and Release; Exclusion of Liabilities.
------------------------------------------------
This Part A and the rights and remedies of Buyer and obligations of
Boeing herein are subject to the Disclaimer and Release and Exclusion of
Consequential and Other Damages provisions of Article 12 of this Agreement.
11. Buyer's Indemnification of Boeing.
---------------------------------
The provisions of Part E, "Buyer's Indemnification of Boeing and
Insurance" of Exhibit C, will apply to all warranty work performed by Boeing
hereunder in accordance with Buyer's specific technical repair or correction
instructions, to the extent any legal liability of Boeing is based upon the
content of such instructions.
B
A-6
<PAGE>
PART B
WARRANTY REPAIRS AND MODIFICATIONS BY BUYER
-------------------------------------------
1. General.
-------
To expedite the return to service of any defective Aircraft or
systems, accessories, equipment and parts (items) that Boeing is obligated to
correct under the Boeing Warranty, repairs and modifications may, at Buyer's
option, be performed by Buyer (work) and charged to Boeing, subject to the
following:
2. Scope.
-----
This option applies only to items manufactured to Boeing's detailed
design. The warranty and notice periods and all other conditions and
limitations applicable to the Boeing Warranty apply to this option.
3. Repairs and Modifications.
-------------------------
All work will be performed in accordance with Boeing's written
instructions, using parts and materials as may be furnished by Boeing and/or
Boeing approved parts and materials as may be furnished by Buyer.
4. Claims for Reimbursement.
------------------------
Buyer's claim for reimbursement must be submitted in writing to Boeing
promptly after completion of the work. Such claim must include the data set
forth in paragraph 4.3 of Part A of this Exhibit B and the following:
4.1 Description of the work performed by Buyer;
4.2 Date work was completed by Buyer;
4.3 Itemized account of the direct labor hours expended in performing
the work; and
4.4 Itemized account of the direct materials incorporated in the
work.
5. Reimbursement.
-------------
Upon approval of Buyer's claim for reimbursement, Boeing will
reimburse Buyer by issuing a credit memorandum as follows:
B
B-1
<PAGE>
5.1 Direct Labor.
------------
At the Warranty Labor Rate specified herein for labor hours
expended by Buyer's direct labor employees in performing the work, including
accessing the item, removal, disassembly, inspection, bench testing, reassembly,
final inspection, and reinstallation, but not to exceed Boeing's estimate of
required labor hours, and excluding time for overhaul.
5.2 Direct Materials.
----------------
At the invoice cost to Buyer for all direct materials
incorporated in the work, excluding (i) materials used for overhaul, (ii)
materials furnished by Boeing at no charge, (iii) materials which exceed
Boeing's estimate of required materials, and (iv) allowances for handling,
overhead, taxes, customs duties and the like.
5.3 Warranty Labor Rate.
-------------------
The Warranty Labor Rate is $41.25 per hour or 150% of Buyer's
average direct hourly labor rate, whichever is greater. For this purpose,
"average direct hourly labor rate" is defined as the average hourly rate
(excluding all fringe benefits, premium-time allowances, social charges,
business taxes and the like) paid by Buyer to Buyer's employees whose jobs are
directly related to the performance of the work. Prior to or concurrently with
submittal of Buyer's first claim for labor reimbursement, Buyer will notify
Boeing of Buyer's then-current average direct hourly labor rate, and thereafter
notify Boeing of any material change in such rate. Boeing may require data from
Buyer to substantiate such rates.
5.4 Limitation.
----------
The total reimbursement with respect to the direct labor and
direct materials incorporated in the work, will not exceed 65% of Boeing's then-
current sales price for the item unless a greater percentage is established for
a particular item by written agreement between Boeing and Buyer.
All claims for reimbursement will be subject to audit by Boeing. Boeing will
promptly notify Buyer of Boeing's disposition of each claim submitted hereunder.
B
B-2
<PAGE>
6. Replaced Parts.
--------------
If component parts of any assembly are replaced by Buyer, the replaced
parts will be tagged with the assembly part number, the serial number and the
warranty claim number and retained for a period of 60 days following the date of
submittal of Buyer's claim, so as to be made available for Boeing's inspection.
Such parts may be scrapped after such 60-day period.
B
B-3
<PAGE>
PART C
BOEING SERVICE LIFE POLICY
--------------------------
1. Definitions.
-----------
1.1 "Airframe Component" means any of the primary structural elements
of the wing, fuselage, or vertical or horizontal stabilizer set forth in
Attachment A hereto and installed in an Aircraft at the time of delivery.
1.2 "Landing Gear Component" means any of the primary structural
elements of the landing gear set forth in Attachment A and installed in an
Aircraft at the time of delivery.
1.3 "Spare Component" means any component set forth in Attachment A
that was furnished to Buyer pursuant to this Policy or purchased by Buyer from
Boeing as a spare part.
1.4 "Covered Component" means an Airframe Component, a Landing Gear
Component or a Spare Component.
1.5 "Failure" means any breakage or defect in a Covered Component.
1.6 "Failed Component" means a Covered Component in which a Failure
has occurred.
2. Service Life Policy.
-------------------
If a Failure occurs in any Covered Component within the following
periods, Boeing will promptly, at a price calculated pursuant to this Policy,
either (i) design and furnish to Buyer materials required to correct the Failed
Component (excluding industry standard parts) or (ii) furnish to Buyer a
replacement Covered Component:
2.1 As to any Airframe Component or Landing Gear Component, within 12
years after delivery of the Aircraft in which such component was initially
installed; or
2.2 As to any Spare Component, within 12 years after delivery of such
Spare Component, or within 12 years after delivery by Boeing of the last new
Model 777 aircraft to Buyer, whichever first expires.
B
C-1
<PAGE>
3. Price.
-----
The price that Buyer will pay for the correction or replacement of a
Failed Component will be calculated pursuant to the following formula:
P = CT
---
144
where:
P = price to Buyer
C = Boeing spare parts sales price at time of correction or
replacement
T = total age in months of the Failed Component from the date of
delivery to Buyer to the date of Failure.
4. Conditions and Limitations.
--------------------------
Boeing's obligations under this Policy are conditioned upon the
following:
4.1 Buyer must notify Boeing of the Failure within three months after
it becomes apparent to Buyer.
4.2 Buyer must provide reasonable evidence that the claimed Failure
is covered by this Policy and if requested by Boeing, that such Failure was not
the result of (i) the breakage of or a defect in a component not covered by this
Policy, (ii) an extrinsic force, (iii) an act or omission of Buyer, or (iv)
operation or maintenance contrary to applicable regulations or Boeing's
instructions.
4.3 If return of a Failed Component is practicable and requested by
Boeing, Buyer will return such Failed Component to Boeing at Boeing's expense.
4.4 Buyer's rights and remedies under this Policy are limited to the
receipt of corrective materials or replacement components at prices calculated
in accordance with this Policy.
5. Disclaimer and Release; Exclusion of Liabilities.
------------------------------------------------
This Part C and the rights and remedies of Buyer and the obligations
of Boeing herein are subject to the Disclaimer and Release and Exclusion of
Consequential and Other Damages provisions of Article 12 of this Agreement.
B
C-2
<PAGE>
Attachment A to
Part C
COVERED AIRFRAME AND LANDING GEAR COMPONENTS
--------------------------------------------
1. Wing.
----
(a) Upper and lower wing skins and stiffeners between the forward
and rear wing spars.
(b) Wing spar webs, chords and stiffeners.
(c) Inspar wing ribs.
(d) Inspar splice plates and fittings.
(e) Upper wing fold hinge, end ribs and lower latch lugs.
(f) Main landing gear support structure.
(g) Wing center section lower beams, spanwise beams and floor beams,
but not the seat tracks attached to the beams.
(h) Wing-to-body structural attachments.
(i) Engine strut support fittings attached directly to wing primary
structure.
(j) Support structure in the wing for spoilers and spoiler
actuators; for aileron hinges and reaction links; and for
leading edge devices and trailing edge flaps.
(k) Leading edge device and trailing edge flap support system.
(l) Aileron, leading edge device and trailing edge flap internal,
fixed attachment and actuator support structure.
B
C-A-1
<PAGE>
Attachment A to
Part C
2. Body.
----
(a) External surface skins and doublers, longitudinal stiffeners,
longerons and circumferential rings and frames between the forward
pressure bulkhead and the vertical stabilizer rear spar bulkhead,
and structural support and enclosure for the APU but excluding all
system components and related installation and connecting devices,
insulation, lining, and decorative panels and related installation
and connecting devices.
(b) Window and windshield structure but excluding the windows and
windshields.
(c) Fixed attachment structure of the passenger doors, cargo doors and
emergency exits, excluding door mechanisms and movable hinge
components. Sills and frames around the body openings for the
passenger doors, cargo doors and emergency exits, excluding scuff
plates and pressure seals.
(d) Nose wheel well structure, including the wheel well walls,
pressure deck, forward and aft bulkheads, and the gear support
structure.
(e) Main gear wheel well structure including pressure deck, bulkheads
and landing gear beam support structure.
(f) Floor beams and support posts in the control cab and passenger
cabin area, but excluding seat tracks.
(g) Forward and aft pressure bulkheads.
(h) Keel structure between the wing front spar bulkhead and the main
gear wheel well aft bulkhead, including splices.
(i) Wing front and rear spar support bulkheads, and vertical and
horizontal stabilizer front and rear spar support bulkheads
including terminal fittings but excluding all system components
and related installation and connecting devices, insulation,
lining, and decorative panels and related installation and
connecting devices.
B
C-A-2
<PAGE>
Attachment A to
Part C
(j) Support structure in the body for the stabilizer pivot and
stabilizer screw.
3. Vertical Stabilizer.
-------------------
(a) External skins between front and rear spars.
(b) Front and rear spars including stiffeners.
(c) Attachment fittings between vertical stabilizer and body.
(d) Inspar ribs.
(e) Support structure in the vertical stabilizer for rudder hinges,
reaction links and actuators.
(f) Rudder internal, fixed attachment and actuator support structure.
(g) Rudder hinges and supporting ribs, excluding bearings.
4. Horizontal Stabilizer.
---------------------
(a) External skins between front and rear spars.
(b) Front and rear spars including splices and stiffeners.
(c) Inspar ribs.
(d) Stabilizer splice fittings and pivot and screw support structure.
(e) Support structure in the horizontal stabilizer for the elevator
hinges, reaction links and actuators.
(f) Elevator internal, fixed attachment and actuator support
structure.
(g) Elevator hinges and supporting ribs, excluding bearings.
B
C-A-3
<PAGE>
Attachment A to
Part C
5. Engine Strut.
------------
(a) Strut external surface skin and doublers and stiffeners.
(b) Internal strut chords, frames and bulkheads.
(c) Strut to wing fittings and diagonal brace.
(d) Engine mount support fittings attached directly to strut structure
and, for General Electric and Pratt and Whitney engines, including
the engine mounted support fittings.
6. Main Landing Gear.
-----------------
(a) Outer cylinder.
(b) Inner cylinder.
(c) Upper and lower side strut, including spindles and universals.
(d) Upper and lower drag strut, including spindles and universals.
(e) Orifice support tube.
(f) Downlock links including spindles and universals.
(g) Torsion links.
(h) Bogie beam.
(i) Axles.
(j) Steering crank arm.
(k) Steering rod.
B
C-A-4
<PAGE>
Attachment A to
Part C
7. Nose Landing Gear.
-----------------
(a) Outer cylinder.
(b) Inner cylinder, including axles.
(c) Orifice support tube.
(d) Upper and lower drag strut, including lock links.
(e) Steering plates and steering collar.
(f) Torsion links.
(g) Actuator support beam and hanger.
NOTE: The Service Life Policy does not cover any bearings, bolts, bushings,
- ---- clamps, brackets, actuating mechanisms or latching mechanisms used in or
on the Covered Components.
B
C-A-5
<PAGE>
PART D
BOEING INDEMNITY AGAINST PATENT INFRINGEMENT
--------------------------------------------
1. Indemnity.
---------
Subject to the provisions of this Part D, Boeing will indemnify and hold
harmless Buyer from and against all claims, suits, actions, liabilities, damages
and costs arising out of actual or alleged infringement, by any Aircraft or any
system, accessory, equipment or part (item) installed thereon at the time of
Aircraft delivery, of any patent issued under the laws of any country in which
Buyer lawfully operates the Aircraft (Country).
2. Exceptions.
----------
2.1 This indemnity will not apply unless, from the time of design of
the allegedly infringing Aircraft or item until the resolution of the
infringement claim, the Country and flag country of the Aircraft: (i) are fully
bound by the Chicago Convention on International Civil Aviation of December 7,
1944, and are fully entitled to all benefits of Article 27 thereof, or (ii) have
been parties to the International Convention for the Protection of Industrial
Property (Paris Convention).
2.2 This indemnity will not apply to Buyer Furnished Equipment,
Engines, any system, accessory, equipment or part that was not manufactured to
Boeing's detailed design, or to any system, accessory, equipment or part
manufactured to Boeing's detailed design without Boeing's authorization.
3. Conditions and Limitations.
--------------------------
Buyer's remedy and Boeing's obligations hereunder are subject to the
following:
3.1 Buyer must give Boeing written notice within 10 days after Buyer
receives notice of a suit or action against Buyer alleging infringement or
within 20 days after Buyer receives a written claim of infringement.
B
D-1
<PAGE>
3.2 Following receipt of such notice Boeing may conduct negotiations
with any party claiming infringement and may intervene in any suit or action.
Whether or not Boeing intervenes, Boeing will be entitled at any stage of the
proceedings to assume or control the defense.
3.3 Buyer will (i) promptly furnish to Boeing all data, records and
assistance within Buyer's control which are material to any such claim, suit or
action and (ii) (except as to amounts mandated by a judgment) obtain Boeing's
prior approval to pay or assume any liabilities, damages, royalties or costs.
3.4 Boeing's obligations and Buyer's remedies herein exclude Buyer's
incidental or consequential damages and liabilities, costs, loss of revenue or
loss of profit resulting from loss of use, but include, at Boeing's option,
replacing the infringing item or otherwise curing any infringement on account of
which use of the Aircraft by Buyer is prevented.
3.5 Boeing's obligations and Buyer's remedies herein are exclusive and
in substitution for, and Buyer hereby waives, releases and renounces, all other
indemnities, obligations and liabilities of Boeing and any assignee of Boeing,
and all other rights, remedies and claims, including claims for damages, direct,
incidental or consequential, of Buyer against Boeing or any assignee of Boeing,
express or implied, arising by law or otherwise, with respect to any actual or
alleged patent infringement or the like by any Aircraft or any item installed
therein.
B
D-2
<PAGE>
PART D-1
BOEING INDEMNITY AGAINST COPYRIGHT INFRINGEMENT
-----------------------------------------------
1. Indemnity.
---------
Subject to the following, Boeing will indemnify Buyer with respect to
claims, suits, damages and costs arising out of copyright infringement by any
computer software included with the Aircraft when the Aircraft is first
delivered by Boeing (Aircraft Software).
2. Exceptions, Limitations and Conditions.
--------------------------------------
2.1 Boeing will have no obligation to indemnify Buyer relative to
Buyer Furnished Equipment, engines, software not manufactured to Boeing's
detailed design, or software manufactured to Boeing's detailed design without
Boeing's written authorization.
2.2 Boeing's obligation to indemnify Buyer is limited to
infringements (a) in countries where Buyer lawfully operates the Aircraft
(Countries) and (b) where, from the time of creation of the allegedly infringing
software until the resolution of the infringement claim, the Countries and flag
country of the Aircraft are members of The Berne Union and recognize computer
software as a "work" under The Berne Convention.
2.3 Boeing will have no obligation or liability for loss of use,
revenue or profit, or for any other incidental or consequential damages.
2.4 Boeing may, at its option, replace any infringing or allegedly
infringing Aircraft Software (or item containing Aircraft Software) with a
noninfringing equivalent.
2.5 Buyer must inform Boeing in writing (a) within 10 days after
Buyer receives notice of a suit or other formal action against Buyer alleging
copyright infringement involving Aircraft Software and (b) within 30 days after
Buyer receives any allegation or claim in the nature of copyright infringement
involving Aircraft Software.
2.6 Boeing may negotiate with any party claiming infringement and may
intervene or assume control of the defense at any stage in any infringement suit
or action.
B
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<PAGE>
2.7 Buyer will promptly furnish to Boeing all data, records and
assistance within Buyer's possession or control which may be material to any
copyright infringement claim, suit or action relating to Aircraft Software.
2.8 Other than as required by a final judgment entered by a court of
competent jurisdiction, Buyer will not make any payment or commitment to pay,
assume any obligation, or make any material concession relative to any copyright
infringement for which Boeing may otherwise be obligated.
2.9 The obligations of Boeing and remedies of Buyer set forth in this
Part are exclusive and in substitution for, and Buyer hereby waives, releases
and renounces, all other indemnities, obligations, and liabilities of Boeing and
all other rights, claims and remedies of Buyer against Boeing, express or
implied, arising by law or otherwise, with respect to any actual or alleged
copyright infringement or the like by any Aircraft or any item included in any
Aircraft.
B
D-1-2
<PAGE>
PART E
SUPPLIER WARRANTIES AND PATENT INDEMNITIES
------------------------------------------
1. Supplier Warranties and Supplier Patent Indemnities.
---------------------------------------------------
Boeing will use diligent efforts to obtain adequate warranties and
indemnities against patent infringement enforceable by Buyer from manufacturers
(Suppliers) of systems, accessories, equipment or parts installed on the
Aircraft at the time of delivery that were selected and purchased by Boeing, but
not manufactured to Boeing's detailed design. Boeing will furnish copies of
such warranties and patent indemnities to Buyer prior to delivery of the first
Aircraft.
2. Boeing Assistance in Administration of Supplier Warranties.
----------------------------------------------------------
Buyer will be responsible for submitting warranty claims directly to
Suppliers; however, if Buyer experiences problems enforcing any Supplier
warranty obtained by Boeing for Buyer, Boeing will conduct an investigation of
such problems and assist Buyer in the resolution of such claims.
3. Boeing Support in Event of Supplier Default.
-------------------------------------------
3.1 If any Supplier defaults in the performance of a material
obligation under a design, material or workmanship warranty obtained by Boeing
for Buyer, and Buyer provides evidence to Boeing that such default has occurred,
then the equivalent warranty and related provisions set forth in this Product
Assurance Document will apply to the claimed defect.
3.2 At Boeing's request, Buyer will assign to Boeing, and Boeing will
be subrogated to, Buyer's rights against the manufacturer providing such
Supplier warranty.
B
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<PAGE>
PART F-1
ENGINE MANUFACTURER'S WARRANTY
------------------------------
AND PRODUCT SUPPORT PLAN
------------------------
Boeing has obtained from General Electric Company (GE) the right to extend to
Buyer the provisions of GE's warranty as set forth below (herein referred to as
the "Warranty"); subject, however, to Buyer's acceptance of the conditions set
forth herein. Accordingly, Boeing hereby extends to Buyer and Buyer hereby
accepts the provisions of GE's Warranty as hereinafter set forth, and such
Warranty shall apply to all GE90 type Engines (including all Modules and Parts
thereof) installed in the Aircraft at the time of delivery or purchased from
Boeing by Buyer for support of the Aircraft except that, if Buyer and GE have
executed, or hereafter execute, a General Terms Agreement, then the terms of
that Agreement shall be substituted for and supersede the provisions of
paragraphs 1 through 10 below and paragraphs 1 through 10 below shall be of no
force or effect and neither Boeing nor GE shall have any obligation arising
therefrom. In consideration for Boeing's extension of the GE Warranty to Buyer,
Buyer hereby releases and discharges Boeing from any and all claims, obligations
and liabilities whatsoever arising out of the purchase or use of such GE90 type
Engines and Buyer hereby waives, releases and renounces all its rights in all
such claims, obligations and liabilities. In addition, Buyer hereby releases
and discharges GE from any and all claims, obligations and liabilities
whatsoever arising out of the purchase or use of such GE90 type Engines except
as otherwise expressly assumed by GE in such GE Warranty or General Terms
Agreement between Buyer and GE and Buyer hereby waives, releases and renounces
all its rights in all such claims, obligations and liabilities.
B
F-1-1
<PAGE>
GENERAL ELECTRIC COMPANY WARRANTY
---------------------------------
1. Title.
-----
General Electric warrants that at the date of delivery, GE has legal
title to and good and lawful right to sell its GE90 Type Engine and Products and
furthermore warrants that such title is free and clear of all claims, liens and
encumbrances of any nature whatsoever.
2. Patents.
-------
A. GE will handle all claims and defend any suit or proceeding
brought against Buyer insofar as based on a claim that any product or part
furnished under this Agreement constitutes an infringement of any patent of the
United States, and will pay all damages and costs awarded therein against Buyer.
This paragraph will not apply to any product or any part manufactured to Buyer's
design or to the aircraft manufacturer's design. As to such product or part, GE
assumes no liability for patent infringement.
B. GE's liability hereunder is conditioned upon Buyer promptly
notifying GE in writing and giving GE authority, information and assistance (at
GE's expense) for the defense of any suit. In case said equipment or part is
held in such suit to constitute infringement and the use of said equipment or
part is enjoined, GE will expeditiously, at its own expense and at its option,
either (1) procure for Buyer the rights to continue using said product or part;
(2) replace the same with a satisfactory and noninfringing product or part; or
(3) modify the same so it becomes satisfactory and noninfringing. The foregoing
will constitute the sole remedy of Buyer and the sole liability of GE for patent
infringement.
C. The above provisions also apply to products which are the same as
those covered by this Agreement and are delivered to Buyer as part of the
installed equipment on GE90 powered Aircraft.
3. Initial Warranty.
----------------
GE warrants that GE90 Engine products will conform to GE's applicable
specifications and will be free from defects in material and workmanship prior
to Buyer's initial use of such products.
B
F-1-2
<PAGE>
4. Warranty Pass-On.
----------------
A. If requested by Buyer and agreed to by GE in writing, GE will
extend warranty support for Engines sold by Buyer to commercial airline
operators, or to other aircraft operators. Such warranty support will be
limited to the New Engine Warranty, New Parts Warranty, Ultimate Life Warranty
and Campaign Change Warranty and will require such operator(s) to agree in
writing to be bound by and comply with all the terms and conditions, including
the limitations, applicable to such warranties.
B. Any warranties set forth herein will not be transferable to a
third party, merging company or an acquiring entity of Buyer.
C. In the event Buyer is merged with, or acquired by, another
aircraft operator which has a general terms agreement with GE, the Warranties as
set forth herein will apply to the Engines, Modules, and Parts.
5. New Engine Warranty.
-------------------
A. GE warrants each new Engine and Module against Failure for the
initial 3500 Flight Hours as follows:
1. Parts Credit Allowance will be granted for any Failed
Parts.
2. Labor Allowance for disassembly, reassembly, tests and
Parts Repair of any new Engine part will be granted for replacement of Failed
Parts.
3. Such Parts Credit Allowance, test and Labor Allowance will
be 100% from new to 3000 Flight Hours and decreasing pro rata from 100% at 3000
Flight Hours to zero percent at 3500 Flight Hours.
B. As an alternative to the above allowances, GE will upon request of
Buyer:
1. Arrange to have failed Engines and Modules repaired as
appropriate, at a facility designated by GE at no charge to Buyer for the first
3000 Flight Hours and at a charge to Buyer increasing pro rata from zero percent
of GE's repair costs at 3000 Flight Hours to 100% of such GE repair costs at
3500 Flight Hours.
B
F-1-3
<PAGE>
2. Transportation to and from the designated facility shall be
at Buyer's expense.
6. New Parts Warranty.
------------------
In addition to the warranty granted for new Engines and Modules GE
warrants Engine and Module Parts as follows:
A. During the first 2000 Flight Hours for such Parts and Expendable
Parts, GE will grant 100% Parts Credit Allowance or Labor Allowance for repair
labor for failed Parts.
B. GE will grant a pro rata Parts Credit Allowance for Scrapped Parts
decreasing from 100% at 2000 Flight Hours Part Time to zero percent at the
applicable hours designated in the Table below:
B
F-1-4
<PAGE>
<TABLE>
<CAPTION>
GE90 Warranty Parts List*
-------------------------
FLIGHT HOURS
--------------------------------
3000 4000 8000 15000
---- ---- ---- -----
<S> <C> <C> <C> <C>
Fan Rotor
---------
Blade, 1st Stage X
Blade, Booster Stages 2-4 X
Disk, 1st Stage X
Spool, Booster Stages X
Forward Fan Shaft X
Spinner X
Mid-shaft X
Fan Stator
----------
Casing incl. containment X
Stator Vane Stages X
Booster Cases X
Outlet Guide Vane (OGV),
Support X
Noise Attenuation Panels X
Bleed Valve System X
Aft Case X
Compressor Rotor
----------------
Blades X
Disks and Spools X
Shaft, Aft X
Compressor Stator
-----------------
Case X
Shrouds X
Vanes X
Variable Stator Actuating
Rings X
Combustor
---------
Inner/Outer Liners & Dome X
HPT Rotor
---------
Blades X
Retaining Rings X
Shaft, Forward and Aft X
Disks X
Thermal Shield X
Spacer/Impeller X
*Warranty Parts List may change
</TABLE>
B
F-1-1
<PAGE>
<TABLE>
<CAPTION>
GE90 Warranty Parts List*
-------------------------
FLIGHT HOURS
--------------------------------
3000 4000 8000 15000
---- ---- ---- -----
<S> <C> <C> <C> <C>
HPT Stator
----------
Vane Assemblies X
Vane Support X
Interstage Seal X
Shrouds X
Shroud Support X
LPT Rotor
---------
Blades X
Interstage Seals X
Disks X
LP Shaft X
LPT Stator
----------
Case X
Vane Assemblies X
Interstage Seals X
Shrouds X
Fan Frame
---------
Mid Frame and Struts X
All Supports X
Fwd. Engine Mount X
Fairings X
Compressor Rear Frame
---------------------
Case X
"B" Sump X
Condition Monitoring Equipment X
------------------------------
Turbine Rear Frame
------------------
Frame X
Liner X
Bearing Supports X
"C/D" Sump X
Main Engine Bearings X
--------------------
Gearboxes
---------
Cases X
Shafts, Drive X
Gears X
Bearings X
Plug-in Adapters X
* Warranty Parts List may change
</TABLE>
B
F-1-2
<PAGE>
<TABLE>
<CAPTION>
GE90 Warranty Parts List*
-------------------------
FLIGHT HOURS
--------------------------------
3000 4000 8000 15000
---- ---- ---- -----
<S> <C> <C> <C> <C>
Rotor Tubes and Baffles X
-----------------------
Sump Air and Oil Seals X
----------------------
Oil Tank X
Controls & Accessories-Engine
-----------------------------
Lube Pump X
Scavenge Pump X
Scavenge Filter X
Fuel/Oil Heat Exchanger X
Main Fuel Pump X
Fuel Filter X
Pressurizing Valve X
Hydro Mechanical Unit X
Compressor Inlet Temperature
Sensor X
Variable Stator Actuator X
Thermocouple Harness X
Tachometer Generator-Fan X
Anti-Icing Valve X
Ignition Unit X
Electronic Control Unit X
Fuel Nozzle X
Power Alternator X
* Warranty Parts List may change
</TABLE>
B
F-1-3
<PAGE>
7. Ultimate Life Warranty.
----------------------
A. GE warrants Ultimate Life limits on the following parts:
GE90 Engine
-----------
Fan Rotor
---------
Disk, Stage 1
Spool, Booster Stages 2-4
Fan-Shaft, Forward
Fan-Shaft, Aft
Compressor Rotor
----------------
Disk Shaft, Forward
Spool Stages 2-6
Disk, Stage 7
Spool Shaft, Stage 8-10
High Pressure Turbine Rotor
---------------------------
Disk Shaft, Stage 1
Disk Shaft, Stage 2
Low Pressure Turbine Rotor
--------------------------
Disks, Stage 1-6
Shaft, Cone
Shaft, Forward
B. GE will grant a pro rata Parts Credit Allowance of 100% when new
to 10,000 Flight Cycles, and a credit allowance decreasing pro rata from 100% at
10,000 Flight Cycles to zero percent at 15,000 Flight Cycles. Credit will be
granted only when such Parts are permanently removed from service by a GE or
U.S. Government imposed Ultimate Life Limitation of less than 15,000 Flight
Cycles.
8. Campaign Change Warranty.
------------------------
A. A campaign change will be declared by GE when a new Part design
introduction, Part modification, Part inspection, or premature replacement of an
Engine or Module is required by a time compliance (specific date) GE Service
Bulletin. Campaign change may also be declared for GE Service Bulletins
requesting new Part introduction no later than the next Engine or Module shop
visit. GE will grant the following Parts Credit Allowances:
B
F-1-4
<PAGE>
Engines and Modules
-------------------
(1) 100% for Parts in inventory or removed from service when new
or with 3000 Flight Hours or less total Part Time.
(2) Pro rata for Parts in inventory or removed from service
decreasing pro rata from 100% at 3000 Flight Hours to 50% at 3500 Flight Hours.
(3) 50% for Parts in inventory or removed from service with over
3500 Flight Hours since new, regardless of warranty status.
B. Labor Allowance - GE will grant 100% Labor Allowance for
disassembly, reassembly, modification, testing, or inspection of GE-supplied
Engines, Modules or Parts therefor when such action is required to comply with a
mandatory time compliance (specific date) GE Service Bulletin. A Labor
Allowance will be granted by GE for other GE issued Service Bulletins if so
specified in such Service Bulletins.
C. Life Controlled Rotating Parts retired by Ultimate Life limits are
excluded from Campaign Change Warranty.
9. Limitations.
-----------
THE PROVISIONS SET FORTH HEREIN ARE EXCLUSIVE AND ARE IN LIEU OF ALL
OTHER WARRANTIES WHETHER WRITTEN, ORAL OR IMPLIED. THERE ARE NO IMPLIED
WARRANTIES OF FITNESS OR MERCHANTABILITY. SAID PROVISIONS SET FORTH THE MAXIMUM
LIABILITY OF GE WITH RESPECT TO CLAIMS OF ANY KIND, INCLUDING NEGLIGENCE,
ARISING OUT OF MANUFACTURE, SALE, POSSESSION, USE OR HANDLING OF THE PRODUCTS OR
PARTS THEREOF OR THEREFOR, AND IN NO EVENT SHALL GE'S LIABILITY TO BUYER EXCEED
THE PURCHASE PRICE OF THE PRODUCT GIVING RISE TO BUYER'S CLAIM OR INCLUDE
INCIDENTAL OR CONSEQUENTIAL DAMAGES.
10. Indemnity and Contribution.
--------------------------
A. IN THE EVENT BUYER ASSERTS A CLAIM AGAINST A THIRD PARTY FOR
DAMAGES OF THE TYPE LIMITED OR EXCLUDED IN LIMITATIONS, PARAGRAPH 9. ABOVE,
BUYER SHALL INDEMNIFY AND HOLD GE HARMLESS FROM AND AGAINST ANY CLAIM BY OR
LIABILITY TO SUCH THIRD PARTY FOR CONTRIBUTION OR INDEMNITY, INCLUDING COSTS AND
EXPENSES (INCLUDING ATTORNEYS' FEES) INCIDENT
B
F-1-5
<PAGE>
THERETO OR INCIDENT TO ESTABLISHING SUCCESSFULLY THE RIGHT TO INDEMNIFICATION
UNDER THIS PROVISION. THIS INDEMNITY SHALL APPLY WHETHER OR NOT SUCH DAMAGES
WERE OCCASIONED IN WHOLE OR IN PART BY THE FAULT OR NEGLIGENCE OF GE, WHETHER
ACTIVE, PASSIVE OR IMPUTED.
B. BUYER SHALL INDEMNIFY AND HOLD GE HARMLESS FROM ANY DAMAGE, LOSS,
CLAIM, AND LIABILITY OF ANY KIND (INCLUDING EXPENSES OF LITIGATION AND
ATTORNEYS' FEES) FOR PHYSICAL INJURY TO OR DEATH OF ANY PERSON, OR FOR PROPERTY
DAMAGE OF ANY TYPE, ARISING OUT OF THE ALLEGED DEFECTIVE NATURE OF ANY PRODUCT
OR SERVICE FURNISHED UNDER THIS AGREEMENT, TO THE EXTENT THAT THE PAYMENTS MADE
OR REQUIRED TO BE MADE BY GE EXCEED ITS ALLOCATED SHARE OF THE TOTAL FAULT OR
LEGAL RESPONSIBILITY OF ALL PERSONS ALLEGED TO HAVE CAUSED SUCH DAMAGE, LOSS,
CLAIM, OR LIABILITY, BECAUSE OF A LIMITATION OF LIABILITY ASSERTED BY BUYER OR
BECAUSE BUYER DID NOT APPEAR IN AN ACTION BROUGHT AGAINST GE. BUYER'S
OBLIGATION TO INDEMNIFY GE HEREUNDER SHALL BE APPLICABLE AT SUCH TIME AS GE IS
REQUIRED TO MAKE PAYMENT PURSUANT TO A FINAL JUDGMENT IN AN ACTION OR PROCEEDING
IN WHICH GE WAS A PARTY, PERSONALLY APPEARED, AND HAD THE OPPORTUNITY TO DEFEND
ITSELF. THIS INDEMNITY SHALL APPLY WHETHER OR NOT BUYER'S LIABILITY IS
OTHERWISE LIMITED.
B
F-1-6
<PAGE>
PART F-2
ENGINE MANUFACTURER'S WARRANTY
------------------------------
AND PRODUCT SUPPORT PLAN
------------------------
Boeing has obtained from United Technologies Corporation ("United") the right to
extend to Buyer the provisions of United's "Warranty for New Engines and New
Parts for Engines" (herein referred to as the "Warranty"); subject, however, to
Buyer's acceptance of the conditions set forth herein. Accordingly, Boeing
hereby extends to Buyer and Buyer hereby accepts the provisions of United's
Warranty as hereinafter set forth, and such Warranty shall apply to all PW4000
type Engines (including all Modules and Parts thereof) installed in the Aircraft
at the time of delivery or purchased from Boeing by Buyer for support of the
Aircraft except that, if Buyer and United have executed a General Terms
Agreement for such installed Engines, then the terms of that Agreement shall be
substituted for and supersede the below-stated provisions and such provisions
shall be of no force or effect and neither Boeing nor United shall have any
obligation arising therefrom. In consideration for Boeing's extension of the
United Warranty to Buyer, Buyer hereby releases and discharges Boeing from any
and all claims, obligations and liabilities whatsoever arising out of the
purchase or use of such Engines and Buyer hereby waives, releases and renounces
all its rights in all such claims, obligations and liabilities. In addition,
Buyer hereby releases and discharges United from any and all claims, obligations
and liabilities whatsoever arising out of the purchase or use of such United
PW4000 Engines except as otherwise expressly assumed by United in its Warranty
or General Terms Agreement between Buyer and United and Buyer hereby waives,
releases and renounces all its rights in all such claims, obligations and
liabilities.
B
F-2-1
<PAGE>
WARRANTY FOR NEW ENGINES AND NEW PARTS FOR ENGINES
--------------------------------------------------
1. Defective Goods.
---------------
United Technologies Corporation, Pratt & Whitney Group, Commercial Engine
Business (Seller) warrants to Customer (Buyer) that at the time of delivery the
goods sold hereunder will be free from defects in material and manufacture and
will conform substantially to Seller's applicable specification. Seller's
liability and Buyer's remedy under this warranty are limited to the repair or
replacement, at Seller's election, of goods or parts thereof returned to Seller
which are shown to Seller's reasonable satisfaction to have been defective;
provided that written notice of the defect will have been given by Buyer to
Seller within ninety (90) days after the first operation or use of the goods (or
if the goods are installed in new aircraft, within ninety (90) days after
acceptance of such aircraft by its first operator) but in no event later than
one (1) year after the date of delivery of such goods by Seller. Transportation
charges for the return of defective goods to Seller and their reshipment to
Buyer and the risk of loss thereof will be borne by Seller only if returned in
accordance with written shipping instructions from Seller.
2. Title.
-----
Seller warrants to Buyer that it will convey good title to the goods sold
hereunder. Seller's liability and Buyer's remedy under this warranty are
limited to the removal of any title defect or, at the election of Seller, to the
replacement of the goods or parts thereof which are defective in title;
provided, however, that the rights and remedies of the parties with respect to
patent infringement shall be limited to the provisions of subparagraph 3. below.
3. Patent Infringement.
-------------------
Seller will conduct, at its own expense, the entire defense of any claim,
suit or action alleging that, without further combination, the use or resale by
Buyer or any subsequent purchaser or user of the goods delivered hereunder
directly infringes any United States patent, but only on the conditions that:
(a) Seller receives prompt written notice of such claim, suit or action and full
opportunity and authority to assume the sole defense thereof, including
settlement and appeals, and all information available to Buyer and defendant for
such defense; (b) said goods are made according to a
B
F-2-2
<PAGE>
specification or design furnished by Seller or, if a process patent is involved,
the process performed by the goods is recommended in writing by Seller; and (c)
the claim, suit or action is brought against Buyer or one expressly indemnified
by Buyer. Provided all of the foregoing conditions have been met, Seller will,
at its own expense, either settle said claim, suit or action or will pay all
damages and costs awarded by the court therein and, if the use or resale of such
goods is finally enjoined, Seller will, at Seller's option, (i) procure for
defendant the right to use or resell the goods, (ii) replace them with
equivalent noninfringing goods, (iii) modify them so they become noninfringing
but equivalent, or (iv) remove them and refund the purchase price paid therefore
(less a reasonable allowance for use, damage and obsolescence).
If a claim, suit or action is based on a design or specification furnished by
Buyer or on the performance of a process not recommended in writing by Seller,
or on the use or sale of the goods delivered hereunder in combination with other
goods not delivered to Buyer by Seller, Buyer will indemnify and save Seller
harmless therefrom.
4. Engine and Parts Service Policy.
-------------------------------
Seller warrants to Buyer that it will extend to Buyer, with respect to
Engines sold to Buyer (whether installed as new equipment in aircraft by the
manufacturer and delivered to Buyer or delivered directly by Seller to Buyer),
allowances and adjustments in accordance with the applicable Engine and Parts
Service Policy offered by said Seller on the date of Seller's receipt of the
order therefor. Seller's liability and Buyer's remedy under this Engine and
Parts Service Policy are limited to the allowances and adjustments and are
subject to the general conditions stipulated in such Engine and Parts Service
Policy; provided, however, that no change in or retraction of such Policy shall
apply to Engines delivered or to be delivered by Seller under orders received by
Seller prior to Seller's announcement of any such change or retraction.
5. Exclusive Warranties and Remedies.
---------------------------------
THE FOREGOING WARRANTIES ARE EXCLUSIVE AND ARE GIVEN AND ACCEPTED IN LIEU
OF (i) ANY AND ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT
LIMITATION THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE, AND (ii) ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY
IN CONTRACT OR TORT, WHETHER OR NOT ARISING FROM SELLER'S NEGLIGENCE, ACTUAL OR
IMPUTED. THE
B
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<PAGE>
REMEDIES OF BUYER SHALL BE LIMITED TO THOSE PROVIDED HEREIN TO THE EXCLUSION OF
ANY AND ALL OTHER REMEDIES INCLUDING, WITHOUT LIMITATION, INCIDENTAL OR
CONSEQUENTIAL DAMAGES. NO AGREEMENT VARYING OR EXTENDING THE FOREGOING
WARRANTIES, REMEDIES OR THIS LIMITATION WILL BE BINDING UPON SELLER UNLESS IN
WRITING, SIGNED BY A DULY AUTHORIZED OFFICER OR SELLER.
6. Warranty Pass-on.
----------------
Seller will, upon the written request of the Buyer, extend Warranty
coverage to Engines (or modules and/or parts thereof) sold by Buyer to another
operator to the extent only, however, that such coverage exists at the time of
such sale and subject to the provisions of the Warranty.
B
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<PAGE>
PART F-3
ENGINE MANUFACTURER'S WARRANTY
------------------------------
AND PRODUCT SUPPORT PLAN
------------------------
Boeing has obtained from Rolls-Royce plc ("RR") the right to extend to Buyer the
provisions of RR's Warranty Agreement (herein referred to as the "Warranty");
subject, however, to Buyer's acceptance of the conditions set forth therein.
Accordingly, Boeing hereby extends to Buyer and Buyer hereby accepts the
provisions of the Warranty, and such Warranty shall apply to all RB211 Trent
type Engine(s) (including all Modules and Parts thereof) installed in the
Aircraft at the time of delivery or purchased from Boeing by Buyer for support
of the Aircraft except that, if Buyer and RR have executed a General Terms
Agreement, then the terms of that Agreement shall be substituted for and
supersede the provisions of the Warranty and the Warranty shall be of no force
or effect and neither Boeing nor RR shall have any obligation arising therefrom.
In consideration for Boeing's extension of the Warranty to Buyer, Buyer hereby
releases and discharges Boeing from any and all claims, obligations and
liabilities whatsoever arising out of the purchase or use of such RB211 Trent
Engine(s) and Buyer hereby waives, releases and renounces all its rights in all
such claims, obligations and liabilities. In addition, Buyer hereby releases
and discharges RR from any and all claims, obligations and liabilities
whatsoever arising out of the purchase or use of such RB211 Trent type Engine(s)
except as otherwise expressly assumed by RR in such Warranty or General Terms
Agreement between Buyer and RR and Buyer hereby waives, releases and renounces
all its rights in all such claims, obligations and liabilities.
The RR Warranty is set forth in Exhibit C to the RB211 TRENT type engine
purchase contract dated May 31, 1990 between Rolls-Royce plc and Boeing. Copies
of the RR Warranty shall be provided to Buyer by Boeing upon request.
B
F-3-1
<PAGE>
PART G
BOEING INTERFACE COMMITMENT
---------------------------
1. Interface Problems.
------------------
If Buyer experiences technical problems in the operation of an
Aircraft or its systems, the cause of which is not readily identifiable by Buyer
but which Buyer believes to be attributable to the design characteristics of the
Aircraft or its systems (Interface Problem), Boeing will, without additional
charge to Buyer, promptly conduct an investigation and analysis to determine the
cause or causes of the Interface Problem and to recommend such corrective action
as may be feasible. Buyer will furnish to Boeing all data and information in
Buyer's possession relevant to the Interface Problem, and will cooperate with
Boeing in the conduct of investigations and tests. Boeing will promptly advise
Buyer at the conclusion of its investigation of Boeing's opinion as to the
causes of the Interface Problem and Boeing's recommendation as to corrective
action.
2. Boeing Responsibility.
---------------------
If Boeing determines that the Interface Problem is primarily
attributable to the design of any item manufactured to Boeing's detailed design,
Boeing will correct the design of such item to the extent of any then-existing
obligations of Boeing under the provisions of the applicable Boeing Warranty or
Boeing Service Life Policy.
3. Manufacturer Responsibility.
---------------------------
If Boeing determines that the Interface Problem is primarily
attributable to the design of an item not manufactured to Boeing's detailed
design, Boeing will assist Buyer in processing a warranty claim against the
manufacturer of such item.
4. Joint Responsibility.
--------------------
If Boeing determines that the Interface Problem is partially
attributable to the design of an item manufactured to Boeing's detailed design
and partially to the design of an item not manufactured to Boeing's detailed
design, Boeing will seek a solution to the Interface Problem through the
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<PAGE>
cooperative efforts of Boeing and the manufacturer of the other item and will
promptly advise Buyer of resulting corrective actions and recommendations.
5. General.
-------
Buyer will, if requested by Boeing, assign to Boeing any of Buyer's
rights against any manufacturer as Boeing may require to fulfill its obligations
hereunder.
6. Disclaimer and Release; Exclusion of Liabilities.
------------------------------------------------
This Part G and the rights and remedies of Buyer and the obligations
of Boeing herein are subject to the Disclaimer And Release and Exclusion of
Consequential and Other Damages provisions of Article 12 of this Agreement.
B
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<PAGE>
PART H
GENERAL
-------
1. Duplicate Product Assurance Remedies.
------------------------------------
Boeing will not provide or be requested to provide multiple remedies for
any claim made pursuant to the provisions of this Product Assurance Document.
2. Notices.
-------
References to "Boeing" in connection with notices or communications
throughout this Product Assurance Document mean Boeing's Product Assurance
Regional Manager at Renton, Washington.
B
H-1
<PAGE>
PART I
SUPPLIER COMPONENT RELIABILITY (MTBUR/MTBF) COMMITMENTS AND
-----------------------------------------------------------
SYSTEM RELIABILITY (MTBMA) COMMITMENTS
--------------------------------------
1. Supplier MTBUR/MTBF and MTBMA Commitments.
-----------------------------------------
Boeing will use diligent efforts to obtain component reliability
commitments and, for fault tolerant systems, system reliability commitments,
enforceable by Buyer, from suppliers of certain systems, accessories, equipment
and parts which are selected and purchased by Boeing but which are not
manufactured to Boeing's detailed design and which will be installed in the
Aircraft at time of delivery. These commitments will be based on the supplier's
contractual targets for Mean Time Between Unscheduled Removals (MTBUR), Mean
Time Between Failures (MTBF) and, for fault tolerant systems, Mean Time Between
Maintenance Alerts (MTBMA). Boeing will furnish copies of such supplier
MTBUR/MTBF and MTBMA commitments to Buyer, in Boeing Document No. D6-56115,
"Supplier Product Support and Product Assurance Document - All Boeing Model
Airplanes," prior to delivery of the first Aircraft.
2. Boeing Support of Supplier MTBUR/MTBF Commitments.
-------------------------------------------------
Buyer will be responsible for submitting any reliability reports directly
to suppliers, however if any supplier defaults in the performance of any
material obligation with respect to the supplier's MTBUR/MTBF commitments
obtained by Boeing pursuant to paragraph 1 above, then the terms and conditions
set forth in Part J of this Product Assurance Document will apply with respect
to the supplier component involved, as if such component was a "Specified
Component" (as defined in paragraph 2.12 of such Part J) provided by Boeing,
except that:
2.1 Buyer will, within 3 months after the occurrence of such default,
submit to Boeing's Warranties Regional Manager at Renton, Washington, reasonable
proof that such default has occurred;
2.2 The MTBUR and MTBF target values used will be the target values
specified in the supplier commitments obtained by Boeing as described in
paragraph 1 above; and
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2.3 Boeing will have the right to assign any or all of its applicable
obligations and liabilities with respect to Part J to any supplier that Boeing
may select, provided that Boeing will remain obligated, pursuant to this
paragraph 2, to such applicable Part J provisions in the event of any further
default by any such supplier.
At Boeing's request, Buyer will assign to Boeing, and Boeing will be subrogated
to, any of Buyer's rights against such supplier as Boeing may reasonably require
to permit Boeing to seek remedies from such supplier comparable to those
provided by Boeing to Buyer pursuant to such Part J.
3. Boeing Support of Supplier MTBMA Commitments.
--------------------------------------------
In the event that any supplier defaults in the performance of any
material obligation with respect to such supplier's MTBMA commitments obtained
by Boeing pursuant to paragraph 1 of this Part I, then the terms and conditions
set forth in Attachment A to this Part I will apply with respect to the supplier
component involved, except that:
3.1 Buyer will, within 3 months after the occurrence of such default,
submit to Boeing's Warranties Regional Manager at Renton, Washington, reasonable
proof that such default has occurred; and
3.2 The MTBMA target values used will be the target values specified
in the supplier commitments obtained by Boeing as described in paragraph 1
above.
B
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<PAGE>
Attachment A to
Part I
Fault Tolerant System Reliability (MTBMA) Program
-------------------------------------------------
for Supplier-Designed Products
------------------------------
Boeing will use diligent efforts to obtain system reliability programs from
suppliers of fault-tolerant systems. The definitive terms being requested of
the suppliers for such programs are essentially the same as those contained in
Part J of this Product Assurance Document, except for the following:
1. Reliability would be measured in terms of Mean Time Between
Maintenance Alerts (MTBMA) wherein the Maintenance Alert is a message provided
to the Aircraft's on-board maintenance system when internal components of the
specified system have failed, but at least 1 additional and like failure would
be required before Aircraft dispatch integrity requirements could no longer be
met.
2. Reliability deficiencies would be based on an excessive level of
Maintenance Alerts wherein removal of the specified system from the Aircraft
would not be a requirement.
3. Remedies for such deficiencies would apply to the affected fleet
of 777 aircraft as well as the Aircraft.
4. To support such fleet-wide remedies, all operators of 777 aircraft
will be strongly encouraged to provide reliability data on a monthly basis
whether or not they are claiming an MTBMA reliability deficiency. Failure to
provide such monthly reports could result in Buyer's loss of remedies under the
programs.
5. Such programs will be administered directly between Buyer and such
suppliers.
B
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<PAGE>
PART J
COMPONENT RELIABILITY (MTBUR/MTBF) PROGRAM
------------------------------------------
FOR SPECIFIED COMPONENTS MANUFACTURED TO BOEING'S
-------------------------------------------------
DETAILED DESIGN
---------------
1. Scope.
-----
1.1 Program Term.
------------
The Component Reliability Mean Time Between Unscheduled Removal
(MTBUR) and Mean Time Between Failure (MTBF) Program as set forth herein (the
Program) will be, with respect to each Specified Component (as hereinafter
defined), in effect for a term of 5 consecutive years after delivery of the
first Model 777 aircraft in which the first of each such Specified Component is
installed (the Program Term). Except as otherwise provided herein, all
provisions of the Program and Boeing's obligations hereunder will terminate,
with respect to each Specified Component, at the end of the last day of the
Program Term applicable to each such Component.
1.2 Covered Aircraft.
----------------
The Program will apply to any Specified Component installed in any
Aircraft operated by Buyer (the Covered Aircraft) during the Program Term.
2. Definitions.
-----------
For purposes of the Program, the following definitions will apply:
2.1 "BITE" means Built-In-Test Equipment.
2.2 "Chargeable Unscheduled Removal" for any Specified Component means
the removal of such Component from a Covered Aircraft during any Reporting
Period or Special Reporting Period for such Component due to a known or
suspected malfunction or defect, including a removal made in response to BITE.
However, the unscheduled removal of a Specified Component will not constitute a
Chargeable Unscheduled Removal in any of the following events:
2.2.1 The removal of the Specified Component is caused by any
operation, service or maintenance of such Component, the Covered Aircraft or a
system in which such
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<PAGE>
Component is installed which is not in accordance with Boeing's applicable
written instructions, unless Buyer can establish that such operation, service or
maintenance is in accordance with recognized standards for commercial air
carriers;
2.2.2 The removal is for maintenance convenience;
2.2.3 The removal is for purposes of condition analysis;
2.2.4 The removal is due to a cause which is incidental to or a
consequence of a failure of another part;
2.2.5 Prior to such removal, a remedy for the cause for such
removal has been offered to Buyer and Buyer has not accomplished such remedy
within the time period set forth in paragraph 6.1 herein; or
2.2.6 The removal is caused by Buyer's failure to repair or
replace all faulty or discrepant component parts of the Specified Component when
performing service or maintenance on such Component.
2.3 "Buyer's Fleet" or "Fleet" means all Covered Aircraft operated by
Buyer during any Reporting Period or Special Reporting Period.
2.4 "Fleet Achieved MTBF" or "Fleet Achieved MTBUR" for any Specified
Component during any Reporting Period or Special Reporting Period for such
Component is the value obtained by use of the following formula:
Fleet Achieved MTBF = Fleet Component Hours
---------------------
or Fleet Verified Failures or
Fleet Achieved MTBUR Fleet Unscheduled Removals, respectively
2.5 "Fleet Component Hours" for any Specified Component are the total
Fleet flying hours (Covered Aircraft takeoff to touchdown) during any Reporting
Period or Special Reporting Period for such Component multiplied by the number
of such Components per Covered Aircraft.
2.6 "Fleet Verified Failures" or "Fleet Unscheduled Removals" for any
Specified Component are the total number of Verified Failures or Chargeable
Unscheduled
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<PAGE>
Removals, respectively, of such Component experienced by a Fleet during any
Reporting Period or Special Reporting Period for such Component.
2.7 "MTBF Deficiency" or "MTBUR Deficiency" for any Specified
Component occurs when, for any Reporting Period for such Component, 4 or more
Verified Failures or 4 or more Chargeable Unscheduled Removals are experienced
and the Fleet Achieved MTBF or Fleet Achieved MTBUR for such Reporting Period is
less than the "Target Critical Value" with respect to such Component, as
determined by the procedure in paragraph 7 herein.
2.8 "Special MTBF Deficiency" or "Special MTBUR Deficiency" for any
Specified Component occurs when, for any Special Reporting Period for such
Component, 3 or more Verified Failures or Chargeable Unscheduled Removals are
experienced and Fleet Achieved MTBF or Fleet Achieved MTBUR for such Component
during such Special Reporting Period does not exceed 50% percent of the MTBF or
MTBUR Target for such Component.
2.9 "MTBUR Target" or "MTBF Target" for any Specified Component will
be the applicable value specified for such Component in paragraph 9 herein.
2.10 "Reporting Period" for each Specified Component in a Fleet will be
the number of consecutive months, including the month immediately preceding the
month of any report furnished by Buyer hereunder, during which at least 4
Verified Failures or Chargeable Unscheduled Removals have occurred. The initial
Reporting Period will commence on the first day of the first full calendar month
following the date Buyer's first Covered Aircraft is delivered.
2.11 "Special Reporting Period" for each Specified Component in a Fleet
will be the number of consecutive months, including the month immediately
preceding the month of any report furnished by Buyer hereunder, wherein (i) at
least 3 Verified Failures or Chargeable Unscheduled Removals of such Component
occur and (ii) no more than 3 Covered Aircraft are operated by Buyer during such
period.
2.12 "Specified Component" or "Component" means any part identified in
paragraph 9 herein or any later configurations thereof installed on a Covered
Aircraft or sold by Boeing to Buyer as a spare part during the Program Term.
B
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<PAGE>
2.13 "Turnaround-Time" for each Specified Component during any
Reporting Period or Special Reporting Period is the average time in calendar
days consumed in the receiving, inspection, test, repair, modification,
replacement, packaging and shipping preparation necessary to confirm or restore
the serviceability of all such Components experiencing a Chargeable Unscheduled
Removal or Verified Failure which are removed and processed during such
Reporting Period or Special Reporting Period. Specific Turnaround-Time periods
are defined as follows:
2.13.1 For Specified Components processed by Boeing, the
Turnaround-Time will start on the date on which both the Component and Buyer's
return order or claim pertaining to such Component have been received by Boeing
and will end on the date the serviceable or replacement Component is shipped by
Boeing to Buyer, plus a maximum of 5 days transportation time for return
shipment from Boeing to Buyer. Boeing will use the most expeditious method of
transportation, including air shipment, to the maximum extent practicable.
2.13.2 For Specified Components processed by Buyer, the average
Turnaround-Time will not exceed a period beginning with the date of removal of
the Specified Component and ending 15 calendar days after such date, unless a
longer period is (i) justified due to a delay by Boeing in providing parts
required to repair or modify such Specified Components or (ii) established by
agreement between Boeing and Buyer.
2.14 "Verified Failure" for any Specified Component means an
unscheduled removal of such Component from a Fleet during any Reporting Period
or Special Reporting Period due to a failure in such Component where such
failure is the primary cause for removal and is subsequently confirmed by
Boeing's approved shop test, investigative processes, inspection findings or
BITE failure confirmation records. However, the unscheduled removal of a
Specified Component due to a failure of such Component will not constitute a
"Verified Failure" in any of the following events:
2.14.1 The failure of such Specified Component is caused by any
operation, service or maintenance of such Component, the Covered Aircraft or a
system in which such Component is installed which is not in accordance with
Boeing's applicable written instructions, unless Buyer can establish that such
operation, service, maintenance or overhaul is in accordance with recognized
standards for commercial air carriers;
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<PAGE>
2.14.2 The failure of the Specified Component is due to a cause
which is incidental to or a consequence of a failure of another part;
2.14.3 Prior to such failure a remedy for such failure has been
offered to Buyer and Buyer has not accomplished such remedy within the time
period set forth in paragraph 6.1 herein; or
2.14.4 The failure is caused by Buyer's failure to repair or
replace all faulty or discrepant component parts of the Specified Component when
performing service or maintenance on such Component.
3. Remedies.
--------
3.1 If Buyer notifies Boeing within 90 days after completion of the
most recent Reporting Period or Special Reporting Period with respect to any
Specified Component that an MTBUR Deficiency or an MTBF Deficiency exists or
that a Special MTBUR Deficiency or Special MTBF Deficiency for such Specified
Component for such Period exists; then Boeing will:
3.1.1 Upon Buyer's request, provide technical assistance and
recommendations to Buyer of the type and extent which Boeing determines is
appropriate for correcting such Deficiency;
3.1.2 Investigate the circumstances and possible causes of any
such Deficiency, and, if such investigation indicates a design review is
appropriate, initiate a review of the design of such Component and, if redesign
is practicable, redesign such Component. If such redesign requires modification
of deficient Specified Components, Boeing will either (i) modify such deficient
Components at no charge to Buyer or (ii) provide retrofit kits required to
accomplish such modification at no-charge to Buyer and reimburse Buyer for the
direct labor costs to incorporate such retrofit kits. Boeing's reimbursement
amount will not exceed Boeing's reasonable estimate of the labor hours required
therefor by Buyer, using the warranty labor reimbursement agreement then in
effect between Boeing and Buyer; and
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<PAGE>
3.1.3 Upon Buyer's request, provide to Buyer on a no-charge loan
basis the quantity of additional spare Specified Components determined by the
formula set forth in paragraph 8 herein. Such spare Specified Component(s) will
be in a new or used-serviceable condition.
3.2 Upon receipt of each subsequent monthly report submitted by Buyer
pursuant to paragraph 5.2 herein, Boeing will monitor the Fleet Achieved MTBUR
and/or Fleet Achieved MTBF with respect to the deficient Specified Component
and, depending on the reliability performance of such Component, either (i) if a
Deficiency continues to exist, and at Buyer's request, furnish any additional
spare Component(s) available to Buyer under the terms of the Program or (ii) if
a Deficiency no longer exists and subject to separate agreement between Buyer
and Boeing, Boeing will:
3.2.1 sell such loaned spare Component(s) to Buyer as additional
follow-on spare parts, and/or
3.2.2 arrange for the incorporation of such loaned spare
Component(s) in one or more of Buyer's follow-on Aircraft.
If Buyer and Boeing cannot reach agreement on either alternative 3.2.1 or 3.2.2
above, Buyer will be responsible for the prompt return to Boeing of any spare
Component(s) loaned hereunder.
4. Extended Remedies.
-----------------
Notwithstanding the expiration of the Program Term for any Specified
Component, if an MTBUR Deficiency, Special MTBUR Deficiency, MTBF Deficiency or
Special MTBF Deficiency exists with regard to such Specified Component on such
expiration date, and Buyer notifies Boeing of such Deficiency within 90 days
after such date, Boeing will either:
4.1 Extend the Program for such Specified Component until such
Deficiency is corrected, in which case the provisions of paragraph 3 herein will
remain in full force and effect with respect to such Specified Component, or
4.2 Negotiate in good faith with Buyer to reach a mutually agreeable
settlement regarding such Deficiency.
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5. Administrative Requirements.
---------------------------
5.1 If no MTBUR Deficiency, Special MTBUR Deficiency, MTBF Deficiency
or Special MTBF Deficiency exists with respect to a Specified Component for any
Reporting Period, or, if applicable, Special Reporting Period, no reports need
be filed. If a Deficiency is being claimed, the reports identified in paragraph
5.2 below covering the Reporting Period or Special Reporting Period during which
such Deficiency occurred will accompany such claim.
5.2 After such a Deficiency has been claimed or when any remedies, as
set forth in paragraph 3 herein, are being provided to Buyer, Buyer will provide
monthly reports to Boeing. Such reports will include the calculation of the
Fleet Achieved MTBUR or Fleet Achieved MTBF for the most recently completed
Reporting Period or, if applicable, Special Reporting Period (which will include
the same number of months in the Reporting Period or Special Reporting Period
initially selected by Buyer pursuant to paragraph 2.10 or 2.11 herein for the
Specified Component involved) and will be submitted to Boeing within 30 days
after the last day of each successive month.
5.3 Upon request, Buyer will submit to Boeing adequate proof that any
removal of a Specified Component for a reason claimed by Buyer to constitute a
Chargeable Unscheduled Removal or Verified Failure does in fact constitute such
Removal or such Failure. Buyer will afford Boeing a reasonable opportunity to
investigate the cause of any claimed Deficiency and will provide such additional
information as is reasonably necessary to monitor the Program or to investigate
any claimed Deficiency. Buyer records supporting such reports and any
additional pertinent information related thereto will be maintained for a
minimum of 1 year after submittal of the report or related information. All
such records and any other data in Buyer's possession reasonably required for
the proper administration of the Program will, upon request, be made available
at Buyer's facilities for examination by Boeing.
5.4 All reports submitted to Boeing will be addressed to the attention
of Boeing's Warranties Regional Manager at Renton, Washington.
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6. Conditions and Limitations.
--------------------------
6.1 If, to improve the Fleet Achieved MTBUR or Fleet Achieved MTBF for
a Specified Component, Boeing provides service bulletins, service letters or
other written instructions (instructions) or offers no-charge retrofit kits
(kits) pertaining to such Component, Buyer will accomplish such instructions or
install such kits within a period of 240 days after availability of such
instructions or kits at Buyer's facility or such longer period as may be
established by mutual agreement between Boeing and Buyer. If Buyer does not
accomplish the instructions or install the kits within the time periods
indicated, all removals of Specified Components affected by such instructions or
kits which occur after expiration of such time periods and prior to
accomplishment by Buyer of such instructions or kits on all affected Specified
Components in Buyer's possession will be excluded from the calculations which
determine whether or not remedies are available under the Program.
6.2 The Program is not a warranty or an agreement to modify any
Specified Component to conform to new developments in the state of design or
manufacturing art. Boeing's sole obligations under the Program and Buyer's sole
remedy and relief for all matters arising under or by virtue of the Program will
be as set forth herein. This Part J and the rights and remedies of Buyer and
obligations of Boeing herein are subject to the disclaimer and release and
Exclusion of Consequential and Other Damages provisions of Article 12 of this
Agreement.
7. Determination of Target Critical Values for MTBUR and MTBF Targets.
------------------------------------------------------------------
7.1 Definitions.
-----------
R = number of Fleet Unscheduled Removals (for MTBUR) or Fleet
Verified Failures (for MTBF) during Reporting Period.
M = applicable MTBUR Target or MTBF Target for the Specified
Component (as set forth in paragraph 9 herein).
C = Critical Value Multiplier (determined using the table
below) which corresponds to the value of "R" as defined
above. (Interpolation is to be used for values not shown
in the table below.)
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7.2 Target Critical Value Calculation.
---------------------------------
The Target Critical Value (used to determine if an MTBUR
Deficiency or an MTBF Deficiency exists) for any Specified Component will be
calculated as follows:
Target Critical Value = CM
7.3 Table of Critical Value Multipliers.
-----------------------------------
<TABLE>
<CAPTION>
R C R C
--- ---- ---- ----
<S> <C> <C> <C>
4 .436 18 .712
5 .486 19 .719
6 .525 20 .726
7 .556 25 .754
8 .582 30 .776
9 .604 40 .803
10 .622 50 .824
11 .638 75 .855
12 .652 100 .874
13 .665 200 .911
14 .677 300 .926
15 .687 400 .935
16 .697 500 .943
17 .704 1000 or .946
more
</TABLE>
Note: The table values are derived from the chi-square
---- confidence limits for the exponential distribution. Each critical
value multiplier is the reciprocal of a 90% one-sided upper
confidence limit.
8. Additional Spare Specified Components Formula.
---------------------------------------------
8.1 Definitions.
M = applicable MTBUR or MTBF Target for the Specified Component
m = Fleet Achieved MTBUR or MTBF
N = total number of installed Specified Components, i.e, number
of Covered Aircraft operated during the Reporting Period
or, if applicable, Special Reporting Period times the
number of such Specified Components installed per Covered
Aircraft.
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T = Turnaround-Time (in calendar days)
u = Average daily utilization (total actual Fleet flying hours,
takeoff to touchdown, divided by total number of Fleet in-
service calendar days) during the latest Reporting Period
or, if applicable, Special Reporting Period
The quantity of spare Specified Components (Q) to be offered
pursuant to Paragraph 3.1.3 is:
Q = (T)(u)(N)(M-m)
-----
(Mm)
8.2 If Q is less than 1, then Buyer will be entitled to 1 spare
Specified Component. Any value of Q greater than 1 will be rounded to the
nearest whole number.
9. Specified Components.
--------------------
<TABLE>
<CAPTION>
Qty.
Part Part Per MTBUR MTBF
Number Name A/C Target Target
- ------ ---- --- ------ ------
<S> <C> <C> <C> <C>
285W0019-101 Card, ECS 2 25,000 50,000
Miscellaneous
285W0114-1 Radio Tuning Panel 3 13,500 15,000
S285W601-1 AMUX 2 33,000 53,000
285W0013-1 Entertainment 1 50,000 77,000
Multi-Plexer/Controller
285W0027-1 Zone Mgt. Unit 3 15,000 47,000
285W0025-1 Speaker Drive Mod. 32 75,000 103,000
285W0029-1 Ovhd. Elec. Unit 102 146,000 240,000
285W0012-1 Cabin Area 3 16,000 25,000
Control Panel
285W0011-1 Cabin System 1 6,000 24,000
Control Panel
</TABLE>
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<TABLE>
<CAPTION>
Qty.
Part Part Per MTBUR MTBF
Number Name A/C Target Target
- ------ ---- ---- ------- -------
<S> <C> <C> <C> <C>
S285W603-1 Zone Power Controller 3 21,000 80,000
285W0035-1 Seat Elec. Unit 135 131,000 170,500
285W0034-1 Cabin System Mgt. Unit 1 23,000 48,000
285W0024 Cabin Attnds. Handset 10 108,000 120,000
285W0026-1 Pass. Address Cabin 1 8,000 16,000
Interphone Controller
285W0037-101 Card File Power Supply 1 7,800 13,000
285W0038-101 Card File Power Supply 1 7,800 13,000
285W0020-101 Card File ARINC Signal 4 15,000 25,000
Gateway Card
285W0212-1 OPAS OPCF 2 409,500 455,000
Card File LRU
285W0259-1 Ovhd. Panel ARINC 629 2 103,000 120,000
S-PDCU LRU
285W0218-1 Ovhd. Panel ARINC 629 4 71,000 120,000
S-OPIC Card
285W0219-1 Ovhd. Panel ARINC 629 2 24,300 27,000
S-OPBC LRU
285W0023-1 Flap Slat Elec. 2 5,000 15,000
Unit (FSEU)
285W0015-101 Warning Elec. 2 11,500 15,000
Unit (WEU)
285W0017-101 WLG Card, Hyd. 4 25,000 60,000
Ind. Module
</TABLE>
Note: The above listing may be subject to change based on the ongoing design of
- ---- -------------------------------------------------------------------------
the Aircraft systems in which the Specified Components will be
--------------------------------------------------------------
incorporated. Should change occur, a final listing will be furnished
---------------------------------------------------------------------
Buyer prior to delivery of the first Aircraft.
----------------------------------------------
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<PAGE>
CUSTOMER SUPPORT DOCUMENT
between
THE BOEING COMPANY
and
INTERNATIONAL LEASE FINANCE CORPORATION
Exhibit C to Purchase Agreement Number 1916
C
<PAGE>
CODE ONE - NEW CUSTOMER
CUSTOMER SUPPORT DOCUMENT
between
THE BOEING COMPANY
and
INTERNATIONAL LEASE FINANCE CORPORATION
Exhibit C-1 to Purchase Agreement Number 1916
C-1
<PAGE>
CUSTOMER SUPPORT DOCUMENT NO. 1916
Dated June 24, 1996
-----------------
Relating to
BOEING MODEL 777 AIRCRAFT
This Customer Support Document is Exhibit C-1 to and forms a part of
Purchase Agreement No. 1916 between The Boeing Company (Boeing) and
International Lease Finance Corporation (Buyer) relating to the purchase of
Boeing Model 777 aircraft. This Customer Support Document consists of the
following parts:
PART A Boeing Maintenance Training Program
PART B Boeing Customer Support Services
PART C Boeing Flight Training Program
PART D Technical Data and Documents
PART E Buyer's Indemnification of Boeing and Insurance
PART F Alleviation or Cessation of Performance
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PART A
BOEING MAINTENANCE TRAINING PROGRAM
-----------------------------------
1. General.
-------
This Part A describes the maintenance training to be provided by Boeing
(Maintenance Training) at Boeing's training facility at or near Seattle. The
Maintenance Training will be provided at no additional charge to Buyer, except
as otherwise provided herein. If any part of the Maintenance Training is not
used by Buyer prior to delivery of the first Aircraft, Boeing will not be
obligated to provide such Maintenance Training at a later date, unless the
parties have otherwise agreed in writing.
All instruction, examinations and materials shall be prepared and presented in
the English language and in the units of measure used by Boeing. Buyer will
provide interpreters if required for Buyer's personnel.
Buyer will be responsible for the living expenses of Buyer's personnel during
Maintenance Training. For Maintenance Training provided at or near Seattle,
Boeing will transport Buyer's personnel between their local lodging and the
training facility.
2. Maintenance Training Planning Conference.
----------------------------------------
No later than 12 months prior to delivery of Buyer's first Aircraft,
Boeing and Buyer will conduct a planning conference in order to schedule and
discuss the Maintenance Training.
Buyer recognizes that if such planning conference is not held at least 12 months
prior to delivery of Buyer's first Aircraft, Boeing's obligation to Buyer and
Buyer's Lessee with respect to providing the requisite training shall be subject
to the availability of appropriate Boeing training facilities and personnel in
the time period in question and is further subject to Buyer's agreement to pay
Boeing those reasonable and substantiated extraordinary costs, if any, which are
incurred by Boeing in connection with the provision of training as a result of
the late planning conference. Furthermore, Boeing agrees to work with Buyer to
minimize any such cost impact and to lessen any other impact of such late
planning conference.
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3. Maintenance Training Program.
----------------------------
The Maintenance Training Program will (i) consist of classroom
presentations supported by training materials and aids and (ii) if practicable,
include an escorted tour of aircraft production areas and/or flight lines. The
Maintenance Training will include the following courses:
3.1 General Familiarization Course.
------------------------------
This course provides general systems information for Buyer's upper
management personnel; it does not address the maintenance of the Aircraft and
its systems in the detail required by maintenance personnel.
Two classes; up to 15 students per class.
3.2 Mechanical/Electrical Systems Course (Instructor).
-------------------------------------------------
This course provides instruction on the normal operation and
maintenance of the Aircraft mechanical and electrical systems, and is oriented
to those personnel who require instructor-level knowledge of aircraft mechanical
and electrical systems.
One class; up to 15 students.
3.3 Avionics Systems Course (Instructor).
------------------------------------
This course provides instruction on the normal operation and
maintenance of the Aircraft avionics systems, and is oriented to those personnel
who require instructor-level knowledge of aircraft avionics systems.
One class; up to 15 students.
3.4 Mechanical/Electrical Systems Course
------------------------------------
(Line and Base).
---------------
This course provides instruction on the normal operation and
maintenance of the Aircraft mechanical and electrical systems, and is oriented
to those personnel who specialize in line and base maintenance of aircraft
mechanical and electrical systems.
Two classes; up to 15 students per class.
3.5 Avionics Systems Course (Line and Base).
---------------------------------------
This course provides instruction on the normal operation and
maintenance of the Aircraft avionics systems,
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and is oriented to those personnel who specialize in line and base maintenance
of aircraft avionics systems.
One class; up to 15 students.
3.6 Engine Run-Up Course.
--------------------
This course provides instruction on test procedures and values for
those personnel involved with engine run-up after an engine change. Students
for this course must have successfully completed the Mechanical/Electrical
Systems Course described above.
Two classes; up to 3 students per class.
3.7 Corrosion Prevention and Control Course.
---------------------------------------
This course provides instruction on aircraft corrosion prevention
and control.
One class; up to 10 students.
3.8 Aircraft Rigging Course.
-----------------------
This course provides instruction on aircraft rigging so as to
provide specialist personnel with the necessary information to rig all flight
control surfaces, landing gear components, aircraft doors and engines.
One class; up to 6 students at a mutually agreeable alternate facility. The
conditions set forth in paragraph 4 below will be applicable with respect to
Boeing providing such course.
3.9 Advanced Composite Repair Course.
--------------------------------
This course provides instruction for structural repair personnel
and promotes understanding of the design philosophy, inspection and repair of
advanced composite components.
One class; up to 6 students.
3.10 Digital Data Familiarization Course.
-----------------------------------
This course provides specialized instruction on using maintenance
training data in digital format, as provided by Boeing in accordance with this
Exhibit C.
One class; up to 15 students.
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3.11 Cabin Management System (CMS) Configuration Database Generator
--------------------------------------------------------------
(CDG) Familiarization Course.
----------------------------
This course will use the CDG Training Manual as primary text and
CDG User Manual as reference source in providing hands-on training to airline
personnel in the utilization of CDG. The course will also include an overview of
CMS components, locations and system operation.
One class; up to 6 students.
4. Training at a Facility Other Than Boeing's.
------------------------------------------
If requested prior to the conclusion of the Maintenance Training Planning
Conference, Boeing will conduct the classroom training described above (except
for the Advanced Composite Repair Course) at a mutually acceptable alternate
training site, subject to the following conditions:
4.1 Buyer will be responsible for providing acceptable classroom space
and training equipment required to present the Boeing courseware.
4.2 Buyer will pay Boeing's then-current per diem charge for each
Boeing instructor for each day, or fraction thereof, such instructor is away
from Seattle, including travel time.
4.3 Buyer will reimburse Boeing for round-trip transportation for
Boeing's instructors and training materials between Seattle and such alternate
training site.
4.4 Buyer will pay, or reimburse Boeing for, all taxes, fees, duties,
licenses, permits and similar expenses incurred by Boeing and its employees as a
result of Boeing's providing the training at such alternate site.
4.5 Those portions of training that require the use of Boeing's
training devices shall be conducted at Boeing-designated facilities.
5. Supplier Training.
-----------------
The Maintenance Training includes sufficient information on the location,
operation and servicing of Aircraft equipment, accessories and parts provided by
suppliers to support line maintenance functions.
If Buyer requires additional maintenance training with respect to any supplier-
provided equipment, accessories or
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parts, Buyer will schedule such training directly with the supplier thereof. If
Buyer experiences difficulty in scheduling such training, Boeing will, if
requested, assist Buyer in coordinating and scheduling such training.
6. Student Training Material.
-------------------------
No revision service will be provided for the material provided hereunder.
6.1 Manuals.
-------
Boeing will provide at the beginning of each Maintenance Training
course 1 copy of a training manual or equivalent for each student attending such
course.
6.2 Component Locator Guide.
-----------------------
Boeing will provide 1 copy of a Component Locator Guide for each
student in each applicable Maintenance Training course.
6.3 Panel Description Booklet.
-------------------------
Boeing will provide 1 copy of a Panel Description Booklet for each
student in each applicable Maintenance Training course.
7. Other Training Material.
-----------------------
Boeing will provide Buyer with 1 set of the following training materials,
as used in the General Familiarization and aircraft systems courses. Revision
Service will not be provided.
7.1 Computer-Based Training (CBT) Courseware.
----------------------------------------
1 set of Boeing standard CBT courseware and instructions for the
courseware installation and operation. This courseware will reflect the major
configuration of the first Aircraft as delivered to Buyer.
7.2 Supplementary Training Courseware.
---------------------------------
Additional training courseware, supplementary to the CBT
courseware, will be provided, as required, and will reflect the full
configuration of the first Aircraft as delivered to Buyer under this Agreement.
Such Supplementary Training Courseware may include the following materials as
used in the Maintenance Training courses:
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7.2.1 1 set of all graphics and applicable text in digital
format, and/or 1 set of 8-1/2 x 11-inch prints suitable for black and white
reproduction.
7.2.2 1 set of visual aids in the form of 81/2 x 11-inch
blackline projection transparencies.
7.2.3 1 set of instrument panel wall charts in the form of 1
set of full-scale color copies and 1 set of full-scale mylar reproducible
copies.
7.2.4 1 set of enhancement slides depicting actual airplane
photos.
7.3 Video Programs.
--------------
1 set of video programs. Such video programs are available on 3/4-
inch U-matic or 1/2-inch VHS cassette formats in NTSC, PAL or SECAM standards,
as selected by Buyer.
8. Shipment of Materials.
---------------------
The training materials described above will be shipped to Buyer 30 days
after completion of the first class of each applicable Maintenance Training
course.
9. Course Completion Records.
-------------------------
At the completion of the Maintenance Training, Boeing will provide Buyer
with course completion records consisting of the following:
9.1 Master copies of all examinations given.
9.2 Attendance and examination records for each student.
9.3 Certificate of Completion for each course each student
successfully completes.
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PART B
BOEING CUSTOMER SUPPORT SERVICES
--------------------------------
1. General.
-------
This Part describes the support services to be provided by Boeing at no
additional charge to Buyer, unless otherwise specified herein. Except with
respect to Field Services, the services described in this Part will be provided
by Boeing during a period commencing with delivery of the first Aircraft and
continuing so long as one Aircraft is regularly operated by Buyer in commercial
air transport service.
2. Field Service Engineering.
-------------------------
Boeing will furnish field service representation to advise Buyer on
maintenance and operation of the Aircraft (Field Services) as follows:
2.1 Field Services will be available to Buyer at or near Buyer's main
maintenance or engineering facility for periods beginning prior to delivery of
each Aircraft and terminating 12 months after delivery of each such Aircraft
(Field Service Period(s)). If such Field Service Periods overlap, the Field
Services will be provided concurrently.
2.2 Buyer will furnish at no charge to Boeing, suitable office space
and equipment that will include desks, chairs, file cabinets, and an electrical
power source in, or convenient to, Buyer's facility where Boeing is providing
Field Service. As required, Buyer will assist each representative providing
Field Services with visas, work permits, customs, mail handling, identification
passes, and local airport authorities.
2.3 In addition to the Field Services referred to above, the services
of any Boeing field service representative will also be available to Buyer
anywhere Buyer may land the Aircraft.
2.4 Boeing may, from time to time, provide additional support services
in the form of Boeing personnel visiting Buyer's facilities to work with Buyer's
personnel in an advisory capacity.
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3. Additional Engineering Support Services.
---------------------------------------
Boeing will, if requested by Buyer in writing, provide technical advisory
assistance with respect to the Aircraft and accessories, equipment and parts
manufactured to Boeing's detailed design and installed in the Aircraft at the
time of delivery. Such technical advisory assistance, which will be provided
from Seattle, will include:
3.1 analysis of and comment on any Aircraft service or operational
problem experienced by Buyer in order to determine the nature of the problem and
its cause and to suggest possible solutions;
3.2 analysis of and comment on Buyer's engineering releases relating
to structural repairs of the Aircraft not covered by Boeing's Structural Repair
Manual; and
3.3 analysis of and comment on Buyer's engineering proposals for
changes in, or replacement of, parts, accessories or equipment manufactured to
Boeing's detailed design (excluding computer software embedded or included
therein); provided that Boeing will not analyze or comment on any such change or
replacement which constitutes a major structural change, nor on any engineering
release related thereto, unless Buyer's request for such analysis and comment is
accompanied by complete detailed drawings, substantiating data (including data,
if any, required by applicable government agencies), all stress or other
appropriate analysis, and a specific statement from Buyer of the kind of review
and response desired by Buyer.
4. Special Services.
----------------
4.1 Facilities, Ground Equipment and Maintenance Planning Assistance.
----------------------------------------------------------------
Boeing will, at Buyer's request, send qualified Boeing engineering
representatives to Buyer's main base to evaluate Buyer's technical facilities,
tools and equipment for servicing and maintaining the Aircraft, to recommend
changes where necessary and to assist in the formulation of Buyer's overall
maintenance plan.
4.2 Additional Services.
-------------------
Boeing may, at Buyer's request, provide additional special
services with respect to the Aircraft after delivery, which services may include
such items as Master Changes (Kits and/or Data), training, and maintenance and
repair of the Aircraft. The provision of such additional services will be
subject to (i) a mutually
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acceptable price, schedule and scope of work and (ii) Boeing's then-current
standard contract therefor, including disclaimer and release, exclusion of
consequential and other damages, and indemnification and insurance requirements.
4.3 Post-Delivery Aircraft Services.
-------------------------------
If Boeing performs unanticipated work on an Aircraft after
delivery of such Aircraft, but prior to the Aircraft's initial departure flight,
or upon the return of the Aircraft to Boeing's facilities prior to completion of
such flight, the following provisions will apply:
4.3.1 Title to and risk of loss of any such Aircraft will at all
times remain with Buyer.
4.3.2 The provisions of the Boeing Warranty set forth in Exhibit
B of this Agreement will apply to such work.
4.3.3 Buyer will reimburse Boeing for such work to the extent not
covered by the Boeing Warranty applicable to the Aircraft.
4.3.4 The disclaimer and release and Exclusion of Consequential
and Other Damages provisions set forth in Article 12 of this Agreement and the
indemnification and insurance provisions set forth in this Exhibit C will apply
to such Boeing work.
4.3.5 In performing such work, Boeing may rely upon the
commitment authority of Buyer's personnel requesting such work.
5. Additional Informational Services.
---------------------------------
Boeing may, from time to time, provide Buyer with additional services in
the form of information about the Aircraft or other aircraft of the same type,
including information concerning design, manufacture, operation, maintenance,
modification, repair and in-service experience.
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PART C
BOEING FLIGHT TRAINING PROGRAM
------------------------------
1. General.
-------
This Part describes the flight training to be provided by Boeing (Flight
Training) at or near Seattle, or at some other location to be determined
pursuant to this Part. The Flight Training Program will be provided at no
additional charge to Buyer, except as otherwise provided herein. If any part of
the Flight Training Program is not used by Buyer within 6 months after delivery
of the first Aircraft, Boeing will not be obligated to provide such Flight
Training at a later date unless the parties have otherwise agreed in writing.
All instruction, examinations and materials will be prepared and presented in
the English language and in the units of measure used by Boeing. Buyer will
provide interpreters if required for Buyer's personnel.
Buyer will be responsible for the living expenses of Buyer's personnel during
the Flight Training Program. For Flight Training courses provided at or near
Seattle, Boeing will transport Buyer's personnel between their local lodging and
the training facility.
2. Flight Training Planning Conference.
-----------------------------------
No later than 12 months prior to delivery of the first Aircraft, Boeing
and Buyer will conduct a planning conference in order to schedule and discuss
the Flight Training Program.
Buyer recognizes that if such planning conference is not held at least 12 months
prior to delivery of Buyer's first Aircraft, Boeing's obligation to Buyer and
Buyer's Lessee with respect to providing the requisite training shall be subject
to the availability of appropriate Boeing training facilities and personnel in
the time period in question and is further subject to Buyer's agreement to pay
Boeing those reasonable and substantiated extraordinary costs, if any, which are
incurred by Boeing in connection with the provision of training as a result of
the late planning conference. Furthermore, Boeing agrees to work with Buyer to
minimize any such cost impact and to lessen any other impact of such late
planning conference.
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3. Flight Training Program.
-----------------------
The Flight Training Program will consist of the following transition
training.
3.1 Flight Crew Training Course.
---------------------------
This FAA-approved course is designed to train flight crews to
operate the Aircraft safely and efficiently under both normal and nonnormal
conditions. The course includes systems and procedures training, flight
simulator training and actual flight training utilizing an Aircraft delivered to
Buyer. The flight crew training may include instructor training of an agreed
upon number of Buyer's personnel.
/[CUSTOMERS PURCHASING 1 AIRCRAFT:]
-------------------------------
Two classes; up to 3 cockpit crews per class./
/[CUSTOMERS PURCHASING MORE THAN 1 AIRCRAFT:]
-----------------------------------------
Two classes; up to 4 cockpit crews per class./
3.2 Flight Dispatcher Training Course.
---------------------------------
This course provides familiarization training on the Aircraft's
systems, operation and performance capabilities and a brief description of the
Aircraft's limitations, followed by in-depth coverage of basic performance,
flight analysis, performance for nonstandard operation and flight planning.
/[CUSTOMERS PURCHASING 1 AIRCRAFT:]
-------------------------------
One class; up to 6 students./
/[CUSTOMERS PURCHASING MORE THAN 1 AIRCRAFT:]
-----------------------------------------
Two classes; up to 6 students per class./
3.3 Flight Attendant Training Course.
--------------------------------
This course provides familiarization training for airline
passenger service personnel. It includes a description of the Aircraft and its
features. Emphasis is placed on the equipment and furnishings with which the
flight attendant is concerned. Particular attention is given to the attendant's
functions related to communications, lighting and emergency equipment. When
practicable, a field trip to an aircraft is arranged to observe operation,
location and arrangement of equipment.
/[CUSTOMERS PURCHASING 1 AIRCRAFT:]
-------------------------------
One class; up to 12 students./
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/[CUSTOMERS PURCHASING MORE THAN 1 AIRCRAFT:]
-----------------------------------------
Two classes; up to 12 students per class./
3.4 Performance Engineer Training Courses.
-------------------------------------
Three types of courses are offered as follows. A schedule for the
courses is published and mailed to all Boeing aircraft operators semiannually
and an agreed upon number of Buyer's personnel may attend.
3.4.1 General Performance Engineer Course.
-----------------------------------
This course provides detailed aircraft performance
information for personnel involved in route planning, performance analysis, and
evaluation and engineering flight testing. This course includes a review of
basic high-speed aerodynamics and engine performance and operation. Students
will make calculations to help them recognize and understand the variables which
influence turbojet aircraft performance.
3.4.2 Model-Specific Performance Engineer Course.
------------------------------------------
This course relates to a specific model aircraft. It covers
a brief review of basic aerodynamics and basic jet engine performance, followed
by detailed coverage of specific performance for the aircraft model type.
Detailed flight planning, including emergency conditions, is covered.
3.4.3 Operational Performance Engineer Course.
---------------------------------------
This course is directed toward personnel who have completed
the performance engineer general and specific courses and have several years'
related experience. Expanded coverage of aircraft noise, runway loading, and
various operational, safety and economic considerations is given.
4. Training at a Facility Other Than Boeing's.
------------------------------------------
If requested prior to the conclusion of the Flight Training Planning
Conference, Boeing will conduct the Flight Crew, Flight Dispatcher and Flight
Attendant training at a mutually acceptable alternate training site, subject to
the following conditions:
4.1 Buyer will be responsible for providing acceptable classroom
space, flight simulator and training
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equipment acceptable to Boeing required to present the Boeing courseware.
4.2 Buyer will pay Boeing's then-current per diem charge for each
Boeing instructor for each day, or fraction thereof, such instructor is away
from Seattle, including travel time.
4.3 Buyer will reimburse Boeing for round-trip transportation for
Boeing's flight training instructors and materials between Seattle and such
alternate site.
4.4 Buyer will pay, or reimburse Boeing for, all taxes, fees, duties,
licenses, permits and similar expenses incurred by Boeing and its employees as
a result of Boeing's providing the training at such alternate site.
4.5 Those portions of the training that require the use of Boeing's
training devices will be conducted at Boeing-designated facilities.
5. Student Training Material.
-------------------------
Student training material, in Boeing's then-standard format, will be
provided to Buyer's personnel (1 set per student) as listed below. No revision
service will be provided for the material provided hereunder.
5.1 Flight Crew Course.
------------------
Operations Manual
Training Manual
Flight Crew Training Manual
Instrument Training Manual - as required
5.2 Flight Dispatcher Course.
------------------------
Flight Dispatcher Training Manual
5.3 Flight Attendant Course.
-----------------------
Flight Attendant Training Manual
5.4 Performance Engineer Courses.
----------------------------
Assorted documents, excerpts and handouts.
6. Other Training Materials.
------------------------
At the conclusion of the Flight Crew Training Course, the following
material will be delivered to Buyer. Revision service will not be provided.
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6.1 Computer Based Training (CBT) Courseware.
----------------------------------------
6.1.1 1 set of Boeing standard flight crew CBT courseware and
instructions for the courseware installation and operation. This courseware
will reflect the major configuration of the first Aircraft as delivered to
Buyer.
6.1.2 1 set of Boeing standard flight attendant course
material will consist of a combination of CBT courseware and slides/scripts, and
will be delivered in the same media as used in the Boeing conducted flight
attendant course.
6.2 Instrument Panel Wall Charts.
----------------------------
6.2.1 1 set of instrument panel wall charts in the form of 1
set of full-scale color copies and 1 set of full-scale mylar reproducible
copies.
6.2.2 Instrument panel wall charts will, at the conclusion of
shipments thereof from Boeing, reflect the configuration of the first Aircraft
as delivered to Buyer under this Agreement.
6.3 Video Programs.
--------------
1 set of video programs, if developed, as used in the Flight
Training Program. Such video programs are available on 3/4-inch U-matic or 1/2-
inch VHS cassette format in NTSC, PAL or SECAM standards, as selected by Buyer.
6.4 Examinations.
6.5 Flight Crew Training Record.
6.6 Training Manual.
6.7 Flight Attendant Manual (50 copies).
7. Ferry Assistance.
----------------
Subject to availability and if requested by Buyer, Boeing will provide
flight crew personnel to ferry, or assist in ferrying, Buyer's first Aircraft to
a Buyer-designated base. Buyer will comply with the insurance requirements set
forth in Part E of this Exhibit C.
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8. Revenue Service Training.
------------------------
/[CUSTOMERS PURCHASING 1 AIRCRAFT:]
-------------------------------
Boeing will provide revenue service training (Revenue Service Training)
for Buyer's flight crews for up to 60 calendar days of instructor pilot services
at a Buyer-designated base. Such Revenue Service Training will be conducted by
the Boeing instructor pilot(s) on Buyer's aircraft /during revenue service./
/[FOR NONAIRLINE CUSTOMERS:] with passengers on board./ The training period
- --------------------------
will commence upon departure of such instructor pilot(s) from Seattle via the
ferry flight referred to above, or via commercial transportation, and will
terminate upon the return of such instructor pilot(s) to Seattle. Buyer will
reimburse Boeing for round-trip or return-trip transportation, as applicable,
for such instructor pilot(s)./
/[CUSTOMERS PURCHASING MORE THAN 1 AIRCRAFT:]
-----------------------------------------
Boeing will provide revenue service training (Revenue Service Training)
for Buyer's flight crews for up to 90 calendar days of instructor pilot services
at a Buyer-designated base. Such Revenue Service Training will be conducted by
the Boeing instructor pilot(s) on Buyer's aircraft /during revenue service./
/[FOR NONAIRLINE CUSTOMERS:] with passengers on board./ The training period
- --------------------------
will commence upon departure of such instructor pilot(s) from Seattle via the
ferry flight referred to above, or via commercial transportation, and will
terminate upon the return of such instructor pilot(s) to Seattle. Buyer will
reimburse Boeing for round-trip or return-trip transportation, as applicable,
for such instructor pilot(s)./
9. Flight Operations Support.
-------------------------
9.1 Approximately 6 months after completion of the Revenue Service
Training, Boeing will, if requested by Buyer, provide at a Buyer-designated base
the services of 1 instructor pilot for a period of approximately 2 weeks to
review Buyer's flight crew operations, and/or to assist Buyer's instructor
personnel in conducting proficiency checks. Such review or assistance will be
during flight operations on Buyer's aircraft by the Boeing instructor pilot and
will be limited to observations of Buyer's cockpit crew. Buyer will reimburse
Boeing for round-trip transportation for such instructor pilot between Seattle
and Buyer's designated base.
9.2 Subject to availability of instructor personnel, Boeing will, from
time to time, provide at a
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Buyer-designated base 1 instructor pilot for brief periods for the purpose of
providing training and information regarding current operational procedures,
including flight observations by such instructor pilot on Buyer's aircraft, when
appropriate.
10. Operations Engineering Support.
------------------------------
If requested by Buyer, Boeing will provide operations engineering support
during the ferry flight referred to above. Thereafter, for so long as any
Aircraft is operated by Buyer in scheduled revenue service, Boeing will provide,
from time to time, operations engineering support in Seattle or at a Buyer-
designated base, as the parties may agree. Such support will include: (i)
assisting Buyer in analyzing and preparing performance data to be used in the
establishment of operating practices and policies for Buyer's efficient
operation of the Aircraft; (ii) assisting Buyer in interpreting the minimum
equipment list, the definition of the configuration deviation list and the
analysis of individual Aircraft performance through in-service audits; (iii)
assisting Buyer in solving operational problems associated with delivery and
route-proving flights; and (iv) providing information regarding significant
service items relating to Aircraft performance or flight operations.
11. General Terms and Conditions and Indemnification.
------------------------------------------------
11.1 Boeing flight instructor personnel will not be required to work in
excess of 5 days per week, nor in excess of 8 hours in any one 24-hour period,
of which not more than 5 hours per 8-hour workday will be spent in actual
flying; provided, however, that the foregoing restrictions will not apply with
respect to Ferry Assistance or Revenue Service Training services, which will be
in accordance with FAA rules and regulations, unless otherwise agreed during the
Flight Training Planning Conference.
11.2 Buyer will pay or reimburse Boeing for all taxes, fees, duties,
licenses, permits and similar expenses incurred by Boeing and its employees as a
result of Boeing's providing Revenue Service Training.
11.3 Boeing will provide normal line maintenance services for any
Aircraft delivered to Buyer while such Aircraft is used for a Flight Crew
Training Course at Seattle. Buyer will provide such services if a Flight Crew
Training Course is conducted elsewhere. Normal line maintenance is defined as
that standard of line maintenance that Boeing might reasonably be expected to
furnish to its flight crew training customers at Boeing Field, Seattle, and
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will include ground support and Aircraft storage in the open, but will not
include provision of spare parts. Regardless of the location of such training,
Buyer will be responsible for the acquisition and supply of, and the charges
for, all maintenance items (other than those included in normal line
maintenance) required during such training, including, but not limited to, fuel,
oil, landing fees and spare parts. In addition, if such training is conducted at
or near Seattle, and if the training Aircraft is damaged during such training,
except for Major Damage (as hereinafter defined), Boeing will make all necessary
repairs to the damaged Aircraft. Such repairs will be performed by Boeing as
promptly as possible. Buyer will pay Boeing's reasonable charge, including the
price of parts and materials, for making such repairs. At Buyer's request Boeing
will also repair Major Damage to such Aircraft, provided Boeing and Buyer enter
into an agreement for additional services as provided for in this Customer
Support Document. "Major Damage" is defined as damage for which Boeing's charge
for labor is estimated by Boeing to exceed $25,000.
11.4 During the Flight Training contemplated hereunder, several
airports in the states of Washington, Montana and Oregon, as well as the
services of the fixed base operator at Grant County Airport at Moses Lake,
Washington, may be used. Unless otherwise agreed in the Flight Training
Planning Conference, it will be Buyer's responsibility to make arrangements for
the use of such airports.
11.5 If Boeing makes arrangements on behalf of Buyer for the use of
airports for flight training, Boeing will pay on Buyer's behalf any landing fee
charged to Buyer by any airport used in conjunction with the Flight Training
provided in the Seattle area. Not later than 30 days prior to the start of such
Flight Training, Buyer will provide to Boeing an open purchase order against
which Boeing will invoice Buyer for any such landing fee paid by Boeing on
Buyer's behalf. Such invoice will be submitted to Buyer approximately 60 days
after completion of such Flight Training when all landing fee charges have been
received and verified. Payment by Buyer to Boeing will be made within 30 days
of the date of such invoice.
11.6 If requested by Boeing, Buyer will make available to Boeing a
delivered Aircraft for the purpose of familiarizing Boeing instructor or ferry
flight crew personnel with operating special equipment or systems installed in
such Aircraft. If flight of the Aircraft is required for any Boeing instructor
or ferry flight crew member to maintain such instructor's or flight crew
member's
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FAA license for flight proficiency or landing currency for aircraft of the same
model type as the Aircraft, Boeing will be responsible for the cost of fuel,
oil, landing fees and spare parts attributable to that portion of any flight.
Buyer's authorization of the use of its Aircraft pursuant to this paragraph
applies only to Boeing instructors assigned to conduct Flight Training and a
reasonable number of alternate instructors and to members of any flight crew who
will participate in the ferry flight of an Aircraft hereunder.
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PART D
TECHNICAL DATA AND DOCUMENTS
----------------------------
1. General.
-------
Boeing will furnish to Buyer the data and documents set forth herein at
no additional charge to Buyer, unless otherwise specified herein. Such data and
documents will, where applicable, be prepared essentially in accordance with the
provisions of Revision 28 to Air Transport Association of America (ATA)
Specification No. 100, dated June 1, 1956, entitled "Specification for
Manufacturers' Technical Data." Such data and documents are only intended to
provide Buyer with pertinent information on components, equipment and
installations designed by Boeing for aircraft of the same model type as the
Aircraft. Such data and documents will be in English and in the units of
measure used by Boeing, except as otherwise specified herein or as may be
required to reflect Aircraft instrumentation.
2. Treatment of Data and Documents.
-------------------------------
2.1 The data and documents provided by Boeing under this Agreement
("Documents") are licensed to Buyer. They contain confidential, proprietary
and/or trade secret information belonging to Boeing; and Buyer will treat them
in confidence and use and disclose them only for Buyer's own internal purposes
as specifically authorized herein. If Buyer makes copies of any Documents, the
copies will also belong to Boeing and be treated as Documents under this
Agreement. Buyer will preserve all restrictive legends and proprietary notices
on all Documents and copies.
2.2 All Documents will only be used: (a) for the purpose of
maintenance, repair, or modification of an Aircraft or spare part as permitted
in the Spare Parts GTA or Customer Services GTA between Buyer and Boeing, and
then only in connection with an Aircraft or spare part for which the Document in
question is tabulated or identified by Boeing serial number, and (b) for the
purpose of Buyer's own development and manufacture of training devices for use
by Buyer, in connection with the Aircraft.
2.3 Any Document may be provided to Buyer's contractors for
maintenance, repair, or modification of the Aircraft; and Airplane Flight
Manuals, Operations Manuals, Maintenance Manuals, Wiring Diagram Manuals,
Systems
C-1
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<PAGE>
Schematics Manuals, and assembly and installation drawings may be provided to
Buyer's contractors for development and manufacture of training devices for use
by Buyer, but in both cases, only if Buyer's contractor is, at the time of
transfer of Documents, bound by a Boeing Customer Services GTA, or other
appropriate proprietary information protection agreement with Boeing, applicable
to the Documents.
3. Document Formats and Quantities.
-------------------------------
The Documents set forth in the Attachment will be provided by Boeing to
Buyer in the quantities and formats specified therein. Where available, Buyer
may select Boeing standard digital format as the delivery medium or,
alternatively, Buyer may select a reasonable quantity of printed (one-side or
two-side) and 16mm microfilm (diazo or silver halide) formats. When Boeing
standard digital format is selected, Buyer may also select no more than five
copies of printed or microfilm format copies, with the exception of the
Illustrated Parts Catalog, which will be provided in one selected format only.
The standard digital format used to deliver data is essentially in accordance
with the Digital Data Standards portion of ATA Specification No. 100, revision
28 or later for text and graphics. The Standard Generalized Mark-up Language
(SGML) text format is preferred where a Document Type Definition (DTD) is
specified by ATA Specification 100. When a DTD is not available in ATA
Specification 100, the data will be delivered in Print File format as defined by
ATA Specification 100. Data will be provided on standard magnetic tape unless
otherwise shown in details of Part D.
4. Data and Documents - Incremental Increase.
-----------------------------------------
Until one year after delivery of the last Aircraft, Buyer may annually
request in writing a reasonable increase in the quantity of the technical
Documents identified in the Attachment, with the exception of microfilm master
copies, digital formats, and all others for which a specified number of copies
are provided. Boeing will provide the additional quantity at no additional
charge to Buyer beginning with the next normal revision cycle. Buyer may
request a decrease in revision quantities at any time.
5. Advance Representative Copies.
-----------------------------
All advance representative copies referred to in the Attachment will be
selected by Boeing from available documents and will be reasonably
representative of the Aircraft. Such advance copies will be for advance
planning
C-1
D-2
<PAGE>
purposes only and may reflect another buyer's aircraft configuration that is
similar to Buyer's Aircraft configuration. Advanced copies in digital format may
also be obtained to support system development and test.
6. Customized Documents.
--------------------
All customized Documents referred to in the Attachment will reflect the
configuration of the Aircraft as delivered by Boeing to Buyer and any Boeing
standard format, instructions or procedures related thereto.
7. Revisions.
---------
7.1 Revision Service.
----------------
Boeing will provide revisions to those Documents so identified in
the Attachment, reflecting changes as developed by Boeing. Such revisions will
be provided in the quantities and formats set forth in the Attachment, and will
be provided for so long as Buyer operates an Aircraft, unless otherwise
specified therein.
7.2 Revisions Based on Boeing Service Bulletin
------------------------------------------
Incorporation.
-------------
If Boeing receives written notice from Buyer that Buyer intends to
incorporate, or has incorporated, any Boeing service bulletin in the Aircraft,
Boeing will at no charge issue revisions to the Documents so identified in the
Attachment, reflecting the effects of such incorporation into the Aircraft.
Such revisions will be issued in the same format and quantity as the original
publication to which the revisions pertain, for the time period specified in the
Attachment and, thereafter, in printed form.
8. COMPUTER SOFTWARE DOCUMENTATION FOR BOEING MANUFACTURED AIRBORNE
----------------------------------------------------------------
COMPONENTS AND EQUIPMENT.
------------------------
Boeing will provide to Buyer a Computer Software Index containing a
listing of (i) all programmed airborne avionics components and equipment
manufactured by Boeing or a Boeing subsidiary, designed and developed in
accordance with Radio Technical commission for Aeronautics Document No. RTCA/DO-
178 dated January 1982, No. RTCA/DO-178A dated March 1985, or later as
available, and installed in the Aircraft by Boeing and (ii) specific software
documents (Software Documentation) available to Buyer from Boeing for the listed
components and equipment.
C-1
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<PAGE>
Two copies (printed both sides) of the Computer Software Index will be furnished
to Buyer with the Aircraft. Revisions to the Computer Software Index applicable
to the Aircraft will be issued to Buyer as such revisions are developed by
Boeing for so long as Buyer operates the Aircraft.
Software Documentation will be provided to Buyer upon Buyer's written request
therefor after delivery of the Aircraft. The charge to Buyer for Software
Documentation shall be Boeing's price to reproduce the Software Documentation so
requested. Software Documentation will be prepared essentially in accordance
with the provisions of Air Transport Association of America (ATA) Specification
No. 102, entitled "Specification for Computer Software Manual," as revised April
20, 1983; but Software Documentation will not include, and Boeing will not be
obligated to provide, any code (including, but not limited to, original source
code, assembled source code, or object code) on computer sensible media.
9. Supplier Technical Data.
-----------------------
9.1 For supplier-manufactured programmed airborne avionics components
and equipment classified as Seller Furnished Equipment (SFE) or Seller Purchased
Equipment (SPE) which contain computer software designed and developed in
accordance with Radio Technical Commission for Aeronautics Document No. RTCA/DO-
178 dated January 1982, No. RTCA/DO-178A dated March 1985, or later as
available, Boeing will request that each supplier of such components and
equipment make software documentation for such components and equipment
available to Buyer in manner similar to that described in paragraph 8 of this
Part D.
9.2 The provisions of this paragraph 8 will not be applicable to items
of Buyer Furnished Equipment (BFE).
10. Buyer Furnished Equipment Data.
------------------------------
Boeing will incorporate Buyer Furnished Equipment Data into the
publications and data addressed herein providing Buyer makes the data available
to Boeing 12 months prior to delivery of Buyer's first Aircraft. Buyer agrees
to supply the data in Boeing standard digital format if publications and data
addressed herein are to be delivered in Boeing standard digital format.
C-1
D-4
<PAGE>
11. Additional Data and Documents.
-----------------------------
If Boeing provides data or documents other than Documents which are not
covered by a Boeing Customer Services GTA or other proprietary information
protection agreement between Boeing and Buyer, all such data and documents will
be considered things delivered under this Agreement and treated as Documents.
12. Technical Data and Documents Shipping Charges.
---------------------------------------------
Boeing pays the reasonable transportation costs of the Documents. Buyer
is responsible for any customs clearance charges, duties, and value added tax.
13. Buyer's Shipping Address.
------------------------
Buyer will promptly furnish to Boeing the specific address, including the
appropriate corporation name, individual title and organization within the
corporation, to which the Documents furnished hereunder are to be sent. Buyer
will notify Boeing promptly of any change to such address.
C-1
D-5
<PAGE>
Attachment to
Part D of Exhibit C-1 to
Purchase Agreement No. 1916
Page 1
<TABLE>
<CAPTION>
Item Description Quantity
- ---- ----------- --------
<S> <C> <C>
A. FLIGHT OPERATIONS
-----------------
1. Airplane Flight Manual
a. Advance Representative Format: ___ Printed One Side
Copy ------
Revisions: No
---------
Delivery: TBD
--------
b. Customized Manual Format: 1 Printed One Side
------ ---
Revisions: Yes
---------
Delivery: On-board each Aircraft
--------
Format: ___ Printed One Side
------
Revisions: Yes
---------
Delivery: 30 days after delivery of
-------- first Aircraft
Check if required: ___ Format: 1 3.5 Inch (1.44MB)
------ --- IBM Compatible
Diskette
Revisions: Yes
---------
Delivery: If available, some or all
-------- parts of the Airplane
Flight Manual may be
supplied in digital
format
2. Operations Manual
a. Advance Representative Format: ___ Printed Two Sides
Copy ------
Revisions: No
---------
Delivery: TBD
--------
b. Customized Manual Format: ___ Printed Two Sides
Check if required: ___ ------ 1 Digital Format
---
Revisions: Yes
---------
Delivery: Concurrent with delivery
-------- of first Aircraft
3. Planning and Performance Manual
a. Advance Representative Format: ___ Printed Two Sides
Copy ------
Revisions: No
---------
Delivery: TBD
--------
</TABLE>
<PAGE>
Attachment to
Part D of Exhibit C-1 to
Purchase Agreement No. 1916
Page 2
<TABLE>
<CAPTION>
Item Description Quantity
- ---- ----------- --------
<S> <C> <C>
b. Customized Manual Format: ___ Printed Two Sides
------
Revisions: Yes
---------
Delivery: Concurrent with delivery
-------- of first Aircraft
4. Weight and Balance Manual
a. Chapter 1 "Control"
1. Advance Representative Format: ___ Printed Two Sides
Copy ------
Revisions: No
---------
Delivery: TBD
--------
2. Customized Manual Format: ___ Printed Two Sides
------
Revisions: Yes
---------
Delivery: Concurrent with delivery
-------- of first Aircraft
b. Chapter 2 "Aircraft Format: ___ Printed One Side
Reports" ------
Revisions: No
---------
Delivery: On board each Aircraft
--------
5. Dispatch Deviation Guide Format: ___ Printed Two Sides
Check if Required: ___ ------ 1 Digital Format
---
Revisions: Yes
---------
Delivery: Concurrent with delivery
-------- of first Aircraft
6. Flight Crew Training Manual Format: ___ Printed Two Sides
------
Revisions: Yes
---------
Delivery: Concurrent with delivery
-------- of first Aircraft
7. Baggage/Cargo Format: ___ Printed One Side
Loading Manual ------ ___ Printed Two Sides
___ Microfilm, 16mm
Duplicate
Check if required: ___ 1 Microfilm, 16mm
--- Master
Check if required: ___ 1 Digital Format
---
Revisions: Yes
---------
Delivery: 90 days prior to delivery
-------- of first Aircraft
</TABLE>
<PAGE>
Attachment to
Part D of Exhibit C-1 to
Purchase Agreement No. 1916
Page 3
<TABLE>
<CAPTION>
Item Description Quantity
- ---- ----------- --------
<S> <C>
8. Fault Reporting
Manual (FRM)
a. Advance Representative Format: ___ Printed Two Sides
Copy ------
Revisions: No
---------
Delivery: TBD
--------
b. Customized Manual Format: ___ Printed Two Sides
Check if required: ___ ------ 1 Digital Format
---
Revisions: Yes
---------
Delivery: Concurrent with delivery
-------- of first Aricraft
9. Performance Engineer's Format: ___ Printed Two Sides
Manual ------
Revisions: Yes
---------
Delivery: Concurrent with delivery
-------- of first Aircraft
10. Jet Transport Format: 2 Printed Two Sides
Performance Methods ------ ---
Revisions: No
---------
Delivery: 90 days prior to
-------- delivery of First
Aircraft
11. FMC Supplemental Format: 2 Printed Two Sides
Data Document ------ ---
Revisions: Yes
---------
Delivery: 90 days prior to
-------- delivery of first
Aircraft
12. Operational Performance
Software (OPS)
a. Inflight and Report Format: 1 9 Track Magnetic
(INFLT/REPORT) Software ------ --- Tape in ASCII or
EBCDIC Format
1 3.5 Inch (1.44MB)
--- IBM Compatible
Diskette
1 3.5 Inch (1.4MB)
--- Macintosh Diskette
Revisions: Yes
---------
Delivery: Concurrent with delivery
-------- of first Aircraft
</TABLE>
<PAGE>
Attachment to
Part D of Exhibit C-1 to
Purchase Agreement No. 1916
Page 4
<TABLE>
<CAPTION>
Item Description Quantity
- ---- ----------- --------
<S> <C> <C>
b. Airplane Performance Format: 1 9 Track Magnetic
Monitoring (APM/HISTRY) ------ --- Tape in ASCII or
Software EBCDIC Format
1 3.5 Inch (1.44MB)
--- IBM Compatible
Diskette
1 3.5 Inch (1.4MB)
--- Macintosh Diskette
Revisions: Yes
---------
Delivery: Concurrent with delivery
-------- of first Aircraft
c. Takeoff Analysis Software Format: 1 9 Track Magnetic
------ --- Tape in ASCII or
EBCDIC Format
1 3.5 Inch (1.44MB)
--- IBM Compatible
Diskette
1 3.5 Inch (1.4MB)
--- Macintosh Diskette
Revisions: Yes
---------
Delivery: Concurrent with delivery
-------- of first Aircraft
d. Landing Analysis Software Format: 1 9 Track Magnetic
------ --- Tape in ASCII Format
1 3.5 Inch (1.44MB)
--- IBM Compatible
Diskette
1 3.5 Inch (1.4MB)
--- Macintosh Diskette
Revisions: Yes
---------
Delivery: Concurrent with delivery
-------- of first Aircraft
B. MAINTENANCE
-----------
1. Maintenance Manual
a. Advance Representative Format: ___ Printed
Copy ------ ___ Microfilm, 16mm
duplicate
1 Digital Format
---
Revisions: No
---------
Delivery: TBD
--------
</TABLE>
<PAGE>
Attachment to
Part D of Exhibit C-1 to
Purchase Agreement No. 1916
Page 5
<TABLE>
<CAPTION>
Item Description Quantity
- ---- ----------- --------
<S> <C> <C>
b. Customized Master
Check if required: ___ 1 Microfilm, 16mm
--- Master
Check if required: ___ 1 Digital Format
---
Revisions: Yes
---------
Delivery: 90 days prior to delivery
-------- first Aircraft
c. Customized Manual Format: ___ Printed Two Sides
------ ___ Printed One Side
___ Microfilm, 16mm
Duplicate
Revisions: Yes
---------
Delivery: 90 days prior to delivery
-------- first Aircraft
2. Wiring Diagram Manual
a. Advance Representative Format: ___ Printed
Copy ------
Revisions: No
---------
Delivery: TBD
--------
b. Customized Master Format:
------
Check if required: ___ 1 35mm Aperture Cards
--- of All Wiring
Diagrams and Charts
Check if required: ___ 1 EDP Portion, 16mm
--- Microfilm Master
Check if required: ___ 1 Entire Manual, 16mm
--- Microfilm Master
Check if required: ___ 1 Entire Manual,
--- Digital Format
Revisions: Yes, until 90 days after
--------- delivery of last Aircraft
Delivery: Concurrent with delivery
-------- of first Aircraft
</TABLE>
<PAGE>
Attachment to
Part D of Exhibit C-1 to
Purchase Agreement No. 1916
Page 6
<TABLE>
<CAPTION>
Item Description Quantity
- ---- ----------- --------
<S> <C> <C>
c. Customized Manual Format: ___ Standard Printed
------ Copies of Entire
Manual
___ Standard Printed
Copies of all
Sections Except EDP
Portion
1 EDP Portion, 16mm
--- Microfilm Duplicate
1 Entire Manual, 16mm
--- Microfilm Duplicate
Revisions: Yes, until 90 days after
--------- delivery of last Aircraft
Delivery: Concurrent with delivery
-------- of first Aircraft
3. System Schematics Manual
a. Advance Representative Format: 1 Printed
Copy ------ ---
Revisions: No
---------
Delivery: TBD
--------
b. Customized Master Format:
------
Check if required: ___ 1 35mm Aperture Cards
--- of all Schematics
Check if required: ___ 1 Digital Format
---
Revisions: Yes, until 90 days after
--------- delivery of last Aircraft
only
Delivery: Concurrent with delivery
-------- of first Aircraft
c. Customized Manual Format: ___ Printed Two Sides
------
Revisions: Yes, until 90 days after
--------- delivery of last Aircraft
only
Delivery: Concurrent with delivery
-------- of first Aircraft
</TABLE>
<PAGE>
Attachment to
Part D of Exhibit C-1 to
Purchase Agreement No. 1916
Page 7
<TABLE>
<CAPTION>
Item Description Quantity
- ---- ----------- --------
<S> <C> <C>
4. Structural Repair Manual Format: ___ Printed Two Sides
------ ___ Printed One Side
___ Microfilm, 16mm
Duplicate
Check if required: ___ 1 Microfilm, 16mm
--- Master
Check if required: ___ 1 Digital Format
---
Revisions: Yes
---------
Delivery: 90 days prior to delivery
-------- of first Aircraft
5. Component Maintenance Format: ___ Printed Two Sides
Manual ------ ___ Microfilm, 16mm
Duplicate
Check if required: ___ 1 Microfilm, 16mm
--- Master
Check if required: ___ 1 Digital Format
---
Revisions: Yes
---------
Delivery: 90 days prior to delivery
-------- of first Aircraft
6. Chapter 20 Standard Format: ___ Printed Two Sides
Overhaul Practices ------ ___ Printed One Side
Manual (Common to other ___ Microfilm, 16mm
models, quantity indicates Duplicate
total for all models)
Check if required: ___ 1 Microfilm, 16mm
--- Master
Check if required: ___ 1 Digital Format
---
Revisions: Yes
---------
Delivery: 90 days prior to delivery
-------- of first Aircraft
7. Chapter 20 Standard Format: ___ Printed Two Sides
Wiring Practices Manual ------ ___ Microfilm, 16mm
(Common to other models, Duplicate
quantity indicates total
for all models)
Check if required: ___ 1 Microfilm, 16mm
--- Master
___ 1 Digital Format
---
Revisions: Yes
---------
Delivery: 90 days prior to delivery
-------- of first Aircraft
</TABLE>
<PAGE>
Attachment to
Part D to Exhibit C-1 to
Purchase Agreement No. 1916
Page 8
<TABLE>
<CAPTION>
Item Description Quantity
- ---- ----------- --------
<S> <C> <C>
8. Nondestructive Test Manuals Format: ___ Printed Two Sides
------ ___ Printed One Side
___ Microfilm, 16mm
Duplicate
Check if required: ___ 1 Microfilm, 16mm
--- Master
Check if required: ___ 1 Digital Format
---
Revisions: Yes
---------
Delivery: 90 days prior to delivery
-------- of first Aircraft
9. Service Bulletins Format: ___ Printed Two Sides
------
1 Digital Format
---
Revisions: Yes
---------
Delivery: As developed by Boeing
--------
9a. Service Bulletin Index Format: ___ Printed Two Sides
------
Revisions: Yes
---------
Delivery: 90 days prior to delivery
-------- of first Aircraft
10. Corrosion Prevention Manual Format: ___ Printed Two Sides
------ ___ Printed One Side
___ Microfilm, 16mm
Duplicate
Check if required: ___ 1 Microfilm, 16mm
--- Master
Check if required: ___ 1 Digital Format
---
Revisions: Yes
---------
Delivery: 90 days prior to delivery
-------- of first Aircraft
11. Fault Isolation Manual
a. Advance Representative Format: ___ Printed Two Sides
Copy ------ ___ Microfilm, 16mm
Duplicate
1 Digital Format
---
Revisions: No
---------
Delivery: TBD
--------
</TABLE>
<PAGE>
Attachment to
Part D of Exhibit C-1 to
Purchase Agreement No. 1916
Page 9
<TABLE>
<CAPTION>
Item Description Quantity
- ---- ----------- --------
<S> <C> <C>
b. Customized Master 1 Microfilm, 16mm
Check if required: ___ --- Master
1 Digital Format
Check if required: ___ ---
Revisions: Yes
---------
Delivery: Concurrent with delivery
-------- of first Aircraft
c. Customized Manual Format: ___ Printed Two Sides
------ ___ Microfilm, 16mm
Duplicate
Revisions: Yes
---------
Delivery: Concurrent with delivery
-------- of first Aircraft
12. Ramp Maintenance Manual
a. Advance Representative Copy Format: ___ Printed Two Sides
------
Revisions: No
---------
Delivery: TBD
--------
b. Customized Manual Format: ___ Printed Two Sides
------
Revisions: Yes
---------
Delivery: Concurrent with delivery
-------- of first Aircraft
13. 777 Interior Reconfiguration Format: ___ Printed Two Sides
Document ------
Revisions: Yes
---------
Delivery: 90 days prior to delivery
-------- of first Aircraft
</TABLE>
<PAGE>
Attachment to
Part D of Exhibit C-1 to
Purchase Agreement No. 1916
Page 10
<TABLE>
<CAPTION>
Item Description Quantity
- ---- ----------- --------
<S> <C>
/[NOT APPLICABLE TO ROLLS-ROYCE ENGINES:]
14. Power Plant Buildup Manual Format: ___ Printed Two Sides
------ ___ Printed One Side
___ Microfilm, 16mm
Duplicate
Check if required: ___ 1 Microfilm, 16mm
--- Master
Check if required: ___ 1 Digital Format
---
Revisions: Yes
---------
Delivery: 90 days prior to delivery
-------- of first Aircraft/
15. In Service Activities Format: ___ Printed Two Sides
Report ------
Revisions: Yes
---------
Delivery: Issued Quarterly
--------
16. Significant Service Format: ___ Printed Two Sides
Item Summary ------
Revisions: Yes
---------
Delivery: As developed by Boeing
--------
17. All Operator Letter Format: ___ Printed One or Two
------ Sides
Revisions: Yes
---------
Delivery: As developed by Boeing
--------
18. Service Letters Format: ___ Printed One or Two
------ Sides
Revisions: Yes
---------
Delivery: As developed by Boeing
--------
19. Structural Item Format: ____ Printed One or Two
Interim Advisory ------ Sides
Revisions: Yes
---------
Delivery: As developed by Boeing
--------
20. Combined Index Format: 2 Printed Two Sides
------ ---
Revisions: Yes
---------
Delivery: As developed by Boeing
--------
21. Maintenance Tips Format: 2 Printed One or Two
------ --- Sides
Revisions: Yes
---------
Delivery: As developed by Boeing
--------
22. Configuration Database Format: 2 Printed Two Sides
Generator (CDG) User Guide ------ ---
Revisions: Yes
---------
Delivery: Concurrent with delivery
-------- of first Aircraft
</TABLE>
<PAGE>
Attachment to
Part D of Exhibit C-1 to
Purchase Agreement No. 1916
Page 11
<TABLE>
<CAPTION>
Item Description Quantity
- ---- ----------- --------
<S> <C> <C>
C. MAINTENANCE PLANNING
--------------------
1. Maintenance Planning Format: ___ Printed Two Sides
Data (MPD) Documents ------ ___ Microfilm, 16mm
Duplicate
___ Microfilm, 16mm
Master
Check if required: ___ 1 Digital Format
---
Revisions: No
---------
Delivery: 90 days after signing
-------- Purchase Agreement
2. Maintenance Task Cards
a. Advance Format: ___ Printed One Side
Representative Copy ------
(Check One) ___ 1 Digital Format
---
Revisions: No
---------
Delivery: TBD
--------
b. Customized Masters
Check if required: ___ Format: 1 Microfilm, 16mm
------ --- Master
Check if required: ___ 1 Digital Format
---
c. Customized Cards Format: ___ Printed One Side
------ ___ Microfilm, 16mm
Duplicate
Revisions: Yes
---------
Delivery: 90 days prior to delivery
-------- of first Aircraft
3. Maintenance Task Card Format: 1 Printed Two Sides
Index ------ ---
Check if required: ___ 1 Digital Format
---
Revisions: First Revision Only
---------
Delivery: 90 days prior to delivery
-------- of first Aircraft
4. Maintenance Inspection Format: ___ Printed Two Sides
Interval Reports ------
(Common with other models Revisions: Yes
quantity indicates total ---------
required) Delivery: 90 days prior to
-------- delivery of first
Aircraft
</TABLE>
<PAGE>
Attachment to
Part D of Exhibit C-1 to
Purchase Agreement No. 1916
Page 12
<TABLE>
<CAPTION>
Item Description Quantity
- ---- ----------- --------
<S> <C> <C>
D. SPARES
------
1. Illustrated Parts Catalog Format: ___ Printed Two Sides
(Select one format only) ------ ___ Printed One Side
___ Microfilm, 16mm
Duplicate
Check if required: ___ 1 Microfilm, 16mm
--- Master
Check if required: ___ 1 Digital Format
---
Revisions: Yes, until 90 days after
--------- delivery of last Aircraft
only
Delivery: 90 days prior to delivery
-------- of first Aircraft
2. Standards Books Format: ___ Printed Two Sides
(Unless previously provided ------ ___ Microfilm, 16mm
pursuant to other Duplicate
agreements, in which case Revisions: Yes
applicable supplements ---------
will be provided) Delivery: 90 days prior to delivery
-------- of first Aircraft
E. FACILITIES AND EQUIPMENT PLANNING
---------------------------------
1. Facilities and Equipment Format: ___ Printed Two Sides
Planning documents ------
Check if required: ___ 1 Microfilm,16mm
--- Master
Revisions: Yes
---------
Delivery: 90 days after signing
-------- Purchase Agreement
2. Special Tool and Ground Format: ___ Microfilm, 35 mm
Handling Equipment Drawings ------ Duplicate in
Aperture Card Format
Revisions: Yes
---------
Delivery: 90 days prior to delivery
-------- of first Aircraft
3. Special Tool and Ground Format: ___ Printed Two Sides
Handling Equipment ------
Drawing Index
Revisions: Yes
---------
Delivery: 90 days prior to delivery
-------- of first Aircraft
</TABLE>
<PAGE>
Attachment to
Part D of Exhibit C-1 to
Purchase Agreement No. 1916
Page 13
<TABLE>
<CAPTION>
Item Description Quantity
- ---- ----------- --------
<S> <C> <C>
4. Supplementary Tooling Format: ___ Printed Two Sides
Documentation ------
(Common with other models Revisions: Yes
quantity indicates total ---------
required) Delivery: 90 days prior to
-------- delivery of first
Aircraft
5. System Test Equipment Format: ___ Printed One Side
Document ------
Revisions: Yes
---------
Delivery: 90 days after signing
-------- Purchase Agreement
6. Illustrated Tool and Format: ___ Printed One Side
Equipment List/Manual ------ ___ Printed Two Sides
___ Microfilm, 16mm
Duplicate
Check if required: ___ 1 Microfilm 16mm
--- Master
Check if required: ___ 1 Digital Format
---
Revisions: Yes
---------
Delivery: 90 days prior to delivery
-------- of first Aircraft
7. Aircraft Recovery Document Format: ___ Printed Two Sides
------
Revisions: Yes
---------
Delivery: 90 days prior to delivery
-------- of first Aircraft
8. Airplane Characteristics Format: ___ Printed Two Sides
for Airport Planning ------
Revisions: Yes
---------
Delivery: 90 days prior to delivery
-------- of first Aircraft
9. Airplane Rescue and Format: ___ Printed Two Sides
Fire Fighting Document ------
(Common with other models Revisions: Yes
quantity indicates total ---------
required) Delivery: 90 days prior to
-------- delivery of first
Aircraft
10. Engine Handling Document Format: ___ Printed Two Sides
------
Revisions: Yes
---------
Delivery: 90 days after signing
-------- Purchase Agreement
F. COMPUTER SOFTWARE INDEX Format: ___ Printed Two Sides
(Common to other models, ------
quantity indicates Revisions: Yes
total required) ---------
Delivery: Concurrent with delivery
-------- of first Aircraft
</TABLE>
<PAGE>
Attachment to
Part D of Exhibit C-1 to
Purchase Agreement No. 1916
Page 14
<TABLE>
<CAPTION>
Item Description Quantity
- ---- ----------- --------
<S> <C> <C>
G. SUPPLIER TECHNICAL DATA
-----------------------
1. Service Bulletins ___
2. Ground Support Equipment
Data ___
3. Provisioning Information ___
4. Component Maintenance/
Overhaul Manuals ___
5. Component Maintenance/ ___
Overhaul Manuals Index
(Common to other models,
quantity indicates
total required)
6. Publications Index ___
7. Product Support ___
Supplier Directory
(Common to other models,
quantity indicates
total required)
</TABLE>
<PAGE>
PART E
BUYER'S INDEMNIFICATION OF BOEING AND INSURANCE
-----------------------------------------------
1. Buyer's Indemnification of Boeing.
---------------------------------
Buyer hereby indemnifies and holds harmless Boeing from and against all
claims and liabilities, including costs and expenses (including attorneys' fees)
incident thereto or incident to successfully establishing the right to
indemnification, for injury to or death of any person or persons, including
employees of Buyer but not employees of Boeing, or for loss of or damage to any
property, including Aircraft, arising out of or in any way related to the
performance by Boeing of training, services or other obligations pursuant to
this Exhibit C, whether or not arising in tort or occasioned in whole or in part
by the negligence of Boeing, whether active, passive or imputed.
1.1 The foregoing indemnification will not apply to the legal
liability to persons or parties other than Buyer or Buyer's assignees arising
out of an accident caused solely by a product defect in an Aircraft.
2. Buyer's Insurance.
-----------------
Evidence of insurance will be required 30 days prior to the scheduled
delivery of the first Aircraft. Accordingly, Buyer will provide certificates of
insurance specifically referencing the Agreement and paragraph 1 of this Part E.
In addition to showing policy number, limits of liability, and effective dates
of coverage, such certificates will contain but not be limited to the following
provisions:
2.1 Hull All Risk; Hull War & Allied Perils Insurance.
-------------------------------------------------
Insurers and/or reinsurers will hold harmless and waive all rights of
subrogation against Boeing for any damages or claims arising out of these
Exhibit C services.
2.2 Aircraft Liability Insurance.
----------------------------
(a) To name Boeing as an additional insured in connection with the
performance by Boeing of training, services, or other obligations provided under
this Exhibit C.
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<PAGE>
(b) To provide that the insurance arranged herein will be primary and
without right of contribution with respect to any other insurance which may be
available for the protection of Boeing.
(c) To provide that all provisions of the insurance, except the limits
of liability, will operate to give each insured or additional insured the same
protection as if there were a separate policy issued covering each insured or
additional insured.
(d) To provide that no act, omission, breach of any warranty or
condition, or misrepresentation on the part of the Insured or any other person
or party (other than Boeing) will void, exclude, minimize, or adversely change
this coverage as it applies to Boeing.
2.3 For Coverages Specified in 2.1 and 2.2.
--------------------------------------
(a) Acknowledgment that the insurers and/or reinsurers are aware of
and have seen a copy of the Agreement and accept and insure the risks and
indemnity herein to the extent of the coverage and endorsements as described in
this certificate.
(b) To give 30 day written notice of cancellation, termination or
adverse material alteration of the policies (7 day written notice in the event
of War Risk or such lesser period as may be in effect with prior notice).
(c) That Boeing will not be responsible for payment, set off, or
assessment of any kind of any premiums in connection with the policies,
endorsements or coverages described herein.
(d) For the purpose of this Part E, "Boeing" is defined as The Boeing
Company, its divisions, subsidiaries, affiliates, the assignees of each and
their respective directors, officers, employees and agents.
If more than one Aircraft is to be delivered under the Purchase Agreement, the
insurance certificates must reference all Aircraft when delivered or separate
certificates must be supplied for each Aircraft. The certificates of insurance
will be kept current and valid.
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3. Notice of Claim.
---------------
Boeing will give prompt notice to Buyer after receipt of a claim that on
its face is subject to indemnification under paragraph 1 of this Part E.
Otherwise, Boeing will give prompt notice to Buyer after receipt of information
sufficient to inform Boeing that a claim is subject to indemnification under
paragraph 1 of this Part E. At Buyer's request, Boeing will cooperate with
Buyer and its attorneys and furnish relevant data and records reasonably
requested by Buyer during the discovery phase of any such claim, subject to
entry of an appropriate protective order.
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PART F
Alleviation or Cessation of Performance
---------------------------------------
Boeing will not be required to provide any services, training, data or goods at
a facility while:
1. a labor stoppage or dispute in progress involving Buyer exists;
2. wars or warlike operations, riots or insurrections in the country
where such facility is located exist;
3. conditions at such facility which, in the opinion of Boeing, are
detrimental to the general health, welfare or safety of its personnel and/or
their families exist;
4. the United States Government refuses permission to any Boeing
personnel or their families to enter into the country where such facility is
located, or recommends that any Boeing personnel or their families leave such
country; or
5. the United States Government refuses permission to Boeing to
deliver goods or services to the country where such facility is located.
Boeing further reserves the right, upon the occurrence of any of such events,
subsequent to the location of Boeing personnel at Buyer's facility, to
immediately and without prior notice relocate its personnel and their families
to a place of Boeing's choosing. Any delay resulting therefrom will be deemed a
delay by mutual agreement.
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<PAGE>
CODE THREE - MINOR MODEL DIFFERENCES
CUSTOMER SUPPORT DOCUMENT
between
THE BOEING COMPANY
and
INTERNATIONAL LEASE FINANCE CORPORATION
Exhibit C-2 to Purchase Agreement Number 1916
C-2
<PAGE>
CUSTOMER SUPPORT DOCUMENT NO. 1916
Dated June 24, 1996
------------------
Relating to
BOEING MODEL 777 AIRCRAFT
This Customer Support Document is Exhibit C-2 to and forms a part of
Purchase Agreement No. 1916 between The Boeing Company (Boeing) and
International Lease Finance Corporation (Buyer) relating to the purchase of
Boeing Model 777 aircraft. This Customer Support Document consists of the
following parts:
PART A Boeing Maintenance Training Program
PART B Boeing Customer Support Services
PART C Boeing Flight Training Program
PART D Technical Data and Documents
PART E Buyer's Indemnification of Boeing and Insurance
PART F Alleviation or Cessation of Performance
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PART A
BOEING MAINTENANCE TRAINING PROGRAM
-----------------------------------
1. General.
-------
This Part describes the maintenance training to be provided by Boeing
(Maintenance Training) at Boeing's training facility at or near Seattle. The
Maintenance Training will be provided at no additional charge to Buyer, except
as otherwise provided herein.
All instruction, examinations and materials shall be prepared and presented in
the English language and in the units of measure used by Boeing. Buyer will
provide interpreters if required for Buyer's personnel.
Buyer will be responsible for the living expenses of Buyer's personnel during
Maintenance Training. For Maintenance Training provided at or near Seattle,
Boeing will transport Buyer's personnel between their local lodging and the
training facility.
2. Maintenance Training Program.
----------------------------
In conjunction with earlier sales to Buyer of the same model type
aircraft as the Aircraft, Boeing has provided to Buyer comprehensive maintenance
training for such aircraft. If requested by Buyer at least 12 months prior to
delivery of the first Aircraft, Boeing agrees to provide 1 Maintenance Training
course consisting of classroom training to acquaint up to 15 of Buyer's
personnel with any operational, structural or systems differences between the
first Aircraft scheduled for delivery pursuant to this Agreement and the last
aircraft of the same model type previously delivered by Boeing to Buyer that are
significant to the maintenance of the Aircraft. Such course will be scheduled
by mutual agreement of Boeing's and Buyer's maintenance training organizations.
3. Training Materials.
------------------
Boeing will provide at the beginning of the course, if required, 1 copy
of a training manual applicable to the differences training course for each
student attending such course. Boeing will also provide 1 set of visual aid
projection transparencies and 1 set of black and white reproducible masters of
applicable graphics and text
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utilized in the Maintenance Training. No revision service will be provided for
such training manuals and materials.
4. Training at a Facility Other Than Boeing's.
------------------------------------------
If seasonably requested, Boeing will conduct the classroom training
described above at a mutually acceptable alternate training site, subject to the
following conditions:
4.1 Buyer will be responsible for providing acceptable classroom space
and training equipment required to present the Boeing courseware.
4.2 Buyer will pay Boeing's then-current per diem charge for each
Boeing instructor for each day, or fraction thereof, such instructor is away
from Seattle, including travel time.
4.3 Buyer will reimburse Boeing for round-trip transportation for
Boeing's instructors and training materials between Seattle and such alternate
training site.
4.4 Buyer will pay, or reimburse Boeing for, all taxes, fees, duties,
licenses, permits and similar expenses incurred by Boeing or its employees as a
result of Boeing's providing the training at such alternate site.
4.5 Those portions of training that require the use of Boeing's
training devices, if any, will be conducted at Boeing-designated facilities.
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PART B
BOEING CUSTOMER SUPPORT SERVICES
--------------------------------
1. General.
-------
This Part describes the support services to be provided by Boeing at no
additional charge to Buyer, unless otherwise specified herein. Except with
respect to Field Services, the services described in this Part will be provided
by Boeing during a period commencing with delivery of the first Aircraft and
continuing so long as one Aircraft is regularly operated by Buyer in commercial
air transport service.
2. Field Service Engineering.
-------------------------
Boeing will furnish field service representation to advise Buyer on
maintenance and operation of the Aircraft (Field Services) as follows:
2.1 Field Services will be available to Buyer at or near Buyer's main
maintenance or engineering facility for periods beginning prior to delivery of
each Aircraft and terminating 12 months after delivery of each such Aircraft
(Field Service Period(s)). If such Field Service Periods overlap, the Field
Services will be provided concurrently.
2.2 Buyer will furnish at no charge to Boeing suitable office space
and equipment that will include desks, chairs, file cabinets and an electrical
power source in, or convenient to, Buyer's facility where each/any Boeing
representative is providing Field Services. As required, Buyer will assist each
representative providing Field Services with visas, work permits, customs, mail
handling, identification passes, and local airport authorities.
2.3 In addition to the Field Services referred to above, the services
of any Boeing field service representative will also be available to Buyer
anywhere Buyer may land the Aircraft.
2.4 Boeing may, from time to time, provide additional support services
in the form of Boeing personnel visiting Buyer's facilities to work with Buyer's
personnel in an advisory capacity.
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3. Additional Engineering Support Services.
---------------------------------------
Boeing will, if requested by Buyer in writing, provide technical advisory
assistance with respect to the Aircraft and accessories, equipment and parts
manufactured to Boeing's detailed design and installed in the Aircraft at the
time of delivery. Such technical advisory assistance, which will be provided
from Seattle, will include:
3.1 analysis of and comment on any Aircraft service or operational
problem experienced by Buyer in order to determine the nature of the problem and
its cause and to suggest possible solutions;
3.2 analysis of and comment on Buyer's engineering releases relating
to structural repairs of the Aircraft not covered by Boeing's Structural Repair
Manual; and
3.3 analysis of and comment on Buyer's engineering proposals for
changes in, or replacement of, parts, accessories or equipment manufactured to
Boeing's detailed design (excluding computer software embedded or included
therein); provided that Boeing will not analyze or comment on any such change or
replacement which constitutes a major structural change, nor on any engineering
release related thereto, unless Buyer's request for such analysis and comment is
accompanied by complete detailed drawings, substantiating data (including data,
if any, required by applicable government agencies), all stress or other
appropriate analysis, and a specific statement from Buyer of the kind of review
and response desired by Buyer.
4. Special Services.
----------------
4.1 Facilities, Ground Equipment and Maintenance Planning Assistance.
----------------------------------------------------------------
Boeing will, at Buyer's request, send qualified Boeing engineering
representatives to Buyer's main base to evaluate Buyer's technical facilities,
tools and equipment for servicing and maintaining the Aircraft, to recommend
changes where necessary and to assist in the formulation of Buyer's overall
maintenance plan.
4.2 Additional Services.
-------------------
Boeing may, at Buyer's request, provide additional special
services with respect to the Aircraft after delivery, which may include such
items as Master Changes (Kits and/or Data), training and maintenance and
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repair of the Aircraft. Providing such additional services will be subject to
(i) mutually acceptable price, schedule and scope of work and (ii) Boeing's
then-current standard contract therefor including disclaimer and release,
exclusion of consequential and other damages and indemnification and insurance
requirements.
4.3 Post-Delivery Aircraft Services.
-------------------------------
If Boeing performs unanticipated work on an Aircraft after
delivery of such Aircraft, but prior to its initial departure flight, or upon
its return to Boeing's facilities prior to completion of such flight, the
following provisions will apply:
4.3.1 Title to and risk of loss of any such Aircraft will at all
times remain with Buyer.
4.3.2 The provisions of the Boeing Warranty set forth in Exhibit
B of this Agreement will apply to such work.
4.3.3 Buyer will reimburse Boeing for such work to the extent
not covered by the Boeing Warranty applicable to the Aircraft.
4.3.4 The Disclaimer and Release and Exclusion of Consequential
and Other Damages provisions set forth in Article 12 of this Agreement and the
indemnification and insurance provisions set forth in this Exhibit C-2 will
apply to such Boeing work.
4.3.5 In performing such work, Boeing may rely upon the
commitment authority of Buyer's personnel requesting such work.
5. Additional Informational Services.
---------------------------------
Boeing may, from time to time, provide Buyer with additional services in
the form of information about the Aircraft or other aircraft of the same type,
including information concerning design, manufacture, operation, maintenance,
modification, repair and in-service experience.
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<PAGE>
PART C
BOEING FLIGHT TRAINING PROGRAM
------------------------------
1. General.
-------
This Part describes the flight training to be provided by Boeing (Flight
Training) at or near Seattle, or at some other location to be determined
pursuant to this Part. The Flight Training will be provided at no additional
charge to Buyer, except as otherwise provided herein.
All instruction, examinations and materials will be prepared and presented in
the English language and in the units of measure used by Boeing. Buyer will
provide interpreters if required for Buyer's personnel.
Buyer will be responsible for the living expenses of Buyer's personnel during
the Flight Training Program. For Flight Training provided at or near Seattle,
Boeing will transport Buyer's personnel between their local lodging and the
training facility.
2. Flight Training Program.
-----------------------
In conjunction with earlier sales to Buyer of aircraft of the same model
type as the Aircraft, Boeing has provided to Buyer comprehensive flight training
for such aircraft. If requested by Buyer at least 12 months prior to delivery
of the first Aircraft, Boeing agrees to provide, if required, 1 classroom
training class to acquaint up to 15 of Buyer's personnel with any operational,
systems and performance differences significant to the operation of the
Aircraft, between the first Aircraft scheduled for delivery pursuant to this
Agreement and the last aircraft of the same model type as the Aircraft
previously delivered by Boeing to Buyer. Such course will be scheduled by
mutual agreement of Boeing's and Buyer's flight training organizations.
3. Training Materials.
------------------
Any training materials, if required, that are used in Flight Training
shall be provided to Buyer at the conclusion of such class. No revision service
shall be provided for such training materials.
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4. Training at a Facility Other Than Boeing's.
------------------------------------------
If seasonably requested, Boeing will conduct the Flight Training at a
mutually acceptable alternate training site, subject to the following
conditions:
4.1 Buyer will be responsible for providing classroom space acceptable
to Boeing, a flight simulator and training equipment required to present the
Boeing courseware.
4.2 Buyer will pay Boeing's then-current per diem charge for each
Boeing instructor for each day, or fraction thereof, such instructor is away
from Seattle, including travel time.
4.3 Buyer will reimburse Boeing for round-trip transportation for
Boeing's flight training instructors and materials between Seattle and such
alternate site.
4.4 Buyer will pay, or reimburse Boeing for, all taxes, fees, duties,
licenses, permits and similar expenses incurred by Boeing or its employees as a
result of Boeing's providing the training at such alternate site.
4.5 Those portions of the training that require the use of Boeing's
training devices, if any, will be conducted at Boeing-designated facilities.
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<PAGE>
PART D
TECHNICAL DATA AND DOCUMENTS
----------------------------
1. General.
-------
Boeing will furnish to Buyer the data and documents set forth herein at
no additional charge to Buyer, unless otherwise specified herein. Such data and
documents will, where applicable, be prepared essentially in accordance with the
provisions of Revision 28 to Air Transport Association of America Specification
No. 100, dated June 1, 1956, entitled "Specification for Manufacturers'
Technical Data," with the specific exception of the Illustrated Parts Catalog,
which will be prepared essentially in accordance with the provisions of Revision
28 thereto. Such data and documents are only intended to provide Buyer with
pertinent information on components, equipment and installations designed by
Boeing for aircraft of the same model type as the Aircraft. Such data and
documents will be in English and in the units of measure used by Boeing, except
as otherwise specified herein or as may be required to reflect Aircraft
instrumentation.
2. Nondisclosure of Data and Documents.
-----------------------------------
None of the data or documents provided herein, or copies thereof, or the
Detail Specification, or copies thereof, will be transferred or permitted out of
Buyer's possession, or the information contained therein divulged by Buyer to
any other person, firm or corporation, or used or furnished by Buyer for the
design, manufacture, maintenance, repair or modification of any aircraft or
spare part except: (i) for the purpose of maintenance, repair or modification
of the Aircraft; (ii) for the purpose of the manufacture or redesign of any
spare part when permitted under the provisions of the Spare Parts General Terms
Agreement; (iii) as required by law; or (iv) with Boeing's prior written
consent. If Buyer so transfers the data and documents or information referred
to above, Buyer will obtain the transferee's agreement to comply with the
provisions of this paragraph. Buyer will maintain all proprietary markings and
notices on copies of data and documents provided pursuant to this Part D.
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<PAGE>
3. Document Formats and Quantities.
-------------------------------
The Attachment is provided to record the quantities and formats of data
and documents provided to Buyer which are applicable to aircraft previously
delivered by Boeing of the same model type as the Aircraft. Revisions to such
data and documents will be provided as necessary to reflect the configuration,
at time of delivery, of the Aircraft to which this Part applies. Space is
provided in the Attachment for Buyer and Boeing to indicate changes, mutually
agreed upon concurrently with signing this Agreement, in the quantities and
formats of such data and documents to be hereinafter provided.
In the event Boeing determines that revisions would not be appropriate for any
of the documents described in the Attachment, Boeing reserves the right to
furnish to Buyer, in lieu of such revisions, a separate publication of such
document for the Aircraft in the same format and quantity as indicated in the
Attachment. Revision service for such publication shall be the same as for the
document it replaces.
4. Revision Service.
----------------
Further revisions to any such data or documents will be provided with
respect to such Aircraft in accordance with the provisions applicable to such
data or documents, as set forth in the purchase agreement or purchase agreement
supplement under which Boeing originally agreed to provide such data and
documents, as such provisions may have been amended by the parties.
5. Supplier Technical Data.
-----------------------
Boeing will continue to maintain the supplier data program referred to in
the purchase agreement or purchase agreement supplement under which data and
documents for Buyer's aircraft of the same model type as the Aircraft were
originally provided to Buyer. As indicated in such prior purchase agreement or
supplement, the provisions of such supplier data program are not applicable to
items of Buyer Furnished Equipment.
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<PAGE>
6. Additional Data and Documents.
-----------------------------
If Boeing provides any data or documents other than those described in
this Agreement, such data or documents will be deemed to be things delivered
pursuant to this Agreement. Boeing reserves the right to deny any request for
additional data and documents.
7. Buyer's Shipping Address.
------------------------
Boeing will ship the data and documents furnished hereunder to Buyer's
shipping address for data and documents previously provided to Boeing. Buyer
shall promptly notify Boeing of any change to such address.
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<PAGE>
Attachment to
Part D
Page 1
<TABLE>
<CAPTION>
WORKSHEET
---------
ORIGINAL REVISED
ITEM NAME QUANTITY QUANTITY FORMAT
- ---- ---- -------- -------- ------
<S> <C> <C> <C>
A. FLIGHT OPERATIONS:
-----------------
1. Airplane Flight Manual ________ ________ Printed 1 Side
NOTE: An additional copy is
placed aboard each
airplane at delivery
as required by FAR's.
2. Operations Manual and Quick ________ ________ Printed 2 Sides
Reference Handbook
________ ________ Digital Magnetic
Tape
3. Weight and Balance Control ________ ________ Reproduced
and Loading Manual
4. Dispatch Deviation ________ ________ Printed 2 Sides
Procedures Guide
5. Flight Crew Training Manual ________ ________ Printed 2 Sides
6. Performance Engineer's Manual ________ ________ Printed 2 Sides
7. Baggage/Cargo Loading Manual ________ ________ Printed 2 Sides
or
________ ________ Printed 1 Side
________ ________ Microfilm (16mm)
or
________ ________ Microfilm
(Silver Halide)
________ ________ Digital Magnetic
Tape
8. Fault Reporting Manual ________ ________ Printed 2 Sides
</TABLE>
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<PAGE>
Attachment to
Part D
Page 2
<TABLE>
<CAPTION>
WORKSHEET
---------
ORIGINAL REVISED
ITEM NAME QUANTITY QUANTITY FORMAT
- ---- ---- -------- -------- ------
<S> <C> <C> <C>
9. Jet Transport ________ ________ Printed 2 Sides
Performance Methods
10. FMC Supplemental ________ ________ Printed 2 Sides
Data document
11. Operational Performance
Software (OPS)
a. Inflight and ________ ________ Digital Magnetic
Report Programs Tape
Diskette, IBM
Compatible:
________ ________ 3.5 Inch (720KB
or
1.44 MB)
________ ________ 5.25 Inch (360KB
or
1.2 MB)
________ ________ Diskette,
Macintosh
3.5 Inch (800KB
or
1.4 MB)
b. Airplane Performance ________ ________ Digital Magnetic
Monitoring (APM/HISTRY Tape
Diskette, IBM
Compatible:
________ ________ 3.5 Inch (720KB
or
1.44 MB)
________ ________ 5.25 Inch (360KB
or
1.2 MB)
________ ________ Diskette,
Macintosh
3.5 Inch (800KB
or
1.4 MB)
</TABLE>
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<PAGE>
Attachment to
Part D
Page 3
<TABLE>
<CAPTION>
WORKSHEET
---------
ORIGINAL REVISED
ITEM NAME QUANTITY QUANTITY FORMAT
- ---- ---- -------- -------- ------
<S> <C> <C> <C>
B. MAINTENANCE
-----------
1. Maintenance Manual ________ ________ Printed 2 Sides
________ ________ Printed 1 Side
________ ________ Microfilm (16mm)
________ ________ Microfilm
(Silver
Halide)
________ ________ Digital Magnetic
Tape
2. Wiring Diagram Manual 1 1 Full-Size Mylar
________ ________ Reproducible of
any
Wiring Diagram
or
Chart on
specific
request therefor
1 1 Sets of 35mm
________ ________ Aperture Cards
of all Wiring
Diagrams and
Charts
________ ________ Standard Printed
Copies of Entire
Manual
________ ________ Standard Printed
Copies of all
sections except
EDP portion
________ ________ EDP portion in
16mm microfilm
packaged in
cassettes
</TABLE>
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<PAGE>
Attachment to
Part D
Page 4
<TABLE>
<CAPTION>
WORKSHEET
---------
ORIGINAL REVISED
ITEM NAME QUANTITY QUANTITY FORMAT
- ---- ---- -------- -------- ------
<S> <C> <C> <C>
________ ________ EDP portion in
16mm
Silver Halide
________ ________ Entire Manual
(16mm)
________ ________ Entire
Manual(Silver
Halide)
________ ________ Entire Manual
Digital Magnetic
Tape
3. System Schematics Manual ________ ________ Printed 2 Sides
________ ________ Full-Size Mylar
Reproducibles of
any page, upon
specific request
therefor
________ ________ 35mm Aperture
Cards
________ ________ Digital Magnetic
Tape
4. Ramp Maintenance Manual ________ ________ Printed 2 Sides
________ ________ Microfilm (16mm)
________ ________ Microfilm
(Silver
Halide)
________ ________ Digital Magnetic
Tape
5. Fault Isolation Manual ________ ________ Printed 2 Sides
or
(if separate)
</TABLE>
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<PAGE>
Attachment to
Part D
Page 5
<TABLE>
<CAPTION>
WORKSHEET
---------
ORIGINAL REVISED
ITEM NAME QUANTITY QUANTITY FORMAT
- ---- ---- -------- -------- ------
<S> <C> <C> <C>
________ ________ Microfilm (16mm)
or
________ ________ Microfilm
(Silver Halide)
________ ________ Digital Magnetic
Tape
6. Structural Repair Manual ________ ________ Printed 2 Sides
________ ________ Microfilm (16mm)
________ ________ Microfilm
(Silver
Halide)
________ ________ Digital Magnetic
Tape
7. Component Maintenance/ ________ ________ Printed 2 Sides
Overhaul Manuals
________ ________ Microfilm (16mm)
________ ________ Microfilm
(Silver
Halide)
________ ________ Digital Magnetic
Tape
8. Chapter 20 Standard ________ ________ Printed 2 Sides
Overhaul Practices Manual ________ ________ Printed 1 Side
(total quantity - all models)
________ ________ Microfilm (16mm)
________ ________ Microfilm
(Silver
Halide)
________ ________ Digital Magnetic
Tape
</TABLE>
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<PAGE>
Attachment to
Part D
Page 6
<TABLE>
<CAPTION>
WORKSHEET
---------
ORIGINAL REVISED
ITEM NAME QUANTITY QUANTITY FORMAT
- ---- ---- -------- -------- ------
<S> <C> <C> <C>
9. Chapter 20 Standard Wiring ________ ________ Printed 2 Sides
Practices Manual
(total quantity - all models) ________ ________
Microfilm (16mm)
________ ________ Microfilm
(Silver
Halide)
10. Non-Destructive Test ________ ________ Printed 2 Sides
Manual ________ ________ Printed 1 Side
________ ________ Microfilm (16mm)
________ ________ Microfilm
(Silver
Halide)
________ ________ Digital Magnetic
Tape
11. Service Bulletins ________ ________ Printed 2 Sides
12. Service Bulletins Index ________ ________ Printed 2 Sides
13. Corrosion Prevention Manual ________ ________ Printed 2 Sides
________ ________ Printed 1 Side
________ ________ Microfilm (16mm)
________ ________ Microfilm
(Silver
Halide)
________ ________ Digital Magnetic
Tape
14. Fuel Measuring Stick ________ ________ Reproduced
Calibration Document
15. Power Plant Buildup Manual ________ ________ Printed 2 Sides
________ ________ Printed 1 Side
</TABLE>
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<PAGE>
Attachment to
Part D
Page 7
<TABLE>
<CAPTION>
WORKSHEET
---------
ORIGINAL REVISED
ITEM NAME QUANTITY QUANTITY FORMAT
- ---- ---- -------- -------- ------
<S> <C> <C> <C>
________ ________ Microfilm (16mm)
________ ________ Microfilm
(Silver Halide)
________ ________ Digital Magnetic
Tape
16. In-Service Activity Report ________ ________ Printed
17. Significant Service Item ________ ________ Printed
Summary
18. All Operators Letters ________ ________ Printed
19. Service Letters ________ ________ Printed
20. Service Letters Index ________ ________ Printed
21. Structural Item Interim ________ ________ Printed
Advisory
22. Structural Item Interim ________ ________ Printed
Advisory Index
23. Maintenance Tips ________ ________ Printed
C. MAINTENANCE PLANNING
--------------------
1. Maintenance Planning ________ ________ Printed
Data Documents
________ ________ Digital Magnetic
Tape
2. Maintenance Task Cards ________ ________ Printed 1 Side
3. Maintenance Task ________ ________ Printed 2 Sides
Card Index ________ ________ Digital Magnetic
Tape
</TABLE>
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<PAGE>
Attachment to
Part D
Page 8
<TABLE>
<CAPTION>
WORKSHEET
---------
ORIGINAL REVISED
ITEM NAME QUANTITY QUANTITY FORMAT
- ---- ---- -------- -------- ------
<S> <C> <C> <C>
D. SPARES
------
1. Illustrated Parts Catalog ________ ________ Printed 2 Sides
(select one format only)
________ ________ Printed 1 Side
________ ________ Microfilm (16mm)
________ ________ Microfilm
(Silver
Halide)
________ ________ Digital Magnetic
Tape
2. Standards Books
a. Index ________ ________ Printed 2 Sides
________ ________ Microfilm
b. Parts Standards ________ ________ Printed 2 Sides
________ ________ Microfilm
c. Parts Specifications ________ ________ Printed 2 Sides
________ ________ Microfilm
d. Standards for Repair ________ ________ Printed 2 Sides
________ ________ Microfilm
e. Obsolete Standards ________ ________ Printed 2 Sides
________ ________ Microfilm
f. Commercial Markers ________ ________ Printed 2 Sides
________ ________ Microfilm
g. Passenger Cabin Symbology ________ ________ Printed 2 Sides
(Commercial Placards)
________ ________ Microfilm
</TABLE>
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D-A-8
<PAGE>
Attachment to
Part D
Page 9
<TABLE>
<CAPTION>
WORKSHEET
---------
ORIGINAL REVISED
ITEM NAME QUANTITY QUANTITY FORMAT
- ---- ---- -------- -------- ------
<S> <C> <C> <C>
h. Process Standards ________ ________ Printed 2 Sides
________ ________ Microfilm
i. Material Standards ________ ________ Printed 2 Sides
________ ________ Microfilm
j. Specification Support ________ ________ Printed 2 Sides
Standards
________ ________ Microfilm
E. FACILITIES AND EQUIPMENT PLANNING
---------------------------------
1. Facilities and Equipment ________ ________ Printed 2 Sides
Planning Document ________ ________ Microfilm (16mm)
2. Special Tool and Ground ________ ________ Sets Aperture
Handling Equipment Drawings Cards
3. Special Tool and Ground ________ ________ Printed 2 Sides
Handling Equipment Drawings
Index
4. Supplementary Tooling ________ ________ Printed 2 Sides
Documentation
(total quantity - all models)
5. System Test Equipment ________ ________ Printed 1 Side
Document
6. Illustrated Tool and ________ ________ Printed 2 Sides
Equipment List/Manual ________ ________ Printed 2 Side
________ ________ Microfilm (16mm)
________ ________ Microfilm
(Silver
Halide)
</TABLE>
C-2
D-A-9
<PAGE>
Attachment to
Part D
Page 10
<TABLE>
<CAPTION>
WORKSHEET
---------
ORIGINAL REVISED
ITEM NAME QUANTITY QUANTITY FORMAT
- ---- ---- -------- -------- ------
<S> <C> <C> <C>
________ ________ Digital Magnetic
Tape
7. Airplane Recovery Document ________ ________ Printed 2 Sides
8. Airplane Characteristics for ________ ________ Printed
Airport Planning
9. Crash, Fire and Rescue ________ ________ Printed
Document
10. Engine Handling Document ________ ________ Printed 2 Sides
F. ETOPS
-----
Configuration, Maintenance ________ ________ Printed 2 Sides
and Procedures for Extended
Twin-Engine Operations Document
G. COMPUTER SOFTWARE DOCUMENTATION FOR AIRBORNE COMPONENTS
-------------------------------------------------------
Computer Software Index ________ ________ Printed 2 Sides
H. SUPPLIER TECHNICAL DATA
-----------------------
1. Product Support Supplier ________ ________ Printed
Directory (total quantity -
all models)
2. Service Bulletins ________ ________ Printed
3. Ground Support ________ ________ Printed
Equipment
4. Provisioning Information ________ ________ Printed
5. Component Maintenance/ ________ ________ Printed
Overhaul Manual Index
(total quantity - all
models)
</TABLE>
C-2
D-A-10
<PAGE>
Attachment to
Part D
Page 11
<TABLE>
<CAPTION>
WORKSHEET
---------
ORIGINAL REVISED
ITEM NAME QUANTITY QUANTITY FORMAT
- ---- ---- -------- -------- ------
<S> <C> <C> <C>
6. Component Maintenance/ ________ ________ Printed
Overhaul Manuals
7. Publications Index ________ ________ Printed
</TABLE>
C-2
D-A-11
<PAGE>
PART E
BUYER'S INDEMNIFICATION OF BOEING INSURANCE
-------------------------------------------
1. Buyer's Indemnification Of Boeing.
---------------------------------
Buyer hereby indemnifies and holds harmless Boeing from and against all
claims and liabilities, including costs and expenses (including attorneys' fees)
incident thereto or incident to successfully establishing the right to
indemnification, for injury to or death of any person or persons, including
employees of Buyer but not employees of Boeing, or for loss of or damage to any
property, including Aircraft, arising out of or in any way related to the
performance by Boeing of training, services or other obligations pursuant to
this Exhibit C-2, whether or not arising in tort or occasioned in whole or in
part by the negligence of Boeing, whether active, passive or imputed.
1.1 The foregoing indemnification will not apply to the legal
liability to persons or parties other than Buyer or Buyer's assignees arising
out of an accident caused solely by a product defect in an Aircraft.
2. Buyer's Insurance.
-----------------
Buyer will cause Boeing to be named as an additional insured under
Buyer's aviation liability insurance policies to the extent of Buyer's above
undertaking. Buyer will cause Buyer's hull insurance policy carriers to waive
all rights of subrogation against Boeing to the extent of Buyer's above
undertaking.
2.1 Not later than 30 days prior to the scheduled delivery of the
first Aircraft, Buyer will furnish Boeing certificates of insurance as required
by Boeing's then-standard practice, evidencing limits of liability coverage and
period of insurance, showing that Boeing has been named as an additional
insured, that insurance maintained by Buyer will be primary and not contributory
with any insurance maintained by Boeing, and that subrogation has been waived,
and specifically referring to the Agreement and to paragraph 1 above in this
Part E. Such insurance certificates must reference all Aircraft to be delivered
or aircraft to be used in connection with the performance by Boeing of training,
services or other obligations under this Exhibit C-2, or separate certificates
must be supplied for each such Aircraft or aircraft. Such certificates of
insurance must be kept current and valid.
C-2
E-1
<PAGE>
2.2 In addition to the insurance and insurance certificates referred
to in paragraph 2.1, at least 30 days prior to commencement of Revenue Service
Training, Buyer will provide insurance and insurance certificates as required by
Boeing's then-standard practice.
2.3 At Buyer's request, Boeing will provide a detailed overview of its
current insurance requirements to Buyer.
3. Notice of Claim.
---------------
Boeing will give prompt notice to Buyer after receipt of a claim that on
its face is subject to indemnification under paragraph 1 of this Part E.
Otherwise, Boeing will give prompt notice to Buyer after receipt of information
sufficient to inform Boeing that a claim is subject to indemnification under
paragraph 1 of this Part E. At Buyer's request, Boeing will cooperate with
Buyer and its attorneys and furnish relevant data and records reasonably
requested by Buyer during the discovery phase of any such claim, subject to
entry of an appropriate protective order.
4. Definitions.
-----------
For the purpose of this Part E, the term "Boeing" includes The Boeing
Company, its divisions, subsidiaries and affiliates, the assignees of each, and
their directors, officers, employees and agents.
C-2
E-2
<PAGE>
PART F
ALLEVIATION OR CESSATION OF PERFORMANCE
---------------------------------------
Boeing will not be required to provide any services, training, data or goods at
a facility while:
1. a labor stoppage or dispute in progress involving Buyer exists;
2. wars or warlike operations, riots or insurrections in the country
where such facility is located exist;
3. conditions at such facility which, in the opinion of Boeing, are
detrimental to the general health, welfare or safety of its personnel and/or
their families exist;
4. the United States Government refuses permission to any Boeing
personnel or their families to enter the country where such facility is located,
or recommends that any Boeing personnel or their families leave such country; or
5. the United States Government refuses Boeing permission to deliver
goods or services to the country where such facility is located.
Boeing further reserves the right, upon the occurrence of any of such events,
subsequent to the location of Boeing personnel at Buyer's facility, to
immediately and without prior notice relocate its personnel and their families
to a place of Boeing's choosing. Any delay resulting therefrom will be deemed a
delay by mutual agreement.
6. In the event Boeing must cease providing any training, or other
services or goods, including without limitation any cessation due to a
relocation of Boeing personnel, pursuant to the terms of this paragraph 4, the
parties hereto shall within a reasonable time under the then-existing
circumstances enter into a written agreement containing the terms and conditions
for either the provision by Boeing of the remaining balance of such training,
other services or goods or the termination of Boeing's obligation to provide the
remaining balance of such training, other services or goods.
C-2
F-1
<PAGE>
AIRFRAME AND ENGINE PRICE ADJUSTMENT
between
THE BOEING COMPANY
and
INTERNATIONAL LEASE FINANCE CORPORATION
Exhibit D to Purchase Agreement Number 1916
D
<PAGE>
Exhibit D
Page 1
PRICE ADJUSTMENT DUE TO
-----------------------
ECONOMIC FLUCTUATIONS
---------------------
AIRFRAME PRICE ADJUSTMENT
-------------------------
( * )
---------------
1. Formula.
-------
The Airframe Price Adjustment will be determined at the time of
Aircraft delivery in accordance with the following formula:
Pa = (P)(L + M - 1)
Where:
Pa = Airframe Price Adjustment.
L = .65 x ECI
-----
130.1
M = .35 x ICI
-----
123.6
P = Aircraft Basic Price (as set forth in Article 3.2 of this
Agreement) less the base price of Engines (as defined in this
Exhibit D) in the amount of * (General Electric), or * (Pratt and
Whitney), or * (Rolls Royce).
ECI = A value using the "Employment Cost Index for workers in aerospace
manufacturing" (aircraft manufacturing, standard industrial
classification code 3721, compensation, base month and year June
1989 = 100), as released by the Bureau of Labor Statistics, U.S.
Department of Labor on a quarterly basis for the months of March,
June, September and December, calculated as follows: A three-
month arithmetic average value (expressed as a decimal and
rounded to the nearest tenth) will be determined using the months
set forth in the table below for the applicable Aircraft, with
the released Employment Cost Index value described above for the
month of March also being used for the months of January and
February; the value for June also used for April and May; the
value for September also used for July and August; and the
* Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and
has been filed separately with the Securities and Exchange Commission.
D-1
<PAGE>
Exhibit D
Page 2
value for December also used for October and November.
ICI = The three-month arithmetic average of the released monthly values
for the Industrial Commodities Index as set forth in the
"Producer Prices and Price Index" (Base Year 1982 = 100) as
released by the Bureau of Labor Statistics, U.S. Department of
Labor values (expressed as a decimal and rounded to the nearest
tenth) for the months set forth in the table below for the
applicable Aircraft.
In determining the value of L, the ratio of ECI divided by 130.1 will
be expressed as a decimal rounded to the nearest ten-thousandth and then
multiplied by .65 with the resulting value also expressed as a decimal and
rounded to the nearest ten-thousandth.
In determining the value of M, the ratio of ICI divided by 123.6 will
be expressed as a decimal rounded to the nearest ten-thousandth and then
multiplied by .35 with the resulting value also expressed as a decimal and
rounded to the nearest ten-thousandth.
Months to be Utilized
Month of Scheduled in Determining the
Aircraft Delivery Value of ECI and ICI
- ------------------ ----------------------
January June B, July B, Aug. B
February July B, Aug. B, Sept. B
March Aug. B, Sept. B, Oct. B
April Sept. B, Oct. B, Nov. B
May Oct. B, Nov. B, Dec. B
June Nov. B, Dec. B, Jan. D
July Dec. B, Jan. D, Feb. D
August Jan. D, Feb. D, Mar. D
September Feb. D, Mar. D, Apr. D
October Mar. D, Apr. D, May D
November Apr. D, May D, June D
December May D, June D, July D
The following definitions of B and D will apply:
B = The calendar year before the year in which the scheduled month of
delivery as set forth in Article 2.1 occurs.
D-2
<PAGE>
Exhibit D
Page 3
D = The calendar year during which the scheduled month of delivery as
set forth in Article 2.1 occurs.
2. If at the time of delivery of an Aircraft Boeing is unable to determine
the Airframe Price Adjustment because the applicable values to be used to
determine the ECI and ICI have not been released by the Bureau of Labor
Statistics, then:
2.1 The Airframe Price Adjustment, to be used at the time of delivery
of each of the Aircraft, will be determined by utilizing the escalation
provisions set forth above. The values released by the Bureau of Labor
Statistics and available to Boeing 30 days prior to scheduled Aircraft delivery
will be used to determine the ECI and ICI values for the applicable months
(including those noted as preliminary by the Bureau of Labor Statistics) to
calculate the Airframe Price Adjustment. If no values have been released for an
applicable month, the provisions set forth in Paragraph 2.2 below will apply.
If prior to delivery of an Aircraft the U.S. Department of Labor changes the
base year for determination of the ECI or ICI values as defined above, such
rebased values will be incorporated in the Airframe Price Adjustment
calculation. The payment by Buyer to Boeing of the amount of the Purchase Price
for such Aircraft, as determined at the time of Aircraft delivery, will be
deemed to be the payment for such Aircraft required at the delivery thereof.
2.2 If prior to delivery of an Aircraft the U.S. Department of Labor
substantially revises the methodology used for the determination of the values
to be used to determine the ECI and ICI values (in contrast to benchmark
adjustments or other corrections of previously released values), or for any
reason has not released values needed to determine the applicable Aircraft
Airframe Price Adjustment, the parties will, prior to delivery of any such
Aircraft, select a substitute for such values from data published by the Bureau
of Labor Statistics or other similar data reported by non-governmental United
States organizations, such substitute to lead in application to the same
adjustment result, insofar as possible, as would have been achieved by
continuing the use of the original values as they may have fluctuated during the
applicable time period. Appropriate revision of the formula will be made as
required to reflect any substitute values. However, if within 24 months from
delivery of the Aircraft the Bureau of Labor Statistics should resume releasing
values for the months
D-3
<PAGE>
Exhibit D
Page 4
needed to determine the Airframe Price Adjustment, such values will be used to
determine any increase or decrease in the Airframe Price Adjustment for the
Aircraft from that determined at the time of delivery of such Aircraft.
2.3 In the event escalation provisions are made non-enforceable or
otherwise rendered null and void by any agency of the United States Government,
the parties agree, to the extent they may lawfully do so, to equitably adjust
the Purchase Price of any affected Aircraft to reflect an allowance for
increases or decreases in labor compensation and material costs occurring since
February, 1995, which is consistent with the applicable provisions of paragraph
1 of this Exhibit D.
3. For the calculations herein, the values released by the Bureau of Labor
Statistics and available to Boeing 30 days prior to scheduled Aircraft delivery
will be used to determine the ECI and ICI values for the applicable months
(including those noted as preliminary by the Bureau of Labor Statistics) to
calculate the Airframe Price Adjustment.
Note: Any rounding of a number, as required under this Exhibit D with respect
- ---- to escalation of the airframe price, will be accomplished as follows: if
the first digit of the portion to be dropped from the number to be
rounded is five or greater, the preceding digit will be raised to the
next higher number.
D-4
<PAGE>
Exhibit D
Page 5
ENGINE PRICE ADJUSTMENT - GENERAL ELECTRIC
------------------------------------------
( * )
---
(a) The Aircraft Basic Price of each Aircraft set forth in Article 3.2 of this
Agreement includes an aggregate price for GE90-85B engines and all accessories,
equipment and parts therefor provided by the engine manufacturer (collectively
in this Exhibit D called "Engines") of * . The adjustment in Engine price
applicable to each Aircraft ("Engine Price Adjustment" herein) will be
determined at the time of Aircraft delivery in accordance with the following
formula:
D\\1\\ = (P\\b\\ x CPI ) - P\\b\\
------
138.27
(b) The following definitions will apply herein:
D\\1\\ = Engine Price Adjustment
P\\b\\ = Aggregate Engine Base Price as set forth in paragraph (a)
above.
CPI = The Composite Price Index as determined in accordance with
the formula set forth below. The Index values referred to
below, to be used in determining the CPI, will be for the
ninth month prior to the month of scheduled Aircraft
delivery. Such Index values will be those prepared by the
Bureau of Labor Statistics, U.S. Department of Labor.
CPI = L + M\\1\\ + M\\2\\ + M\\3\\
L = The Labor Index for such month will be the
quotient, expressed as a decimal and rounded to the
nearest thousandth, of the "Hourly Earnings of
Aircraft Engines and Engine Parts Production
Workers" SIC 3724, for such month divided by Eleven
Dollars and Sixteen Cents ($11.16). Such quotient
will be multiplied by 100 and then by fifty-five
percent (55%) with the value resulting from the
latter multiplication expressed as a decimal and
rounded to the nearest hundredth.
* Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and
has been filed separately with the Securities and Exchange Commission.
D-5
<PAGE>
Exhibit D
Page 6
M\\1\\ = The Industrial Commodities Index for such month
will be equal to ten percent (10%) of the Producer
Price Index for "all commodities other than Farm
and Foods," Code 3-15, (Base Year 1982 = 100) for
such month expressed as a decimal and rounded to
the nearest hundredth.
M\\2\\ = The Metals and Metal Products Index for such month
will be equal to twenty-five percent (25%) of the
Producer Price Index for "Metals and Metal
Products" Code 10, (Base Year 1982 = 100) for such
month expressed as a decimal and rounded to the
nearest hundredth.
M\\3\\ = The Fuel Index for such month will be equal to ten
percent (10%) of the Producer Price Index for "Fuel
and Related Products and Power," Code 5, (Base Year
1982 = 100) for such month expressed as a decimal
and rounded to the nearest hundredth.
138.27 = Composite Price Index for October, 1994.
The factor (CPI divided by 138.27) by which the Aggregate Engine Base Price is
to be multiplied will be expressed as a decimal and rounded to the nearest
thousandth.
The Engine Price Adjustment will not be made if it would result in a decrease in
the aggregate Engine base price.
(c) The values of the Average Hourly Earnings and Producer Price Indices used
in determining the Engine Price Adjustment will be those published by the Bureau
of Labor Statistics, U.S. Department of Labor as of a date 30 days prior to the
scheduled Aircraft delivery to Buyer. Such values will be considered final and
no Engine Price Adjustment will be made after Aircraft delivery for any
subsequent changes in published Index values.
(d) If the U.S. Department of Labor, Bureau of Labor Statistics (i)
substantially revises the methodology (in contrast to benchmark adjustments
or other corrections of previously published data) or (ii) discontinues
publication
D-6
<PAGE>
Exhibit D
Page 7
of any of the data referred to above, General Electric agrees to meet jointly
with Boeing and Buyer to jointly select a substitute for the revised or
discontinued data; such substitute data to lead in application to the same
adjustment result, insofar as possible, as would have been achieved by
continuing the use of the original data as it may have fluctuated had it not
been revised or discontinued.
Appropriate revision of the Engine Price Adjustment provisions set forth above
will be made to accomplish this result for the affected Engines.
In the event the Engine price escalation provisions are made non-enforceable or
otherwise rendered null and void by any agency of the United States Government,
General Electric agrees to meet jointly with Boeing and Buyer to jointly agree,
to the extent such parties may lawfully do so, to adjust equitably the purchase
price of any affected Engine(s) to reflect an allowance for increases in labor,
material and fuel costs that have occurred from the period represented by the
CPI to the ninth month preceding the month of scheduled delivery of the
applicable Aircraft.
NOTE: Any rounding of a number, as required under this Exhibit D with respect
- ---- to escalation of the Engine price, will be accomplished as follows: if
the first digit of the portion to be dropped from the number to be
rounded is five or greater, the preceding digit will be raised to the
next higher number.
D-7
<PAGE>
Exhibit D
Page 8
ENGINE PRICE ADJUSTMENT - PRATT & WHITNEY
-----------------------------------------
( * )
---
(a) The Aircraft Basic Price of each Aircraft set forth in Article 3.2 of this
Agreement includes an aggregate price for PW4084 engines and all accessories,
equipment and parts therefor provided by the engine manufacturer (collectively
in this Exhibit D called "Engines") of * . The adjustment in Engine price
applicable to each Aircraft ("Engine Price Adjustment" herein) will be
determined at the time of Aircraft delivery in accordance with the following
formula:
P\\a\\ = (P) (AA + BB + CC) - P
(b) The following definitions will apply herein:
P\\a\\ = Engine Price Adjustment
P = Aggregate Engine Base Price as set forth in paragraph (a)
above.
AA = .60 x L
------
$17.80
BB = .30 x M
-----
130.6
CC = .10 x E
-----
76.6
In determining the value of AA, BB and CC, the ratio of L divided by $17.80, M
divided by 130.6 and E divided by 76.6 will be expressed as a decimal and
rounded to the nearest ten-thousandth but the decimal value resulting from
multiplying such ratios by the respective constants (.60, .30 and .10) will not
be rounded. The value of the sum of AA + BB + CC will also be rounded to the
nearest ten-thousandth.
L = Labor Index, which is the "Hourly Earnings of Aircraft Engines and
Engine Parts Production Workers, SIC 3724" published by the Bureau
of Labor Statistics, U.S. Department of Labor, for the seventh
month preceding the month of scheduled Aircraft delivery.
* Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and
has been filed separately with the Securities and Exchange Commission.
D-8
<PAGE>
Exhibit D
Page 9
$17.80 = Published Labor Index (SIC 3724) for December, 1994.
M = Material Index, which is the "Producer Price Index - Code 10,
Metals and Metal Products," (Base Year 1982 = 100) published by
the Bureau of Labor Statistics, U.S. Department of Labor, for the
seventh month preceding the month of scheduled Aircraft delivery.
130.6 = Published Material Index (Code 10) for December, 1994.
E = Fuel Index, which is the "Producer Price Index - Code 5, Fuels and
Related Products and Power" (Base Year 1982 = 100) published for
the Bureau of Labor Statistics, U.S. Department of Labor, for the
seventh month preceding the month of scheduled Aircraft delivery.
76.6 = Published Fuel Index (Code 5) for December, 1994.
The Engine Price Adjustment will not be made if it would result in a decrease in
the aggregate Engine base price.
(c) The value of the Labor, Material and Fuel Index used in determining the
Engine Price Adjustment will be those published by the Bureau of Labor
Statistics, U.S. Department of Labor as of a date 30 days prior to the scheduled
Aircraft delivery to Buyer. Such Index values will be considered final and no
revision to the Engine Price Adjustment will be made after Aircraft delivery for
any subsequent changes in published Index values.
(d) If the Bureau of Labor Statistics, U. S. Department of Labor, (i)
substantially revises the methodology (in contrast to benchmark adjustments or
other corrections of previously published data), or (ii) discontinues
publication of any of the data referred to above or (iii) temporarily
discontinues publication of any of the data referred to above, Pratt & Whitney
Aircraft (P&WA) agrees to meet jointly with Boeing and Buyer and jointly select
a substitute for the revised or discontinued data, such substitute data to lead
in application to the same adjustment result, insofar as possible, as would have
been achieved by continuing the use of the original data as it may have
fluctuated had it not been revised or discontinued.
D-9
<PAGE>
Exhibit D
Page 10
Appropriate revision of the Engine Price Adjustment provisions set forth above
will be made to accomplish this result for affected Engines.
In the event the Engine Price Adjustment escalation provisions of this Agreement
are made non-enforceable or otherwise rendered null and void by any agency of
the United States Government, P&WA agrees to meet with Boeing and jointly agree,
to the extent that they may lawfully do so, to adjust equitably the purchase
price of the Engine(s) to reflect an allowance for increases in labor, material
and fuel costs that occurred from December, 1994 to the seventh month preceding
the month of scheduled delivery of the applicable Aircraft.
NOTES: Any rounding of a number, as required under this Exhibit D with respect
- ----- to escalation of the Engine price, will be accomplished as follows: if
the first digit of the portion to be dropped from the number to be
rounded is five or greater, the preceding digit will be raised to the
next higher number.
D-10
<PAGE>
Exhibit D
Page 11
ENGINE PRICE ADJUSTMENT - ROLLS-ROYCE
-------------------------------------
( * )
---
(a) The Aircraft Basic Price of each Aircraft set forth in Article 3.2 of this
Agreement includes an aggregate price for RBTRENT884 engines and all
accessories, equipment and parts therefor provided by the engine manufacturer
(collectively in this Exhibit D called "Engines") of * . The adjustment in
Engine price applicable to each Aircraft ("Engine Price Adjustment" herein) will
be determined at the time of Aircraft delivery in accordance with the following
formula:
P\\a\\ = (P\\o\\ + F) (AA + BB + CC) - P\\o\\
(b) The following definitions will apply herein:
P\\a\\ = Engine Price Adjustment
P\\o\\ = The Aggregate Engine Base Price as set forth in paragraph (a)
above.
F = 0.005 (N) (P\\o\\). Where N = the calendar year of scheduled
Engine delivery, minus 1995. For purposes of this calculation,
Engine delivery is assumed to be 3 months prior to the month
of scheduled Aircraft delivery.
AA = .60 x L
-------
$17.263
BB = .30 x M
------
122.50
CC = .10 x E
------
76.53
In determining the value of AA, BB and CC, the ratios of L divided by $17.263, M
divided by 122.50 and E divided by 76.53 will each be expressed as a decimal
which will not be rounded, but the value resulting from multiplying such ratios
by the respective constants (.60, .30 and .10) will be expressed as a decimal
and rounded to the nearest ten-thousandth.
L = The arithmetic average of the Average Hourly Earnings - SIC
3724, for the 16th, 15th and
* Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and
has been filed separately with the Securities and Exchange Commission.
D-11
<PAGE>
Exhibit D
Page 12
14th months prior to the month of scheduled Aircraft delivery
to Buyer. Such arithmetic average will be expressed as a
decimal and rounded to the nearest thousandth.
$17.263 = Average Hourly Earnings - SIC 3724 for the average of March,
April and May 1994.
M = The arithmetic average of the Producer Price Indices - Code
10 (Base Year 1982 = 100) for the 16th, 15th and 14th months
prior to the month of scheduled Aircraft delivery to Buyer.
Such arithmetic average will be expressed as a decimal and
rounded to the nearest hundredth.
122.50 = Producer Price Index - Code 10 for the average of March,
April and May 1994.
E = The arithmetic average of the Producer Price Indices - Code 5
(Base Year 1982 = 100) for the 16th, 15th and 14th months
prior to the month of scheduled Aircraft delivery to Buyer.
Such arithmetic average will be expressed as a decimal and
rounded to the nearest hundredth.
76.53 = Producer Price Index - Code 5 for the average of March, April
and May 1994.
The Engine Price Adjustment will not be made if it would result in a decrease in
the aggregate Engine base price.
The Average Hourly Earnings and Producer Price Indices referred to above are
defined below:
(i) Average Hourly Earnings. SIC 3724 of the Industry Group "Hourly
-----------------------
Earnings of Aircraft Engines and Engine Parts Production Workers" published by
the Bureau of Labor Statistics, U.S. Department of Labor.
(ii) Producer Price Index. Code 10 for the Commodities Group "Metals and
--------------------
Metal Products" published by the Bureau of Labor Statistics, U.S. Department of
Labor.
D-12
<PAGE>
Exhibit D
Page 13
(iii) Producer Price Index. Code 5 for the Commodities Group "Fuels and
--------------------
Related Products and Power" published by the Bureau of Labor Statistics, U.S.
Department of Labor.
The values of the Average Hourly Earnings and Producer Price Indices used in
determining the Engine Price Adjustment will be those published by the Bureau of
Labor Statistics, U.S. Department of Labor as of a date 30 days prior to the
scheduled Aircraft delivery to Buyer. Such values will be considered final and
no Engine Price Adjustment will be made after Aircraft delivery for any
subsequent changes in published values.
NOTE: Any rounding of a number, as required under this Exhibit D with respect
- ---- to escalation of the Engine price, will be accomplished as follows: if
the first digit of the portion to be dropped from the number to be
rounded is five or greater, the preceding digit will be raised to the
next higher number.
D-13
<PAGE>
BUYER FURNISHED EQUIPMENT PROVISIONS DOCUMENT
between
THE BOEING COMPANY
and
INTERNATIONAL LEASE FINANCE CORPORATION
Exhibit E to Purchase Agreement Number 1916
E
<PAGE>
BUYER FURNISHED EQUIPMENT PROVISIONS DOCUMENT
Dated June 24, 1996
-------------
Relating to
BOEING MODEL 777 AIRCRAFT
---------------------
This Buyer Furnished Equipment Provisions Document is Exhibit E to and
forms a part of Purchase Agreement No. 1916, between The Boeing Company (Boeing)
and International Lease Finance Corporation (Buyer) relating to the purchase of
Boeing Model 777 aircraft.
E
(I)
<PAGE>
BUYER FURNISHED EQUIPMENT PROVISIONS DOCUMENT
---------------------------------------------
1. General.
-------
Certain equipment to be installed in the Aircraft is furnished to
Boeing by Buyer at Buyer's expense. This equipment is designated "Buyer
Furnished Equipment" (BFE) and is listed in the Detail Specification. On or
before * , Boeing will provide to Buyer a BFE Requirements On-Dock/
Inventory Document (BFE Document) or an electronically transmitted BFE Report
which may be periodically revised, setting forth the items, quantities, on-dock
dates and shipping instructions relating to the in sequence installation of BFE.
For planning purposes, a preliminary BFE on-dock schedule is set forth in the
attachment to this Exhibit.
2. Supplier Selection.
------------------
Buyer will:
2.1 Select and notify Boeing of the suppliers of the following BFE
items by the following dates:
Galley System 15 Months Prior to the
First Day of the
Month/Year of Delivery
Specified in Table 1 of
the Agreement
Seats (passenger) 21 Months Prior to the
First Day of the
Month/Year of Delivery
Specified in Table 1 of
the Agreement
Video Cabin 18 Months Prior to the
Management System First Day of the Month/Year
of Delivery Specified in Table 1
of the Agreement
2.2 Meet with Boeing and such selected BFE suppliers promptly after
such selection to:
2.2.1 complete BFE configuration design requirements for such
BFE; and
* Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and
has been filed separately with the Securities and Exchange Commission.
E-1
<PAGE>
2.2.2 confirm technical data submittal dates for BFE
certification.
3. Buyer's Obligations.
-------------------
Buyer will:
3.1 comply with and cause the supplier to comply with the provisions
of the BFE Document or BFE Report;
3.1.1 deliver technical data (in English) to Boeing as required
to support installation and FAA certification in accordance with the schedule
provided by Boeing or as mutually agreed upon during the BFE meeting referred to
above;
3.1.2 deliver BFEproduction and/or flight training spares to
Boeing in accordance with the quantities and schedule provided therein; and
3.1.3 deliver appropriate quality assurance documentation to
Boeing as required with each BFE part (D6-56586, "BFE Product Acceptance
Requirements");
3.2 authorize Boeing to discuss all details of the BFE directly with
the BFE suppliers, after Buyer notifies Boeing of the BFE supplier selection;
3.3 authorize Boeing to conduct or delegate to the supplier quality
source inspection and supplier hardware acceptance of BFE at the supplier
location;
3.3.1 require supplier's reasonable contractual compliance to
Boeing defined source inspection and supplier delegation programs, including the
allowance of access on a non-interference basis for Boeing resident personnel;
and
3.3.2 specify that Boeing identified supplier's quality systems
be approved to Boeing document D1-9000;
3.4 provide necessary field service representation at Boeing's
facilities to support Boeing on all issues related to the installation and
certification of BFE;
3.5 deal directly with all BFE suppliers to obtain overhaul data,
provisioning data, related product support documentation and any warranty
provisions applicable to the BFE;
E-2
<PAGE>
3.6 work closely with Boeing and the BFE suppliers to resolve any
difficulties, including defective equipment, that arise;
3.7 be responsible for modifying, adjusting and/or calibrating BFE as
required for FAA approval and for all related expenses;
3.8 warrant that the BFE will meet the requirements of the Detail
Specification; and
3.9 be responsible for providing equipment which is FAA certifiable
at time of Aircraft delivery, or for obtaining waivers from the applicable
regulatory agency for non-FAA certifiable equipment.
4. Boeing's Obligations.
--------------------
Other than as set forth below, Boeing will provide for the
installation of and install the BFE and obtain certification of the Aircraft
with the BFE installed.
5. Nonperformance by Buyer.
-----------------------
If Buyer's nonperformance of obligations in this Exhibit or in the BFE
Document causes a delay in the delivery of the Aircraft or causes Boeing to
perform out-of-sequence or additional work, Buyer will reimburse Boeing for all
resulting expenses and be deemed to have agreed to any such delay in Aircraft
delivery. In addition Boeing will have the right to:
5.1 provide and install specified equipment or suitable alternate
equipment and increase the price of the Aircraft accordingly; and/or
5.2 deliver the Aircraft to Buyer without the BFE installed.
6. Return of Equipment.
-------------------
BFE not installed in the Aircraft will be returned to Buyer in
accordance with Buyer's instructions and at Buyer's expense.
7. Title and Risk of Loss.
----------------------
Title to and risk of loss of BFE will at all times remain with Buyer
or other owner. Boeing will have only
E-3
<PAGE>
such liability for BFE as a bailee for mutual benefit would have, but will not
be liable for loss of use.
8. Indemnification of Boeing.
-------------------------
Except to the extent Boeing indemnifies Buyer in Article 9.6 of the
Agreement, Buyer hereby indemnifies and holds harmless Boeing from and against
all claims and liabilities, including costs and expenses (including attorneys'
fees) incident thereto or incident to successfully establishing the right to
indemnification, for injury to or death of any person or persons, including
employees of Buyer but not employees of Boeing, or for loss of or damage to any
property, including any Aircraft, arising out of or in any way connected with
any nonconformance or defect in any BFE and whether or not arising in tort or
occasioned in whole or in part by the active, passive or imputed negligence of
Boeing. This indemnity will not apply with respect to any nonconformance or
defect caused solely by Boeing's installation of the BFE.
9. Patent Indemnity.
----------------
Buyer hereby indemnifies and holds harmless Boeing from and against
all claims, suits, actions, liabilities, damages and costs arising out of any
actual or alleged infringement of any patent or other intellectual property
rights by BFE or arising out of the installation, sale or use of BFE by Boeing.
10. Definitions.
-----------
For the purposes of the above indemnities, the term "Boeing" includes
The Boeing Company, its divisions, subsidiaries and affiliates, the assignees of
each, and their directors, officers, employees and agents.
11. Notice of Claim.
---------------
Boeing will give prompt notice to Buyer after receipt of a claim that
on its face is subject to indemnification under paragraph 8 of this Exhibit E.
Otherwise, Boeing will give prompt notice to Buyer after receipt of information
sufficient to inform Boeing that a claim is subject to indemnification under
paragraph 8 of this Exhibit E. At Buyer's request, Boeing will cooperate with
Buyer and its attorneys and furnish relevant data and records reasonably
requested by Buyer during the discovery phase of any such claim, subject to
entry of an appropriate protective order.
E-4
<PAGE>
Attachment A to
Exhibit E
BOEING MODEL 777-200IGW AIRCRAFT
--------------------------------
Item Preliminary On-Dock Dates
- ---- -------------------------
<TABLE>
<CAPTION>
* *
Aircraft Aircraft
-------- --------
<S> <C> <C>
Seats * *
Galleys * *
Electronics * *
Furnishings * *
Video Cabin Mgt. Sys. * *
</TABLE>
* Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and
has been filed separately with the Securities and Exchange Commission.
E
A-1
<PAGE>
DEFINED TERMS DOCUMENT
between
THE BOEING COMPANY
and
INTERNATIONAL LEASE FINANCE CORPORATION
Exhibit F to Purchase Agreement Number 1916
F
<PAGE>
DEFINED TERMS DOCUMENT
Dated June 24, 1996
Relating to
BOEING MODEL 777 AIRCRAFT
----------------------
This Document is Exhibit F to and forms a part of Purchase Agreement
No. 1916 (Agreement) between The Boeing Company (Boeing) and International Lease
Finance Corporation (Buyer) relating to the purchase of Boeing Model 777
aircraft.
The following is a list of those terms and their definitions as used
and not otherwise defined in this Agreement. Such terms are identified in the
Agreement by the use of an initial capital letter.
F
(I)
<PAGE>
DEFINED TERMS DOCUMENT
EXHIBIT F TO AGREEMENT NO. 1916
TERM DEFINITION FIRST REFERENCE
- -------------------------------------------------------------------------------
Advance Payment Boeing's estimate of the Article 3
Base Price Aircraft Price is set
forth in Article 3.
Agreement Purchase Agreement Opening paragraph
No. 1916, including all of the Agreement
Exhibits, the Detail
Specification,
attachments, letter
agreements and other
written modifications and
amendments thereto.
Aircraft (includes The aircraft described in Article 1, Para. 1.1
"the", "all", "first", Article 1, Para. 1.1.
"last" "such", etc.)
Aircraft Basic Price The amount set forth in Article 3, Para.
Article 3, Para. 3.1.4. 3.1.4
Aircraft Price The total amount Buyer is Article 3, Para.
to pay for an Aircraft 3.1.6
which is described in
Article 3, Para. 3.1.6.
Aircraft Software The computer software Exhibit B, Part D-1,
included with the Aircraft Para 1
when the Aircraft is
delivered by Boeing,
described in Exhibit B,
Part D-1, Para. 1.
Airframe Component A component described in Exhibit B Part C
Exhibit B, Part C, Para. Para. 1.1
1.1
Article An Article of the Article 6, Para. 6.4
Agreement.
Base Airframe Price The airframe price Article 3,
described in Article 3, Para. 3.1.2/
Para. 3.1.2.
F-1
<PAGE>
DEFINED TERMS DOCUMENT
EXHIBIT F TO AGREEMENT NO. 1916
TERM DEFINITION FIRST REFERENCE
- -------------------------------------------------------------------------------
Boeing The Seller of the Aircraft Opening paragraph of
identified in the opening the Agreement
paragraph of the Agreement.
Boeing Warranty Part A of Exhibit B to the Exhibit B, Part A,
Agreement. Para. 1
Buyer The purchaser of the Opening paragraph of
Aircraft identified in the the Agreement
opening paragraph of the
Agreement.
Buyer Furnished Equipment Equipment provided by Article 4.1
or BFE Buyer pursuant to Exhibit
E for installation by
Boeing on the Aircraft.
Buyer Furnished Equipment Document provided by Article 13, Para.
Document Boeing to Buyer defining 13.1
requirements for BFE.
Exhibit E, Para. 1.
Certificate of The certificate issued by Article 8, Para.
Airworthiness the FAA pursuant to Part 8.1.1.2
21 of the Federal Aviation
Regulations for the type
of Aircraft purchased
under this Agreement as
described in Article 8.
Change Order A change to the Detail Article 7, Para. 7.2
Specification, as
described in Article 7,
Para. 7.2.
Covered Component An Airframe Component as Exhibit B Part C
described in Exhibit B, Para. 1.4
Part C, Para. 1.4.
Customer Support Document Exhibit C to the Agreement. Article 12, Para.
12.5
F-2
<PAGE>
DEFINED TERMS DOCUMENT
EXHIBIT F TO AGREEMENT NO. 1916
TERM DEFINITION FIRST REFERENCE
- -------------------------------------------------------------------------------
Customer Support Services The Boeing services, Article 12, Para.
training and other 12.5
obligations described in
Exhibit C to the Agreement.
Deposit The money paid by Buyer to Article 5, Para. 5.1
Boeing as part of the
acceptance of the Aircraft
proposal.
Detail Specification The Boeing document that Article 1, Para. 1.1
describes the
specifications of the
Aircraft modified from
time to time to include
developmental and Buyer
requested changes.
Development Change(s) Changes to the basic Article 7, Para. 7.1
specification that do not
affect price, delivery,
guaranteed weight,
performance or
interchangeability as
described in Article 7,
Para. 7.1.
Disclaimer and Release The disclaimer and Release Article 12,
set forth in Article 12, Para. 12.2
Para. 12.2.
Documents The data and documents Exhibit C, Part D
provided by Boeing under Para. 2
the Agreement.
Economic Price Adjustment Article 3, Para. 3.1.5. Article 3,
Para. 3.1.5
Engine(s) The engines installed on Article 3,
the Aircraft as described Para. 3.1.2
in the Detail
Specification.
F-3
<PAGE>
DEFINED TERMS DOCUMENT
EXHIBIT F TO AGREEMENT NO. 1916
TERM DEFINITION FIRST REFERENCE
- -------------------------------------------------------------------------------
Engine Price The price of the Engines Article 3, Para.
installed on the Aircraft 3.1.3
set forth in Exhibit D,
including all accessories,
equipment and parts
therefor provided by the
Engine manufacturer.
Engine Price Adjustment The adjustment to the Article 3 Para.
Engine Price as required 3.3.2
by Article 3, Para. 3.3.2,
and as calculated pursuant
to Exhibit D.
Excusable Delay A delay resulting from any Article 6, Para. 6.1
of the causes described in
Article 6, Para. 6.1.
Export Certificate of A certificate issued by Article 8, Para.
Airworthiness the FAA as described in 8.1.1 (ii)
Article 8, Para. 8.1.1
(ii).
FAA The Federal Aviation Article 8, Para.
Administration of the 8.1.1
Department of
Transportation of the
United States, including
the Administrator of the
Federal Aviation
Administration, the
National Transportation
Safety Board and any other
authority or agency of the
Federal Government of the
United States having like
jurisdiction.
Failed Component A component as described Exhibit B Part C
in Exhibit B, Part C, Para. 1.6
Para. 1.6.
Failure Any breakage or defect as Exhibit B Part C
described in Exhibit B, Para. 1.5
Part C, Para. 5.
F-4
<PAGE>
DEFINED TERMS DOCUMENT
EXHIBIT F TO AGREEMENT NO. 1916
TERM DEFINITION FIRST REFERENCE
- -------------------------------------------------------------------------------
Federal Aviation The United States Federal Article 8, Para.
Regulations Aviation Regulations and, 8.1.1
if they are redesignated
or discontinued, any
comparable regulations or
parts thereof issued by
the FAA.
Field Service(s) Boeing-provided services Exhibit C, Part B,
as described in Exhibit C, Para. 2
Part B, Para. 2.
Field Service Period The length of time Boeing Exhibit C, Part B,
provides Field Service to Para. 2.1
Buyer as described in
Exhibit C, Part B, Para.
2.1.
Flight Training Planning A planning conference as Exhibit C, Part C,
Conference described in Exhibit C, Para. 2
Part C, Para. 2.
Flight Training Program The program of flight Exhibit C, Part C,
training described in Para. 3
Exhibit C, Part C, Para. 3.
Interface Problem A technical problem Exhibit B, Part G,
attributed to the design Para. 1
characteristics of the
Aircraft or its systems,
as described in Exhibit B,
Part G, Para. 1.
Landing Gear Component A component as described Exhibit B Part C
in Exhibit B, Part C, Para. 1.2
Para. 1.2.
Maintenance Training A planning conference as Exhibit C, Part A,
Planning Conference described in Exhibit C, Para. 2
Part A, Para. 2.
Maintenance Training The program of training Exhibit C, Part A,
Program described in Exhibit C, Para. 3
Part A, Para. 3.
F-5
<PAGE>
DEFINED TERMS DOCUMENT
EXHIBIT F TO AGREEMENT NO. 1916
TERM DEFINITION FIRST REFERENCE
- -------------------------------------------------------------------------------
Major Damage Damage described in Exhibit C Part C
Exhibit C, Part C, Para. Para. 11.3
11.3.
Manufacturer Change(s) A change to the Aircraft Article 8, Para.
or performance required of 8.2.1
Boeing as described in
Article 8, Para. 8.2.1.
Operator Change(s) A change to the Aircraft Article 8, Para.
described in Article 8, 8.3.1
Para. 8.3.1.
Performance Guarantees The written guarantees Article 1, Para. 1.3
regarding the operational
performance of the
Aircraft set forth in the
Agreement or the Detail
Specification.
Policy (Boeing Service Exhibit B, Part C, Para. 2. Exhibit B, Part C,
Life Policy) Para. 2
Product Assurance Document Exhibit B of the Agreement. Article 12,
Para. 12.1
Revenue Service Training Flight Training conducted Exhibit C, Part C,
on the Aircraft during Para. 8
revenue service with cargo
and/or passengers on
board, as described in
Exhibit C, Part C, Para. 8.
Software Documentation A listing of components Exhibit C, Part D,
and equipment referred to Para. 3.3.6
in Exhibit C, Part D,
Para. 3.3.6.
Spare Component A component as described Exhibit B Part C
in Exhibit B, Part C, Para. 1.3
Para. 1.3.
F-6
<PAGE>
DEFINED TERMS DOCUMENT
EXHIBIT F TO AGREEMENT NO. 1916
TERM DEFINITION FIRST REFERENCE
- -------------------------------------------------------------------------------
Special Features Article 3, Para. 3.1.1. Article 3,
Para. 3.1.1
Standard Airworthiness A certificate issued by Article 8, Para.
Certificate the FAA, pursuant to Part 8.1.1 (i)
21 of the Federal Aviation
Regulations as described
in Article 8, Para. 8.1.1
(i).
Target Delivery Date A non binding estimated Article 2, Para. 2.2
delivery date provided for
Buyer's planning purposes,
described in Article 2.
Taxes The term "Taxes" defined Article 2, Para. 2.3
in Article 4, Para. 4.1.
Type Certificate A certificate issued by Article 8, Para.
the FAA pursuant to Part 8.1.1
21 of the Federal Aviation
Regulations described in
Article 8, Para. 8.1.1.
Warranty Labor Rate The hourly labor rate Exhibit B, Part B,
defined in Exhibit B, Para. 5.3
Part B, Para. 5.3.
F-7
<PAGE>
[LETTERHEAD OF BOEING COMMERCIAL AIRPLANE GROUP]
1916-1
International Lease Finance Corporation
1999 Avenue of the Stars, 39th Floor
Los Angeles, California 90067
Subject: Letter Agreement No. 1916-1 to
Purchase Agreement No. 1916 -
Disclosure of Confidential Information
Gentlemen:
This Letter Agreement amends Purchase Agreement No. 1916 dated as of even date
herewith (the Agreement) between The Boeing Company (Boeing) and International
Lease Finance Corporation (Buyer) relating to Model 777 aircraft (the
Aircraft).
All terms used herein and in the Agreement, and not defined herein, will have
the same meaning as in the Agreement.
1. Buyer understands that certain commercial and financial information
contained in the documents listed below (Confidential Documents) is considered
by Boeing as confidential.
2. Buyer agrees that it will treat the Confidential Documents and the
information contained therein as confidential and will not, without the prior
written consent of Boeing, disclose such Confidential Documents or any
information contained therein to any other person or entity except (i) as may be
required by applicable law or governmental regulations, (ii) for financing the
Aircraft in accordance with the provisions of Article 10 of the Agreement or
(iii) for periodic review by Buyer's or Buyer's parent company's auditors.
3. In connection with any such disclosure or filing of the Confidential
Documents, or the information contained therein pursuant to any such applicable
law or governmental regulation, Buyer will request and use its best reasonable
efforts to obtain confidential treatment of such Confidential Documents and the
information contained therein. Boeing agrees to cooperate with Buyer in making
and supporting its request for confidential treatment.
<PAGE>
International Lease Finance Corporation
1916-1 Page 2
Schedule of Confidential Documents
----------------------------------
1. Letter Agreement No. 6-1162-JDR-266.
2. Letter Agreement No. 6-1162-JDR-267.
3. Letter Agreement No. 6-1162-JDR-268.
4. Letter Agreement No. 6-1162-JDR-269.
5. Letter Agreement No. 6-1162-JDR-270.
6. Letter Agreement No. 6-1162-JDR-271.
7. Letter Agreement No. 6-1162-JDR-272.
8. Letter Agreement No. 6-1162-JDR-273.
9. Letter Agreement No. 6-1162-JDR-274.
10. Letter Agreement No. 6-1162-JDR-275.
11. Letter Agreement No. 6-1162-JDR-276.
Very truly yours,
THE BOEING COMPANY
By /s/ J.D. Robinson
---------------------------
Its Attorney-In-Fact
--------------------------
ACCEPTED AND AGREED TO as of this
date: June 24, 1996
-------
INTERNATIONAL LEASE FINANCE CORPORATION
By /s/ Steven R. Adams
---------------------------
Its Attorney-In-Fact
--------------------------
<PAGE>
[LETTERHEAD OF BOEING COMMERCIAL AIRPLANE GROUP]
1916-2
International Lease Finance Corporation
1999 Avenue of the Stars, 39th Floor
Los Angeles, California 90067
Subject: Letter Agreement No. 1916-2 to
Purchase Agreement No. 1916 -
Waiver of Aircraft Demonstration Flights
Gentlemen:
This Letter Agreement amends Purchase Agreement No. 1916 dated as of even date
herewith (the Agreement) between The Boeing Company (Boeing) and International
Lease Finance Corporation (Buyer) relating to Model 777 aircraft (the Aircraft).
All terms used herein and in the Agreement, and not defined herein, will have
the same meaning as in the Agreement.
Notwithstanding the provisions of paragraph 9.3 of Article 9 of the Agreement
requiring that the Aircraft be test flown prior to delivery for the purpose of
demonstrating to Buyer the functioning of such Aircraft and its equipment, the
parties agree that Buyer will make best reasonable effort to provide written
notice to Boeing no later than 90 days prior to the scheduled date of delivery
of the Aircraft, that Buyer may waive such flight. With respect to each
Aircraft for which Buyer waives the demonstration flight, the following
provisions will apply:
1. Additional Fuel.
---------------
Boeing provides 3,000 gallons of jet fuel to Buyer, at no charge, at the
time of delivery of the Aircraft. In consideration of the above waiver of the
demonstration flight, Boeing further agrees that promptly after delivery of an
Aircraft leased to a lessee whose main base is in the continental United States
that Boeing will provide aboard the Aircraft an amount of jet fuel, including
adequate fuel reserves, which together with the 3,000 gallons of fuel
<PAGE>
International Lease Finance Corporation
1916-2 Page 2
provided above, * ; or for Aircraft leased to a lessee outside
the continental United States, * .
2. Reimbursement for Correction of Flight Discrepancies.
----------------------------------------------------
2.1 Ferry Flight. Except for Aircraft to be used promptly after delivery
------------
for Boeing flight crew training provided to Buyer at or near Seattle,
Washington, Boeing will reimburse Buyer for Buyer's direct labor costs (as
defined below) and the cost of any material (Correction Costs) required to
correct any flight discrepancy detected by Buyer while the Aircraft is being
ferried from Seattle, Washington, to Buyer's main base. Within 90 days after the
date of such ferry flight Buyer will submit to Boeing's Director, Warranties, at
Renton, Washington, a written itemized statement describing any such flight
discrepancy and indicating the Correction Costs incurred by Buyer for the
correction of such flight discrepancy.
2.2 Training Flights. If the Aircraft will be used promptly after its
----------------
delivery for Boeing flight crew training provided to Buyer at or near Seattle,
Washington, Boeing will, at no charge to Buyer, correct any flight discrepancy
which may be detected by Buyer during the first two (2) flights flown in support
of such flight crew training.
2.3 Definitions. For purposes of any reimbursement under this paragraph
-----------
2; (i) Buyer's direct labor costs will be determined using the Warranty Labor
Rate in effect between the parties as of the date such labor is expended, and
(ii) flight discrepancies mean any failure or malfunction of such Aircraft, or
the accessories, equipment, systems and parts installed therein which results
from a defect in such Aircraft, accessories, equipment, systems and parts or a
nonconformance to the Detail Specification for such Aircraft which was present
at the time of delivery of the Aircraft
* Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and
has been filed separately with the Securities and Exchange Commission.
<PAGE>
International Lease Finance Corporation
1916-2 Page 3
to Buyer and which, if detected during a Boeing predelivery demonstration
flight, would have been reported in the pilot's flight discrepancy report and
would have been corrected by Boeing prior to the delivery of such Aircraft to
Buyer.
3. Return of Aircraft.
------------------
Any flight discrepancy, as defined in paragraph 2, detected by Buyer during
the ferry flight of any Aircraft, which requires the return of such Aircraft to
Boeing's facilities at Seattle, Washington, will be corrected by Boeing * .
Boeing further agrees, * , to re-fuel such Aircraft back to the amount of fuel
provided per the provisions of paragraph 1. Boeing and Buyer agree that title to
and risk of loss of such Aircraft will at all times remain with Buyer and that
Boeing will have such responsibility for such Aircraft while it is on the ground
at Boeing's Seattle, Washington, facilities as is chargeable by law to a bailee
for mutual benefit, but Boeing will not be chargeable for loss of use.
Very truly yours,
THE BOEING COMPANY
By /s/ J.D. Robinson
---------------------------
Its Attorney-In-Fact
--------------------------
ACCEPTED AND AGREED TO as of this
date: June 24, 1996
-------
INTERNATIONAL LEASE FINANCE CORPORATION
By /s/ Steven R. Adams
---------------------------
Its Steven R. Adams
--------------------------
Vice President
* Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and
has been filed separately with the Securities and Exchange Commission.
<PAGE>
[LETTERHEAD OF BOEING COMMERCIAL AIRPLANE GROUP]
1916-3
International Lease Finance Corporation
1999 Avenue of the Stars, 39th Floor
Los Angeles, California 90067
Subject: Letter Agreement No. 1916-3 to
Purchase Agreement No. 1916 -
Seller Purchased Equipment
Gentlemen:
This Letter Agreement amends Purchase Agreement No. 1916 dated as of even date
herewith (the Agreement) between The Boeing Company (Boeing) and International
Lease Finance Corporation (Buyer) relating to Model 777 aircraft (the Aircraft).
For purposes of this Letter Agreement the following definitions apply:
Seller Purchased Equipment (SPE) is Buyer Furnished Equipment (BFE) that Boeing
purchases for Buyer.
Developmental Buyer Furnished Equipment (DBFE) is all BFE not previously
certified for installation on the same model aircraft.
Developmental Seller Purchased Equipment (DSPE) is DBFE which is converted to
SPE. This Letter Agreement does not include avionics DBFE.
All other terms used herein and in the Agreement, and not defined above, will
have the same meaning as in the Agreement.
Buyer has requested that Boeing purchase as SPE the BFE which have been changed
to SPE by Change Request. Such changes to SPE from BFE do not include galleys
and seats. In accordance with Buyer's request, Boeing will purchase the SPE,
subject to the following terms and conditions:
1. Price.
-----
Advance Payments. An estimated SPE price will be included in the
----------------
Aircraft Advance Payment Base Price for the purpose of establishing the advance
payments for each Aircraft.
<PAGE>
International Lease Finance Corporation
1916-3 Page 2
Aircraft Price. The Aircraft Price will be adjusted to reflect (i) the
--------------
actual costs charged Boeing by the SPE suppliers, (ii) a handling fee of 10% of
such costs and (iii) transportation charges. If all DBFE, other than avionics,
is converted to SPE, Boeing will waive the handling fee for all SPE.
2. Responsibilities.
----------------
2.1 Buyer is responsible for:
(i) selecting SPE suppliers in a timely manner;
(ii) selecting a FAA certifiable part;
(iii) providing to Boeing the SPE part specification/Buyer
requirements.
2.2. Boeing is responsible for:
(i) placing and managing the purchase order with the supplier;
(ii) coordinating with the suppliers on technical issues;
(iii) ensuring that the delivered SPE complies with the part
specification/Buyer requirements;
(iv) obtaining certification of the Aircraft with the SPE
installed, and
(v) obtaining for Buyer the supplier's standard warranty for
the SPE. SPE is deemed to be BFE for purposes of Exhibit B, the Product
Assurance Document, of the Agreement.
3. Changes.
-------
After this Letter Agreement is signed, changes to SPE can only be made by
and between Boeing and the suppliers. Buyer's contacts with SPE suppliers
relating to design (including selection of materials and colors), weights,
prices or schedules are for informational purposes only. If Buyer wants changes
made to any of the above, requests should be made directly to Boeing for
processing with the supplier.
<PAGE>
International Lease Finance Corporation
1916-3 Page 3
4. Proprietary Rights.
------------------
Boeing's obligation to purchase SPE will not impose upon Boeing any
obligation to compensate Buyer or any supplier for any proprietary rights Buyer
may have in the design of the SPE.
5. Remedies.
--------
If Buyer does not comply with the obligations above, but not before
Boeing gives 14 days written notice to Buyer of such noncompliance Boeing may:
(i) delay delivery of the Aircraft;
(ii) increase the Aircraft Price by the amount of Boeing's additional
costs attributable to such noncompliance;
(iii) deliver the Aircraft without installing the SPE,
(iv) substitute a comparable part and invoice Buyer for the cost.
6. Buyer's Indemnification of Boeing.
---------------------------------
Buyer will indemnify and hold harmless Boeing from and against all claims
and liabilities, including costs and expenses (including attorneys' fees)
incident thereto or incident to successfully establishing the right to
indemnification, for injury to or death of any person or persons, including
employees of Buyer but not employees of Boeing, or for loss of or damage to any
property, including any Aircraft, arising out of or in any way connected with
any nonconformance or defect in any SPE and whether or not arising in tort or
occasioned in whole or in part by the negligence of Boeing, whether active,
passive or imputed. This indemnity will not apply with respect to any
nonconformance or defect caused solely by Boeing's installation of the SPE.
7. Notice of Claim.
---------------
Boeing will give prompt notice to Buyer after receipt of a claim that on
its face is subject to indemnification under paragraph 6 of this Letter
Agreement. Otherwise, Boeing will give prompt notice
<PAGE>
International Lease Finance Corporation
1916-3 Page 4
to Buyer after receipt of information sufficient to inform Boeing that a claim
is subject to indemnification under paragraph 6 of this Letter Agreement. At
Buyer's request, Boeing will cooperate with Buyer and its attorneys and furnish
relevant data and records reasonably requested by Buyer during the discovery
phase of any such claim, subject to entry of an appropriate protective order.
Very truly yours,
THE BOEING COMPANY
By /s/ J.D. Robinson
-----------------------
Its Attorney-In-Fact
-----------------------
ACCEPTED AND AGREED TO as of this
Date: June 24 , 1996
-----------------
INTERNATIONAL LEASE FINANCE CORPORATION
By /s/ Steven R. Adams
-----------------------
Its Steven R. Adams
-----------------------
Vice President
<PAGE>
[LETTERHEAD OF BOEING COMMERCIAL AIRPLANE GROUP]
1916-4
International Lease Finance Corporation
1999 Avenue of the Stars, 39th Floor
Los Angeles, California 90067
Subject: Letter Agreement No. 1916-4 to
Purchase Agreement No. 1916 -
Spare Parts Support for Flight Training
Gentlemen:
This Letter Agreement amends Purchase Agreement No. 1916 dated as of even date
herewith (the Agreement) between The Boeing Company (Boeing) and International
Lease Finance Corporation (Buyer) relating to Model 777 aircraft (the Aircraft).
The following spare parts support for flight training is fully assignable by
Buyer.
All terms used herein and in the Agreement, and not defined herein, will have
the same meaning as in the Agreement.
For purposes of this Letter Agreement the following definitions apply:
Flight Crew Training is flight training under Exhibit C of the Agreement using
Boeing facilities occurring immediately after delivery.
Removed Parts are parts removed from an Aircraft during Flight Crew Training.
Replacement Parts are parts taken from Boeing inventory and installed in an
Aircraft because no Standby Spare Parts are available.
Standby Spare Parts are spare parts which are owned by Buyer and located at
Buyer's designated storage area at Boeing to support Flight Crew Training.
Training Aircraft are the aircraft used for Flight Crew Training.
If parts fail during Flight Crew Training, Boeing will require spare parts. In
support of this requirement, Buyer will provide to Boeing certain Standby Spare
<PAGE>
International Lease Finance Corporation
1916-4 Page 2
Parts in accordance with the following terms and conditions.
1. Provision of Spare Parts.
------------------------
1.1 Boeing will provide normal line maintenance for any Aircraft used for
Flight Crew Training. As part of such normal line maintenance Boeing will, at
no charge, provide expendable spare parts required for the normal maintenance of
any Training Aircraft. Such spare parts will include low cost Boeing
proprietary items, nonrepairable items, low cost vendor items and standards.
1.2 Buyer will provide the Standby Spare Parts listed in the Boeing BFE
Requirements On-Dock/Inventory Document. The attachment to this Letter
Agreement sets forth a general listing of the types and approximate numbers of
the Standby Spare Parts required. This list including part numbers, exact
quantities and on-dock dates will be established during the provisioning meeting
described in the GTA Supplement.
1.3 In order to prevent extended downtime on the Training Aircraft, if
parts other than those discussed above fail, Boeing will attempt to provide
Replacement Parts for any such failed parts. If Boeing is unable to provide
Replacement Parts, Buyer will be responsible for providing replacement parts.
Delivery to Buyer of Replacement Parts will occur when the Replacement Parts are
installed on the Aircraft. All terms and conditions of the GTA, including those
related to price and payment which are not inconsistent with the provisions of
this Letter Agreement, will apply to Boeing's sale of any Replacement Part to
Buyer.
2. Disposition of Parts.
--------------------
2.1 With respect to Removed Parts, Boeing may:
(i) repair such Removed Parts, at no charge to Buyer, and either
retain such Removed Parts as Standby Spare Parts or return such Removed Parts to
Buyer, at Buyer's expense; or
(ii) return the Removed Parts to Buyer at Buyer's expense; or
<PAGE>
International Lease Finance Corporation
1916-4 Page 3
(iii) return the Removed Parts to the manufacturer thereof for repair
or replacement under such manufacturer's warranty. (Upon Boeing's receipt of the
repaired Removed Parts or the replacements therefor, Boeing may retain such
Removed Parts or their replacements as Standby Spare Parts or return such
Removed Parts or their replacements to Buyer, at Buyer's expense).
2.2 Any return to Buyer of Removed Parts, or replacements therefor, will be
accomplished in accordance with any written instructions from Buyer received by
Boeing prior to such return.
3. Redelivery of Standby Spare Parts.
---------------------------------
Standby Spare Parts not installed in an Aircraft during Flight Crew Training
will be redelivered to Buyer on board the last Aircraft delivered to Buyer under
the Agreement or, upon mutual agreement, at an earlier time. All Standby Spare
Parts furnished by Buyer and not incorporated in an Aircraft shall be returned
to Buyer in as good condition as when received by Boeing as Standby Spare Parts,
reasonable wear and tear excepted.
4. Non-performance by Buyer.
------------------------
If Buyer's nonperformance of obligations in this Letter Agreement causes a
delay in the Flight Crew Training, Buyer will reimburse Boeing for any
reasonable resulting expenses and be deemed to have agreed to any such delay in
Flight Crew Training. In addition Boeing, with timely notice, will have the
right to:
(i) purchase Standby Spare Parts and invoice Buyer for the price of such
Parts and for any necessary adjustment and calibration of such Parts;
(ii) cancel or reschedule the Flight Crew Training.
5. Buyer Warranty.
--------------
Buyer warrants that the Standby Spare Parts will meet the requirements of
the Detail Specification and be in a condition to pass Boeing's receival
inspection and functional test and if not in a new condition, will
<PAGE>
International Lease Finance Corporation
1916-4 Page 4
have a Serviceable Parts Tag from the appropriate regulatory agency attached
thereto.
6. Title and Risk of Loss.
----------------------
Title to and risk of loss of any Standby Spare Parts or Removed Parts will
remain with Buyer. Boeing will have only such liability for Standby Spare Parts
and Removed Parts as a bailee for mutual benefit would have, but will not be
liable for loss of use. For Replacement Parts, title will transfer to Buyer at
the time such part is installed in the Aircraft.
Very truly yours,
THE BOEING COMPANY
By J. D. Robinson
------------------------
Its Attorney-In-Fact
------------------------
ACCEPTED AND AGREED TO this
date: June 24, 1996
-------
INTERNATIONAL LEASE FINANCE CORPORATION
By /s/ Steven R. Adams
-------------------------
Its Steven R. Adams
------------------------
Vice President
Attachment
<PAGE>
Attachment to
Letter Agreement No. 1916-4
Page 1
STANDBY SPARE PARTS
-------------------
The following notations, used in the list of Standby Spare Parts set forth in
this Attachment, will have the meanings indicated below:
(1) Training Spare Parts, in the indicated amounts, are required only if Flight
Crew Training will be provided at Boeing's facilities at or near Seattle,
Washington.
(2) Part numbers and/or dash numbers may vary with configuration of the
Aircraft and/or Buyer's choice of vendor.
(3) Quantity of wheels, tires and brakes required as Training Spare Parts may
vary with configuration of the Aircraft and/or Buyer's choice of vendors.
(4) Optional Electronics: Parts to be included in the event Buyer's aircraft
are so equipped.
SP Same Part: The Production Spare Part will be retained by Boeing and used
as a Training Spare Part.
AR As Required: The number required will depend upon the amount of training
involved.
<PAGE>
Attachment to
Letter Agreement No. 1916-4
Page 2
Standby Spare Parts
-------------------
<TABLE>
<CAPTION>
Quantity Required
Part Number(2) Nomenclature Production Training(1) Total
- -------------- ------------ --------------------------------
<S> <C> <C>
Electronics
- -----------
LRRA Receiver/Transmitter 1
Weather Radar Receiver 1
VOR/MB Receiver 1
DME Interrogator 1
ATC Transponder 1
VHF Communications Transceiver 1
ILS Receiver 1
PAX Address/Cabin Interphone Controller 1
Display Units (DU) 1
HF Transceiver 1
Systems
- -------
Generator Control Unit (GCU) 1
Bus Power Control Unit (BPCU) 1
Wheels, Tires and Brakes(3)
- ---------------------------
Main Wheel AR
Nose Wheel AR
Brakes AR
Main Tires AR
Nose Tires AR
/[P&W PW4000 SERIES:]
-----------------
Engines
- -------
Electronic Engine Control (EEC) 1
/[G.E. GE90 SERIES:]
----------------
Engines
- -------
Electronic Engine Control (EEC) 1
/[R.R. RB211-TRENT SERIES:]
-----------------------
Engines
- -------
Electronic Engine Control (EEC) 1
</TABLE>
<PAGE>
[LETTERHEAD OF BOEING COMMERCIAL AIRPLANE GROUP]
1916-5
International Lease Finance Corporation
1999 Avenue of the Stars, 39th Floor
Los Angeles, California 90067
Subject: Letter Agreement No. 1916-5 to
Purchase Agreement No. 1916 -
Promotional Support
Gentlemen:
This Letter Agreement amends Purchase Agreement No. 1916 dated as of even date
herewith (the Agreement) between The Boeing Company (Boeing) and International
Lease Finance Corporation (Buyer) relating to Model 777 aircraft (the Aircraft).
All terms used herein and in the Agreement, and not defined herein, will have
the same meaning as in the Agreement.
1. Planning Meeting.
----------------
Boeing will assist Buyer in the introduction of the Aircraft by providing
to Buyer certain promotional support. At a mutually agreed time and location,
Boeing Airline Promotion will meet with Buyer's designated representatives to
discuss the extent, selection and scheduling of the promotional support to be
provided.
2. Support Level.
-------------
Boeing will make available to Buyer * per Aircraft at execution of the
Agreement for Buyer's promotional programs including marketing research; tourism
development consultation; corporate/promotion identity consultation; support for
video tape, film or still photography requirements; planning, design, production
and management of promotion programs based on Buyer's marketing requirements and
for advertising campaigns relating to Buyer's introduction and operation of the
Aircraft.
Boeing's obligation to provide the support will commence at execution of the
Agreement and will terminate * after delivery of the last
* Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and
has been filed separately with the Securities and Exchange Commission.
<PAGE>
International Lease Finance Corporation
1916-5 Page 2
Aircraft to Buyer. There will be no cash payments or other promotional support
in lieu thereof.
3. Additional Support.
------------------
Additional promotional support may be provided by Boeing subject to the
parties reaching mutual agreement as to the type of services, timing and price.
Very truly yours,
THE BOEING COMPANY
By /s/ J.D. Robinson
---------------------------
Its Attorney-In-Fact
--------------------------
ACCEPTED AND AGREED TO this
Date: June 24, 1996
-------
INTERNATIONAL LEASE FINANCE CORPORATION
By /s/ Steven R. Adams
---------------------------
Its Steven R. Adams
--------------------------
Vice President
<PAGE>
[LETTERHEAD OF BOEING COMMERCIAL AIRPLANE GROUP]
1916-6
International Lease Finance Corporation
1999 Avenue of the Stars, 39th Floor
Los Angeles, CA 90067
Subject: Letter Agreement No. 1916-6 to
Purchase Agreement No. 1916 -
Configuration Decision Matters
Gentlemen:
This Letter Agreement amends Purchase Agreement No. 1916 (the Agreement) between
The Boeing Company (Boeing) and International Lease Finance Corporation (Buyer)
relating to Model 777 aircraft (the Aircraft).
All terms used and not defined herein shall have the same meaning as in the
Agreements.
1. Configuration Changes.
---------------------
It is understood and agreed that the configuration of the Aircraft
described in Exhibit A to the Agreement is not complete and that Buyer shall
have the option to select for incorporation on the Aircraft additional changes
set forth in the Boeing Configuration Specification. Such additional changes
may be selected by Buyer subject to the terms and conditions set forth below.
Boeing and Buyer agree to establish the configuration for the Aircraft no later
than * prior to the scheduled delivery of the first Aircraft. The Boeing
Configuration Specification will be used to establish such configuration.
2. Purchase Agreement Revision.
---------------------------
When (no later than * prior to the scheduled delivery of the first
Aircraft) Buyer selects for incorporation in the Aircraft any of the changes,
the parties agree to enter into a supplemental agreement amending the Purchase
Agreement to reflect Buyer's selection of such changes. Such supplemental
agreement shall:
(a) Revise the Detail Specification to incorporate the changes.
* Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and
has been filed separately with the Securities and Exchange Commission.
<PAGE>
International Lease Finance Corporation
1916-6 Page 2
(b) Revise the basic price of the Aircraft set forth in Article 3.1 of the
Purchase Agreement to reflect the price effects of the changes.
(c) Revise the advance payment base price of the Aircraft set forth in
Article 5.1 of the Purchase Agreement to reflect the price of the
changes.
(d) Provide for an additional advance payment which would amount to the
difference between the amount paid prior to signing of such
Supplemental Agreement and the amount which would have been paid had
the advance payment price established in (c) above been incorporated
in the Purchase Agreement at time of signing. Such additional advance
payment is to be paid to Boeing by Buyer within * of signing such
Supplemental Agreement.
(e) Revise Exhibit A to incorporate such changes.
(f) Revise the performance guarantees specified in Letter Agreement No. 6-
1162-JDR-266 as required to reflect changes in the Aircraft
configuration due to such changes.
3. Aircraft Basic Price Revision.
-----------------------------
The Basic Price of the Aircraft as set forth in
* Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and
has been filed separately with the Securities and Exchange Commission.
<PAGE>
International Lease Finance Corporation
1916-6 Page 3
Article 3 of the Agreement will be revised in accordance with paragraph 2 herein
upon selection of changes by Buyer.
Very truly yours,
THE BOEING COMPANY
By /s/ J.D. Robinson
---------------------------
Its Attorney-In-Fact
--------------------------
ACCEPTED AND AGREED TO this
Date: June 24, 1996
-------
INTERNATIONAL LEASE FINANCE CORPORATION
By /s/ Steven R. Adams
---------------------------
Its Steven R. Adams
--------------------------
Vice President
<PAGE>
[LETTERHEAD OF BOEING COMMERCIAL AIRPLANE GROUP]
1916-7
International Lease Finance Corporation
1999 Avenue of the Stars, 39th Floor
Los Angeles, California 90067
Subject: Letter Agreement No. 1916-7 to
Purchase Agreement No. 1916 -
Price Adjustment on Rolls Royce Engines
Gentlemen:
This Letter Agreement amends Purchase Agreement No. 1916 (the Agreement) between
The Boeing Company (Boeing) and International Lease Finance Corporation (Buyer)
relating to Model 777-200 aircraft (the Aircraft).
All terms used and not defined herein, shall have the same meaning as in the
Agreement.
1. It is understood by the parties that the Basic Price of certain of the
Aircraft includes an aggregate price for two (2) Rolls Royce Model RBTRENT884
Engines (Engines) of * . Such price may be adjusted by Rolls Royce to reflect
any change incorporated in such Engines in order to satisfy any new rules or
regulations, or changes or amendments to the existing rules or regulations,
issued by the FAA, or other applicable U.S. Federal Agency, after July 26, 1995
(Engine Modification).
2. Within twenty working days subsequent to the execution of the Agreement for
the purchase of the Aircraft, Boeing will place a purchase order with Rolls
Royce for the engines to be installed on such Aircraft. The engine price
adjustment specified in paragraph 1 shall not apply to any engines for which the
scheduled delivery date to Boeing is less than * after the later of * .
3. The parties therefore agree that notwithstanding the provisions of Article
8 of the Agreement, if any
* Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and
has been filed separately with the Securities and Exchange Commission.
<PAGE>
International Lease Finance Corporation
1916-7 Page 2
Engine Modification is incorporated by Rolls
Royce on Engines installed on any of the Aircraft (i) Boeing will adjust the
Purchase Price of any such Aircraft by the amount that Rolls Royce adjusts the
price of such Engines to Boeing, as provided in paragraph 1 above; (ii) if any
Engine Modification requires any change, modification or alteration to the
Aircraft on which such Engines are installed (Aircraft Modification), the cost
of accomplishing the Aircraft Modification will be added to the Purchase Price
of such Aircraft; (iii) notwithstanding the provisions of Article 2 of the
Agreement, the time of delivery of such Aircraft will be extended to the extent
of any delay attributable to any such Engine Modification or Aircraft
Modification and said delay will be deemed an Excusable Delay under the
provisions of the Agreement; and (iv) Boeing will, if necessary, revise the
applicable Aircraft Detail Specification as required to reflect the effects of
any Engine Modification or Aircraft Modification.
Very truly yours,
THE BOEING COMPANY
By /s/ J.D. Robinson
---------------------------
Its Attorney-In-Fact
--------------------------
ACCEPTED AND AGREED TO as of this
date: June 24, 1996
-------
INTERNATIONAL LEASE FINANCE CORPORATION
By /s/ Steven R. Adams
---------------------------
Its Steven R. Adams
--------------------------
Vice President
<PAGE>
[LETTERHEAD OF BOEING COMMERCIAL AIRPLANE GROUP]
6-1162-JDR-266
International Lease Finance Corporation
1999 Avenue of the Stars, 39th Floor
Los Angeles, California 90067
Subject: Letter Agreement No. 6-1162-JDR-266 to
Purchase Agreement No. 1916 -
Aircraft Performance Guarantees
Gentlemen:
This Letter Agreement amends Purchase Agreement No. 1916 (the Agreement) between
The Boeing Company (Boeing) and International Lease Finance Corporation (Buyer)
relating to Model 777 aircraft (the Aircraft).
All terms used herein and in the Agreement, and not defined herein will have the
same meaning as in the Agreement.
1. Aircraft Performance Guarantees. The only performance guarantees
-------------------------------
applicable to the Aircraft are those set forth in Attachments A, B, and C. Such
guarantees are exclusive and will expire upon delivery of the Aircraft to Buyer.
2. Confidentiality. Buyer understands that certain commercial and financial
---------------
information contained in this Letter Agreement including any attachments hereto
are considered by Boeing as confidential. Buyer agrees that it will treat this
Letter Agreement and the information contained herein as confidential and will
not, without the prior written consent of Boeing, disclose this Letter
<PAGE>
International Lease Finance Corporation
6-1162-JDR-266 Page 2
Agreement or any information contained herein to any other person or entity
except as provided in Letter Agreement 1916-1.
Very truly yours,
THE BOEING COMPANY
By /s/ J.D. Robinson
-------------------------
Its Attorney-In-Fact
------------------------
ACCEPTED AND AGREED TO as of this
date: June 24, 1996
-------
INTERNATIONAL LEASE FINANCE CORPORATION
By /s/ Steven R. Adams
-------------------------
Its Steven R. Adams
------------------------
Vice President
Attachments
<PAGE>
Attachment A to Letter Agreement
No. 6-1162-JDR-266
GE90-85B Engines
Page 1
MODEL 777-200 PERFORMANCE GUARANTEES
GE90-85B ENGINES
SECTION CONTENTS
1 AIRCRAFT MODEL APPLICABILITY
2 FLIGHT PERFORMANCE
3 MANUFACTURER'S EMPTY WEIGHT
4 AIRCRAFT CONFIGURATION
5 GUARANTEE CONDITIONS
6 GUARANTEE COMPLIANCE
7 EXCLUSIVE GUARANTEES
<PAGE>
Attachment A to Letter Agreement
No. 6-1162-JDR-266
GE90-85B Engines
Page 2
1 AIRCRAFT MODEL APPLICABILITY
The guarantees contained in this Attachment (the "Performance
Guarantees") are applicable to the 777-200 Aircraft with a maximum
takeoff weight of * pounds, a maximum landing weight of * pounds, a
maximum zero fuel weight of * pounds equipped with Boeing furnished
GE90-85B engines operated at a Boeing equivalent thrust rating of
84,700 pounds and flat rated to 86 degrees F at sea level.
2 FLIGHT PERFORMANCE
2.1 CRUISE FUEL MILEAGE
The cruise fuel mileage at a gross weight of * pounds on a standard
day, at an altitude of * feet, at * Mach number and using not more than
maximum cruise thrust, shall not be less than the following guarantee
value:
NOMINAL: * NAM/Pound
TOLERANCE: * NAM/Pound
GUARANTEE: * NAM/Pound
3 MANUFACTURER'S EMPTY WEIGHT
The Manufacturer's Empty Weight (MEW) is guaranteed not to exceed * .
4 AIRCRAFT CONFIGURATION
4.1 The guarantees contained in this Attachment are based on the Aircraft
configuration as defined in Paragraph 4.3. Appropriate adjustment shall
be made for changes approved by the Buyer and Boeing or otherwise
allowed by the Purchase Agreement which cause changes to the
performance and/or weight and balance of the Aircraft. Such adjustment
shall be accounted for by Boeing in its evidence of compliance with the
guarantees.
* Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and
has been filed separately with the Securities and Exchange Commission.
<PAGE>
Attachment A to Letter Agreement
No. 6-1162-JDR-266
GE90-85B Engines
Page 3
4.2 The Manufacturer's Empty Weight guarantee of Section 3 will be adjusted
by Boeing for the following in its evidence of compliance with the
guarantees:
(1) Changes to the Aircraft configuration defined in Paragraph 4.3
including Change Requests, Master Changes, Change Orders or any other
changes mutually agreed upon between the Buyer and Boeing or otherwise
allowed by the Purchase Agreement.
(2) The difference between the component weight allowances given in
Appendix IV of the Detail Specification and the actual weights.
4.3 The Aircraft configuration is defined as the original release of
Configuration Specification D019W004.
5 GUARANTEE CONDITIONS
5.1 All guaranteed performance data are based on the ICAO International
Standard Atmosphere (ISA) and specified variations therefrom; altitudes
are pressure altitudes.
5.2 The FAA Regulations (FAR) referred to in this Attachment are, unless
otherwise specified, those set forth in FAR Part 25 effective February
1, 1965, plus Amendments 25-1 through 25-74 excluding Paragraph
25.571(e)(1), which remains at Amendment 71 level.
5.3 In the event a change is made to any law, governmental regulation or
requirement, or in the interpretation of any such law, governmental
regulation or requirement that affects the certification basis for the
Aircraft as described in Paragraph 5.2 and as a result thereof, a
change is made to the configuration and/or the performance of the
Aircraft in order to obtain certification, the guarantees set forth in
this Attachment shall be appropriately modified to reflect any such
change.
<PAGE>
Attachment A to Letter Agreement
No. 6-1162-JDR-266
GE90-85B Engines
Page 4
5.4 The cruise fuel mileage guarantee includes allowances for normal power
extraction and engine bleed for normal operation of the air
conditioning system. Normal electrical power extraction shall be
defined as not less than a 212 kilowatts total electrical load. Normal
operation of the air conditioning system shall be defined as pack
switches in the "Auto" position, the temperature control switches in
the "Auto" position that results in a nominal cabin temperature of
75 degrees F, and all air conditioning systems operating normally. This
operation allows a maximum cabin pressure differential of 8.6 pounds
per square inch at higher altitudes, with a nominal Aircraft cabin
ventilation rate of 7,880 cubic feet per minute including passenger
cabin recirculation. The APU is turned off unless otherwise specified.
5.5 The cruise fuel mileage guarantee is based on an Aircraft center of
gravity location, as determined by Boeing, not to be aft of 30 percent
of the mean aerodynamic chord.
5.6 Performance, where applicable, is based on a fuel Lower Heating Value
(LHV) of * BTU per pound.
5.7 Boeing equivalent thrust is defined as the installed takeoff net thrust
at 0.25 Mach number, sea level, standard day (no airbleed, but with
horsepower extraction included) multiplied by 1.255, then rounded to
the nearest 100 pounds.
* Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and
has been filed separately with the Securities and Exchange Commission.
<PAGE>
Attachment A to Letter Agreement
No. 6-1162-JDR-266
GE90-85B Engines
Page 5
6 GUARANTEE COMPLIANCE
6.1 Compliance with the guarantees of Sections 2 and 3 shall be based on
the conditions specified in those sections, the Aircraft configuration
of Section 4 and the guarantee conditions of Section 5.
6.2 Compliance with the cruise fuel mileage guarantee shall be established
by calculations based on flight test data obtained from an aircraft in
a configuration similar to that defined by the Configuration
Specification.
6.3 Compliance with the Manufacturer's Empty Weight guarantee shall be
based on information in the "Weight and Balance Control and Loading
Manual - Aircraft Report."
6.4 The data derived from tests shall be adjusted as required by
conventional methods of correction, interpolation or extrapolation in
accordance with established engineering practices to show compliance
with these guarantees.
6.5 Compliance shall be based on the performance of the airframe and
engines in combination, and shall not be contingent on the engine's
meeting its manufacturer's performance specifications.
7 EXCLUSIVE GUARANTEES
The only performance guarantees applicable to the Aircraft are those
set forth in this Attachment.
<PAGE>
Attachment B to Letter Agreement
No. 6-1162-JDR-266
PW4084 Engines
Page 1
MODEL 777-200 PERFORMANCE GUARANTEES
PW4084 ENGINES
SECTION CONTENTS
1 AIRCRAFT MODEL APPLICABILITY
2 FLIGHT PERFORMANCE
3 MANUFACTURER'S EMPTY WEIGHT
4 AIRCRAFT CONFIGURATION
5 GUARANTEE CONDITIONS
6 GUARANTEE COMPLIANCE
7 EXCLUSIVE GUARANTEES
<PAGE>
Attachment B to Letter Agreement
No. 6-1162-JDR-266
PW4084 Engines
Page 2
1 AIRCRAFT MODEL APPLICABILITY
The guarantees contained in this Attachment (the "Performance
Guarantees") are applicable to the 777-200 Aircraft with a maximum
takeoff weight of * pounds, a maximum landing weight of * pounds, a
maximum zero fuel weight of * pounds equipped with Boeing furnished
PW4084 engines (84K bill of materials) operated at a Boeing equivalent
thrust rating of 84,600 pounds and flat rated to 86 degrees F at sea
level.
2 FLIGHT PERFORMANCE
2.1 CRUISE FUEL MILEAGE
The cruise fuel mileage at a gross weight of * pounds on a standard
day, at an altitude of * feet, at * Mach number and using not more than
maximum cruise thrust, shall not be less than the following guarantee
value:
NOMINAL: * NAM/Pound
TOLERANCE: * NAM/Pound
GUARANTEE: * NAM/Pound
3 MANUFACTURER'S EMPTY WEIGHT
The Manufacturer's Empty Weight (MEW) is guaranteed not to exceed * .
4 AIRCRAFT CONFIGURATION
4.1 The guarantees contained in this Attachment are based on the Aircraft
configuration as defined in Paragraph 4.3. Appropriate adjustment shall
be made for changes approved by the Buyer and Boeing or otherwise
allowed by the Purchase Agreement which cause changes to the
performance and/or weight and Balance of the Aircraft. Such adjustment
shall be accounted for by Boeing in its evidence of compliance with the
guarantees.
* Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and
has been filed separately with the Securities and Exchange Commission.
<PAGE>
Attachment B to Letter Agreement
No. 6-1162-JDR-266
PW4084 Engines
Page 3
4.2 The Manufacturer's Empty Weight guarantee of Section 3 will be adjusted
by Boeing for the following in its evidence of compliance with the
guarantees:
(1) Changes to the Aircraft configuration defined in Paragraph 4.3
including Change Requests, Master Changes, Change Orders or any other
changes mutually agreed upon between the Buyer and Boeing or otherwise
allowed by the Purchase Agreement.
(2) The difference between the component weight allowances given in
Appendix IV of the Detail Specification and the actual weights.
4.3 The Aircraft configuration is defined as the original release of
Configuration Specification D019W004.
5 GUARANTEE CONDITIONS
5.1 All guaranteed performance data are based on the ICAO International
Standard Atmosphere (ISA) and specified variations therefrom; altitudes
are pressure altitudes.
5.2 The FAA Regulations (FAR) referred to in this Attachment are, unless
otherwise specified, those set forth in FAR Part 25 effective February
1, 1965, plus Amendments 25-1 through 25-74 excluding Paragraph
25.571(e)(1), which remains at Amendment 71 level.
5.3 In the event a change is made to any law, governmental regulation or
requirement, or in the interpretation of any such law, governmental
regulation or requirement that affects the certification basis for the
Aircraft as described in Paragraph 5.2 and as a result thereof, a
change is made to the configuration and/or the performance of the
Aircraft in order to obtain certification, the guarantees set forth in
this Attachment shall be appropriately modified to reflect any such
change.
<PAGE>
Attachment B to Letter Agreement
No. 6-1162-JDR-266
PW4084 Engines
Page 4
5.4 The cruise fuel mileage guarantee includes allowances for normal power
extraction and engine bleed for normal operation of the air
conditioning system. Normal electrical power extraction shall be
defined as not less than a 212 kilowatts total electrical load. Normal
operation of the air conditioning system shall be defined as pack
switches in the "Auto" position, the temperature control switches in
the "Auto" position that results in a nominal cabin temperature of
75 degrees F, and all air conditioning systems operating normally. This
operation allows a maximum cabin pressure differential of 8.6 pounds
per square inch at higher altitudes, with a nominal Aircraft cabin
ventilation rate of 7,880 cubic feet per minute including passenger
cabin recirculation. The APU is turned off unless otherwise specified.
5.5 The cruise fuel mileage guarantee is based on an Aircraft center of
gravity location, as determined by Boeing, not to be aft of 30 percent
of the mean aerodynamic chord.
5.6 Performance, where applicable, is based on a fuel Lower Heating Value
(LHV) of * BTU per pound.
5.7 Boeing equivalent thrust is defined as the installed takeoff net thrust
at 0.25 Mach number, sea level, standard day (no airbleed, but with
horsepower extraction included) multiplied by 1.255, then rounded to
the nearest 100 pounds.
* Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and
has been filed separately with the Securities and Exchange Commission.
<PAGE>
Attachment B to Letter Agreement
No. 6-1162-JDR-266
PW4084 Engines
Page 5
6 GUARANTEE COMPLIANCE
6.1 Compliance with the guarantees of Sections 2 and 3 shall be based on
the conditions specified in those sections, the Aircraft configuration
of Section 4 and the guarantee conditions of Section 5.
6.2 Compliance with the cruise fuel mileage guarantee shall be established
by calculations based on flight test data obtained from an aircraft in
a configuration similar to that defined by the Configuration
Specification.
6.3 Compliance with the Manufacturer's Empty Weight guarantee shall be
based on information in the "Weight and Balance Control and Loading
Manual - Aircraft Report."
6.4 The data derived from tests shall be adjusted as required by
conventional methods of correction, interpolation or extrapolation in
accordance with established engineering practices to show compliance
with these guarantees.
6.5 Compliance shall be based on the performance of the airframe and
engines in combination, and shall not be contingent on the engine's
meeting its manufacturer's performance specifications.
7 EXCLUSIVE GUARANTEES
The only performance guarantees applicable to the Aircraft are those
set forth in this Attachment.
<PAGE>
Attachment C to Letter Agreement
No. 6-1162-JDR-266
TRENT884 Engines
Page 1
MODEL 777-200 PERFORMANCE GUARANTEES
TRENT884 ENGINES
SECTION CONTENTS
1 AIRCRAFT MODEL APPLICABILITY
2 FLIGHT PERFORMANCE
3 MANUFACTURER'S EMPTY WEIGHT
4 AIRCRAFT CONFIGURATION
5 GUARANTEE CONDITIONS
6 GUARANTEE COMPLIANCE
7 EXCLUSIVE GUARANTEES
<PAGE>
Attachment C to Letter Agreement
No. 6-1162-JDR-266
TRENT884 Engines
Page 2
1 AIRCRAFT MODEL APPLICABILITY
The guarantees contained in this Attachment (the "Performance
Guarantees") are applicable to the 777-200 Aircraft with a maximum
takeoff weight of * pounds, a maximum landing weight of * pounds, a
maximum zero fuel weight of * pounds equipped with Boeing furnished
TRENT884 engines.
2 FLIGHT PERFORMANCE
2.1 CRUISE FUEL MILEAGE
The cruise fuel mileage at a gross weight of * pounds on a standard
day, at an altitude of * feet, at * Mach number and using not more than
maximum cruise thrust, shall not be less than the following guarantee
value:
NOMINAL: * NAM/Pound
TOLERANCE: * NAM/Pound
GUARANTEE: * NAM/Pound
3 MANUFACTURER'S EMPTY WEIGHT
The Manufacturer's Empty Weight (MEW) is guaranteed not to exceed * .
4 AIRCRAFT CONFIGURATION
4.1 The guarantees contained in this Attachment are based on the Aircraft
configuration as defined in Paragraph 4.3. Appropriate adjustment shall
be made for changes approved by the Buyer and Boeing or otherwise
allowed by the Purchase Agreement which cause changes to the
performance and/or weight and balance of the Aircraft. Such adjustment
shall be accounted for by Boeing in its evidence of compliance with the
guarantees.
* Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and
has been filed separately with the Securities and Exchange Commission.
<PAGE>
Attachment C to Letter Agreement
No. 6-1162-JDR-266
TRENT884 Engines
Page 3
4.2 The Manufacturer's Empty Weight guarantee of Section 3 will be adjusted
by Boeing for the following in its evidence of compliance with the
guarantees:
(1) Changes to the Aircraft configuration defined in Paragraph 4.3
including Change Requests, Master Changes, Change Orders or any other
changes mutually agreed upon between the Buyer and Boeing or otherwise
allowed by the Purchase Agreement.
(2) The difference between the component weight allowances given in
Appendix IV of the Detail Specification and the actual weights.
4.3 The Aircraft configuration is defined as the original release of
Configuration Specification D019W004.
5 GUARANTEE CONDITIONS
5.1 All guaranteed performance data are based on the ICAO International
Standard Atmosphere (ISA) and specified variations therefrom; altitudes
are pressure altitudes.
5.2 The FAA Regulations (FAR) referred to in this Attachment are, unless
otherwise specified, those set forth in FAR Part 25 effective February
1, 1965, plus Amendments 25-1 through 25-74 excluding Paragraph
25.571(e)(1), which remains at Amendment 71 level.
5.3 In the event a change is made to any law, governmental regulation or
requirement, or in the interpretation of any such law, governmental
regulation or requirement that affects the certification basis for the
Aircraft as described in Paragraph 5.2 and as a result thereof, a
change is made to the configuration and/or the performance of the
Aircraft in order to obtain certification, the guarantees set forth in
this Attachment shall be appropriately modified to reflect any such
change.
<PAGE>
Attachment C to Letter Agreement
No. 6-1162-JDR-266
TRENT884 Engines
Page 4
5.4 The cruise fuel mileage guarantee includes allowances for normal power
extraction and engine bleed for normal operation of the air
conditioning system. Normal electrical power extraction shall be
defined as not less than a 212 kilowatts total electrical load. Normal
operation of the air conditioning system shall be defined as pack
switches in the "Auto" position, the temperature control switches in
the "Auto" position that results in a nominal cabin temperature of
75 degrees F, and all air conditioning systems operating normally. This
operation allows a maximum cabin pressure differential of 8.6 pounds
per square inch at higher altitudes, with a nominal Aircraft cabin
ventilation rate of 7,880 cubic feet per minute including passenger
cabin recirculation. The APU is turned off unless otherwise specified.
5.5 The cruise fuel mileage guarantee is based on an Aircraft center of
gravity location, as determined by Boeing, not to be aft of 30 percent
of the mean aerodynamic chord.
5.6 Performance, where applicable, is based on a fuel Lower Heating Value
(LHV) of * BTU per pound.
* Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and
has been filed separately with the Securities and Exchange Commission.
<PAGE>
Attachment C to Letter Agreement
No. 6-1162-JDR-266
TRENT884 Engines
Page 5
6 GUARANTEE COMPLIANCE
6.1 Compliance with the guarantees of Sections 2 and 3 shall be based on
the conditions specified in those sections, the Aircraft configuration
of Section 4 and the guarantee conditions of Section 5.
6.2 Compliance with the cruise fuel mileage guarantee shall be established
by calculations based on flight test data obtained from an aircraft in
a configuration similar to that defined by the Configuration
Specification.
6.3 Compliance with the Manufacturer's Empty Weight guarantee shall be
based on information in the "Weight and Balance Control and Loading
Manual - Aircraft Report."
6.4 The data derived from tests shall be adjusted as required by
conventional methods of correction, interpolation or extrapolation in
accordance with established engineering practices to show compliance
with these guarantees.
6.5 Compliance shall be based on the performance of the airframe and
engines in combination, and shall not be contingent on the engine's
meeting its manufacturer's performance specifications.
7 EXCLUSIVE GUARANTEES
The only performance guarantees applicable to the Aircraft are those
set forth in this Attachment.
<PAGE>
[LETTERHEAD OF BOEING COMMERCIAL AIRPLANE GROUP]
6-1162-JDR-267
International Lease Finance Corporation
1999 Avenue of the Stars, 39th Floor
Los Angeles, California 90067
Subject: Letter Agreement No. 6-1162-JDR-267 to
Purchase Agreement No. 1916 -
Certain Contractual Matters
Gentlemen:
This Letter Agreement amends Purchase Agreement No. 1916 (the Agreement) between
The Boeing Company (Boeing) and International Lease Finance Corporation (Buyer)
relating to Model 777 aircraft (the Aircraft).
All terms used and not defined herein shall have the same meaning as in the
Agreement.
1. Credit Memoranda.
----------------
1.1 Airframe Credits - Aircraft. In consideration of the purchase of
---------------------------
the Aircraft, Boeing will issue a credit memorandum for each Aircraft at the
time of delivery in an amount determined by *.
1.1.1 Reduction of Certain Credit Memoranda Amounts. The
---------------------------------------------
amount of each such credit memorandum to be issued for the Aircraft scheduled
for delivery in * will be reduced by * at *.
* Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and
has been filed separately with the Securities and Exchange Commission.
<PAGE>
International Lease Finance Corporation
6-1162-JDR-267 Page 2
1.1.2 Revised Delivery Schedule. Either pursuant to the
-------------------------
Agreement or by mutual agreement between Boeing and Buyer, in the event the
scheduled month of delivery of any Aircraft is revised or Model 737 aircraft are
substituted for one Aircraft such that the Affected Aircraft scheduled months of
delivery are revised from those identified in paragraph 1.1.1 herein and/or the
Affected Aircraft are no longer the initial eight Aircraft delivered under the
Agreement, Boeing and Buyer agree (i) that the reduction in credit memorandum
will apply to each of the initial eight Aircraft to be delivered under the
Agreement and (ii) the amount of the credit memorandum reduction for each of the
initial eight Aircraft will be recalculated such that the net present value of
the reductions for the initial eight Aircraft to be delivered under the revised
delivery schedule is equal to the net present value of the reductions for the
Affected Aircraft, as defined in paragraph 1.1.1 herein.
1.2 *
1.3 Airframe Credit - Option Aircraft. In consideration of the
---------------------------------
purchase of the Option Aircraft, Boeing will issue a credit memorandum for each
Option Aircraft at the time of delivery in an amount determined by *
* Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and
has been filed separately with the Securities and Exchange Commission.
<PAGE>
International Lease Finance Corporation
6-1162-JDR-267 Page 3
*
1.4 Application of Credit Memoranda. Such credit memoranda may be
-------------------------------
utilized by Buyer for the purchase of * or applied against the balance of
the purchase price of the Aircraft for which such credit is issued, * but
may not be used for the purchase of other aircraft or application against
advance payments for any Aircraft.
1.5 Engine Thrust Changes. As shown in Attachment B to Letter
---------------------
Agreement No. 6-1162-JDR-269, for engines from the same manufacturer, * . In the
event Boeing revises its pricing policy for other Model 777 engine thrust
increases such that the price for increasing engine thrust in production for
engines from the same manufacturer includes an airframe component and Buyer
subsequently elects to increase the engine thrust of any Aircraft prior to
delivery for engines from the same manufacturer, * .
1.6 *
* Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and
has been filed separately with the Securities and Exchange Commission.
<PAGE>
International Lease Finance Corporation
6-1162-JDR-267 Page 4
*
2. Cooperative Marketing Agreement.
-------------------------------
It is recognized by Boeing and Buyer that Buyer may, from time to time,
require assistance from Boeing in product-related areas such as sales
presentations, route analysis and similar activities in order to successfully
market the Aircraft. Boeing agrees to cooperate with Buyer in the above-
mentioned activities for the period commencing on the date of execution of the
Purchase Agreement and ending on the later of December 31, 2004, or at delivery
of the last Aircraft, unless earlier termination is mutually agreed. Boeing
further agrees to meet with Buyer from time to time during such period to review
sales campaigns of mutual interest.
The above cooperative marketing agreement is subject to the following
conditions:
(i) All financial transactions and any lease-related incentives to be
provided by Buyer to its lessees shall be the sole responsibility of Buyer and
Boeing's financial commitments in support of any transaction involving any
Aircraft shall be limited to the business arrangements between Boeing and Buyer
set forth in the Purchase Agreement for any such Aircraft unless otherwise
specifically agreed to by Boeing and Buyer and included in the Purchase
Agreement by written amendment; and
(ii) Nothing contemplated in this paragraph 2 shall in any way restrict
either party from pursuing those independent sales activities which either
considers in its own best interests without concern for the effects of any such
action on the other party; and
(iii) The cooperation contemplated hereunder shall in no way require
either party to disclose to the other any data or interests of any customer or
potential customer provided to either party in
* Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and
has been filed separately with the Securities and Exchange Commission.
<PAGE>
International Lease Finance Corporation
6-1162-JDR-267 Page 5
confidence by that customer or potential customer or which is proprietary to
either party.
Nothing in this paragraph 2 or elsewhere in this Purchase Agreement shall be
deemed to create a joint venture, agency or other mutual legal relationship
between the parties and the sole relationship of Boeing and Buyer is one of
seller and purchaser of the Aircraft.
*
3. Credit Memorandum for * .
-------------------------
*
* Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and
has been filed separately with the Securities and Exchange Commission.
<PAGE>
International Lease Finance Corporation
6-1162-JDR-267 Page 6
*
4. * .
--
*
5. Improvement of *.
----------------
In consideration of the purchase of the Aircraft, Boeing will *
* Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and
has been filed separately with the Securities and Exchange Commission.
<PAGE>
International Lease Finance Corporation
6-1162-JDR-267 Page 7
*
An appropriate amendment to the above affected purchase agreement will be
executed by Buyer and Boeing simultaneously with the Agreement.
6. Application to * Aircraft.
-------------------------
The terms of this Agreement, including amending Letter Agreements
executed simultaneously with the Agreement but excluding the provisions of
paragraphs 1.1 and 1.3 of this Letter Agreement, are applicable to *
7. * Credit Consideration.
----------------------
In consideration of the purchase of the Aircraft *, Boeing will issue a *
credit memorandum of * . Such credit memoranda may be utilized by Buyer for the
purchase of *.
8. Deletion of Option Aircraft.
---------------------------
In consideration of the purchase of the Aircraft, Boeing agrees to (i)
cancel one Model 757-200 option * and (ii) cancel one Model 767-300 option *
* Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and
has been filed separately with the Securities and Exchange Commission.
<PAGE>
International Lease Finance Corporation
6-1162-JDR-267 Page 8
*
Appropriate amendments to the above affected purchase agreements will be
executed by Buyer and Boeing simultaneously with the Agreement.
9. Confidentiality.
---------------
Buyer understands that certain commercial and financial information
contained in this Letter Agreement are considered by Boeing as confidential.
Buyer agrees that it will treat this Letter Agreement and the information
contained herein as confidential and will not, without the prior written consent
of Boeing, disclose this Letter Agreement or any information contained herein to
any other person or entity, except as provided in Letter Agreement 1916-1.
Very truly yours,
THE BOEING COMPANY
By /s/ J.D. Robinson
-----------------------
Its Attorney-In-Fact
-----------------------
ACCEPTED AND AGREED TO this 24th
----
day of June , 1996
-----------------
INTERNATIONAL LEASE FINANCE
CORPORATION
By /s/ Steven R. Adams
-----------------------
Its Steven R. Adams
-----------------------
Vice President
* Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and
has been filed separately with the Securities and Exchange Commission.
<PAGE>
[LETTERHEAD OF BOEING COMMERCIAL AIRPLANE GROUP]
6-1162-JDR-268
International Lease Finance Corporation
1999 Avenue of the Stars, 39th Floor
Los Angeles, California 90067
Subject: Letter Agreement No. 6-1162-JDR-268 to
Purchase Agreement No. 1916 -
Advance Payment Matters
Gentlemen:
This Letter Agreement amends Purchase Agreement No. 1916 (the Agreement) between
The Boeing Company (Boeing) and International Lease Finance Corporation (Buyer)
relating to Model 777-200 aircraft (the Aircraft).
All terms used and not defined herein, shall have the same meaning as in the
Agreement.
*
1. *
------------------------
1.1 *
1.2 *
* Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and
has been filed separately with the Securities and Exchange Commission.
<PAGE>
International Lease Finance Corporation
6-1162-JDR-268 Page 2
*
1.3 *
* Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and
has been filed separately with the Securities and Exchange Commission.
<PAGE>
International Lease Finance Corporation
6-1162-JDR-268 Page 3
2. Application of * Deposits.
-------------------------
Boeing agrees to apply * currently held as * to the advance payment amount
due Boeing from Buyer at time of execution of the Agreement. *
3. Payment by Check.
----------------
In the event that Buyer elects to pay Boeing any advance payment due under
the Purchase Agreement (either in accordance with the schedule determined in
accordance with Article 5.1 of the Purchase Agreement or the alternate schedule
set forth in this Letter Agreement) by means of a check, Boeing shall charge
interest on any amounts for which Boeing does not have immediate use of such
funds. The period of calculation for such interest shall commence on the date
any payment was due and continue to and include the day immediately preceding
the day on which Boeing obtains use of the funds. The rate of interest on any
such payments shall be the rate set forth in subparagraph 1.2 herein.
4. *
------------------------
*
5. Applicability to Option Aircraft.
--------------------------------
The provisions of this Letter Agreement shall be applicable in their
entirety to the purchase by Buyer of any Option Aircraft offered by Boeing to
Buyer in accordance with Letter Agreement No. 6-1162-JDR-275.
* Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and
has been filed separately with the Securities and Exchange Commission.
<PAGE>
International Lease Finance Corporation
6-1162-JDR-268 Page 4
6. Confidentiality.
---------------
Buyer understands that certain commercial and financial information
contained in this Letter Agreement are considered by Boeing as confidential.
Buyer agrees that it will treat this Letter Agreement and the information
contained herein as confidential and will not, without the prior written consent
of Boeing, disclose this Letter Agreement or any information contained herein to
any other person or entity, except as provided in Letter Agreements 1916-1 dated
even date herewith.
Very truly yours,
THE BOEING COMPANY
By /s/ J. D. Robinson
------------------------
Its Attorney-In-Fact
-----------------------
ACCEPTED AND AGREED TO this 24th
----
day of June, 1996
----
INTERNATIONAL LEASE FINANCE
CORPORATION
By /s/ Steven R. Adams
------------------------
Its Steven R. Adams
-----------------------
Vice President
Attachment
<PAGE>
Attachment A to
Letter Agreement No. 6-1162-JDR-268
Page 1
*
* Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and
has been filed separately with the Securities and Exchange Commission.
<PAGE>
[LETTERHEAD OF BOEING COMMERCIAL AIRPLANE GROUP]
6-1162-JDR-269
International Lease Finance Corporation
1999 Avenue of the Stars, 39th Floor
Los Angeles, California 90067
Subject: Letter Agreement No. 6-1162-JDR-269 to
Purchase Agreement No. 1916 -
Aircraft Configuration Matters
Gentlemen:
This Letter Agreement amends Purchase Agreement No. 1916 (the Agreement) between
The Boeing Company (Boeing) and International Lease Finance Corporation (Buyer)
relating to Model 777 aircraft (the Aircraft).
All terms used and not defined herein, shall have the same meaning as in the
Agreement.
1. Right of Substitution - Model *.
-------------------------------
Commencing with Aircraft scheduled for delivery in * , Buyer shall have the
right to substitute in lieu of any or all of the Aircraft a Boeing Model *
Aircraft, (the Substitute Aircraft), on a one for one basis, subject to the
following terms and conditions:
1.1 Buyer shall provide Boeing with its written or telegraphic notice of
its election to substitute aircraft for the Substitute Aircraft no later than
* .
1.2 The delivery of the Substitute Aircraft shall occur during the same
general time period as the Aircraft for which substitution is being made, unless
otherwise agreed by the parties, and shall be subject to the availability of
delivery positions for the Substitute Aircraft in the time period in question.
1.3 Promptly after receipt of notice from Buyer of its election to
substitute, Boeing shall prepare and submit to Buyer appropriate documents
amending the Purchase Agreement to reflect the manufacture and sale of such
Substitute Aircraft to Buyer.
* Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and
has been filed separately with the Securities and Exchange Commission.
<PAGE>
International Lease Finance Corporation
6-1162-JRD-269 Page 2
1.4 The Base Airframe Price and Engine Price of the Substitute Aircraft
shall be determined in accordance with Attachment A to this Letter Agreement. In
the event Buyer selects engine models for the Substitute Aircraft which are not
included in Attachment A, the price of such engines shall be the then-current
price quoted by the engine manufacturer at the time of substitution unless
otherwise agreed by the parties.
1.5 The configuration of the Substitute Aircraft will be defined by Boeing
Detail Specifications * , all of which will be comprised of Boeing Configuration
Specification * , dated * , as amended to incorporate the applicable
specification language to reflect the effect of any Change Requests offered by
Boeing and selected by Buyer for incorporation in the Substitute Aircraft.
2. Right of Substitution - Engines.
-------------------------------
2.1 Notwithstanding that at the time of execution of the Agreement, Buyer
has selected the engines to power the Aircraft, Buyer shall have the right to
change its selection of engine manufacturer and engine type by so advising
Boeing no later than * prior to the scheduled month of delivery of the Aircraft
in question, subject to the offerability of the proposed airframe/engine
combination under consideration and the receipt by Boeing of appropriate
commitments from the respective engine manufacturers. In the event of such
change in engine selection, * . Boeing and Buyer agree to work together to
minimize the impact of such change. The Base Airframe Price corresponding to the
substitute engines and the price of the substitute engines shall be determined
in accordance with Attachment B to this Letter Agreement, unless otherwise
agreed by the parties.
* Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and
has been filed separately with the Securities and Exchange Commission.
<PAGE>
International Lease Finance Corporation
6-1162-JDR-269 Page 3
2.2 In the event the substitute engines selected by Buyer have not been
previously certified at the time of selection by Buyer, Buyer's aircraft may be
used by Boeing as required prior to delivery to obtain certification of the
substitute engine/airframe combination. In the event Boeing requires the use of
one or more of Buyer's aircraft for the substitute engine certification flight
test program, Boeing agrees to provide Buyer reasonable compensation for such
usage and to address any related condition items on such aircraft.
3. Right of Model Conversion.
-------------------------
3.1 Buyer shall have the right to substitute either * Model * aircraft or
* Model * aircraft for * Model 777 Aircraft scheduled for delivery between * .
The substitute Model * aircraft shall be scheduled for delivery during * .
Such substitution is subject to: (i) Boeing receiving written notice of
substitution from Buyer no later than * prior to the scheduled month of delivery
of the Model 777 Aircraft for which such substitution is requested, (ii) the
availability of substitute Model * aircraft delivery positions, (iii) Boeing
determination that the substitute Model * aircraft is in production and is
available for sale to Buyer, (iv) timely execution of a supplement to Purchase
Agreement No. * and (v) Buyer's agreement to * from such substitution which are
paid by Boeing. Boeing and Buyer agree to work together to minimize the impact
of such substitution.
3.2 In the event Boeing determines that a substitute Model * aircraft
delivery position is not available in accordance with paragraph 3.1 above,
Boeing will advise Buyer of the next available Model * aircraft delivery
position for which a Model * aircraft substitution may be accomplished.
3.3 In the event Buyer exercises such substitution rights, Boeing will
provide a proposal outlining the delivery schedule (subject to available
delivery positions) and date by which definitive agreement must be reached.
Such substitute Model * aircraft will constitute an Aircraft in accordance
with the terms of Purchase Agreement No. * .
* Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and
has been filed separately with the Securities and Exchange Commission.
<PAGE>
International Lease Finance Corporation
6-1162-JDR-269 Page 4
4. Later Assessment of Buyer's BFE Obligations.
-------------------------------------------
In consideration of Buyer's concern related to differences in the
provisions set forth in paragraph 3 of Exhibit E of the Agreement related to
Buyer's obligations compared to previously executed agreements, Boeing agrees to
meet with Buyer no later than 12 months after delivery of the first Aircraft to
discuss what, if any, impact such revised provisions have had on Buyer.
5. Limitation of New Customer Introductions.
----------------------------------------
Boeing shall have the right to limit the number of new customer
introductions in any calendar year based on resources available to accomplish
required configuration changes, certification activity and/or to provide
customer services to support such new customer introductions. If a requested
new customer introduction cannot be accomplished in the scheduled month of
delivery for a particular Aircraft, Boeing shall so notify Buyer, and shall
advise Buyer as to the next available delivery month in which such new customer
introduction can be accomplished. Such limitation will not apply to any
Aircraft either for which such notification has not been issued by Boeing to
Buyer or for which a lessee has been officially identified to Boeing by Buyer no
less than * prior to scheduled delivery of such Aircraft.
6. Purchase Agreement and Detail Specification Revision.
----------------------------------------------------
In the event of a substitution, rescheduling or cancellation of an Aircraft
as contemplated in this Agreement, Boeing and Buyer agree that within thirty
(30) days after receipt by Boeing of Buyer's notice thereof, or within such
other time as the parties may mutually agree, the parties will execute
appropriate documents reflecting the effects of such substitution, rescheduling
or cancellation on the Purchase Agreement terms, including but not limited to
the effects on the Aircraft Basic Price, Aircraft Price, Advance Payment Base
Price and applicable escalation provisions.
* Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and
has been filed separately with the Securities and Exchange Commission.
<PAGE>
International Lease Finance Corporation
6-1162-JDR-269 Page 5
7. Confidentiality.
---------------
Buyer understands that certain commercial and financial information
contained in this Letter Agreement are considered by Boeing as confidential.
Buyer agrees that it will treat this Letter Agreement and the information
contained herein as confidential and will not, without the prior written consent
of Boeing, disclose this Letter Agreement or any information contained herein to
any other person or entity, except as provided in Letter Agreements 1916-1 dated
even date herewith.
Very truly yours,
THE BOEING COMPANY
By /s/ J.D. Robinson
---------------------------
Its Attorney-In-Fact
--------------------------
ACCEPTED AND AGREED TO this 24th
----
day of June, 1996
----
INTERNATIONAL LEASE FINANCE
CORPORATION
By /s/ Steven R. Adams
---------------------------
Its Steven R. Adams
--------------------------
Vice President
<PAGE>
Attachment A to
6-1162-JDR-269 Page 1
Price Applicable to Substitute
Model * Aircraft
<TABLE>
<CAPTION>
Base Airframe Engines
Price Price
Engine Model ( * ) ( * )
- ------------ -------------- ---------
<S> <C> <C>
Pratt and Whitney Engines
* * *
General Electric Engines
* * *
Rolls-Royce Engines
* * *
</TABLE>
* Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and
has been filed separately with the Securities and Exchange Commission.
<PAGE>
Attachment B to
6-1162-JDR-269 Page 1
Base Airframe and Engine Prices
Applicable to Engine Substitution
Model * Aircraft
<TABLE>
<CAPTION>
Base Airframe Engines
Price Price
Engine Model (*) (*)
- ------------ -------------- ------------
<S> <C> <C>
Pratt and Whitney Engines
* * *
* * *
General Electric Engines
* * *
* * *
Rolls-Royce Engines
* * *
* * *
</TABLE>
* Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and
has been filed separately with the Securities and Exchange Commission.
<PAGE>
[LETTERHEAD OF BOEING COMMERCIAL AIRPLANE GROUP]
6-1162-JDR-270
International Lease Finance Corporation
1999 Avenue of the Stars, 39th Floor
Los Angeles, California 90067
Subject: Letter Agreement No. 6-1162-JDR-270 to
Purchase Agreement No. 1916 -
Lessee Matters
Gentlemen:
Reference is made to Purchase Agreement No. 1916 dated as of even date herewith
(the Agreement) between The Boeing Company (Boeing) and International Lease
Finance Corporation (Buyer) relating to Model 777 aircraft (Aircraft).
All terms used herein and in the Agreement, and not defined herein, shall have
the same meaning as in the Agreement.
It is understood that Buyer intends to lease the Aircraft to third party
operators. This Letter Agreement relates to certain services that Boeing will
provide to such third party operators.
1. Identification of Lessee and Country of Registry.
------------------------------------------------
Buyer agrees to give Boeing written notice as soon as reasonably
practicable, but in no case less than * prior to the month during which an
Aircraft is scheduled for delivery, of the name and address of the applicable
lessee, the month(s) of Aircraft delivery and the term of the lease.
Promptly after notification, Boeing will advise Buyer as to whether such
Aircraft can be delivered no later than its contract delivery month and in a
configuration such that an Export Certificate of Airworthiness (if required) can
be obtained for the country of registry requested. In the event Boeing
determines that obtaining such requested Export Certificate of Airworthiness
would result in delivery of the Aircraft later than its contract delivery
* Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and
has been filed separately with the Securities and Exchange Commission.
<PAGE>
International Lease Finance Corporation
6-1162-JDR-270 Page 2
month, the Aircraft will be certified with a Standard Airworthiness Certificate
and Buyer will, upon tender of delivery of the Aircraft in accordance with the
Agreement, accept delivery of such Aircraft with such Certificate or if mutually
agreed establish a later delivery month which supports Buyer's requirement. In
the event of such later delivery month, the Agreement shall be amended by
written agreement which shall include but not be limited to changes in contract
delivery month, price, storage charges and related matters arising from such
rescheduling.
2. Late Identification of Lessees.
------------------------------
Buyer recognizes that Boeing's ability to schedule and provide the
training, services and data as set forth in Exhibits C-1 and C-2, as well as its
ability to incorporate lessee-peculiar changes in an Aircraft, may be subject to
severe curtailment in the event of late notification by Buyer of the identity of
lessees as provided in paragraph 2 herein. If Buyer does not provide timely
notification to Boeing of lessee identification, Boeing's obligation to Buyer
and such lessee with respect to providing the requisite training, services and
data shall be subject to the availability of appropriate Boeing training
facilities and personnel in the time period in question and is further subject
to Buyer's agreement to pay Boeing those reasonable extraordinary costs, if any,
which are incurred by Boeing in connection with the provision of training,
services and data, as a result of late identification of a lessee.
3. Customer Support Categories for Lessees.
---------------------------------------
Category 1 services are provided on a one time basis for each major
aircraft model. If at the time training is to be provided, a lessee which has
been identified to receive Category I services pursuant to this Letter Agreement
has received Category I services from Boeing for any previous lease or purchase
of a Model 777 aircraft, Boeing will provide the adjusted level of services to
which the lessee is entitled.
It is recognized by Boeing that the lessees to be identified under paragraph 1.
above may have different requirements with regard to maintenance and
<PAGE>
International Lease Finance Corporation
6-1162-JDR-270 Page 3
flight crew training and technical documents applicable to the Aircraft. For the
purpose of this Letter Agreement, and in order to determine the applicability of
either Exhibit C-1 or C-2 and Parts thereof to each of Buyer's lessees, the
following categories shall apply;
Category 1 Lessee is not operating Boeing Model 777 aircraft prior to
----------
delivery of Buyer's Aircraft. (Exhibit C-1 provides new Model training and
Documents.)
Category 3 Lessee is operating Boeing Model 777-200A aircraft prior to
----------
delivery of Buyer's Aircraft. (Exhibit C-2 provides minor Model differences
training and documents.)
The determination of applicability of Exhibit C-1 or C-2 will be made at time of
lessee identification, unless otherwise agreed by Boeing and Buyer.
4. Training and Technical Documents.
--------------------------------
4.1 Boeing will provide the training, services and technical documents
set forth in Exhibit C-1 or C-2 to the Agreement and under the terms, conditions
and provisions thereof to lessees in Category 1 or 3 respectively; provided that
such lessees are the initial operators of the Aircraft, and the initial lease
term of each Aircraft is for a term of not less than *. The level of training,
services and technical documents, if any, that Boeing will provide to lessees of
Buyer who are the initial operators of the Aircraft but lease the Aircraft for
an initial lease term of less than * will, if requested by Buyer, be determined
by Boeing and given to Buyer. Such support level will be based on the particular
circumstances of the lease and the lessee involved.
4.2 At the time of execution of the Agreement, the training schedules,
quantities and formats of the technical data and documents to be provided under
the applicable Exhibit had not been defined. Boeing and Buyer agree to define
such items not later than * prior to delivery of the first Aircraft to lessee.
* Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and
has been filed separately with the Securities and Exchange Commission.
<PAGE>
International Lease Finance Corporation
6-1162-JDR-270 Page 4
4.3 At such time as Buyer identifies to Boeing the lessee of an
Aircraft, Boeing will give written notice to Buyer as to the Category of such
lessee and advise which Exhibit C is applicable or pursuant to paragraph 4.2
above the level of support Boeing will provide in the event the Aircraft is
leased for a term of less than *.
5. Assignment of Rights and Obligations.
------------------------------------
5.1 Partial Assignment. Promptly after identification of the lessee,
------------------
Buyer and lessee will enter into an assignment of certain rights and obligations
under the Agreement with respect to training activities, and of Buyer's Spare
Parts General Terms Agreement or, when executed, Customer Services General Terms
Agreement (GTA) for those lessees who do not have a GTA with Boeing, containing
terms and conditions substantially as set forth in Attachment A to this Letter
Agreement. The GTA payment provisions will apply for Spare Parts ordered by the
lessee for the Aircraft; provided, however, the "net 30 days" payment provisions
are subject to approval of the lessee's credit by Boeing. Such asignment will
be effective upon Boeing's consent.
5.2 Full Assignment. At the time of delivery by Buyer of any Aircraft
---------------
to an initial lessee, Buyer and lessee will enter into an assignment of
additional rights and obligations under the Purchase Agreement containing terms
and conditions substantially as set forth in Attachment B to this Letter
Agreement. Such asignment will be effective upon Boeing's consent.
6. Confidentiality.
---------------
Buyer understands that certain commercial and financial information
contained in this Letter Agreement are considered by Boeing as confidential.
Buyer agrees that it will treat this Letter Agreement and the information
contained herein as confidential and will not, without the prior written consent
of
* Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and
has been filed separately with the Securities and Exchange Commission.
<PAGE>
International Lease Finance Corporation
6-1162-JDR-270 Page 5
Boeing, disclose this Letter Agreement or any information contained herein to
any other person or entity, except as provided in Letter Agreement 1916-1.
Very truly yours,
THE BOEING COMPANY
By /s/ J.D. Robinson
------------------------
Its Attorney-In-Fact
-----------------------
ACCEPTED AND AGREED TO this 24th
----
day of June, 1996
----
INTERNATIONAL LEASE FINANCE
CORPORATION
By /s/ Steven R. Adams
---------------------------------
Its Steven R. Adams
--------------------------------
Vice President
Attachments
<PAGE>
Boeing Commercial Airplane Group
P.O. Box 3707
Seattle, Washington 98124-2207
Attention: Vice President - Contracts
Mail Stop 75-38
Subject: Partial Assignment of Rights -
International Lease Finance Corporation
as Lessor and @ as Lessee of Model 777
Aircraft
Gentlemen:
In connection with International Lease Finance Corporation's lease to @
(Lessee) of a Boeing aircraft (more fully described below), reference is made to
the following documents:
(1) Purchase Agreement No. 1916 dated as of + , between The
Boeing Company (Boeing) and International Lease Finance (ILFC), as amended
and supplemented, (the Agreement) under which ILFC purchased Boeing Model
777 aircraft, including certain aircraft which have been designated for
lease to Lessee (the Aircraft).
(2) Spare Parts General Terms Agreement No. Q8 dated as of May 20, 1977, as
amended and supplemented, or, when executed, Customer Services General
Terms Agreement No. Q8, between Boeing and ILFC, referenced in Article 13
of the Purchase Agreement (the ILFC GTA).
/(3) Spare Parts General Terms Agreement or Customer Services General Terms
Agreement No. + dated as of + , as amended and
supplemented, between Boeing and Lessee (Lessee GTA)./
/(3)/(4)/ /Letter of Intent/ /Memorandum of Understanding/ /Aircraft Lease
Agreement/ (the /LOI/ /MOU/ /Lease/) dated as of +
between ILFC and Lessee.
Pursuant to the /LOI/ /MOU/ /Lease/, ILFC has agreed to lease the Aircraft to
Lessee. Included in such /LOI/ /MOU/ /Lease/ is the transfer to Lessee of (a)
training
<PAGE>
Attachment A to
6-1162-JDR-270
Page 2
entitlements, support and services, and other things related to the
Aircraft (the Entitlements) under the provisions of Exhibit C (the Customer
Support Document) to the Purchase Agreement, and (b) rights to purchase from
Boeing Spare Parts related to the Aircraft. In order to accomplish such
transfer of the Entitlements and rights, as authorized by the provisions of
Article /10/ /11/ of the Agreement /[OPTION A: USE WHEN LESSEE HAS NO GTA:]; and
------------------------------------
Article /23/ of the ILFC GTA/, the parties agree as follows:
1. Lessee's Agreement.
------------------
In consideration of Boeing's consent and agreement to this assignment,
Lessee, its successors and assigns, hereby agree to be bound by and comply with
all applicable terms, conditions, and limitations of the Agreement including,
without limitation, the disclaimer and release, exclusion of liabilities,
indemnity and insurance provisions of the Purchase Agreement (Article 12 and
Part E of Exhibit C to the Agreement).
2. Lessee's Insurance.
------------------
Boeing's obligation to provide those portions of the Entitlements
involving aircraft-related training, support or services to Lessee is
conditioned on the receipt by Boeing of evidence of compliance by Lessee with
the insurance requirements set forth in paragraph 2 of Part E of Exhibit C or in
such other form as may be satisfactory to Boeing, prior to the provision of such
Entitlements.
3. Spare Parts General Terms.
-------------------------
/[OPTION A (LESSEE WITHOUT GTA):]
-----------------------------
3.1 Lessee, who is not presently a party to a Spare Parts General Terms
Agreement with Boeing, agrees, together with any successors and assignees, to be
bound by all applicable terms, conditions, and limitations of the ILFC GTA,
including, without limitation, Articles /15.10/ and /17/ of the ILFC GTA /and
paragraphs /9.8/ and /11/ of Exhibit A to the ILFC GTA,/ with respect to any
Spare Parts or Leased Parts ordered for the Aircraft; and
3.2 Lessee hereby agrees that the payment provisions of Article 12 of
the ILFC GTA will be applicable to Spare Parts ordered by Lessee for the
<PAGE>
Attachment A to
6-1162-JDR-270
Page 3
Aircraft, provided however, the "net 30 days" payment provisions are subject to
approval of Lessee's credit by Boeing and, in addition, Boeing may establish a
credit limit on Lessee's account./
/[OPTION B (LESSEE WITH GTA):]
--------------------------
Lessee, who is presently a party to the Lessee GTA agrees, together with
any successors and assignees, to be bound by all applicable terms, conditions,
and limitations of such agreement with respect to any Spare Parts or Leased
Parts ordered for the Aircraft; it further being agreed, however, that in
connection with this assignment, no transfer of rights to Lessee is being made
with respect to the ILFC GTA.
4. Continuing Lessor Rights and Obligations.
----------------------------------------
ILFC reserves to itself all rights, claims and interests it may have under
the Purchase Agreement not expressly assigned to Assignee hereunder. ILFC
agrees to remain responsible for any payments due Boeing (a) with respect to the
Aircraft under Articles 3 and 5 (Price of Aircraft and Payment), respectively,
of the Purchase Agreement and (b) with respect to any Spare Parts /or Leased
Parts/ for the Aircraft ordered by ILFC under the ILFC GTA.
5. Appointment of Lessee.
---------------------
ILFC hereby assigns to Lessee the sole authority to exercise all rights
and powers of ILFC with respect to the Entitlements under Exhibit C of the
Purchase Agreement /[USE WITH OPTION A:] and the ILFC GTA/. Such authorization
-----------------
shall continue until Boeing shall have received from ILFC written notice to the
contrary addressed to Boeing's Vice President - Contracts, P.O. Box 3707,
Seattle, Washington 98124-2207. Until Boeing shall have received such notice,
Boeing shall be entitled to deal exclusively and solely with Lessee with respect
to the Entitlements and, with respect to the rights, powers, duties or
obligations under Exhibit C to the Agreement, /[USE WITH OPTION A:] and the ILFC
-----------------
GTA/ and all actions taken by Lessee or agreements entered into by Lessee with
respect to such Entitlements /[USE WITH OPTION A:] and the ILFC GTA/ during the
-----------------
period prior to Boeing's receipt of such notice, shall be final and binding upon
ILFC.
<PAGE>
Attachment A to
6-1162-JDR-270
Page 4
6. Modification, Revision or Substitution of Entitlements.
------------------------------------------------------
ILFC and Lessee agree that the appointment of Lessee set forth in
paragraph 5 herein includes the authority, in cooperation with Boeing, to
modify, revise or substitute the form, type, and scope of the Entitlements;
provided however, that such modification, revision or substitution does not
create any additional Lessor financial obligation to Boeing. It is further
understood and agreed that the provisions of this assignment (including but not
limited to matters of disclaimer and release, exclusion of liabilities,
indemnity and insurance) shall apply to the provision by Boeing of such
modified, revised or substituted Entitlements to the same extent as if they were
specifically described in the Agreement; and
7. Boeing Rights and Obligations.
-----------------------------
ILFC and Lessee confirm expressly for the benefit of Boeing that nothing
in this Assignment shall (i) subject Boeing to any obligation or liability to
which it would not otherwise by subject under the Agreement or limit, restrict,
or change in any respect Boeing's rights, representations, warranties,
indemnities or other agreements thereunder, except as otherwise expressly
provided herein, (ii) limit any rights of set-off Boeing may have under
applicable law, or (iii) require Boeing to divest itself of title to or
possession of the Aircraft until delivery thereof and payment therefor as
provided in the Agreement.
8. Signing in Counterparts.
-----------------------
This Assignment may be signed by the parties hereto in separate
counterparts, each of which when executed and delivered shall be an original,
but all such counterparts shall together constitute but one and the same
instrument.
9. Governing Law.
-------------
This Assignment shall be governed by, and construed in accordance with,
the laws of the State of Washington, including all matters of construction,
validity and performance.
<PAGE>
Attachment A to
6-1162-JDR-270
Page 5
10. Lessee Acceptance.
-----------------
Lessee hereby accepts the authorizations set forth in paragraphs 5 and 6
herein and agrees to be bound by and to comply with all the terms, conditions
and limitations of the Agreement /[USE WITH OPTION A:] and the ILFC GTA/.
-----------------
We request that Boeing, upon receipt of this letter, acknowledge receipt
thereof and the transfer of rights, under the Agreement /[USE WITH OPTION A:]
-----------------
and the ILFC GTA/ /[USE WITH OPTION B:] and concurrence that Spare Parts for the
-----------------
Aircraft ordered from Boeing will be under the provisions of the Lessee GTA/ as
set forth above, by signing the acknowledgment set forth below and forwarding
one copy of this letter, so acknowledged, to each of the undersigned.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment Agreement to
be duly executed as of the dates written below.
# INTERNATIONAL LEASE
FINANCE CORPORATION
(Lessee) (Lessor)
By________________________ By_______________________
Its_______________________ Its______________________
Dated_____________________ Dated____________________
[BOEING ACKNOWLEDGEMENT AND CONSENT TO ASSIGNMENT:]
------------------------------------------------
Receipt of the above letter acknowledged and transfer of rights under the
Purchase Agreement /[USE WITH OPTION A:] and the ILFC GTA/ /[USE WITH OPTION B:]
----------------- -----------------
and the applicability of the provisions of the Lessee GTA with respect to Spare
Parts ordered from Boeing/, with
<PAGE>
Attachment A to
6-1162-JDR-270
Page 6
respect to the Aircraft, confirmed effective as of the date indicated below:
THE BOEING COMPANY
By
-------------------------
Its Attorney-in-Fact
------------------------
Dated
----------------------
<PAGE>
Boeing Commercial Airplane Group
P.O. Box 3707
Seattle, Washington 98124-2207
Attention: Vice President - Contracts
Mail Stop 75-38
Subject: Assignment of Rights and Obligations -
International Lease Finance Corporation
as Lessor and @ as Lessee of Model 777
Aircraft Serial No.
Gentlemen:
In connection with International Lease Finance Corporation's lease to
_______________________ ("Lessee") of a Boeing aircraft (more fully described
below), reference is made to the following documents:
1. Purchase Agreement No. 1916 dated as of _________, 19__ between The Boeing
Company ("Boeing") and International Lease Finance Corporation ("ILFC") (the
"Boeing Agreement") under which ILFC purchased a certain Boeing Model 777
aircraft bearing Manufacturer's Serial No. _______ (the "Aircraft").
2. Aircraft Lease Agreement (the "Lease") for the Aircraft dated as of
__________, 19__, between ILFC and Lessee.
[3. Spare Parts General Terms Agreement No. 8Q dated as of May 20, 1977, as
amended and supplemented, between Boeing and ILFC (the "ILFC GTA").][THIS
REFERENCE SHOULD BE USED ONLY IF LESSEE DOES NOT HAVE ITS OWN GTA]
Capitalized terms used herein without definition will have the same meaning as
in the Boeing Agreement.
In connection with ILFC's lease of the Aircraft under the Lease, ILFC is
transferring to Lessee (i) all remaining rights of ILFC related to the Aircraft
under the Boeing Agreement[ and (ii) rights to purchase Spare Parts related to
the Aircraft from Boeing].[THIS PART OF THE SENTENCE SHOULD BE USED ONLY IF
LESSEE DOES NOT HAVE ITS OWN GTA]. To accomplish this transfer of rights, as
authorized by the provisions of the Boeing Agreement:
<PAGE>
Attachment B to
6-1162-JDR-270
Page 2
(1) Lessee acknowledges that it has received copies of the following
provisions of the Boeing Agreement applicable to the Aircraft and agrees to be
bound by and comply with all the terms, conditions, and limitations contained in
such provisions, including without limitation the disclaimer and release,
exclusion of liabilities, indemnity and insurance provisions thereof:
A. Boeing Agreement
(1) Article 6 - Excusable Delay
(a) 6.1 General
(2) Article 10 - Assignment, Resale or Lease
(a) 10.1 Assignment
(b) 10.3 Sale by Buyer after Delivery
(c) 10.4 Lease by Buyer after Delivery
(d) 10.5 No Increase in Boeing Liability
(e) 10.6 Exculpatory or Indemnity Clause in Post-delivery Sale or
Lease
(3) Article 12 - Product Assurance; Disclaimer and Release; Exclusion
of Liabilities; Customer Support; Indemnification and
Insurance (in its entirety)
(4) Article 14 - Contractual Notices and Requests
(5) Article 15 - Miscellaneous
(a) 15.4 Governing Law
B. Exhibit B - Product Assurance Document
(1) Part A Boeing Warranty
(2) Part B Warranty Repairs and Modifications by Buyer
(3) Part C Boeing Service Life Policy
(4) Part D Boeing Indemnity Against Patent Infringement
(5) Part D-1 Boeing Indemnity Against Copyright Infringement
(6) Part E Supplier Warranties and Patent Indemnities
(7) Part G Boeing Interface Commitment
(8) Part H General
C. Exhibit C - Customer Support Document
(1) Part B Boeing Customer Support Services
(2) Part D Technical Data and Documents
(3) Part E Buyer's Indemnification of Boeing and Insurance
<PAGE>
Attachment B to
6-1162-JDR-270
Page 3
(4) Part F Alleviation or Cessation of Performance
D. Exhibit E - Buyer Furnished Equipment Provisions Document
(1) Paragraph 8 Indemnification of Boeing
(2) Paragraph 9 Patent Indemnity
E. Letter Agreement No. 1916-3 - Seller Purchased Equipment
(1) Paragraph 6 Buyer's Indemnification of Boeing
(2) Lessee recognizes that Boeing's obligation to provide training,
support and services to Lessee pursuant to Exhibit C of the Boeing Agreement is
conditioned on the receipt by Boeing of evidence of compliance by Lessee with
the insurance requirements set forth in paragraph 2 of Part E of Exhibit C or in
such other form as may be satisfactory to Boeing, prior to the commencement of
such support and services.
[(3) Lessee confirms to Boeing that Lessee, which is not presently a
party to a /Spare Parts//Customer Services/ General Terms Agreement with Boeing,
agrees to be bound by all applicable terms, conditions and limitations of the
ILFC GTA including, without limitation, paragraphs 15.9 and 15.10 of Article 15,
Article 17 and paragraphs 9.8, 9.9 and 11 of Exhibit A, with respect to any
Spare Parts or Leased Parts ordered for the Aircraft. Lessee further agrees
that the payment provisions of the ILFC GTA will be applicable to Spare Parts or
Leased Parts ordered by Lessee for the Aircraft, provided however, the "net 30
days" payment provisions are subject to approval of Lessee's credit by Boeing
and, in addition, Boeing may establish a credit limit on Lessee's account;
and][THIS PARAGRAPH SHOULD BE USED ONLY IF LESSEE DOES NOT HAVE ITS OWN GTA]
/(3)//(4)/ ILFC reserves to itself all rights, claims and interests it
may have under the Boeing Agreement not expressly assigned to Lessee hereunder.
ILFC will remain responsible to Boeing for (i) any amounts with respect to the
Aircraft owed to Boeing under the Boeing Agreement prior to the effective date
of this letter, including any amounts owed by ILFC to Boeing under Articles and
paragraphs of the Boeing Agreement referenced in paragraph 1 above
<PAGE>
Attachment B to
6-1162-JDR-270
Page 4
based upon events or incidents relating to the Aircraft occurring prior to the
effective date of this letter and (ii) any amounts owed to Boeing for any Spare
Parts or Leased Parts for the Aircraft ordered by ILFC under the ILFC General
Terms Agreement prior to the effective date of this letter.
/(4)//(5)/ ILFC hereby assigns to Lessee the sole authority to
exercise all rights and powers of ILFC with respect to the Aircraft under the
Articles and paragraphs of the Boeing Agreement referenced in paragraph 1 above.
Such authorization will continue until Boeing receives from ILFC written notice
to the contrary addressed to Boeing's Vice President, Contracts, P.O. Box 3707,
Seattle, Washington 98124-2207. Until Boeing receives such notice Boeing will be
entitled to deal exclusively with Lessee with respect to the Aircraft, under the
Articles and paragraphs of the Boeing Agreement referenced in paragraph 1 above
and, with respect to the rights, powers, duties or obligations under such
articles and paragraphs of the Boeing Agreement, and all actions taken by Lessee
or agreements entered into by Lessee during the period prior to Boeing's receipt
of such notice, will be final and binding on ILFC.
/(5)//(6)/ Lessee hereby accepts the authorization set forth in
paragraph /(4)//(5)/ and agrees to be bound by and to comply with all the terms,
conditions and limitations of the Articles and paragraphs of the Boeing
Agreement referenced in paragraph 1 above.
/(6)//(7)/ This Assignment may be signed by the parties hereto in
separate counterparts, each of which when executed and delivered shall be an
original, but all such counterparts shall together constitute but one and the
same instrument.
/(7)//(8)/ This Assignment shall be governed by, and construed in
accordance with, the laws of the State of Washington, including all matters of
construction, validity and performance.
We request that Boeing, upon receipt of this letter, acknowledge receipt thereof
and the transfer of rights set forth above by signing the acknowledgment and
forwarding one copy of this letter to each of the undersigned.
<PAGE>
Attachment B to
6-1162-JDR-270
Page 5
IN WITNESS WHEREOF, the parties hereto have caused this Assignment Agreement to
be duly executed as of the dates written below.
# INTERNATIONAL LEASE
FINANCE CORPORATION
(Lessee) (Lessor)
By________________________ By_______________________
Its_______________________ Its______________________
Dated_____________________ Dated____________________
Boeing Acknowledgment and Consent to Assignment
-----------------------------------------------
Receipt of the above letter acknowledged and transfer of rights as set forth
therein with respect to the Aircraft is confirmed, effective as of this date.
THE BOEING COMPANY
By:
------------------------
Its: Attorney-in-Fact
-----------------------
Dated:
---------------------
<PAGE>
[LETTERHEAD OF BOEING COMMERCIAL AIRPLANE GROUP]
6-1162-JDR-271
International Lease Finance Corporation
1999 Avenue of the Stars, 39th Floor
Los Angeles, CA 90067
Subject: Letter Agreement No. 6-1162-JDR-271 to
Purchase Agreement No. 1916 -
* Operator Matters
Gentlemen:
This Letter Agreement amends Purchase Agreement No. 1916 (the Agreement) between
The Boeing Company (Boeing) and International Lease Finance Corporation (Buyer)
relating to Model 777 aircraft (the Aircraft).
All terms used herein and in the Agreement, and not defined herein, will have
the same meaning as in the Agreements.
The Aircraft, as defined in this Letter Agreement, include certain Model 777
aircraft which Buyer has the option to purchase per the provisions of Letter
Agreement 6-1162-JDR-275, dated as of even date herewith, to the Agreement.
1. *
* Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and
has been filed separately with the Securities and Exchange Commission.
<PAGE>
International Lease Finance Corporation
6-1162-JDR-271 Page 2
*
2. *
3. *
* Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and
has been filed separately with the Securities and Exchange Commission.
<PAGE>
International Lease Finance Corporation
6-1162-JDR-271 Page 3
*
4. *
5. Reports. Boeing agrees to provide periodic reports to Buyer of the
-------
status of *.
6. Confidentiality. Buyer understands that certain commercial and
---------------
financial information contained in this Letter Agreement are considered by
Boeing as confidential. Buyer agrees that it will treat this Letter Agreement
and the information contained herein as confidential and will not, without the
prior written consent of Boeing, disclose this Letter Agreement or any
information contained herein to any other person or entity, except as provided
in Letter Agreements 1916-1.
* Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and
has been filed separately with the Securities and Exchange Commission.
<PAGE>
International Lease Finance Corporation
6-1162-JDR-271 Page 4
Very truly yours,
THE BOEING COMPANY
By /s/ J.D. Robinson
-----------------------
Its Attorney-In-Fact
----------------------
ACCEPTED AND AGREED TO as of this
date: June 24, 1996
-------
INTERNATIONAL LEASE FINANCE CORPORATION
By /s/ Steven R. Adams
-----------------------
Its Steven R. Adams
----------------------
Vice President
<PAGE>
[LETTERHEAD OF BOEING COMMERCIAL AIRPLANE GROUP]
6-1162-JDR-272
International Lease Finance Corporation
1999 Avenue of the Stars, 39th Floor
Los Angeles, CA 90067
Subject: Letter Agreement No. 6-1162-JDR-272 to
Purchase Agreement No. 1916 -
Delivery Schedule Matters
Gentlemen:
This Letter Agreement amends Purchase Agreement No. 1916 (the Agreement) between
The Boeing Company (Boeing) and International Lease Finance Corporation (Buyer)
relating to Model 777 aircraft (the Aircraft).
All terms used herein and in the Agreement, and not defined herein, will have
the same meaning as in the Agreement.
1. *
2. *
* Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and
has been filed separately with the Securities and Exchange Commission.
<PAGE>
International Lease Finance Corporation
6-1162-JDR-272 Page 2
3. *
4. *
* Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and
has been filed separately with the Securities and Exchange Commission.
<PAGE>
International Lease Finance Corporation
6-1162-JDR-272 Page 3
5. Confidentiality.
---------------
Buyer understands that certain commercial and financial information
contained in this Letter Agreement are considered by Boeing as confidential.
Buyer agrees that it will treat this Letter Agreement and the information
contained herein as confidential and will not, without the prior written consent
of Boeing, disclose this Letter Agreement or any information contained herein to
any other person or entity, except as provided in Letter Agreement 1916-1.
Very truly yours,
THE BOEING COMPANY
By /s/ J.D. Robinson
------------------------
Its Attorney-In-Fact
-----------------------
ACCEPTED AND AGREED TO this 24th
----
day of June, 1996
----
INTERNATIONAL LEASE FINANCE
CORPORATION
By /s/ Steven R. Adams
------------------------
Its Steven R. Adams
-----------------------
Vice President
<PAGE>
[LETTERHEAD OF BOEING COMMERCIAL AIRPLANE GROUP]
6-1162-JDR-273
International Lease Finance Corporation
1999 Avenue of the Stars, 39th Floor
Los Angeles, California 90067
Subject: Letter Agreement No. 6-1162-JDR-273 to
Purchase Agreement No. 1916 -
* Matters
Gentlemen:
This Letter Agreement amends Purchase Agreement No. 1916 (the Agreement) between
The Boeing Company (Boeing) and International Lease Finance Corporation (Buyer)
relating to Model 777 aircraft (the Aircraft).
All terms used and not defined herein shall have the same meaning as in the
Agreements.
The Aircraft, as defined in this Letter Agreement, include certain Model 777
aircraft which Buyer has the option to purchase per the provisions of Letter
Agreement 6-1162-JDR-275, dated as of even date herewith, to the Agreement.
1. *
-------------------------------------------
*
* Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and
has been filed separately with the Securities and Exchange Commission.
<PAGE>
International Lease Finance Corporation
6-1162-JDR-273 Page 2
*
2. * .
----------------------------------
*
* Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and
has been filed separately with the Securities and Exchange Commission.
<PAGE>
International Lease Finance Corporation
6-1162-JDR-273 Page 3
3. *
-----------------------
*
(i) *
(ii) *
(iii) *
* Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and
has been filed separately with the Securities and Exchange Commission.
<PAGE>
International Lease Finance Corporation
6-1162-JDR-273 Page 4
*
4. * .
-----------------------
*
(i) *
(ii) *
* Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and
has been filed separately with the Securities and Exchange Commission.
<PAGE>
International Lease Finance Corporation
6-1162-JDR-273 Page 5
*
5. * .
------------------------
*
6. * .
----------------------------------
*
* Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and
has been filed separately with the Securities and Exchange Commission.
<PAGE>
International Lease Finance Corporation
6-1162-JDR-273 Page 6
*
7. * .
-------------------------------------------------------
*
* Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and
has been filed separately with the Securities and Exchange Commission.
<PAGE>
International Lease Finance Corporation
6-1162-JDR-273 Page 7
*
8. * .
--------------------------------------------------------
*
9. * .
-----------------------------------------
*
10. * .
-----------------------
*
* Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and
has been filed separately with the Securities and Exchange Commission.
<PAGE>
International Lease Finance Corporation
6-1162-JDR-273 Page 8
*
(i) *
(ii) *
*
11. Confidentiality.
---------------
Buyer understands that certain commercial and financial information
contained in this Letter Agreement are considered by Boeing as confidential.
Buyer agrees that it will treat this Letter Agreement and the information
contained herein as confidential and will not, without the prior written consent
of Boeing, disclose this Letter Agreement or any information contained herein to
any other person or entity, except as provided in Letter Agreements 1916-1.
Very truly yours,
THE BOEING COMPANY
By /s/ J.D. Robinson
----------------------
Its Attorney-In-Fact
-----------------------
ACCEPTED AND AGREED TO this 24th
----
day of June, 1996
----
INTERNATIONAL LEASE FINANCE
CORPORATION
By /s/ Steven R. Adams
-----------------------
Its Steven R. Adams
-----------------------
Vice President
* Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and
has been filed separately with the Securities and Exchange Commission.
<PAGE>
[LETTERHEAD OF BOEING COMMERCIAL AIRPLANE GROUP]
6-1162-JDR-274
International Lease Finance Corporation
1999 Avenue of the Stars, 39th Floor
Los Angeles, CA 90067
Subject: Letter Agreement No. 6-1162-JDR-274 to
Purchase Agreement No. 1916 -
Miscellaneous Matters
Gentlemen:
This Letter Agreement amends Purchase Agreement No. 1916 (the Agreement) between
The Boeing Company (Boeing) and International Lease Finance Corporation (Buyer)
relating to Model 777 aircraft (the Aircraft).
1. Training at a Facility Other Than Boeing's.
------------------------------------------
If Buyer's lessee requests training at a facility other than Boeing's as
contemplated in Exhibit C-1 or C-2, as applicable, to the Agreement, Boeing
agrees that, subject to terms and conditions mutually agreed upon during the
Flight Training Planning Conference, Buyer or Buyer's lessee may provide round
trip transportation for Boeing's employees and necessary materials for such
training as an alternative to reimbursement of Boeing for the cost of the
transportation.
2. Warranty Claim, Response and Payment Time.
-----------------------------------------
For purposes of Exhibit B to the Agreement, Boeing shall use its best
reasonable efforts to provide: (i) its disposition regarding each claim
submitted by Buyer within thirty (30) days after receipt of such claim and
required substantiating data; and (ii) for approved claims, its credit
memorandum, as applicable, within sixty (60) calendar days after receipt of
Buyer's claim and required substantiating data.
3. Warranty Labor Rate Determination.
---------------------------------
In the event Buyer contracts for warranty work with a third party, for
purposes of determining the "average direct hourly labor rate" per the
provisions of paragraph 5.3 of Part B of Exhibit B of the Agreement, *
* Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and
has been filed separately with the Securities and Exchange Commission.
<PAGE>
International Lease Finance Corporation
6-1162-JDR-274 Page 2
*
4. State and Local Income Taxes.
----------------------------
So long as the Aircraft is delivered to Buyer by Boeing in the state of
Washington, the definition of Taxes as set forth in Article 4.1 of the
Agreements is hereby amended to also except Washington State state and local
income taxes. Notwithstanding such condition, if an Aircraft is delivered
outside the state of Washington at Boeing's request, then Boeing will be
responsible for state and local income taxes.
5. Return of Advance Payments Due to * .
-------------------------------------------------------------
* , if either party exercises its rights to * , then Boeing will refund to
Buyer all advance payments paid by Buyer to Boeing with respect to the *
Aircraft *
6. Further Excusable Delay Matters.
-------------------------------
In the event of rescheduling of an Aircraft due to an Excusable Delay
pursuant to Article 6, for the purposes of applying the escalation provisions of
Exhibit D to determine the purchase price of such Aircraft, the previously
scheduled delivery month will be used. Buyer will pay advance payments for such
Aircraft based on its previously scheduled delivery month.
7. Return of Advance Payments Due to * .
--------------------------------------------------------------------
* , if the Agreement is terminated by Buyer because Boeing * , Boeing will
refund to Buyer all advance payments paid by Buyer to Boeing with respect to the
* Aircraft *
* Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and
has been filed separately with the Securities and Exchange Commission.
<PAGE>
International Lease Finance Corporation
6-1162-JDR-274 Page 3
*
8. Use of the Aircraft for Flight Test.
-----------------------------------
In the event Boeing requires the use of one or more of the Aircraft for
Boeing's certification flight test program, Boeing will notify Buyer of such
requirement and will offer Buyer reasonable compensation for such usage. Boeing
further agrees to address any conditions on such Aircraft related to such
testing and will assure a return to a deliverable configuration prior to
delivery.
9. Assembly and Installation Drawings.
----------------------------------
If requested by Buyer, Boeing will provide, * , assembly and installation
drawings in aperture card format for any Aircraft, including regular revisions
to such drawings, for as long as Buyer owns such Aircraft. Initial aperture
cards will be shipped subject to Boeing's normal reprint cycle, but not sooner
than 120 days after delivery of the affected Aircraft. As an alternative to
Buyer receiving such drawings in aperture format and in lieu of such aperture
cards, Boeing will provide access to such drawings in an on-line data retrieval
system. The on-line data retrieval system offering is contingent upon Buyer
executing a standard on-line data retrieval system subscription agreement.
10. Use of Aircraft for Boeing Purposes.
-----------------------------------
In the event Boeing requires an Aircraft prior to delivery for Boeing's
sole purpose, such as a marketing, sales or community use, Boeing will obtain
Buyer's consent to use such Aircraft. In addition, Boeing agrees to indemnify
Buyer per the provisions of Article 9.6 for any such flight.
In addition, notwithstanding the provisions of paragraph 7 of Exhibit E
related to Buyer's risk of loss for BFE, Boeing agrees to assume risk of loss
for such BFE during any flight, prior to delivery of an Aircraft, conducted by
Boeing where the Aircraft is in Boeing's care, custody and control and to the
extent that such flight is for Boeing's sole purpose as defined above and is not
a flight as described in paragraphs 9.3 and 9.5.1 of Article 9 of the Agreement.
* Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and
has been filed separately with the Securities and Exchange Commission.
<PAGE>
International Lease Finance Corporation
6-1162-JDR-274 Page 4
11. BFE Supplier Selection.
----------------------
Boeing and Buyer recognize that Buyer's late selection of BFE suppliers may
result in the impacts identified in Exhibit E to the Agreement.. Thus, Boeing
and Buyer agree to work together to minimize any such impacts.
12. Ongoing Process Improvements.
----------------------------
Boeing and Buyer have been holding continuing discussions related to
improving the processes Boeing utilizes in the engineering, production, delivery
and customer support of Boeing aircraft. Boeing acknowledges the importance to
Buyer and Boeing of improving such processes and agrees to continue such
discussions. *
13. FAA Issued Flying Time Wires.
----------------------------
Boeing and Buyer acknowledge that a circumstance may occur from time to
time where an Aircraft at time of delivery is (i) registered with the FAA (N-
registered), (ii) has been sold to Buyer from the Boeing subsidiary, the Boeing
Sales Corporation, (iii) must be exported from the United States immediately
after delivery for Boeing's convenience and (iv) cannot be exported until the
FAA office in Oklahoma City, Oklahoma issues a Flying Time Wire to the Buyer
that must be carried as a temporary certificate of registration on the Aircraft.
To expedite the issuance of such Flying Time Wire, Boeing agrees to work closely
with Buyer and Buyer's representative in Oklahoma City, Oklahoma to assure
within the constraints of the FAA process, that such Flying Time Wire is issued
as soon as possible after delivery of the Aircraft to Buyer. Furthermore, Boeing
and Buyer agree to work together to identify, in a timely manner, Aircraft which
require Flying Time Wires after delivery so that such requirement can be
factored into the delivery schedule development process.
* Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and
has been filed separately with the Securities and Exchange Commission.
<PAGE>
International Lease Finance Corporation
6-1162-JDR-274 Page 5
14. Confidentiality.
---------------
Buyer understands that certain commercial and financial information
contained in this Letter Agreement are considered by Boeing as confidential.
Buyer agrees that it will treat this Letter Agreement and the information
contained herein as confidential and will not, without the prior written consent
of Boeing, disclose this Letter Agreement or any information contained herein to
any other person or entity, except as provided in Letter Agreements 1916-1.
Very truly yours,
THE BOEING COMPANY
By /s/ J.D. Robinson
---------------------------
Its Attorney-In-Fact
--------------------------
ACCEPTED AND AGREED TO as of this
date: June 24, 1996
-------
INTERNATIONAL LEASE FINANCE CORPORATION
By /s/ Steven R. Adams
---------------------------
Its Steven R. Adams
--------------------------
Vice President
<PAGE>
[LETTERHEAD OF BOEING COMMERCIAL AIRPLANE GROUP]
6-1162-JDR-275
International Lease Finance Corporation
1999 Avenue of the Stars, 39th Floor
Los Angeles, CA 90067
Subject: Letter Agreement No. 6-1162-JDR-275 to
Purchase Agreement No. 1916 -
Option Aircraft
Gentlemen:
This Letter Agreement amends Purchase Agreement No. 1916 dated as of even date
herewith (the Agreement) between The Boeing Company (Boeing) and International
Lease Finance Corporation (Buyer) relating to Model 777 aircraft (Aircraft).
All terms used and not defined herein shall have the same meaning as in the
Purchase Agreement.
In consideration of the purchase by Buyer of the Aircraft, Boeing hereby agrees
to manufacture and sell two (2) additional Model 777-200 aircraft as described
in paragraph 1 of Attachment A hereto (Option Aircraft) to Buyer, subject to the
terms and conditions set forth below.
1. Delivery.
--------
The Option Aircraft will be delivered to Buyer during or before the
months set forth in the following schedule:
Month and Year Number of
of Delivery Option Aircraft
-------------- ---------------
* One (1)
* One (1)
2. Price.
-----
2.1 The advance payment base prices of the Option Aircraft set forth
below and in paragraph 2.1 of Attachment A represent the estimated delivery
prices of
* Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and
has been filed separately with the Securities and Exchange Commission.
<PAGE>
International Lease Finance Corporation
6-1162-JDR-275 Page 2
the Option Aircraft. The Option Aircraft pricing elements and associated pricing
terms and conditions are given in Attachment A.
2.2 The engine manufacturers have not established the price or
escalation provisions for Engines for delivery to Boeing for the Option
Aircraft. The current engine prices and escalation provisions have been used for
the purposes of this proposal. If such prices and provisions are established as
of the date of signing the definitive agreement for such Aircraft such prices
and provisions will be appropriately incorporated into the definitive agreement
and, if not, then the definitive agreement will be appropriately amended when
such information becomes available.
For additional information relating to price and escalation provisions
applicable to the Option Aircraft refer to paragraphs 2.2 and 3.2 of Attachment
A.
2.3 The advance payment base prices of the Option Aircraft indicated
below includes an estimate of * for unselected special features but do not
include any amount for items of Buyer Furnished Equipment (BFE). For Buyer's
planning purposes, an estimate of the price for Buyer Furnished Equipment is *
(expressed in * dollars).
Month and Year Advance Payment Base
of Delivery Price Per Option Aircraft
------------- -------------------------
General Electric GE90-85B Engines
---------------------------------
* *
* *
Pratt and Whitney PW4084 Engines
--------------------------------
* *
* *
Rolls-Royce RBTRENT884 Engines
------------------------------
* *
* *
2.4 The Option Aircraft purchase price shall be the applicable basic
price thereof at the time of Option Aircraft delivery adjusted in accordance
with
* Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and
has been filed separately with the Securities and Exchange Commission.
<PAGE>
International Lease Finance Corporation
6-1162-JDR-275 Page 3
Boeing's airframe escalation provisions and the engine manufacturer's
escalation provisions contained in the definitive agreement to purchase the
Option Aircraft. The purchase price will include the price for Seller Purchased
Equipment (SPE) if Buyer has elected to change Buyer Furnished Equipment (BFE)
to SPE.
3. Option Aircraft Payment.
-----------------------
3.1 In consideration of the granting of the option as set forth
herein, Buyer will pay a deposit to Boeing of * for each Option Aircraft
(Deposit). Such deposit will be made in two payments for each Option Aircraft;
the first payment of * to be made * ; and the second payment of * to be paid * .
In the event Buyer exercises its option herein, the amount of the Deposit will
be credited against the first advance payment due for such Option Aircraft
pursuant to the advance payment schedule set forth in paragraph 3 of Attachment
A. The Deposits for the Option Aircraft shall be refunded to Buyer, without
interest, if the parties do not enter into a definitive purchase agreement for
the Aircraft.
In the event that, after the parties enter into a definitive agreement to
purchase the Aircraft, Buyer does not exercise its option to purchase the Option
Aircraft pursuant to the terms and conditions set forth herein, Boeing shall be
entitled to retain the Deposits for the Option Aircraft except as provided in
paragraph 4.2 herein.
3.2 Advance payments in the amount of * of the advance payment base
price will be payable on the Option Aircraft in accordance with paragraph 3 of
Attachment A. The remainder of the Option Aircraft purchase price is due at the
time of delivery of the Option Aircraft.
4. Option Exercise.
---------------
4.1 To exercise its Option, Buyer shall give written or telegraphic
notice thereof to Boeing on or before * prior to the first day of the scheduled
delivery month of each Option Aircraft.
* Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and
has been filed separately with the Securities and Exchange Commission.
<PAGE>
International Lease Finance Corporation
6-1162-JDR-275 Page 4
In such notice Buyer shall select the Option Model type, engine type, and the
applicable delivery positions.
4.2 It is understood and agreed that Boeing may accelerate the option
exercise dates specified above if Boeing must make production decisions which
are dependent on Buyer's decision to buy the Option Aircraft. If Boeing elects
to accelerate the option exercise dates, Boeing shall do so by giving written or
telegraphic notice thereof to Buyer. Such notice shall specify the revised
option exercise dates, which shall not be earlier than thirty (30) days after
the date of transmittal of such notice, and the Option Aircraft delivery
positions affected by such revision. If Buyer fails to exercise its option for
any Option Aircraft affected by such revised dates, the Deposit applicable to
such Option Aircraft shall be promptly refunded to Buyer, *.
5. Contract Terms.
--------------
It is understood that Boeing and Buyer will use their best efforts to
amend the Agreement, within thirty (30) days after Buyer exercises an option to
purchase Option Aircraft pursuant to paragraph 4 to add the Option Aircraft to
the Agreement as an Aircraft, except that the provisions of paragraph 1.3 of
Letter Agreement 6-1162-JDR-267 will apply to such Option Aircraft.
In the event the parties have not entered into such an agreement within the time
period contemplated herein, either party shall have the right, exercisable by
written or telegraphic notice given to the other within ten (10) days after such
period, to cancel the purchase of such Option Aircraft.
6. Cancellation of Option to Purchase.
----------------------------------
Either Boeing or Buyer may cancel the option to purchase an Option
Aircraft if any of the following events are not accomplished by the respective
dates contemplated in this letter agreement, or in the Purchase Agreement, as
the case may be:
* Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and
has been filed separately with the Securities and Exchange Commission.
<PAGE>
International Lease Finance Corporation
6-1162-JDR-275 Page 5
(i) termination of the purchase of the Aircraft under the Purchase
Agreement for any reason, except exercise of Buyer's rights under Letter
Agreement 6-1162-JDR-269, paragraph 3 and Letter Agreement 6-1162-JDR-272,
paragraph 2;
(ii) payment by Buyer of the Deposit with respect to an Option Aircraft
pursuant to paragraph 3.1 herein; or
(iii) exercise of an option to purchase an Option Aircraft pursuant to
the terms hereof.
Any cancellation of an option to purchase by Boeing which is based on the
termination of the purchase of Aircraft under the Purchase Agreement shall be on
a one-for-one basis, for each Aircraft so terminated.
Cancellation of an option to purchase provided by this letter agreement shall be
caused by either party giving written notice to the other within ten (10) days
after the respective date in question. Upon receipt of such notice, all rights
and obligations of the parties with respect to an Option Aircraft for which the
option to purchase has been cancelled shall thereupon terminate.
If cancellation is because of the revision of an option exercise date by Boeing
pursuant to paragraph 4.2, Boeing will promptly refund to Buyer, without
interest, any payments received from Buyer, including the Deposit, with respect
to the Option Aircraft for which the option is cancelled. If cancellation is
for any other reason, Boeing shall promptly refund to Buyer, without interest,
any payments received from Buyer with respect to the affected Option Aircraft,
except the Deposit, which Boeing shall retain.
7. Confidentiality.
---------------
Buyer understands that certain commercial and financial information
contained in this Letter Agreement are considered by Boeing as confidential.
Buyer agrees that it will treat this Letter Agreement and the information
contained herein as confidential and will not, without the prior written consent
of
<PAGE>
International Lease Finance Corporation
6-1162-JDR-275 Page 6
Boeing, disclose this Letter Agreement or any information contained herein to
any other person or entity, except as provided in Letter Agreement 1916-1.
Very truly yours,
THE BOEING COMPANY
By /s/ J.D. Robinson
- ---------------------------
Its ATTORNEY IN FACT
-----------------------
ACCEPTED AND AGREED TO this
Date: June 24, 1996
--------
INTERNATIONAL LEASE FINANCE CORPORATION
By /s/ Steven R. Adams
------------------------
Its Steven R. Adams
------------------------
Vice President
Attachment
<PAGE>
Attachment A to
6-1162-JDR-275
Page 1
Model 777-200IGW Aircraft
- -------------------------
1. Option Aircraft Description and Changes.
---------------------------------------
1.1 Aircraft Description - General Electric Engines.
-----------------------------------------------
The Option Aircraft is described by Boeing Configuration
Specification D019W004, Revision A, dated February 29, 1996 (excluding Optional
Features defined within the Configuration Specification), which includes a
Takeoff Gross Weight of 580,000 pounds, as revised to include:
(1) The following special features:
(a) Three-Class Passenger Interior With 7-Abreast Business
Class and 9-Abreast Economy Class Seating (305
passengers) -
(Change Request 0130CG7207).
(b) GE Aircraft Engines (GEAE) -
GE90-85B Engines (Change Request 7200CG7012).
1.2 Aircraft Description - Pratt and Whitney Engines.
------------------------------------------------
The Option Aircraft is described by Boeing Configuration
Specification D019W004, Revision A, dated February 29, 1996 (excluding Optional
Features defined within the Configuration Specification), which includes a
Takeoff Gross Weight of 580,000 pounds, as revised to include:
(1) The following special features:
(a) Three-Class Passenger Interior With 7-Abreast Business
Class and 9-Abreast Economy Class Seating (305
passengers) -
(Change Request 0130CG7207).
(b) Pratt and Whitney -
PW4084 Engines (Change Request 7200CG7010).
<PAGE>
Attachment A to
6-1162-JDR-275
Page 2
1.3 Aircraft Description - Rolls-Royce Engines.
------------------------------------------
The Option Aircraft is described by Boeing Configuration Specification
D019W004, Revision A, dated February 29, 1996 (excluding Optional Features
defined within the Configuration Specification), which includes a Takeoff Gross
Weight of 580,000 pounds, as revised to include:
(1) The following special features:
(a) Three-Class Passenger Interior With 7-Abreast Business
Class and 9-Abreast Economy Class Seating (305
passengers) -
(Change Request 0130CG7207).
(b) Rolls Royce - RB211-TRENT-884
Engines (Change Request 7200CG7015).
1.4 Changes. The Option Aircraft Configuration Specification will be
-------
further revised to include:
(1) Changes applicable to the basic Model 777-200IGW aircraft which are
developed by Boeing between the date of the Configuration Specification and the
signing of the definitive agreement.
(2) Changes mutually agreed upon.
(3) Changes required to obtain an Export Certificate of
Airworthiness or a Standard Airworthiness Certificate, as the case may be.
<PAGE>
Attachment A to
6-1162-JDR-275
Page 3
2. Price Description.
-----------------
2.1 Option Aircraft Price Details.
-----------------------------
<TABLE>
<CAPTION>
Base Estimated
Quantity Airframe Engine Estimated Estimated
Month/Year of Price Price Aircraft Basic Price Advance Payment
of Delivery Aircraft (*) (*) (*) Base Price
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
If GE Engines:
- -----------------
* One (1) * * * *
* One (1) * * * *
If PW Engines:
- -----------------
* One (1) * * * *
* One (1) * * * *
If RR Engines:
- -----------------
* One (1) * * * *
* One (1) * * * *
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
* Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and
has been filed separately with the Securities and Exchange Commission.
<PAGE>
Attachment A to
6-1162-JDR-275
Page 4
2. Price Description. (Continued)
-----------------
2.2 Special Features. The Aircraft Basic Price for the Option Aircraft
----------------
will be adjusted as required to reflect Special Features selected by Buyer for
the Option Aircraft.
2.3 Price Adjustments.
-----------------
2.3.1 The Advance Payment Base Price of each Option Aircraft will be
adjusted at the time of signing the definitive agreement and thereafter as
appropriate to reflect changes made in the elements of such prices.
2.3.2 The Aircraft Basic Price of the Option Aircraft will be
subject to adjustment in accordance with the provisions of Article 8 of the
Agreement.
2.3.3 The engine manufacturers have not established the price or
escalation provisions for Engines for delivery to Boeing for the Option
Aircraft. The current engine prices and escalation provisions have been used
for the purposes of this proposal. If such prices and provisions are
established as of the date of signing the definitive agreement for such Aircraft
such prices and provisions will be appropriately incorporated into the
definitive agreement and, if not, then the definitive agreement will be
appropriately amended when such information becomes available.
2.4 Foreign Regulatory Requirements. The Aircraft Price does not include
-------------------------------
any amount relating to changes to the Option Aircraft required in order to
export such Option Aircraft to a country outside the United States.
Accordingly, Buyer will pay Boeing's price for any addition to, or change,
modification or testing of any Option Aircraft (in this paragraph individually
or collectively called "change") required by such country of import, which
varies from or is in addition to the airworthiness requirements of the FAA for
the issuance of a Standard Airworthiness Certificate. The Detail Specification
for the Option Aircraft will be amended to reflect such change. Buyer will pay
Boeing's price to obtain validation of the Option Aircraft for export to such
country of import, including amounts for data, studies and testing required by
any governmental agency of such country of import, and any associated charges by
such agency. If delivery of the Option Aircraft is delayed by the incorporation
in the Option Aircraft or validation of such changes the definitive
<PAGE>
Attachment A to
6-1162-JDR-275
Page 5
purchase agreement will be appropriately revised to reflect such delay.
3. Advance Payment Schedules, Prices and Adjustments.
-------------------------------------------------
3.1 Buyer will pay advance payments for each Option Aircraft on the dates
and in the amounts determined below.
<TABLE>
<CAPTION>
Amount Due per Option Aircraft
------------------------------
(Percentage times Advance
Due Date of Payment Payment Base Price)
- -------------------
<S> <C>
* *
----- -----
Total *
</TABLE>
Any advance payments that would be past due as of the date of signing the
definitive purchase agreement for the Option
* Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and
has been filed separately with the Securities and Exchange Commission.
<PAGE>
Attachment A to
6-1162-JDR-275
Page 6
Aircraft in accordance with the above schedule are due and payable on such date.
3.2 The Advance Payment Base Price of each Option Aircraft has been
established using currently available forecasts of the escalation factors used
by Boeing and applicable to the scheduled month and year of Option Aircraft
delivery. Such Advance Payment Base Prices will be reestablished at the time of
signing of the definitive purchase agreement for the Option Aircraft, using the
then-current forecasted escalation factors used by Boeing.
3.3 With respect to Option Aircraft contracted for delivery more than 36
months from the date of the definitive purchase agreement for the Option
Aircraft, the Advance Payment Base Prices will be further revised not later than
25 months prior to the scheduled month of delivery, as required to reflect the
effects of (i) any adjustments in the Option Aircraft Basic Prices of such
Option Aircraft, as determined in accordance with the provisions of the
definitive purchase agreement, and (ii) the then-current forecasted escalation
factors used by Boeing.
3.4 For Option Aircraft for which the Advance Payment Base Prices are
adjusted pursuant to this paragraph, Buyer will: (i) *; and (ii) use such
adjusted Advance Payment Base Price in determining the amount of remaining
advance payments due Boeing for such Option Aircraft.
* Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and
has been filed separately with the Securities and Exchange Commission.
<PAGE>
[LETTERHEAD OF BOEING COMMERCIAL AIRPLANE GROUP]
6-1162-JDR-276
International Lease Finance Corporation
1999 Avenue of the Stars, 39th Floor
Los Angeles, CA 90067
Subject: Letter Agreement No. 6-1162-JDR-276 to
Purchase Agreement No. 1916 -
Assignment of Rights, * and
* Matters
Gentlemen:
This Letter Agreement amends Purchase Agreement No. 1916 (the Agreement) between
The Boeing Company (Boeing) and International Lease Finance Corporation (Buyer)
relating to Model 777 aircraft (the Aircraft).
All terms used herein and in the Agreement, and not defined herein, will have
the same meaning as in the Agreement.
Boeing acknowledges the nature of Buyer's business as a lessor of aircraft to
commercial airlines and that Buyer is not an aircraft operator. In consideration
of the relationship between Boeing and Buyer and the purchase of the Aircraft,
Boeing and Buyer agree as follows:
1. Assignment of Rights in Post-Delivery Sale or Lease.
---------------------------------------------------
* Boeing's consent to any such assignment shall be conclusive evidence
that Buyer has satisfied its obligations *.
* Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and
has been filed separately with the Securities and Exchange Commission.
<PAGE>
International Lease Finance Corporation
6-1162-JDR-276 Page 2
2. Future Changes.
--------------
If, prior to delivery of the last Aircraft, Boeing substantially changes
the pro forma language of * the Agreement, *. If Buyer accepts Boeing's offer
to incorporate the revised language, then the Agreement will be amended, as
appropriate, to incorporate the revised provisions.
3. Confidentiality.
---------------
Buyer understands that certain commercial and financial information
contained in this Letter Agreement are considered by Boeing as confidential.
Buyer agrees that it will treat this Letter Agreement and the information
contained herein as confidential and will not, without the prior written consent
of Boeing, disclose this Letter Agreement or any information contained herein to
any other person or entity, except as provided in Letter Agreement 1916-1.
Very truly yours,
THE BOEING COMPANY
By /s/ J.D. Robinson
-----------------------
Its Attorney-In-Fact
-----------------------
ACCEPTED AND AGREED TO this 24th
----
day of June, 1996
----
INTERNATIONAL LEASE FINANCE
CORPORATION
By /s/ Steven R. Adams
-----------------------
Its Steven R. Adams
----------------------
Vice President
ATTACHMENTS
* Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and
has been filed separately with the Securities and Exchange Commission.
<PAGE>
Attachment A to
Letter Agreement
No. 6-1162-JDR-276 Page 1
ASSIGNMENT OF RIGHTS AND OBLIGATIONS
------------------------------------
(Post-Delivery Sale of an Aircraft)
-----------------------------------
Vice President - Aircraft Contracts
The Boeing Company
P.O. Box 3707
Seattle, Washington 98124
Subject: Notice of Sale - International Lease Finance
Corporation, as Seller and ___________________, as
Buyer of one 777 Aircraft, Serial No. _______
In connection with International Lease Finance Corporation's sale to
_______________________ ("Buyer") of a Boeing aircraft (more fully described
below), reference is made to the following documents:
1. Purchase Agreement No. 1916 dated as of _________, 19__ between The Boeing
Company ("Boeing") and International Lease Finance Corporation ("ILFC")
(the "Boeing Agreement") under which ILFC purchased a certain Boeing Model
777 aircraft bearing Manufacturer's Serial No. _______ (the "Aircraft").
2. Aircraft Sale Agreement (the "Sale Agreement") for the Aircraft dated as of
__________, 19__, between ILFC and Buyer.
Capitalized terms used herein without definition will have the same meaning as
in the Boeing Agreement.
In connection with ILFC's sale of the Aircraft under the Sale Agreement, ILFC is
transferring to Buyer (i) all remaining rights, if any, of ILFC related to the
Aircraft under the Boeing Agreement. To accomplish this transfer of rights, as
authorized by the provisions of the Boeing Agreement:
(1) Buyer acknowledges that it has received copies of the following
provisions of the Boeing Agreement applicable to the Aircraft and agrees to be
bound by and comply with all the terms, conditions, and limitations contained in
such provisions, including without limitation the disclaimer and release,
exclusion of liabilities, indemnity and insurance provisions thereof:
<PAGE>
Attachment A to
Letter Agreement
No. 6-1162-JDR-276 Page 2
A. Boeing Agreement
(1) Article 6 - Excusable Delay
(a) 6.1 General
(2) Article 10 - Assignment, Resale or Lease
(a) 10.1 Assignment
(b) 10.3 Sale by Buyer after Delivery
(c) 10.4 Lease by Buyer after Delivery
(d) 10.5 No Increase in Boeing Liability
(e) 10.6 Exculpatory or Indemnity Clause in
Post-delivery Sale or Lease
(3) Article 12 - Product Assurance; Disclaimer and
Release; Exclusion of Liabilities;
Customer Support; Indemnification
and Insurance (in its entirety)
(4) Article 14 - Contractual Notices and Requests
(5) Article 15 - Miscellaneous
(a) 15.4 Governing Law
B. Exhibit B - Product Assurance Document
(1) Part A Boeing Warranty
(2) Part B Warranty Repairs and Modifications by
Buyer
(3) Part C Boeing Service Life Policy
(4) Part D Boeing Indemnity Against Patent
Infringement
(5) Part D-1 Boeing Indemnity Against Copyright
Infringement
(6) Part E Supplier Warranties and Patent
Indemnities
(7) Part G Boeing Interface Commitment
(8) Part H General
C. Exhibit C-1/C-2 - Customer Support Document
(1) Part B Boeing Customer Support Services
(2) Part D Technical Data and Documents
(3) Part E Buyer's Indemnification of Boeing and
Insurance
(4) Part F Alleviation or Cessation of Performance
D. Exhibit E - Buyer Furnished Equipment Provisions
Document
(1) Paragraph 8 Indemnification of Boeing
(2) Paragraph 9 Patent Indemnity
E. Letter Agreement No. 1916-3 - Seller Purchased
Equipment
(1) Paragraph 6 Buyer's Indemnification of Boeing
<PAGE>
Attachment A to
Letter Agreement
No. 6-1162-JDR-276 Page 3
(2) *
(3) *
(4) *
We request that Boeing, upon receipt of this letter, acknowledge receipt thereof
and the transfer of rights set forth above by signing the acknowledgment and
forwarding one copy of this letter to each of the undersigned.
Very truly yours,
___________________________ INTERNATIONAL LEASE
________________ (Buyer) FINANCE CORPORATION (Seller)
By:______________________ By:________________________
Its:_____________________ Its:_______________________
Dated:___________________ Dated:_____________________
* Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and
has been filed separately with the Securities and Exchange Commission.
<PAGE>
Attachment A to
Letter Agreement
No. 6-1162-JDR-276 Page 4
Boeing Acknowledgment and Consent to Assignment
-----------------------------------------------
Receipt of the above letter acknowledged and transfer of rights as set forth
therein with respect to the Aircraft is confirmed, effective as of this date.
THE BOEING COMPANY
By:
---------------------------
Its: Attorney-in-Fact
--------------------------
Dated:
------------------------
<PAGE>
Attachment B to
Letter Agreement
No. 6-1162-JDR-276 Page 1
ASSIGNMENT OF RIGHTS AND OBLIGATIONS
------------------------------------
(Post-Delivery Lease of an Aircraft)
------------------------------------
Vice President - Aircraft Contracts
Boeing Commercial Airplane Group
P.O. Box 3707
Seattle, Washington 98124
Subject: Assignment of Rights and Obligations - International Lease Finance
Corporation, as Lessor and ___________________, as
Lessee of Model 777 Aircraft, Serial No. _______
In connection with International Lease Finance Corporation's lease to
_______________________ ("Lessee") of a Boeing aircraft (more fully described
below), reference is made to the following documents:
1. Purchase Agreement No. 1916 dated as of _________, 19__ between The Boeing
Company ("Boeing") and International Lease Finance Corporation ("ILFC")
(the "Boeing Agreement") under which ILFC purchased a certain Boeing Model
777 aircraft bearing Manufacturer's Serial No. _______ (the "Aircraft").
2. Aircraft Lease Agreement (the "Lease") for the Aircraft dated as of
__________, 19__, between ILFC and Lessee.
[3. Spare Parts General Terms Agreement No. 8Q dated as of May 20, 1977, as
amended and supplemented, between Boeing and ILFC (the "ILFC GTA").][THIS
REFERENCE SHOULD BE USED ONLY IF LESSEE DOES NOT HAVE ITS OWN GTA]
Capitalized terms used herein without definition will have the same meaning as
in the Boeing Agreement.
In connection with ILFC's lease of the Aircraft under the Lease, ILFC is
transferring to Lessee (i) all remaining rights of ILFC related to the Aircraft
under the Boeing Agreement [and (ii) rights to purchase Spare Parts related to
the Aircraft from Boeing].[THIS PART OF THE SENTENCE SHOULD BE USED ONLY IF
LESSEE DOES NOT HAVE ITS OWN GTA]. To accomplish this transfer of rights, as
authorized by the provisions of the Boeing Agreement:
(1) Lessee acknowledges that it has received copies of the following
provisions of the Boeing Agreement
<PAGE>
Attachment B to
Letter Agreement
No. 6-1162-JDR-276 Page 2
applicable to the Aircraft and agrees to be bound by and comply with all the
terms, conditions, and limitations contained in such provisions, including
without limitation the disclaimer and release, exclusion of liabilities,
indemnity and insurance provisions thereof:
A. Boeing Agreement
(1) Article 6 - Excusable Delay
(a) 6.1 General
(2) Article 10 - Assignment, Resale or Lease
(a) 10.1 Assignment
(b) 10.3 Sale by Buyer after Delivery
(c) 10.4 Lease by Buyer after Delivery
(d) 10.5 No Increase in Boeing Liability
(e) 10.6 Exculpatory or Indemnity Clause in
Post-delivery Sale or Lease
(3) Article 12 - Product Assurance; Disclaimer and
Release; Exclusion of Liabilities;
Customer Support; Indemnification
and Insurance (in its entirety)
(4) Article 14 - Contractual Notices and Requests
(5) Article 15 - Miscellaneous
(a) 15.4 Governing Law
B. Exhibit B - Product Assurance Document
(1) Part A Boeing Warranty
(2) Part B Warranty Repairs and Modifications by
Buyer
(3) Part C Boeing Service Life Policy
(4) Part D Boeing Indemnity Against Patent
Infringement
(5) Part D-1 Boeing Indemnity Against Copyright
Infringement
(6) Part E Supplier Warranties and Patent
Indemnities
(7) Part G Boeing Interface Commitment
(8) Part H General
C. Exhibit C - Customer Support Document
(1) Part B Boeing Customer Support Services
(2) Part D Technical Data and Documents
(3) Part E Buyer's Indemnification of Boeing and
Insurance
(4) Part F Alleviation or Cessation of Performance
D. Exhibit E - Buyer Furnished Equipment Provisions
Document
(1) Paragraph 8 Indemnification of Boeing
(2) Paragraph 9 Patent Indemnity
<PAGE>
Attachment B to
Letter Agreement
No. 6-1162-JDR-276 Page 3
E. Letter Agreement No. 1916-3 - Seller Purchased
Equipment
(1) Paragraph 6 Buyer's Indemnification of Boeing
(2) Lessee recognizes that Boeing's obligation to provide training,
support and services to Lessee pursuant to Exhibit C of the Boeing Agreement is
conditioned on the receipt by Boeing of evidence of compliance by Lessee with
the insurance requirements set forth in paragraph 2 of Part E of Exhibit C or in
such other form as may be satisfactory to Boeing, prior to the commencement of
such support and services.
[(3) Lessee confirms to Boeing that Lessee, which is not presently a
party to a /Spare Parts//Customer Services/ General Terms Agreement with Boeing,
agrees to be bound by all applicable terms, conditions and limitations of the
ILFC GTA including, without limitation, paragraphs 15.9 and 15.10 of Article 15,
Article 17 and paragraphs 9.8, 9.9 and 11 of Exhibit A, with respect to any
Spare Parts or Leased Parts ordered for the Aircraft. Lessee further agrees that
the payment provisions of the ILFC GTA will be applicable to Spare Parts or
Leased Parts ordered by Lessee for the Aircraft, provided however, the "net 30
days" payment provisions are subject to approval of Lessee's credit by Boeing
and, in addition, Boeing may establish a credit limit on Lessee's account;
and][THIS PARAGRAPH SHOULD BE USED ONLY IF LESSEE DOES NOT HAVE ITS OWN GTA]
/(3)//(4)/ *
/(4)//(5)/ *
* Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and
has been filed separately with the Securities and Exchange Commission.
<PAGE>
Attachment B to
Letter Agreement
No. 6-1162-JDR-276 Page 4
*
/(5)//(6)/ Lessee hereby accepts the authorization set forth in
paragraph /(4)//(5)/ and agrees to be bound by and to comply with all the terms,
conditions and limitations of the Articles and paragraphs of the Boeing
Agreement referenced in paragraph 1 above.
/(6)//(7)/ This Assignment may be signed by the parties hereto in
separate counterparts, each of which when executed and delivered shall be an
original, but all such counterparts shall together constitute but one and the
same instrument.
/(7)//(8)/ This Assignment shall be governed by, and construed in
accordance with, the laws of the State of Washington, including all matters of
construction, validity and performance.
We request that Boeing, upon receipt of this letter, acknowledge receipt thereof
and the transfer of rights set forth above by signing the acknowledgment and
forwarding one copy of this letter to each of the undersigned.
Very truly yours,
___________________________ INTERNATIONAL LEASE
________________ (Lessee) FINANCE CORPORATION (Lessor)
By:______________________ By:________________________
Its:_____________________ Its:_______________________
Dated:___________________ Dated:_____________________
* Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and
has been filed separately with the Securities and Exchange Commission.
<PAGE>
Attachment B to
Letter Agreement
No. 6-1162-JDR-276 Page 5
Boeing Acknowledgment and Consent to Assignment
-----------------------------------------------
Receipt of the above letter acknowledged and transfer of rights as set forth
therein with respect to the Aircraft is confirmed, effective as of this date.
THE BOEING COMPANY
By:
---------------------------
Its: Attorney-in-Fact
---------------------------
Dated:
------------------------
<PAGE>
EXHIBIT 12
INTERNATIONAL LEASE FINANCE CORPORATION AND SUBSIDIARIES
COMPUTATION OF RATIOS OF EARNINGS FOR THE SIX MONTHS ENDED JUNE 30, 1996
AND 1995
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
1996 1995
---------- ----------
(Unaudited)
<S> <C> <C>
Earnings:
Net Income...................................... $121,499 $101,091
Add:
Provision for income taxes.................. 71,683 63,351
Fixed charges............................... 317,589 281,113
Less:
Capitalized interest........................ 24,643 27,286
-------- --------
Earnings as adjusted (A)...................... $486,128 $418,269
======== ========
Preferred dividend requirements................. $ 8,480 $ 6,581
Ratio of income before provision
for income taxes to net income.............. 159% 163%
-------- --------
Preferred dividend factor on pretax
basis....................................... 13,483 10,727
-------- --------
Fixed Charges:
Interest expense.............................. 280,551 253,827
Capitalized interest.......................... 24,643 27,286
Interest factor of rents...................... 12,395 -
-------- --------
Fixed charges as adjusted (B)................. 317,589 281,113
-------- --------
Fixed charges and preferred stock
dividends (C)............................... $331,072 $291,840
======== ========
Ratio of earnings to fixed charges
(A) divided by (B).......................... 1.53x 1.49x
===== =====
Ratio of earnings to fixed charges
and preferred stock dividends
(A) divided by (C).......................... 1.47x 1.43x
===== =====
</TABLE>
-15-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS INCLUDED IN THE REGISTRANT'S QUARTERLY REPORT ON FORM 10Q
FOR THE QUARTER ENDED JUNE 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 33,513
<SECURITIES> 0
<RECEIVABLES> 536,633
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 13,442,095
<DEPRECIATION> 1,384,891
<TOTAL-ASSETS> 13,871,697
<CURRENT-LIABILITIES> 0
<BONDS> 9,129,786
0
400,000
<COMMON> 3,582
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 13,871,697
<SALES> 693,870
<TOTAL-REVENUES> 786,828
<CGS> 0
<TOTAL-COSTS> 313,095
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 280,551
<INCOME-PRETAX> 193,182
<INCOME-TAX> 71,683
<INCOME-CONTINUING> 121,499
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 121,499
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
