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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended January 31, 1997
--------------------------------------------
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 0-22760
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AIRPORT SYSTEMS INTERNATIONAL, INC.
-----------------------------------
(Exact name of small business issuer as specified in its charter)
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Kansas 48-1099142
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(State or other jurisdiction of incorporation (I.R.S. Employer Identification No.)
or organization)
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11300 West 89th Street
Overland Park, Kansas 66214
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(address of principal executive offices)
(913)492-0861
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(Issuer's telephone number)
Indicate by check mark whether the registrant (1) filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the previous 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 ( )
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date:
Common stock, $0.01 par value - 2,230,500 shares outstanding as of March 7, 1997
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AIRPORT SYSTEMS INTERNATIONAL, INC. AND SUBSIDIARY
FORM 10-QSB
QUARTER ENDED JANUARY 31, 1997
INDEX
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Page
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PART I - FINANCIAL INFORMATION
ITEM I - CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Condensed Consolidated Balance Sheets 3
Condensed Consolidated Statements of Operations 4
Condensed Consolidated Statements of Cash Flows 5
Notes to Condensed Consolidated Financial Statements 6
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF
OPERATIONS 7
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings 10
Item 6 - Exhibits and Reports on Form 8-K 10
SIGNATURE PAGE 11
EXHIBIT INDEX 12
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Part I. - Financial Information
ITEM I. Financial Statements
AIRPORT SYSTEMS INTERNATIONAL, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
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JANUARY 31, APRIL 30,
1997 1996
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(In thousands)
(Unaudited) (Note)
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ASSETS
Current assets:
Cash & cash equivalents $ 489 $ 621
Accounts receivable, net 5,523 4,722
Inventories, net 4,365 3,686
Other current assets 131 490
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Total current assets 10,508 9,519
Property and equipment, at cost 2,958 3,030
Accumulated depreciation and amortization 1,238 1,136
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1,720 1,894
Cost in excess of net assets acquired, net 1,282 1,337
Other assets 60 128
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Total assets $ 13,571 $ 12,878
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,054 $ 1,279
Accrued expenses 2,151 1,267
Current portion of long-term debt 17 16
Other current liabilities 105 165
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Total current liabilities 3,327 2,727
Long-term debt, less current portion 1,208 1,221
Stockholders' equity:
Common stock 22 22
Additional paid-in capital 7,293 7,286
Retained earnings 1,721 1,622
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Total stockholders' equity 9,036 8,930
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Total liabilities and stockholders' equity $ 13,571 $ 12,878
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NOTE: The balance sheet at April 30, 1996 has been derived from the audited
financial statements at that date but does not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements.
See notes to condensed consolidated financial statements.
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AIRPORT SYSTEMS INTERNATIONAL, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
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Three Months Ended Nine Months Ended
January 31, January 31,
-------- -------- -------- --------
1997 1996 1997 1996
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(In thousands, except per share data)
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Sales $3,636 $3,676 $12,805 $9,661
Cost of products sold 2,584 2,626 8,930 6,953
------ ------ ------- ------
Gross margin 1,052 1,050 3,875 2,708
Selling, general and administrative expenses 854 914 2,922 2,591
Research and development expenses 265 245 712 806
------ ------ ------- ------
Operating income (loss) (67) (109) 241 (689)
Other income (expense):
Interest expense (26) (33) (77) (103)
Litigation settlement (83) (-) (83) (-)
Other, net 22 23 76 86
------ ------ ------- ------
Income (loss) before income taxes (154) (119) 157 (706)
Provision (benefit) for income taxes (56) (45) 58 (265)
------ ------ ------- ------
Net income (loss) $ (98) $ (74) $ 99 $ (441)
====== ====== ======= ======
Income (loss) per share:
Primary $(0.04) $(0.03) $ 0.04 $(0.20)
====== ====== ======= ======
Fully diluted $(0.04) $(0.03) $ 0.04 $(0.20)
====== ====== ======= ======
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See notes to condensed consolidated financial statements.
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AIRPORT SYSTEMS INTERNATIONAL, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
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NINE MONTHS ENDED
JANUARY 31,
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1997 1996
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(In thousands)
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OPERATING ACTIVITIES:
Net income (loss) $ 99 $ (441)
Adjustments to reconcile net income (loss) to net cash
used in operating activities:
Depreciation and amortization 364 375
Loss on sale of equipment 3 3
Changes in operating assets and liabilities:
Restricted cash (133)
Accounts receivable, net (801) 296
Inventories, net (679) (474)
Accounts payable (225) 190
Accrued expenses 884 (905)
Other, net 332 (254)
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Net cash used in operating activities (26) (1,343)
INVESTING ACTIVITIES:
Purchase of short-term investments (997) (492)
Liquidation of short-term investments 997 1,939
Proceeds from sale of property and equipment 15 --
Purchases of property and equipment (114) (132)
Additions to other assets --
Net cash provided by (used in) investing activities (99) 1,315
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FINANCING ACTIVITIES:
Principal payments on notes payable to banks (1,005) --
Borrowing on notes payable to banks 1,005 --
Payments on long-term debt and capital lease
obligations (17) (9)
Borrowing on long-term debt and capital lease
obligations --
Proceeds from exercise of stock options 7 --
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Net cash used in financing activities (10) (9)
Net decrease in cash and cash equivalents (132) (37)
Cash and cash equivalents at beginning of period 621 556
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Cash and cash equivalents at end of period $ 489 $ 519
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SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for:
Interest $ 79 $ 103
======= =======
Income taxes $ 49 $ 66
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AIRPORT SYSTEMS INTERNATIONAL, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
JANUARY 31, 1997
1. Basis of presentation
The accompanying unaudited condensed consolidated financial statements of
Airport Systems International, Inc. (the Company) include the accounts of the
Company and its wholly owned subsidiary, ASII International, Inc., a foreign
sales corporation incorporated in Barbados. All intercompany balances and
transactions have been eliminated. The condensed consolidated financial
statements have been prepared in accordance with generally accepted accounting
principles for interim financial information and with the instructions to Form
10-QSB. 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 of
normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three months and nine months ended
January 31, 1997, are not necessarily indicative of the results that may be
expected for the year ended April 30, 1997. For further information, refer to
the consolidated financial statements and footnotes included in the Airport
Systems International Inc. and Subsidiary annual report on Form 10-KSB for the
year ended April 30, 1996.
2. Notes Payable to Banks
During September, 1996, the Company amended its line of credit to provide for
maximum borrowings of $4,000,000, at an interest rate of prime (8.25% at
January 31, 1997), secured by accounts receivable, inventory, and equipment.
The agreement matures in September, 1997. There were no borrowings outstanding
at January 31, 1997.
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The discussions set forth in this Form 10-QSB may contain forward-looking
comments based on current expectations that involve a number of risks and
uncertainties. Actual results could differ materially from those projected or
suggested in the forward-looking comments. The difference could be caused by a
number of factors, including, but not limited to the factors and conditions
which are described under the headings "Results of Operations," and "Backlog,"
the timely completion of financing for the Indonesia project through the
Export/Import Bank of the United States, and competitive and pricing pressures
related to all contracts. Further information on the factors that could affect
the Company's financial results are included in the Company's other SEC
filings, including the Form 10-QSB for the quarters ended July 31, 1996 and
October 31, 1996, and the Form 10-KSB for the year ended April 30, 1996. The
reader is cautioned that the Company does not have a policy of updating or
revising forward-looking statements and thus he or she should not assume that
silence by management of the Company over time means that actual events are
bearing out as estimated in such forward-looking statements.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Sales for the third quarter of fiscal 1997 were $3.6 million compared to $3.7
million for the third quarter of fiscal 1996. Sales for the first nine months
of fiscal 1997 increased 32.5%, to $12.8 million from $9.7 million for the same
period in fiscal 1996. The increase in sales for the nine months is due to an
increase in units shipped as a result of a higher beginning backlog and
increased bookings compared to the same period of fiscal 1996.
Gross margin remained unchanged in the third quarter of fiscal 1997 compared to
the third quarter of fiscal 1996. Gross margin for the first nine months of
fiscal 1997 increased to $3.9 million (or 30.3% of sales) compared to $2.7
million (or 28.0% of sales) for the first nine months of fiscal 1996. Gross
margin as a percent of sales increased during both periods compared to the
comparative periods in fiscal 1996 due to the delivery of higher gross margin
products and services as well as reduced manufacturing costs. In addition, the
Company's mix of international sales increased from 65% of total sales in the
fiscal 1996 nine month period to 88% of total sales in the fiscal 1997 nine
month period. As international sales have historically generated a higher
gross margin, this change in mix also contributed to the increase in the gross
margin. The Company expects gross margins to continue to fluctuate due to the
timing and mix of contract awards and delivery of product and services.
Selling, general, and administrative expenses decreased during the third
quarter to $854,000 (23.5% of sales) from $914,000 (24.9% of sales) in the
third quarter of fiscal 1996. The decrease in dollar terms reflects reduced
marketing travel expense as compared to the same period of the prior year. For
the first nine months of fiscal 1997, selling, general, and administrative
expenses increased to $2.9 million (22.8% of sales) from $2.6 million (26.8% of
sales) in the same period
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of fiscal 1996. The increased dollar amount is principally due to increased
marketing and selling costs resulting from the growth in sales, backlog, and
international marketing opportunities. The decrease as a percent of sales is
primarily due to economies of scale associated with higher sales as certain
costs are fixed in nature.
Research and development expenses increased during the third quarter to
$265,000 from $245,000 in the third quarter of fiscal 1996. The increase
reflects increased expenses related to the GPS navaids product site
installation and flight tests as well as the initiation of research and
development programs designed to enhance the current product line. In the
first nine months, research and development expenses decreased to $712,000 from
$806,000 for the first nine months of fiscal 1996. The decrease is a result of
decreased labor associated with the current integration and testing stage of
the Company's GPS navaids product during the first six months, partially offset
by the increased activity in the third quarter. In the comparative period of
fiscal 1996, the Company was primarily involved in the more labor intensive
initial design stage of the project which resulted in higher levels of research
and development expenses.
Interest expense decreased $7,000 for the third quarter and $26,000 for the
first nine months compared to the respective periods in the prior year due to a
decrease in the average debt obligations outstanding compared to the prior year
period. During the quarter ended January 31, 1997, the Company settled a
lawsuit with a former sales representative resulting in a non-recurring charge
of $83,000 relating to this litigation settlement.
The Company's estimated provision (benefit) for income taxes amounted to
(36.4%) and 36.9% for the third quarter and first nine months, respectively,
resulting from the generation of pretax losses for the third quarter of fiscal
1997, but pretax income for the first nine months of fiscal 1997. In the
prior year comparative periods, the Company recorded an effective income tax
benefit of approximately 38% due to the Company's loss position.
The net loss for the third quarter was $98,000, compared with a fiscal 1996
third quarter net loss of $74,000. For the first nine months, net income was
$99,000, compared with a net loss of $441,000 for the first nine months of
fiscal 1996. The increase in net income is primarily due to increased sales and
gross margin, as previously mentioned.
BACKLOG
The Company's backlog was $7.4 million at January 31, 1997, compared to $6.5
million at January 31, 1996, and $6.5 million at April 30, 1996. Approximately
59% of the backlog at January 31, 1997, was represented by three contracts.
The contracts call for providing navaid equipment to Taiwan (15% of backlog),
Canada (14% of backlog) and the Federal Aviation Administration (30% of
backlog). The Company expects to ship approximately $2.4 million of the total
backlog through the end of the fiscal year.
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The increase in backlog, as compared to April 30, 1996, is the result of
approximately $5.3 million in contract awards during the third quarter. These
contracts represented a mix of sales to new and existing customers in the
United States, Canada, the Middle East and the Pacific Rim. During the quarter,
the Company announced the signing of a $17.7 million contract with the Republic
of Indonesia. Upon financing approval from the Export/Import Bank of the
United States, the contract will be recorded in backlog. While the Company is
confident it can obtain approval of the financing over the next several months,
a delay could effect results during the Company's fourth quarter of fiscal
1997. Other bids remained active at quarter end, but the Company is unable to
determine when or if the related contracts will be awarded. The Company
expects backlog and bidding activities as well as contract awards to continue
to fluctuate due to the size and timing of contract programs.
LIQUIDITY AND CAPITAL RESOURCES
Net cash of $26,000 was used by operations for the first nine months of fiscal
1997 compared to $1,343,000 used in the first nine months of fiscal 1996. The
decrease was the result of higher net income compared to the same period in
fiscal 1996 and cash provided by increased customer deposits reflected as
accrued expenses offset by increases in accounts receivable and inventory. The
increase in accounts receivable and inventory represents the granting of longer
credit terms on certain contracts and a build-up of inventories for upcoming
contracts, respectively.
Cash used in investing activities was $99,000 for the first nine months of
fiscal 1997 compared to cash provided of $1,315,000 in the first nine months of
fiscal 1996. The decrease in cash provided is primarily the result of the
liquidation of short-term investments in the prior year period of $1,939,000.
Cash used in financing activities was $10,000 in the first nine months of
fiscal 1997 compared to cash used of $9,000 in the first nine months of fiscal
1996 as a result of the normal paydown of the Company's debt obligations.
The Company expects that it will meet its ongoing requirements for working
capital and capital expenditures from a combination of cash expected to be
generated from operations, existing cash and cash equivalents, and available
borrowings under its existing revolving credit facility.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings
On February 22, 1995, the Company was named in a suit filed in
the District Court of Johnson County, Kansas Civil Department
by Jaju Kakarlapudi, d/b/a Communications International, a
former representative claiming payment of a 15% commission due
on sales made by the Company to the Country of India. This
lawsuit was settled during the quarter-ended January 31, 1997.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
Exhibit 10 - Contract with the Government of the
Republic of Indonesia dated November 7, 1996
(portions omitted pursuant to request for
confidential treatment).
Exhibit 11.1 - Computation of Earnings Per Share
Exhibit 27 - Financial Data Schedule (SEC Use Only)
(b) Reports on Form 8-K:
Form 8-K dated November 7, 1996
(I) Other Events
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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.
AIRPORT SYSTEMS INTERNATIONAL, INC. AND SUBSIDIARY
March 14, 1997 /s/ THOMAS C. CARGIN
- -------------- -----------------------------------------------------------
Date Thomas C. Cargin, Vice President of Finance and
Administration, Secretary, and Principal Accounting Officer
Page 11
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EXHIBIT INDEX
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Number Description Page
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10.0 Contract with the Government of the Republic of Indonesia
dated November 7, 1996 13 - 106
11.1 Computation of Earnings Per Share, filed herewith. 107
27 Financial Data Schedule (for SEC use only)
99.1 Press release issued November 7, 1996, announcing signing *
of a contract with the Government of Indonesia, attached as
Item 5 of the Company's Form 8K, filed November 15, 1996
with the Securities and Exchange Commission, is incorporated
herein by reference.
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EXHIBIT 10.0
DEPARTMENT OF COMMUNICATIONS REPUBLIC OF INDONESIA
DIRECTORATE GENERAL OF AIR COMMUNICATIONS
----------------
CONTRACT
----------------
NUMBER: LN.95/XI/1996
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BETWEEN
- --------------------------------------------------------------------------------
THE GOVERNMENT OF THE REPUBLIC OF INDONESIA
AND
AIRPORT SYSTEMS INTERNATIONAL,INC
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FOR
- --------------------------------------------------------------------------------
PROCUREMENT, INSTALLATION AND UPGRADING
OF DVOR/DME AT 22 LOCATIONS
(FAT-59 PROJECT)
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INDEX
ARTICLE
1. DEFINITIONS
2. SCOPE OF CONTRACT
3. CONTRACT PRICE
4. PERFORMANCE BOND
5. PAYMENTS
6. DELIVERY OF THE EQUIPMENT AND TRANSFER OF TITLE
7. FORCE MAJEURE
8. FACTORY ACCEPTANCE TESTING
9. TRAINING
10. SITE ACCEPTANCE TESTING, FLIGHT COMMISSIONING TEST, AND FINAL
ACCEPTANCE AND HANDING OVER
11. AMENDMENT
12. NOTICES
13. LANGUAGE
14. WARRANTY AND GUARANTY
15. PRESERVATION, PACKAGING AND MARKING
16. TRANSPORTATION
17. TARIFFS, DUTIES, AND TAXES
18. SETTLEMENT OF DISPUTE
19. PATENT AND DATA RIGHTS
20. LIQUIDATED DAMAGES
21. SUSPENSIONS
22. TERMINATION
23. LIABILITY OF SELLER
24. INSTALLATION AND COMMISSIONING
25. DOCUMENTATION AND REPORTING
26. INSURANCE
27. APPLICABLE LAW
28. EXPORT CONTROL REGULATIONS
29. SUB-ANNEXES
30. COMING INTO FORCE
31. LOCAL CONTENT
32. ENTIRE AGREEMENT
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ANNEXES: (BOOK 2 AND BOOK 3)
LIST OF ANNEXES
I Power of Attorney
II Representative in Indonesia Documents
III Bill of Quantity, Schedules and Breaking Down of Spares
IV Technical Requirements and Scope of Works
V Description of Equipment and Services (ANNEXES)
VI Seller Equipment Technical Specifications
VII Training Program
VIII Factory Acceptance Test
IX Site Acceptance Test
X Flight Commissioning Test Procedure
XI Documentation
XII Project Reporting
XIII Factory Acceptance Test Certificate
XIV Site Acceptance Test Certificate
XV Flight Commissioning Test Certificate
XVI Delivery Time Schedule
XVII List of Sites
XVIII Buyer Certification of Site Readiness
XIX Certificate of Final Acceptance and Handing Over of Equipment
XX Price Summary
XXI Performance Bond
XXII Advance Payment Bond
XXIII Certificate of Training Completion
XXIV Instrument Flight Procedures
XXV Warranty Claim Form
XXVI Statement of Technical Support and After Sales Service
XXVII Statement of Commitment to Use Indonesian Freight Forwarder and
Insurance
XXVIII List of Equipment Frequencies
XXIX Statement of Manpower Insurance
XXX List of Local Content
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CONTRACT NO. LN.95/XI/1996
FOR PROCUREMENT,INSTALLATION AND UPGRADING OF DVOR/DME AT 22 LOCATIONS (FAT-59
PROJECT)
This CONTRACT is made and concluded this Thursday of November 7, 1996 by and
between:
THE GOVERNMENT OF THE REPUBLIC OF INDONESIA, acting by and through its MINISTER
OF COMMUNICATIONS, for this purpose represented by,
Ir. WIDJAJA LAGHA
Project Manager of Telecommunication, Navigation and Electricity Facilities,
Directorate General of Air Communications, having its office at Jalan Angkasa I
Number 2, Jakarta 10620 Indonesia, duly authorized by virtue of the Minister of
Communication Decree Number SK.13/KU.403/Phb-96, dated February 15, 1996, party
of the First part, and
AIRPORT SYSTEMS INTERNATIONAL, INC., a company organized and established under
the laws of the State of Kansas in the United States of America, having its
office at 11300 West 89th Street, Overland Park, Kansas, for this purpose
represented by,
MICHAEL WARNER
Vice President Business Development, duly authorized to sign the CONTRACT by
virtue of the power of attorney issued in his name dated March 27, 1996
legalized by the Embassy of the Republic of Indonesia in Washington DC, USA,
Number 9607401-3, dated April 9, 1996 as attached in ANNEX I, party of the
Second part, assisted by:
PT. ELEKTRINDO NUSANTARA, having its office at Gedung Elektrindo, 11th Floor,
Jalan, Kuningan Barat No. 8, Jakarta 12710, Indonesia, previously located at
Bimantara Building Jalan Kebon Sirih No. 17-19 Jakarta Pusat, for this purpose
represented by,
HARRY KUNTORO
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President Director, acting as the Sole Agent of the SELLER as defined in the
Registration Paper as a Sole Agent of Foreign-Produced Materials No.
3281/STP-LN/BSP-5/X/1995, dated October 9, 1995, issued by the Ministry of
Trade of Republic of Indonesia as attached in ANNEX II.
WITNESSETH THAT :
WHEREAS, the BUYER desires to procure the Installation and Upgrading of Doppler
Very High Frequency Omni Range/Distance Measuring Equipment (DVOR/DME) for 22
locations of airports, at Kibon Point/Ketapang, Binaka/Pulau Nias, Padang
Kemiling/Bengkulu, Lasem Point/Lasem, Nabire/Nabire, Eltari/Kupang,
Iskandar/Pangkalan Bun, Mohammad Salahuddin/Bima, Iswahyudi/Madiun,
Jalaluddin/Gorontalo, PLP TC/Curug, Juwata/Tarakan, Sentani/Jayapura,
Jefman/Sorong, Pangkal Pinang/Pangkal Pinang, Buluh Tumbang/Tanjung Pandan,
Bandar Lampung/Tanjung Karang, Budiarto/Curug, Abdurahman Saleh/Malang,
Mutiara/Palu, Wolter Mongonsidi/Kendari, Maintenance Center and Repair Center
Balai Elektronika/Jakarta (hereinafter referred to as the FAT-59 PROJECT), and
WHEREAS, the SELLER is in the business of designing, manufacturing, installing
and selling of Navigation Aids Equipment (DVOR/DME) and was the winner of the
public tender for the FAT-59 PROJECT.
NOW THEREFORE, in consideration of the mutual covenants and agreements herein
contained, the BUYER and the SELLER (hereinafter referred to collectively as
the PARTIES) hereby agree as follows:
ARTICLE 1 - DEFINITIONS
Unless modified by future Amendment, the following terms and expressions shall,
when used in this CONTRACT, have the meanings as described herein:
1.1. CONTRACT means:
This CONTRACT between the BUYER and the SELLER including all ANNEXes attached
and it's Amendments, if any.
1.2. LOAN AGREEMENT means:
The Agreement to be entered between the Republic of Indonesia acting by and
through the Ministry of Finance for part of the financing required to purchase
United States source
2
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equipment and other eligible items as determined by the Export-Import Bank of
the United States which constitutes the subject mater of this CONTRACT.
1.3. WORK means:
EQUIPMENT and SERVICES to be delivered under this CONTRACT for the following
Airports for 22 locations as follows: Kibon Point/Ketapang, Binaka/Pulau Nias,
Padang Kemiling/Bengkulu, Lasem Point/Lasem, Nabire/Nabire, Eltari/Kupang,
Iskandar/Pangkalan Bun, Mohammad Salahuddin/Bima, Iswahyudi/Madiun,
Jalaluddin/Gorontalo, PLP TC/Curug, Juwata/Tarakan, Sentani/Jayapura,
Jefman/Sorong, Pangkal Pinang/Pangkal Pinang, Buluh Tumbang/Tanjung Pandan,
Bandar Lampung/Tanjung Karang, Budiarto/Curug, Abdurahman Saleh/Malang,
Mutiara/Palu, Wolter Mongonsidi/Kendari, Maintenance and Repair Center Balai
Elektronika/Jakarta.
1.4. EQUIPMENT means:
The Navigation Aids Equipment (DVOR/DME) and Spare Parts to be supplied by
SELLER under this CONTRACT as attached in ANNEXes III, IV, V and VI of this
CONTRACT. The above mentioned EQUIPMENT has to be delivered unused (brand new).
1.5. SERVICES means:
The management, factory inspection, testing, flight commissioning, training and
flight procedures for the EQUIPMENT as attached in ANNEXes III, IV, V, VII,
VIII, IX, X, XI and XII of this CONTRACT.
1.6. INSTALLATION means:
The assembly, mounting, setting-up, erection, tuning, and making ready of the
EQUIPMENT, power supply, lighting and grounding system for site acceptance and
commissioning flight check as attached in ANNEXes IV and V.
1.7. CIVIL WORKS means:
The construction and/or renovation of buildings, access roads and fencing, land
filling, cutting of trees, renovation of counterpoise, and other construction
works relating to concrete, brick and earthwork check as attached in ANNEXes IV
and V.
1.8. INSPECTION ENGINEER(S) means:
3
<PAGE> 7
BUYER'S representative(s) who are authorized by BUYER to act on his behalf to
inspect and report the progress of the WORK; perform pre-installation site
surveys; witness factory tests, site acceptance and flight commissioning tests;
and sign the necessary certification for the WORK according to the provisions
of this CONTRACT.
1.9. FACTORY ACCEPTANCE TEST means:
The tests to be carried out at the manufacturing location of the equipment to
ensure that it will meet the technical specifications agreed upon as specified
in this CONTRACT and certified by the SELLER with the form as attached in ANNEX
XIII.
1.10. SITE ACCEPTANCE TEST means:
The test to be carried out at each site location to insure that the delivered
equipment will meet the technical specifications agreed upon as specified in
this CONTRACT and certified by the SELLER with the form as attached in ANNEX
XIV.
1.11. FLIGHT COMMISSIONING TEST means:
The tests to be carried out at each site location prior to final acceptance and
handing over of the EQUIPMENT to the BUYER. These test utilize flight check
aircraft measurements to verify the proper operation of the equipment.
Successful completion of Flight Commissioning Test confirms that the site
complies with the specification as agreed upon in this CONTRACT as certified by
the SELLER as attached in ANNEX XV.
1.12. S.G.S. means:
SOCIETY GENERALE DE SURVEILLANCE S.A. as surveyor appointed by the Government
of Indonesia in accordance with Indonesian Presidential Instruction no. 3/1991.
1.12.1. SURVEYOR's INSPECTION REPORT means: The clean report of finding,
issued by S.G.S.
1.13. DELIVERY TIME SCHEDULE means:
The period of performance as attached in ANNEX XVI for completing the WORKS as
defined in this CONTRACT.
1.14. COST INSURANCE AND FREIGHT (CIF) means: CIF terms defined in the
International Rules for the Interpretation of Trade Terms (INCOTERMS 1990 and
subsequent edition).
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1.15. USD and Rp means:
United States Dollar (USD), the legal currency of the United States of America,
and Rupiah (Rp), the legal currency of the Republic of Indonesia, respectively.
1.16. BUYER'S EQUIPMENT means:
Existing Navigation Aids Equipment (DVORDME), structures or loose material as
attached in ANNEXes III and IV at the sites which are BUYER'S property which
are to be incorporated into the WORK.
1.17. BUYER CERTIFICATION OF SITE READINESS means:
The BUYER'S written and fully executed certification in the form as attached in
ANNEX XVIII that BUYER'S EQUIPMENT and other items related to BUYER'S property
which are to be incorporated into the WORK, are available to the SELLER in
proper working order and in the types, the quantities and the locations as
attached in ANNEXes III, IV and VII.
1.18. TOOLS means:
CONTRACT specific TOOLS as attached in ANNEXes III and V provided for the
proper installation and putting into service of the EQUIPMENT.
These TOOLS will be the property of the BUYER and can be used by SELLER until
the fulfillment of the SELLER's contractual obligations. After this time they
will be handed over to the BUYER.
1.19. TEST EQUIPMENT means:
CONTRACT specific TEST EQUIPMENT as attached in ANNEXes III and V provided for
the proper installation, putting into service and maintenance of the EQUIPMENT.
This TEST EQUIPMENT will be the property of the BUYER and can be used by SELLER
until the fulfillment of the SELLER's contractual obligations. After this time
they will be handed over to the BUYER.
1.20. CERTIFICATE OF FINAL ACCEPTANCE AND HANDING OVER OF EQUIPMENT means:
The fully executed certification of the BUYER and SELLER as attached in ANNEX
XIX that all WORK related to an individual site has been completed by the
SELLER, and that the site
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is finally accepted and the EQUIPMENT is handed over to the BUYER, according to
the provisions agreed upon in this CONTRACT.
1.21. BUYER means:
The Government of the Republic of Indonesia acting for this purpose through its
Minister of Communications represented by,
Ir. WIDJAJA LAGHA
in Jakarta, its successors and permitted assigns.
1.22. SELLER means:
Airport Systems International, Inc., it's offices located at 11300 west 89th
Street, Overland Park, Kansas U.S.A. for this purpose represented by,
MICHAEL WARNER
its successors and permitted assigns.
1.23. PHYSICAL PRICE means:
The total EQUIPMENT and SERVICES PRICE excluding VAT 10% mentioned in ARTICLE
3.
1.24. FREE ON BOARD (FOB) means:
FOB terms defined in the International Rules for the Interpretation of Trade
Terms (INCOTERMS 1990 and subsequent editions).
1.25. PORT OF ENTRY means:
TANJUNG PRIOK, JAKARTA, INDONESIA.
1.26. SITE means:
The locations of the EQUIPMENT to be installed as defined by ANNEX XVII.
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1.27. CONTRACT PRICE means:
The total EQUIPMENT and SERVICES PRICE including VAT 10% (ten percent)
mentioned in ARTICLE 3.
ARTICLE 2 - SCOPE OF CONTRACT
The BUYER undertakes to buy and to receive from the SELLER, and the SELLER
undertakes to sell and to deliver to the BUYER, in accordance with the terms
and conditions of this CONTRACT as follows:
2.1 The EQUIPMENT, consisting of:
Navigational Aids Equipment (DVOR/DME), including TOOLS, TEST EQUIPMENT and
spare parts as attached in ANNEX XX, items IA and IB and further defined in
ARTICLE 1.4.
2.2 The INSTALLATION consisting of:
INSTALLATION, replacement and upgrading activity as attached in ANNEX XX, item
II and further defined in ARTICLE 1.6.
2.3 The CIVIL WORKS consisting of:
The CIVIL WORKS listed as attached in ANNEX XX, item III and further defined in
ARTICLE 1.7.
2.4 The SERVICES consisting of:
Other SERVICES to be performed by SELLER as attached in ANNEX XX, item IV and
further defined in ARTICLE 1.5.
ARTICLE 3 - CONTRACT PRICE
3.1 The CONTRACT PRICE for the WORKS including CIF to BUYER's SITES is:
CONTRACT PRICE: USD [Subject to Request For Confidential Treatment] including
VAT 10% (ten percent).
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PHYSICAL PRICE: USD 17,689,184 consists of:
- - Foreign Portion: USD [Subject to Request For Confidential Treatment]
(includes Local Content of USD [Subject to Request For Confidential
Treatment]
- - Local Portion: Rp. [Subject to Request For Confidential Treatment]
(equals USD [Subject to Request For Confidential Treatment]
VAT 10% (ten percent) consists of:
- - VAT Foreign Portion (not collected):
USD [Subject to Request For Confidential Treatment]
- - VAT for the Local Portion (collected):
Rp [Subject to Request For Confidential Treatment] (equals USD
[Subject to Request For Confidential Treatment]
3.2 VAT 10% (ten percent) for the Foreign Portion shall be borne by the
Government of the Republic of Indonesia, and VAT 10% (ten percent) for the
Local Portion shall be paid by the Government of the Republic of Indonesia.
3.3 The PHYSICAL PRICE as follows:
(a) The total price for the EQUIPMENT is fixed and firm amounting to USD
[Subject to Request For Confidential Treatment] as attached in ANNEX XX, No. IA
and IB consisting of:
(1) The total FOB price of the EQUIPMENT and SPARES is USD [Subject to
Request For Confidential Treatment] consisting of:
- - Foreign Portion: USD [Subject to Request For Confidential Treatment]
- - Local Portion: USD [Subject to Request For Confidential Treatment]
(2) The total freight, insurance, forwarding and handling price for the
EQUIPMENT from the factory to PORT OF ENTRY is USD [Subject to Request For
Confidential Treatment].
(3) The total local freight, insurance forwarding, handling and storage
price from PORT OF ENTRY to the SITE is USD [Subject to Request For
Confidential Treatment].
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(4) In the event that actual cost of freight and insurance is less than
the stated price as set forth in item (2) and (3) above, the excess funds are
to be used to supply extra spare parts or equipment to be selected by the BUYER.
(b) The total price of INSTALLATION is fixed and firm amounting to USD
[Subject to Request For Confidential Treatment] as attached in ANNEX XX No. II
consisting of:
- - Foreign Portion: USD [Subject to Request For Confidential Treatment]
- - Local Portion: USD [Subject to Request For Confidential Treatment]
(c) The total price of CIVIL WORKS is fixed and firm amounting to USD
[Subject to Request For Confidential Treatment] as attached in ANNEX XX, No.
III consisting of:
- - Foreign Portion: USD [Subject to Request For Confidential Treatment]
- - Local Portion: USD [Subject to Request For Confidential Treatment]
(d) The total price of SERVICES is fixed and firm amounting to USD
[Subject to Request For Confidential Treatment] as attached in ANNEX XX No. IV,
consisting of:
- - Foreign Portion: USD [Subject to Request For Confidential Treatment]
- - Local Portion: USD [Subject to Request For Confidential Treatment]
3.4 All prices stated herein are exclusive of any taxes, duties, levies as
may be levied by the Government or local authorities of the Republic of
Indonesia and shall insofar as any such taxes, duties or levies would become
payable under or in connection with this CONTRACT be for the BUYER'S account,
except that the stamp duty and personal income tax which may be imposed on the
income of personnel of SELLER who perform the WORK and any other personal taxes
incurred by those SELLER personnel shall be borne by the SELLER in accordance
with the prevailing rules.
Any bank charges, taxes, levies and or duties levied outside the Republic of
Indonesia shall be for the SELLER's account.
ARTICLE 4 - PERFORMANCE BOND
The SELLER shall submit to the BUYER before the signing of the CONTRACT a
Performance Bond issued by a first class United States Bank and counter -
guaranteed by a
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first class Indonesian Bank in substance and form as attached in ANNEX XXI to
execute as surety from the SELLER.
The Performance Bond shall be constituted by a Bank Bond of [Subject to Request
For Confidential Treatment] of the PHYSICAL PRICE as stated in ARTICLE 3.1
amounting to USD [Subject to Request For Confidential Treatment].
The Performance Bond shall then be valid for [Subject to Request For
Confidential Treatment] up to the end of the warranty period according to the
DELIVERY TIME SCHEDULE, as attached in ANNEX XVI.
ARTICLE 5 - PAYMENTS
Payment of the PHYSICAL PRICE as specified in ARTICLE 3 shall be made in
accordance with the terms of the LOAN AGREEMENT in USD by the BUYER to the
SELLER and be effected by a means of a wire transfer in the amount the down
payment totaling USD [Subject to Request For Confidential Treatment] and
drawing(s) against an irrevocable Letter of Credit to be opened by Bank of
Indonesia approved by the Export Import Bank of the United States and confirmed
by a United States Bank in the amount of USD [Subject to Request For
Confidential Treatment] and shall be valid for the period of in accordance with
the LOAN AGREEMENT.
5.1 Term of Payment
Under this CONTRACT payment shall be effected with regard to ARTICLE 5.4 of
this CONTRACT as follows:
5.1.1 That [Subject to Request For Confidential Treatment] of the Total
PHYSICAL PRICE per ARTICLE 3.1 being USD [Subject to Request For Confidential
Treatment] as advance payment to be paid by wire transfer as described under
ARTICLE 5 herein, within 30 (thirty) days after Coming into Force of this
CONTRACT against presentation of the following documents:
(a) Simple receipt of the SELLER'S Commercial Invoice in the amount of the
down payment issued and signed by the SELLER.
(b) One original of an Advance Payment Guarantee of value equal to the
Advance Payment in ARTICLE 5.1.1 above, issued by an Indonesian Government
Bank, stating that amount of the guarantee shall be reduced as EQUIPMENT is
delivered or SERVICES are rendered confirmed by the SELLER. The Form of Bank
Guarantee shall be as shown in ANNEX XXII of this CONTRACT.
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Payments shall be made to the SELLER's bank and account which is as follows:
Bank IV Kansas N.A.
ABA No: 101100045
Account No.: 3322 00008673
5.1.2 The remaining [Subject to Request For Confidential Treatment] of the
PHYSICAL PRICE per ARTICLE 3.1 being USD [Subject to Request For Confidential
Treatment] will be paid by drawing(s) on a Letter of Credit described under
ARTICLE 5 above, as follows:
(a) [Subject to Request For Confidential Treatment] of the EQUIPMENT and
SPARES being USD [Subject to Request For Confidential Treatment] as attached in
ANNEX XX No. IA and IB to be paid upon delivery on a site-by-site basis against
presentation of the documents mentioned under ARTICLE 16.4 to advising Letter
of Credit bank. Said EQUIPMENT is defined, on a site-by-site basis, in the
Schedule(s) as attached in ANNEX III.
(b) [Subject to Request For Confidential Treatment] of the INSTALLATION
being USD [Subject to Request For Confidential Treatment] as attached in ANNEX
XX No. II, and CIVIL WORKS, being USD [Subject to Request For Confidential
Treatment] as attached in ANNEX XX No. III, which is further defined for each
particular site in the Schedule(s) as attached in ANNEX III, to be paid on a
site-by-site basis upon presentation of the certificate in the form of which is
attached as ANNEX XIV.
(c) [Subject to Request For Confidential Treatment] of the SERVICES being
USD [Subject to Request For Confidential Treatment] as attached in ANNEX XX
no. IV to be paid as follows:
(1) [Subject to Request For Confidential Treatment] of DVOR, DME, RCMS and
Radio Link, Factory Training as attached in ANNEX XX No. IV.1 totaling USD
[Subject to Request For Confidential Treatment], a part thereof to be paid upon
completion of each separate class and upon presentation of completion
certificate(s) the form of which is shown in ANNEX XXIII. The total paid for
Factory Training shall not exceed the amount specified in this paragraph.
(2) [Subject to Request For Confidential Treatment] of FACTORY ACCEPTANCE
TEST and SITE ACCEPTANCE TEST as attached in ANNEX XX No. IV.2 totaling USD
[Subject to Request For Confidential Treatment] to be paid as follows:
(i) [Subject to Request For Confidential Treatment] of FACTORY ACCEPTANCE
TEST totaling USD [Subject to Request For Confidential Treatment] shall be paid
according
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to Schedule 22 Item 2 of ANNEX III, upon presentation of acceptance
certificate(s) the form of which is attached in ANNEX XIII.
(ii) [Subject to Request For Confidential Treatment] of SITE ACCEPTANCE
TEST totaling USD [Subject to Request For Confidential Treatment] shall be paid
on a site by site basis, which is further defined for each particular site in
the Schedule(s) as attached in ANNEX III, upon presentation of the certificate
the form of which is attached in ANNEX XIV.
(3) [Subject to Request For Confidential Treatment] of FLIGHT
COMMISSIONING totaling USD [Subject to Request For Confidential Treatment] to
be paid on a site-by-site basis, which is further defined for each particular
site in Schedules 1-21 as attached in ANNEX III, upon presentation of the
certificate the form of which is as attached in ANNEX XV.
(4) [Subject to Request For Confidential Treatment] of Instrument Flight
Procedure and Earth Coordinate Measurement as attached in Schedules 1-10 of
ANNEX III totaling USD [Subject to Request For Confidential Treatment] to be
paid on a site-by-site basis upon presentation and acceptance of the documents
by the BUYER the format of which shall be similar as attached in ANNEX XXIV.
(5) [Subject to Request For Confidential Treatment] of Program Management
as attached in Schedule 22 of ANNEX III totaling USD [Subject to Request For
Confidential Treatment] to be paid monthly in [Subject to Request For
Confidential Treatment], upon presentation of the SELLER'S commercial invoice
beginning 14 (fourteen) days after the CONTRACT has come into force.
(6) [Subject to Request For Confidential Treatment] of Local Training, as
attached in Schedule 22 of ANNEX III totaling USD [Subject to Request For
Confidential Treatment] to be paid upon presentation of completion
certificate(s) the form of which is as attached in ANNEX XXIII.
(7) [Subject to Request For Confidential Treatment] of On the Job Training
(OJT), Ground Technical Assistance Flight Calibration totaling USD [Subject to
Request For Confidential Treatment] to be paid on a site-by-site basis as
attached in Schedules 1-21 and 23, ANNEX III, upon presentation of the
certificates the form of which is as attached in ANNEXes XV, XIX, and XXIII.
5.2 Payment Procedure
According to the above mentioned terms of payment and financing the Credit
Facility shall be utilized in the following way, which effects the transfer of
funds to the SELLER.
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Payment shall be made under an irrevocable Letter of Credit in favor of the
SELLER confirmed by a United States Bank acceptable to the SELLER, allowing
partial shipment.
The Letter of Credit shall be opened by Bank of Indonesia approved by the
Export Import Bank of the United States and confirmed by a United States Bank
covering [Subject to Request For Confidential Treatment] of the PHYSICAL PRICE,
being USD [Subject to Request For Confidential Treatment] for a period of time
in accordance with the LOAN AGREEMENT, and shall be:
(a) payable with a bank acceptable to the SELLER.
(b) governed by the Rules of the Uniform Customs and Practice for
Documentary Credits Revision 1993 (UCP) Publication No. 500), presentation of
stale documents shall be allowed.
The Letter of Credit confirmation charges outside Indonesia shall be for the
account of the SELLER.
All other Letter of Credit charges in Indonesia shall be for the BUYER'S
account. The Letter of Credit shall be utilized according the conditions as
mentioned under ARTICLE 5.1.
ARTICLE 6 - DELIVERY OF THE EQUIPMENT AND TRANSFER OF TITLE
6.1 The EQUIPMENT will be delivered CIF to final destination as attached
in ANNEX XVII hereto via Indonesian PORT OF ENTRY, unless explicitly stated
otherwise in this CONTRACT.
The title of the EQUIPMENT will pass to the BUYER from the SELLER upon delivery
of the EQUIPMENT. The SELLER undertakes to inform the BUYER with at least 10
(ten) days prior notice about the scheduled date of departure of each shipment.
6.2 If on any site, preparations to be taken care of by the BUYER,
pursuant to ARTICLE 24 of this CONTRACT, are not ready so as to enable the
SELLER to implement SERVICES defined in this CONTRACT, the BUYER shall:
(a) at no cost to SELLER, store the EQUIPMENT safely and properly,
immediately following arrival of the EQUIPMENT, or
(b) take delivery of the EQUIPMENT at the SELLER'S factory and authorize
the SELLER to store such EQUIPMENT until the site is prepared, and
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(c) In either case (a) or (b), extend the DELIVERY TIME SCHEDULE as
attached in ANNEX XVI of the CONTRACT accordingly.
The BUYER undertakes to apply in due time for any import licenses required for
the importation of the EQUIPMENT into Indonesia.
6.3 The SELLER shall use its best endeavors to conclude the WORK in the
total period of [Subject to Request For Confidential Treatment] as attached in
ANNEX XVI of this CONTRACT.
ARTICLE 7 - FORCE MAJEURE
7.1 Failure of either party to perform any of its obligations under this
CONTRACT shall not be considered as a breach of CONTRACT if such failure is
caused by Force Majeure.
7.2 For the purpose of this CONTRACT, Force Majeure shall mean
unforeseeable circumstances that are beyond the reasonable control of either
party and which prevent the party so affected from carrying out its obligations
under this CONTRACT.
Such circumstances are not to have been caused by the fault or negligence of
the party so affected and shall include but not be limited to: war, strikes,
earthquake, volcanic eruption, lightning, hurricanes, acts of God, insoluble
interruption of means of communications, floods, fire, epidemics, quarantine
restrictions, freight embargoes, sabotage, public enemy, lockouts, revolution,
riots, transport damages of EQUIPMENT, acts of any Government in its sovereign
capacity, however, only as far as any of such circumstances directly and
substantially affects the performance of the respective PARTY'S obligations
under this CONTRACT. The DELIVERY TIME SCHEDULE as attached in ANNEX XIV, in
the event of delay in the performance of contractual obligations hereunder for
reasons of Force Majeure, be extended accordingly.
7.3 In the event of Force Majeure the affected party shall promptly inform
the other party by Telex, Facsimile or registered Air-Mail Letter and supply
within 10 (ten) days written notification which shall be evidenced and
confirmed by Chamber of Commerce and/or Consulate, Embassy or other authorized
government agency showing that such Force Majeure exists. The same procedure
shall apply on termination of Force Majeure. The parties shall exert every
reasonable effort to keep the effect of Force Majeure conditions to a minimum.
7.4 In the event Force Majeure having lasted for a total period of more
than 6 (six) months, either party shall have the right to terminate this
CONTRACT upon giving 30
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(thirty) days in advance a written notice, provided always, both parties will
convene to evaluate the portion of the WORK performed and in progress by SELLER
and payment made by or on behalf of BUYER to settle the account.
ARTICLE 8 - FACTORY ACCEPTANCE TEST AND INSPECTION
8.1 The EQUIPMENT shall be tested and inspected by the SELLER in
accordance with the standard practice of the SELLER as attached in ANNEXes VIII
and XIII in order to ensure that the EQUIPMENT shall be capable of meeting the
full performance requirements of the Technical Specifications as attached in
ANNEXes IV and VI.
8.2 The BUYER'S INSPECTION ENGINEER(S) shall have the right to attend the
testing and inspection of any unit or units of the EQUIPMENT. For this
purpose, the BUYER requires the SELLER to give one (1) month notice in advance
in writing of the time and place of the testing and inspection of any unit of
EQUIPMENT at which the INSPECTION ENGINEER(S) is to be present.
The BUYER shall provide the SELLER, by Telex or Facsimile, at least 2 (two)
weeks before commencement of inspection all the necessary information about
INSPECTION ENGINEER(S) arrival.
8.3 Upon his request the BUYER or INSPECTION ENGINEER(S) shall be entitled
to inspect all the EQUIPMENT at the SELLER's factory pertaining to this
CONTRACT.
Should the BUYER waive this right, the items shall be regarded as inspected by
internal factory inspection.
8.4 The INSPECTION ENGINEER(S) acting on behalf of the BUYER shall have
free access to the WORK of the SELLER during execution of this CONTRACT for the
purpose of inspection, except to those areas of the factory engaged in
activities, the nature of which is such, that access is restricted by national
security regulation and/or confidential reasons of the SELLER.
The SELLER shall give access to all appropriate facilities at the factory to
enable the INSPECTION ENGINEER(S) to confirm that the WORK is being carried out
in accordance with this CONTRACT.
8.5. This free access shall not be exercised in such a manner as to delay
the execution of the work, and shall not incur additional costs to the SELLER
in excess of the agreed price for the FACTORY ACCEPTANCE.
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The costs of carrying out all standard factory tests shall be at the SELLER's
expense. The SELLER shall provide the BUYER at least 1 (one) month prior to
the inspection visits the test procedure, for the EQUIPMENT to be inspected.
8.6 Travel expenses between JAKARTA and factory site in United States or
Indonesia and vice versa, and all transportation, accommodation and living
expenses of the BUYER'S INSPECTION ENGINEER(S) shall be for the account of the
SELLER, in accordance with provisions as attached in ANNEX VIII.
8.7 The SELLER shall assist S.G.S. (SOCIETE GENERAL DE SURVEILLANCE), or
any other institution that may be designated by the BUYER, in finding any
information including technical specification, drawing, and other data related
thereto for the issuance of SURVEYOR's INSPECTION REPORTS in accordance with
the Indonesian Presidential Instruction Nr. 3/1991.
8.8 If the BUYER fails to witness the testing, on the dates notified, the
SELLER will commence to the approved technical test procedure and these tests
will be considered performed and FACTORY ACCEPTANCE shall take place on the
basis of the results, as stated in the Factory Acceptance Test Certificate as
attached in ANNEX XIII, prepared by the SELLER.
ARTICLE 9 - TRAINING
The SELLER shall implement the training program detailed in ANNEX VII for the
BUYER'S personnel in the skills required for the efficient operation and
maintenance of the EQUIPMENT. Such training program shall include training in
operation and maintenance of the EQUIPMENT at the SELLER's factories, with
reasonable costs of transportation and living expenses to be borne by the
SELLER as attached in ANNEX VII.
ARTICLE 10 - SITE ACCEPTANCE TEST, FLIGHT COMMISSIONING TEST and FINAL
ACCEPTANCE AND HANDING OVER OF EQUIPMENT
10.1 The following provisions will be applicable to the SITE ACCEPTANCE
TESTING of the EQUIPMENT, which the SELLER will deliver and install under this
CONTRACT.
10.1.1 SITE ACCEPTANCE TESTING at each site will commence on completion of
the installation of the EQUIPMENT at those sites, as attached in ANNEX XVII.
10.1.2 SELLER will inform BUYER of the anticipated date of commencement of
each SITE ACCEPTANCE TEST at the start of installation, and at least 30
(thirty) days in
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advance, and at that date the SELLER will forward his standard technical test
procedure as attached in ANNEX IX to the BUYER for review.
10.1.3 The SELLER will notify the BUYER' INSPECTION ENGINEER(S) of the actual
date on which SITE ACCEPTANCE TESTING may commence at least 3 (three) weeks
beforehand.
10.1.4 All SITE ACCEPTANCE TESTS will be carried out by SELLER and witnessed
by the BUYER's INSPECTION ENGINEER(S) according to the standard technical test
procedures as defined in ARTICLE 10.1.2.
10.1.5 If the BUYER fails to attend the testing on the dates notified, SELLER
will commence with his standard technical test procedures and these tests will
be considered approved on the basis of the results stated in the Site
Acceptance Test Certificate as attached in ANNEX XIV prepared by SELLER.
10.1.6 Within 14 (fourteen) days after the completion of each SITE ACCEPTANCE
TEST, a Site Acceptance Test Certificate will be drawn up and signed by the 2
(two) parties, unless the EQUIPMENT is rejected for justified reasons.
10.1.7 In case of rejection, the BUYER will inform the SELLER in writing
within the above 14 (fourteen) day period about the reasons of rejection, and
SELLER will rectify the defects with due diligence and the SELLER will conduct
the applicable portions of the tests again, for acceptance in accordance with
the above mentioned procedure.
10.1.8 Minor defects not affecting the operational use of the EQUIPMENT will
be stated in the Site Acceptance Test Certificate, but will not obstruct or
suspend payment according to ARTICLE 5.1 provided the SELLER undertakes to
remedy such defects at his earliest opportunity and with all possible speed
within the warranty period.
10.1.9 If after the elapse of 14 (fourteen) days following completion of the
SITE ACCEPTANCE TESTS, the Site Acceptance Test Certificate has not been signed
by the BUYER, whereas the EQUIPMENT has not been rejected for justified
reasons, the SITE ACCEPTANCE TEST shall be considered complete. The respective
Site Acceptance Test Certificate shall then mention that the BUYER did not sign
said certificate within the elapse of 14 (fourteen) days.
10.2 The following provisions will be applicable to the FLIGHT
COMMISSIONING TEST of the EQUIPMENT, which the SELLER will conduct under this
CONTRACT.
10.2.1 SELLER will inform BUYER of the anticipated date of commencement of
each FLIGHT COMMISSIONING TEST at the start of installation, and at least 15
(fifteen) days
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in advance, and at that date the SELLER will forward his standard technical
procedures test as attached in ANNEX X to the BUYER for review. SELLER shall
further incorporate and use such BUYER specified ICAO Flight Commissioning
forms as are also included with and made a part of ANNEX X.
10.2.2 All FLIGHT COMMISSIONING TESTS will be carried out by SELLER and
witnessed by the BUYER'S INSPECTION ENGINEER(S) according to the standard
technical test procedures as defined in ARTICLE 10.2.1. Prior to FLIGHT
COMMISSIONING TESTS conducted on new sites (schedules 1 through 11 of ANNEX
III), the SELLER shall have submitted and received approval of the Instrument
Flight Procedure for that site.
10.2.3 If the BUYER fails to witness the testing on the dates notified,
SELLER will commence with the technical test procedures and these tests will be
considered completed on the basis of the results stated on the Flight
Commissioning Test Certificate as attached in ANNEX XV and prepared by SELLER.
10.2.4 At the time of the completion of each FLIGHT COMMISSIONING TEST, a
Flight Commissioning Test Certificate will be drawn up and signed by the 2
(two) parties, unless the EQUIPMENT is rejected for justified reasons.
10.2.5 In case of rejection, the BUYER will inform the SELLER in writing
within 5 (five) days about the reasons of rejection, and SELLER will rectify
the defects with due diligence and the SELLER will conduct the FLIGHT
COMMISSIONING TEST again in accordance with the above mentioned procedure.
10.2.6 Minor defects not affecting the operational use of the EQUIPMENT will
be stated in the Flight Commissioning Test Certificate, but will not obstruct
or suspend payment according to ARTICLE 5.1 provided the SELLER undertakes to
remedy such defects at his earliest opportunity and with all possible speed
within the warranty period.
10.2.7 If after the elapse of 5 (five) days following completion of the
FLIGHT COMMISSIONING TESTS, the Flight Commissioning Test Certificate has not
been signed by the BUYER, whereas the EQUIPMENT has not been rejected for
justified reasons, the FLIGHT COMMISSIONING TESTS shall be considered complete.
The respective Flight Commissioning Test Certificate shall then mention that
BUYER did not sign said certificate within the elapse of 5 (five) days.
10.3 The following provisions shall be applicable to FINAL ACCEPTANCE AND
HANDING OVER OF EQUIPMENT:
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10.3.1 Following completion and certification of the testing described in
this ARTICLE 10 and other WORKS related to each individual site, the SELLER
shall submit to the BUYER his written certification, in the form as attached in
ANNEX XIX, that all remaining WORKS have been completed according to the agreed
upon provisions of this CONTRACT.
10.3.2 Within 7 (seven) days after receiving the SELLER'S CERTIFICATE OF
FINAL ACCEPTANCE AND HANDING OVER OF EQUIPMENT, the BUYER shall sign and
return the certificate to the SELLER. This fully executed certificate will
evidence that FINAL ACCEPTANCE AND HANDING OVER OF EQUIPMENT has occurred as
described in ARTICLE 14 of this CONTRACT.
10.3.3 Should the BUYER disagree that the WORKS related to the site have been
completed, the BUYER shall so notify the SELLER and shall provide a detailed
list of deficiencies preventing final acceptance, within the above-stated 7
(seven) day period. The BUYER and SELLER will then negotiate in good faith to
undertake the corrective action necessary to resolve the mutually-agreed
deficiencies. Following completion of such corrective action, the BUYER shall
sign the CERTIFICATE OF FINAL ACCEPTANCE AND HANDING OVER OF EQUIPMENT.
10.3.4 Minor deficiencies not affecting the operational use of the site shall
be noted in the CERTIFICATE OF FINAL ACCEPTANCE AND HANDING OVER OF EQUIPMENT
but shall not prevent execution of the certificate by the BUYER provided the
SELLER undertakes to remedy such minor deficiencies at his earliest opportunity
and with all possible speed within the warranty period.
10.3.5 Failure of the BUYER to execute the CERTIFICATE OF FINAL ACCEPTANCE
AND HANDING OVER OF EQUIPMENT or to submit evidence of his disagreement with
the SELLER according to the provisions of this ARTICLE 10.3 within the 7
(seven) day period indicated above shall constitute FINAL ACCEPTANCE AND
HANDING OVER OF THE EQUIPMENT by the SELLER to the BUYER.
ARTICLE 11 - AMENDMENT
11.1 Any alterations or modifications to this CONTRACT shall be binding
only if transmitted in writing and signed by both parties and will become an
Amendment of this CONTRACT, and will form an intregal and inseparable part of
this CONTRACT.
11.2 Minor modifications of the EQUIPMENT, not causing any change in the
DELIVERY TIME SCHEDULE and/or Prices, may be introduced by SELLER provided that
the EQUIPMENT supplied shall be functionally equivalent or better than the
EQUIPMENT specified in this CONTRACT and agreed to by the BUYER.
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All other modifications are subject to previous mutual agreement.
11.3 In case of the BUYER failure to fulfill his obligations which in any
way affect the SELLER'S ability to complete the WORKS under this CONTRACT, the
SELLER shall notify the BUYER in written form of the failure. The BUYER shall
invite the SELLER not more than 14 (fourteen) days after the BUYER has received
the above mentioned notification to start negotiations to determine an
appropriate resolution.
The SELLER is entitled out of the above mentioned Amendment to this CONTRACT to
claim for equipment, material, services, costs, and to extend accordingly the
DELIVERY TIME SCHEDULE as attached in ANNEX XVI, if any, after both PARTIES
agree.
ARTICLE 12 - NOTICES
The following offices are designated for administration of the CONTRACT as well
as matter related thereto, unless indicated otherwise in writing by one of the
party to the other party, giving 30 (thirty) days prior written notice:
For the BUYER:
PROJECT MANAGER OF TELECOMMUNICATIONS, NAVIGATION AND
ELECTRICITY FACILITIES
DIRECTORATE GENERAL OF AIR COMMUNICATIONS
Jalan Angkasa I Number 2,
Jakarta 10620, Indonesia
Telex: 49407 DTNLIA
Facsimile: 62-21-4244916
Telephone: 62-21-4240361
For the SELLER:
AIRPORT SYSTEMS INTERNATIONAL, INC.
11300 West 89th Street
Overland Park, Kansas 66214
UNITED STATES OF AMERICA
Facsimile: 1-913-492-0870
Telephone: 1-913-495-2600
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ARTICLE 13 - LANGUAGE
The text of the CONTRACT shall be in the Indonesian and English language, both
texts shall be equally authentic.
The text of the CONTRACT in Indonesian shall however prevail if there is any
difference of interpretation between both parties hereto.
All ANNEXes of this CONTRACT, documents, training materials, drawings,
specifications, reports, mailings, instructions and other data or information
provided by the SELLER or the BUYER under this CONTRACT shall be only in the
English language.
ARTICLE 14 - WARRANTY and GUARANTEE
14.1 For purpose of this warranty the following definitions shall apply:
14.1.1 WORKMANSHIP DEFECT means non compliance with design standards for
interconnection of parts or materials which cause the WORKS not to comply with
the Technical Specifications as defined in ANNEXes IV and VI.
14.1.2 MATERIAL means component parts which interconnection constitutes the
process of the EQUIPMENT.
14.1.3 DEFECT IN MATERIAL means a deficiency in MATERIAL item which renders
it incapable of functioning in the manner specified by the design.
14.1.4 DEFECT IN BUYER EQUIPMENT means a deficiency in BUYER'S EQUIPMENT
which:
(a) causes a malfunction of the SELLER'S equipment or improper operation
of the site, and
(b) is not caused by the improper installation or operation of the
SELLER'S equipment.
14.2 Subject to the limitations and conditions hereinafter set forth, the
SELLER warrants that the WORK sold hereunder shall be free from DEFECTS IN
MATERIAL and WORKMANSHIP DEFECT.
14.3 With respect to the part of the WORK which will be delivered under
this CONTRACT, a defect under this warranty must become apparent to the BUYER
within
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[Subject to Request for Confidential Treatment] after FINAL ACCEPTANCE AND
HANDING OVER OF EQUIPMENT of each relevant site as described in ARTICLE 10.3.
The SELLER is not liable under this warranty for any indirect defects at or
arising out of DEFECTS IN BUYER'S EQUIPMENT as defined in paragraph 14.1.4
above.
14.3.1 Where SELLER has effected warranty repair on a board, module, or other
Component of the EQUIPMENT, the warranty period for that board, module, or
other COMPONENT of the EQUIPMENT shall be extended for [Subject to Request For
Confidential Treatment] from the date of that repair.
14.4 The SELLER's liability under this warranty as to DEFECTS IN MATERIAL
and WORKMANSHIP shall in any case be limited to:
The repair and or replacement, the choice to which method utilized shall be at
the SELLER's sole discretion, of the EQUIPMENT and the MATERIAL at the final
destination as attached in ANNEX XVII hereto and/or return of the EQUIPMENT and
the MATERIAL to the factory for replacement or repair.
14.5 At the conclusion of the warranty period as stated in ARTICLE 14.3
above, SELLER and BUYER shall agree on a list of boards, modules, and/or other
components of the EQUIPMENT for which the warranty period stated in ARTICLE
14.3 has been extended according to ARTICLE 14.3.1 (hereinafter referred to as
the EXTENDED WARRANTY LIST).
The USD value and the revised warranty expiration of the items on the EXTENDED
WARRANTY LIST shall also be indicated. Upon agreement thereof, the SELLER
shall amend its Performance Bond mentioned in ARTICLE 4, to extend the
expiration date to be equal to the latest date shown on the EXTENDED WARRANTY
LIST. The Performance Bond shall also be amended to reduce the value equal to
the total value of the items listed on the EXTENDED WARRANTY LIST. The SELLER
shall ensure that the faulty EQUIPMENT and/or MATERIAL is replaced within a
maximum of [Subject to Request For Confidential Treatment] after written
notification has been presented to the SELLER by the BUYER that an EQUIPMENT or
MATERIAL has developed a fault, and if necessary after the SELLER has clarified
the fault, and further provided that the relevant spare parts are immediately
available to the SELLER and that the SELLER shall be allowed by BUYER to use
them out of this CONTRACT.
The SELLER shall be responsible to repair and/or replace the those spare parts
which were used from the BUYER's inventory. Delivery of these parts will be
made within reasonable time to be agreed upon mutually.
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In case the replacement spare parts to make good the DEFECT IN MATERIAL or
WORKMANSHIP are not available from the BUYER'S inventory, or in cases where the
repair can only be performed at the premises of the SELLER, the relevant time
will be mutually agreed between BUYER and SELLER, but in any case not more than
[Subject to Request For Confidential Treatment] after mutual agreement.
All costs of the replacement and/or repair of EQUIPMENT and MATERIAL including
transportation between the relevant factory and final destination as defined in
ANNEX XVII will be borne by the SELLER.
14.6 In case the SELLER fails to do his repair or replacement within the
limited time as aforementioned, the BUYER has the right to appoint a third
party to perform the repair, or replace this EQUIPMENT and or MATERIAL on the
SELLER's account after notifying the SELLER.
14.7 The SELLER shall, as to matters embraced within this warranty, be
released of all obligations and liability, if the SELLER's or his appointed
agent's examination reveals that the defect results from:
14.7.1 Exposure to conditions which exceed specified limits, or
14.7.2 Alteration, or overhaul of the system by a person not authorized by
SELLER except as provided in ARTICLE 14.5 above, or
14.7.3 Operation, maintenance, or modification of the system which is not in
accordance with the SELLER's instructions and data, or
14.7.4 Failure by the BUYER to report the malfunction or to deliver to the
SELLER within 30 (thirty) days of the BUYER'S discovery of the malfunction.
14.8 With respect to MATERIAL or EQUIPMENT not of the SELLER's manufacture
the SELLER will grant to the BUYER the same warranty period as that initially
provided by the original manufacturer.
14.9 To be valid, a warranty claim must be accompanied by a written report
as attached in ANNEX XXV which includes (but is not limited to) a description
of the failure, malfunction, circumstances and number involved.
14.10 The express warranties contained in this CONTRACT are in lieu of all
other warranties, guarantees, promises, which would be deemed applicable to the
system sold hereunder and in lieu of all agreements, express or implied, for
the benefit of anyone.
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No expressed warranties and no implied warranties whether of merchantability,
fitness for any particular purpose or use, infringement otherwise (except as to
title), other than those expressly set forth in this CONTRACT shall apply.
14.11 The SELLER guarantees that:
14.11.1 The EQUIPMENT shall be brand new and of the latest tropical design.
14.11.2 The EQUIPMENT will comply with the technical specifications as stated
in ANNEX IV.
14.11.3 The spare parts supplied are directly interchangeable against the
parts fitted in the relevant equipment system.
14.11.4 The spare parts or suitable replacements will be available from the
SELLER for minimum of [Subject to Request For Confidential Treatment] as
attached in ANNEX XXVI from that date of the FINAL ACCEPTANCE AND HANDING OVER
OF EQUIPMENT of the last site.
ARTICLE 15 - PRESERVATION, PACKAGING AND MARKING
15.1 EQUIPMENT delivered by the SELLER shall be packed to best commercial
standards adapted to the mode of shipment, in such a manner as to afford
adequate protection against environmental conditions and physical damage during
multiple reshipment, handling and storage in covered accommodation in a
temperate zone for a period of 6 (six) months following arrival to the site as
attached in ANNEX XVII.
15.2 EQUIPMENT delivered in multiple parts shall be packed individually in
seaworthy cases or crates even when shipped altogether by container.
15.3 All cases shall be marked on two sides with oil paint or printed paper
and the marking shall be as follows:
GOVERNMENT EQUIPMENT
TO:
DIRECTORATE GENERAL OF AIR COMMUNICATIONS
DEPARTMENT OF COMMUNICATIONS
REPUBLIC INDONESIA
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FROM :
AIRPORT SYSTEMS INTERNATIONAL
11300 WEST 89TH STREET
OVERLAND PARK, KANSAS 66214 USA
INDONESIAN PORT OF ENTRY AND/OR AIRPORT
CASES AND PARCELS NO.: A/B
A: TOTAL NUMBER OF CASES IN THE BATCH
B: SERIAL NUMBER OF THIS CASE
IMPORT LICENSE NUMBER (IF ANY)
LETTER OF CREDIT NUMBER
GROSS-WEIGHT (IN KILOGRAM), SIZE
15.4 Fragile parts should be indicated clearly.
Heavy parts should be packed separate from fragile parts and be anchored to
prevent displacement.
Dangerous goods such as chemicals or acid, if any, shall be packed separately
using special safe containers if required according to international standards.
15.5 Further marking instructions shall be requested by the SELLER and
provided by the BUYER within 60 (sixty) days after CONTRACT coming into force.
ARTICLE 16 - TRANSPORTATION
16.1 Transportation from United States port to final destination via
Indonesian PORT OF ENTRY will be made by sea-freight.
16.2 Transportation shall be unless otherwise required by LOAN AGREEMENT,
at the latest 3 months after the CONTRACT is coming into force the SELLER
should submit 3 Indonesian Freight Forwarders and Insurance Companies to obtain
the BUYERs approval as stated in ANNEX XXVII.
16.3 The BUYER shall process and propose to Minister of Communications to
appoint one (1) each of the Indonesian Freight Forwarders and Insurance
companies to execute shipment and insurance.
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16.4 The shipment of the EQUIPMENT can be executed after the Indonesian
Freight Forwarder and Insurance company are appointed by the decree of the
Minister of Communications.
16.5 If within 3 months of the SELLER's proposal no decision by the
Minister of Communications as set forth in ARTICLE 16.3 has been made the
SELLER has the right to appoint the Indonesian Freight Forwarder and Insurance
company and execute the shipment without the BUYER's approval.
16.6 If in the SELLER's judgement it is necessary to fulfill his obligation
according to the CONTRACT, the SELLER is entitled to use air-freight in case of
urgency and/or for small independent shipments after written notice to the
BUYER.
16.7 Provided that no contradiction exists with the terms of the LOAN
AGREEMENT or regarding ANNEX XXVII, Indonesian vessels are to be given first
preference for the carriage of the EQUIPMENT, but in the event of non
availability of Indonesian Vessels and with the prior approval of the BUYER,
the SELLER may use other vessels if this non-availability should interfere with
the DELIVERY TIME SCHEDULE as in ANNEX XVI.
16.8 The EQUIPMENT shall be insured against All Risks, War Risk and SRCC
(Strike, Riot, Civil Commotion) by the SELLER in favor of the SELLER for
transportation provided that no contradiction exists with the terms of the LOAN
AGREEMENT.
The insurance certificate shall be issued by Indonesian national insurance
company as attached in ANNEX XXVII appointed by SELLER and approved by the
BUYER.
16.9 After shipment, the SELLER shall forward to BUYER'S notified address
by registered air-mail:
- - commercial invoice, 1 original, 6 copies
- - packing list, 3 originals, 6 copies
- - airway bill or bills of lading, 2 copies
- - insurance certificate (copy), 2 copies
- - clean report of findings (copy), 6 copies
- - other documents required in accordance with ARTICLE 5.1
To advising Letter of Credit Bank:
- - commercial invoice, 1 original, 6 copies
- - packing list, 3 originals, 6 copies
- - airway bill or bill of lading, 2 copies
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- - insurance certificate, 1 original, 2 copies
- - clean report of findings, 6 copies
- - related documents as required under the LOAN AGREEMENT
- - other documents required in accordance with ARTICLE 5.1
The Letter of Credit shall state that 1 (one) set of non-negotiable documents
shall be sent to the BUYER'S designated representative.
16.10 Partial Shipment of the EQUIPMENT is permitted.
16.11 Import formalities and customs clearance will be exclusively arranged
and expedited by the SELLER with BUYERS assistance.
16.12 Inland transportation of the EQUIPMENT from the Indonesian PORT(S) OF
ENTRY to final sites according ANNEX XVII will be the exclusive responsibility
of the SELLER.
ARTICLE 17 - TARIFF, DUTIES AND TAXES
17.1 The SELLER shall bear all duties and taxes levied outside Indonesia in
connection with this CONTRACT and the performance thereof.
17.2 All taxes and other public charges levied in Indonesia in connection
with the conclusion and implementation of this CONTRACT are for the account of
the Government of the Republic of Indonesia.
17.3 EQUIPMENT or MATERIALS brought into Indonesia, by the SELLER for
carrying out the CONTRACT and to be subsequently shipped out of Indonesia,
shall be handled according to the Government Regulations in Indonesia, and the
BUYER shall give its assistance to arrange this for the SELLER.
For this purpose, the SELLER shall submit to the BUYER the list of the
necessary EQUIPMENT at least 1 (one) month before shipment.
ARTICLE 18 - SETTLEMENT OF DISPUTE
18.1 Any dispute or difference arising out of or in connection with this
CONTRACT shall be settled amicably by direct negotiations.
18.2 Any controversy, dispute or disagreement arising out of or relating to
the executing or the interpretation of the CONTRACT or the breach thereof and
indicated as such by one
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of the contracting parties and which the PARTIES cannot settle by direct
negotiations according ARTICLE 18.1 shall be finally settled and binding by
Arbitration according to the rules and procedures of B.A.N.I (Indonesian
Nasional Arbitration Agency).
ARTICLE 19 - PATENT AND DATA RIGHTS
19.1 Nothing contained in this CONTRACT shall convey to the BUYER the right
to reproduce or cause or permit the reproduction of the said upgrade Navigation
Aids (DVOR/DME) or any part thereof or design identical or similar to that of
the said upgrade Navigation Aids or parts thereof or give the BUYER license
under any patent or right owned or controlled by the SELLER.
19.2 The BUYER has no liability to pay any amount for patent rights or
royalties for the EQUIPMENT, MATERIALS or SERVICES to be delivered.
The SELLER shall indemnify, and keep the BUYER indemnified against all actions,
claims of use or exercise of any intention, by person of the BUYER'S possession
or use of such EQUIPMENT, MATERIALS or SERVICES or any part thereof.
All claims out of the above mentioned patent rights or royalties are the
responsibility of the SELLER.
ARTICLE 20 - LIQUIDATED DAMAGES
In the event the SELLER fails to complete the WORK or supply and deliver the
EQUIPMENT or any part thereof, and/or the subject and SCOPE OF CONTRACT as
defined in ARTICLE 2 are not successfully completed within [Subject to Request
For Confidential Treatment] after the effective date of this CONTRACT according
to the DELIVERY TIME SCHEDULE as attached in ANNEX XVI for any reason other
than those referred to in the applicable portions of ARTICLEs 6, 7, 8, 10, 11,
21, 22 and 24 which are not caused by the SELLER or are outside the control of
the SELLER, the SELLER shall pay to the BUYER by way of Liquidated Damages an
amount equal to of [Subject to Request For Confidential Treatment] of the
PHYSICAL PRICE for such uncompleted item for each 1 (one) day of delay.
The delay for Liquidated Damages is calculated from the day since the elapse of
the last schedule as defined in ANNEX XVI. Such Liquidated Damages shall be
paid in USD by means of wire transfer remittance to the bank account of the
BUYER within 14 (fourteen) days of the date of which such delay is calculated.
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A delay of an individual schedule is not relevant and the BUYER shall not ask
for Liquidated Damages in such a case. All other claims for any loss of use or
production, profit, interest, revenues, or any indirect or consequential
damages are excluded.
ARTICLE 21 - SUSPENSIONS
21.1 Suspensions by BUYER
BUYER may at any time and from time to time and for urgent reason, by written
or Telex notice to SELLER, suspend the performance of the WORK. Notices of
suspension shall specify the date of suspension; and the estimated duration of
the suspension. Upon receiving any such notice of suspension, SELLER shall
promptly suspend further performance of the WORK and during the period of such
suspension shall properly care for and protect all WORK in progress and all
property of BUYER which pursuant to the terms of this CONTRACT is subject to
the supervision of the SELLER in whatever state of completion.
BUYER may at any time terminate the suspension by written or Telex notice to
SELLER specifying the effective date of termination and SELLER shall use its
best efforts to resume performance of its obligations pursuant to this CONTRACT
as soon as possible upon receipt of such notice.
Schedule of delivery dates occurring during the suspension or thereafter shall
be extended by periods as agreed by the both parties required to reinstall all
necessary organization for production and/or delivery of EQUIPMENT and
SERVICES. If BUYER elects to suspend the WORK pursuant to this ARTICLE, BUYER
shall use its best efforts to protect SELLER from any damage caused by such
suspension.
If the suspension is longer than 7 (seven) days, SELLER is with concurrence of
BUYER entitled to demobilize the SELLER's personnel and/or subcontractors.
If the suspension is longer than 4 (four) weeks, than the SELLER is entitled to
demobilize the SELLER's personnel and/or subcontractors.
21.2 Payments During Suspension
During a suspension, the SELLER shall be paid under this CONTRACT for all WORK
carried out or already in progress up to the point of suspension and any
subsequent costs incurred as a result of such suspension, after mutually agreed
by both PARTIES.
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The SELLER has the obligation to hand over the EQUIPMENT in progress to a
representative of the BUYER, after the SELLER has received the relevant payment
for the WORK in Progress and after written request by the BUYER.
The place of handing over such EQUIPMENT will be that place at which the
EQUIPMENT was stored or in production at the date of such suspension. Such
cause as mentioned above exclude any loss of profit, interest or any indirect
or consequential damages.
ARTICLE 22 - TERMINATION
22.1 The BUYER shall only have the right to terminate the relevant WORK of
the sites regarding ANNEXes III and VI, totally or partially, on that parts
which are involved to the subject matter as mentioned in under the following:
(a) where the SELLER fails to make delivery or completion of the WORK
because of his proven "willful negligence". However, failure in delivery due
to FORCE MAJEURE shall not be deemed herein to be failure because of "willful
negligence".
b) where the delivery or completion of the WORK has not been made within
6 (six) months after the defined time of completion of the WORK fixed according
to ARTICLE 6 due to reason imputable to the SELLER, except for reasons of the
BUYER'S default or Force Majeure or other reasons out of this CONTRACT, where
the BUYER is entitled to extend the DELIVERY TIME SCHEDULE as attached in ANNEX
XVI.
(c) where the SELLER has been unable to obtain an export license for
certain EQUIPMENT and/or SERVICES and the SELLER indicates that such export
license cannot be obtained in reasonable time to permit delivery in accordance
with the DELIVERY TIME SCHEDULE as attached in ANNEX XVI.
(d) where the rejected EQUIPMENT which are not in accordance with the
requirement mentioned in ARTICLE 2 have not been replaced or repaired within 6
(six) months.
(e) where the BUYER has rightfully assessed Liquidated Damages against the
SELLER according to ARTICLE 20; the value of such damages equals or exceeds the
unpaid portion of the CONTRACT, and the remaining portion of the WORK cannot be
completed by the SELLER.
22.2 Termination shall be made only after 30 (thirty) days counting from
the date when written notice with full details of the termination in accordance
with any of the cases stated in this ARTICLE is received by the SELLER.
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22.3 In case of termination of this CONTRACT, or portion thereof, pursuant
to the foregoing ARTICLE 22.1 the SELLER agrees to release Bank Indonesia
immediately by Telex with copy to the BUYER of the obligation regarding its
irrevocable Letter of Credit, in total or of the respective portion thereof
provided that all payments out of ARTICLE 22.5 are settled and the BUYER agrees
to release any guarantee under this CONTRACT issued in his favor.
22.4 The SELLER shall be entitled to terminate the CONTRACT by written
notice of termination delivered to the BUYER only in the following cases:
(a) in the event that the BUYER has issued a suspension order to the
CONTRACT and WORK, which is not reinstated within 6 (six) months after receipt
by the SELLER of the suspension order, or if the total time out of this
suspension is exceeding more than 6 (six) months.
(b) if the total extension of time out of Force Majeure as mentioned under
ARTICLE 7 is longer than 6 (six) months.
(c) where the BUYER has been unable to fulfil his obligations out of this
CONTRACT within 3 (three) months. 22.5If the BUYER or the SELLER decides to
terminate the CONTRACT according ARTICLE 21 and 22, then the SELLER is entitled
to be paid by the BUYER for WORK, which are already partially or completely
performed and for other costs if mentioned in the CONTRACT.
22.6 In case of termination, the BUYER hereby waives the provisions of
ARTICLE 1266 and 1267 of the Indonesian Civil Code with respect to this
CONTRACT.
ARTICLE 23 - LIABILITY OF SELLER
23.1 The SELLER shall be liable for and shall indemnify the BUYER in
respect of any liability, loss, and damage of BUYER'S property caused directly
by negligence or wrongful act (breach of contract or tortious conduct) on the
part of the SELLER, its personnel and/or its Subcontractors engaged for the
execution of the WORK in Indonesia under this CONTRACT.
23.2 The SELLER shall indemnify the BUYER in respect of any liability,
loss, claim or proceeding whatsoever, whether arising at common law or by
statute in respect of personal injuries to or the death of any person whom so
ever caused directly by negligence or wrongful act on the part of the SELLER in
the course of the execution of the WORK in Indonesia under the CONTRACT.
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23.3 The SELLER shall forthwith and as a condition precedent to the
commencement the WORK under this CONTRACT take out with an Insurance Company a
policy or policies of insurance indemnifying the BUYER whatsoever arising under
the provisions of ARTICLE 23.1 and 23.2.
SELLER shall be liable for personal injuries and for damages to property which
can be proved to have been caused by the SELLER'S personnel in the course of
the contracted WORK in each individual instance.
In the case of property damage, up to USD [Subject to Request For Confidential
Treatment] for each damage in the case of personal injury or death against
third parties including BUYER'S personnel in accordance with the applicable law.
23.4 The liability of SELLER as stated above for property damages shall
not, in any event, exceed the PHYSICAL PRICE according to ARTICLE 3.1. Any
liability of the SELLER shall cease at the end of the warranty period as set
forth in ARTICLE 14 of this CONTRACT.
The SELLER shall not be liable for any loss of use or production, loss of
profit, interest or revenues or for any indirect or consequential damages or
losses.
23.5 The SELLER is, however, not obliged to compensate for personal injury
or loss of or damage to equipment or property to the extent such injury, as
long as such loss or damage is already covered by insurance(s) taken out by the
BUYER, and the BUYER is not entitled to recover same from the SELLER.
ARTICLE 24 - INSTALLATION AND COMMISSIONING
24.1 The SELLER undertakes under this CONTRACT to carry out the
installation and commissioning of the EQUIPMENT, as attached in ANNEXes III,
IV, V, IX, X, XV, and XVII. Such installation and commissioning activities of
the SELLER shall include the tuning of deliverable equipment to frequencies
listed as attached in ANNEX XXVIII.
24.2 The BUYER shall take care, without cost to the SELLER, that the
respective sites are available, ready and suitable for the installation of the
EQUIPMENT.
24.3 The BUYER shall notify in writing to the SELLER at the latest 6 (six)
weeks in advance of the intended start of installation of each individual site
if the land is not available.
The SELLER has no responsibility to assist in the acquisition of land to hold
the EQUIPMENTS.
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24.4 Prior to the SELLER beginning the installation activity at each site,
the BUYER shall conduct a site survey to confirm that BUYER EQUIPMENT and
property related to the WORKS are available and in proper working order.
Following the conduct of each site survey and not less than 30 (thirty) days
prior to the intended beginning of installation, the BUYER shall submit to the
SELLER his written certification as defined in ARTICLE 1.17 and ANNEX XVIII
that the site is operating properly and is ready for the SELLER to begin the
installation effort.
The BUYER shall notify the SELLER in writing of his intention to conduct each
site survey in a timely manner consistent with the DELIVERY TIME SCHEDULE as
attached in ANNEX XIV to enable the SELLER, at his discretion, to witness the
site survey conduct.
24.5 During the installation and commissioning period the SELLER shall keep
the BUYER regularly informed by submitting a weekly status report for each
site, similar to the format as attached in ANNEX XII.
24.6 In case the above conditions are not, or improperly complied with, the
DELIVERY TIME SCHEDULE as attached in ANNEX XVI of the CONTRACT, and to the
extent affected, will be extended after mutual agreement according to ARTICLE
11.
ARTICLE 25 - DOCUMENTATION AND REPORTING
The SELLER undertakes to deliver to the BUYER the documentation as attached in
ANNEX XI according to the DELIVERY TIME SCHEDULE as therein defined.
The SELLER further undertakes to conduct quarterly FAT-59 PROJECT status
meetings with BUYER personnel in Indonesia for the purpose of reporting the
progress of the WORK hereunder, or as otherwise required to resolve CONTRACT
related issues.
ARTICLE 26 - INSURANCE
26.1 WORK, including TOOLS, shall be insured with an All Risk, War Risk and
SRCC (Strike, Riot, Civil Commotion) insurance policy.
26.2 The insurance shall be issued by Indonesian national insurance company
as attached in ANNEX XXVII, appointed by SELLER and approved by the BUYER.
26.3 The insurance shall cover [Subject to Request For Confidential
Treatment] of the PHYSICAL PRICE of the EQUIPMENT including freight costs and
Installation Commissioning and CIVIL WORKS.
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26.4 The SELLER further undertakes to ensure that its foreign employees and
subcontractors shall be covered by Workman's Compensation Insurance as attached
in ANNEX XXIX.
26.5 The SELLER further undertakes to provide BUYER'S personnel attending
FACTORY ACCEPTANCE TESTING and Factory Training at the SELLER facility with
health insurance. The insurance shall be in effect through the duration of
said personnel's work in Overland Park, Kansas.
ARTICLE 27 - APPLICABLE LAW
27.1 This CONTRACT shall be governed by and construed in accordance with
the laws of the Republic of Indonesia.
27.2 The validity of remaining ARTICLEs, SECTION, provisions, terms and
parts of this CONTRACT shall not be effected by a court, administrative board
or other proceeding of competent jurisdiction deciding that an ARTICLE,
SECTION, provision, term, or part of this CONTRACT is illegal, unenforceable,
in conflict with any law or contrary to the public policy.
ARTICLE 28 - EXPORT CONTROL REGULATIONS
Performance of deliveries and services hereunder shall be subject to the
provision that no impediments exist as a result of the United States or
Indonesian export control regulations.
ARTICLE 29 - SUB ANNEXES
The Sub ANNEXes as attached in ANNEX V form an integral part of this CONTRACT.
ARTICLE 30 - COMING INTO FORCE
This CONTRACT shall become effective when the following conditions are
fulfilled:
30.1 This CONTRACT shall have been signed by both PARTIES.
30.2 The CONTRACT shall be subject to the appropriate approval of both the
United States and Indonesia government, if necessary.
30.3 Submission of Performance Bond by SELLER.
30.4 The relevant LOAN AGREEMENT has been signed and is effective.
34
<PAGE> 38
30.5 The Letter of Credit has been opened.
30.6 The occurrence of the effective date of the CONTRACT has been
confirmed by both parties.
ARTICLE 31 - LOCAL CONTENT
31.1 Local Content consists of EQUIPMENT or SERVICES provided by Indonesian
local suppliers through the issuance of subcontracts to such Indonesian
suppliers for work directly related to FAT-59 Project implementation.
SELLER agrees to use local supplies amounting to a maximum of USD [Subject to
Request For Confidential Treatment] excluding VAT 10% (ten percent) subject to
the fulfillment of quality, guarantee, warranty, and terms of this CONTRACT and
the ANNEXes. The SELLER will endeavor to procure local products and services
out of, but not limited to the following:
- - EQUIPMENT: USD [Subject to Request For Confidential Treatment]
- - INSTALLATION: USD [Subject to Request For Confidential Treatment]
- - CIVIL WORKS: USD [Subject to Request For Confidential Treatment]
- - SERVICES: USD [Subject to Request For Confidential Treatment]
31.2 The SELLER hereby agrees to accept a penalty in the amount of the
shortfall in achieving the Local Content commitment of USD [Subject to Request
For Confidential Treatment].
31.3 Prior to the SELLER submitting the final payment invoice for the
FAT-59 PROJECT, SELLER agrees to review with the BUYER, the Total Local Content
achieved against the Local Content commitment as detailed in ANNEX XXX. If a
shortfall is identified, then the penalty described in Article 31.2 above will
apply.
31.4 The penalty payment as defined in Article 31.3 above, will be paid in
USD by means of wire transfer remittance to the Bank account ot the BUYER
within fourteen (14) days after the PARTIES agree on the review concerned in
ARTICLE 31.3.
31.5 If the Local Content commitment is not achieved and the penalty
applied, the SELLER shall commit to deliver the EQUIPMENT and SERVICES as
specified in ANNEX III and this CONTRACT.
35
<PAGE> 39
ARTICLE 32 - ENTIRE AGREEMENT
This CONTRACT sets forth the entire understanding of the PARTIES as to the
subject matter of this CONTRACT and merges all prior discussions or agreements
on the present subject between them.
Neither of the PARTIES shall be bound by any conditions, warranties, or
representations with respect to the subject matter of this CONTRACT other than
as expressly provided in this CONTRACT and ANNEXes or as duly set forth
subsequent to the date hereof in writing executed by both parties by their duly
authorized representatives.
This CONTRACT is drawn up in 10 (ten) duly signed originals: 8 (eight) for the
BUYER, and 2 (two) for the SELLER.
This CONTRACT to be executed on their behalf by their respective duly
authorized and empowered officials, as of the day and year first written above.
36
<PAGE> 40
PEMBELI PENJUAL
- ------- -------
BUYER SELLER
Pemerintah Republik Indonesia, AIRPORT SYSTEMS INTERNATIONAL, INC.
Bertindak oleh dan melalui
Menteri Perhubungan, diwakili oleh:
BAGIAN PROYEK FASILITAS
- -----------------------
TELNAVUDLIS DIREKTORAT JENDERAL
- -------------------------------
PERHUBUNGAN UDARA DI JAKARTA.
- -----------------------------
/s/ Lagha [Seal] /s/ Michael Warner
MICHAEL WARNER
--------------
IR. WIDJAJA LAGHA WAKIL DIREKTUR, PENGEMBANGAN
- ----------------- ----------------------------
PEMIMPIN BAGIAN PROYEK BISNIS
- ---------------------- ------
PROJECT MANAGER VICE PRESIDENT, BUSINESS
DEVELOPMENT
37
<PAGE> 41
MENGETAHUI
----------
ACKNOWLEDGED BY:
DIREKTORAT JENDERAL PERHUBUNGAN
- -------------------------------
UDARA P.T. ELEKTRINDO NUSANTARA
-----
DIRECTORATE GENERAL OF AIR
COMMUNICATIONS
[Seal] [Stamp]
ZAINUDDIN SIKADO HARRY KUNTORO
- ---------------- -------------
DIREKTUR JENDERAL DIREKTUR UTAMA
- ----------------- --------------
DIRECTOR GENERAL PRESIDENT DIRECTOR
38
<PAGE> 42
ANNEX TABLE OF CONTENTS
I Power of Attorney
II Representative in Indonesia Documents
III Bill of Quantity, Schedules and Breaking Down of Spares
IV Technical Requirements and Scope of Works
V Description of Equipment and Services (ANNEXES)
VI Seller Equipment Technical Specifications
VII Training Program
VIII Factory Acceptance Test
IX Site Acceptance Test
X Flight Commissioning Test Procedure
XI Documentation
XII Project Reporting
XIII Factory Acceptance Test Certificate
XIV Site Acceptance Test Certificate
XV Flight Commissioning Test Certificate
XVI Delivery Time Schedule
XVII List of Sites
XVIII Buyer Certification of Site Readiness
XIX Certificate of Final Acceptance and Handing Over of Equipment
XX Price Summary
XXI Performance Guarantee
XXII Advance Payment Guarantee
XXIII Certificate of Training Completion
XXIV Instrument Flight Procedures
XXV Warranty Claim Form
XXVI Statement of Technical Support and After Sales Service
XXVII Statement of Commitment to Use Indonesian Freight Forwarder and
Insurance
XXVIII Equipment Frequency Assignments
XXIX Statement of Manpower Insurance
XXX List of Local Content
<PAGE> 43
ANNEX I - POWER OF ATTORNEY
<PAGE> 44
[Airport Systems International, Inc. Letterhead]
March 27, 1996
LETTER OF AUTHORIZATION
TO WHOM IT MAY CONCERN
I hereby confirm that Michael Warner, US Passport No. Z7073735 whole signature
appears below, has authority to sign on behalf of Airport Systems International,
Inc., Bidding Documents for the Procurement and Installation of F-AT 59 to the
Government of Republic of Indonesia.
/s/ Keith Cowan [Stamp]
- ----------------------------------
Keith Cowan
President and CEO
/s/ Michael Warner
- ----------------------------------
Michael Warner
Vice President, Business Development
Signed or attested before me on day of March 27,
1996, County of Johnson, State of Kansas.
Notary Public /s/ Carolyn J. Wiles
-----------------------
My Commission Expires: November 14, 1999
-----------------
<PAGE> 45
STATE OF KANSAS
OFFICE OF
SECRETARY OF STATE [Seal of the State
RON THORNBURGH of Kansas]
To all to whom these presents shall come, Greetings:
I, RON THORNBURGH, Secretary of State of the State of Kansas, do
hereby certify that the records of my office show that on the
14th day of November, 1995
CAROLYN J. WILES
was appointed a Notary Public in the State of Kansas, with an
expiration date of November 14, 1999, and that as such Notary Public
all official acts are entitled to full faith and credit. I further
certify that said Notary Public is empowered by the laws of the State
of Kansas to administer oaths, take acknowledgments and perform other
official duties.
IN TESTIMONY WHEREOF:
I hereto set my hand and cause to
be affixed my official seal. Done
at the city of Topeka, this 1st day
of April, 1996.
[Seal of the Secretary
of State of the State
of Kansas]
/s/ Ron Thornburgh
RON THORNBURGH
SECRETARY OF STATE
<PAGE> 46
No. 9607401-3
UNITED STATES OF AMERICA
[Seal]
DEPARTMENT OF STATE
To all to whom these present shall come, Greeting:
I Certify That the document hereunto annexed is under the Seal of the State of
Kansas.*
In testimony whereof, I, Warren Christopher,
Secretary of State, have hereunto caused the
seal of the Department of State to be
affixed and my name subscribed by the
Authentication Officer of the said
Department, at the city of Washington, in
the District of Columbia, this fourth day of
April, 1996.
/s/ Warren Christopher
-----------------------------------
Secretary of State
By /s/ Annie R. Maddux
-----------------------------------
Authentication Officer
Department of State
* FOR THE CONTENTS OF THE ANNEXED
DOCUMENT. THE DEPARTMENT ASSUMES
NO RESPONSIBILITY
<PAGE> 47
STATE OF KANSAS
[SEAL]
OFFICE OF THE GOVERNOR
I, BILL GRAVES, Governor of the State of Kansas, do hereby certify that
RON THORNBURGH is the duly elected and qualified Secretary of State of the State
of Kansas; that the signature attached to the certificate within is his genuine
signature; and that said certificate and attestation are in due form and by the
proper officer.
IN TESTIMONY WHEREOF, I have hereunto
subscribed my name and caused to be affixed
the Great Seal of the State of Kansas, this
1st day of April, 1996.
/s/ Bill Graves
---------------------------------------
Governor
<PAGE> 48
[SEAL]
EMBASSY OF THE REPUBLIC OF INDONESIA
TO WHOM IT MAY CONCERN
No.: 121b/KL/IV/96
Seen for the legalization of the seal of the Department of State of the
United States of America No.: 9607401-3 as affixed by Annie R. Maddux,
Authentication Officer, Department of State.
Done at the Embassy of the Republic of Indonesia in Washington,
District of Columbia, this ninth day of April, nineteen hundred ninety six.
For the contents of the annexed document the Embassy of the Republic of
Indonesia assumes no responsibility.
For the Ambassador
of Consular Affairs
[SEAL]
BROTO UTOMO Counselor
<PAGE> 49
ANNEX II - REPRESENTATIVE IN INDONESIA DOCUMENTS
<PAGE> 50
[Government Certificate of Registrant's Representative in Indonesia -
PT Elektrindo Nusantara in Bahasa Language]
<PAGE> 51
[Airport Systems International, Inc. Letterhead]
TO WHOM IT MAY CONCERN
To further clarify the Sole Agent certification Serial Number 1613 P.T.
Elektrindo Nusantara will act as our Sole Agent for the manufacturing of navaid
equipment for F-AT-59 consisting of the following items.
Doppler VHF OminRange (DVOR) System which consists of:
- DVOR Model 1150 and accessories
- Remote Control and Monitoring System (RCMS)
- Radio Link for RCMS
Distance Measuring Equipment (DME) System which consists of:
- DME Model 1119 and 1118 and accessories
Conventional VHF OmniRange (CVOR) System which consists of:
- CVOR Model 1150 and accessories
/s/ K. Cowan [Stamp]
- ------------------------------
K. Cowan
President and CEO
<PAGE> 52
[Airport Systems International, Inc. Letterhead]
5 September 1995
Embassy of the Republic of Indonesia
Office of the Commercial Attache
2020 Massachusetts Avenue, N.W.
Washington, D.C. 20036
Attn: Mr. Sumiyono
Airport Systems International, Inc. ("Airport Systems"), located at 11300 W.
89th Street, Overland Park, KS, USA, 66214, hereby certifies that:
P.T. Elektrindo Nusantara
Bimantara Building
J1. Kebon Sirih 17-19
Jakarta 10340
Republic of Indonesia
is our sole agent and exclusive distributor for Airport Systems' products and
services listed in the agency agreement between Airport Systems and P.T.
Elektrindo Nusantara for the FAT-59 tender for the procurement and installation
of radio navigational aids and related facilities. This tender will be released
by the Directorate General of Air Communication, Communication Department, in
1995 or 1996.
This certificate is valid for three (3) years beginning 5 September 1995.
Respectfully Yours,
/s/ M. M. Warner
M.M. Warner
Vice President, Business Development
[Notary Seal]
/s/ Paula L. Byrnes
<PAGE> 53
Airport Systems International, Inc.
PRODUCTS to be represented by P.T. Elektrindo Nusantara for FAT-59:
Model 1150 Conventional & Doppler VHF Omnirange (DVOR & CVOR)
Models 1118 & 1119 Distance Measuring Equipment (DME)
and any related support equipment, spare or replacement parts, as related to
ground navigation equipment and services as may be required in support of the
operation of Airport Systems' equipment to include training, installation,
maintenance and operation support and other technical assistance.
<PAGE> 54
___edutaan Besar Republik Indonesia [SEAL] Kantor Atase Perdagangan
Embassy of the Republic of Indonesia Office of the Commercial
Attache' Washington, D.C. 20036 2030 Massachusetts Avenue, N.W.
(Cannot read)
No.: 51/ATDAG-REP/VIII/1995 New Registration
TO WHOM IT MAY CONCERN
This is to certify that the following is in accordance with the
statement of Mr. Mike Warner, V.P. Business Development, dated August 7, 1995
which has been notarized by Paula L. Byrnes, Notary Public, State of Kansas
1. Name of Company. Airport Systems International, Inc.
2. Legal form/status. Corporation
3. Date of establishment. 1991
4. Name of Company's President Keith S. Cowan
5. Headquarter's address 11300 West 89th Street
6. Name and address of branch(es) Overland Park, Kansas 66214
and/or factory Same
7. Line of business. Manufacturing navaid
equipment for FAT-59
8. Name & address of agent Mr. Salaman P. Harahap,
in Indonesia PT. Elektrindo Nusantara
Bimantara Bldg. 4th Floor J1. Kebon
Sirih 17-19, Jakarta,
Indonesia
9. Marketing area Republic of Indonesia
This certificate is issued in the framework of execution of the Decree
of the Minister of Trade and Cooperative No. l78/Kp/III/78 dated March 9, 1978,
and The Instruction of Director General of Internal Trade No. 01/DAGRI/INS/II/85
dated February 12, 1985.
Washington, D.C., August 10, 1995
/s/ Gusmardi Bustami
Gusmardi Bustami
----------------
Commercial Attache'
<PAGE> 55
ANNEX III - BILL OF QUANTITY, SCHEDULES AND
BREAKING DOWN OF SPARES
[Subject to Request For Confidential Treatment in its Entirety]
<PAGE> 56
ANNEX IV - TECHNICAL REQUIREMENTS AND SCOPE OF WORKS
[Subject to Request For Confidential Treatment in its Entirety]
<PAGE> 57
ANNEX V - DESCRIPTION OF EQUIPMENT AND SERVICES (ANNEXES)
[Subject to Request For Confidential Treatment in its Entirety]
<PAGE> 58
ANNEX VI - SELLER EQUIPMENT TECHNICAL SPECIFICATIONS
[Subject to Request For Confidential Treatment in its Entirety]
<PAGE> 59
ANNEX VII - TRAINING PROGRAM
[Subject to Request For Confidential Treatment in its Entirety]
<PAGE> 60
ANNEX VIII - FACTORY ACCEPTANCE TEST
[Subject to Request For Confidential Treatment in its Entirety]
<PAGE> 61
ANNEX IX - SITE ACCEPTANCE TEST
[Subject to Request For Confidential Treatment in its Entirety]
<PAGE> 62
ANNEX X - FLIGHT COMMISSIONING TEST PROCEDURE
[Subject to Request For Confidential Treatment in its Entirety]
<PAGE> 63
ANNEX XI - DOCUMENTATION
[Subject to Request For Confidential Treatment in its Entirety]
<PAGE> 64
ANNEX XII - PROJECT REPORTING
[Subject to Request For Confidential Treatment in its Entirety]
<PAGE> 65
ANNEX XIII - FACTORY ACCEPTANCE TEST CERTIFICATE
[Subject to Request For Confidential Treatment in its Entirety]
<PAGE> 66
ANNEX XIV - SITE ACCEPTANCE TEST CERTIFICATE
[Subject to Request For Confidential Treatment in its Entirety]
<PAGE> 67
ANNEX XV - FLIGHT COMMISSIONING TEST CERTIFICATE
[Subject to Request For Confidential Treatment in its Entirety]
<PAGE> 68
ANNEX XVI - DELIVERY TIME SCHEDULE
[Subject to Request For Confidential Treatment in its Entirety]
<PAGE> 69
ANNEX XVII - LIST OF SITES
<PAGE> 70
ANNEX XVII
List of Sites
1 Kibon Point/Ketapang
2 Binaka/Pulau Nias
3 Padang Kemiling/Bengkulu
4 Lasem Point/Lasem
5 Nabire/Nabire
6 Eltari/Kupang
7 Iskandar/Pangkalan Bun
8 Moh Salahuddin/Bima
9 Iswahyudi/Madiun
10 JalaluddinBorontalo
11 PLP TC/Curug
12 Juwata/Tarakan
13 Sentani/Jayapura
14 Jefman/Sorong
15 Pangkal Pinang/Pangkal Pinang
16 Buluh Tumbang/Tanjung Pandan
17 Bandar Lampung/Tanjung Karang
18 Budiarto/Curug
19 Abdurahman Saleh/Malang
20 Mutiara/Palu
21 Walter Mongonsidi/Kendari
22 Maintenance Center and Repair Balai Elektronika/Jakarta
<PAGE> 71
ANNEX XVIII - BUYER CERTIFICATION OF SITE READINESS
[Subject to Request For Confidential Treatment in its Entirety]
<PAGE> 72
ANNEX XIX - CERTIFICATE OF FINAL ACCEPTANCE
AND HANDING OVER OF EQUIPMENT
[Subject to Request For Confidential Treatment in its Entirety]
<PAGE> 73
ANNEX XX - PRICE SUMMARY
[Subject to Request For Confidential Treatment in its Entirety]
<PAGE> 74
ANNEX XXI - PERFORMANCE BOND
[Subject to Request For Confidential Treatment in its Entirety]
<PAGE> 75
ANNEX XXII - ADVANCE PAYMENT BOND
[Subject to Request For Confidential Treatment in its Entirety]
<PAGE> 76
ANNEX XXIII - CERTIFICATE OF TRAINING COMPLETION
[Subject to Request For Confidential Treatment in its Entirety]
<PAGE> 77
ANNEX XXIV - INSTRUMENT FLIGHT PROCEDURES
<PAGE> 78
DOCUMENTATION RECORD
Procedure Checklist for Non-Precision
[The first four pages of this Annex consist of a Documentation Record
which is a tabular procedural checklist for non-precision approaches.]
<PAGE> 79
INSTRUMENT APPROACH PROCEDURES FORM
[Pages 5-8 of this Annex consist of an Instrument Approach Procedures
Form with boxed areas for information relating to the name of the
airport, location, approach control, ADC tower, ground control, type
radar service, runway TDZ elevation, procedure identification,
aerorome reference point, magnetic variation, effective date, plan
view, profile view, landing minima, approach information, additional
information, obstacle data, holding data, minimum altitude, emergency
safe altitude, feeder routes, visual aids, flight check, coordination,
lost communication instruction and remarks.]
<PAGE> 80
CHAPTER 4. ON-AIRPORT VOR (NO FAF)
400. GENERAL.
This chapter is divided into two sections: one for low altitude
procedures and one for high altitude teardrop penetration procedures. These
criteria apply to procedures based on a VOR facility located on an airport in
which no final approach fix (FAF) is established. These procedures must
incorporate a procedure or a penetration turn. An ON-AIRPORT facility is one
which is located:
a. For Straight-In Approach. Within one mile of the nearest
portion of the landing runway.
b. For Circling Approach. Within one mile of the nearest portion
of the usable landing surface of the airport.
401.-409. RESERVED.
SECTION 1. LOW ALTITUDE PROCEDURES
410. FEEDER ROUTES.
Criteria for feeder routes are contained in Para 220.
411. INITIAL APPROACH SEGMENT.
The initial approach fix is received by overheading the navigation
facility. The initial approach is a procedure turn. The criteria for the
procedure turn areas are contained in Paragraph 234.
412. INTERMEDIATE APPROACH SEGMENT.
This type of procedure has no intermediate segment. Upon completion of
the procedure turn, the aircraft is on final approach.
413. FINAL APPROACH SEGMENT.
The final approach begins where the procedure turn intersects the final
approach course inbound.
a. Alignment. The alignment of the final approach course with
the runway centerline determines whether a straight-in or
circling approach may be established.
(1) Straight-In. The angle of convergence of the final
approach course and the extended runway centerline
shall not exceed 30 degrees. The final approach
course should be aligned to intersect the extended
runway centerline 3000 feet outward from the runway
threshold. When an
<PAGE> 81
operational advantage can be achieved this point of
intersection may be established at any point between
the runway threshold and a point 5200 feet outward
from the runway threshold. Also, where an
operational advantage can be achieved, a final
approach course which does not intersect the runway
centerline, or intersects it at a distance greater
than 5200 feet from the threshold, may be established
provided such a course lies within 500 feet laterally
of the extended runway centerline at a point 3000
feet outward from the runway threshold. See Figure
38.
(2) Circling Approach. When the final approach course
alignment does not meet the criteria for straight-in
landing, only a circling approach shall be
authorized, and the course alignment should be made
to the center of the landing area. When an
operational advantage can be achieved, the final
approach course may be aligned to pass through any
portion of the usable landing surface. See Figure 39.
b. Area. Figure 40 illustrates the final approach primary and
secondary areas. The primary area is longitudinally centered
on the final approach course, and is 10 miles long. The
primary area is 2 miles wide at the facility and expands
uniformly to 6 miles at 10 mile from the facility. A
secondary area is on each side of the primary area. It is
zero miles wide at the facility and expands uniformly to 1.34
miles on each side of the primary area at 10 miles from the
facility. When the 5 mile procedure turn is used, only the
inner 5 miles of the final approach area need be considered.
c. Obstacle Clearance.
(1) Straight-In. The minimum obstacle clearance in the
primary area is 300 feet. In the secondary area, 300
feet of obstacle clearance shall be provided at the
inner edge, tapering uniformly to zero feet at the
outer edge. The minimum required obstacle clearance
at any given point in the secondary area is found in
Annex C. Figure 126.
[Diagram - Figure 38. Alignment Options for Final Approach Course.
On-Airport VOR, No. FAF. Straight-in Approach Procedure. Para
413.a.(1).]
[Diagram - Figure 39. Alignment Options for Final Approach Course
On-Airport VOR. No. FAF. Circling Approach Procedure. Para.
413.a.(2).]
[Diagram - Figure 40. Final Approach Primary and Secondary Areas.
On-Airport VOR. No. FAF. Para. 413.b.]
[Diagram - Figure 41. Procedure Turn Altitude. On-Airport VOR. No.
FAF. Para. 413.d.]
(2) Circling Approach. In addition to the minimum
requirements specified in Para. 413.c.(1) obstacle
clearance in the circling area shall be as prescribed
in Chapter 2, Section 6.
<PAGE> 82
d. Procedure Turn Altitude (Descent Gradient). The procedure
turn completion altitude shall be within 1500 feet of the MDA
(1000 feet with a 5 mile procedure turn), provided the
distance from the facility to the point where the final
approach course intersects the runway centerline (or the first
usable portion of the landing area for "circling only"
procedures) does not exceed 2 miles. When this distance
exceeds 2 miles, the maximum difference between the procedure
turn completion altitude and the MDA shall be reduced at the
rate of 25 feet for each one tenth of a mile in excess of 2
miles.
NOTE: For those procedures in which the final approach does NOT intersect the
extended runway centerline within 5200 feet of the runway threshold (see Para
413.a.(1)) the assumed point of intersection for computing the distance from
the facility shall be 3000 feet from the runway threshold. See Figure 38.
e. Use of Step-down Fix. Use of the step-down fix (para 288.c)
is permitted provided the distance from the facility to the
step-down fix does not exceed 4 miles. Where the step-down
fix is used, the obstacle clearance (para 413.c.(1)) may be
reduced to 250 feet from the step-down fix to the MAP. See
Figure 42 below. See also Para 251.
[Diagram - Figure 42. Use of Step-down Fix. On-Airport VOR.
No. FAF. Para 413.e.]
f. Minimum Descent Altitude. Criteria for determining the MDA
are contained in Chapter 3.
414. MISSED APPROACH SEGMENT.
Criteria for the missed approach segment are contained in Chapter 2,
Section 7. The missed approach point is the facility. See Figure 42. The missed
approach surface shall commence over the facility at the required height. See
Para 274.
415.-419. RESERVED.
SECTION 2. HIGH ALTITUDE TEARDROP PENETRATIONS
420. FEEDER ROUTES.
Criteria for feeder routes are contained in Para 220.
421. INITIAL APPROACH SEGMENT.
The initial approach fix is received by overheading the navigation
facility. The initial approach is a teardrop penetration turn. The criteria
for the penetration turn are contained in Para 235.
<PAGE> 83
422. INTERMEDIATE APPROACH SEGMENT.
This procedure has no intermediate segment. Upon completion of the
penetration turn, the aircraft is on final approach.
423. FINAL APPROACH SEGMENT.
An aircraft is considered to be on final approach upon completion of
the penetration turn. However, the final approach segment begins on the final
approach course 10 miles from the facility. That portion of the penetration
procedure prior to the 10-mile point is treated as the initial approach segment.
See Figure 43.
a. Alignment. Same as low altitude (Para 413.a.).
b. Area. Figure 43 illustrates the final approach primary and
secondary areas. The primary area is longitudinally centered
on the final approach course, and is 10 miles long. The
primary area is 2 miles wide at the facility, and expands
uniformly to 8 miles at a point 10 miles from the facility. A
secondary area is on each side of the Primary area. It is
zero miles wide at the facility, and expands uniformly to 2
miles each side of the primary area at a point 10 miles from
the facility.
[Diagram - Figure 43. Penetration Turn On-Airport VOR. No. FAF. Para
423.]
c. Obstacle Clearance.
(1) Straight-In. The minimum obstacle clearance in the
primary area is 500 feet. In the secondary area, 500
feet of obstacle clearance shall be provided at the
inner edge, tapering uniformly to zero feet at the
outer edge. The minimum required obstacle clearance
at any given point in the secondary area is shown in
Annex C, Figure 123.
(2) Circling Approach. In addition to the minimum
requirements specified in Para 423.c.(1), obstacle
clearance in the circling area shall be as prescribed
in Chapter 2, Section 6.
d. Penetration Turn Altitude (Descent Gradient). The penetration
turn completion altitude shall be at least 1000 feet, but not
more than 4000 feet above the MDA on final approach.
3. Use of Step-down Fix. The use of the step-down fix is
permitted provided the distance from the facility to the
step-down fix does not exceed 10 miles. See Para 288.c.
f. Minimum Descent Altitude. In addition to the normal obstacle
clearance requirement of the final approach segment (see Para
423.c.), the MDA specified shall provide at least 500 feet of
clearance over obstacles in the portion of the
<PAGE> 84
initial approach segment between the final approach segment
and the point where the assumed penetration turn tract
intercepts the inbound course. See Figure 43.
424. MISSED APPROACH SEGMENT.
Criteria for the missed approach segment are contained in Chapter 2,
Section 7. The missed approach point is the facility. See Figure 43. The
missed approach surface shall commence over the facility at the required
height. See Para 274.
425.-499. RESERVED.
<PAGE> 85
CHAPTER 5. TACAN, VOR/DME AND VOR WITH FAF
500. GENERAL.
This chapter applies to approach procedures based on the elements of
the VORTAC facility; i.e., VOR, VOR/DME, and TACAN, in which a final approach
fix (FAF) is established. The chapter is divided into two sections: Section 1
for VOR procedures which do not use DME as the primary method for establishing
fixes, and Section 2 for VOR/DME and TACAN procedures which use collocated,
frequency paired DME as the sole method of establishing fixes. When both the VOR
and TACAN azimuth elements of a VORTAC station will support it, a single
procedure, identified as a VOR/DME or TACAN shall be published. Such a procedure
may be flown using either a VOR/DME or TACAN airborne receiver and shall satisfy
TACAN terminal area fix requirements. See Para 286.d.
501.-509. RESERVED.
SECTION 1. VOR WITH FAF
510. FEEDER ROUTES.
Criteria for feeder routes are contained in Para 220.
511. INITIAL APPROACH SEGMENT.
Criteria for the initial approach segment are contained in Chapter 2,
Section 3. See Figures 44 and 45.
512. INTERMEDIATE APPROACH SEGMENT.
Criteria for the intermediate approach segment are contained in
Chapter 2, Section 4. See Figures 44 and 45.
513. FINAL APPROACH SEGMENT.
The final approach may be made either "FROM" or "TOWARD" the facility.
The final approach segment begins at the final approach fix and ends at the
runway or missed approach point, whichever is encountered last.
a. Alignment. The alignment of the final approach course with
the runway centerline determines whether a straight-in or
circling-only approach may be established. The alignment
criteria differs depending on whether the facility is OFF or
ON the airport. See definitions in Para 400.
<PAGE> 86
(1) Off-Airport Facility.
(a) Straight-In. The angle of convergence of the
final approach course and the extended runway
centerline shall not exceed 30 degrees. The
final approach course should be aligned to
intersect the runway centerline at the runway
threshold. However, when an operational
advantage can be achieved, the point of
intersection may be established as much as
3000 feet outward from the runway threshold.
See Figure 46.
(b) Circling Approach. When the final approach
course alignment does not meet the criteria
for a straight-in landing, only a circling
approach shall be authorized, and the course
alignment should be made to the center of the
landing area. When an operational advantage
can be achieved, the final approach course
may be aligned to any portion of the usable
landing surface. See Figure 47.
(2) On-Airport Facility.
(a) Straight-In. The angle of convergence of the
final approach course and the extended runway
centerline shall not exceed 30 degrees. The
final approach course should be aligned to
intersect the extended runway centerline 3000
feet outward from the runway threshold. When
an operational advantage can be achieved,
this point of intersection may be established
at any point between the threshold and a
point 5200 feet outward from the threshold.
Also, where an operational advantage can be
achieved a final approach course which does
not intersect the runway centerline, or which
intersects it at a distance greater than 5200
feet from the threshold, may be established,
provided that such a course lies within 500
feet laterally of the extended runway
centerline at a point 3000 feet outward from
the runway threshold. See Figure 48.
(b) Circling Approach. When the final approach
course alignment does not meet the criteria
for a straight-in landing, only a circling
approach shall be authorized, and the course
alignment should be made to the center of the
landing area. When an operational advantage
can be achieved, the final approach course
may be aligned to any portion of the usable
landing surface. See Figure 49.
b. Area. The area considered for obstacle clearance in
the final approach segment starts at the final
approach fix and ends at the runway or missed
approach point, whichever is encountered last. It is
a portion of a 30-mile long trapezoid (see Figure 50)
which is made up of primary and secondary areas. The
primary area is centered longitudinally on the final
approach course. It is 2 miles wide at the facility,
and expands uniformly to 5
<PAGE> 87
miles wide at 30 miles from the facility. A
secondary area is on each side of the primary area.
It is zero miles wide at the facility and expands
uniformly to 1 miles on each side of the primary area
at 30 miles from the facility. Final approaches may
be made to airports which are a maximum of 30 miles
from the facility. See Figure 51. The OPTIMUM
length of the final approach segment is 5 miles. The
MAXIMUM length is 10 miles. The MINIMUM length of
the final approach segment shall provide adequate
distance for an aircraft to make the required
descent, and to regain course alignment when a turn
is required over the facility. Table 14 shall be
used to determine the minimum length needed to regain
the course.
[Diagram - Figure 44. Typical Low Altitude Approach Segments. VOR with
FAF. Para 511 and 512.]
[Diagram - Figure 45. Typical High Altitude Segments. VOR with FAF.
Para 511 and 512.]
[Diagram - Figure 46. Alignment Options for Final Approach Course.
Off-Airport VOR with FAF. Straight-in Approach. Para 513.a.(1)(a).]
[Diagram - Figure 47. Alignment Options for Final Approach Course.
Off-Airport VOR with FAF. Circling Approach. Para 513.a.(1)(b).]
[Diagram - Figure 48. Alignment Options for Final Approach Course.
On-Airport VOR with FAF. Straight-in Approach. Para 513.a.(2)(a).]
[Diagram - Figure 49. Alignment Options for Final Approach Course.
On-Airport VOR with FAF. Circling Approach. Para 513.a.(2)(b).]
[Diagram - Figure 50. Final Approach Trapezoid. VOR with FAF. Para
513.b.]
[Diagram - Figure 51. Typical Straight-in Final Approaches. FOR with
FAF. Para 513.b.]
[Diagram Figure 52. Missed Approach Point. Off-Airport VOR with FAF.
Para 514.a.(1).]
c. Obstacle Clearance.
(1) Straight-In Landing. The minimum obstacle clearance
in the primary area is 250 feet. In the secondary
area 250 feet of obstacle clearance shall be provided
at the inner edge, tapering uniformly to zero feet at
the outer edge. The minimum obstacle clearance at
any given point in the secondary area is shown in
Annex C, Figure 125
<PAGE> 88
(2) Circling Approach. In addition to the minimum
requires specified in Para 513.c(1) above, obstacle
clearance in the circling area shall be as prescribed
in Chapter 2, Section 6.
d. Descent Gradient. The OPTIMUM descent gradient in the final
approach segment should not exceed 300 feet per mile. Where a
higher descent gradient is necessary, the MAXIMUM permissible
gradient is 400 feet per mile. (See also Para 288.a).
(1) Straight-In Approach. The descent gradient shall be
computed using the distance from the FAF to the
runway threshold and the difference in altitude
between the altitude over the FAF and the touchdown
zone elevation.
Table 14. MINIMUM LENGTH OF FINAL APPROACH SEGMENT-VOR (MILES)
[Table of Approach Categories and Magnitude of Turnover the Facility.]
Note: This table may be interpolated. If the
minimum lengths specified in the table are not
available, straight-in minimums are not authorized.
See Figure 51 for typical final approach areas.
(2) Circling Approach. The descent gradient shall be
computed using the distance from the FAF to the first
usable portion of the landing surface and the
difference in altitude between the altitude over the
FAF and the circling MDA.
e. Use of Fixes. Criteria for the use of radio fixes are
contained in Chapter 2, Section 8. Where a procedure is based
on a procedure turn and an on-airport facility is the
procedure turn fix, the distance from the facility to the FAF
shall not exceed 4 miles.
f. Minimum Descent Altitudes. Criteria for determining the MDA
are contained in Chapter 3, Section 2.
514. MISSED APPROACH SEGMENT.
Criteria for the missed approach segment are contained in Chapter 2,
Section 7. VOR procedures, the missed approach point and surface shall be
established as follows:
a. Off-Airport Facilities.
(1) Straight-In. The missed approach point is a point on
the final approach course which is NOT farther from
the final approach fix than the runway threshold.
See Figure 52. The missed approach surface shall
commence over the missed approach point at the
required height. (See Para 274).
<PAGE> 89
(2) Circling Approach. The missed approach point is a
point on the final approach course which is NOT
farther from the final approach fix than the first
usable portion of the landing area. The missed
approach surface shall commence over the missed
approach point at the required height. (See Para
274).
b. On-Airport Facilities. The missed approach point is a point
on the final approach course which is NOT farther from the
final approach fix than the facility. The missed approach
surface shall commence over the missed approach point at the
required height. (See Paragraph 274).
515.-519. RESERVED.
SECTION 2. TACAN AND VOR/DME
520. FEEDER ROUTES.
Criteria for feeder routes are contained at Para 220.
521. INITIAL APPROACH SEGMENT.
Due to the fixing capability of TACAN and VOR/DME a procedure turn
initial approach may not be required. Criteria for initial approach segments are
contained in Chapter 2, Section 3.
522. INTERMEDIATE APPROACH SEGMENT.
Criteria for the intermediate segment are contained in Chapter 2,
Section 4.
523. FINAL APPROACH SEGMENT.
TACAN and VOR/DME final approaches may be based either on arcs or
radials. The final approach begins at a final approach fix and ends at the
missed approach point. The missed approach point is always marked with a fix.
a. Radial Final Approach. Criteria for the radial final approach
are specified in Para 513.
b. Arc Final Approach. The final approach arc shall be a
continuation of the intermediate arc. It shall be specified
in nautical miles and tenths thereof. Arcs closer than 7
miles (15 miles for high altitude procedures) and farther than
30 miles from the facility shall NOT be used for final
approach. No turns are permitted over the final approach fix.
(1) Alignment. For Straight-In approaches, the final
approach arc shall pass through the runway threshold
when the angle of convergence of the runway
centerline and the tangent of the arc does not exceed
15 degrees. When the angle exceeds 15 degrees the
final approach arc shall be aligned
<PAGE> 90
to pass through the center of the airport and only
circling minimums shall be authorized. See Figure
53.
[Diagram - Figure 53. Arc Final Approach Alignment. Arc Aligned to
Threshold. TACAN or VOR/DME. Para 523.b.(1).]
(2) Area. The area considered for obstacle clearance in
the arc final approach segments starts at the final
approach fix and ends at the runway or missed
approach point, whichever is encountered last. It
should NOT be more than 5 miles long. It shall be
divided into primary and secondary areas. The
primary area is 8 miles wide, and extends 4 miles on
either side of the arc. A secondary area is on each
side of the primary area. The secondary areas are 2
miles wide on each side of the primary area. See
Figure 54.
[Diagram - Figure 54. ARC Final Approach Area. TACAN or VOR/DME. Para
523.b.(2).]
(3) Obstacle Clearance. The minimum obstacle clearance
in the primary area is 500 feet. In the secondary
area, 500 feet of obstacle clearance shall be
provided at the inner edge, tapering uniformly to
zero feet at the outer edge. The minimum required
obstacle clearance at any point in the secondary area
is shown in Appendix 2, Figure 123.
(4) Descent Gradient. Criteria for descents are
specified in Para 513.d.
(5) Use of Fixes. Fixes along an arc are restricted to
those formed by radials from the VORTAC facility
which provides the DME signal. Criteria for such
fixes are contained in Chapter 2, Section 8.
(6) Minimum Descent Altitude. Straight-In MDAs shall be
specified lower than circling for arc procedures.
Criteria for determining the circling MDA are
contained in Chapter 3, Section 2.
524. MISSED APPROACH SEGMENT.
Criteria for the missed approach segment are contained in Chapter 2,
Section 7. The missed approach point shall be a radial/DME fix. The missed
approach surface shall commence over the fix and at the required height. (Also
See Para 514.)
NOTE: The arc missed approach course may be a continuation of the final
approach arc.
525.-599. RESERVED.
<PAGE> 91
ANNEX XXV - WARRANTY CLAIM FORM
[Subject to Request For Confidential Treatment in its Entirety]
<PAGE> 92
ANNEX XXVI - STATEMENT OF TECHNICAL SUPPORT
AND AFTER SALES SERVICE
[Subject to Request For Confidential Treatment in its Entirety]
<PAGE> 93
ANNEX XXVII - STATEMENT OF COMMITMENT TO USE
INDONESIAN FREIGHT FORWARDER AND INSURANCE
[Subject to Request For Confidential Treatment in its Entirety]
<PAGE> 94
ANNEX XXVIII - LIST OF EQUIPMENT FREQUENCIES
[Subject to Request For Confidential Treatment in its Entirety]
<PAGE> 95
ANNEX XXIX - STATEMENT OF MANPOWER INSURANCE
[Subject to Request For Confidential Treatment in its Entirety]
<PAGE> 96
ANNEX XXX - LIST OF LOCAL CONTENT
[Subject to Request for Confidential Treatment in its Entirety]
<PAGE> 1
EXHIBIT 11.1
AIRPORT SYSTEMS INTERNATIONAL, INC. AND SUBSIDIARY
NET INCOME PER SHARE COMPUTATION
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
January 31, January 31,
-------- -------- -------- --------
1997 1996 1997 1996
-------- -------- -------- --------
(In thousands, except per share data)
PRIMARY
- ---------------------------------------------------
<S> <C> <C> <C> <C>
Net income (loss) applicable to common stockholders $ (98) $ (74) $ 99 $ (441)
======= ======= ========= =======
Weighted average number of common
shares outstanding during the periods 2,231 2,190 2,230 2,190
Add - dilutive common equivalent shares
(determined using the "treasury stock method")
representing shares issuable upon the exercise
of stock options -- -- 170 --
------- ------- --------- -------
Weighted average number of shares used
in calculation of primary net income (loss) per share 2,231 2,190 2,400 2,190
======= ======= ========= =======
Net income (loss) per common share - primary $ (0.04) $ (0.03) $ 0.04 $ (0.20)
======= ======= ========= =======
FULLY DILUTED
- ---------------------------------------------------
Net income (loss) applicable to common stockholders $ (98) $ (74) $ 99 $ (441)
======= ======= ========= =======
Weighted average number of shares used in calculating
primary net income per common share computation 2,231 2,190 2,400 2,190
Add (deduct) incremental shares representing:
Shares issuable upon exercise of stock options
included in primary calculation above -- -- (170) --
Shares issuable upon exercise of stock options
based on period-end market price -- -- (170) --
------- ------- --------- -------
Weighted average number of shares used in
calculation of fully diluted net income (loss)
per share 2,231 2,190 2,400 2,190
======= ======= ========= =======
Net income (loss) per common share - fully diluted $ (0.04) $ (0.03) $ 0.04 $ (0.20)
======= ======= ========= =======
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE AIRPORT
SYSTEMS INTERNATIONAL, INC. FORM 10-QSB FOR THE PERIOD ENDED JANUARY 31, 1997
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FORM 10-QSB.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> APR-30-1997
<PERIOD-START> MAY-01-1996
<PERIOD-END> JAN-31-1997
<EXCHANGE-RATE> 1
<CASH> 489
<SECURITIES> 0
<RECEIVABLES> 5,468
<ALLOWANCES> 55
<INVENTORY> 4,365
<CURRENT-ASSETS> 131
<PP&E> 2,958
<DEPRECIATION> 1,238
<TOTAL-ASSETS> 13,571
<CURRENT-LIABILITIES> 3,327
<BONDS> 0
0
0
<COMMON> 22
<OTHER-SE> 9,014
<TOTAL-LIABILITY-AND-EQUITY> 13,571
<SALES> 12,805
<TOTAL-REVENUES> 12,805
<CGS> 8,930
<TOTAL-COSTS> 12,564
<OTHER-EXPENSES> 83
<LOSS-PROVISION> 17
<INTEREST-EXPENSE> 77
<INCOME-PRETAX> 157
<INCOME-TAX> 58
<INCOME-CONTINUING> 99
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 99
<EPS-PRIMARY> .04
<EPS-DILUTED> .04
</TABLE>
