AIRCRAFT GENERAL TERMS AGREEMENT
AGTA-AAT
between
THE BOEING COMPANY
and
American Trans Air, Inc.
TABLE OF CONTENTS
PAGE
ARTICLES NUMBER
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1. Subject Matter of Sale 1
2. Price, Taxes and Payment 1
3. Regulatory Requirements and Certificates 3
4. Detail Specification; Changes 4
5. Representatives, Inspection, Demonstration Flights,
Test Data and Performance Guarantee Compliance 4
6. Delivery 5
7. Excusable Delay 5
8. Risk Allocation/Insurance 7
9. Assignment, Resale or Lease 8
10. Termination for Certain Events 9
11. Notices 10
12. Miscellaneous 10
EXHIBITS
A Buyer Furnished Equipment Provisions Document
B Customer Support Document
C Product Assurance Document
APPENDICES
I Insurance Certificate
II Purchase Agreement Assignment
III Post-Delivery Sale Notice
IV Post-Delivery Lease Notice
V Purchaser's/Lessee's Agreement
VI Owner Appointment of Agent - Warranties
VII Contractor Confidentiality Agreement
AIRCRAFT GENERAL TERMS AGREEMENT NUMBER AGTA-AAT
between
The Boeing Company
and
American Trans Air, Inc.
Relating to
BOEING AIRCRAFT
This Aircraft General Terms Agreement Number AGTA-AAT (AGTA)
between The Boeing Company, including its wholly-owned subsidiary McDonnell
Douglas Corporation, (Boeing) and American Trans Air, Inc. (Customer) will apply
to all Boeing aircraft contracted for purchase from Boeing by Customer after the
effective date of this AGTA.
Article 1. Subject Matter of Sale.
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1.1 Aircraft. Boeing will manufacture and sell to Customer and
Customer will purchase from Boeing aircraft under purchase agreements that
incorporate the terms and conditions of this AGTA.
1.2 Buyer Furnished Equipment. Exhibit A, Buyer Furnished
Equipment Provisions Document to the AGTA, contains the obligations of Customer
and Boeing with respect to equipment purchased and provided by Customer, which
Boeing will receive, inspect, store, and install in an aircraft before delivery
to Customer. This equipment is defined as Buyer Furnished Equipment (BFE).
1.3 Customer Support. Exhibit B, Customer Support Document to
the AGTA, contains the obligations of Boeing relating to Materials (as defined
in Part 3 thereof), training, services, and other things in support of aircraft.
1.4 Product Assurance. Exhibit C, Product Assurance Document
to the AGTA, contains the obligations of Boeing and the suppliers of equipment
installed in each aircraft at delivery relating to warranties, patent
indemnities, software copyright indemnities, and service life policies.
Article 2. Price, Taxes, and Payment.
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2.1 Price.
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2.1.1 Airframe Price is defined as the price of the airframe for a specific
model of aircraft described in a purchase agreement. (For Models 717-200,
737-600, 737-700, 737-800 and 737-900, the Airframe Price includes the engine
price at its basic thrust level.)
2.1.2 Optional Features Prices are defined as the prices for optional
features selected by Customer for a specific model of aircraft described in a
purchase agreement.
2.1.3 Engine Price is defined as the price set by the engine manufacturer
for a specific engine to be installed on the model of aircraft described in a
purchase agreement (not applicable to Models 717-200, 737-600, 737-700, 737-800
and 737-900).
2.1.4 Aircraft Basic Price is defined as the sum of the Airframe Price,
Optional Features Prices, and the Engine Price, if applicable.
2.1.5 Escalation Adjustment is defined as the price adjustment to the
Airframe Price (which includes the basic engine price for Models 717-200,
737-600, 737-700 737-800 and 737-900) and the Optional Features Prices resulting
from the calculation using the economic price formula contained in the Airframe
Escalation Adjustment to the applicable purchase agreement. The price adjustment
to the Engine Price for all other models of aircraft will be calculated using
the economic price formula in the Engine Escalation Adjustment to the applicable
purchase agreement.
2.1.6 Advance Payment Base Price is defined as the estimated price of an
aircraft rounded to the nearest thousand dollars, as of the date of signing a
purchase agreement, for the scheduled month of delivery of such aircraft using
commercial forecasts of the Escalation Adjustment.
2.1.7 Aircraft Price is defined as the total amount Customer is to pay for
an aircraft at the time of delivery, which is the sum of the Aircraft Basic
Price, the Escalation Adjustment, and other price adjustments made pursuant to
the purchase agreement.
2.2 Taxes.
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2.2.1 Taxes. Taxes are defined as all taxes, fees, charges, or duties and
any interest, penalties, fines, or other additions to tax, including, but
not limited to sales, use, value added, gross receipts, stamp, excise, transfer,
and similar taxes imposed by any domestic or foreign taxing authority, arising
out of or in connection with the performance of the applicable purchase
agreement or the sale, delivery, transfer, or storage of any aircraft, BFE, or
other things furnished under the applicable purchase agreement. Except for U.S.
federal or California State income taxes imposed on Boeing or Boeing's assignee,
and Washington State business and occupation taxes imposed on Boeing or Boeing's
assignee, Customer will be responsible for and pay all Taxes. Customer is
responsible for filing all tax returns, reports, declarations and payment of any
taxes related to or imposed on BFE.
2.2.2 Reimbursement of Boeing. Customer will promptly reimburse Boeing on
demand, net of additional taxes thereon, for any Taxes
that are imposed on and paid by Boeing or that Boeing is responsible for
collecting.
2.3 Payment.
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2.3.1 Advance Payment Schedule. Customer will make advance payments to
Boeing for each aircraft in the amounts and on the dates indicated in the
schedule set forth in the applicable purchase agreement.
2.3.2 Payment at Delivery. Customer will pay any unpaid balance of the
Aircraft Price at the time of delivery of each aircraft.
2.3.3 Form of Payment. Customer will make all payments to Boeing by
unconditional wire transfer of immediately available funds in United States
Dollars in a bank account in the United States designated by Boeing.
2.3.4 Monetary and Government Regulations. Customer is responsible for
complying with all monetary control regulations and for obtaining necessary
governmental authorizations related to payments.
Article 3. Regulatory Requirements and Certificates.
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3.1 Certificates. Boeing will manufacture each aircraft to
conform to the appropriate Type Certificate issued by the United States Federal
Aviation Administration (FAA) for the specific model of aircraft and will obtain
from the FAA and furnish to Customer at delivery of each aircraft either a
Standard Airworthiness Certificate or an Export Certificate of Airworthiness
issued pursuant to Part 21 of the Federal Aviation Regulations.
3.2 FAA or Applicable Regulatory Authority Manufacturer Changes.
3.2.1 A Manufacturer Change is defined as any change to an aircraft, data
relating to an aircraft, or testing of an aircraft required by the FAA to obtain
a Standard Airworthiness Certificate, or by the country of import and/or
registration to obtain an Export Certificate of Airworthiness.
3.2.2 Boeing will bear the cost of incorporating all Manufacturer Changes
into the aircraft:
(i) resulting from requirements issued by the FAA prior to the date of the
Type Certificate for the applicable aircraft;
(ii) resulting from requirements issued by the FAA prior to the date of
the applicable purchase agreement; and
(iii) for any aircraft delivered during the 18 month period immediately
following the date of the applicable purchase agreement (regardless of when the
requirement for such change was issued by the FAA).
3.2.3 Customer will pay Boeing's charge for incorporating all other
Manufacturer Changes into the aircraft, including all changes for validation of
an aircraft required by any governmental agency of the country of import and/or
registration.
3.3 FAA Operator Changes.
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3.3.1 An Operator Change is defined as a change in equipment that is
required by Federal Aviation Regulations which (i) is generally applicable to
transport category aircraft to be used in United States certified air carriage
and (ii) the required compliance date is on or before the scheduled delivery
month of the aircraft.
3.3.2 Boeing will deliver each aircraft with Operator Changes incorporated
or, at Boeing's option, with suitable provisions for the incorporation of such
Operator Changes, and Customer will pay Boeing's applicable charges.
3.4 Export License. If an export license is required by United
States law or regulation for any aircraft or any other things delivered under
the purchase agreement, it is Customer's obligation to obtain such license. If
requested, Boeing will assist Customer in applying for any such export license.
Customer will furnish any required supporting documents.
Article 4. Detail Specification; Changes.
-----------------------------
4.1 Configuration Changes. The Detail Specification is defined
as the Boeing document that describes the configuration of each aircraft
purchased by Customer. The Detail Specification for each aircraft may be amended
(i) by Boeing to reflect the incorporation of Manufacturer Changes and Operator
Changes or (ii) by the agreement of the parties. In either case the amendment
will describe the particular changes to be made and any effect on design,
performance, weight, balance, scheduled delivery month, Aircraft Basic Price,
Aircraft Price, and/or Advance Payment Base Price.
4.2 Development Changes. Development Changes are defined as
changes to aircraft that do not affect the Aircraft Price or scheduled delivery
month, and do not adversely affect guaranteed weight, guaranteed performance, or
compliance with the interchangeability or replaceability requirements set forth
in the applicable Detail Specification. Boeing may, at its option, incorporate
Development Changes into the Detail Specification and into an aircraft prior to
delivery to Customer.
4.3 Notices. Boeing will promptly notify Customer of any amendments to a
Detail Specification.
Article 5. Representatives, Inspection, Demonstration Flights, Test Data
and Performance Guarantee Compliance.
5.1 Office Space. Twelve months before delivery of the first aircraft
purchased, and continuing until the delivery of the last aircraft on firm order,
Boeing will furnish, free of charge, suitable office space and equipment for the
accommodation of up to three representatives of Customer in or conveniently
located near the assembly plant.
5.2 Inspection. Customer's representatives may inspect each aircraft at any
reasonable time, provided such inspection does not interfere with Boeing's
performance.
5.3 Demonstration Flights. Prior to delivery, Boeing will fly each aircraft
up to 4 hours to demonstrate to Customer the function of the aircraft and its
equipment using Boeing's production flight test procedures. Customer may
designate up to five representatives to participate as observers.
5.4 Test Data; Performance Guarantee Compliance. Performance Guarantees are
defined as the written guarantees in a purchase agreement regarding the
operational performance of an aircraft. Boeing will furnish to Customer flight
test data obtained on an aircraft of the same model to evidence compliance with
the Performance Guarantees. Performance Guarantees will be met if reasonable
engineering interpretations and calculations based on the flight test data
establish that the particular aircraft being delivered under the applicable
purchase agreement would, if actually flown, comply with the guarantees.
5.5 Special Aircraft Test Requirements. Boeing may use an aircraft for
flight and ground tests prior to delivery, without reduction in the Aircraft
Price, if the tests are considered necessary by Boeing (i) to obtain or maintain
the Type Certificate or Certificate of Airworthiness for the aircraft or (ii) to
evaluate potential improvements that may be offered for production or retrofit
incorporation.
Article 6. Delivery.
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6.1 Notices of Delivery Dates. Boeing will notify Customer of the
approximate delivery date of each aircraft at least 30 days before the scheduled
month of delivery and again at least 14 days before the scheduled delivery date.
6.2 Place of Delivery. Each aircraft will be delivered at a facility
selected by Boeingin the same state as the primary assembly plant for the
aircraft.
6.3 Bill of Sale. At delivery of an aircraft, Boeing will provide Customer
a bill of sale conveying good title, free of encumbrances.
6.4 Delay. If Customer delays acceptance of an aircraft beyond the
scheduled delivery date, Customer will reimburse Boeing for all costs incurred
by Boeing as a result of the delay.
Article 7. Excusable Delay.
---------------
7.1 General. Boeing will not be liable for any delay in the scheduled
delivery month of an aircraft or other performance under a purchase agreement
caused by (i) acts of God; (ii) war or armed hostilities; (iii) government acts
or priorities; (iv) fires, floods, or earthquakes; (v) strikes or labor troubles
causing cessation, slowdown, or interruption of work; (vi) inability, after due
and timely diligence, to procure materials, systems, accessories, equipment or
parts; or (vii) any other cause to the extent such cause is beyond Boeing's
control and not occasioned by Boeing's fault or negligence. A delay resulting
from any such cause is defined as an Excusable Delay.
7.2 Notice. Boeing will give written notice to Customer (i) of a delay as
soon as Boeing concludes that an aircraft will be delayed beyond the scheduled
delivery month due to an Excusable Delay and, when known, (ii) of a revised
delivery month based on Boeing's appraisal of the facts.
7.3 Delay in Delivery of Twelve Months or Less. If the revised delivery
month is 12 months or less after the scheduled delivery month, Customer will
accept such aircraft when tendered for delivery, subject to the following:
7.3.1 The calculation of the Escalation Adjustment will be based on the
previously scheduled delivery month.
7.3.2 The advance payment schedule will be adjusted to reflect the revised
delivery month.
7.3.3 All other provisions of the applicable purchase agreement, including
the BFE on-dock dates for the delayed aircraft, are unaffected by an Excusable
Delay.
7.4 Delay in Delivery of More Than Twelve Months. If the revised delivery
month is more than 12 months after the scheduled delivery month, either party
may terminate the applicable purchase agreement with respect to such aircraft
within 30 days of the notice. If either party does not terminate the applicable
purchase agreement with respect to such aircraft, all terms and conditions of
the applicable purchase agreement will remain in effect.
7.5 Aircraft Damaged Beyond Repair. If an aircraft is destroyed or damaged
beyond repair for any reason before delivery, Boeing will give written notice to
Customer specifying the earliest month possible, consistent with Boeing's other
contractual commitments and production capabilities, in which Boeing can deliver
a replacement. Customer will have 30 days from receipt of such notice to elect
to have Boeing manufacture a replacement aircraft under the same terms and
conditions of purchase, except that the calculation of the Escalation Adjustment
will be based upon the scheduled delivery month in effect immediately prior to
the date of such notice, or, failing such election, the applicable purchase
agreement will terminate with respect to such aircraft. Boeing will not be
obligated to manufacture a replacement aircraft if reactivation of the
production line for the specific model of aircraft would be required.
7.6 Termination. Termination under this Article will discharge all
obligations and liabilities of Boeing and Customer with respect to any aircraft
and all related undelivered Materials (as defined in Exhibit B, Customer Support
Document), training, services, and other things terminated under the applicable
purchase agreement, except that Boeing will return to Customer, without
interest, an amount equal to all advance payments paid by Customer for the
aircraft. If Customer terminates the applicable purchase agreement as to any
aircraft, Boeing may elect, by written notice to Customer within 30 days, to
purchase from Customer any BFE related to the aircraft at the invoice prices
paid, or contracted to be paid, by Customer.
7.7 Exclusive Rights. The termination rights in this Article are in
substitution for all other rights of termination or any claim arising by
operation of law due to delays in performance covered by this Article.
Article 8. Risk Allocation/Insurance.
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8.1 Title and Risk with Boeing.
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8.1.1 Boeing's Indemnification of Customer. Until transfer of title to an
aircraft to Customer, Boeing will indemnify and hold harmless Customer and
Customer's observers from and against all claims and liabilities, including all
expenses and attorneys' fees incident thereto or incident to establishing the
right to indemnification, for injury to or death of any person(s), including
employees of Boeing but not employees of Customer, or for loss of or damage to
any property, including an aircraft, arising out of or in any way related to the
operation of an aircraft during all demonstration and test flights conducted
under the provisions of the applicable purchase agreement, whether or not
arising in tort or occasioned by the negligence of Customer or any of Customer's
observers.
8.1.2 Definition of Customer. For the purposes of this Article, "Customer"
is defined as American Trans Air, Inc., its divisions,
subsidiaries, affiliates, the assignees of each, and their respective directors,
officers, employees, and agents.
8.2 Insurance.
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8.2.1 Insurance Requirements. Customer will purchase and maintain insurance
acceptable to Boeing and will provide a certificate of such insurance that names
Boeing as an additional insured for any and all claims and liabilities for
injury to or death of any person or persons, including employees of Customer but
not employees of Boeing, or for loss of or damage to any property, including any
aircraft, arising out of or in any way relating to Materials, training,
services, or other things provided under Exhibit B of the AGTA, which will be
incorporated by reference into the applicable purchase agreement, whether or not
arising in tort or occasioned by the negligence of Boeing, except with respect
to legal liability to persons or parties other than Customer or Customer's
assignees arising out of an accident caused solely by a product defect in an
aircraft. Customer will provide such certificate of insurance at least thirty
(30) days prior to the scheduled delivery of the first aircraft under a purchase
agreement. The insurance certificate will reference each aircraft delivered to
Customer pursuant to each applicable purchase agreement. Annual renewal
certificates will be submitted to Boeing before the expiration of the policy
periods. The form of the insurance certificate, attached as Appendix I, states
the terms, limits, provisions, and coverages required by this Article 8.2.1. The
failure of Boeing to demand compliance with this 8.2.1 in any year will not in
any way relieve Customer of its obligations hereunder nor constitute a waiver by
Boeing of these obligations.
8.2.2 Noncompliance with Insurance Requirements. If Customer fails to
comply with any of the insurance requirements of Article 8.2.1 or if any of the
insurers fails to pay a claim covered by the insurance or otherwise fails to
meet any of insurer's obligations required by Appendix I, Customer will provide
the same protection to Boeing as that required by Article 8.2.1 above.
8.2.3 Definition of Boeing. For purposes of this article, "Boeing" is
defined as The Boeing Company, its divisions, subsidiaries, affiliates,
assignees of each, and their respective directors, officers, employees, and
agents.
Article 9. Assignment, Resale, or Lease.
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9.1 Assignment. This AGTA and each applicable purchase agreement are for
the benefit of the parties and their respective successors and assigns. No
rights or duties of either party may be assigned or delegated, or contracted to
be assigned or delegated, without the prior written consent of the other party,
except:
9.1.1 Either party may assign its interest to a corporation that (i)
results from any merger, reorganization, or acquisition of such party and (ii)
acquires substantially all the assets of such party;
9.1.2 Boeing may assign its rights to receive money; and
9.1.3 Boeing may assign any of its rights and duties to any wholly-owned
subsidiary of Boeing.
9.1.4 Boeing may assign any of its rights and duties with respect to Part
1, Articles 1, 2, 4 and 5 of Exhibit B, Customer Support Document to the AGTA,
to FlightSafety Boeing Training International L.L.C.
9.2 Transfer by Customer at Delivery. Boeing will take any requested action
reasonably required for the purpose of causing an aircraft, at time of delivery,
to be subject to an equipment trust, conditional sale, lien, or other
arrangement for Customer to finance the aircraft. However, no such action will
require Boeing to divest itself of title to or possession of the aircraft until
delivery of and payment for the aircraft. A sample form of assignment acceptable
to Boeing is attached as Appendix II.
9.3 Sale or Lease by Customer After Delivery. If, following delivery of an
aircraft, Customer sells or leases the aircraft (including any sale and
lease-back for financing purposes), all of Customer's rights with respect to the
aircraft under the applicable purchase agreement will inure to the benefit of
the purchaser or lessee of such aircraft, effective upon Boeing's receipt of the
written agreement of the purchaser or lessee, in a form satisfactory to Boeing,
to comply with all applicable terms and conditions of the applicable purchase
agreement. Sample forms of agreement acceptable to Boeing are attached as
Appendices III and IV.
9.4 Notice of Sale or Lease After Delivery. Customer will give notice to
Boeing as soon as practicable of the sale or lease of an aircraft, including in
the notice the name of the entity or entities with title and/or possession of
such aircraft.
9.5 Exculpatory Clause in Post-Delivery Sale or Lease. If, following the
delivery of an aircraft, Customer sells or leases such aircraft and obtains from
the transferee any form of exculpatory clause protecting Customer from liability
for loss of or damage to the aircraft, and/or related incidental or
consequential damages, including without limitation loss of use, revenue, or
profit, Customer shall obtain for Boeing the purchaser's or lessee's written
agreement to be bound by terms and conditions substantially as set forth in
Appendix V. This Article 9.5 applies only if purchaser or lessee has not
provided to Boeing the written agreement described in Article 9.3 above.
9.6 Appointment of Agent - Warranty Claims. If, following delivery of an
aircraft, Customer appoints an agent to act directly with Boeing for the
administration of claims relating to the warranties under the applicable
purchase agreement, Boeing will deal with the agent for that purpose, effective
upon Boeing's receipt of the agent's written agreement, in a form satisfactory
to Boeing, to comply with all applicable terms and conditions of the applicable
purchase agreement. A sample form of agreement acceptable to Boeing is attached
as Appendix VI.
9.7 No Increase in Boeing Liability. No action taken by Customer or Boeing
relating to the resale or lease of an aircraft or the assignment of Customer's
rights under the applicable purchase agreement will subject Boeing to any
liability beyond that in the applicable purchase agreement or modify in any way
Boeing's obligations under the applicable purchase agreement.
Article 10. Termination of Purchase Agreements for Certain Events.
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10.1 Termination. If either party
(i) ceases doing business as a going concern, or
suspends all or substantially all its business
operations, or makes an assignment for the benefit of
creditors, or generally does not pay its debts as
they become due, or admits in writing its inability
to pay its debts; or
(ii) petitions for or acquiesces in the appointment
of any receiver, trustee or similar officer to
liquidate or conserve its business or any substantial
part of its assets; commences any legal proceeding
such as bankruptcy, reorganization, readjustment of
debt, dissolution, or liquidation available for the
relief of financially distressed debtors; or becomes
the object of any such proceeding, unless the
proceeding is dismissed or stayed within a reasonable
period, not to exceed 60 days,
the other party may terminate any purchase agreement with respect to any
undelivered aircraft, Materials, training, services, and other things by giving
written notice of termination.
10.2 Repayment of Advance Payments. If Customer terminates the applicable
purchase agreement under this Article, Boeing will repay to Customer, without
interest, an amount equal to any advance payments received by Boeing from
Customer with respect to undelivered aircraft.
Article 11. Notices.
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All notices required by this AGTA or by any applicable
purchase agreement will be in English, will be effective on the date of receipt,
and will be transmitted by any customary means of written communication,
addressed as follows:
Customer: American Trans Air, Inc.
7337 West Washington Street
Indianapolis, IN 46231
U.S.A.
Attention: Treasurer
Boeing: Boeing Commercial Airplane Group
P.O. Box 3707
Seattle, Washington 98124-2207
U.S.A.
Attention: Vice President - Contracts
Mail Code 21-34
Article 12. Miscellaneous.
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12.1 Government Approval. Boeing and Customer will assist each other in
obtaining any governmental consents or approvals required to effect
certification and sale of aircraft under the applicable purchase agreement.
12.2 Headings. Article and paragraph headings used in this AGTA and in any
purchase agreement are for convenient reference only and are not intended to
affect the interpretation of this AGTA or any purchase agreement.
12.3 GOVERNING LAW. THIS AGTA AND ANY PURCHASE AGREEMENT WILL BE
INTERPRETED UNDER AND GOVERNED BY THE LAWS OF THE STATE OF WASHINGTON, U.S.A.,
EXCEPT THAT WASHINGTON'S CHOICE OF LAW RULES SHALL NOT BE INVOKED FOR THE
PURPOSE OF APPLYING THE LAW OF ANOTHER JURISDICTION.
12.4 Waiver/Severability. Failure by either party to enforce any provision
of this AGTA or any purchase agreement will not be construed as a waiver. If any
provision of this AGTA or any provision of any purchase agreement are held
unlawful or otherwise ineffective by a court of competent jurisdiction, the
remainder of the AGTA or the applicable purchase agreement will remain in
effect.
12.5 Survival of Obligations. The Articles and Exhibits of this AGTA
including but not limited to those relating to insurance, DISCLAIMER AND RELEASE
and the EXCLUSION OF CONSEQUENTIAL AND OTHER DAMAGES will survive termination or
cancellation of any purchase agreement or part thereof.
12.6 AGTA Changes. The intent of the AGTA is to simplify the standard
contracting process for terms and conditions which are related to the sale and
purchase of all Boeing aircraft. This AGTA has been mutually agreed to by the
parties as of the date indicated below. From time to time the parties may elect,
by mutual agreement to update, or modify the existing articles as written. If
such changes are made, any existing executed Purchase Agreement(s) will be
governed by the terms and conditions of the Revision level of the AGTA in effect
based on the date of the executed Purchase Agreement.
DATED AS OF
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American Trans Air, Inc. THE BOEING COMPANY
By By
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Its Its
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