EXHIBIT 10.5
Version 1-Ka1itta
December 8, 2010
AIRCRAFT AND/OR ENGINE MAINTENANCE SERVICES AGREEMENT
Dated as of December 23, 2010 by and between
BALTIA AIR LINES, INC. ("Buyer")
and
KALITTA AIR, L.L.C. (D/B/A KALITTA MAINTENANCE) Agreement No. AEMSA-1
INDEX
ARTICLE HEADING Page
ARTICLE 1
DEFINITIONS----------------------------------------------- 4
ARTICLE 2 ENGAGEMENT ------------------------------------------------ 6
ARTICLE 3 TERMS OF AGREEMENT ---------------------------------------- 6
ARTICLE 4 SCOPE OF THE SERVICE-------------------------------------- 7
ARTICLE 5 PARTS, MATERIAL, SUPPLIES---------------------------------- 7
ARTICLE 6 REGULATORY REQUIREMENTS----------------------------------- 9
ARTICLE 7 OUTSIDE SERVICES----------------------------------------- 10
ARTICLE 8 DELIVERY, ACCEPTANCE AND REDELIVERY---------------------- 11
ARTICLE 9 CHARGES AND PAYMENTS------------------------------------- 14
ARTICLE 10 WARRANTIES----------------------------------------------- 14
ARTICLE 11 RELEASE AND INDEMNIFICATION------------------------------ 17
ARTICLE 12 INSURANCE------------------------------------------------ 18
ARTICLE 13 DEFAULT AND REMEDIES------------------------------------- 21
ARTICLE 14 DELAYS--------------------------------------------------- 22
ARTICLE 15 TAXES-----------------------------------------------------23
ARTICLE 16 RECORDS-------------------------------------------------- 22
ARTICLE 17 NON-LIABILITY OF INDIVIDUALS----------------------------- 24
ARTICLE 18 CUSTOMER'S REPRESENTATIVES------------------------------- 25
ARTICLE 19 NON-DISCLOSURE/NON-SOLICITATION-------------------------- 25
ARTICLE20 MISCELLANEOUS-------------------------------------------- 26
INDEX TO EXHIBITS
EXHIBIT EXHIBIT HEADING PAGE
EXHIBIT 1 WORK AUTHORIZATION FORM---------------------------------- 29
EXHIBIT 2 SCHEDULE OF CHARGES-------------------------------------- 31
EXHIBIT 3 MODIFICATION OF WORK SCOPE REQUEST----------------------- 38
EXHIBIT 4 AIRCRAFT DELIVERY RECEIPT-------------------------------- 39
EXHIBIT 5 AIRCRAFT REDELIVERY RECEIPT------------------------------ 41
EXHIBIT 6 ENGINE DELIVERY RECEIPT---------------------------------- 42
EXHIBIT 7 ENGINE REDELIVERY RECEIPT-------------------------------- 43
EXHIBIT 8 MISCELLANEOUS EXPENDABLE MATERIAL & SUPPLIES (MSP) LIST-- 44
EXHIBIT 9 INVENTORY LIST OF CUSTOMER PROVIDED PARTS---------------- 45
AIRCRAFT AND/OR ENGINE MAINTENANCE SERVICES AGREEMENT
THIS AIRCRAFT AND/OR ENGINE MAINTENANCE SERVICES AGREEMENT is made as
of
the 23 day of December, 2010, between BaltiaAir Lines, Inc., a New York
corporation having its registered office at 63-25 Saunders Street, Rego
Park,
NY 11374, (hereinafter referred to as "CUSTOMER"), and KALITTA AIR, L.L.C. (dba
KALITTA MAINTENANCE), a Michigan limited liability company having its
registered office at 818 Willow Run Airport, Ypsilanti, Michigan 48198
(hereinafter called "KALITTA"). CUSTOMER and KALITTA may hereinafter be
referred to as (the "Parties").
RECITALS
WHEREAS, CUSTOMER desires that KALITTA perform maintenance services
on
CUSTOMER's Aircraft and/or Engine as may be designated by CUSTOMER from time to
time as set forth in Exhibit 1 hereto; and
WHEREAS, KALITTA maintains and operates a Federal Aviation Administration
approved certified facility (Repair Station with certificate number
KOOR718X)
pursuant to Part
145 of the Federal Aviation Regulations which authorizes it to perform certain
aircraft inspections, engine inspections, maintenance, modification, overhaul
and repair services, and KALITTA is willing to provide the Services
(as defined below) on the te1ms and conditions as set out below;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants set forth herein, the two parties agree as follows:
1 DEFINITIONS
In this Agreement, unless the context requires otherwise:
1.1 "Acceptance Tests"- means acceptance ground and flight tests performed
on the Aircraft by CUSTOMER prior to Redelivery in accordance with the
provisions of Article 8.5 and 8.7 hereof.
1.2 "Agreement" - means this Aircraft and/or Engine Maintenance Services
Agreement and all schedules, annexes and exhibits hereto as well as all
amendments or variation as agreed in writing from time to time by the parties
hereto.
1.3 "Aircraft" - means the aircraft and installed engines owned by
CUSTOMER on which Services are to be performed pursuant to a Work Authorization
Form.
1.4 "Delivery" - means the delivery of the Aircraft and/or Engine by
CUSTOMER to KALITTA at the Facility.
1.5 "Delivery Date" - means the date of Delivery of an Aircraft
and/or Engine by CUSTOMER to KALITTA at the facility.
1.6 "Delivery Receipt" - means a receipt in the form of Exhibit 4 hereto
executed by KALITTA and CUSTOMER upon the Delivery of the Aircraft and/or
Engine.
1.7 "Engine" - means the engine owned by CUSTOMER on which Services
are to be perfonned pursuant to a Work Authorization Form.
1.8 "Engine Test" - means a test performed pursuant to the Pratt & Whitney
or General Electric Maintenance Manual.
1.9 "FAA"- means the Federal Aviation Administration of the United States
of America, and any successor thereof.
1.10 "Facility" -means KALITTA's facility at OSC, Oscoda, Michigan.
1.11 "FARs" - means any regulations promulgated by the FAA and any
successor
thereof that are applicable to the provision of the Services.
1.12 "Herein", "hereof, "hereunder", and like terms - shall refer to
this
Agreement, as the same may be amended or supplemented from time to time.
1.13 "Induction Date"- means the date KALITTA will begin the work on
the
Aircraft and/or Engine as described in Exhibit 1 hereto.
1.14 "Modified Work Scope Services" - means any additional maintenance,
modification or other services, other than those described in the Work
Authorization Form, requested by CUSTOMER in writing (including e-mail)
which,
will modify the Work Authorization Form and shall become part of this
Agreement.
1.15 "Modification of Work Scope Request" or "MWSR" - means a document
in
the form of Exhibit 3 for Additional Services, which should be
executed
by KALITTA and CUSTOMER. The MWSR shall memorialize the request by CUSTOMER
to amend the Work Authorization Form to include the Additional Services to
be
performed by KALITTA.
1.16 "Parts" - means all accessories, compoonents, instruments and other
equipment, parts and materials required for the performance of the Service
(other than engines).
1.17 "Redilivery" - means the redelivery of the Aircraft and/or Engine from
KALITTA to CUSTOMER at the Facility at the completion of tbe Services, in
accordance witb Article 8 hereof.
1.18 "Redelivery Date"- means the date of Redelivery.
1.19 "Redelivery Receipt" - means a receipt in tbe form of Exhibit 5
hereto
executed by KALITTA and CUSTOMER concurrently with tbe Redelivery of tbe
Aircraft and/or Engine.
1.20 "Schedule of Charges" - means the Schedule of Charges for
performing
tbe Services and providing Parts as set forth in Exhibit 2 hereto, which
shall
be executed by tbe parties hereto prior to the induction of the Aircraft and/or
Engine.
1.21 "Services" - means tbe services to be performed by KALITTA for the
Aircraft and/or Engine as set forth in tbe Work Autborization Form and any
MWSRs.
1.22 "Work Antborization Form" - means a document in the form of
Exhibit 1 hereto identifying tbe Aircraft and/or Engine on which Services are
to be performed, describing the Services and the man-hours or charges for
performing the Services, and setting forth tbe scheduled Delivery and
Redelivery Dates. The form when executed by KALITTA and CUSTOMER shall
constitute, in each case, CUSTOMER's authorization for KALITTA to perform
the
Services on tbe Aircraft and/or Engine and KALITTA undertaking to do so, in
accordance with this Agreement.
2 ENGAGEMENT
2.1 Subject to the terms and conditions of this Agreement, CUSTOMER engages
KALITTA to perform the Services and provide Parts in accordance with Kalitta
Maintenance Repair Station procedures as authorized by the Department of
Transportation pursuant to Part 145 of the Federal Regulation Aviation and
applicable FAA Regulations .
3 TERMSOFAGREEMENT
3.1 Except as may be otherwise provided herein, this Agreement shall
commence as of the date set forth on the first page of this Agreement upon
execution hereof by botb parties and shall continue in full force and effect
for a period of two (2) years after such date, unless earlier terminated by
either party in writing. CUSTOMER may elect to extend this Agreement for
addiotional successive terms of one (1) year each, by providing written
notice
of such election to KALITTA at least sixty (60) days prior to the end of the
initial term or any renewal term. KALITTA shall have the right to reject any
such renewal or to condition such renewal on a new Schedule of Charges by
giving CUSTOMER notice of such rejection or new Schedule of Charges within
thirty (30) days after receipt of CUSTOMER's renewal notice. If the parties
are unable to agree on the revised charges, this Agreement shall terminate
at
the expiration of that initial or renewal term.
3.2 CUSTOMER agrees to pay all charges specified on the Schedule of Charges.
4 SCOPE OF THE SERVICES
4.1 Services to be Provided
a. The specific Services to be provided by KALITTA shall be
mutually agreed upon between KALITTA and CUSTOMER in the Work Authorization
Form. A Work Authorization Form must be executed for each Aircraft and/or
Engine on which KALITTA perfonns Services under tlJ.is Agreement and must be
signed by both parties.
b. The Work Authorization Form may from time to time be amended by
additional, alternative, or supplementing services as the parties may agree
in
writing including email, and memorialize by means of a written Modification
of
Work Scope Request or "MWSR" in the form of Exhibit 3 hereto, to be executed by
authorized representatives of KALITTA and CUSTOMER. Any additional Services
which have a schedule impact on the scheduled Redelivery Date shall be mutually
agreed and indicated in the applicable MWSR.
c. In the event of any conflict between the general terms and
conditions of this Agreement and the specific terms and conditions which have
been mutually agreed to by the parties in an executed Work Authorization
Form,
the terms and conditions contained in the Work Authorization Form shall
prevail.
5 PARTS, MATERIAL, SUPPLIES
5.1 KALITTA -Frunished Parts
Except as otherwise provided on Article 5.2 hereof, KALITTA shall secure and
privude all common aircraft hardware parts necessary to perform the Services
for Maintenance for the Aircraft only, not for maintenance of the Engine unless
specifically agreed to in advance by both parties. All freight and handling
charges shall be in accordance with the Schedule of Charges.
5.2 CUSTOMER-Furnished Parts
CUSTOMER will furnish to KALITTA any Parts required for the performance of
the
Services ("CUSTOMER-Furnished Parts"), in which case they shall be delivered to
KALITTA no later than the scheduled Delivery Date. All parts furnished by
CUSTOMER for the routine or stated work appearing in Exhibit 1 hereto,
will be received through OSC Stores Inspection Procedures and placed in a
holding area as stated in Atiicle 5.3 (a) hereof. All non-routine parts
supplied by CUSTOMER will meet the need by date specified by the Project
Manager and confmm to the OSC Inspection Procedures. Any CUSTOMER-furnished
non-routine part not delivered to OSC by the need date will be considered a
cause to escalate the re-delivery schedule on a day for day slip, predicated on
the actual date the part is received in OSC.
Should the CUSTOMER be unable to supply a non-routine pati, after stating it
would supply the part, CUSTOMER has forty eight (48) hours to notify KALITTA.
In the event CUSTOMER fails to notify KALITTA within the fotiy eight (48)
hour
period or fails to supply a non-routine part, KALITTA may procure the non-
routine pati and charge CUSTOMER according to the provisions of Exhibit 2
hereto.
CUSTOMER will provide KALITTA with an inventory list of all provided
Parts,
including, pati numbers, descriptions and values in accordance with the
provisions of Exhibit 9, hereto.
5.3 Handling, Storage and Disposition of CUSTOMER's Property
a. KALITTA shall provide sufficient hangar space for the Aircraft
and/or Engine when required for performance of the Services and sufficient
warehouse space for all CUSTOMER-Furnished Parts and/or any of CUSTOMER's
property removed from the Aircraft and/or Engine for storage. CUSTOMER-
Furnished Parts shall be reasonably isolated from KALITTA Parts, and KALITTA
shall take reasonable precautions to ensure limited access to and provide
adequate security for the CUSTOMER-Furnished Parts.
b. CUSTOMER shall be responsible for all the actual handling,
shipping and fiueight charges incunued for all CUSTOMER-Furnished Parts or
propetiy.
c. KALITTA shall retum all the unused CUSTOMER-Furnished Parts and
propetiy to CUSTOMER at the Redelivery. KALITTA shall arrange, at CUSTOMER's
sole expense and risk, for preparation and shipment of such Parts to the
locations designated by CUSTOMER.
5.4 Title and Risk of Loss and Damage
During the performance of the Services, title to t11e Aircraft and/or
Engine,
any of CUSTOMER's property removed from the Aircraft and/or Engine for
storage
and all CUSTOMER-Furnished Parts shall at all times remain with CUSTOMER.
KALITTA shall not assume the risk of loss or damage to the Aircraft and/or
Engine, items of CUSTOMER-Furnished Parts and items of CUSTOMER's property
arising or occurring while in the care, custody or control of KALITTA,
except
to the extent caused by the gross negligence or willful misconduct of KALITTA.
6 REGULATORY REQUIREMENTS
6.1 KALITTA Regulatory Responsibilities
KALITTA shall:
a. at all times meet the technical and operational requirements
of an FAA Certified Repair Station authorized to perform the Services and shall
maintain an FAR Part 145 Certificate with applicable ratings for performance of
the Services;
b. promptly report to CUSTOMER any discrepancies between FAA
requirements and KALITTA operations as repmied to KALITTA by the FAA;
c. provide CUSTOMER with appropriate records of all maintenance
transactions and component and piece part removals, along with the related
teardown findings and repair billing information;
d. be responsible for preparing FAA Form 337, or comparable
CUSTOMER supplied paperwork (E.A. I E.O., etc.), to cover all major repairs and
alterations accomplished during the Services; and
e. be responsible for preparing and submitting FAA Form 337 on
behalf of the CUSTOMER and providing the CUSTOMER a copy for its records.
It shall be the responsibility of CUSTOMER to supply FAA approved data
(acceptable to KALITTA) to cover all alterations, unless otherwise agreed by
KALITTA. It shall be the responsibility of KALITTA to supply FAA approved
data
for all major repairs performed during the Services, unless otherwise
agreed,
in writing, between KALITTA and CUSTOMER.
6.2 Classification of Repairs
CUSTOMER shall be required to classifY major and minor repairs in accordance
with the FAR Part 43 Appendix "A" defmition and guidelines, it being understood
that KALITTA shall have no obligation to do so for CUSTOMER under this
Agreement.
7 OUTSIDE SERVICES
7.1 Use of Subcontracts
KALITTA may have any of the Services performed by subcontractors; provided,
that the use of subcontractors shall not create any contractual or agency
relationship between CUSTOMER and any such subcontractor. The performance by
any subcontractor of any Services shall not relieve KALITTA of any of its
obligations to CUSTOMER hereunder.
7.2 Outside Services or Subcontract Services Requirements
Any subcontractor used by KALITTA shall meet one or more of the following
provisions as applicable:
a.
hold a currently valid FAA Repair Station Certificate issued under Part
145 of the Federal Aviation Regulations, with applicable rating for work to
be
performed under this Agreement and the specific requirements of FAR 145.2;
b.
hold a cunently valid FAA Repair Station Certificate issued under
Part 145 of the
Federal Aviation Regulations, with a limited rating for specialized services
applicable to the Services performed, and have the related FAA approved
process specification listed on its operations specifications;
c.
be the manufacturer of the items to be serviced and have attached
to each item a maintenance record prepared in accordance with Part 43 of the
Federal Aviation Regulations; or
d.
be equipped with the necessary tools, facilities, qualified personnel,
quality control system, inspection procedures, and technical data to perform
the Services; and be listed as an approved vendor for these Services in
accordance with KALITTA's FAA approved 145 Repair Station requirements.
Services performed by Kalitta under this provision shall be retumed to
service by Kalitta under its authority.
8 DELIVERY, ACCEPTANCE AND REDELIVERY
8.1 Delivery ofthe Aircraft and/or Engine
a.
CUSTOMER shall deliver the Aircraft and/or Engine designated in the
Work Authorization Form to the Facility on or before the Induction Date.
b.
In the event of any delay of the scheduled Delivery of the Aircraft
and/or Engine by CUSTOMER to the Facility, CUSTOMER shall immediately
inform KALITTA of the details of such delay and advise KALITTA of a
new scheduled Delivery Date. If the delay has an impact on the scheduled
Redelivery Date, both parties shall discuss and mutually agree upon an
amendment in the scheduled Redelivery Date specified in the Work
Authorization Form.
c.
Upon Delivery, KALITTA and CUSTOMER shall malce a ground inspection of
the Aircraft and/or Engine and execute a Delivery Receipt in the form
ofExhibit 4 and/or Exhibit 6 hereto.
d.
If defueling is required to accomplish the Services on the Aircraft,
CUSTOMER shall be charged for the defueling, storage, re-certification
and refueling in accordance with the provisions set forth in the
Schedule of Charges in Exhibit 2 hereto.
8.2 Inspections and Tests of Aircraft
KALITT A shall conduct such inspections of the Aircraft and perform
such tests as it deems necessary to comply with this Agreement.
8.3 Acceptance Tests by CUSTOMER of Aircraft
a.
Upon KALITTA's completion of the Services and ground tests, CUSTOMER
[may, using CUSTOMER's flight crews and at CUSTOMER's sole risk and
expense, perform ground and flight tests ("Acceptance Tests") on the
Aircraft. KALITTA shall have the right to have a representative on
board during any ground or test flight.
b.
All Acceptance Tests which are required by CUSTOMER shall be carried
out by CUSTOMER at its own expense and risk, and CUSTOMER shall insure
for all risks ofloss, damage or liability arising from such Acceptance
Tests. CUSTOMER agrees that all provisions of Atiicle 11 and 12 of this
Agreement apply to all Acceptance Tests.
8.4 Correction of Discrepancies of Aircraft
Upon completion of Acceptance Tests, KALITTA shall promptly correct
any defects or discrepancies to the extent attributable to the
performance of the Services by KALITTA or its subcontractor, at no
additional cost to CUSTOMER. Additional Acceptance Tests may be
performed by CUSTOMER at its own expense and risk to inspect KALITTA's
con ection of such defects or discrepancies.
8.5 Redelivery ofthe Aircraft
a.
Upon completion of the Services by KALITTA and Acceptance Tests by
CUSTOMER, KALITTA shall redeliver the Aircraft to CUSTOMER at the
Facility. KALITTA and CUSTOMER shall make a ground inspection of the
Aircraft and execute a Redelivery Receipt in the form of Exhibit 5
hereto which shall indicate:
i. CUSTOMER's acceptance of the Aircraft and willingness to take
redelivery thereof, and
ii. CUSTOMER's recognition that KALITTA has performed all Services
in compliance with the Work Authorization Form and MWSRs pursuant to
this Agreement.
b.
KALITTA warrants to CUSTOMER that at Redelivery:
i. The Aircraft's maintenance paperwork shall have received all
appropriate entries and where approved by the CUSTOMER, appropriate
aircraft log entries made; and
ii. All Services shall have been appropriately docnrnented and
shall have been performed in conformance with all applicable F ARs, the
Operators Maintenance Program, if applicable, and Exhibit 1.
8.6 Inspections and Tests of Engine
KALITTA shall conduct such inspections of the Engine( s) and perform snch
tests as it deems necessary to comply with this Agreement. CUSTOMER shall
have the right, upon providing prior notice to KALITTA, but not the
obligation, to observe KALITTA's performance of the inspections and
tests and shall have the right, at all reasonable times, upon reasonable
advance notice to KALITTA, to inspect the Engine(s), the maintenance
records, FAA forms and records and all other documentation pertaining
to the Engine( s) or the perfmmance of the Services, provided that
CUSTOMER shall not interfere with KALITTA's performance and its obligations
under this Agreement.
8.7 Redelivery ofthe Engine
a.
Upon completion of the Services, KALITTA shall redeliver the Engine to
CUSTOMER at the Facility together with:
i. such Engine's relevant Customer-Furnished Docnrnentation, duly up-dated;
ii. all relevant test reports, teclmical repair reports and/or investigation
reports (if any) including any required by the FAA IA Inspector in
accordance
with Section 6.l(d) ofthis Agreement; and
b.
Upon receipt of the foregoing, CUSTOMER shall execute a Redelivery
Receipt in the fmm of Exhibit 7 which shall indicate:
i. CUSTOMER's acceptance of the Engine and willingness to take
redelivery thereof, and
ii. CUSTOMER's recognition that KALITTA has performed all Services
in compliance with the Work Authorization Form and MWSRs pursuant
to this Agreement.
c.
KALITTA agrees that all Services shall have been appropriately
documented and shall have been performed in conformance with all
applicable F ARs.
9 CHARGESANDPAYMENTS
9.1 KALITTA charges to CUSTOMER and payment by CUSTOMER for all
Services and Parts provided by KALITTA, subcontract services and other
charges associated with the performance of the Services, shall be in
accordance with the Schedule of Charges.
10 WARRANTIES
10.1 KALITTA Warranties
KALITTA waJTants its workmanship performed under this Agreement and agrees
o bear the costs required to correct any defect in any Part serviced by
KALITTA if the defect in such Part is caused by KALITTA's faulty
workmanship, provided:
a.
the defect is discovered within sixty (60) days or one hundred fifty (150)
flying hours, whichever occurs first, following Redelivery of the Aircraft
and/or Engine, and KALITTA is notified in writing within ten (10) days of
CUSTOMER discovering the defect;
b.
CUSTOMER demonstrates to the reasonable satisfaction of KALITTA that the
defect was due to faulty workmanship by KALITT A, provided that no act or
omission by KALITTA shall be deemed to be faulty workmanship unless such
ct or omission is shown to be contrary to approved technical procedures in e
ffect at the time perfonned; in the event of a wananty related dispute, both
parties will attempt to reach an agreement; if an agreement cannot be
reached, a third party expert agreeable to both the patiies will be used
for arbitration and whose decision will be accepted as final; and
c.
the Aircraft, Engine, Part or material is returned to the Facility, at
CUSTOMER's expense, together with written particulars as to the nature
of the claimed defect or to such other location as may be agreed upon
between the parties in writing, and
d.
in no event shall KALITTA's liability under this Section exceed the
total repair costs already paid by CUSTOMER to KALITTA.
10.2 Warranty Repairs by KALITTA
a.
KALITTA's liability under the warranties set forth in Article 10.1
hereto shall be limited to the replacement or repair, at K.ALITTA's
expense, (and subject to the limitations of Section 10.1(d)), of all or
any portion of the warranted Services which, in the reasonable discretion
of KALITTA, is caused by the defective workmanship of KALITTA, and to the
repair or replacement of only those items or Parts which have been
serviced by and returned to KALITT A and, while in the reasonable
discretion of KALITTA, have suffered damage directly as a result of
a defect in KALITTA's warranted Services.
b.
KALITTA's obligations under this Article 10.2 shall not extend to
CUSTOMER-Fmnished or third-party furnished Parts used by KALITTA
in the performance of the Services unless and to the extent such
parts are found by Kalitta, in its reasonable discretion to be damaged
as a direct result of a defect in the wananted Services.
10.3 Limitation ofWananties
THE WARRANTIES SET FORTH IN THIS ARTICLE 10 AND THE OBLIGATIONS AND
LIABILITIES OF KALITTA UNDER THIS ARTICLE 10 ARE THE EXCLUSIVE
WARRANTIES PROVIDED BY KALITTA UNDER THIS AGREEMENT. KALITTA MAKES
NO WARRANTY, EXPRESS, IMPLIED, STATUTORY, OR ORAL OF ANY KIND, INCLUDING,
WITHOUT LIMITATION, ANY WARRANTY OF AIRWORTHINESS, MERCHANTABILITY, OR
FITNESS FOR INTENDED USE OR FITNESS FOR A PARTICULAR PURPOSE FOR ANY
SERVICES, PARTS OR MATERIALS OR INFORMATION FURNISHED HEREUNDER. KALITTA
WILL NOT BE LIABLE FOR ANY INCIDENTAL, SPECIAL, CONSEQUENTIAL, OR
RESULTANT DAMAGES OF ANY KIND. CUSTOMER AGREES THAT KALITTA'S SOLE
LIABILITY UNDER THIS ARTICLE 10 WILL BE AS PROVIDED IN ARTICLE 10.2 HEREOF.
10.4 CUSTOMER's Warranty Repairs
Unless otherwise agreed in writing by KALITTA, CUSTOMER shall return the
Aircraft and/or Engine or defective Parts to KALITTA for all warranty repair
or
replacement pursuant to Article 10.2 hereof.
10.5 Assignment of Warranties
KALITTA shall assign to CUSTOMER on Parts provided by KALITTA any and
all assignable wananties, service life policies and patent indenmities
of manufacturers, suppliers and subcontractors other than KALITTA. CUSTOMER
shall be solely responsible for enforcement of CUSTOMER's rights under such
warranties, service life policies and patent indemnities. Upon CUSTOMER's
request, KALITTA shall give notice to any such manufacturers, suppliers and
subcontractors of the assignment of such wananties, service life policies
and patent indemnities. To the extent warranties are not assignable by
KALITTA to CUSTOMER, KALITTA shall endeavor, at CUSTOMER's expense, to
enforce its rights under such warranties, service life policies and patent
indenmities for the benefit of CUSTOMER.
10.6 Limitation ofKALITTA 's Liabilities
KALITTA shall be relieved of all obligations and liabilities under this
Article 10 if:
a.
CUSTOMER maintains, operates or permits operation of the Aircraft, Engine
or Part other than in accordance with the applicable manufacturer's
operating and maintenance instructions, or other than in accordance with an
approved maintenance program for the Aircraft ancllor Engine.
b.
CUSTOMER accomplishes or has accomplished by agencies other than by
KALITTA, the repair or replacement of all or any portion of KALITTA's
warranted Services without notifying and obtaining KALITTA's consent
in writing.
c.
CUSTOMER accomplishes or has accomplished by agenc1es other than KALITTA,
repairs, alterations, modifications, replacements or overhauls of the
Aircraft, Engine or Part and if such repair, alteration, modification,
replacement or overhaul is determined to be the cause of such defect.
d.
The Aircraft, Engine or Part is operated subsequent to involvement in an
accident and prior to complete repair, if such operation is determined to be
the cause of such defect.
e.
KALITTA is notified in writing of any defect in KALITTA warranted
Services after the expiration ofthe warranty period set forth in Article
10.1 hereof.
11 RELEASE AND INDEMNIFICATION
11.1 Release, Indemnification and Liability.
a.
Except as specifically provided for in Articles 5.4, 10 and ll.l(b),
CUSTOMER
shall release, indemnify, defend, and hold hmmless KALITTA , its members,
officers, directors, agents, contractors, subcontractors, shareholders,
employees and assigns, from and against any and all liabilities, dllillages,
losses, expenses, claims, suits, or judgments, including, but not limited
to, reasonable attorneys' fees and expenses ("Claims"), for the death of
or bodily injury to any person (other than the death of or bodily injury
to an employee of KALITTA occurring during the course of his or her
employment), and for the loss of, dllillage to, or destruction of any
property (including, but not limited to, the Aircraft, Engines and Parts),
and for consequential, special, indirect or contingent dllillages,
including but not limited to, loss of use, loss of revenue, loss of
profits and/or diminution of value arising out of KALITTA's performance
of this Agreement. Notwithstanding the foregoing, CUSTOMER's indemnification
of KALITTA shall not extend to any Claims to the extent attributable to the
gross negligence or willful misconduct ofKALITTA.
b.
Each party assumes full responsibility for any and all liability on account
of bodily injury to or death of any of its own employees occurring in the
course of their employment. Each pmiy, with respect to its own employees,
accepts full and exclusive liability in the payment of Worker's Compensation
or employer's liability insurance premiums and for the payment of all taxes,
contributions, or other payments for unemployment compensation or old age
benefits, pensions or annuities imposed by any gove1ment or agency having
jurisdiction.
11.2 Exclusion
NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR, AND EACH PARTY EXPRESSLY
WAlVES AND RELEASES THE OTHER PARTY FROM, ANY CLAIM FOR CONSEQUENTIAL,
SPECIAL, INCIDENTAL, CONTINGENT AND/OR INDIRECT DAMAGES OF ANY KIND,
INCLUDING, BUT NOT LIMITED TO, LOSS OF USE, LOSS OF REVENUE, LOSS OF
PROFITS AND/OR DIMINUTION OF VALUE.
11.3 Survival
The provisions of this Article 11 shall remain in full force and effect
after the expiration or earlier termination of this Agreement. Further,
CUSTOMER will require any lessee or future operator ofthe Aircraft and/or
Engine to agree to release and indemnify KALITTA according to the
provisions of this Article 11.
11.4 Employee
Each party represents that it has or will obtain appropriate agreements
with its employees or others whose services it may require, sufficient
to enable it to comply with all the provisions of this Agreement. KALITTA
shall have the sole responsibility for supervision and control of its
personnel.
12 INSURANCE
12.1 General
Prior to Services being performed and throughout the term of this
Agreement, both KALITTA and CUSTOMER shall maintain insurance as
required in this Article 12 and shall furnish to the other a certificate
from its insurance companies or insurance brokers. The certificate will be
in a form that is reasonably acceptable to the other party, and will
include the expiration dates, limits of coverage, additional insured
requirements, contractual liability, and insurer's acceptance of all
the provisions of this Agreement. All policies of insurance shall be
endorsed so that coverage may not be canceled or
changed adverse to the interest of the other party, without at least
thirty (30) days prior written notice to the Parties.
12.2 KALITTA's Coverage:
a.
Comprehensive General Liability Insurance (including, but not limited
to, Premises, Products, and Hangar keeper's liabilities) with a
Combined Single Limit (Bodily Injury/Property Damage) of Five
Hundred Million United States Dollars (US$500,000,000.00) any one
accident I occurrence, but subject to the following: as respects
Products Liability, the above limit is in the aggregate aunually.
b.
Worker's Compensation Insurance and/or Employer's Liability Insurance,
as required by law, including a waiver of subrogation in favor of CUSTOMER,
with limits of not less than One Million United States Dollars
(US$1,000,000.00) per occunence unless otherwise required by law.
c.
KALITTA shall provide CUSTOMER with a cetiificate or certificates
from its insurance cauiers indicating the expiration dates and
limits of coverage of such insurance. The certificate of insurance
holder shall be in the name of CUSTOMER at the address set forth
in the introductory paragraph ofthis Agreement.
KALITTA shall bear the costs and shall be responsible for all
deductibles contained in the insurance policies required under this
Article 12.2.
12.3 CUSTOMER's Coverage:
CUSTOMER agrees to maintain in force, during the term of this
Agreement and for a period of three (3) years after Redelivery
of the Aircraft and/or Engine or for the duration of CUSTOMER's
ownership of the Aircraft and/or Engine, whichever occurs later,
the following insurance coverages:
a. Comprehensive Airline Liability (including, but not limited
to, Third Party Legal Liability, Public Liability, Passenger Legal
Liability, Contractual Liability Insurance) with combined single limit of
liability (Bodily Injury/Property Damage) of not less than Five Hundred
Million United States Dollars KALITTA shall have the right to refuse to
accept
the Aircraft and/or Engine from CUSTOMER until CUSTOMER provides KALITTA
with a certificate or certificates from its insurance carriers indicating
the expiration dates and limits of coverage of such
insurance. The certificate of insurance holder shall be in the following
name and address:
KALITTA AIR, L.L.C.
818 Willow Run Airport Ypsilanti, MI 48198
(US$500,000,000.00) or whatever limit CUSTOMER carnes aircraft and/or
engine, whichever is higher, per occurrence; and on its fleet of
b. All Risks (ground, taxiing, and flight) Aviation Hull Insurance and
All Risks (including Transit) Aircraft Spare Parts, Engines and Equipment I
nsurance, each including a wavier of subrogation in favor ofKalitta; and
c. Worker's Compensation Insurance as required by law and Employer's
Liability Insurance, including a wavier of subrogation in favor of Kalitta,
with limits of not less than One Million United States Dollars
(US$1,000,000.00) per occurrence unless otherwise required by law.
CUSTOMER shall bear the costs and shall be responsible for all
deductibles contained in the insurance policies required under this
Article 12.3.
12.4 Special Insurance Provision
Except as stated otherwise herein, each insurance policy required under
Article12.3 hereof shall also satisfY the following requirements:
a.
Each policy, other than worker's compensation policies, shall name KALITTA,
its members, officers, directors, employees and agents and any other party
which KALITTA may fi:om time to time reasonably require as additional
insured
(the "Additional Insured") as their respective rights and interests may
appear.
b.
Each policy shall contain a Breach of Warranty Clause in favor of the
Additional Insured.
c.
Solely with respect to Comprehensive Airline Liability Insurance:
i. such insurance afforded the Additional Insured shall be primmy and
without any right of contribution from any insurance which is carried by
the Additional Insured;
ii. such insurance as is afforded CUSTOMER under the policy shall apply
to liability assumed by CUSTOMER under contract or agreement and includes
this Agreement; and
iii. such insurance shall provide a cross liability/severability of
interests clause in favor of the Additional Insured.
d.
Each policy shall provide the Additional Insured thirty (30) days seven (7)
days or such shorter period as may be custommy in the case of War Risks and
Allied Perils Coverage) prior written notice of material change and/or
cancellation of msurance.
e.
Each policy shall contain a hold hamliess and full waiver of underwriters'
rights of subrogation in favor of the Additional Insured.
12.5 In the event the Aircraft is leased or sold by CUSTOMER within
three
(3) years of the completion of the Workscope, CUSTOMER will require any
LESSEE or future operator of the Aircraft and/or Engine to maintain
insurance coverages as provided for in this Article 12, including, but
not limited to, KALITTA as an additional insured and waiving subrogation
in favor of KALITTA.
13 DEFAULT AND REMEDIES
13.1 Events ofDefault
Except as otherwise provided in this Agreement, if any one or more of
the following events of default (the "Events of Default") shall happen,
then this Agreement may be terminated, at the option of the party not
in default (provided that the non-defaulting party's option to terminate
shall not be deemed an election of remedies):
a.
If either party shall fail, in any material respect, in the
performance of any of the obligations contained in this Agreement, which
failure shall continue uncured for a period of ten (1 0) calendar days
following written notice from the other party, unless the defaulting
party provides to the other adequate assurance of its ability
to cure such failure within a commercially reasonable time,
and thereafter so cures;
b.
If either party shall file a voluntary petition in banlauptcy, or shall
be adjudicated a bankrupt or insolvent or shall file any petition or
answer seeking any reorganization, composition, readjustment, liquidation
or similar relief for itself under any present or future statutes, law or
regulation of the United States or shall seek or consent to or acquiesce
in the appointment of any trustee, or shall make any general assigmnent
for the benefit of creditors, or shall admit in writing its inability to
pay its debts generally as they become due; or
c.
If any representation or warranty made by any party herein or made in
any statement or certificate furnished or required hereunder, or in
connection with the execution and delivery of this Agreement proves
untrue in any material respect as ofthe date ofthe issuance or
making thereof.
d.
Notwithstanding the provisions ofArticle 13.1 a, hereof, CUSTOMER
shall not be entitled to any notice of default with respect to
its obligation to pay invoices under Article 9 hereof and in
accordance with the provisions specified in the Terms of Payment
set forth in Exhibit 2 hereto.
DELAYS
14.1. Excusable Delays
a.
KALITTA shall be excused from perfmmance of the Services
to the extent that such performance is delayed by change in the
scope of Services to be provided, acts or omissions by CUSTOMER to
supply agreed data for Aircraft and/or Engine in work, the non-availability
of Parts not generally anticipated in the performance of the Services on the
Aircraft and/or Engine, delays caused by CUSTOMER, such as, but not limited
to, the late Delivery of the Aircraft and/or Engine, the delivery of
CUSTOMER-Furnished Parts in an unusable or unserviceable condition or in
in sufficient quantities, mistalces, inaccuracies or other insufficiencies
in any clata supplied by CUSTOMER and relied upon by KALITTA, delays caused
by CUSTOMER-Furnished labor and/or CUSTOMER-Furnished maintenance or the
late delivery of documents CUSTOMER is required to furnish ptior to the
performance of the Services or an Act of God, natural hazard and/or disaster
or any labor unrest, riot, civil commotion, lockout, national emergency,
government intervention, restrictions or requirements, war, acts of foreign
enemies or any fire, flood, earthquake, hurricane, tornado or perils of the
sea or other perils or any circumstances beyond the control of KALITTA
("Excusable Delays").
b.
Notwithstanding, if CUSTOMER is delayed in delivering the Aircraft
and/or Engine due to causes beyond CUSTOMER's reasonable control, KALITTA
shall, upon Delivery ofthe Aircraft and/or Engine, use diligent efforts
to complete the Services to be performed by the scheduled Redelivery Date
and shall, to the extent necessary, request overtime authorization from
CUSTOMER's representative or extend the Redelivery Date.
l5. TAXES
15.1 Taxes
a.
CUSTOMER shall be solely responsible for paying any and all taxes, excises,
duties and assessments (except taxes levied or assessed against KALITTA
based on gross or net income) ("Taxes") arising out of KALITTA's performance
of the Services and because the Aircraft and/or Engine is located in
Michigan, in any manner levied, assessed or imposed by any government
or subdivision or agency having jurisdiction.
b.
CUSTOMER shall promptly pay and discharge when due, unless the validity
or application to the Services is being contested in good faith, any and
all Taxes, together with any interest and penalties, the responsibility
and liability for which is assumed by CUSTOMER pursuant hereto. If any
such Taxes are levied, assessed or imposed upon KALITTA, KALITTA shall
notifY CUSTOMER and CUSTOMER shall promptly pay and discharge the Taxes,
but upon the written request and at the expense of CUSTOMER, KALITTA shall
assist CUSTOMER in contesting the validity or application of such Taxes.
If KALITTA receives a refund of all or any part of any Taxes (including,
but not limited to, a refund of interest or penalties), the amount
refunded to KALITTA shall promptly be remitted to CUSTOMER, less
any expenses of KALITTA associated with contesting the validity
or application of the Taxes which were not previously reimbursed by
CUSTOMER to KALITTA.
15.2 Tax Indemnities
Each party indemnifies and holds the other hannless fi om any and all
Taxes, charges, interest, penalties and expenses assessed against the
other party but which is the responsibility ofthe indemnifYing party
pursuant to Article 15.1 hereof.
16 RECORDS
16.1 Record keeping by KALITTA
a.
KALITTA shall maintain work records consistent with FAA, and KALITTA
policies and procedures and shall provide CUSTOMER reasonable access to such
records, for examination and, at CUSTOMER's expense, reproduction, upon
reasonable advance request from CUSTOMER.
b.
KALITTA shall maintain all records required by the FAA and shall supply to
CUSTOMER all data required by CUSTOMER for FAA reports.
c.
KALITTA shall supply CUSTOMER with one (1) copy of the records described in
this Article 16 upon Redelivery or no later than ten (1 0) calendar days
after Redelivery of the Aircraft and/or Engine to CUSTOMER by KALITTA;
provided, however, KALITTA shall supply CUSTOMER with one (1) copy ofthe
records necessary or advisable for the operation of the Aircraft and/or
Engine upon Redelivery. KALITTA shall provide CUSTOMER with man-hour runs
with respect to T & M items three (3) times per week for Aircraft only.
16.2 Aircraft and/or Engine Maintenance Records
a.
KALITTA shall record all maintenance entries in accordance with Kalitta
Maintenance Repair Station procedures and applicable FARs.
b.
CUSTOMER shall furnish to KALITTA all applicable Aircraft and/or Engine
records, manuals and forms necessary for KALITTA's performance of the
Services. It is the responsibility of CUSTOMER to supply current revisions
of CUSTOMER's manuals held by KALITTA.
17 NON-LIABILITY OF INDIVIDUALS
17.1 Non-Liability
No director, officer, agent or employee of either party shall be charged
personally or held contractually liable by or to the other party under any
term or provision of this Agreement or any supplement, modification, or
amendment to this Agreement or because of any breach thereof or because
of its execution or attempted execution.
18 CUSTOMER'S REPRESENTATIVES
18.1 On-Site Representatives
a.
During the period the Aircraft I Engine is in the Facility, CUSTOMER shall
assign and designate, in writing, one or more person
(the "On-Site Representative") to oversee KALITTA performance of the
Services. The On-Site Representative shall have the authority to execute
or authorize any MWSRs, overtime, Part requisitions, purchase orders and
accept performance of the Services to be performed pursuant to the Work
Authorization Fonn. All MWSRs executed by the On-Site Representative
shall be for the account of CUSTOMER.
b.
KALITTA shall provide the CUSTOMER's On-Site Representative(s) with
an appropriately furnished office at the Facility. The CUSTOMER's
On-Site Representative(s) shall have access to telephone, internet
access, facsimile machine and photocopier as required. All long distance
telephone calls and facsimile, living and traveling expenses, taxes,
levies and other costs incnned by the On-Site Representative(s) shall
be for the account of CUSTOMER.
19 NON-DISCLOSURE/NON-SOLICITATION
19.1 Non-Disclosure
The parties recognize that, in order for KALITTA to be able to perform
the Services under this Agreement, it may be necessary for CUSTOMER or
one or more of its affiliates or representatives to provide to KALITTA
engineering and other technical data, drawings and other information
that are confidential and proprietary to CUSTOMER (the Version 1-Kalitta
December 8, 2010 "Confidential Information"). KALITTA (a) shall not disclose
any of the Confidential Information to any person or entity except as
necessary for the performance of the Services, and (b) shall not use any of
the Confidential Infmmation in any manner or for any purpose other than for
the performance of the Services. The term "Confidential Information"
does not include data, drawings or information that are a matter of public
record.
19.2 Mutual Non-Solicitation
CUSTOMERJI<:ALITTA shall not actively recruit or solicit, for employment
any of the other party's employees, directly or indirectly, during the
term of this Agreement and for a peliod of one (1) year following the
termination of this Agreement, or the date of the last maintenance
performed pursuant to this Agreement, whichever occurs last, without
the prior written approval ofthe other party.
20 MISCELLANEOUS
20.1 Notices
All notices, approvals, requests, consents and other communications
given pursuant to this Agreement shall be in writing and shall be
deemed to have been duly given when received if hand-delivered, sent
by facsimile, by courier service or by United States certified or
registered mail, addressed as follows:
If to KALITTA :
KALITTA AIR, L.L.C.
818 Willow Run Airport Ypsilanti, MI 48198
Attn: Conrad Kalitta
Fax: (734) 544-5008
Email: ketiman@kalittaair.com
If to CUSTOMER
BALTIA AIR LINES, INC.
JFK Intemational Airport
Termina1 4, Room 263.047
Jamaica, NY 11430
Attn: Igor Dmitrowsky
Fax: 203-840-3241
Email:Baltia@juno.com
or to such other persons or addresses as may be specified by either
party in writing.
20.2 Assignment
This Agreement shall inure to the benefit of and be binding upon each
of the parties and their respective successors and assigns, but neither
the rights nor the duties of either party under this Agreement may be
voluntarily assigned, in whole or in part, without the prior written
consent ofthe other party, which consent shall not be unreasonably withheld.
20.3 Article Headings and Captions
All section headings and captions used in this Agreement are for
convenient reference and shall not affect the interpretation of
this Agreement.
20.4 Exhibits
All Exhibits described in this Agreement shall be deemed to be
incorporated herein and made a part of this Agreement.
20.5 Applicable Law, Jurisdiction and Venue
This Agreement will be governed and interpreted by Michigan law. Any lawsuit
arising either directly or indirectly out of this Agreement, will be
litigated in the Circuit Court for Washtenaw County, Michigan, or if
original jurisdiction can be established, in the United States District
Court for the Eastern District of Michigan.
Each Party shall be responsible for all associated costs related to
acquiring and retention oftheir respective legal counsel.
20.6 Amendments
Except as otherwise specifically provided, this Agreement shall not be
modified except by written agreement signed on behalf of CUSTOMER and
KALITTA by their respective authorized representatives.
20.7 Entire Agreement
This Agreement supersedes all prior understandings, representations,
negotiations and correspondence between the parties and constitutes
the entire Agreement between the parties with respect to the transaction
contemplated herein and shall not in any marmer be
[Version 1-Execution Version]
[December 23, 2010 ]
usage of trade or by any other means except executed in writing on behalf
of the parties by their duly authorized officers.
20.8 Legality of Provisions if any provision of this Agreement shall
be held to be invalid, illegal or unenforceable,
the validity, legality and enforceability of the remaining provisions
shall not in any way be affected or impaired thereby.
The failure of either party at any time to require perfonnance by the other
of any provision of this Agreement shall in no way affect that party's right
thereafter to enforce such provisions, nor shall the waiver of either party
of any breach of any provision of this Agreement be taken or held to be a
waiver of any further breach of the same provision or any other provision.
Executed as of the date first set forth above, by the duly authorized
representatives of CUSTOMER and KALITTA.
BALTIA AIR LINES. INC.
By: ___(signature)____________
Name: Igor Dmitrowsky
Title: President
KALITTA MAINTENMANCE
B: ____ (signature)____________
Name: Conrad Kalitta
Title: President
KALITTTA
AIR
Dated: December 23, 2012
LETTER AGREEMENT TO EXTEND THE AIRCRAFT
MAINTENANCE SERVICE AGREEMENT
WHEREAS, Kalitta Air, LLC d/b/a/ Kalitta Maintenance ("Kalitta")
and Baltia Air Lines, Inc. ("Customer'') have entered into an
Aircraft Maintenance Service Agreement ("Agreement") dated
December 23, 201O; and
WHEREAS, the term of the Agreement has or will terminate; and
WHEREAS, Kalitta and Customer desires to extend the Agreement:
NOW THEREFORE, Kalitta and Customer agree that the Agreement is
extended from December 23, 2012 until December 23, 2013 or
one year from the date of this Agreement, whichever is earlier,
subject to Kalitta and Customer agreeing to a revised workscope.
FURTHER. Kalitta and Customer agree that all the remaining Terms and
Conditions of the Agreement remain in full force and effect.
_____(signature)______________________
Kalitta Air d/b/a Kalitta Maintenance
By: D. NOLANM
Title: MGR OF HVYMX
______(signature)______________________
Baltia Air Lines, Inc.
By: Igor Dmitrowsky
Title: President
g:\k\kalitta\air\b\baltia air lines, inc\maintenance agreement-engine
and aircraft\2010-2012\letter agreement to extend maintenance
agreement-v1-122012-gwk.doc
818 Willow Run Airport, Ypsilanti, MI 48198
Telephone 734-484-0088
Fax 734-544-5008