Exhibit 10.29

 

LETTER AGREEMENT NO. 3

TO GTA No. 1-2299982290

 

December 22, 2017

 

Willis Lease Finance Corporation

773 San Marin Drive, Suite 2215

Novato, CA  94998

 

Re:       Purchase of three (3) new General Electric Company model [*] aircraft
engines, two (2) used General Electric Company model [*] aircraft engines, and
option to purchase one (1) new General Electric Company model [*] aircraft
engine by Willis Lease Finance Corporation

 

WHEREAS, General Electric Company, acting through its GE Aviation business unit
(hereinafter individually referred to as “GE” or “Seller”), and Willis Lease
Finance Corporation, a corporation organized under the laws of Delaware, U.S.A.
(hereinafter individually referred to as “WLFC” and together with any of its
affiliates to which title may be caused to be transferred, “Buyer”) (GE and WLFC
being hereinafter collectively referred to as the “Parties”) have entered into
General Terms Agreement 1-2299982290 dated May 26, 2010, (as heretofore
supplemented and amended, the “GTA”); and

 

WHEREAS, the GTA contains the applicable terms and conditions governing the sale
by GE and the purchase by Buyer of Spare Engine or [*], related equipment and
spare parts therefor in support of Buyer’s GE powered fleet of aircraft.

 

NOW THEREFORE, in consideration of the mutual covenants herein contained, the
Parties agree as follows:

 

1.   Purchase by Buyer.  Buyer agrees to purchase and take delivery of one (1) -
spare [*] and two (2) spare [*] (the new “Spare Engines or  [*]”) [*] and two
(2) used  spare [*] Engines (the used “Spare Engines”), with the option to
purchase one additional new [*] Spare Engine [*], direct from GE in accordance
with the delivery schedule set forth in Attachment A hereto (the “Spare Engines
or [*] Delivery Schedule”) on a specific date to be agreed between Buyer and
Seller (the “Delivery Date”) in both used and factory new condition, in
accordance with the terms and conditions as set forth herein and as further
described in the Acceptance Certificate, Attachment H for such Engine or
[*].   The purchase of the Spare Engines or [*] is subject to the terms and
conditions of the GTA and this Letter Agreement, including Attachment B and
Attachment C.

 

1.A      Transfer of Title, Delivery   Seller shall transfer to Buyer upon
Delivery, as such term is defined herein below, good and marketable title to the
new Spare Engines or [*]. Buyer and Seller have agreed the delivery location for
such Spare Engines or [*] shall be the Seller’s facility at Peebles, Ohio (the
“Delivery Location”). Title shall pass to Buyer at

NOTE: Certain Confidential Information in this document (indicated by [*]) has
been omitted and filed
separately with the Securities and Exchange Commission pursuant to a request for
confidential treatment.

 

 

 

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GE PROPRIETARY INFORMATION

 

 

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the Delivery Location.  Buyer is responsible for transportation and Delivery
shall be Ex-Works at the Delivery Location.

Seller shall transfer to Buyer good and marketable title to the used Spare
Engines over international waters.  Title and risk of loss shall occur at the
time of transfer.

1.B       Security Interests.  Upon Delivery, the Spare Engines or [*] shall be
free and clear of all security interests including without limitation any
mortgage, chattel mortgage, charge, pledge, lien, conditional sale agreement,
title retention agreement, equipment trust agreement, lease, encumbrance,
assignment, right of set-off or any other agreement or arrange having the effect
of conferring security.

1.C      Purchase Price

i) New Spare Engines or [*].

Subject to and contingent upon Buyer purchasing and taking delivery of all [*]
new Spare Engines, and based on Spare Engine pricing in Attachment B, subject to
escalation per Attachment B-1, GE agrees to provide Buyer with a new Spare
Engine or [*] allowance in the form of a [*] % discount off the Basic Engine,
[*] and [*] price. This discount will be made available to Buyer as a credit on
the invoice issued by GE for each Spare Engine or [*] purchased by Buyer, with
delivery schedules as noted in Attachment A. For avoidance of doubt, the [*] %
discount does not apply to the [*]in Attachment F.  The full Purchase Price for
the December deliveries shall be paid on or before the Delivery Date.  For the
[*] option, Buyer shall make a [*] % down payment within thirty (30) days of
exercising its option to purchase the Spare Engine pursuant to this Letter
Agreement with the balance due on or before the Delivery Date. All payments
shall be made in the currency of the United States of America by wire transfer
of immediately available funds to the account listed on GE’s invoice.   If Buyer
requests, GE shall provide commercially reasonable efforts to assist Buyer in
purchasing neutral QEC kits from third-party vendors.

ii) Used Spare Engines

The purchase price for each of the two (2) used spare [*] Engines is $[*] in
December 2017. With respect to the technical documentation and engine records
for the two used [*] Spare Engines required by the Buyer to perform the
pre-purchase inspections prior to the Delivery Date, Buyer will agree to the
following minimum list of records, subject to review and acceptance by Buyer,
for each used Spare Engine, and Seller agrees that all remaining technical
documentation and engine records for the two used [*]  Spare Engines requested,
and subject to review and acceptance by Buyer, will be provided by GE no later
than the 15th January 2018:

 

(i)  The up-to-date LLP data sheets dated as of 11/30/2017;

(ii) Clean Non-Incident Statement signed by the current operator as of the
Delivery Date; and

(iii) Full back-to-birth trace on the commercial title.

 

NOTE: Certain Confidential Information in this document (indicated by [*]) has
been omitted and filed
separately with the Securities and Exchange Commission pursuant to a request for
confidential treatment.

 

 

 

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GE PROPRIETARY INFORMATION

 

 

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GE confirms that (i) GE sold the two used Spare Engines [*] as engines to be
installed on the [*] Airlines operated aircraft, (ii) [*] sold these to [*]
Airlines as installed engines, and (iii) [*] Airlines transferred these to
GE.  GE assures Buyer that it is making best efforts to obtain the bill of sale
from [*] to [*] Airlines for these two used Spare Engines.

 

Notwithstanding the above Buyer agrees to pay the purchase price for each of the
two used Spare Engines on or before the Delivery Date.

 

The purchase price is based on [*] thrust rating and includes [*], and [*] in
Attachment F, and the neutral QEC listed in Attachment G, and engine stands and
bags.  Immediately upon title transfer, GE shall lease these used Spare Engines
from Buyer for a ([*]) month term and ([*]) month term, respectively.  at a
lease rate of [*] for each used Spare Engine pursuant to a mutually agreed to
General Terms Agreement and Lease Agreement.

 

GE shall provide Customer with [*] permanent thrust upgrade from [*] to [*] for
Engine Serial Numbers [*] and [*] no later than the expiration of their
respective lease terms.

 

For each of the two (2) [*] Engines, [*] and [*]. Seller shall be responsible
for the full performance restoration (the services performed during a shop visit
in which, at a minimum, the combustor and high-pressure turbine are exposed and
subsequently refurbished) including a full [*] upgrade to be accomplished during
the [*] -month and [*] -month lease terms at the next shop visit and no later
than the end of the lease agreement for each used Spare Engine. Buyer and Seller
and such shop visit workscope is to be agreed between Buyer and GE) in
compliance with each lease agreement The parties acknowledge the cost associated
with each [*] upgrade is $[*] which is included in the Purchase Price and has
been prepaid for by Buyer. For the avoidance of doubt, Buyer shall not be
responsible for any additional payment for such full performance restoration
shop visit and [*] and [*] upgrade of each Engine including the costs associated
with the removal, repair and/or replacement of parts exposed during such shop
visit. Payment in full shall be made on or before the Delivery Date. All
payments shall be made in the currency of the United States of America by wire
transfer of immediately available funds to the account listed on GE’s invoice.

E.   Pre-purchase Inspection

Buyer shall be given the opportunity to inspect the new and used Spare Engines
and its associated records prior to the respective Delivery Dates, at Buyer’s
cost.  For the purposes of the inspection related to the used Spare Engine GE
shall provide or cause to provide the related Engine records including but not
limited to the non-incident statements reasonably required for Buyer to assess
the used Engines.  Promptly after such inspection, Buyer shall notify GE in
writing either that the new and used Spare Engines do or do not meet the
requirements set forth in the GTA and Letter Agreement. Following such
inspection and until delivery of the new or used Spare Engines to Buyer
hereunder, GE will ensure that the new or used Spare Engines remains properly
stored if it is not currently in service, and GE will not allow any parts to be
removed from the new or used Spare Engines.

 

NOTE: Certain Confidential Information in this document (indicated by [*]) has
been omitted and filed
separately with the Securities and Exchange Commission pursuant to a request for
confidential treatment.

 

 

 

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GE PROPRIETARY INFORMATION

 

 

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If the new or used Spare Engines are lost, confiscated, damaged, destroyed or
otherwise rendered unfit or unavailable for use prior to the Delivery Date, or
if the new or used Spare Engines do not meet the requirements set forth in the
GTA and Letter Agreement following the inspection, the Buyer will not be liable
to purchase the applicable new or used Spare Engines and GE shall (i) propose an
equivalent replacement engine for Buyer to purchase, (ii) promptly refund any
progress payments made with respect to the new or used Spare Engines and the
cancellation fees set forth in Attachment C shall not apply, or (iii) upon
mutual agreement of the Parties to repair to bring new or used Spare Engines
into compliance with the requirements set forth in the GTA and Letter
Agreement.  Immediately upon the delivery of each Spare Engine to Buyer on the
respective Delivery Date, Buyer shall execute and deliver to GE a Certificate of
Acceptance in the form attached hereto as Attachment H and GE shall provide
Buyer with a Bill of Sale in the form attached hereto as Attachment I.

 

1.F   New [*] ESN [*].  Immediately upon title transfer of the new Spare Engine
with ESN [*] to Buyer, [*] shall lease the new Spare Engine from Buyer for a [*]
year period at a lease rate of [*] dollars per day pursuant to a mutually agreed
to General Terms Agreement and Lease.  [*].

2.   Repurchase Option.  In order to assure that an adequate supply of GE Spare
Engines are available to support the worldwide operating fleet of GE powered
aircraft, GE reserves the option, for a limited period of time following the
sale of Spare Engines to Buyer, to repurchase Spare Engines which Buyer proposes
to utilize for other than its own operating purposes, other than (i) a sale to
an affiliate or an owner trustee for the benefit of an affiliate or (ii) an
offer to sell such Engine to a bona fide third party leasing company, investment
fund, bank or other purchaser while such Engine is subject to a bona fide lease
to an airline operator, and Customer remains as servicer until the re-purchase
option is satisfied. Accordingly, if prior to the accumulation of [*] Flight
Hours on any Spare Engine sold hereunder, Buyer elects to a) offer such Spare
Engine including neutral QEC for resale or b) undertake action to cause
components or parts of such Spare Engine to be made available for sale, Buyer
shall give GE prompt advanced written notice of such determination (“Buyer’s
Notice”). Promptly upon receipt of such notice, GE shall have the option to
repurchase the Spare Engine from Buyer (the “GE Repurchase Option”) at the lower
of (i) the net price (the GE quoted spare engine price less any allowances or
other credits available to, and exercised by, Buyer) at which such Spare Engine
was sold by GE to Buyer, plus the actual cost of any QEC, [*], [*] or additional
equipment purchased by Buyer and installed on the Spare Engine, less an amount
to cover any use and operation of the Spare Engine which, as agreed by the
Parties, shall be equal to then current restoration charges per operating hours
and cycles applicable to the equivalent GE lease pool engine; or (ii) any lower
amount contained in any current, bona fide offer made to Buyer by a third party
for such Spare Engine including the actual cost of any QEC, [*], [*] or
additional equipment purchased by Buyer and installed on the Spare Engine. If
requested by GE, an independent expert, jointly designated by GE and Buyer,
shall verify such offer while maintaining in confidence the identity of such
third party. GE shall give Buyer notice of its decision to decline or exercise
such GE Repurchase Option within [*] business days of its receipt of Buyer’s
Notice. Fulfillment by GE of GE Repurchase Option shall be conditional

NOTE: Certain Confidential Information in this document (indicated by [*]) has
been omitted and filed
separately with the Securities and Exchange Commission pursuant to a request for
confidential treatment.

 

 

 

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GE PROPRIETARY INFORMATION

 

 

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upon technical inspection, review and acceptance of the Spare Engine and its
records by GE and the execution of a mutually acceptable purchase agreement. If
GE Repurchase Option “i” is exercised by GE, upon completion of the repurchase,
GE shall restore to Buyer’s account any allowances or credits applied to reduce
the GE quoted spare engine price.

 

3.   [*] Engine Stands and Bags.  [*]

4.   Disclaimers.    

The Warranty for the new and used Spare Engines is set forth in Attachment D;
however the Warranties for the used Spare Engines would be the remaining
warranty period under the applicable Warranty.  For the avoidance of doubt Parts
in the used Spare Engines remain eligible for coverage under the Warranty Plan.
EXCEPT FOR THE WARRANTIES SET FORTH IN THE GTA SELLER HEREBY DISCLAIMS AND BUYER
HEREBY WAIVES ANY AND ALL REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED,
INCLUDING BUT NOT LIMITED TO ANY IMPLIED WARRANTY OF FITNESS FOR A PARTICULAR
PURPOSE OR MERCHANTABILITY, DEALING OR USAGE OF TRADE, AND ALL OBLIGATION AND
LIABILITY IN TORT, NEGLIGENCE OR STRICT LIABILITY, AS TO AIRWORTHINESS,
CONDITION OR DESIGN OF THE SPARE ENGINES OR [*] OR ANY PART THEREOF, AND BUYER
HEREBY WAIVES, RELEASES AND DISCLAIMS EXPECTATION OF OR RELIANCE UPON ANY SUCH
WARRANTY, OBLIGATION OR LIABILITY.

5.   Technical Publications and Date

Upon Buyer’s written request, GE, at no additional cost to Buyer, shall provide
Buyer with the electronic technical manuals, including revisions thereof, as
applicable for Spare Engine model. Electronic technical manuals will be made
available by GE to Buyer through GE Sites. All electronic technical manuals
provided by GE shall be in the English language and in accordance with mutually
agreed upon provisions of the ATA 2200 Specification or S1000D Specification, at
GE’s option.

6.   Technical Training

A.  Scope:

The training furnished under this Agreement shall be as follows:

 

      Product – as previously defined in this Agreement ([*]  Spare Engines).

      Quantity – [*]  Student-Days* at no charge shall be provided to Customer
for each [*]  new and used Spare Engine delivered.

      Courses – detailed in training catalog.

 

* Student-Days = the number of students multiplied by the number of class days

Upon Customer’s written request, GE will provide a quotation for technical
training.

The courses will be detailed in the GE training catalog:

   Standard Line Maintenance Training

NOTE: Certain Confidential Information in this document (indicated by [*]) has
been omitted and filed
separately with the Securities and Exchange Commission pursuant to a request for
confidential treatment.

 

 

 

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o   General Familiarization

o   PowerPlant Line & Base Maintenance

o   Borescope Inspection

Student shall be an employee of the Customer, unless written approval received
from GE prior to scheduling the training.

The Customer Support Manager, in conjunction with appropriate GE Training
representatives, will be available to conduct a review session with Customer to
schedule required training.

B.   Training Location

Unless arranged otherwise with GE concurrence, training shall be provided by GE
in English at one or more of the GE designated facilities identified in the
training catalog.

If an alternate site is desired, GE will furnish a quotation with following
minimum conditions that must be met in order to deliver “equivalent” training at
the alternate site.

1.       Customer will be responsible for providing acceptable classroom space
and equipment – including engines, special tools, and hand tools required to
conduct the training.

2.       Customer will pay GE’s travel and living charges for each GE instructor
for each calendar day, or fraction thereof, such instructor is away from GE’s
designated facility, including travel time and administrative fees.

3.       Customer will pay for round-trip transportation for GE’s instructors
and shipment of training materials between the designated facility and such
alternate training site.

C.  Customer Responsibility

During engine maintenance training at any of the GE designated facilities,
Customer shall be responsible for its personnel’s typical expenses such as:

     Air and ground transportation expenses

     Lodging (hotel accommodations)

     Meals

     All Medical – physicians, medication, emergencies, etc.

     Other various and sundry expenses (visits to other businesses,
entertainment, etc.).

Customer will be responsible for shipping costs of training materials in all
cases.

7.   Notices.  All notices under, or in connection with, this Letter Agreement
will be given in writing by means of an overnight courier service or facsimile
transmission, with a copy by e-mail, to the respective addresses or facsimile
numbers given below or such other address or facsimile number as the recipient
may have notified to the sender in writing.  Any notice is deemed given when
received by the recipient (or if receipt is refused by the recipient, when so
refused).

NOTE: Certain Confidential Information in this document (indicated by [*]) has
been omitted and filed
separately with the Securities and Exchange Commission pursuant to a request for
confidential treatment.

 

 

 

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GE PROPRIETARY INFORMATION

 

 

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To Buyer

To General Electric Company

Willis Lease Finance Corporation

773 San Marin Drive, Suite 2215

Novato, CA  94998

 

Attention: General Counsel

 

Telephone:

 

Email:

GE Aviation

One Neumann Way, MD F104

Cincinnati, OH 45215

 

Attention: General Counsel, Commercial Engine Operations

 

Telephone:

 

Email:

 

8.   Miscellaneous.

a)         Benefit of Agreement.  Neither Buyer nor Seller shall assign or
transfer all or any of its rights or obligations under this Letter Agreement;
provided, however, WLFC may cause any affiliate to take title to any Engine at
Delivery in accordance with this Letter Agreement and the GTA.

b)         Counterparts.  This Letter Agreement may be executed in two (2) or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

9.   The obligations set forth in this Letter Agreement are in addition to the
obligations set forth in the GTA.  In the event of conflict between the terms of
this Letter Agreement and the terms of the GTA, the terms of this Letter
Agreement shall take precedence.  Terms which are capitalized but not otherwise
defined herein shall have the meaning given to them in Article I of the GTA.

 

10. Confidentiality of Information. This Letter Agreement contains information
specifically for Buyer and GE, and nothing herein contained shall be divulged by
Buyer or GE to any third person, firm or corporation, without the prior written
consent of the other Parties, which consent shall not be unreasonably withheld;
except that prior written consent shall not be required (i) for disclosure by GE
of this Letter Agreement, to an Engine program participant, joint venture
participant, engineering service provider or consultant to GE so as to enable GE
to perform its obligations under this Letter Agreement or to provide
informational data; (ii) for disclosure by Buyer of this Letter Agreement and
related  data given by GE to Buyer to Buyer’s subsidiaries and affiliates,
including, Willis Engine Structured Trust III, Willis Engine Securitization
Trust II, Willis Aeronautical Services, Inc., Willis Asset Management Limited,
CASC Willis Engine Lease Company Limited and Willis Mitsui & Co Engine Support
Limited; (iii) to the extent required by Government agencies, by law, or to
enforce this Letter Agreement; and (iv) to the extent necessary for disclosure
to the Parties’ respective insurers, accountants or other professional advisors
who must likewise agree to be bound by the provisions of this paragraph.  In the
event (i), (ii) or (iv) occur, suitable restrictive legends limiting further
disclosure shall be applied.  In the event this Letter Agreement, or other GE
information or data is required to be disclosed or filed by government agencies
by law, or by

NOTE: Certain Confidential Information in this document (indicated by [*]) has
been omitted and filed
separately with the Securities and Exchange Commission pursuant to a request for
confidential treatment.

 

 

 

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GE PROPRIETARY INFORMATION

 

 

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court order, Buyer shall notify GE at least [*] days in advance of such
disclosure or filing and shall cooperate fully with GE in seeking confidential
treatment of sensitive terms of this Letter Agreement.

 

Please indicate your agreement with the foregoing by signing two (2) duplicate
originals as provided below.

 

Very truly yours,

 

 

 

 

 

WILLIS LEASE FINANCE

CORPORATION

GENERAL ELECTRIC

COMPANY

 

 

SIGNATURE

SIGNATURE

 

 

PRINTED NAME

PRINTED NAME

 

 

TITLE

TITLE

 

 

EXECUTION DATE

EXECUTION DATE

 

 

 

NOTE: Certain Confidential Information in this document (indicated by [*]) has
been omitted and filed
separately with the Securities and Exchange Commission pursuant to a request for
confidential treatment.

 

 

 

A-8

 

GE PROPRIETARY INFORMATION

 

 

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ATTACHMENT A

 

Spare Engines or  [*] Delivery Schedule

 

 

 

 

 

Spare Engines or [*] Qty.

Engine Type

ESN

Delivery Dates

3

New [*]  

[*], [*]  &[*]

By [*]

As mutually agreed by the Parties

*1 Option

New [*]  

[*]

By [*]

As mutually agreed by the Parties

2

Used [*]  

[*]  &[*]

By [*]

As mutually agreed by the Parties

 

* GE agrees to provide Buyer with a new Spare Engine or [*] allowance in the
form of a [*] % discount off the Basic Engine, [*] and [*] price.  GE agrees to
provide, [*], one (1) [*]  rollover stand or split stand depending on if the
Buyer elects to purchase a [*] or [*] Engine.

 

NOTE: Certain Confidential Information in this document (indicated by [*]) has
been omitted and filed
separately with the Securities and Exchange Commission pursuant to a request for
confidential treatment.

 

 

 

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GE PROPRIETARY INFORMATION

 

 

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ATTACHMENT B - PRICE

 

 

 

 

[*] Basic Engine

 

 

 

 

 

 

 

[*]

[*]

[*]

 

 

 

 

BASE PRICES FOR NEW [*] SPARE ENGINE 

 

Prices Applicable to Deliveries through June 30, 2018

 

 

 

 

Item

 

1.    [*] Basic Engine

       [*]

      [*]*

 

Base Price

January 2017 US Dollars

[*]

 

$  [*]

$  [*]

$  [*]

 

 

 

 

A.  Base prices are effective for basic Spare Engine (including associated
equipment and maximum climb thrust increase), Option Equipment and Modules
delivered to WLFC by GE on or before [*].  The base prices are Ex Works,
Evendale, Ohio, or point of manufacture, subject to adjustment for escalation,
and WLFC shall be responsible, upon delivery, for the payment of all taxes,
duties, fees or other similar charges.

 

B.  The selling price of [*] basic Spare Engine, Optional Equipment and Modules
ordered for delivery after the period set forth in Paragraph A above shall be
the base price then in effect, which base price shall be subject to adjustment
for escalation in accordance with GE’s then-current escalation provisions.

 

C.  [*] pricing is for reference only.  Actual price will be based on vendor
catalog price in effect at the time of delivery.

 

D.  [*] definition subject to change by GE based on modifications in
configuration, assembly processes, and/or shipping requirements.

 

 

NOTE: Certain Confidential Information in this document (indicated by [*]) has
been omitted and filed
separately with the Securities and Exchange Commission pursuant to a request for
confidential treatment.

 

 

 

 

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GE PROPRIETARY INFORMATION

 

 

(subject to restrictions on first page)

 

 

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[*]

 

 

 

 

 

 

 

[*]

[*]     $ [*]

 

 

 

 

BASE PRICES FOR NEW [*]

 

Prices Applicable to Deliveries through [*]

 

 

 

 

Item

 

1.     [*]

      [*]

      [*]*

 

Base Price

January 2017 US Dollars

[*]

 

$  [*]

 $ [*]     $ [*]

 

 

 

 

 

A.  Base prices are effective for basic [*] (including associated equipment and
maximum climb thrust increase), Option Equipment and Modules delivered to WLFC
by GE on or before [*].  The base prices are Ex Works, Evendale, Ohio, or point
of manufacture, subject to adjustment for escalation, and WLFC shall be
responsible, upon delivery, for the payment of all taxes, duties, fees or other
similar charges.

 

B.  The selling price of [*] basic [*], Optional Equipment and Modules ordered
for delivery after the period set forth in Paragraph A above shall be the base
price then in effect, which base price shall be subject to adjustment for
escalation in accordance with GE’s then-current escalation provisions.

 

C.  *[*] pricing is for reference only.  Actual price will be based on vendor
catalog price in effect at the time of delivery.

 

D.  [*] definition subject to change by GE based on modifications in
configuration, assembly processes, and/or shipping requirements.

 

 

NOTE: Certain Confidential Information in this document (indicated by [*]) has
been omitted and filed
separately with the Securities and Exchange Commission pursuant to a request for
confidential treatment.

 

 

 

 

B-3

 

GE PROPRIETARY INFORMATION

 

 

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ATTACHMENT B-1

 

[*] Spare Engines or [*] Escalation Formula

 

[*]

 

 

NOTE: Certain Confidential Information in this document (indicated by [*]) has
been omitted and filed
separately with the Securities and Exchange Commission pursuant to a request for
confidential treatment.

 

 

 

 

B-4

 

GE PROPRIETARY INFORMATION

 

 

(subject to restrictions on first page)

 

 

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ATTACHMENT  C

 

Conditions For Delay/Cancellation

 

1.     Cancellation of Spare Engines

 

Buyer recognizes that harm or damage will be sustained by GE if Buyer to accept
delivery of the Spare Engines when duly tendered. Within [*] calendar days of
any such cancellation or failure to accept delivery occurs, Buyer shall remit to
GE a cancellation charge equal to [*] percent ([*] %) of the new Spare Engine
base price, and a cancellation charge equal to [*] percent ([*] %) of the used
Spare Engine base price in accordance with Attachment B hereto.

 

The Parties acknowledge such cancellation charge to be a reasonable estimate of
the minimum harm or damage to GE in such circumstances.

 

GE shall retain any progress payments or other deposits made to GE for any such
cancelled Engine or failure to accept delivery. Such progress payments will be
applied to the cancellation charge for such Engine, Progress payments held by GE
in respect of any such Engine which are in excess of such amounts will be
promptly refunded to Buyer, provided Buyer is not then in arrears on other
amounts owed to GE.

 

 

NOTE: Certain Confidential Information in this document (indicated by [*]) has
been omitted and filed
separately with the Securities and Exchange Commission pursuant to a request for
confidential treatment.

 

 

 

C-2

 

GE PROPRIETARY INFORMATION

 

 

(subject to restrictions on first page)

 

 

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ATTACHMENT D

 

ENGINE WARRANTY PLAN

 

SECTION I - WARRANTIES

 

A.    New Engine Warranty

 

1.       GE warrants each new Engine and Module against Failure for the initial
[*] Engine Flight Hours (“EFH”) as follows:

 

a.        Parts Credit Allowance will be granted for any Failed Parts.

 

b.       Labor Allowance for disassembly, reassembly, test and Parts Repair of
any new Engine part will be granted for replacement of Failed Parts.

 

c.        Such Parts Credit Allowance and Labor Allowance will be:  100% from
new to [*] EFH and decreasing pro rata from 100% at [*] EFH to zero percent at
[*] EFH.

 

2.       As an alternative to the above allowances, GE shall upon request of
Buyer:

 

a.        Arrange to have Failed Engines and Modules repaired per the terms of
Paragraph 1 above, at a facility designated by GE.

 

B.     New Parts Warranty

 

In addition to the warranty granted for Spare Engines and Modules GE warrants
Parts as follows:

 

1.       During the first [*] EFH for such Parts GE will grant 100% Parts Credit
Allowance or Labor Allowance for repair labor for Failed Parts.

 

2.       GE will grant a pro rata Parts Credit Allowance for Scrapped Parts
decreasing from 100% at [*]  EFH Part Time to zero percent at the applicable
hours designated in the applicable Engine Parts Table set forth in Attachment E
to this Attachment D.

 

C.     Ultimate Life Warranty

 

1.       GE warrants Ultimate Life limits on a rotating Part for which a FAA
imposed Ultimate Life limitation is published provided the Part has always been
operated in GE approved configurations and has been maintained in accordance
with GE technical documents and recommendations.

 

NOTE: Certain Confidential Information in this document (indicated by [*]) has
been omitted and filed
separately with the Securities and Exchange Commission pursuant to a request for
confidential treatment.

 

 

 

 

 

 

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2.       For rotating LLP, GE will grant a pro rata Parts Credit Allowance of
100% when new and a credit allowance decreasing pro rata from 100% at new to
zero percent at [*]  Engine Flight Cycles (“EFC”).   Credit will be granted only
when such rotating Parts are permanently removed from service by a U.S.
Government imposed Ultimate Life Limitation of less than [*]  EFC.  Credit will
not be granted under this Ultimate Life Warranty for any individual Failure or
other cause not related to the total usage capability of all such Parts in Buyer
service.  For the avoidance of doubt, the Non-Rotating LLP will decrease on a
pro rata from 100% at new to zero percent at [*]  EFH or [*]  Engine Flight
Cycles (“EFC”) whichever occurs first.  Credit will not be granted under this
Ultimate Life Warranty for any individual Failure or other cause not related to
the total usage capability of all such Parts in Buyer service.

 

D.    Campaign Change Warranty

 

1.       A campaign change will be declared by GE when a new Part design
introduction, Part modification, Part Inspection, or premature replacement of an
Engine or Module is required by a time compliance GE Service Bulletin
implementing an Airworthiness Directive.  GE will grant the following Parts
Credit Allowances:

 

(i)         100% for Parts in inventory or removed from service when new or with
[*]  EFH or less total Part Time.

 

(ii)       Pro rata for Parts in inventory or removed from service decreasing
pro rata from 100% at [*]  EFH to zero percent at [*]  EFH or the applicable
hours designated in the applicable Engine Parts Table set forth in Attachment I
to this Exhibit A, whichever is earlier.

 

2.       Labor Allowance - GE will grant 100% Labor Allowance for disassembly,
reassembly, modification, testing, or Inspection of GE-supplied Engines, Modules
or Parts therefor when such action is required to comply with a mandatory time
compliance GE Service Bulletin implementing an Airworthiness Directive.

 

3.       Life controlled Parts which are set forth in the Ultimate Life Warranty
and which are retired by Ultimate Life limits including FAA Airworthiness
Directive, are excluded from Campaign Change Warranty.

 

E.     Warranty Pass-On

 

If requested by Buyer and consented to by GE in writing, which consent will not
be unreasonably withheld, GE will permit assignment of the warranty support for
Engines sold by Buyer to commercial Buyer operators, or to other aircraft
operators.  Such warranty support will be limited to Engines or Parts which were
purchased under this Agreement or to initially installed Engines purchased by
Buyer from the Aircraft manufacturer and apply to the unexpired portion of the
New Engine Warranty, New Parts Warranty, Ultimate Life Warranty, Campaign Change
Warranty, Vendor Back-Up Warranty, and Vendor Interface Warranty (collectively,
the “Engine Warranties”), and will require such operator(s) to agree

NOTE: Certain Confidential Information in this document (indicated by [*]) has
been omitted and filed
separately with the Securities and Exchange Commission pursuant to a request for
confidential treatment.

 

 

 

 

 

 

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GE PROPRIETARY INFORMATION

 

 

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in writing to be bound by and comply with all the terms and conditions,
including the limitations, applicable to the Engine Warranties.

 

Seller's consent shall not be required for the assignment by Buyer of Buyer’s
rights to the Engine Warranties to (i) Buyer’s subsidiaries and affiliates,
including, Willis Engine Structured Trust III, Willis Engine Securitization
Trust II, Willis Aeronautical Services, Inc., Willis Asset Management Limited,
CASC Willis Engine Lease Company Limited and Willis Mitsui & Co Engine Support
Limited, (ii) an owner trustee for the benefit such abovementioned affiliates or
subsidiaries, (iii) to a bona fide third party leasing company, investment fund,
bank or one or more financing institutions,  or (iv) each such assignment made
in respect to Buyer's initial financing of one or more spare Engine(s), as the
case may be.  In exercising any rights under such Engine Warranties, such
assignee shall be conclusively deemed to have accepted the applicable terms and
conditions of this GTA, including the limitations, applicable to the Engine
Warranties.  The exercise by such assignee of any rights to the Engine
Warranties shall not release Buyer from any of its duties or obligations to
Seller under this GTA except to the extent of actual performance by the
assignee.  Seller’s liability to either or both Buyer and its assignee shall not
be increased, duplicated or multiplied in any way by reason of such
assignment.  Buyer shall provide the assignee an extracted copy of the terms and
conditions of this GTA (including a copy of this paragraph) applicable to the
Engines Warranties. Seller’s consent to the assignment under the foregoing terms
shall be deemed fulfilled, without further action by the Seller, upon receipt by
Seller of Buyer’s written notice identifying the assignee of the Engine
Warranties.

 

F.   Vendor Back-Up Warranty

 

1.   GE controls and accessories vendors provide a warranty on their products
used on GE Engines.  This warranty applies to controls and accessories sold to
GE for delivery on installed or spare Engines and controls and accessories sold
by the vendor to Buyer on a direct purchase basis.  In the event the controls
and accessories suffer a failure during the vendor’s warranty period, Buyer will
submit a claim directly to the vendor in accordance with the terms and
conditions of the vendor’s warranty.

 

2.   In the event a controls and accessories vendor fails to provide a warranty
at least as favorable as the GE New Engine Warranty (for complete controls and
accessories) or New Parts Warranty (for components thereof), or if provided,
rejects a proper claim from Buyer, GE will intercede on behalf of Buyer to
resolve the claim with the vendor.  In the event GE is unable to resolve a
proper claim with the vendor, GE will honor a claim from Buyer under the
provisions and subject to the limitations of GE’s New Engine or New Parts
Warranty, as applicable.  Settlements under Vendor Back-Up Warranty will exclude
credits for resultant damage to or from controls and accessories procured
directly by Buyer from vendors.

 

G.  Vendor Interface Warranty

 

Should any control or accessory, for which GE is responsible, develop a problem
due to its environment or interface with other controls and accessories or with
an Engine, Module or

NOTE: Certain Confidential Information in this document (indicated by [*]) has
been omitted and filed
separately with the Securities and Exchange Commission pursuant to a request for
confidential treatment.

 

 

 

 

 

 

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equipment supplied by the aircraft manufacturer, GE will be responsible for
initiating corrective action.  If the vendor disclaims warranty responsibility
for Parts requiring replacement, GE will apply the provisions of its New Parts
Warranty to such Part whether it was purchased originally from GE or directly
from the vendor.

 

H.  THE WARRANTIES SET FORTH HEREIN ARE EXCLUSIVE AND IN LIEU OF ALL OTHER
WARRANTIES, WHETHER WRITTEN, STATUTORY, ORAL, OR IMPLIED (INCLUDING, WITHOUT
LIMITATION, ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE
OR ANY IMPLIED WARRANTY ARISING FROM COURSE OF DEALING, COURSE OF PERFORMANCE,
OR USAGE OF TRADE).

 

SECTION II - GENERAL CONDITIONS

 

A.    Buyer will maintain adequate operational and maintenance records and make
these available for GE inspection.

 

B.     GE will deny a claim under any of the Warranty provisions, and the
Warranty provisions will not apply if it has been reasonably determined by GE
that:

 

(1)    [*]

 

C.     The express provisions herein set forth the maximum liability of GE with
respect to all claims of any kind under this Attachment D, including, without
limitation, contracts, warranty, tort and negligence arising out of the
manufacture, design, sale, possession, use or handling of the Products
(including Engines installed on Buyer’s owned or leased aircraft as original
equipment and engines obtained, acquired, leased or operated before or after the
execution of this Agreement) or Parts thereof or therefor, and in no case shall
GE’s liability to Buyer exceed the purchase price (or in the absence of a
purchase price, the fair market value) of the Engine, service or other thing
giving rise to Buyer’s claim.  In no event shall GE be liable for incidental,
special, punitive or consequential damages.  For the purpose of this Section II,
the term “GE” shall be deemed to include the General Electric Company, its
subsidiaries, assigns, subcontractors, suppliers, Product co-producers, and the
respective directors, officers, employees, and agents of each. If Buyers uses
non- GE Parts or non- GE approved repairs and such parts or repairs cause
personal injury, death or property damage to third parties, Buyer shall
indemnify and hold harmless GE from all claims and liabilities connected
therewith. This indemnification shall survive termination of this Agreement.

 

D.    Buyer shall apprise GE of any Failure within [*]  days after the discovery
of such Failure.  Any Part for which a Parts Credit Allowance is requested by
Buyer shall be returned to GE upon specific request by GE and must be
accompanied by sufficient information to identify the Part and the reason for
its return.  In such event, upon return to GE, such Part shall become the
property of GE unless GE directs otherwise.  Transportation expenses shall be
borne by GE.

 

NOTE: Certain Confidential Information in this document (indicated by [*]) has
been omitted and filed
separately with the Securities and Exchange Commission pursuant to a request for
confidential treatment.

 

 

 

 

 

 

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E.     The warranty applicable to a replacement Part provided under the terms of
the New Engine Warranty or New Parts Warranty shall be the same as the warranty
on the original Part.  The unexpired portion of the applicable warranty will
apply to Parts repaired under the terms of such warranty.

 

F.     Buyer will cooperate with GE in the development of Engine operating
practices, repair procedures, and the like with the objective of improving
Engine operating costs.

 

G.     If compensation becomes available to Buyer under more than one warranty
or other Engine program consideration, Buyer will not receive duplicate
compensation but will receive the compensation most beneficial to Buyer under a
single warranty or other program consideration.

 

H.     Any repair which is performed without the prior authorization of GE will
not be covered by the applicable warranty.

 

I.      Transportation to and from repair facilities shall be paid by Buyer.

 

 

NOTE: Certain Confidential Information in this document (indicated by [*]) has
been omitted and filed
separately with the Securities and Exchange Commission pursuant to a request for
confidential treatment.

 

 

 

 

 

 

D-6

 

GE PROPRIETARY INFORMATION

 

 

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ATTACHMENT E

 

[*] WARRANTY PARTS LIST*

 

 

 

 

 

 

 

ENGINE FLIGHT
HOURS

 

[*]

[*]

[*]

Fan Rotor

 

[*]

 

 

 

 

[*]

 

 

 

 

[*]

 

 

 

 

[*]

 

 

 

 

[*]

 

 

 

 

[*]

 

 

 

 

[*]

 

 

 

Fan Stator

 

[*]

 

 

 

 

[*]

 

 

 

 

[*]

 

 

 

 

[*]

 

 

 

 

[*]

 

 

 

 

[*]

 

 

 

 

[*]

 

 

 

Compressor Rotor

 

[*]

 

 

 

 

[*]

 

 

 

Compressor Stator

 

[*]

 

 

 

 

[*]

 

 

 

 

[*]

 

 

 

 

[*]

 

 

 

Combustor

 

[*]

 

 

 

 

[*]

 

 

 

HPT Rotor

 

[*]

 

 

 

 

[*]

 

 

 

 

[*]

 

 

 

 

[*]

 

 

 

 

[*]

 

 

 

 

[*]

 

 

 

HPT Stator

 

[*]

 

 

 

 

[*]

 

 

 

 

[*]

 

 

 

NOTE: Certain Confidential Information in this document (indicated by [*]) has
been omitted and filed
separately with the Securities and Exchange Commission pursuant to a request for
confidential treatment.

 

 

 

 

 

 

E-2

 

GE PROPRIETARY INFORMATION

 

 

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[*]

 

 

 

LPT Rotor

 

[*]

 

 

 

 

[*]

 

 

 

 

[*]

 

 

 

 

[*]

 

 

 

 

[*]

 

 

 

LPT Stator

 

[*]

 

 

 

 

[*]

 

 

 

 

[*]

 

 

 

Fan Frame

 

[*]

 

 

 

 

[*]

 

 

 

 

[*]

 

 

 

Turbine Center Frame

 

[*]

 

 

 

 

[*]

 

 

 

Turbine Rear Frame

 

 

 

 

[*]

 

 

 

 

[*]

 

 

 

 

[*]

 

 

 

Main Engine Bearings

Gearboxes

 

[*]

 

 

 

 

[*]

 

 

 

 

[*]

 

 

 

 

[*]

 

 

 

Air Duct

 

 

 

Sump Air and Oil Seals

 

 

 

Controls & Accessories-Engine

 

All Basic Engine items are warranted to [*] hours

 

 

 

 

*  Warranty Parts List may change as Engine program evolves

 

 

NOTE: Certain Confidential Information in this document (indicated by [*]) has
been omitted and filed
separately with the Securities and Exchange Commission pursuant to a request for
confidential treatment.

 

 

 

 

 

 

E-3

 

GE PROPRIETARY INFORMATION

 

 

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ATTACHMENT F

 

[*]Equipment

 

 

 

NOTE: Certain Confidential Information in this document (indicated by [*]) has
been omitted and filed
separately with the Securities and Exchange Commission pursuant to a request for
confidential treatment.

 

 

 

 

 

 

F-2

 

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ATTACHMENT G

 

[*] used Spare Engines QEC listing

 

Aircraft QEC
(customer selects which hardware they will purchase and which they will
transfer)

varies by configuration

varies

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

 

 

NOTE: Certain Confidential Information in this document (indicated by [*]) has
been omitted and filed
separately with the Securities and Exchange Commission pursuant to a request for
confidential treatment.

 

 

 

 

 

 

G-2

 

GE PROPRIETARY INFORMATION

 

 

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ATTACHMENT H

 

FORM OF

 

CERTIFICATE OF ACCEPTANCE

 

                             (“Buyer”) hereby certifies that pursuant to the
Letter Agreement dated as of [Date], by and
between                                  (“Seller”) and Buyer (the “Engine Sales
Agreement”), in connection with the sale by Seller to Buyer of the used/new
General Electric model [*] aircraft engines bearing the manufacturer’s serial
number  (the “Engines”)   Engines:

(a)        Buyer has inspected the Engines, including all technical records, and
is satisfied the Engine conforms with the delivery condition requirements as set
forth in the Engine Sales Agreement;

(b)      Buyer has inspected, found to be complete and satisfactory to it and
received all of the Engine’s technical documents.

Date: _____________

 

Company Name

 

 

 

By:

 

 

 

 

 

Name:

 

 

 

 

 

Title:

 

 

 

NOTE: Certain Confidential Information in this document (indicated by [*]) has
been omitted and filed
separately with the Securities and Exchange Commission pursuant to a request for
confidential treatment.

 

 

 

 

 

 

H-2

 

GE PROPRIETARY INFORMATION

 

 

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FORM OF

 

BILL OF SALE

 

Pursuant to the Letter Agreement, dated [Date], by and between Willis Lease
Finance Corporation (“Buyer”) and General Electric (“Seller”) (the “Engine Sales
Agreement”), and for and in consideration of the Purchase Price, and other good
and valuable consideration, the payment of which is described in the Engine
Sales Agreement, Seller, the owner of full legal and beneficial title to:

 

Identification of the Engine

 

Engine Model

Engine Serial Number

[*]

xxx-xxx

 

has as of the ____ day of [Date], sold, granted, transferred and delivered all
right, title, and interest in and to the above listed engine to Buyer, and to
its successors and assigns, to have and to hold said Engine forever.

 

Seller hereby warrants to Buyer that at the time of delivery of the Engine to
Buyer, Seller was the lawful owner of the Engine with good title thereto; that
said the Engine is free from all claims, liens, encumbrances and rights of
others; that Seller has good and lawful right to sell the Engine; that there is
hereby conveyed to Buyer on the date hereof good and marketable title to the
Engine free and clear of all liens, claims, charges and encumbrances and that
Seller will warrant and defend such title against all claims and demands of all
persons, whomsoever arising from any event or condition occurring prior to the
delivery of the Engine by Seller to Buyer.

 

This Bill of Sale will be governed in accordance with the laws of the State of
New York, U.S.A.; except, that New York conflict of law rules will not apply if
the result would be the application of the laws of another jurisdiction.

 

The undersigned has caused this Bill of Sale to be signed by a duly authorized
officer as of this ___ day of [Month, Year].

 

 

GENERAL ELECTRIC COMPANY

 

 

 

 

By:

 

 

 

 

 

Printed Name:

 

 

 

 

 

Title:

 

 

 

NOTE: Certain Confidential Information in this document (indicated by [*]) has
been omitted and filed
separately with the Securities and Exchange Commission pursuant to a request for
confidential treatment.

 

 

 

 

 

 

H-3

 

GE PROPRIETARY INFORMATION

 

 

(subject to restrictions on first page)

 

 

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