Document:

Exhibit 10.21

 

Erickson Air-Crane Incorporated

2012 Long-Term Incentive Plan

 

1.             Purpose.  The purpose of the Erickson Air-Crane Incorporated 2012 Long-Term Incentive Plan is to further align the interests of eligible participants with those of the Company’s stockholders by providing long-term incentive compensation opportunities tied to the performance of the Company and its Common Stock.  The Plan is intended to advance the interests of the Company and its stockholders by attracting, retaining and motivating key personnel upon whose judgment, initiative and effort the successful conduct of the Company’s business is largely dependent.

 

2.             Definitions.  Wherever the following capitalized terms are used in the Plan, they shall have the meanings specified below:

 

“Award” means an award of a Stock Option, Stock Appreciation Right, Restricted Stock Award, Restricted Stock Unit, Cash Performance Award or Stock Award granted under the Plan.

 

“Award Agreement” means an agreement entered into between the Company and a Participant setting forth the terms and conditions of an Award granted to a Participant, as provided in Section 15.1 hereof.

 

“Board” means the Board of Directors of the Company.

 

“Cash Performance Award” means an Award that is denominated by a cash amount granted to an Eligible Person under Section 10 hereof and payable based upon the attainment of pre-established business and/or individual performance goals.

 

“Cause” shall have the meaning set forth in Section 14.2(b) hereof.

 

“Change in Control” shall have the meaning set forth in Section 13.2 hereof.

 

“Code” means the Internal Revenue Code of 1986, as amended.

 

“Committee” means the Compensation Committee of the Board, or such other committee of the Board appointed by the Board to administer the Plan.

 

“Common  Stock” means the Company’s common stock, par value $0.0001 per share.

 

“Company” means Erickson Air-Crane Incorporated, a Delaware corporation.

 

“Date of Grant” means the date on which an Award under the Plan is granted by the Committee, or such later date as the Committee may specify to be the effective date of an Award.

 

“Disability” means a medically determinable mental or physical impairment that is expected to result in death or has lasted or is expected to last for a continuous period of twelve

 

 

(12) months or more and that, in the opinion of the Company and one independent physician, causes a Participant to be unable to perform his or her Service and unable to be engaged in any substantial gainful activity.  Disability is deemed to have occurred on the first day after the independent physician furnished his or her written opinion of disability to the Company and the Company has reached an opinion of disability.

 

“Effective Date” shall have the meaning set forth in Section 16.1 hereof.

 

“Eligible Person” means any person who is an employee, officer, or Non-Employee Director of the Company or any of its Subsidiaries.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“Fair Market Value” means, with respect to a share of Common Stock as of a given date, the closing price per share of Common Stock on such date (or if such date is not a trading day, then on the next preceding trading date), as reported on the NASDAQ Stock Market or other principal exchange on which the Common Stock is then listed, or if not so listed, “Fair Market Value” shall be such value as determined by the Board in its discretion and, to the extent necessary, shall be determined in a manner consistent with Section 409A of the Code and the regulations thereunder.

 

“Incentive Stock Option” means a Stock Option granted under Section 6 hereof that is intended to meet the requirements of Section 422 of the Code and the regulations thereunder.

 

“Non-Employee Director” means any member of the Board who is not an employee of the Company.

 

“Nonqualified Stock Option” means a Stock Option granted under Section 6 hereof that is not an Incentive Stock Option.

 

“Participant” means any Eligible Person who holds an outstanding Award under the Plan.

 

“Plan” means the Erickson Air-Crane Incorporated 2012 Long-Term Incentive Plan as set forth herein, effective as of the Effective Date, and as may be amended from time to time.

 

“Restricted Stock Award” means a grant of shares of Common Stock to an Eligible Person under Section 8 hereof that are issued subject to such vesting and transfer restrictions as the Committee shall determine, and such other conditions, as are set forth in the Plan and the applicable Award Agreement.

 

“Restricted Stock Unit” means a grant to an Eligible Person under Section 9 hereof representing notional unit interests equal in value to a share of Common Stock to be paid or distributed at such times, and subject to such conditions, as set forth in the Plan and the applicable Award Agreement.

 

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“Securities Act” means the Securities Act of 1933, as amended.

 

“Service” means, as applicable, a Participant’s employment with the Company or any Subsidiary, or a Participant’s service as a Non-Employee Director with the Company or any Subsidiary.

 

“Stock Award” means a grant of shares of Common Stock to an Eligible Person under Section 11 hereof, which may be free of transfer restrictions and forfeiture conditions.

 

“Stock Appreciation Right” means a grant to an Eligible Person under Section 7 hereof entitling such Eligible Person to receive a payment, representing the difference between the base price per share of the right and the Fair Market Value of a share of Common Stock at such time, and subject to such conditions, as are set forth in the Plan and the applicable Award Agreement.

 

“Stock Option” means a grant to an Eligible Person under Section 6 hereof to purchase shares of Common Stock at such time and price, and subject to such conditions, as are set forth in the Plan and the applicable Award Agreement.

 

“Subsidiary” means an entity (whether or not incorporated) that is wholly or majority owned or controlled, directly or indirectly, by the Company; provided, however, that with respect to Incentive Stock Options, the term “Subsidiary” shall include only an entity that qualifies under Section 424(f) of the Code as a “subsidiary corporation” with respect to the Company.

 

3.             Administration.

 

3.1           Committee Members.  The Plan shall be administered by a Committee comprised of no fewer than two members of the Board who are appointed by the Board to administer the Plan.  To the extent deemed necessary by the Board, each Committee member shall satisfy the requirements for (i) an “independent director” under rules adopted by the NASDAQ Stock Market, (ii) a “nonemployee director” for purposes of such Rule 16b-3 under the Exchange Act and (iii) an “outside director” under Section 162(m) of the Code.  No member of the Committee will be liable for any action or determination made in good faith by the Committee with respect to the Plan or any Award thereunder.

 

3.2           Committee Authority.  It shall be the duty of the Committee to administer the Plan in accordance with the Plan’s provisions.  The Committee shall have all powers and discretion necessary or appropriate to administer the Plan and to control its operation, including, but not limited to, the power to (i) determine the Eligible Persons to whom Awards shall be granted under the Plan, (ii) determine the types of Awards that may be granted, the time or times at which Awards may be granted, and the number of shares of Common Stock, units or other rights subject to each Award, (iii) prescribe the terms and conditions of all Awards, (iv) interpret the Plan and terms of the Awards, (v) adopt rules for the administration, interpretation and application of the Plan as are consistent therewith, and interpret, amend or revoke any such rules, (vi) make all determinations with respect to a Participant’s Service and the termination of such Service for purposes of any Award, and (vii) adopt such procedures and subplans as are necessary or appropriate to permit participation in the Plan by Eligible Person who are foreign

 

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nationals or employed outside of the United States.   The Committee’s determinations under the Plan need not be uniform and may be made by the Committee selectively among Participants and Eligible Persons, whether or not such persons are similarly situated.  The Committee shall, in its discretion, consider such factors as it deems relevant in making its interpretations, determinations and actions under the Plan including, without limitation, the recommendations or advice of any officer or employee of the Company or such attorneys, consultants, accountants or other advisors as it may select.  All interpretations, determinations, and actions by the Committee shall be final, conclusive, and binding upon all parties.

 

3.3           Delegation of Authority.  The Committee, in its discretion, and on such terms and conditions as it may provide, may delegate all or any part of its authority and powers under the Plan to the Company’s Chief Executive Officer or to a committee of officers of the Company, subject to the requirements of Section 157(c) of the Delaware General Corporation Law (or any successor provision); provided, however, that no delegate will have the authority to grant or amend Awards to executive officers of the Company, nor, to grant or amend Awards that are intended to qualify as performance-based compensation under Section 162(m) of the Code, to the extent necessary for such qualification.

 

4.             Shares Subject to the Plan.

 

4.1           Number of Shares Reserved.  Subject to adjustment as provided in Section 4.3 hereof, the total number of shares of Common Stock that are reserved for issuance under the Plan shall be 643,951.  Notwithstanding the foregoing, no more than 500,000 shares of Common Stock shall be issued under Plan pursuant to Restricted Stock Awards, Restricted Stock Units and Stock Awards, in the aggregate.  Any shares of Common Stock delivered under the Plan shall consist of authorized and unissued shares, or treasury shares.

 

4.2           Share Replenishment.  To the extent that any Award under the Plan is canceled, expired, forfeited, surrendered, settled in cash, or otherwise terminated without delivery of shares of Common Stock to the Participant, in whole or in part, the shares of Common Stock retained by or returned to the Company will not be deemed to have been delivered under the Plan, and will be available for future Awards under the Plan.  Shares that are (i) withheld from an Award or separately surrendered by the Participant in payment of the exercise or purchase price or taxes relating to such an Award or (ii) not issued or delivered as a result of the net settlement of an outstanding Stock Option or Stock Appreciation Right shall be deemed to constitute delivered shares and will not be available for future Awards under the Plan.

 

4.3           Adjustments and Other Corporate Changes.  If there shall occur any change with respect to the outstanding shares of Common Stock by reason of any recapitalization, reclassification, stock dividend, extraordinary dividend, stock split, reverse stock split or other distribution with respect to the shares of Common Stock, or any merger, reorganization, consolidation, combination, spin-off, or other similar corporate change, or any other change affecting the Common Stock, the Committee shall, in the manner and to the extent it considers equitable to the Participants and consistent with the terms of the Plan, cause an adjustment to be made to (i) the maximum number and kind of shares of Common Stock provided in Sections 4.1, 6.1, 7.1, 8.1, 9.1 and 11.1 hereof, (ii) the number and kind of shares of Common Stock, units, or other rights subject to then outstanding Awards, (iii) the exercise price or base price for each

 

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share or unit or other right subject to then outstanding Awards, and (iv) any other terms of an Award that are affected by the event.  Notwithstanding the foregoing, (a) any such adjustments shall, to the extent necessary, be made in a manner consistent with the requirements of Section 409A of the Code, and (b) in the case of Incentive Stock Options, any such adjustments shall, to the extent practicable, be made in a manner consistent with the requirements of Section 424(a) of the Code.

 

5.             Eligibility and Awards.

 

5.1           Designation of Participants.  Any Eligible Person may be selected by the Committee to receive an Award and become a Participant under the Plan in accordance with the Committee’s authority under Section 3.2 hereof.  In selecting Eligible Persons to be Participants, and in determining the type and amount of Awards to be granted under the Plan, the Committee shall consider any and all factors that it deems relevant or appropriate.

 

5.2           Determination of Awards.  The Committee shall determine the terms and conditions of all Awards granted to Participants in accordance with its authority under Section 3.2 hereof.  An Award may consist of one type of right or benefit hereunder or of two or more such rights or benefits granted in tandem.  The terms of all Awards under the Plan will be specified by the Committee and will be set forth in individual Award Agreements as described in Section 15.1 hereof.

 

6.             Stock Options.

 

6.1           Grant of Stock Options.  Stock Options may be granted to any Eligible Person selected by the Committee, except that an Incentive Stock Option may only be granted to an Eligible Person satisfying the conditions of Section 6.7(a) hereof.   Each Stock Option shall be designated, in the discretion of the Committee, as an Incentive Stock Option or as a Nonqualified Stock Option. The maximum number of shares of Common Stock that may be subject to Stock Options granted to any Participant during any calendar year shall be limited to 400,000 shares of Common Stock (subject to adjustment as provided in Section 4.3 hereof).  All Stock Options granted under the Plan are intended to comply with the requirements for exemption under Section 409A of the Code.

 

6.2           Exercise Price.  The exercise price per share of a Stock Option shall not be less than one hundred percent (100%) of the Fair Market Value of a share of Common Stock on the Date of Grant.  The Committee may, in its discretion, specify an exercise price per share that is higher than the Fair Market Value of a share of Common Stock on the Date of Grant.

 

6.3           Vesting of Stock Options.  The Committee shall, in its discretion, provide in an Award Agreement the time or times at which, or the conditions upon which, a Stock Option or portion thereof shall become vested and/or exercisable.  The requirements for vesting and exercisability of a Stock Option may be based on the continued Service of the Participant for a specified time period (or periods), on the attainment of a specified performance goal (or goals) or on such other terms and conditions as approved by the Committee in its discretion.  The Committee may accelerate the vesting or exercisability of any Stock Option upon termination of

 

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Service under certain circumstances, as set forth in the Award Agreement or otherwise.  If the vesting requirements of a Stock Option are not satisfied, the Award shall be forfeited.

 

6.4           Term of Stock Options.   The Committee shall, in its discretion, provide in an Award Agreement the period during which a vested Stock Option may be exercised, provided, however, that the maximum term of a Stock Option shall be ten (10) years from the Date of Grant.  The Stock Option of a Participant whose Service is terminated for any reason, including, without limitation, due to the Participant’s Disability, shall terminate on the earlier of (A) the maximum term of the Stock Option or (B) unless otherwise provided in an Award Agreement, except as otherwise provided in Section 6.7(c) hereof with respect to Incentive Stock Options, and except for termination for Cause (as described in Section 14.2 hereof), the date that is one hundred eighty (180) days following the termination of Service of the Participant.  Notwithstanding the foregoing, the Stock Option of a Participant whose Service is terminated due to the Participant’s death or the Participant’s retirement at normal retirement age as defined under the provisions of the Company’s Retirement Plan or under conditions of bona fide early retirement shall terminate on the earlier of (A) the maximum term of the Stock Option or (B) unless otherwise provided in an Award Agreement, the date that is three hundred sixty-five (365) days following the termination of Service of the Participant.

 

6.5           Stock Option Exercise.  Subject to such terms and conditions as specified in an Award Agreement, a Stock Option may be exercised in whole or in part at any time during the term thereof by notice in the form required by the Company, together with payment of the aggregate exercise price therefor and applicable withholding tax.  Payment of the exercise price shall be made in the manner set forth in the Award Agreement, and unless otherwise provided by the Committee at the time of payment: (i) in cash or by cash equivalent acceptable to the Committee, (ii) by payment in shares of Common Stock valued at the Fair Market Value of such shares on the date of exercise, (iii) through an open-market, broker-assisted sales transaction pursuant to which the Company is promptly delivered the amount of proceeds necessary to satisfy the exercise price, (iv) by a combination of the methods described above or (v) by such other method as may be approved by the Committee and set forth in the Award Agreement.   In addition to, and at the time of payment of the exercise price, a Stock Option shall be subject to applicable tax withholding requirements as provided in Section 15.11 hereof.

 

6.6           Limited Transferability of Nonqualified Stock Options.  All Stock Options shall be nontransferable except (i) upon the Participant’s death, in accordance with Section 15.3 hereof or (ii) subject to prior approval by the Committee, in the case of Nonqualified Stock Options only, for the transfer of all or part of the Stock Option to a Participant’s “family member” (as defined for purposes of the Form S-8 registration statement under the Securities Act), as may be approved by the Committee, in its discretion, at the time of the proposed transfer.  The transfer of a Nonqualified Stock Option may be subject to such terms and conditions as the Committee may, in its discretion, impose from time to time.  Subsequent transfers of a Nonqualified Stock Option shall be prohibited.

 

6.7           Additional Rules for Incentive Stock Options.

 

(a)           Eligibility.  An Incentive Stock Option may only be granted to an Eligible Person who is considered an employee for purposes of Treasury Regulation §1.421-7(h) with

 

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respect to the Company or any Subsidiary that qualifies as a “subsidiary corporation” with respect to the Company for purposes of Section 424(f) of the Code.

 

(b)           Limitations.  The entire pool of shares of Common Stock available under the Plan, as provided in Section 4.1 hereof, is available for the grant of Incentive Stock Options.  No Incentive Stock Option shall be granted to a Participant as a result of which the aggregate Fair Market Value (determined as of the Date of Grant) of Common Stock with respect to which incentive stock options under Section 422 of the Code are exercisable for the first time in any calendar year under the Plan and any other stock option plans of the Company or any subsidiary or parent corporation, would exceed $100,000, determined in accordance with Section 422(d) of the Code.  This limitation shall be applied by taking stock options into account in the order in which granted.

 

(c)           Termination of Employment.  The Incentive Stock Option of a Participant whose Service is terminated for any reason, including, without limitation, due to the Participant’s Disability, shall terminate on the earlier of (A) the maximum term of the Stock Option or (B) unless otherwise provided in an Award Agreement, except for termination for Cause (as described in Section 14.2 hereof), the date that is ninety (90) days following the termination of Service of the Participant.  Notwithstanding the foregoing, the Incentive Stock Option of a Participant whose Service is terminated due to the Participant’s death shall terminate on the earlier of (A) the maximum term of the Stock Option or (B) unless otherwise provided in an Award Agreement, the date that is three hundred sixty-five (365) days following the termination of Service of the Participant.

 

(d)           Other Terms and Conditions; Nontransferability.  Any Incentive Stock Option granted hereunder shall contain such additional terms and conditions, not inconsistent with the terms of the Plan, as are deemed necessary or desirable by the Committee, which terms, together with the terms of the Plan, shall be intended and interpreted to cause such Incentive Stock Option to qualify as an “incentive stock option” under Section 422 of the Code.  An Award Agreement for an Incentive Stock Option may provide that such Stock Option shall be treated as a Nonqualified Stock Option to the extent that certain requirements applicable to “incentive stock options” under the Code shall not be satisfied.  An Incentive Stock Option shall by its terms be nontransferable other than by will or by the laws of descent and distribution, and shall be exercisable during the lifetime of a Participant only by such Participant.

 

(e)           Disqualifying Dispositions.  If shares of Common Stock acquired by exercise of an Incentive Stock Option are disposed of within two (2) years following the Date of Grant or one (1) year following the transfer of such shares to the Participant upon exercise, the Participant shall, promptly following such disposition, notify the Company in writing of the date and terms of such disposition and provide such other information regarding the disposition as the Company may reasonably require.

 

6.8           Repricing Prohibited.  Subject to the anti-dilution adjustment provisions contained in Section 4.3 hereof, without the prior approval of the Company’s stockholders,  neither the Committee nor the Board shall cause the cancellation, substitution or amendment of a Stock Option that would have the effect of reducing the exercise price of such a Stock Option previously granted under the Plan, or otherwise approve any modification to such a Stock Option

 

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that would be treated as a “repricing” under the then applicable rules, regulations or listing requirements adopted by the NASDAQ Stock Market or other principal exchange on which the Common Stock is then listed.

 

7.             Stock Appreciation Rights.

 

7.1           Grant of Stock Appreciation Rights.  Stock Appreciation Rights may be granted to any Eligible Person selected by the Committee.  Stock Appreciation Rights may be granted on a basis that allows for the exercise of the right by the Participant or that provides for the automatic payment of the right upon a specified date or event.  The maximum number of shares of Common Stock that may be subject to Stock Appreciation Rights granted to any Participant during any calendar year shall be limited to 400,000 shares of Common Stock (subject to adjustment as provided in Section 4.3 hereof).  Stock Appreciation Rights shall be non-transferable, except as provided in Section 15.3 hereof.  All Stock Appreciation Rights granted under the Plan are intended to comply with the requirements for exemption under Section 409A of the Code.  A Stock Appreciation Right may, in the discretion of the Committee, be granted in tandem with a Stock Option, and in such event, shall (i) have a base price per share equal to the per share exercise price of the Stock Option, (ii) be vested and exercisable at the same time or times that a related Stock Option is vested and exercisable, and (iii) expire no later than the time at which the related Stock Option expires.

 

7.2           Base Price. The base price of a Stock Appreciation Right shall not be less than one hundred percent (100%) of the Fair Market Value of a share of Common Stock on the Date of Grant.  The Committee may, in its discretion, specify a base price per share that is higher than the Fair Market Value of a share of Common Stock on the Date of Grant.

 

7.3           Vesting of Stock Appreciation Rights.  The Committee shall, in its discretion, provide in an Award Agreement the time or times at which, or the conditions upon which, a Stock Appreciation Right or portion thereof shall become vested and/or exercisable.  The requirements for vesting and exercisability of a Stock Appreciation Right may be based on the continued Service of a Participant for a specified time period (or periods), on the attainment of a specified performance goal (or goals) or on such other terms and conditions as approved by the Committee in its discretion.  The Committee may accelerate the vesting or exercisability of any Stock Appreciation Right upon termination of Service under certain circumstances as set forth in the Award Agreement or otherwise.  If the vesting requirements of a Stock Appreciation Right are not satisfied, the Award shall be forfeited.

 

7.4           Term of Stock Appreciation Rights.  The Committee shall, in its discretion, provide in an Award Agreement the period during which a vested Stock Appreciation Right  may be exercisable or payable, provided, however, that the maximum term of a Stock Appreciation Right shall be ten (10) years from the Date of Grant.  The Stock Appreciation Right of a Participant whose Service is terminated for any reason, including, without limitation, due to the Participant’s Disability, shall terminate on the earlier of (A) the maximum term of the Stock Appreciation Right or (B) unless otherwise provided in an Award Agreement, and except for termination for Cause (as described in Section 14.2 hereof), the date that is one hundred eighty (180) days following the termination of Service of the Participant.  Notwithstanding the foregoing, the Stock Appreciation Right of a Participant whose Service is terminated due to the

 

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Participant’s death or the Participant’s retirement at normal retirement age as defined under the provisions of the Company’s Retirement Plan or under conditions of bona fide early retirement shall terminate on the earlier of (A) the maximum term of the Stock Appreciation Right or (B) unless otherwise provided in an Award Agreement, the date that is three hundred sixty-five (365) days following the termination of Service of the Participant.

 

7.5           Payment of Stock Appreciation Rights.  Subject to such terms and conditions as specified in an Award Agreement, a Stock Appreciation Right will entitle the holder, upon exercise or other payment of the Stock Appreciation Right, as applicable, to receive an amount determined by multiplying: (i) the excess of the Fair Market Value of a share of Common Stock on the date of exercise or payment of the Stock Appreciation Right over the base price of such Stock Appreciation Right, by (ii) the number of shares as to which such Stock Appreciation Right is exercised or paid.  Payment of the amount determined under the foregoing may be made, as approved by the Committee and set forth in the Award Agreement, in shares of Common Stock valued at their Fair Market Value on the date of exercise or payment, in cash, or in a combination of shares of Common Stock and cash, subject to applicable tax withholding requirements as provided in Section 15.11 hereof.

 

7.6           Repricing Prohibited.  Subject to the anti-dilution adjustment provisions contained in Section 4.3 hereof, without the prior approval of the Company’s stockholders, neither the Committee nor the Board shall cause the cancellation, substitution or amendment of a Stock Appreciation Right that would have the effect of reducing the base price of such a Stock Appreciation Right previously granted under the Plan, or otherwise approve any modification to such Stock Appreciation Right that would be treated as a “repricing” under the then applicable rules, regulations or listing requirements adopted by the NASDAQ Stock Market or other principal exchange on which the Common Stock is then listed.

 

8.             Restricted Stock Awards.

 

8.1           Grant of Restricted Stock Awards.  A Restricted Stock Award may be granted to any Eligible Person selected by the Committee.  The maximum number of shares of Common Stock that may be subject to Restricted Stock Awards granted to a Participant during any one calendar year shall be limited to 200,000 shares of Common Stock (subject to adjustment as provided in Section 4.3 hereof).  The Committee may require the payment by the Participant of a specified purchase price in connection with any Restricted Stock Award.

 

8.2           Vesting Requirements.  The restrictions imposed on shares granted under a Restricted Stock Award shall lapse in accordance with the vesting requirements specified by the Committee in the Award Agreement.  The requirements for vesting of a Restricted Stock Award may be based on the continued Service of the Participant for a specified time period (or periods), on the attainment of a specified performance goal (or goals) designed to meet the requirements for exemption under Section 162(m) of the Code or on such other terms and conditions as approved by the Committee in its discretion.  The Committee may accelerate the vesting of a Restricted Stock Award upon termination of Service under certain circumstances, as set forth in the Award Agreement, or otherwise.  If the vesting requirements of a Restricted Stock Award shall not be satisfied, the Award shall be forfeited and the shares of Common Stock subject to the Award shall be returned to the Company.

 

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8.3           Transfer Restrictions.  Shares granted under any Restricted Stock Award may not be transferred, assigned or subject to any encumbrance, pledge, or charge until all applicable restrictions are removed or have expired, unless otherwise allowed by the Committee.  Failure to satisfy any applicable restrictions shall result in the subject shares of the Restricted Stock Award being forfeited and returned to the Company.  The Committee may require in an Award Agreement that certificates representing the shares granted under a Restricted Stock Award bear a legend making appropriate reference to the restrictions imposed, and that certificates representing the shares granted or sold under a Restricted Stock Award will remain in the physical custody of an escrow holder until all restrictions are removed or have expired.

 

8.4           Rights as Stockholder.  Subject to the foregoing provisions of this Section 8 and the applicable Award Agreement, unless otherwise determined by the Committee, the Participant shall have all rights of a stockholder with respect to the shares granted to the Participant under a Restricted Stock Award, including the right to vote the shares and receive all dividends and other distributions paid or made with respect thereto.  Any Common Stock received as a stock dividend or distribution will be subject to the same restrictions as the underlying Restricted Stock Award.

 

8.5           Section 83(b) Election.  If a Participant makes an election pursuant to Section 83(b) of the Code with respect to a Restricted Stock Award, the Participant shall file, within thirty (30) days following the Date of Grant, a copy of such election with the Company and with the Internal Revenue Service, in accordance with the regulations under Section 83 of the Code.  The Committee may provide in an Award Agreement that the Restricted Stock Award is conditioned upon the Participant’s making an election with respect to the Award under Section 83(b) of the Code.

 

9.             Restricted Stock Units.

 

9.1           Grant of Restricted Stock Units.  A Restricted Stock Unit may be granted to any Eligible Person selected by the Committee.  The maximum number of units that may be subject to Restricted Stock Units granted to a Participant during any one calendar year shall be limited to 200,000 units (subject to adjustment as provided in Section 4.3 hereof).  The value of each Restricted Stock Unit is equal to the Fair Market Value of one share of Common Stock on the applicable date or time period of determination, as specified by the Committee.  Restricted Stock Units shall be subject to such restrictions and conditions as the Committee shall determine.

 

9.2           Vesting of Restricted Stock Units.  On the Date of Grant, the Committee shall, in its discretion, determine any vesting requirements with respect to Restricted Stock Units, which shall be set forth in the Award Agreement.  The requirements for vesting of a Restricted Stock Unit may be based on the continued Service of the Participant for a specified time period (or periods), on the attainment of a specified performance goal (or goals) designed to meet the requirements for exemption under Section 162(m) of the Code or on such other terms and conditions as approved by the Committee in its discretion.  The Committee may accelerate the vesting of a Restricted Stock Unit upon termination of Service under certain circumstances, as set forth in the Award Agreement, or otherwise.

 

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9.3           Payment of Restricted Stock Units.  Restricted Stock Units shall become payable to a Participant at the time or times determined by the Committee and set forth in the Award Agreement, which may be upon or following the vesting of the Award.  Payment of a Restricted Stock Unit may be made, as approved by the Committee and set forth in the Award Agreement, in cash or in shares of Common Stock, or in a combination thereof, subject to applicable tax withholding requirements as provided in Section 15.11 hereof.  Any cash payment of a Restricted Stock Unit shall be made based upon the Fair Market Value of the Common Stock, determined on such date or over such time period as determined by the Committee in its discretion.

 

9.4           Dividend Equivalent Rights. Restricted Stock Units may be granted together with a dividend equivalent right with respect to the shares of Common Stock subject to the Award, which may be accumulated and may be deemed reinvested in additional Restricted Stock Units or may be accumulated in cash, as determined by the Committee in its discretion, and will be paid at the time the underlying Restricted Stock Unit is payable. Dividend equivalent rights shall  be subject to forfeiture under the same conditions as apply to the underlying Restricted Stock Units.

 

9.5           No Rights as Stockholder.  The Participant shall not have any rights as a stockholder with respect to the shares of Common Stock subject to a Restricted Stock Unit until such time as such shares are delivered to the Participant pursuant to the terms of the Award Agreement.

 

10.           Cash Performance Awards.

 

10.1         Grant of Cash Performance Awards.  A Cash Performance Award may be granted to any Eligible Person selected by the Committee.  The maximum amount of cash compensation that may be paid to a Participant during any one calendar year under Cash Performance Awards shall be $500,000.

 

10.2         Vesting of Cash Performance Awards.  Each Cash Performance Award shall be evidenced by an Award Agreement that shall specify the performance period, and such other terms and conditions as the Committee, in its discretion, shall determine.  Payment amounts may be based on the achievement of specified levels of performance with respect to a performance goal (or goals), including, if applicable, specified threshold, target and maximum performance levels.  The requirements for vesting may also be based upon the continued Service of the Participant or on such other conditions as determined by the Committee and set forth in an Award Agreement.  The Committee may accelerate the vesting of a Cash Performance Award upon termination of Service under certain circumstances, as set forth in the Award Agreement, or otherwise.

 

10.3         Payment of Cash Performance Awards.  Unless otherwise provided in an Award Agreement, payment of Cash Performance Awards will be made as soon as practicable, but not later than sixty (60) days, after the expiration of the applicable performance period.  Payment of Cash Performance Awards may be made in cash or in shares of Common Stock, or in a combination thereof, subject to applicable tax withholding requirements as provided in Section

 

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15.11 hereof.  Any payment of a Cash Performance Award in Common Stock shall be made based upon the Fair Market Value thereof.

 

11.           Stock Awards.

 

11.1         Grant of Stock Awards.  A Stock Award may be granted to any Eligible Person selected by the Committee.  A Stock Award may be granted for past services, in lieu of bonus or other cash compensation, as compensation for Non-Employee Directors or for any other valid purpose as determined by the Committee.  The Committee shall determine the terms and conditions of such Awards, and such Awards may be made without vesting requirements.  In addition, the Committee may, in connection with any Stock Award, require the payment of a specified purchase price.  The maximum number of shares of Common Stock that may be subject to Stock Awards granted to a Participant during any one calendar year shall be limited to 200,000 shares (subject to adjustment as provided in Section 4.3 hereof).

 

11.2         Rights as Stockholder.  Subject to the foregoing provisions of this Section 11 and the applicable Award Agreement, upon the issuance of Common Stock under a Stock Award, the Participant shall have all rights of a stockholder with respect to the shares of Common Stock, including the right to vote the shares and receive all dividends and other distributions paid or made with respect thereto.

 

12.           Section 162(m) Awards.

 

12.1         Awards.  Awards of Stock Options and Stock Appreciation Rights are intended by their design pursuant to the terms of the Plan to qualify for the performance-based compensation exception under Section 162(m) of the Code and the regulations promulgated thereunder.  Restricted Stock Awards, Restricted Stock Units, Cash Performance Awards and Stock Awards may qualify for such exception if the Awards are granted or become payable or vested based upon pre-established performance goals in accordance with this Section 12.

 

12.2         Performance Criteria.  In the case of a Restricted Stock Award, Restricted Stock Units, Cash Performance Award or Stock Award that is intended to qualify for the performance-based compensation exception under Section 162(m) of the Code, the performance criteria upon which the grant, payment or vesting may be based shall be limited to one or more of the following performance measures, which may be applied on a Company-wide, departmental, or individual basis, or any other basis determined by the Committee in its discretion: 1) net earnings; 2) earnings per share; 3) dividend ratio; 4) net sales growth; 5) income or net income (before taxes); 6) operating profit or net operating profit; 7) return measures (including, but not limited to, return on assets, capital, equity or sales); 8) cash flow (including, but not limited to, operating cash flow, cash from operations and free cash flow); 9) earnings before or after taxes, interest, depreciation and/or amortization; 10) share price (including, but not limited to growth measures and total stockholder return); 11) expense targets; 12) customer satisfaction; 13) market share; 14) economic value added; 15) the formation of joint ventures or the completion of other corporate transactions; 16) market capitalization; 17) debt leverage (debt to capital); 18) operating income or net operating income; 19) operating margin or profit margin; 20) return on operating revenue; 21) operating ratio; 22) integration and/or penetration of the market; 23) inventories or inventory returns; and/or 24) any combination of or a specified increase in any of

 

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the foregoing.  The Committee may adjust, change, or eliminate the performance goals or the applicable performance period of the Award as it deems appropriate, in its discretion.  The foregoing performance measures may be determined on an absolute basis or relative to internal goals or relative to levels attained in prior years, or related to other companies or indices, or as ratios expressing relationships between two or more performance measures.

 

12.3         Section 162(m) Requirements.  For purposes of qualifying Awards as performance-based compensation under Section 162(m) of the Code, the performance goals shall be set by the Committee on or before the latest date permissible to enable the Awards to so qualify.  In granting such Awards, the Committee shall (i) interpret this Plan in a manner consistent with Section 162(m) of the Code; (ii) have no discretion to adjust any performance goal in any way that would adversely affect the treatment of the Award under Section 162(m) of the Code; and (iii) certify that the performance goals applicable to the Award are met before any payment with respect to such Award.  With respect to any Awards intended to comply with the requirements of Section 162(m) of the Code, adjustments to performance goals shall only be made to the extent consistent with Section 162(m) of the Code, and the Committee may appropriately adjust any evaluation of performance under a performance goal to exclude any of the following events that occurs during a performance period, to the extent consistent with Section 162(m) of the Code: (i) asset write-downs, (ii) litigation, claims, judgments or settlements, (iii) the effect of changes in tax law, accounting principles or other such laws or provisions affecting reported results, (iv) mergers, acquisitions and divestitures, (v) accruals for reorganization and restructuring programs and (vi) any extraordinary, unusual or non-recurring items as described in applicable accounting standards and/or in management’s discussion and analysis of financial condition and results of operations appearing in the Company’s Forms 10-K or 10-Q for the applicable year.

 

13.           Change in Control.

 

13.1         Effect of Change in Control.  The Committee may, at the time of the grant of an Award and as set forth in an Award Agreement, provide for the effect of a Change in Control on an Award.  Such provisions may include any one or more of the following: (i) the acceleration or extension of time periods for purposes of exercising, vesting in, or realizing gain from any Award, (ii) the elimination or modification of performance or other conditions related to the payment or other rights under an Award, (iii) provision for the cash settlement of an Award for an equivalent cash value, as determined by the Committee, or (iv) such other modification or adjustment to an Award as the Committee deems appropriate to maintain and protect the rights and interests of Participants upon or following a Change in Control.  Unless otherwise provided by the Committee and set forth in an Award Agreement, upon a Change in Control, in the event that an Award is not assumed, or a reasonably equivalent award is not substituted for the Award, in connection with the Change in Control, the Award shall fully vest (and, as applicable become fully exercisable or payable) immediately prior to a Change in Control.  Notwithstanding anything in the Plan or in an Award Agreement to the contrary, in the event of a Change in Control in which the stockholders of the Company receive a majority of the consideration for the Common Stock in cash, the Committee shall have the right, but not the obligation, to cancel, immediately prior to the Change in Control, any Award, and to pay to each affected Participant in consideration for such cancellation an amount that the Committee, in its sole discretion, in good faith determines to be the equivalent value of such Award at the time of the Change in

 

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Control, based on the fair market value of the consideration received by the stockholders in the Change in Control transaction (e.g., the “in-the-money” value for a Stock Option, and the per share value for a Restricted Stock Unit).  Any Stock Option or Stock Appreciation Right with an exercise price greater than or equal to the Fair Market Value of the of the Common Stock in such Change in Control transaction may be cancelled without payment of consideration.

 

13.2         Definition of Change in Control. For purposes of the Plan, unless otherwise defined in an Award Agreement, “Change in Control” shall mean: (i) a change in ownership of the Company under paragraph (a) below, or (ii) a change in effective control of the Company under paragraph (b) below, or (iii) a change in the ownership of a substantial portion of the assets of the Company under paragraph (c) below.

 

(a) Change in the Ownership of the Company.  A change in the ownership of the Company shall occur on the date that any one person, or more than one person acting as a group (as defined in paragraph (d)), acquires ownership of stock of the Company that, together with stock held by such person or group, constitutes more than 50 percent of the total fair market value or total voting power of the stock of the Company.  However, if any one person or more than one person acting as a group, is considered to own more than 50 percent of the total fair market value or total voting power of the stock of the Company, the acquisition of additional stock by the same person or persons is not considered to cause a change in the ownership of the Company (or to cause a change in the effective control of the corporation (within the meaning of paragraph (b) below)). An increase in the percentage of stock owned by any one person, or persons acting as a group, as a result of a transaction in which the Company acquires its stock in exchange for property will be treated as an acquisition of stock for purposes of this section. This paragraph (a) applies only when there is a transfer of stock of the Company and stock in the Company remains outstanding after the transaction.

 

(b) Change in the Effective Control of the Company.  A change in the effective control of the Company shall occur on the date that either (i) any one person or more than one person acting as a group (as defined in paragraph (d)), acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) ownership of stock of the Company possessing 30 percent or more of the total voting power of the stock of the Company; or (ii) a majority of members of the Board is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the Board prior to the date of the appointment or election.

 

(c) Change in the Ownership of a Substantial Portion of the Company’s Assets.  A change in the ownership of a substantial portion of the Company’s assets shall occur on the date that any one person, or more than one person acting as a group (as defined in paragraph (d) below), acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) assets from the Company that have a total gross fair market value equal to or more than 40 percent of the total gross fair market value of all of the assets of the Company immediately prior to such acquisition or acquisitions. For this purpose, gross fair market value means the value of the assets of the Company, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets. There is no Change in Control event under this paragraph (c) when there is a transfer to an entity that is controlled by the stockholders of the transferring corporation immediately after the transfer. A

 

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transfer of assets by the Company is not treated as a change in the ownership of such assets if the assets are transferred to (i) a stockholder of the Company (immediately before the asset transfer) in exchange for or with respect to its stock, (ii) an entity, 50 percent or more of the total value or voting power of which is owned, directly or indirectly, by the Company, (iii) a person, or more than one person acting as a group, that owns, directly or indirectly, 50 percent or more of the total value or voting power of all the outstanding stock of the Company, or (iv) an entity, at least 50 percent of the total value or voting power of which is owned, directly or indirectly, by a person described in paragraph (d).  For purposes of this paragraph (c), a person’s status is determined immediately after the transfer of the assets.

 

(d) Persons Acting As a Group.  For the purposes of paragraphs (a), (b), and (c), persons will not be considered to be acting as a group solely because they purchase or own assets or stock of the same corporation at the same time, or as a result of the same public offering. However, persons will be considered to be acting as a group if they are owners of a corporation that enters into a merger, consolidation, purchase or acquisition of assets or stock, or similar business transaction with the corporation.  If a person, including an entity, owns stock in both corporations that enter into a merger, consolidation, purchase or acquisition of assets or stock, or similar transaction, such stockholder is considered to be acting as a group with other stockholders in a corporation only with respect to the ownership in that corporation before the transaction giving rise to the change and not with respect to the ownership interest in the other corporation.

 

(e) Each of the sub-paragraphs (a) through (d) above shall be construed and interpreted consistent with the requirements of Section 409A of the Code and the regulations thereunder.

 

14.           Forfeiture Events.

 

14.1         General.  The Committee may specify in an Award Agreement at the time of the Award that the Participant’s rights, payments and benefits with respect to an Award shall be subject to reduction, cancellation, forfeiture or recoupment upon the occurrence of certain specified events, in addition to any otherwise applicable vesting or performance conditions of an Award.  Such events shall include, but shall not be limited to, termination of Service for Cause, breach of noncompetition, confidentiality or other restrictive covenants that may apply to the Participant, or other conduct by the Participant that is materially detrimental to the business or reputation of the Company.

 

14.2         Termination for Cause.

 

(a)  General.  Unless otherwise provided by the Committee and set forth in an Award Agreement, if a Participant’s Service is terminated for Cause, such Participant’s rights, payments and benefits with respect to an Award shall be subject to cancellation, forfeiture and/or recoupment.  The Company shall have the power to determine whether the Participant has been terminated for Cause and the date upon which such termination for Cause occurs.  Any such determination shall be final, conclusive and binding upon the Participant.  In addition, if the Company shall reasonably determine that a Participant has committed or may have committed any act which could constitute the basis for a termination of such Participant’s employment for

 

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Cause, the Committee may, subject to compliance with Section 409A of the Code and the regulations thereunder, suspend the Participant’s rights to exercise any option, receive any payment or vest in any right with respect to any Award pending a determination by the Company of whether an act has been committed which could constitute the basis for a termination for “Cause” as provided in this Section 14.2.

 

(b)  Definition of “Cause”.  For purposes of the Plan, unless otherwise defined in an Award Agreement, “Cause” means the Participant’s termination of Service due to: (i) persistent neglect or negligence in the performance of the Participant’s Service duties; (ii) conviction (including pleas of guilty or no contest) for any act of fraud, misappropriation or embezzlement, or for any criminal offense related to the Participant’s Service; (iii) any deliberate and material breach of fiduciary duty to the Company or other conduct that leads to the material damage or prejudice of the Company, or (iv) a material breach of an essential Company policy, such as the Company’s code of conduct.

 

14.3         Right of Recapture.

 

(a)  General.  If at any time within one (1) year after the date on which a Participant exercises a Stock Option or Stock Appreciation Right or on which a Restricted Stock Award, Restricted Stock Unit or Stock Award vests or becomes payable or on which a Cash Performance Award is paid to a Participant, or on which income otherwise is realized by a Participant in connection with an Award, (i) a Participant terminates from Service for Cause or (ii) after termination of Service for any other reason, the Committee determines in its discretion either that, (a) while employed, the Participant had engaged in an act which would have warranted termination from Service for Cause or (b) after termination, the Participant has engaged in conduct that violates any continuing obligation or duty of the Participant in respect of the Company or any Subsidiary, then any gain realized by the Participant from the exercise, vesting, payment or other realization of income by the Participant in connection with an Award, shall be paid by the Participant to the Company upon notice from the Company.  Such gain shall be determined as of the date on which the gain is realized by the Participant, without regard to any subsequent change in the Fair Market Value of a share of Common Stock.  The Company shall have the right to offset such gain against any amounts otherwise owed to the Participant by the Company (whether as wages, vacation pay or pursuant to any benefit plan or other compensatory arrangement), subject to compliance with Section 409A of the Code.

 

(b)  Accounting Restatement.  If a Participant receives compensation pursuant to an Award under the Plan based on financial statements that are subsequently required to be restated in a way that would decrease the value of such compensation, the Participant will forfeit and repay to the Company the difference between what the Participant received and what the Participant should have received based on the accounting restatement, in accordance with the Company’s compensation recovery or “clawback” policy, as may be in effect from time to time, which shall be consistent with the provisions of Section 945 of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the rules, regulations and requirements adopted thereunder by the Securities and Exchange Commission and/or any national securities exchange on which the Company’s equity securities may be listed.  By accepting an Award hereunder, the Participant acknowledges and agrees that such policy shall apply to such Award, and all

 

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incentive-based compensation payable pursuant to such Award shall be subject to forfeiture and repayment pursuant to the terms of such policy.  Although not required to give effect to the provisions of this Section 14.3(b), the Committee may, as it deems appropriate, amend the Plan to reflect the terms of such policy.

 

15.           General Provisions.

 

15.1         Award Agreement.  To the extent deemed necessary by the Committee, an Award under the Plan shall be evidenced by an Award Agreement in a written or electronic form approved by the Committee setting forth the number of shares of Common Stock, units or other rights subject to the Award, the exercise price, base price, or purchase price of the Award, the time or times at which an Award will become vested, exercisable or payable and the term of the Award.  The Award Agreement may also set forth the effect on an Award of a Change in Control or a termination of Service under certain circumstances.  The Award Agreement shall be subject to and incorporate, by reference or otherwise, all of the applicable terms and conditions of the Plan, and may also set forth other terms and conditions applicable to the Award as determined by the Committee consistent with the limitations of the Plan.  The grant of an Award under the Plan shall not confer any rights upon the Participant holding such Award other than such terms, and subject to such conditions, as are specified in the Plan as being applicable to such type of Award (or to all Awards) or as are expressly set forth in the Award Agreement.  An Award Agreement may be in the form of an agreement to be executed by both the Participant and the Company (or an authorized representative of the Company) or certificates, notices or similar instruments as approved by the Committee.  The Committee need not require the execution of an Award Agreement by a Participant, in which case, acceptance of the Award by the Participant shall constitute agreement by the Participant to the terms, conditions, restrictions and limitations set forth in the Plan and the Award Agreement as well as any administrative guidelines of the Company in effect from time to time.

 

15.2         Determinations of Service.  The Committee shall make all determinations relating to the Service of a Participant with the Company or any Subsidiary in connection with an Award, including with respect to the continuation, suspension or termination of such Service.  Subject to compliance with Section 409A of the Code, a Participant’s Service shall not be deemed terminated if the Committee determines that (i) a transition of employment to service with a partnership, joint venture or corporation not meeting the requirements of a Subsidiary in which the Company or a Subsidiary is a party is not considered a termination of Service, or (ii) the Participant transfers between service as an employee and that of a Non-Employee Director (or vice versa).  The Committee may determine whether any corporate transaction, such as a sale or spin-off of a division or subsidiary that employs a Participant, shall be deemed to result in a termination of Service for purposes of any affected Awards, and the Committee’s decision shall be final and binding.

 

15.3         No Assignment or Transfer; Beneficiaries.  Except as provided in Section 6.6 hereof, Awards under the Plan shall not be assignable or transferable by the Participant, and shall not be subject in any manner to assignment, alienation, pledge, encumbrance or charge.  Notwithstanding the foregoing, in the event of the death of a Participant while employed by the Company or any of its Subsidiaries, except as otherwise provided by the Committee in an Award Agreement, an outstanding Award may be exercised by or shall become payable to the

 

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Participant’s beneficiary as designated by the Participant in the manner prescribed by the Committee or, in the absence of an authorized beneficiary designation, by the legatee or legatees of such Award under the Participant’s last will, or by such Participant’s executors, personal representatives or distributees of such Award in accordance with the Participant’s will or the laws of descent and distribution.  The Committee may provide in the terms of an Award Agreement or in any other manner prescribed by the Committee that the Participant shall have the right to designate a beneficiary or beneficiaries who shall be entitled to any rights, payments or other benefits specified under an Award following the Participant’s death.

 

15.4         Deferrals of Payment.  The Committee may, in its discretion, permit a Participant to defer the receipt of payment of cash or delivery of shares of Common Stock that would otherwise be due to the Participant by virtue of the exercise of a right or the satisfaction of vesting or other conditions with respect to an Award, provided, however, that such discretion shall not apply in the case of a Stock Option or Stock Appreciation Right.  If any such deferral is to be permitted by the Committee, the Committee shall establish rules and procedures relating to such deferral in a manner intended to comply with the requirements of Section 409A of the Code, including, without limitation, the time when an election to defer may be made, the time period of the deferral and the events that would result in payment of the deferred amount, the interest or other earnings attributable to the deferral and the method of funding, if any, attributable to the deferred amount.

 

15.5         No Right to Continued Service.  Nothing in the Plan, in the grant of any Award or in any Award Agreement shall confer upon any Eligible Person or any Participant any right to continue in the Service of the Company or any of its Subsidiaries, or interfere in any way with the right of the Company or any of its Subsidiaries to terminate the employment or other service relationship of an Eligible Person or a Participant for any reason at any time.

 

16.           Rights as Stockholder.  A Participant shall have no rights as a holder of shares of Common Stock with respect to any unissued securities covered by an Award until the date the Participant becomes the holder of record of such securities.  Except as provided in Section 4.3 hereof, no adjustment or other provision shall be made for dividends or other stockholder rights, except to the extent that the Award Agreement provides for dividend payments or dividend equivalent rights.  The Committee may determine, in its discretion, the manner of delivery of Common Stock to be issued under the Plan, which may be by delivery of stock certificates, electronic account entry into new or existing accounts or any other means as the Committee, in its discretion, deems appropriate. The Committee may require that the stock certificates be held in escrow by the Company for any shares of Common Stock or cause the shares to be legended in order to comply with the securities laws or other applicable restrictions, or should the shares of Common Stock be represented by book or electronic account entry rather than a certificate, the Committee may take such steps to restrict transfer of the shares of Common Stock as the Committee considers necessary or advisable.

 

16.1         Section 409A Compliance.  To the extent applicable, it is intended that the Plan and all Awards hereunder comply with the requirements of Section 409A of the Code and the regulations and other guidance issued thereunder, and that the Plan and all Award Agreements shall be interpreted and applied by the Committee in a manner consistent with this intent in order to avoid the imposition of any additional tax under Section 409A of the Code.  In the event that

 

18

 

any provision of the Plan or an Award Agreement is determined by the Committee to not comply with the applicable requirements of Section 409A of the Code and the regulations and other guidance issued thereunder, the Committee shall have the authority to take such actions and to make such changes to the Plan or an Award Agreement as the Committee deems necessary to comply with such requirements, provided that no such action shall adversely affect any outstanding Award without the consent of the affected Participant.  No payment that constitutes deferred compensation under Section 409A of the Code that would otherwise be made under the Plan or an Award Agreement upon a termination of Service will be made or provided unless and until such termination is also a “separation from service,” as determined in accordance with Section 409A of the Code. Notwithstanding the foregoing or anything elsewhere in the Plan or an Award Agreement to the contrary, if a Participant is a “specified employee” as defined in Section 409A of the Code at the time of termination of Service with respect to an Award, then solely to the extent necessary to avoid the imposition of any additional tax under Section 409A of the Code, the commencement of any payments or benefits under the Award shall be deferred until the date that is six months following the Participant’s termination of Service (or such other period as required to comply with Section 409A).  In no event whatsoever shall the Company be liable for any additional tax, interest or penalties that may be imposed on a Participant by Section 409A of the Code or any damages for failing to comply with Section 409A of the Code.

 

16.2         Securities Law Compliance.  No shares of Common Stock will be issued or transferred pursuant to an Award unless and until all then applicable requirements imposed by Federal and state securities and other laws, rules and regulations and by any regulatory agencies having jurisdiction, and by any exchanges upon which the shares of Common Stock may be listed, have been fully met.  As a condition precedent to the issuance of shares pursuant to the grant or exercise of an Award, the Company may require the Participant to take any reasonable action to meet such requirements.  The Committee may impose such conditions on any shares of Common Stock issuable under the Plan as it may deem advisable, including, without limitation, restrictions under the Securities Act, under the requirements of any exchange upon which such shares of the same class are then listed, and under any blue sky or other securities laws applicable to such shares.  The Committee may also require the Participant to represent and warrant at the time of issuance or transfer that the shares of Common Stock are being acquired only for investment purposes and without any current intention to sell or distribute such shares.

 

16.3         Non-United States Participants and Jurisdictions.  Notwithstanding any provision in the Plan to the contrary, in order to foster and promote achievement of the purposes of the Plan or to comply with provisions of laws in other countries in which the Company operates or has employees, the Committee, in its discretion, shall have the power and authority, to the extent not inconsistent with the intent of the Plan, to (i) determine which Eligible Persons who are foreign nationals or who are employed outside of the United States are eligible to participate in the Plan, (ii) modify the terms and conditions of any Awards made to such Eligible Persons, and (iii) establish subplans and modify exercise and payment procedures and other Award terms and procedures to the extent such actions may be necessary or advisable to comply with any tax, securities, regulatory or other laws of other jurisdictions with respect to Awards that may be subject to such laws.  Moreover, the Committee may approve such supplements to or amendments, restatements or alternative versions of the Plan, not inconsistent with the intent of the Plan, as it may consider necessary or appropriate for such purposes, without thereby affecting the terms of the Plan as in effect for any other purpose.

 

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16.4         Substitute Awards in Corporate Transactions.  Nothing contained in the Plan shall be construed to limit the right of the Committee to grant Awards under the Plan in connection with the acquisition, whether by purchase, merger, consolidation or other corporate transaction, of the business or assets of any corporation or other entity.  Without limiting the foregoing, the Committee may grant Awards under the Plan to an employee or director of another corporation who becomes an Eligible Person by reason of any such corporate transaction in substitution for awards previously granted by such corporation or entity to such person.  The terms and conditions of the substitute Awards may vary from the terms and conditions that would otherwise be required by the Plan solely to the extent the Committee deems necessary for such purpose.

 

16.5         Tax Withholding.  The Participant shall be responsible for payment of any taxes or similar charges required by law to be paid or withheld from an Award or an amount paid in satisfaction of an Award.  Any required withholdings shall be paid or, in the discretion of the Committee, otherwise satisfied (including, without limitation, by reduction of the number of shares of Common Stock subject to the Award), by the Participant on or prior to the payment or other event that results in taxable income in respect of an Award.  The Award Agreement may specify the manner in which the withholding obligation shall be satisfied with respect to the particular type of Award.

 

16.6         Unfunded Plan.  The adoption of the Plan and any reservation of shares of Stock or cash amounts by the Company to discharge its obligations hereunder shall not be deemed to create a trust or other funded arrangement.  Except upon the issuance of Common Stock pursuant to an Award, any rights of a Participant under the Plan shall be those of a general unsecured creditor of the Company, and neither a Participant nor the Participant’s permitted transferees or estate shall have any other interest in any assets of the Company by virtue of the Plan.  Notwithstanding the foregoing, the Company shall have the right to implement or set aside funds in a grantor trust, subject to the claims of the Company’s creditors or otherwise, to discharge its obligations under the Plan.

 

16.7         Other Compensation and Benefit Plans.  The adoption of the Plan shall not affect any other share incentive or other compensation plans in effect for the Company or any Subsidiary, nor shall the Plan preclude the Company from establishing any other forms of share incentive or other compensation or benefit program for employees of the Company or any Subsidiary.  The amount of any compensation deemed to be received by a Participant pursuant to an Award shall not constitute includable compensation for purposes of determining the amount of benefits to which a Participant is entitled under any other compensation or benefit plan or program of the Company or a Subsidiary, including, without limitation, under any pension or severance benefits plan, except to the extent specifically provided by the terms of any such plan.

 

16.8         Plan Binding on Transferees.  The Plan shall be binding upon the Company, its successors, transferees and assigns, and the Participant, the Participant’s executor, administrator and permitted transferees and beneficiaries.

 

16.9         Severability.  If any provision of the Plan or any Award Agreement shall be determined to be illegal or unenforceable by any court of law in any jurisdiction, the remaining

 

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provisions hereof and thereof shall be severable and enforceable in accordance with their terms, and all provisions shall remain enforceable in any other jurisdiction.

 

16.10       Governing Law.  The Plan and all rights hereunder shall be subject to and interpreted in accordance with the laws of the State of Delaware, without reference to the principles of conflicts of laws, and to applicable Federal securities laws.

 

17.           Term; Amendment and Termination.

 

17.1         Term.  The Plan was adopted by the Board on, and shall become effective as of                , 2012 (the “Effective Date”), and shall automatically terminate ten (10) years from its adoption by the Board, unless sooner terminated in accordance with Section 16.2 hereof.

 

17.2         Amendment and Termination.  The Board may from time to time and in any respect, amend, modify, suspend or terminate the Plan.  Notwithstanding the foregoing, no amendment, modification, suspension or termination of the Plan shall adversely affect any Award theretofore granted without the consent of the Participant or the permitted transferee of the Award.  The Board may seek the approval of any amendment, modification, suspension or termination by the Company’s stockholders to the extent it deems necessary or advisable in its discretion for purposes of compliance with Section 162(m) or Section 422 of the Code, the listing requirements of the NASDAQ Stock Market or other exchange or securities market or for any other purpose.  At the discretion of the Board, for purposes of compliance with Section 162(m) of the Code, the performance goals provided in Section 12 hereof shall be subject to approval (and re-approval) by the Company’s stockholders.

 

21Exhibit 10.22

 

AIRCRAFT LEASE AND PURCHASE OPTION AGREEMENT

 

This Aircraft Lease and Purchase Option Agreement (the “Agreement”)  is made as of the 1st day of August, 2011 (the “Effective Date”)  by and between Erickson Air-Crane Incorporated, a company organized and existing under the laws of the State of Delaware, United States of America, with its principal place of business at 5550 SW Macadam Avenue, Suite 200, Portland, Oregon 97239 (“Lessor”), and HRT Netherlands B.V., a company organized and existing under the laws of Netherlands with its principle place of business at Strawinskylaan 3105 Atrium, 1077zx, Amsterdam (“Lessee  or HRT”),  in accordance with the following terms and conditions.

 

RECITALS

 

WHEREAS, Lessor is engaged in the design, development, manufacture, promotion, sale, lease, and operation of S-64 heavy lift helicopters and has particular experience in construction, firefighting and other applications;

 

WHEREAS, Lessee desires to lease a Type 1 Erickson S-64E helicopter for a period beginning August 1, 2011 and ending at the deadline date of December 15, 2011;

 

WHEREAS, Lessee desires to lease from Lessor and Lessor is willing to lease to Lessee, the Aircraft described herein for the purpose of providing the services as further described in this Lease.

 

WHEREAS, Lessee desires the option to purchase the Aircraft from Lessor, and Lessor is willing to provide Lessee the option to purchase the Aircraft.

 

AGREEMENT

 

NOW THEREFORE, in consideration of the mutual promises herein contained, Lessor and Lessee agree as follows:

 

1.             DEFINITIONS

 

The following terms shall have the following respective meanings for all purposes of this Agreement:

 

1.1           Air Authority shall mean Agência Nacional de Aviação Civil (ANAC), or any successor entity thereof or other entity performing its functions in the future.

 

1.2           Aircraft shall mean the helicopter identified and described in Appendix A hereto, including all engines, components, equipment, rotables, parts and spare parts and/or ancillary and loose equipment or devices and associated aircraft documentation furnished therewith under this Agreement, and all substitutions, renewals and replacements from time to time made in or on the said Aircraft in accordance with this Agreement, whether or not for the time being installed on the Airframe.

 

[***]  This confidential material has been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment.

 

1

 

1.3           Airframe shall mean the Aircraft described in Appendix A hereto, excluding the engines, and any components, rotables and parts installed on or attached to said Aircraft.

 

1.4           Air Operating Certificate shall mean the certificate or license document issued by the Air Authority that allows for the continued operation of the Aircraft in Brazil in compliance with applicable Law and in accordance with the terms of this Lease.

 

1.5           ANAC shall mean the Brazilian National Agency of Civil Aviation and any successor to any thereof, in each case with respect to Brazil.

 

1.6           Approved Maintenance Program shall mean the approved maintenance program of Lessor.  The Approved Maintenance Program shall include scheduled maintenance, condition monitored maintenance, and on-condition maintenance of the Aircraft, Components, engines and rotables including but not limited to, servicing, testing, preventive maintenance, repairs, structural inspections, system checks, overhauls, approved modifications, service bulletins, engineering orders, airworthiness directives, corrosion control, inspections and treatment.

 

1.7           Delivery Date shall mean the date on which the Aircraft is delivered to the Lessee under this Agreement, such date to be mutually agreed upon by Lessor and Lessee.

 

1.8           Delivery Location shall mean the location agreed to by the parties.

 

1.9           EMSP Flight Hour shall mean each hour or part thereof elapsing from the moment at which the Aircraft wheels leave the ground until such time as the Aircraft wheels touch back down to the ground.

 

1.10         FAA shall mean the Federal Aviation Administration of the Department of Transportation, the National Transportation Safety Board, and Federal Communications Commission, and any successor to any thereof, in each case with respect to the United States of America.

 

1.11         Flight Hour, as used in this Agreement, or any addendum hereto, shall mean each hour or part thereof elapsing from the moment at which the Aircraft blades/rotors commence movement (whether or not the Aircraft is on the ground or in the air) until such time as the Aircraft blades/rotors cease movement.

 

1.12         Governmental Entity shall mean and include:  (i) any national government, political subdivision thereof, or local jurisdiction therein; (ii) any instrumentality, court, or agency, however constituted of any entity described in (i), including the FAA and ANAC; and (iii) any association, organization, or institution of which any entity described in (i) or (ii) is a member or to whose jurisdiction any thereof is subject or in whose activities any thereof is a participant.

 

1.13         Law shall mean and include:  (i) any statute, decree, constitution, regulation, order or any directive of any Governmental Entity; (ii) any treaty, pact, compact or other agreement to which any Governmental Entity is a signatory or party; (iii) any judicial or administrative interpretation or application of any law described in (i) or (ii); and (iv) any amendment or revision of any Law described in (i) or (ii) above.

 

2

 

1.14         Lease Rates shall mean the monthly fixed fee and hourly rates set forth on Appendix B attached hereto, and any other rates that are agreed to by the parties and set forth on Appendix B.

 

1.15         Permitted Sublessee shall mean HRT O & G Exploração e Produção de Petróleo Ltda., as further described in Section 15.1 below.

 

1.16         RAB shall mean the Brazilian Aeronautical Registry.

 

1.17         Security Interest shall mean any mortgage, charge, pledge, lien, right of set-off or any security interest whatsoever, however created or arising.

 

1.18         Taxes shall mean any and all present and future sales, use, goods and services tax, personal property, customs, business, fuel, leasing, occupational, transfer, excess profits, excise, franchise, ad valorem, value-added, turnover, stamp, interest equalization, income, gross receipts, or other taxes, fees, withholdings, imposts, duties, deductions, levies, or other charges of any nature, together with any penalties, fines, or interest thereon, imposed, levied, or assessed by, or otherwise payable to, any Governmental Entity (excluding Taxes imposed on the net income or net profits of Lessor by any Governmental Entity).

 

2.             AGREEMENT TO LEASE

 

2.1           Subject to the terms and conditions set forth herein, and subject to Aircraft availability, Lessor agrees to lease the Aircraft to Lessee and Lessee agrees to take the Aircraft on lease from Lessor, at the Lease Rates designated in Appendix B attached hereto.  Lessee agrees to pay the Lease Rates provided on Appendix B.

 

2.2           The Aircraft to be leased hereunder shall be delivered to Lessee “As-Is, Where-Is,” and subject to each and every disclaimer of warranty and representation as set forth in Appendix A hereof; provided, however, that (a) the Aircraft shall accord with the description set forth in Appendix A hereto; (b) the Aircraft shall be airworthy and the related maintenance records shall comply with applicable regulations; and (c) all of the Aircraft systems shall be functioning properly.

 

2.2.1        The Lessor hereby certifies that it is the owner of the Aircraft and has good marketable title thereto, free and clear of any and all valid and continuing mortgages, charges, security interest, liens, encumbrances or adverse claims of any nature of kind whatsoever, except for a lien in favor of Wells Fargo Bank N.A. pursuant to the aircraft security agreement between Lessor and Wells Fargo Bank N.A. dated June 24, 2010.  If Lessee exercises the Purchase Option (as described in Section 9 hereof) the lien will be released by Wells Fargo Bank N.A. prior to the sale of the Aircraft, and the Lessor shall demonstrate such release by a appropriate document duly executed by Wells Fargo Bank.

 

2.3           During the Term, Lessor shall retain legal ownership and title to the Aircraft, and Lessee shall not acquire any right, title or interest in the ownership of the Aircraft, unless and until Lessee exercises the Purchase Option on the terms and conditions described herein.

 

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3.             TERM

 

3.1           The term of this Agreement shall commence on August 1, 2011 and shall continue until December 15, 2011, unless earlier terminated as provided herein (the “Term”).  Any extension of the Term shall be negotiated and agreed to in a writing signed by the parties.

 

4.             AIRCRAFT SERVICES; PERSONNEL

 

4.1           The Aircraft may be used for long line, external load, mountain flying, fire retardant water dropping and cargo missions during the Term (collectively, the “Services”).  During the Term, Lessor shall provide the personnel required to fly, crew, operate, manage and maintain the Aircraft and provide the Services.  For the sake of clarity, the crew provided by Lessor shall include one captain/instructor pilot, one crew chief and one mechanic.  Each person provided by Lessor shall be an employee or contractor of Lessor, appropriately certified and qualified to provide the Services.

 

4.2           The Aircraft and any personnel provided under this Agreement shall be available to provide the Services no more than 14 hours per day, with no more than 10 Flight Hours per day.

 

4.3           Lessor shall be responsible for the payment or provision of any wages, salaries, benefits or fees to any personnel provided by Lessor under this Agreement, it being agreed that such persons shall not be employees or contractors of Lessee.

 

4.4           Lessee agrees to pay all accommodation, meal, and travel expenses for Lessor’s pilots, mechanics, and ground crew while they are in Brazil for the purpose of maintenance, training, crewing or repair of the Aircraft.  Upon the presentation of the due receipt of these expenses, Lessee shall reimburse Lessor’s personnel at a daily rate limited to:

 

[***]

 

The parties agree that if Lessee offers directly the transportation, accommodation and meals, the option suggested by Lessee shall be the one used by Lessor’s personnel.  If Lessor’s personnel elect to forego Lessee’s option, Lessee shall not be responsible for reimbursing any of those expenses.

 

4.5           Lessee agrees to pay all local taxes, custom fees, duties, remittance taxes, local income taxes on Lessor’s personnel, and visas for Lessor’s personnel for the purpose of maintenance, training, crewing or repair of the Aircraft.

 

4.6           The personnel provided by Lessor under this Agreement shall be under the operational control of Lessor and shall be subject to the applicable requirements of FAA regulations, all other applicable laws and Lessor’s company policies and procedures including, without limitation, the Safety Management System (SMS), all Standard Operating Procedures (SOP’s) applicable to the maintenance and operation of the Aircraft, and Aerial Operations Policy Manual (AOPM).

 

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5.             INVOICING AND PAYMENT

 

5.1           Lessee agrees to pay Lessor, as an advance payment for the four and a half months of fixed monthly fees(each monthly fee in an amount of [***]), a deposit in the amount of [***] upon the signing of this Agreement, (the “Deposit”).  In the event that Lessee exercises the Purchase Option to purchase the Aircraft as described under Clause 9 of this Agreement, Lessor agrees to credit the Deposit against the Purchase Price (as defined in Clause 9 of this Agreement).  In the event HRT decides to terminate this Agreement before the Term expires and without exercising the Purchase Option, Lessor shall return a portion of the Deposit to Lessee, which amount shall be determined on the basis of the time remaining from the date of termination to the end of the Term.

 

5.2           At the beginning of each calendar month during the Term, Lessor shall prepare an invoice which includes amounts due for the prior calendar month taking into account the hourly rates and any other rates, but not the fixed monthly fees, set forth on Appendix B (the “Invoice”).  The Invoice shall be provided to Lessee within fifteen (15) days of the final day of the preceding calendar month.  Within thirty (30) days of the date of Invoice, Lessee shall make payment to Lessor.  Payment shall not be reduced for any Taxes or other withholding.  Lessee hereby agrees that interest in the amount proportionally to [***] shall accrue upon any past due amounts owing hereunder, and any and all accrued interest shall be payable by Lessee to Lessor upon demand.

 

5.3           The payment of any and all amounts under this Agreement by Lessee to Lessor shall be made in United States Dollars and by wire transfer of immediately available funds, without any set-off or counterclaim whatsoever and free and clear of any deductions and withholdings, to the bank account set forth below:

 

[***]

 

5.4           Lessee and Lessor agree that all fuel costs for the operation of the Aircraft shall be borne by the Lessee.  Accordingly, Lessee agrees that Lessor shall not be responsible for any fuel costs relating to the operation of the Aircraft under this Agreement, and Lessee acknowledges that the Lease Rates are not inclusive of any Aircraft fuel costs.

 

6.             BRAZIL REGISTRATION

 

6.1           Lessee shall facilitate all required registration, licensing, and legal formalities required for the use and operation of the Aircraft, Aircraft parts and the operation of Erickson’s personnel in Brazil.  Lessor shall cooperate and assist Lessee with all required registration, licensing, and legal formalities.  Lessee acknowledges that any delay in performance of the Services under this Agreement that results from a delay in certifying the Aircraft or Erickson’s personnel for work in

 

5

 

Brazil is not a breach of this Agreement, and Lessor shall not be held liable for any damages resulting from the delay, unless the delay is the direct result of Lessor’s failure to cooperate with Lessee.

 

6.2           Lessee and Lessor acknowledge and understand that (i) the Aircraft shall be “N” registered with the FAA until it reaches Brazil, and (ii) upon reaching Brazil the Aircraft shall be de-registered with the FAA and “BR” registered with the RAB.  If Lessee does not exercise the Purchase Option, Lessee agrees to facilitate and cooperate with Lessor to de-register the Aircraft from the RAB at the end of the Term.

 

6.3           Lessee shall maintain or shall cause Permitted Sublessee to maintain a valid Brazilian Air Operating Certificate for the Term hereof and obtain and maintain all and any necessary certificates, licenses, permits and authorizations required to import and expert the Aircraft (and any components, parts, and spare parts) into and from Brazil.

 

7.             LESSOR OBLIGATIONS

 

Lessor hereby agrees with Lessee that during the Term, it shall:

 

7.1           ensure that the Aircraft is operative and duly maintained according to FAA and/or ANAC standards, provided that the Aircraft may need to be grounded for a (cumulative) maximum of one (1) day per each fifteen (15) days of availability hereunder, for technical necessities.

 

7.2           provide spares and support equipment for maintenance of the Aircraft and, in general, shall ensure that the Aircraft shall always be in conformity with and ready to provide the Services.

 

7.3           be responsible for all flight and ground operations and activities of the Aircraft.  Lessee agrees to render assistance and logistics support as necessary.

 

7.4           not cause or permit the Aircraft to be operated in any manner contrary to the operating limitations set forth in the Aircraft’s flight manual or any part thereof or any recommendation or regulation of the applicable aviation authorities.

 

7.5           comply with the legal requirements of the Brazilian and U.S. and/or other aviation authorities (including without limitation, any country to, from or over which the Aircraft may be flown in accordance with this Agreement).

 

7.6           Assist Lessee with all requested paper work and legal formalities required for the Aircraft, aircraft parts, and Lessor personnel for the purpose of maintaining, training crewing or repair of the aircraft.

 

8.             LESSEE OBLIGATIONS

 

Lessee hereby agrees with Lessor that during the Term, it shall:

 

6

 

8.1           not cause or permit the Aircraft to be operated in any manner contrary to the operating limitations set forth in the Aircraft’s flight manual or any part thereof or contrary to any recommendation or regulation of the Air Authority.

 

8.2           comply with the requirements of the Brazilian and U.S. and/or other air authorities (including without limitation, any country to, from or over which the Aircraft may be flown in accordance with this agreement) which may be applicable to the operations under this Agreement.

 

8.3           neither create, nor permit to exist, any Security Interest upon the Aircraft or any parts thereof, nor do or permit to be done anything which may expose the Aircraft or any parts thereof to penalty, forfeiture, seizure, arrest, impounding, detention, confiscation, taking in execution, attachment, appropriation or destruction, nor abandon the Aircraft or any parts thereof.

 

8.4           not permit any act or omission which might jeopardize the rights of Lessor as owner of the Aircraft.

 

8.5           not permit the Aircraft to be operated by persons other than the pilots approved by Lessor, and not interfere in any way with such persons in the performance of their responsibilities, including without limitation operating and maintaining the Aircraft and maintaining accurate and complete records and reports in accordance with Lessor’s policies and FAA and Air Authority requirements and procedures.

 

8.6           cooperate with Lessor in keeping the Aircraft equipped with the engines, components, and rotables installed on the Delivery Date or with substitutes or replacements provided and installed by Lessor.

 

8.7           allow none but Lessor to service, repair, maintain, overhaul, test or cause the same to be done to the Aircraft in accordance with the Approved Maintenance Program.  Lessee shall not interfere in any way with Lessor’s service, repair, maintenance, overhaul, test personnel in the performance of their responsibilities.

 

8.8           take all the necessary steps to cooperate with and assist Lessor to assure that each Aircraft is properly secured when parked or stored in a hangar to prevent damage, wear, vandalism or theft, and promptly provide to Lessor all reasonable requested assistance, personnel, services and equipment on a full cost base rate at its arms-length availability.

 

8.9           pay and discharge when due and payable all taxes, debts, damages, claims and liabilities of or payable by Lessee, and promptly pay all license and registration fees and all taxes of any nature (together with any penalties, fines or interest thereon) assessed or demanded on or after August 1, 2011 by any Governmental Entity, upon or with respect to the Aircraft or upon the ownership, delivery, leasing, possession, use, operation, return, or other disposition thereof.

 

8.10         acquire and pay the expenses of an operational field base and bonded warehouse suitable for the following:  (i) the Aircraft; (ii) parts storage; and (iii) Aircraft maintenance.  Lessee shall obtain Lessor’s approval for any proposed location, which shall not be unreasonably withheld.

 

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8.11         pay the expenses of transporting spare parts inventory for the Aircraft between the United States and Brazil, including but not limited to taxes applicable to the import or export of such spare parts into and out of Brazil.

 

9.             PURCHASE OPTION

 

9.1           Lessor hereby provides an option in favor of Lessee for Lessee’s purchase of the Aircraft on the terms and conditions of purchase set forth herein (the “Purchase Option”).

 

9.2           The total purchase price for the Aircraft shall be [***], the “Purchase Price”).

 

9.3           The Deposit of [***] paid by Lessee to Lessor shall be credited against the Purchase Price.  For the sake of clarity, if the Purchase Option is exercised at any time on or before December 15, 2011, the Deposit shall be credited against the Purchase Price.

 

9.4           Included in the Purchase Price for the Aircraft are the following accessories:  (i) shock & pendant, (ii) bambi bucket (iii) ferry tank, (iv) two 20,000 pound remote hooks, and (v) fly away toolbox.

 

9.5           In order to exercise the Purchase Option, which may be exercised at any time on or before December 15, 2011, Lessee shall:  (i) sign and return to Lessor the Notice of Option attached hereto as “Attachment A”; and (ii) sign and return to Lessor the Aircraft Purchase Agreement attached hereto as “Attachment B”.  If Lessor has not received the signed Notice of Option and signed Aircraft Purchase Agreement on or before December 15, 2011, the Purchase Option shall terminate.

 

9.6           Lessor shall be fully responsible for all United States Taxes imposed as a result of the purchase, sale, transfer of title to, and delivery of, the Aircraft in accordance with the terms and conditions set forth herein.

 

10.           TRAINING AND CREWING SERVICES

 

10.1         Training.  Lessor will provide training for four (4) pilots for the Aircraft.  The pilot training shall include:

 

(a)           Ground School.  Up to forty (40) hours of ground school training and aircraft familiarization per pilot; and

 

(b)           Flight Training.  Up to ten (10) Flight Hours per pilot to be accomplished on the Aircraft.  Any training Flight Hours are subject to the Flight Rates set forth on Appendix B to this Agreement.

 

In addition, Lessor will provide training for four (4) maintenance technicians for the Aircraft.  The maintenance technician training will include up to two hundred forty (240) hours of training per technician.

 

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10.2         Crewing Services.  Lessor shall provide Lessee with crewing services to include a training captain/instructor pilot, a crew chief and a mechanic for the Term (the “Crew”).  If Lessee purchases the Aircraft by exercise of the Purchase Option, then Lessor agrees to continue to provide the Crew until July 31, 2012.  Notwithstanding the foregoing, the parties acknowledge that Brazilian law may only permit the Crew to operate in Brazil for six months.  The parties agree that if the parties are unable to obtain the necessary extension for the Crew to continue to operate the Aircraft in Brazil, then all Lessor obligations under this provision shall terminate automatically with the expiration of the Crew’s certification.

 

11.           AFTER-MARKET SUPPORT SERVICES

 

11.1         If Lessee purchases the Aircraft, then Lessor shall provide Erickson Material Support Plan (“EMSP”) services on the following terms and conditions.  In exchange for a flat rate per EMSP Flight Hour (the “Flight Hour Rate”),  Lessor will provide all replacement parts/components for:  (i) any unscheduled parts or component failures; (ii) the replacement of life limited and expendable parts or components; and (iii) any scheduled parts or component overhauls at such time or times required by Lessor maintenance manuals and procedures (collectively, the “Support Services”).  The Flight Hour Rate does not include any freight or other transportation/logistics costs.  These costs shall be paid separately by Lessee.

 

11.2         Base Rates.  The 2011 base Flight Hour Rates for nose to tail EMSP for the Aircraft based on the total number of EMSP Flight Hours in a twelve-month period are as follows:

 

	
1 to 500 flight hours:
    	
[***] per   EMSP Flight Hour
    
	
501 to 1000 flight hours:
    	
[***]   each additional EMSP Flight Hour
    
	
Over 1000 flight hours:
    	
[***]   each additional EMSP Flight Hour
    

 

The final negotiated Flight Hour Rate is based on Lessee’s Aircraft configuration, mission profiles, and availability requirements.  For Support Services purposes only, flight hours shall be calculated from the time the aircraft wheels leave the ground until the Aircraft wheels touch back down the ground.

 

11.3         Price Escalation.  The negotiated Flight Hour Rate is quoted in 2011 dollars and will be subject to escalation for the year 2012 and each year thereafter as determined by the producer price index for aircraft manufacturing, Series ID # PCU336411336411 as published by the United States Bureau of Labor and Statistics (BLS) at the time of the then-current anniversary of the Effective Date.

 

11.4         The Support Services shall be provided for a period of five (5) years unless sooner terminated by the parties for customary reasons including, without limitation, bankruptcy, insolvency, ceasing of business operations, and material breach of agreement by either party that remains uncured.  The term of Support Services shall be calculated as commencing on the first day of the Term.

 

11.5         In connection with the Support Services, Lessor will provide (i) [***] availability of parts or components for any Aircraft on Ground (“AOG”) situation (ship within 48 hours of notification) and (ii) [***] availability of parts or components for any non-AOG situation (ship within 96 hours of notification).  For availability needs greater than those above, Lessor will

 

9

 

work with HRT to identify which components should be purchased by the customer as additional spares.

 

11.6         Exclusions & Limitations.  With respect to the Support Services program, the parties recognize that certain standard exclusions and limitations will apply.  By way of example, and not in limitation, Support Services do not include any parts or components that fail or are rendered unserviceable as a result of (i) improper storage, use or operation, abuse or negligent, or other acts or omissions of Lessee or any third party, (ii) failure of Lessee or any third party to properly install, service, or maintain such part/components, (iii) the failure of any parts or components not supplied by Lessor, (iv) accident or incident or any other causes external to the relevant part/component (including foreign object damage), (v) regulatory agency changes or directives or, (vii) failure of Lessee to operate the Aircraft in accordance with Lessor specifications, limitations and in accordance with all operations and maintenance manuals.  The Support Services do not include the replacement of consumable parts (oils, greases) or expendable parts with a unit cost less than USD $150 (filters, o-rings, fasteners).  Engineering services provided at Lessee’s request or outside routine support are also excluded.

 

11.7         Material Support Agreement.  If Lessee exercises the Purchase Option, the parties will enter into a separate after-market support services agreement consistent with the terms set forth herein concerning Support Services and pursuant to which the Lessor will provide full parts and components support to Lessee in exchange for a fixed flight hour rate.

 

12.           INSURANCE

 

12.1         During the Term, Lessor shall be responsible for effecting and maintaining or causing to be effected and maintained, in full force and effect, in respect of the Aircraft, public liability insurance for bodily injury and property damage and insurance against loss or damage to the Aircraft, including, without limitation, loss by fire, theft, collision and such other risks of loss as are customarily insured against by Lessor on its other Aircraft, in such amounts, in such from and with such insurers and brokers as shall be satisfactory to Lessor, as well as the Brazilian mandatory RETA insurance (the “Insurance”).  Lessor shall name Lessee as an additional insured party under the Insurance.  If the Purchase Option is exercised, then the insurance provisions of the Purchase Agreement shall govern the period following the exercise of the Purchase Option.

 

12.2         Lessee shall:

 

(a)                                  ensure that all legal requirements as to insurance of the Aircraft which may from time to time be imposed by the Laws of Brazil or any state to, from or over which the Aircraft shall be flown, in so far as they affect or concern the operation of the Aircraft, are immediately communicated to Lessor and in particular those requirements compliance with which is necessary to ensure that:  (i) the Aircraft is not in danger of detention of forfeiture; (ii) the Insurance remains valid and in full force and effect; and (iii) the interests of the Indemnitees in the Insurance and the Aircraft or any parts thereof are not thereby prejudiced;

 

10

 

(b)                                 not use, cause or permit the Aircraft to be used for any purpose or in any manner not covered by the Insurance or outside any geographical limit imposed by such Insurance or for any purpose or in any manner which is contrary to applicable Law.  Lessee shall comply with the terms and conditions of each and every policy of the Insurance and shall not do, consent or agree to any act or omission which invalidates or may invalidate or render unenforceable or may render unenforceable the whole or any part of any such Insurance; and

 

(c)                                  promptly notify Lessor of any occurrence likely to give rise to a claim under the Insurance.

 

13.           INDEMNIFICATION

 

13.1         Lessee agrees to defend, indemnify and hold harmless the Lessor and its successors and assigns and its shareholders, subsidiaries, affiliates, directors, officers, agents, and indemnitees (the “Indemnitees”)  from and against any and all claims, proceedings, losses, liabilities, suits, judgments, costs, expenses (including attorneys’ fees at trial or on appeal), penalties or fines (each, a “Claim”)  (regardless of when the same shall be made or incurred, whether during or after the termination of the letting of the Aircraft under this Agreement) for or on account of or arising from or in any way connected with injury to or death of any persons whomsoever (including employees of Lessee) or loss or damage to any property of any person, body or company, including without limitation, damage to the Aircraft which is the result of any breach of any representation, warranty or agreement made by Lessee hereunder, or which is the result of the gross negligence or willful misconduct of the Lessee.

 

13.2         Lessee agrees promptly to pay and indemnify, defend and hold Lessor harmless against all Taxes levied or imposed against or upon Lessor or Lessee and relating to or attributable to Lessee, this Agreement, the Aircraft during the term of this Agreement or the importation, exportation, registration, leasing, sub-leasing, delivery, possession, use, operation, repair, maintenance, overhaul, transportation, landing, storage, presence or redelivery during the term of this Agreement of the Aircraft or any parts thereof or any rent, receipts, insurance proceeds or income arising therefrom.  If Lessee is required by any applicable Law, or by any third party, to deliver or furnish any report or return in connection with any such Taxes, Lessee shall complete the same in a manner satisfactory to Lessor and the appropriate tax authorities and in particular shall state therein that Lessor is the lessor of the Aircraft and that the Lessee is exclusively responsible for the use and operation of the Aircraft and for any such Taxes, and Lessee shall supply a copy of such report or return to Lessor.

 

13.3         Lessee shall pay all stamp, documentary, registration or other like duties, taxes, or charges (including any such duties, taxes, or charges payable by Lessor or imposed on or in connection with the registration of the Aircraft or otherwise) imposed on or in connection with this Agreement and shall indemnify Lessor against any liability arising by reason of any delay or omission by Lessee to pay such duties, taxes or charges.

 

13.4         The indemnities contained in this Article 13 shall continue in full force and effect for a period of one (1) year after the expiration or other termination of this Agreement or of the letting of the Aircraft hereunder.  This indemnity applies for any events or accidents that occur during

 

11

 

the Term, but if the Purchase Option is exercised, then the indemnity provisions contained in the Purchase Agreement shall govern the period following the exercise of the Purchase Option.

 

14.           TERMINATION:  REMEDIES

 

14.1         Lessor may immediately terminate this Agreement in the event:  (i) that Lessor, in its good faith judgment, believes that the continued safe maintenance and operation of the Aircraft may have been compromised or may be compromised in the future; (ii) that Lessee becomes insolvent or the subject of any bankruptcy, insolvency or similar proceedings; makes an assignment for the benefit of creditors; becomes unable to pay its debts as they become due; goes into liquidation or winding-up; commences or has commenced with respect to it any dissolution or liquidation proceedings; (iii) that the Air Authority revokes the Air Operating Certificate or otherwise prohibits operation of the Aircraft in Brazil under this Agreement; (iv) of Lessee’s failure to pay to Lessor the Lease Rates and any other amounts required hereunder at the time or times required by Article 5 of this Agreement; and (v) of a breach or default of this Agreement by Lessee, if Lessee has not reasonably cured such breach within fifteen (15) days following Lessee’s receipt of notice of breach from Lessor.

 

14.2         Without prejudice to Lessor’s other remedies under this Agreement, Lessee agrees that the occurrence and continuation of any event of default as described in Section 14.1 above or elsewhere in this Agreement shall entitle Lessor and Lessor only, to automatically and unilaterally cancel this Agreement (de pleno direito)  without requirement of any notice or judicial interpellation (interpelação)  for all legal purposes.  The intent of the parties is that this paragraph constitutes and shall be interpreted as an express resolutory clause (cláusula resolutiva expressa)  as that term is known in Brazil, and Lessee agrees that upon such cancellation, Lessor shall have the right to repossess the Aircraft by means of “Reintegração de Posse”,  pursuant to Article 926 of the Brazilian Civil Procedure Code.

 

14.3         In case Lessee, for any reason whatsoever, fails to return the Aircraft to Lessor upon occurrence of any event of default as described in Section 14.1 above or elsewhere in this Agreement, the wrongful possession (esbulho possessório,  as such term is known in Brazil) of the Aircraft will be characterized in accordance with Article 1210 et. seq. of the Brazilian Civil Code.  Lessee hereby acknowledges and agrees that the characterization of the wrongful possession will be sufficient for Lessor to obtain a preliminary injunction from a court for immediate repossession of the Aircraft without Lessee being heard in the courts, in accordance with Article 928 of the Brazilian Code of Civil Procedure.

 

15.           ASSIGNMENT

 

15.1         Lessee may sublease the Aircraft to HRT O & G Exploração e Produção de Petróleo Ltda (HRT O&G), a Corporation organized under the laws of the Federative Republic of Brazil, with its principal address located at Avenida Atlântica 1130, 4°, 7°, 8°, 10° andares, upon written notice to Lessor and provided the express consent from Lessor be registered with the RAB along with this Agreement and the relevant sublease agreement.

 

15.1.1      In case of sublease of the aircraft, as described above, Lessor shall name also HRT O&G as an additional insured party under the Insurance.  If the Purchase Option is

 

12

 

exercised, then the insurance provisions of the Purchase Agreement shall govern the period following the exercise of the Purchase Option.

 

15.2         Except in accordance with Clause 15.1 above, Lessee shall not:  (i) assign this Agreement; (ii) sublet or transfer possession of the Aircraft, Airframe, components or engines to any party other than HRT O & G Exploração e Produção de Petróleo Ltda.; or (iii) create or permit to exist any Security Interest over any of its rights or obligation hereunder.  Any assignment by operation of Law or any change in the ownership of, or power to vote, by operation of Law, merger, reorganization, or consolidation over fifty percent (50%) of voting capital stock of Lessee shall constitute a prohibited assignment for purposes of this Clause 15.2.

 

15.3         Lessor shall have the right at its sole cost and expense to assign, sell or encumber any interest of Lessor in the Aircraft or this Agreement or the proceeds hereof subject to the rights of Lessee under the provisions of this Agreement.

 

16.           MISCELLANEOUS

 

16.1         If any of the provisions of this Agreement becomes invalid, illegal or unenforceable in any respect under any Law, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired.

 

16.2         If Lessee fails to comply with any provision of this Agreement, Lessor may, without being in any way obliged to do so or responsible for so doing and without prejudice to the ability of Lessor to treat such non-compliance as an event of default hereunder, effect compliance on behalf of Lessee, whereupon Lessee shall become liable to pay immediately any sums expended by Lessor together with all costs and expenses (including legal costs) in connection therewith.

 

16.3         Notice.  All notices and consents required or permitted to be given by either party under this Agreement shall be in writing and shall be personally delivered or sent by facsimile, electronic mail, express courier or registered mail to the party to which they are directed at the following address for such party:

 

	
Lessee:
    	
HRT   Netherlands, B.V.
    
	
Address:
    	
Strawinskylaan   3105 Atrium, 1077zx
    
	
 
    	
Amsterdam,   Netherlands
    
	
Telephone:
    	
(55)   21- 21059700
    
	
Facsimile:
    	
(55)   21 2105 9713
    
	
Attention:
    	
Mr. Milton   Romeu Franke
    
	
 
    	
 
    
	
Financial Issues: Mr. Jose Carlos Pedrosa.
    
	
Telephone:
    	
(55)   21-21059700
    
	
Facsimile
    	
(55)   21 2105 9713
    
	
 
    	
 
    
	
With   a copy to:
    	
 
    
	
Jorge Pedroso,
    	
 
    
	
Address: Av.   Atlántica, 1130, 7°,8° e 10° andares- Copacabana- Rio de Janeiro- Brazil
    
	
Telephone:
    	
(55)   21-21059700
    
	
Facsimile:
    	
(55)   2121059713
    

 

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Lessor:
    	
Erickson   Air-Crane Incorporated
    
	
Address:
    	
5550   SW Macadam Avenue, Suite 200
    
	
 
    	
Portland,   Oregon 97239
    
	
Telephone:
    	
(503)   505-5800
    
	
Facsimile:
    	
(503)   473-8540
    
	
Email:
    	
URieder@ericksonaircrane.com
    
	
Attention:
    	
President &   CEO
    

 

or at such other address as either party may hereafter notify the other in the manner described in this Clause.  Such notices shall be deemed given (i) on the date of transmission, in the case of notices sent by electronic mail or facsimile, or (ii) on the date of recorded delivery by an independent delivery service or postal agency.

 

16.4         Governing Law.  This Agreement shall in all respects be governed by and construed in accordance with the laws of Brazil without regard to conflicts of law principles.

 

16.5         Settlement of Disputes.  In the event that any controversy, dispute, or demand arises from this Agreement, its fulfilment, breach, cancellation, expiration or validity, the parties agree to try their best efforts to resolve the dispute on a friendly basis, within 15 (fifteen) days from the notice of any of the parties to the other party informing of the controversy.

 

Any controversies, disputes, actions, causes of action, or other claims arising out of or in connection with the provisions of this Agreement which cannot be settled by mutual agreement shall be finally settled by arbitration in London, England under the rules of arbitration of the International Chamber of Commerce, by one arbitrator appointed in accordance with said rules.  All arbitration proceedings shall be conducted in the English language.  The arbitrator shall decide any such dispute or claim strictly in accordance with the governing law specified in Clause 16.4 hereof.  The arbitrator may enter a default decision against any party who fails to participate in the arbitration proceedings.

 

Any decision made by the arbitrator shall be reasoned and in writing and shall be final and binding on each of the parties that were parties to the dispute.  Judgment upon any arbitral award rendered hereunder may be entered in any court having jurisdiction, or application may be made to such court for a judicial acceptance of the award and an order of enforcement, as the case may be; provided that nothing shall preclude either party from seeking interim relief from any court having jurisdiction to grant the same.

 

The costs and expenses of the arbitration, including, without limitation, the fees of the arbitrator, shall be borne equally by each party to the dispute or claim and each party shall pay its own fees, disbursements and other charges of its counsel.  The arbitrator shall have the power to award reasonable interest on any sum awarded pursuant to the arbitration proceedings and such sum would carry interest, if awarded, until the actual payment of such amounts.

 

Notwithstanding the foregoing, with respect to repossession of the Aircraft, Lessor shall have the option, in its sole and exclusive discretion, to institute legal proceedings against the Lessee for repossession of the Aircraft in any jurisdiction where the Aircraft may be located from time to time.  The parties hereby consent and agree to be subject to the jurisdiction of all of the aforesaid

 

14

 

courts and, to the greatest extent permitted by applicable law the parties hereby waive any right to seek to avoid the jurisdiction of the above courts on the basis of the doctrine of forum non conveniens.

 

16.6         Entire Agreement.  This Agreement (including all Exhibits, Attachments and documents attached thereto) is the sole and entire agreement between Lessor and Lessee in relation to the leasing of the Aircraft, and supersedes all previous agreements in relation to such leasing.  This Agreement may not be amended except by an instrument signed by both parties.

 

16.7         Force Majeure.  No failure or omission by either party to carry out or observe any of the terms or conditions of this Agreement shall, except in relation to obligations to make payments hereunder, give rise to any claim against the party in question or be deemed a breach of this Agreement if such failure or omission arises from any Force Majeure event such as acts of God, war, epidemics and/or earthquakes, weather and landowners other than the Lessee or any of its affiliates.  In the event, however, that any such Force Majeure event shall continue for a period of not less than thirty (30) days, either party may by written notice terminate this Agreement forthwith if the operation of this Agreement as a whole is affected by the Force Majeure event, and the Lessor shall return a portion of the Deposit the Lessee, which amount shall be determined on the basis of the time remaining from the date of termination to the end of the term.

 

16.8         Safety.  Lessor, or any of the pilots operating the aircraft, shall have the right to refuse or suspend operations in the interest of reasonable safety, whether the hazard be weather or other natural conditions, mechanical problems, risks created by third parties, and/or any other situation that, in Lessor’s opinion, involves an unreasonable risk of injury to any person or damage to any property.  This shall in no way result in any breach of contract by Lessor under this Agreement.

 

16.9         Language.  This Contract is in English and the English language shall govern.  No translation shall change the meaning of the rights and obligations hereunder.  Lessee warrants it is knowledgeable and proficient in the English language so that Lessee has a complete comprehension of all parts of this Contract.  All communications, both written and oral, shall be in the English language.  Any and all documents forwarded or sent to Lessor by Lessee if in a non-English language shall be accompanied by an excellent quality translation in English of the whole document.  Lessor shall have the right to require Lessee to submit independent and reliable certification of any such translation.

 

16.10       Limitation of Liability.  Neither party shall be liable to the other party for consequential, incidental, special, or indirect damages, including without limitation damages for loss of use, delay or loss of business, revenue or profit.

 

15

 

APPENDIX A
  TO
 AIRCRAFT LEASE AND PURCHASE OPTION AGREEMENT

 

AIRCRAFT

 

	
 
    	
 
    	
 
    	
 
    	
SERIAL
    	
 
    	
YEAR OF
    	
 
    	
REGISTRATION
    
	
MANUFACTURER
    	
 
    	
MODEL
    	
 
    	
NUMBER
    	
 
    	
MANUFACTURE
    	
 
    	
NUMBER
    
	
SIKORSKY
    	
 
    	
S-64E
    	
 
    	
#64015
    	
 
    	
1994
    	
 
    	
N173AC
    

 

Main Features S-64 E Helicopter

General Arrangement

 

	
Wheeled   Landing Gear Type
    	
 
    	
Standard
    
	
Dual   Engine P & W JFTD12A-4A 4,500 SHP X 2
    	
 
    	
Standard
    
	
Engine   Fire Detection System
    	
 
    	
Standard
    
	
6   Blade Fully Articulated Main Rotor Head
    	
 
    	
Standard
    
	
4   Blade Tail Rotor Head
    	
 
    	
Standard
    
	
Fuel   Capacity, Main 908 USG Aux 448 USG
    	
 
    	
Standard
    
	
Dual   Control 2 Pilot Requirement
    	
 
    	
Standard
    
	
42,000   lbs Max Gross Weight
    	
 
    	
Standard
    
	
20,000   lbs Max External Load Weight
    	
 
    	
Standard
    
	
Environmental   Control Unit (ECU)
    	
 
    	
Standard
    
	
Engine   Anti Ice System
    	
 
    	
Standard
    
	
3   Axis AFCS
    	
 
    	
Standard
    
	
Primary   Instrumentation
    	
 
    	
Standard
    
	
Rotor   Brake Hand Pump Style
    	
 
    	
Standard
    
	
Main   Wheel Brakes
    	
 
    	
Standard
    
	
LH/RH   Cockpit Door Bubble Windows
    	
 
    	
Standard
    
	
Pulse   Lights
    	
 
    	
Standard
    
	
Red &   White Strobe Tail Lights
    	
 
    	
Standard
    
	
Red   Nose Strobe Light
    	
 
    	
Standard
    
	
Sealed   Lead Acid Battery
    	
 
    	
Standard
    
	
Auxiliary   Power Plant; Electric Start
    	
 
    	
Standard
    
	
Cockpit   Fans
    	
 
    	
Standard
    
	
Fire   Extinguisher Hand Held
    	
 
    	
Standard
    
	
Crash   Axe
    	
 
    	
Standard
    
	
Two   Color Paint Scheme
    	
 
    	
Standard
    
	
Hard   Wiring for RADS, RADS Kit Included
    	
 
    	
Standard
    
	
Collective   Down Lock System
    	
 
    	
Standard
    
	
Auxiliary   Fuel Tank with Indicator
    	
 
    	
Standard
    
	
First   Aid Kit
    	
 
    	
Standard
    

 

16

 

Analog Instrumentation

 

	
N1 Indicator (2 ea.)
    	
 
    	
Standard
    
	
Fuel Flow Indicator (2 ea.)
    	
 
    	
Standard
    
	
EPR Indicator (2 ea.)
    	
 
    	
Standard
    
	
MGB Oil Temperature Indicator
    	
 
    	
Standard
    
	
Fuel Quantity Indicator (3 ea.)
    	
 
    	
Standard
    
	
Torque Indicator (3 ea.)
    	
 
    	
Standard
    
	
Triple Tachometer (2 ea.)
    	
 
    	
Standard
    
	
Oil Cooler Tachometer
    	
 
    	
Standard
    
	
T-5 Indicator (2 ea.)
    	
 
    	
Standard
    
	
Hydraulic Pressure Indicator (3 ea.)
    	
 
    	
Standard
    
	
MGB Oil Temperature Indicator
    	
 
    	
Standard
    
	
Engine Oil Temperature Indicator (2 ea.)
    	
 
    	
Standard
    
	
Load Cell Indicator
    	
 
    	
Standard
    
	
Electronic   Horizontal-Situation Indicator (EHSI) (2 ea.)
    	
 
    	
Standard
    
	
Magnetic   Compass
    	
 
    	
Standard
    
	
Altimeter   (2 ea.)
    	
 
    	
Standard
    
	
Airspeed   Indicator (2 ea.)
    	
 
    	
Standard
    
	
Vertical   Speed Indicator (2 ea.)
    	
 
    	
Standard
    
	
Artificial   Horizon (1 ea.) Standby
    	
 
    	
Standard
    
	
Clock   Digital (2 ea.)
    	
 
    	
Standard
    
	
OAT   Indicator - Digital and Analog (2 ea.)
    	
 
    	
Standard
    
	
Hour   Meter
    	
 
    	
Standard
    

 

Radio Package

 

	
6   Position Intercom System, 4 Inside, 2 External
    	
 
    	
Standard
    
	
VHF   COMM- 118-136.992 MHz (VHF-22) (2ea.)
    	
 
    	
Standard
    
	
ATC   Transponder (TDR-94/94D Mode S Transponder) (1 ea.)
    	
 
    	
Standard
    
	
Radio   Tuning Unit (RTU) (2ea.)
    	
 
    	
Standard
    
	
Emergency   Locator Transmitter (ELT) 406 MHz
    	
 
    	
Standard
    
	
Radar   Altimeter
    	
 
    	
Standard
    
	
VHF   FM Transceiver (Northern Airborne Technology)(2 ea.)
    	
 
    	
Standard
    
	
GPS   (Garmin 500)
    	
 
    	
Standard
    
	
Cockpit   Voice Recorder
    	
 
    	
Standard
    
	
AFF   Flight Following (Blue Sky)
    	
 
    	
Standard
    

 

Construction System

 

	
Siren   Warning System
    	
 
    	
Standard
    
	
Shock &   Pendant to include upper hook
    	
 
    	
Included
    
	
20,000   1bs Remote Hook (2)
    	
 
    	
Included
    
	
Ferry   Tanks (1 Set)
    	
 
    	
Included
    
	
Bambi   Bucket (1)
    	
 
    	
Included
    

 

17

 

Aircraft Support Equipment

 

	
Fall   Protection System
    	
 
    	
Standard
    
	
Blade   Tie Downs
    	
 
    	
Standard
    
	
Engine   Exhaust and Intake Plugs
    	
 
    	
Standard
    
	
Tow   Bar
    	
 
    	
Standard
    

 

DISCLAIMER

 

EXCEPT AS EXPRESSLY STATED IN CLAUSE 2.2 and 2.2.1 OF THIS AGREEMENT, LESSOR HAS NOT AND SHALL NOT BE DEEMED TO HAVE MADE, AND LESSOR HEREBY SPECIFICALLY DISCLAIMS, ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE CONDITION, DESIGN, OPERATION, MERCHANTABILITY, FREEDOM FROM CLAIMS OF INFRINGEMENT OR THE LIKE, OR FITNESS FOR USE FOR A PARTICULAR PURPOSE OF THE AIRCRAFT, OR AS TO THE QUALITY OF THE MATERIAL OR WORKMANSHIP OF THE AIRCRAFT, THE ABSENCE THEREFROM OF LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, OR AS TO ANY OTHER REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED (INCLUDING ANY IMPLIED WARRANTY ARISING FROM A COURSE OF PERFORMANCE OR DEALING OR USAGE OF TRADE), WITH RESPECT TO THE AIRCRAFT; AND LESSEE HEREBY WAIVES, RELEASES, RENOUNCES AND DISCLAIMS EXPECTATION OF OR RELIANCE UPON ANY SUCH WARRANTY OR WARRANTIES.  THIS PARAGRAPH SHALL NOT BE MODIFIED EXCEPT BY A WRITTEN AGREEMENT SIGNED ON BEHALF OF LESSOR AND LESSEE BY THEIR RESPECTIVE DULY AUTHORIZED REPRESENTATIVES.

 

18

 

APPENDIX B

TO

AIRCRAFT LEASE AND PURCHASE OPTION AGREEMENT

 

LEASE RATES:

 

I.                                         Fixed Monthly Fee

 

The fixed monthly fee shall be [***] per month.

 

II.                                     Hourly Rate

 

The hourly rate shall be [***] per Flight Hour.

 

III.                                 Other Applicable Rates

 

Costs of mobilization of the Aircraft and support equipment shall be borne by the Lessee.

 

If the Purchase Option is not exercised, then costs of demobilization of the Aircraft and support equipment to Central Point, Oregon (or a cost equivalent location of Lessor’s choice) shall be borne by the Lessee.

 

19

 

IN WITNESS WHEREOF, the parties hereto have executed this Aircraft Lease and Purchase Option Agreement the day and year first herein written above.

 

	
LESSOR:
    
	
 
    
	
ERICKSON AIR-CRANE INCORPORATED
    
	
 
    
	
 
    
	
By: 
    	
/s/   Udo Rieder
    	
 
    
	
Name: Udo Rieder
    
	
Title: President & CEO
    
	
 
    
	
 
    
	
LESSEE:
    
	
 
    
	
HRT NETHERLANDS, B.V.
    
	
 
    
	
 
    
	
By: 
    	
/s/   Marcio Rocha Mello
    	
 
    
	
Name:
    
	
Title:
    
	
 
    
	
 
    
	
HRT NETHERLANDS, B.V.
    
	
 
    
	
 
    
	
By: 
    	
/s/ Milton Romeu Franke
    	
 
    
	
Name:
    
	
Title:
    

 

 

Witnesses:

 

 

	
1.
    	
/s/   Rafaela C. Pontes Lopes
    	
 
    	
2.   
    	
/s/   Mayara Silva Pereira
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Name:
    	
Rafaela   C. Pontes Lopes
    	
 
    	
Name:
    	
Mayara   Silva Pereira
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
ID:
    	
55695387-2
    	
 
    	
ID:   
    	
13249377-6
    
									

 

20

 

ATTACHMENT A
  TO
 AIRCRAFT LEASE AND PURCHASE OPTION AGREEMENT

 

NOTICE OF OPTION LETTER

 

Date:                                            , 2011

 

TO:                            Erickson Air-Crane Incorporated
 Attention:  Mr. Udo Rieder, President & Chief Executive Officer

 

RE:                              Notice of Exercise of Purchase Option For Purchase of Erickson S-64E

 

Dear Mr. Rieder:

 

Pursuant to Clause 9.5 of that certain Aircraft Lease and Purchase Option Agreement (the “Agreement”) dated as of the 1st day of August, 2011, by and between HRT Netherlands B.V. and Erickson Air-Crane Incorporated, pertaining to that certain Erickson S-64E helicopter bearing manufacturer’s serial number 64015 (the “Aircraft”), this letter shall serve as formal notice of our intention to irrevocably exercise the option to purchase the Aircraft and together with this letter we have included a signed copy of the Aircraft Purchase Agreement, which we have dated effective as of the date of this letter.

 

 

	
Sincerely,
    	
 
    
	
 
    	
 
    
	
HRT NETHERLANDS, B.V.
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Title:
    	
 
    	
 
    

 

 

ATTACHMENT B TO AIRCRAFT LEASE
 AND PURCHASE OPTION AGREEMENT

 

HRT NETHERLANDS, B.V.

 

as Purchaser

 

and

 

ERICKSON AIR-CRANE INCORPORATED

 

as Seller

 

 

AIRCRAFT PURCHASE AGREEMENT IN RESPECT OF
 ONE (1) ERICKSON S-64E HELICOPTER

 

 

 

TABLE OF CONTENTS

 

	
 
    	
PAGE
    
	
ARTICLE
    	
 
    
	
 
    	
 
    
	
1.
    	
Definitions and Interpretation
    	
1
    
	
 
    	
 
    	
 
    
	
2.
    	
Aircraft Purchase; Crew Provisioning
    	
4
    
	
 
    	
 
    	
 
    
	
3.
    	
Delivery and Certification; Total Loss
    	
5
    
	
 
    	
 
    	
 
    
	
4.
    	
Aircraft Warranty
    	
6
    
	
 
    	
 
    	
 
    
	
5.
    	
Conditions Precedent
    	
8
    
	
 
    	
 
    	
 
    
	
6.
    	
Representations and Warranties
    	
10
    
	
 
    	
 
    	
 
    
	
7.
    	
Fees & Expenses
    	
12
    
	
 
    	
 
    	
 
    
	
8.
    	
Indemnities
    	
12
    
	
 
    	
 
    	
 
    
	
9.
    	
Taxes
    	
13
    
	
 
    	
 
    	
 
    
	
10.
    	
Insurance
    	
14
    
	
 
    	
 
    	
 
    
	
11.
    	
Assignment
    	
15
    
	
 
    	
 
    	
 
    
	
12.
    	
Amendment
    	
15
    
	
 
    	
 
    	
 
    
	
13.
    	
Notices
    	
16
    
	
 
    	
 
    	
 
    
	
14.
    	
Miscellaneous
    	
17
    
	
 
    	
 
    	
 
    
	
15.
    	
Governing Law
    	
19
    
	
 
    	
 
    	
 
    
	
16.
    	
Arbitration
    	
19
    
	
 
    	
 
    	
 
    
	
EXECUTION PAGE
    	
28
    

 

 

THIS AIRCRAFT PURCHASE AGREEMENT,  dated as of                             , 2011 (the “Effective Date”),  by and between:

 

(1)                                  HRT NETHERLANDS, B.V.,  a company organized and existing under the laws of Netherlands with its principle place of business at Strawinskylaan 3105 Atrium, 1077zx, Amsterdam (the “Purchaser”); and

 

(2)                                  ERICKSON AIR-CRANE INCORPORATED,  a corporation organized and existing under the laws of the State of Delaware, and having its offices at 5550 SW Macadam Avenue, Suite 200, Portland, Oregon 97239, USA (the “Seller”).

 

RECITALS

 

WHEREAS, Seller manufactures, sells and provides aftermarket parts and supports for its S-64 model helicopters throughout the world;

 

WHEREAS, Purchaser operates helicopters in connection with its oil and gas operations;

 

WHEREAS, Purchaser desires to purchase the Aircraft (as defined below) from the Seller, and Seller is willing to sell the Aircraft to Purchaser, on the terms and subject to the conditions set forth in this Agreement (as defined below);

 

NOW, THEREFORE, for good and valuable consideration, the parties agree as follows:

 

1.                                      DEFINITIONS AND INTERPRETATION

 

1.1                                 Definitions

 

The terms set forth in this Clause 1.1 when used in this Agreement shall have the meanings set forth herein:

 

1.1.1                        “Acceptance and Sale Certificate”  means an acceptance and sale certificate in the form set out in Exhibit I attached hereto.

 

1.1.2                        “Agreement”  means this aircraft purchase agreement together with the Schedules and Exhibits (which form an integral part hereof) as executed by the parties hereto, as the same may be amended, modified, novated, replaced or supplemented from time to time.

 

1.1.3                        “Aircraft” means the Used Erickson model S-64E aircraft bearing manufacturer’s serial number 64015, together with two (2) P&W dual engine JFTD 12A-4A engines bearing manufacturer’s serial numbers 672490 and 637125 as described on Schedule 1 hereto, including the airframe, the engines and all components and accessories(including, without limitation, (i) shock and pendant, (ii) bambi bucket, (iii) ferry tank, (iv) two 20,000 pound remote hooks, (v) two steel 200 foot long lines and (vi) fly away toolbox), as set forth on Schedule 1. Where the context permits, references to the “Aircraft” shall also mean and include the Aircraft Documentation.

 

1

 

1.1.4                        “Aircraft Documentation”  means the manuals, logbooks and other records relating to the Aircraft or any part thereof delivered by Seller to Purchaser, including two copies of the Aircraft flight and maintenance manuals (for service of the Aircraft) and one copy each of the service bulletins and the customer service letters current as of the date of Delivery.

 

1.1.5                        “ANAC” means Agência Nacional de Aviação Civil, or any successor entity thereof or other entity performing its functions in the future.

 

1.1.6                        “Balance of the Purchase Price”  means the Purchase Price minus the Deposit.

 

1.1.7                        “Business Day”  means any day of the year other than either a Saturday, Sunday or public holiday in United States of America (New York, New York or Portland, Oregon), the Netherlands and Brazil or a day on which banks are required to close in United States of America (New York, New York or Portland, Oregon), the Netherlands and Brazil.

 

1.1.8                        “Data”  means all information and data of any type, form or nature (including, but not limited to, designs, drawings, blueprints, manuals, layouts, software, specifications, technical publications, electronic transmitíais, and memoranda) which may be furnished or made available to Purchaser as the result of or in connection with this Agreement.

 

1.1.9                        “Delivery”  means, with respect to the Aircraft, the date and time at which all of the conditions precedent (as described under Article 5 of this Agreement) are either satisfied or waived in writing.  Notwithstanding the above, the parties agree that Delivery will be deemed to have occurred as soon as the Purchaser takes full possession and control of the Aircraft.

 

1.1.10                  “Delivery Date”  means the date the Delivery occurs, which the parties anticipate will occur no later than December 15, 2011.

 

1.1.11                  “Delivery Location”  means Manaus, Brazil or such other location agreed between the parties.

 

1.1.12                  “Deposit”  means a payment of [***] to be paid to Seller at the time set forth in Section 5.1 of the Lease Agreement.

 

1.1.13                  “FAA” means the United States Department of Transportation - Federal Aviation Administration.

 

1.1.14                  “Foreign Object Damage”  means any damage to the Aircraft caused by objects which are not part of the Aircraft.

 

1.1.15                  “Indemnified Expense”  means any and all liabilities, obligations, losses, damages, penalties, fines, claims (whether fraudulent, groundless, false or not), demands, actions, suits, judgments, legal proceedings (whether civil or criminal), 

 

2

 

investigations, costs, disbursements and expenses (including reasonable legal fees and disbursements) of every kind and nature whatsoever, other than taxes of any kind.

 

1.1.16                  “Lease Agreement”  or “Lease” means that certain Aircraft Lease and Purchase Option Agreement dated as of August 1, 2011, between ERICKSON AIR-CRANE INCORPORATED, as Lessor and HRT NETHERLANDS, B.V., as Lessee, which sets forth the full terms and conditions of the lease of the Aircraft and the option to purchase the Aircraft, in form and substance satisfactory to the parties thereto.

 

1.1.17                  “Lien”  means any lien, mortgage, security interest, lease or other charge or encumbrance or claim or right of others, both in law and equity, registered or unregistered, including, without limitation, rights of others under any engine or parts interchange, loan, lease, or pooling agreement.

 

1.1.18                  “Lien Holder”  means any person, corporation, limited liability company or other entity possessing a Lien interest in the Aircraft.

 

1.1.19                  “Purchase Price”  means the amount of [***], as defined under Clause 2.2 of this Agreement.

 

1.1.20                  “RAB”  shall mean the Brazilian Aeronautical Registry.

 

1.1.21                  “Sublessee” means HRT O & G Exploração e Produção de Petróleo Ltda, a corporation organized under the laws of the Federative Republic of Brazil.

 

1.1.22                  Technical Acceptance Letter”  means a Technical Acceptance Letter acknowledging the completion of the inspection of the Aircraft, Aircraft Documents and Inventory, in the form of Exhibit 3 attached hereto.

 

1.1.23                  “Total Loss” means loss of the Aircraft or loss of the use of the Aircraft due to (without limitation) theft, hi-jacking, disappearance, destruction, damage beyond repair, damage to the Aircraft which results in an insurance settlement, the condemnation or confiscation or the requisition of title by any government entity or taking of title to the Aircraft by any government entity or other rendering of the Aircraft permanently unfit for normal use for any reason whatsoever.

 

1.1.24                  “Transfer Taxes” shall mean any and all present and future sales, use, personal property, value added, withholding, transfer, customs, stamp, documentary or any other similar taxes, levies, imposts, duties, fees or withholdings, together with any penalties, fines, surcharges or interest thereon, whether paid or incurred by Seller or Purchaser, and “Taxation” shall be construed accordingly.

 

1.1.25                  “Warranty Bill of Sale”  means the Bill of Sale for the Aircraft in the form attached hereto as Exhibit 1.

 

3

 

1.2                                 Interpretation

 

Clause and Schedule headings are for ease of reference only and shall not affect the interpretation of any of the provisions hereof.  Words importing the singular number include the plural and vice versa.

 

2.                                      AIRCRAFT PURCHASE; CREW PROVISIONING

 

2.1                                 Sale and Purchase of Aircraft

 

Upon and subject to the terms and conditions of this Agreement, Seller hereby agrees to sell to Purchaser and Purchaser hereby agrees to purchase from Seller one (1) Aircraft.

 

2.2                                 Aircraft Purchase Price

 

The purchase price for the Aircraft shall be [***] ([***], the “Purchase Price”),  which amount shall be paid in accordance with the payment schedule set forth under Clause 2.3 hereof.

 

2.3                                 Payment of Purchase Price

 

2.3.1                        Upon and subject to the terms and conditions of this Agreement, Purchaser shall pay the Purchase Price for the Aircraft to Seller in accordance with the following payment schedule:

 

a)                                      the Deposit previously paid by Purchaser in accordance with the terms of the Lease Agreement shall be applied to the Purchase Price; and

 

a)                                      the Balance of the Purchase Price ([***]) shall be paid by wire transfer upon Purchaser’s signing of this Agreement, but in no event later than December 15, 2011

 

2.4                                 Payment Instructions

 

All payments made pursuant to this Agreement shall be made on the due date for payment by remittance in US Dollars, by wire transfer of immediately available funds, without any set-off or counterclaim whatsoever and free and clear of any deductions and withholdings, to the bank account set forth below:

 

[***]

 

4

 

2.5                                 Transfer Taxes

 

Except to the extent expressly agreed by the Parties under Article 9 of this Agreement, all payments to be made by Purchaser to Seller hereunder shall be made free and clear of, and without deduction for or on account of, any Transfer Taxes.

 

2.6                                 Crew Provisioning

 

Seller shall provide Purchaser with crewing services to include a training captain/instructor pilot, a crew chief and a mechanic until July 31, 2012.  The terms and conditions under which any crewing services will be provided by Seller to Purchaser shall be negotiated and agreed by the parties under a separate written crewing or support services agreement.

 

2.7                                 Training

 

As provided in the Lease Agreement and in accordance with the terms and conditions therein, Seller will continue to provide training for four (4) pilots per Aircraft.  The pilot training will include:

 

·                                          Ground School - up to forty (40) hours of ground school training and aircraft familiarization per pilot; and

 

·                                          Flight Training - up to ten (10) flight hours per pilot to be accomplished on the Purchaser’s Aircraft.

 

In addition, Seller will continue to provide training for four (4) maintenance technicians per Aircraft.  The maintenance technician training will include up to two hundred forty (240) hours of training per technician.

 

3.                                      DELIVERY AND CERTIFICATION; TOTAL LOSS

 

3.1                                 Delivery; Aircraft Condition

 

The Delivery of the Aircraft shall be made to Purchaser on the Delivery Date in the following condition:

 

The Aircraft will be configured and equipped as specified in the Aircraft description attached hereto as SCHEDULE 1 and in the same condition as during the Inspection (as defined in Section 5.2 hereof);

 

The Aircraft will have a valid certificate of airworthiness or export certificate of airworthiness issued by the FAA, dated as of a date on or following August 1, 2011 but prior to the date the Aircraft is registered with the RAB

 

5

 

The Aircraft will be in an airworthy condition, with all systems and installed equipment and engines in normal working order and operating to manufacturer’s specifications, normal wear and condition of used parts and components excepted;

 

The Aircraft will be up to date on all manufacturer’s required maintenance and inspection schedules (including all calendar and hourly inspections), and in compliance with all applicable airworthiness directives and manufacturers’ mandatory service bulletins (or equivalents) that have been issued with respect to the Aircraft on or before the Delivery Date;

 

With no parts, systems or components installed in the Aircraft on a temporary loan or exchange basis;

 

With all Aircraft Documentation in the possession of Seller as disclosed during the Inspection;

 

The Aircraft will be delivered with “no damage history” relating to the Aircraft; and

 

The Seller has not used the Aircraft for more than fifty (50) flight hours during the period commencing on the date of that certain Letter of Intent between the Seller and Purchaser dated July 6, 2011 and ending on the commencement date of the term of the Lease.

 

3.2                                 Acceptance of the Aircraft; Transfer of Title and Risk

 

Upon Delivery of the Aircraft by Seller to Purchaser at the Delivery Location in the condition as set forth and agreed in Clause 3.1 hereof, Purchaser shall be deemed to have accepted the Aircraft, and title to, and all risk of Loss in, said Aircraft shall immediately pass from Seller to Purchaser.

 

3.3                                 ANAC Certification

 

3.3.1                        Aircraft Type Certification.  Seller agrees, at its expense (a) to provide all relevant documents (in each case, in the English language ) that may be required to complete type certification of the Aircraft in Brazil and permit ANAC to issue a certificate of airworthiness for the Aircraft in order to register the Aircraft with ANAC, and (b) to obtain such certificate of airworthiness, including completing all modifications on the Aircraft (if any) required by ANAC in order for ANAC to issue such certificate of airworthiness.

 

3.3.2                        Aircraft Registration.  Purchaser agrees, at its expense (a), to cause the certificate of airworthiness for the Aircraft that was issued by ANAC and delivered to Purchaser pursuant to the terms of Clause 3.3.1 to be certified by and registered with ANAC and (b) to take all other actions, including, without limitation, paying all applicable import fees.

 

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3.3.3                        Crewing Certification.  Purchaser agrees to be solely responsible, at its expense but with the commercially reasonable cooperation of Seller, to obtain from ANAC and from any other applicable governmental authority in Brazil (including, without limitation, those authorities responsible for immigration, work permits, visas and taxation), any and all permits, certifications, or consents (or extensions thereof) with respect to the performance by Seller of the crew provisioning services for Purchaser.  If Purchaser is unable to obtain the required certifications, the parties agree that Seller shall not be in breach of this Agreement, nor held liable for any resulting damages, unless the delay is the direct result of Seller’s failure to cooperate with Purchaser.

 

3.4                                 Total Loss

 

If, before Delivery, the Aircraft suffers a Total Loss (a “Totaled Aircraft”).  Purchaser will have the option to choose one of the following:

 

3.4.1                        based on the availability of aircraft in Seller’s fleet and with no obligation whatsoever to adjust its fleet lease schedule in any way, Seller may offer a replacement fleet aircraft to Purchaser; or

 

3.4.2                        in the event that delivery of a replacement aircraft (with identical features and specifications) cannot be made by Seller to Purchaser within three (3) months of the original delivery date for the Totaled Aircraft, elect to cancel the sale of the Totaled Aircraft, in which case Seller shall refund all advance payments made by Purchaser to Seller for said Totaled Aircraft.

 

4.                                      AIRCRAFT WARRANTY

 

4.1                                 Seller warrants for a period of [***] from the date of Delivery, whichever comes first, with respect to the Aircraft, that Seller will, subject to the terms and conditions set forth below, be exclusively responsible for and will repair or replace, at Seller’s sole discretion and expense, any part or component delivered by Seller on the date of Delivery which is or becomes unserviceable during the above warranty period.  The term “unserviceable” means that such part or component has failed prior to its scheduled repair/overhaul interval.

 

4.2                                 The warranty provided in Clause 4.1 does not apply to, and Seller shall not bear any responsibility to repair or replace, any part or component rendered unserviceable due to (i) improper storage, use or operation, or abuse or negligent acts or omissions of Purchaser or any third party, (ii) failure of Purchaser or any third party to properly install, service, or maintain such part or component, (iii) failure of the Purchaser to operate the Aircraft or maintain the Aircraft in accordance with all Aircraft operations and maintenance manuals, (iv) the failure of parts not supplied by Seller, (v) accident or incident or any other causes external to the parts/components covered by this warranty, (vi) any Foreign Object Damage, and (vii) any failure of Purchaser to operate the Aircraft in accordance with Seller specifications and limitations, including any specific limitations

 

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relating to operations of the Aircraft in a desert environment prior to Seller’s installation of the engine air particle separator components.

 

4.3                                 The warranty period applicable to any part or component repaired or replaced pursuant to this limited warranty is the remainder of the warranty period described in Clause 4.1 that is in effect on the date that such Part is repaired or replaced.

 

4.4                                 Purchaser must discover any unserviceable part or component within the warranty period and shall, promptly (and in no event more than three (3) business days after such discovery) notify Seller in writing of such unserviceable part.  Purchaser, at its own cost and expense shall ship the affected item C.I.F. to Seller’s facility in Central Point, Oregon and shall bear all risk of loss of or damage to the item during shipment.  Seller shall promptly ship the repaired or replacement item C.I.F. to Purchaser’s base of operation in Brazil (or such other designated location) at Seller’s cost and expense and shall bear all risk of loss of or damage to such item during shipment.  If Seller, substantiated on a technical statement, determines that any Part shipped to it for warranty repair or replacement was not unserviceable, then Purchaser shall be responsible for the return of the item to it FOB Central Point at its cost and expense and shall bear all risk of loss of or damage to the item and, further, Purchaser shall pay to Seller the cost to inspect the item and return it to service at Seller’s then prevailing retail prices charged to customers in the ordinaiy course of its business.  Such payment shall be made net no more than thirty (30) days from the date of Seller’s invoice.

 

4.5                                 EXCEPT AS SPECIFICALLY AND EXPRESSLY SET FORTH IN THIS AGREEMENT, ITS SCHEDULES, EXHIBITS OR AMENDMENTS OR IN THE ACCEPTANCE AND SALE CERTIFICATE WITH RESPECT TO TITLE, THE SELLER MAKES NO REPRESENTATIONS WHATSOEVER IN RESPECT OF THE AIRCRAFT, AND THE SELLER SPECIFICALLY DISCLAIMS, AND EXCLUDES (i) ANY EXPRESS OR IMPLIED WARRANTY OR REPRESENTATION AS TO CONDITION, DESCRIPTION, AIRWORTHINESS, VALUE, SATISFACTORY QUALITY, DESIGN, QUALITY, MANUFACTURE OR OPERATION OF ANY KIND OR NATURE, (ii) ANY EXPRESS OR IMPLIED REPRESENTATION OR WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, (iii) ANY IMPLIED REPRESENTATION OR WARRANTY ARISING FROM COURSE OF PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE, AND (iv) ANY OBLIGATION OR LIABILITY FOR LOSS OF USE, REVENUE OR PROFIT WITH RESPECT TO THE AIRCRAFT, OR FOR ANY LIABILITY OF THE PURCHASER TO ANY THIRD PARTY OR FOR ANY OTHER DIRECT, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGE WHATSOEVER.

 

4.6                                 It is anticipated that following the parties execution of this Agreement they will enter into a separate after-market support services agreement pursuant to which the Seller will provide full parts and components support to Purchaser in exchange for a fixed flight hour rate as more particularly described in the Lease Agreement.  The parties hereby agree that upon the execution of such support services agreement, the warranty provided

 

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under this Agreement, with respect to the Aircraft, will terminate and be of no further force and effect.

 

5.                                      CONDITIONS PRECEDENT

 

5.1                                 Conditions Precedent to Seller’s Obligations

 

The obligations of Seller to sell and deliver to Purchaser each Aircraft in accordance with the terms and conditions of this Agreement are subject to the following conditions precedent being fulfilled to the satisfaction of, or waived in writing by, Seller

 

a)                                      this Agreement shall have been executed and delivered by Purchaser;

 

b)                                     the insurance certificates and brokers letter of undertaking required by Clause 10.4 of this Agreement shall have been delivered to Seller, and Purchaser shall otherwise be in compliance with Clauses 10.3 and 10.4 hereof; and

 

c)                                      Seller shall have received all payments required by Clause 2.3 hereof.

 

5.2                                 Conditions Precedent to Purchaser’s Obligations

 

Purchaser’s obligation to purchase and accept the Aircraft from Seller on the Delivery Date shall be subject to the following conditions precedent:

 

(a)                                  completion of an inspection of the Aircraft by Purchaser and an inspection conducted by team designated by Purchaser; and a finding in Purchaser’s sole and reasonable discretion, that the Aircraft is in acceptable condition (as set forth in Clause 3.1 hereof) in the Delivery Location, on or before December 15, 2011.  Should the Purchaser not accept in writing the condition of the Aircraft by such date, the Deposit paid to the Seller for the Aircraft pursuant to Purchase Price Payment hereof (to the extent not applied to the Lease) shall immediately be repaid to Purchaser within five (5) Business Days and the obligations of the Purchaser under this Agreement shall terminate;

 

(b)                                 completion of the purchase of the Aircraft hereunder shall be subject to the Purchaser agreeing in writing to a final Aircraft description including:  the Aircraft Specification (Schedule 1) on or before the Delivery Date.  This condition shall be deemed satisfied if Purchaser agrees to and signs the Technical Acceptance Letter attached hereto as Exhibit 3. Should the Purchaser and Seller not agree in writing to the Aircraft description by the Delivery Date, the Deposit paid to Seller for the Aircraft pursuant to Purchase Price Payment hereof (to the extent not applied to the Lease), shall immediately be repaid to Purchaser within five (5) Business Days and the obligations of the Purchaser under this Agreement shall terminate;

 

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(c)                                  the Seller shall not be in breach or default of any of the Seller’s obligations arising under this Agreement or the Lease;

 

(d)                                 all of the Seller’s representations set forth herein shall be true and accurate;

 

(e)                                  the Seller shall pay all amounts required to release any Liens upon the Aircraft, especially the lien in favor of Wells Fargo Bank N.A. pursuant to the aircraft security agreement between Seller and Wells Fargo Bank N.A. dated June 24, 2010.  The Release shall be duly executed by Wells Fargo Bank, or any other entity, and demonstrated to Purchaser; and

 

(f)                                    the Seller shall deliver to the Purchaser:

 

(i)                                     A Commercial Invoice substantially in the form attached hereto as Exhibit 2;

 

(ii)                                  A copy of electronic confirmation from the International Registry that the Seller is a registered Transaction User Entity under the Cape Town Treaty;

 

(iii)                               A copy of the written Release of Lien Holders, especially Wells Fargo Bank releases, and companion forms of releases filed before the competent authorities, whereby the Aircraft will not be subject to any Lien(s), as may be reasonably required by applicable government registries including, but not limited to the FAA and International Registry;

 

(iv)                              A copy of the fully executed Warranty Bill of Sale executed by the Seller transferring title to the Aircraft in the form attached hereto as Schedule 1;

 

(v)                                 A copy of the fully executed Bill of Sale for the Aircraft in a form acceptable to record the transfer of title in and to the Aircraft, as may be reasonably required with applicable government aircrafts registries including the FAA and the International Registry;

 

(vi)                              A certificate executed by an officer of the Seller certifying for and on behalf of the Seller that the representations and warranties of the Seller in this Agreement are true and correct on the Delivery Date, and that the Seller has performed and complied with all of its obligations, covenants and agreements in this Agreement to be performed or complied with by it; and

 

(vii)                           Such other certificates, documents and instruments, duly executed, which in the opinion of the Purchaser, acting reasonably, are necessary or desirable to effect and evidence the sale, conveyance,

 

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transfer and delivery to Purchaser of the Seller’s right, title and interest in and to the Assets free and clear of all Liens.

 

The conditions set out in this Section 5.2 are for the exclusive benefit of the Purchaser and may be waived by the Purchaser in writing prior to Closing.

 

Each of the parties will use commercially reasonable efforts to cause the conditions to the parties’ obligations to consummate the transactions contemplated hereby to be satisfied.

 

5.3                                 Delivery

 

Upon the satisfaction or written waiver of all conditions written in Clauses 5.1 and 5.2 hereof, the Delivery shall have occurred.

 

The Aircraft shall be located at the Delivery Location at the time of the Delivery.  The Purchaser shall be responsible for all Brazilian taxes, import Licenses and permits, and import duties and fees.  The Purchaser will be responsible, at its expense, for the registration of the Aircraft with Brazilian authorities including but not limited to ANAC (Agência Nacional de Aviação Civil).  The Seller shall package the Aircraft for shipment to the Delivery Location at its expense.

 

6.                                      REPRESENTATIONS AND WARRANTIES

 

6.1                                 Representations and Warranties of Seller

 

Seller hereby represents and warrants to Purchaser as of the date hereof that:

 

6.1.1                        Seller is a corporation validly existing under the laws of the State of Delaware (US) and has the corporate power to enter into and perform the transactions contemplated by this Agreement.  The execution, delivery and performance of this Agreement have been duly authorised by all necessary corporate action on the part of Seller;

 

6.1.2                        each consent required by Seller to authorise, or required by it in connection with the execution, delivery, performance, legality, validity or enforceability of this Agreement has been obtained and is in full force and effect, and there is no default in the observance or performance of any of the conditions and restrictions (if any) imposed on or in connection therewith;

 

6.1.3                        the entry by Seller into, and performance by Seller of the transactions contemplated by, this Agreement does not and will not conflict with:  (i) any law or regulation or any official or judicial order applicable to Seller; (ii) the constitutional documents of Seller; or (iii) any material agreement or document to which Seller is a party or by which Seller or any of its properties is bound; and

 

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6.1.4                        upon Delivery, Seller shall convey to Purchaser good title to the Aircraft, free and clear of any Liens, encumbrances, other than those created or granted by or through Purchaser.

 

6.1.5                        the Aircraft is being delivered with all systems in airworthy and fully operational condition as determined pursuant to manufacturer’s published specifications, tolerances and guidelines, and current on the manufacturer’s maintenance program in compliance with all required time and calendar maintenance actions.

 

DISCLAIMER AND LIMITATION OF LIABILITY.  EXCEPT AS EXPRESSLY SET FORTH IN THIS PURCHASE AGREEMENT INCLUDING THE SELLERS WARRANTY OF GOOD, MERCHANTABLE AND CLEAR TITLE OF THE ASSETS, THE ASSETS ARE BEING SOLD AND DELIVERED TO PURCHASER IN “AS IS, WHERE IS” CONDITION.  SUBJECT TO THE WARRANTIES SET FORTH HEREIN, THE PURCHASER AGREES THAT THERE SHALL BE NO REPRESENTATIONS, WARRANTIES OR CONDITIONS, EITHER EXPRESSED OR IMPLIED, AS TO THE FITNESS OR DESIGN OF THE AIRCRAFT OR ITS MERCHANTABILITY, ITS FITNESS FOR ANY PARTICULAR PURPOSE, THE QUALITY OR CAPACITIES OF THE MATERIALS OR COMPONENTS IN THE AIRCRAFT OR ITS WORKMANSHIP THE PURCHASER RELINQUISHES ANY RECOURSE AGAINST THE SELLER, ITS OFFICERS, DIRECTORS, AGENTS AND ITS INSURERS AND RELEASES THE SELLER, ITS OFFICERS, DIRECTORS, AGENTS OR ITS INSURERS IN RESPECT TO ANY CLAIM THAT MAY ARISE EITHER AGAINST THE SELLER OR AGAINST THE PURCHASER IN RESPECT OF ANY INCIDENT OR ACCIDENT CALLING INTO QUESTION THE AIRCRAFT DESIGN OR MANUFACTURE.

 

6.2                                 Representations and Warranties of Purchaser

 

Purchaser represents and warrants to Seller as of the date hereof that:

 

6.2.1                        Purchaser is a company validly existing under the laws of the Netherlands and has the corporate power to enter into and perform the transactions contemplated by this Agreement.  The execution, delivery and performance of this Agreement have been duly authorised by all necessary corporate action on the part of Purchaser;

 

6.2.2                        each consent required by Purchaser to authorise, or required by it in connection with the execution, delivery, performance, legality, validity or enforceability of this Agreement has been obtained and is in full force and effect, and there is no default in the observance or performance of any of the conditions and restrictions (if any) imposed on or in connection therewith; and

 

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6.2.3                        the entry by Purchaser into, and performance by Purchaser of the transactions contemplated by, this Agreement does not and will not conflict with:  (i) any law or regulation or any official or judicial order applicable to Purchaser; (ii) the constitutional documents of Purchaser; or (iii) any material agreement or document to which Purchaser is a party or by which Purchaser or any of its properties is bound.

 

7.                                      FEES & EXPENSES

 

Each of Purchaser and Seller shall be responsible for its own costs and expenses, including legal fees, incurred by each of them in connection with the negotiation, preparation and execution of this Agreement, regardless of whether the Aircraft are, in fact, sold by Seller to Purchaser hereunder.  In addition, Purchaser shall be responsible at its own expense for obtaining and maintaining any governmental and other licences, approvals, consents, certificates, exemptions, registrations and filings necessary for the ownership, leasing, registration, maintenance, use or operation of the Aircraft on and after Delivery.  Subject to the provisions of Clause 3.3, Seller and Purchaser will, at Purchaser’s expense, execute and file documents with ANAC with respect to the sale and registration of the Aircraft hereunder.

 

8.                                      INDEMNITIES

 

8.1                                 Purchaser’s Indemnities

 

Purchaser shall indemnify, defend, save and keep harmless Seller and each of its respective successors, assigns, and affiliates, and each of their respective officers, directors, shareholders, agents, and employees, including, without limitation, those persons engaged in any crew provisioning (collectively, the “Seller Indemnitees”)  for, from and against, and on written demand shall pay or reimburse each Seller Indemnitee for the payment of, any and all Indemnified Expenses imposed on, incurred by or asserted against any Seller Indemnitee to the extent relating to or arising directly or indirectly out of or in any way connected with (i) the breach by Purchaser of any obligation, representation or warranty hereunder, or (ii) from and after the date of Delivery of the first Aircraft hereunder, the ownership, possession, maintenance, modification, control, use, operation, sale, leasing or other application or disposition of the Aircraft or any engine or part thereof or interest therein, whether by Seller, Purchaser or any other person or party; provided, however, that such Indemnified Expenses are not attributable to the gross negligence or wilful misconduct of a Seller Indemnitee or the breach by Seller of any express warranty, representation or obligation hereunder.

 

Purchaser shall indemnify, defend and hold harmless each of the Seller Indemnitees (and each of their respective successors and assigns) from and against all Indemnified Expenses arising from (i) the death of or injury to any employee, agent, representative or contractor of Purchaser or (ii) the loss of or damage to any property of Purchaser or any employee, agent, representative or

 

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contractor of Purchaser, in connection with or arising out of any activity of Purchaser or any employee, agent, representative or contractor of Purchaser, including, without limitation, with respect to any acceptance flight, demonstration flight, monitoring or inspection of the Aircraft and the correction of any non-conformities whether or not arising from the negligence of any such indemnified person.

 

8.2                                 Seller’s Indemnities

 

Seller shall indemnify, defend, save and keep harmless Purchaser and each of its respective successors, assigns, and affiliates, and each of their respective officers, directors, shareholders, agents, and employees (collectively, the “Purchaser Indemnitees”)  for, from and against, and on written demand shall pay or reimburse each Purchaser Indemnitee for the payment of, any and Indemnified Expenses imposed on, incurred by or asserted against any Purchaser Indemnitee to the extent relating to or arising directly or indirectly out of or in any way connected with (i) the breach by Seller of any obligation, representation or warranty hereunder or (ii) prior to the date of Delivery of the first Aircraft hereunder, the ownership, possession, control, use, or operation of the Aircraft or any engine or part thereof or interest therein; provided, however, that such Indemnified Expenses are not attributable to the gross negligence or wilful misconduct of a Purchaser Indemnitee or the breach by Purchaser of any express warranty, representation or obligation hereunder.

 

8.3                                 Claims for Indemnification

 

If a claim is made by a third party against a Purchaser Indemnitee or a Seller Indemnitee (such indemnitee, an “Indemnified Party”)  for any such Indemnified Expenses, the relevant Indemnified Party shall promptly notify the indemnifying party upon receiving notice of such claim.  If requested by the indemnifying party in writing, such Indemnified Party will, at the expense of the indemnifying party, take such action as the indemnifying party or any insurer defending such claim may reasonably direct with respect to such claim.  If a claim is made against a Seller Indemnitee for any such Losses, the relevant Seller Indemnitee shall promptly notify Purchaser upon receiving notice of such claim.  If requested by Purchaser in writing, such Seller Indemnitee will, at Purchaser’s expense, take such action as Purchaser or the insurer defending such claim may reasonably direct with respect to such claim.  Notwithstanding any other provision of this Agreement, the obligations of parties under this Article 8 will survive the Delivery of the Aircraft and the delivery of Crew Provisioning.

 

9.                                      TAXES

 

9.1                                 Each of Seller and Purchaser shall cooperate and use reasonable efforts to avoid or minimise any and all Transfer Taxes or other taxes (such as taxes based on gross or net income, profits or revenue, or franchise or doing business) imposed on or arising out of the sale of the Aircraft to Purchaser by Seller or otherwise imposed on the transactions

 

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contemplated by this Agreement.  Notwithstanding the foregoing, (a) any and all applicable Transfer Taxes charged or imposed by the government of Brazil arising out of the Delivery of the Aircraft or any engine or part thereof or the fulfilment by Purchaser of its obligations hereunder shall be the sole responsibility and liability of Purchaser and (b) any and all applicable Transfer Taxes charged or imposed in the United States or by the United States arising out of the Delivery of the Aircraft or any engine or part thereof shall be the sole responsibility and liability of Seller.

 

9.2                                 Each party will indemnify and hold the other party harmless on demand from and against any and all Transfer Taxes levied or imposed against or upon such other party that are payable by the indemnifying party pursuant to Clause 9.1, and any taxes and expenses of any kind whatsoever assessed against such other party that are attributable to any payment made by the indemnifying party pursuant to this Clause 9.2.

 

9.3                                 If a claim is made against a party for any Transfer Taxes required to be indemnified pursuant to Clause 9.2, the claiming party shall promptly notify the indemnifying party.  Following receipt of such notice or upon receipt of any claim made by a taxing authority against the claiming party directly, the indemnifying party shall promptly pay and discharge when due any and all Transfer Taxes and, as the case may be any other taxes or expenses described in Clause 9.2, the responsibility and liability for which is assumed by the indemnifying party pursuant to the provisions of Clauses 9.1 and 9.2.

 

10.                               INSURANCE

 

10.1                           Seller shall, at no expense to Purchaser, maintain until the date of Delivery, liability insurance (including war risks and allied perils, including passengers and third parties, cargo and baggage, products liability and property damage) in respect of the Aircraft in an amount of not less than [***] in respect of any one accident or occurrence (but in the aggregate in respect of products and personal injury liability).

 

10.2                           Seller shall, during the period of time for which Crew Provisioning services are provided hereunder, maintain workers compensation insurance and any other insurance required by applicable statute or regulation for the benefit of Seller’s employees providing Crew Provisioning pursuant to this Agreement.

 

10.3                           Purchaser shall, at no expense to Seller, maintain as of the date of Delivery for the Aircraft delivered hereunder, liability insurance (including war risks and allied perils, including passengers and third parties, cargo and baggage, products liability and property damage) in respect of the Aircraft, including cover for the Seller Indemnitees, in an amount of not less than [***] in respect of any one accident or occurrence (but in the aggregate in respect of products and personal injury liability).

 

10.4                           The insurance policies in respect of such insurance shall be (a) in the case of Seller, Seller’s existing insurance policy, the details of which will be confirmed in

 

15

 

writing to Purchaser by the applicable insurer or broker, and (b) in the case of Purchaser, in form and substance, and underwritten by insurers, satisfactory to Seller, and be delivered to Seller on or before the date of Delivery, and such insurance policies shall include provisions whereby:

 

a)                                      the Seller Indemnitees are named as additional named insureds for their respective rights and interests;

 

b)                                     the insurers under any hull policy for the Aircraft shall waive all rights of subrogation against the Seller Indemnitees to the extent of the indemnity under Clause 8.1 of this Agreement; and

 

c)                                      if such insurance is cancelled or allowed to lapse for any reason whatsoever, or if any material change is made in such insurance that adversely affects the interest of any Seller Indemnitee, such cancellation, lapse or change shall not be effective as to any Seller Indemnitee for 30 days (or 7 days or such other period as is then customarily obtainable in the industry in the case of any war and allied perils liability coverage) after giving notice from such insurers or Purchaser’s appointed insurance broker to Seller.

 

Within ten (10) business days of the effectiveness of this Agreement, Seller shall deliver to Purchaser an original insurance certificate confirming that Seller has complied with its obligations hereunder.  On or before the date of Delivery of the Aircraft, and at each renewal of the required insurances, Purchaser shall deliver to Seller originals of each insurance certificate and broker’s letter of undertaking in relation to the Aircraft confirming that Purchaser has complied with its obligations hereunder.

 

11.                               ASSIGNMENT

 

Neither party shall assign or transfer its rights, obligations or interests hereunder without the prior written consent of the other party, such consent not to be unreasonably withheld, delayed or conditioned; provided, however, that in the case of any assignment requested by Purchaser, consent by Seller will be contingent upon Seller’s sole and absolute determination that any requested assignee (i) is creditworthy and (ii) is willing and able to, and does, assume (in writing) all obligations of Purchaser under this Agreement.  The terms “Purchaser” and “Seller”  when used herein, shall be deemed to include their respective successors and permitted assigns.

 

12.                               AMENDMENT

 

Neither this Agreement nor any provision hereof (including, for the avoidance of doubt, this Article 12) may be amended, supplemented, changed, waived, discharged or terminated, except pursuant to a statement in writing signed by each of Seller and Purchaser.

 

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13.                               NOTICES

 

13.1                           Notices

 

Every notice, request, demand or other communication under this Agreement shall be in writing and either sent by an internationally recognized overnight courier service to the parties’ business addresses (set forth above), in which case notice shall be deemed delivered as of the date shown on the courier’s delivery receipt; sent by telecopy during business hours of the recipient, with a copy of the notice also deposited in the mail (postage prepaid) the same business day, in which case notice shall be deemed delivered on transmittal by telecopy provided that a transmission report is generated reflecting the accurate transmission of the notices; sent by electronic mail to the email addresses set forth below, in which case notice shall be deemed delivered immediately after the message delivery, unless the sender receives an error message; or sent by mail, postage prepaid, in which case notice shall be deemed delivered as of five business days after deposit in the mail, addressed as follows:

 

	
to   Purchaser to:
    
	
 
    
	
Address:
    	
HRT   NETHERLANDS, B.V.
    
	
 
    	
Strawinskylaan   3105 Atrium, 1077zx, Amsterdam,
    
	
 
    	
Netherlands
    
	
 
    	
 
    
	
Fax:
    	
(55) 21 -2105-9713
    
	
Email:
    	
Milton@hrt.com.br/
    
	
Attention:
    	
Milton   Franke
    
	
 
    
	
With   a copy to:
    
	
 
    
	
Address:  Av.    Atlantica 1130, 10th floor., Copacabana, Rio de   Janeiro,Brazil.
    
	
Email:   jpedroso@hrt.com.br/
    
	
Attention:
    	
Jorge   Pedroso
    
	
 
    
	
to   Seller to:
    	
 
    
	
 
    
	
Address:
    	
ERICKSON   AIR-CRANE INCORPORATED
    
	
 
    	
5550   SW Macadam Avenue, Suite 200, Portland, Oregon 97239
    
	
 
    	
 
    
	
Fax:
    	
1-503-473-8540
    
	
Email:
    	
erizzuti@ericksonaircrane.com
    
	
Attention:
    	
Edward Rizzuti, General Counsel
    
	
 
    	
 
    
	
With   a copy to:
    
	
 
    
	
Fax:
    	
1-503-473-8540
    
	
Attention:
    	
Steve   Crowley, Charles Ryan
    
			

 

or to such other address, email or facsimile number as is notified by one party to the other under this Agreement.

 

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13.2                           English Language

 

All notices, requests, demands, or other communication under this Agreement, unless made in the English language, shall (unless expressly provided to the contrary) be accompanied by an English translation and the English version of all such documents, notices, communications, evidence, reports, opinions and other documents shall, to the extent permitted by applicable law, prevail in the event of any conflict with the non-English version thereof.

 

14.                               MISCELLANEOUS

 

14.1                           Entire Agreement

 

This Agreement (including all Exhibits, Schedules and documents attached hereto) contains the entire agreement and understanding between Seller and Purchaser relating to the subject matter hereof, and supersedes any and all prior understandings, and agreements, whether written or oral, in regard to such matters.  For the avoidance of doubt, the parties hereby expressly agree that upon the parties’ execution of this Agreement, the Lease and Option Agreement shall automatically terminate and shall be of no further force and effect.

 

14.2                           Delay in Exercising Rights

 

No failure or delay on the part of either party in exercising any right, power or remedy under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise by either party of any such right, power or remedy preclude any other or further exercise thereof or the exercise of any other right, power or remedy.

 

14.3                           Further Assurances

 

Each party shall from time to time do and perform such other and further acts and execute and deliver any and all such further documents and instruments as may be required by law or reasonably requested in writing by the other to establish, maintain and protect the rights and remedies of the other and to carry out and effect the intent and purposes of this Agreement.

 

14.4                           Rights Cumulative

 

Nothing contained in this Agreement shall be construed to limit in any way any right, power, remedy or privilege of each party hereunder or now or hereafter existing at law or in equity.

 

14.5                           Counterparts

 

This Agreement may be executed in any number of counterparts and by each of the parties hereto in separate counterparts, each of which when so executed shall

 

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be deemed to be an original, and all of which, taken together, shall constitute one and the same instrument.

 

14.6                           Severability

 

If any provision of this Agreement shall become invalid, illegal or unenforceable in any respect under any law, the validity, legality and enforceability of the remaining provisions of this Agreement shall not in any way be affected or impaired

 

14.7                           Data and Confidentiality

 

All Data is proprietary to and shall remain the property of Seller.  All Data is disclosed to Purchaser in confidence, and shall neither (1) be used by Purchaser or be furnished by Purchaser to any other person or entity for the design or manufacture of any products, articles, compositions of matter, or processes or otherwise to compete with Seller in any way, nor (2) be permitted out of Purchaser’s possession, or divulged to any other person or entity except as otherwise agreed by Seller in writing, nor (3) be used in the creation, manufacture, development or derivation of any repairs, modifications, designs or configuration changes to or related to the Aircraft, or to obtain FAA or any other government or regulatory approval of any of the foregoing.  If consent is given, in writing by Seller, for reproduction in whole or in part of any Data, any existing notice or legend, including notices and legends identifying the confidential or proprietary nature of such Data, shall appear in any such reproduction.  Nothing in this Clause shall preclude Purchaser from using Data for the overhaul or maintenance by Purchaser of the Aircraft for its own use; except that all repairs or repair processes that require substantiation will be the subject of a separate license and substantiated repair agreement between Seller and Purchaser.  Purchaser shall be responsible for, and take all steps necessary to insure, compliance by its employees and agents with this Clause.  Nothing in this Agreement shall convey to Purchaser the right to use Data to create, manufacture, develop, or cause the reproduction of any aircraft, spare part, or part or component thereof, of a design identical or similar to that of the Aircraft purchased hereunder or to use Data to develop any repair for the Aircraft or give to Purchaser a license under any patents or rights owned or controlled by Purchaser.

 

The content of this Agreement is confidential and neither party shall publicize the existence or content of this Agreement without the prior written consent of the other party, except (i) to the extent required by law or to enforce this Agreement; or (ii) to the extent necessary for disclosure to both parties’ respective insurers, accountants, legal counsel or other professional advisors, for whom each party hereto shall be responsible to take all steps necessary to insure compliance by those persons with this Clause.

 

19

 

14.8                           No Partnership

 

No partnership, joint venture or other relationship between the parties whereby any party may be held liable for the acts or omissions of the other party is intended or created by this Agreement.

 

14.9                           Government Authorization; Export Shipment

 

The parties shall be responsible for obtaining required export licenses and import licenses and other required governmental authorization as set forth in Clause 3.3 above, and shall be responsible for complying with all applicable U.S. and Brazilian government licensing and reporting requirements related thereto.

 

15.                               GOVERNING LAW

 

This Agreement shall be governed by and construed in accordance with the laws of Brazil (excluding the United Nations Convention on Contracts for the International Sale of Goods), without giving effect to the conflicts of laws principles thereof.

 

16.                               ARBITRATION

 

16.1                           In the event that any controversy, dispute, or demand arises from this Agreement, its fulfilment, breach, cancellation, expiration or validity, the parties agree to try their best efforts to resolve the dispute on a friendly basis, within 15 (fifteen) days from the notice of any of the parties to the other party informing of the controversy.

 

16.2                           Any controversies, disputes, actions, causes of action, or other claims arising out of or in connection with the provisions of this Agreement which cannot be settled by mutual agreement shall be finally settled by arbitration in London, England under the rules of arbitration of the International Chamber of Commerce, by one arbitrator appointed in accordance with said rules.  All arbitration proceedings shall be conducted in the English language.  The arbitrator shall decide any such dispute or claim strictly in accordance with the governing law specified in Article 15 hereof.  The arbitrator may enter a default decision against any party who fails to participate in the arbitration proceedings.

 

16.3                           The costs and expenses of the arbitration, including, without limitation, the fees of the arbitrator, shall be borne equally by each party to the dispute or claim and each party shall pay its own fees, disbursements and other charges of its counsel.  The arbitrator shall have the power to award reasonable interest on any sum awarded pursuant to the arbitration proceedings and such sum would carry interest, if awarded, until the actual payment of such amounts.

 

16.4                           Each party hereto waives to the fullest extent permitted by law any right it may otherwise have under the laws of any jurisdiction to any form of appeal of, or collateral attack against, such award.  Any award or decision by the arbitration tribunal shall be final, non- appealable and binding upon the parties, and judgment upon any award may be entered in any court having jurisdiction, or application may be made to such court for a judicial acceptance of the award and an order of enforcement, as the case may be.

 

20

 

Schedule 1 to Aircraft Purchase Agreement

 

The Aircraft

 

S-64E HELICOPTER

 

Main Features S-64 E Helicopter

General Arrangement

 

	
Wheeled   Landing Gear Type
    	
 
    	
Standard
    
	
Dual   Engine P & W JFTD12A-4A 4,500 SHP X 2
    	
 
    	
Standard
    
	
Engine   Fire Detection System
    	
 
    	
Standard
    
	
6   Blade Fully Articulated Main Rotor Head
    	
 
    	
Standard
    
	
4   Blade Tail Rotor Head
    	
 
    	
Standard
    
	
Fuel   Capacity, Main 908 USG Aux 448 USG
    	
 
    	
Standard
    
	
Dual   Control 2 Pilot Requirement
    	
 
    	
Standard
    
	
42,000   1bs Max Gross Weight
    	
 
    	
Standard
    
	
20,000   1bs Max External Load Weight
    	
 
    	
Standard
    
	
Environmental   Control Unit (ECU)
    	
 
    	
Standard
    
	
Engine   Anti Ice System
    	
 
    	
Standard
    
	
3   Axis AFCS
    	
 
    	
Standard
    
	
Primary   Instrumentation
    	
 
    	
Standard
    
	
Rotor   Brake Hand Pump Style
    	
 
    	
Standard
    
	
Main   Wheel Brakes
    	
 
    	
Standard
    
	
LH/RH   Cockpit Door Bubble Windows
    	
 
    	
Standard
    
	
Pulse   Lights
    	
 
    	
Standard
    
	
Red &   White Strobe Tail Lights
    	
 
    	
Standard
    
	
Red   Nose Strobe Light
    	
 
    	
Standard
    
	
Sealed   Lead Acid Battery
    	
 
    	
Standard
    
	
Auxiliary   Power Plant; Electric Start
    	
 
    	
Standard
    
	
Cockpit   Fans
    	
 
    	
Standard
    
	
Fire   Extinguisher Hand Held
    	
 
    	
Standard
    
	
Crash   Axe
    	
 
    	
Standard
    
	
Two   Color Paint Scheme
    	
 
    	
Standard
    
	
Hard   Wiring for RADS, RADS Kit Included
    	
 
    	
Standard
    
	
Collective   Down Lock System
    	
 
    	
Standard
    
	
Auxiliary   Fuel Tank with Indicator
    	
 
    	
Standard
    
	
First   Aid Kit
    	
 
    	
Standard
    

 

Analog Instrumentation

 

	
N1 Indicator (2 ea.)
    	
 
    	
Standard
    
	
Fuel   Flow Indicator (2 ea.)
    	
 
    	
Standard
    
	
EPR   Indicator (2 ea.)
    	
 
    	
Standard
    
	
MGB   Oil Temperature Indicator
    	
 
    	
Standard
    
	
Fuel   Quantity Indicator (3 ea.)
    	
 
    	
Standard
    
	
Torque   Indicator (3 ea.)
    	
 
    	
Standard
    

 

21

 

	
Triple   Tachometer (2 ea.)
    	
 
    	
Standard
    
	
Oil   Cooler Tachometer
    	
 
    	
Standard
    
	
T-5   Indicator (2 ea.)
    	
 
    	
Standard
    
	
Hydraulic   Pressure Indicator (3 ea.) a
    	
 
    	
Standard
    
	
MGB   Oil Temperature Indicator
    	
 
    	
Standard
    
	
Engine   Oil Temperature Indicator (2 ea.)
    	
 
    	
Standard
    
	
Load   Cell Indicator
    	
 
    	
Standard
    
	
Electronic   Horizontal-Situation Indicator (EHSI) (2 ea.)
    	
 
    	
Standard
    
	
Magnetic   Compass
    	
 
    	
Standard
    
	
Altimeter   (2 ea.)
    	
 
    	
Standard
    
	
Airspeed   Indicator (2 ea.)
    	
 
    	
Standard
    
	
Vertical   Speed Indicator (2 ea.)
    	
 
    	
Standard
    
	
Artificial   Horizon (1 ea.) Standby
    	
 
    	
Standard
    
	
Clock   Digital (2 ea.)
    	
 
    	
Standard
    
	
OAT   Indicator - Digital and Analog (2 ea.)
    	
 
    	
Standard
    
	
Hour   Meter
    	
 
    	
Standard
    

 

Radio Package

 

	
6   Position Intercom System, 4 Inside, 2 External
    	
 
    	
Standard
    
	
VHF   COMM- 118-136.992 MHz (VHF-22) (2ea.)
    	
 
    	
Standard
    
	
ATC   Transponder (TDR-94/94D Mode S Transponder) (1 ea.)
    	
 
    	
Standard
    
	
Radio   Tuning Unit (RTU) (2ea.)
    	
 
    	
Standard
    
	
Emergency   Locator Transmitter (ELT) 406 MHz
    	
 
    	
Standard
    
	
Radar   Altimeter
    	
 
    	
Standard
    
	
VHF   FM Transceiver (Northern Airborne Technology)(2 ea.)
    	
 
    	
Standard
    
	
GPS   (Garmin 500)
    	
 
    	
Standard
    
	
Cockpit   Voice Recorder
    	
 
    	
Standard
    
	
AFF   Flight Following (Blue Sky)
    	
 
    	
Standard
    

 

Construction System

 

	
Siren   Warning System
    	
 
    	
Standard
    
	
Shock &   Pendant to include upper hook
    	
 
    	
Included
    
	
20,000   lbs Remote Hook (2)
    	
 
    	
Included
    
	
Ferry   Tanks (1 Set)
    	
 
    	
Included
    
	
Bambi   Bucket (1)
    	
 
    	
Included
    

 

Aircraft Support Equipment

 

	
Fall   Protection System
    	
 
    	
Standard
    
	
Blade   Tie Downs
    	
 
    	
Standard
    
	
Engine   Exhaust and Intake Plugs
    	
 
    	
Standard
    
	
Tow   Bar
    	
 
    	
Standard
    

 

22

 

Exhibit I

 

Warranty Bill of Sale

 

For valuable consideration, the receipt and sufficiency of which is hereby acknowledged, ERICKSON AIR-CRANE INCORPORATED (the “Seller”), owner of the full legal and beneficial title to the aircraft, engines, equipment and documents described below (hereinafter referred to as the “Aircraft”):

 

1.                                       one (1) Erickson S-64E aircraft bearing manufacturer’s serial number 64015;

 

2.                                       all equipment, accessories and parts belonging to, installed in or appurtenant to such Aircraft; and

 

3.                                       the Aircraft Documentation,

 

does hereby sell, grant, transfer and deliver all its right, title and interest in and to the Aircraft free and clear of all Encumbrances other than those created or granted by, or through, Purchaser, to HRT NETHERLANDS, B.V. (the “Purchaser”), under that certain Aircraft Purchase Agreement dated as of                             , 2011 and made between Seller and Purchaser (the “Sale Agreement”), to have and to hold the Aircraft forever.  The Seller hereby warrants to the Purchaser, and its successors and assigns, that it is the legal and beneficial owner of the Aircraft and that there is hereby conveyed to the Purchaser good and marketable title to the Aircraft free and clear of any Encumbrances other than the Encumbrances granted or created by, or through, Purchaser.

 

The terms “Aircraft Documentation” and “Encumbrances” shall have the same meanings in this Bill of Sale as in the Sale Agreement.

 

The Aircraft is sold AS IS and WHERE IS and under all the terms and conditions set forth in the Sale Agreement.

 

Except as stated in Clause 6.1 (Representations and Warranties of the Seller)  and Clause 4.1 (Limited Warranties)  of the Sale Agreement and in this Bill of Sale, to the extent permitted by applicable law, no representations, guarantees or warranties are given by Seller, express or implied of any kind, arising by law or otherwise.

 

This Bill of Sale and all matters arising from or connected with it are governed by the laws of Brazil (excluding the United Nations Convention on Contracts for the International Sale of Goods), without giving effect to the conflicts of laws principles thereof.

 

Executed by duly authorized representatives of Seller and Purchaser this                      day of               , 2011.

 

23

 

	
ERICKSON   AIR-CRANE
    	
HRT   NETHERLANDS, B.V.
    
	
INCORPORATED
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    	
By:
    	
 
    
	
Name:
    	
Name:
    
	
Title:
    	
Title:
    
					

 

24

 

EXHIBIT 2

 

COMMERCIAL INVOICE

 

Erickson Air-Crane Incorporated 
  5550 SW Macadam Avenue 
 Portland, OR 97239

 

To:  HRT Netherlands B.V.

 

Date:                                , 20

 

Re:  Invoice for Sale of Erickson model S-64E Helicopter Serial Number 64015

 

	
Quantity
    	
 
    	
Description
    	
 
    	
Amount
    
	
ONE   (1)
    	
 
    	
Erickson   model S-64E 
   S/N:  64015
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Purchase   Price: 
    	
 
    	
 
    	
[***]
    	
 
    	
 
    
	
 
    	
 
    	
Less   Deposit: 
    	
 
    	
 
    	
[***]
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Purchase   Price 
   Balance due on close: 
    	
 
    	
 
    	
[***]
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
[taxes,   if any]:
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Balance   Payable to Seller:
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Payable   by way of bank wire transfer pursuant to the attached bank to bank wire   transfer directions
    	
 
    	
 
    	
[***]
    

 

	
 
    	
ERICKSON   AIR-CRANE INCORPORATED
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    
	
 
    	
Name:
    	
 
    
				

 

25

 

EXHIBIT 3

 

TECHNICAL ACCEPTANCE LETTER

 

Date:                                        , 2011

 

TO:                            Erickson Air-Crane Incorporated

 

RE :                           Completion of Pre-Purchase Inspection

 

Dear Sir/Madam:

 

Pursuant to that certain Aircraft Purchase Agreement (the “Agreement”) dated as of the                day of               , 2011, by and between HRT Netherlands B.V. (“Purchaser”) and Erickson Air-Crane Incorporated (“Seller”), pertaining to that certain Erickson S-64E helicopter bearing manufacturer’s serial number 64015 (the “Aircraft”), this letter confirms that the Purchaser completed its Inspection (as such term is defined in the Agreement) of the Aircraft and Aircraft Documents on                     , 2011 the Aircraft is satisfactory and is hereby accepted in accordance with the terms of the Agreement.  The following is the accepted description of the Aircraft:

 

“Aircraft”  means that certain Erickson S-64E helicopter bearing manufacturer’s serial number 64015, as more particular described as follows:

 

	
Quantity:
    	
ONE   (1)
    
	
Manufacturer:
    	
Erickson
    
	
Model:
    	
S-64E
    
	
Airframe Serial number:
    	
64015
    
	
Year manufactured:
    	
1994
    
	
Engine Manufacturer:
    	
P&W
    
	
Engine Model:
    	
JFTD12A-4A
    
	
Engine # 1: Serial Number:
    	
672490
    
	
Engine # 2: Serial Number:
    	
637125
    
			

 

Together with a complete set of installed parts, components, accessories, instruments and avionics and all tools, operating equipment and log books, manuals and related Aircraft Documents.

 

Sincerely,

 

PURCHASER:
 HRT NETHERLANDS B.V.

 

	
 
    	
 
    
	
Per:
    	
 
    

 

26

 

	
 
    	
 
    
	
Name:
    	
 
    	
 
    
	
Title:
    	
 
    	
 
    
	
Date:
    	
 
    	
 
    

 

SELLER ACKNOWLEDGEMENT:

 

ERICKSON AIR-CRANE
 INCORPORATED

Per:

 

 

	
 
    	
 
    
	
Name:
    	
 
    	
 
    
	
Title:
    	
 
    	
 
    
	
Date:
    	
 
    	
 
    

 

27

 

EXECUTION PAGE

 

IN WITNESS WHEREOF the duly authorised representatives of the parties hereto have executed this Agreement and the same has been delivered and rendered effective on the Effective Date,

 

Purchaser

 

for and on behalf of
  HRT NETHERLANDS, B.V.

 

 

Signature:

 

Name:

 

Title:

 

 

Seller

 

for and on behalf of

ERICKSON AIR-CRANE INCORPORATED

 

 

Signature:

 

Name:

 

Title:

 

Witnesses:

 

 

	
1.
    	
 
    	
 
    	
2.
    	
 
    
	
 
    	
 
    
	
Name:
    	
Name:
    
	
 
    	
 
    
	
ID:
    	
ID:
    

 

28

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