GENERAL TERMS AND CONDITIONS FOR THE SUPPLY OF PARTS - Technical Publications

GENERAL TERMS AND CONDITIONS FOR THE SUPPLY OF PARTS

These General Terms and Conditions (these “Terms”) shall apply to any Purchase of a Part from Seller (as defined below). Seller submits all Quotations and accepts all Orders in accordance with and subject to these Terms. These Terms supersede, cancel, and/or shall prevail over any terms and conditions appearing on a Customer’s Order or any other documentation accompanying Customer’s Order for a Part. Any such terms and conditions on a Customer’s Order or any other document shall be deemed null and void and of no force and effect.

Article 1 DEFINITIONS

1.1 Unless otherwise specifically defined herein, and/or unless the context shall otherwise provide, capitalized words used in these Terms shall have the meanings given them in this Article 1.

“Buyer” shall mean the customer purchasing, or otherwise acquiring a Part or material from Seller under an Order.

“Catalogue” shall mean any on-line system allowing users access to Seller’s published price for select Parts or any electronic or printed document issued by Seller containing Seller’s published price information for select Parts.

“Customer” shall mean the entity purchasing,or otherwise acquiring a Part or material from Seller under an Order.

“Customer Service Representative” shall mean that employee of Seller, or of an affiliate or subsidiary of Seller, who is designated to be the customer service representative or customer relations specialist for Customer inquiries.

“Day” shall mean a calendar day.

“Material Return Authorization” shall mean the paperwork and process for the return of a Part or material to Seller.

“Non-Catalogue Part” shall mean a Part not found or otherwise identified in the Catalogue. Such Non-Catalogue Part shall be subject to the terms and conditions as shall be set forth in the respective Non-Catalogue Part Purchase document or, if there are no such other terms and conditions, then these Terms.

“Order” shall mean Customer’s placement of a request for a Part or material to Seller via call, internet, purchase order, etc.

“Part” shall mean any material, data, item (rotable, repairable, expendable, consumable, structural), part, line replaceable unit, component, assembly, special tools and items of equipment (including ground support equipment).

“Purchase” shall mean any purchase of a Part by a Customer.

“Quotation” shall mean Seller’s Parts offer to Customer in respect of a proposed order, including, but not limited to, information with respect to Part numbers, quantity, price, availability, lead time, delivery terms, etc.

“Seller” shall mean Short Brothers PLC., or such other affiliate or subsidiary of Short Brothers PLC. (each as the case may be), that accepts Customer’s Order and distributes the Part accepted in the Order.

“Vendor” means a manufacturer or supplier of a Part other than Seller.

“Vendor Spare Part” shall mean a Part for which Seller is not the holder of the design authority and that is procured by Seller from a Vendor.

“Warranty Period” shall mean the period of time for which Seller shall provide a warranty for certain Parts hereunder, as further described and set forth in Appendix 1 hereof.

Article 2 PRICE

2.1 All prices are expressed and payable in U.S. Dollars, for delivery to Customer Free Carrier (FCA) Seller’s designated facility (Incoterms® 2010), and include the cost of standard commercial packing for shipment via air freight generally in accordance with ATA Specification 300.

2.2 Orders for Parts accepted by Seller will be invoiced at the list price in force for such Parts at time of Seller’s acceptance of the Order.

2.3 Price Quotations for Parts (which are in stock at the time Seller issues the Quotation) will remain valid for Orders received and accepted by Seller within 30 days from the date of such Quotation, unless Seller provides for an alternative period of time, shorter or longer, each as the case may be (the “Quotation Period”).

2.3.1 Price Quotations issued or renewed repeatedly or exceeding 25 lines may be subject to a per line fee of $25, at Seller’s discretion. This fee is refundable upon the placement of an Order for quoted items during the Quotation Period.

2.4 If a Part requires a review by Seller’s engineers, or a vendor cost analysis (“VCA”) from the Vendor, Seller may bill the Customer for the actual recovery cost of such engineering or VCA fee.

2.5 Prices exclude any form of export fees, handling, shipping, special packaging, insurance, taxes, duties, import fees and/or levies. Customer shall be responsible for the payment of any such applicable charges.

2.6 Seller reserves the right to modify its Parts, services, catalogues, prices, and terms and conditions, without prior notice to Customer. By means of example and not as limitation, price adjustments may become necessary due to unusual market fluctuations beyond Seller’s reasonable control.

2.7 Price Quotations for out-of-stock Parts are to be considered as estimated or budgetary prices. The final price may vary from the price provided in the Quotation.

2.7.1 Customer agrees to pay any minimum buy fees, processing fees, “First Article” fees, or any other charges incurred by Seller on out-of-stock Parts.

2.8 A minimum Order charge of $250 may be billed to Customer, at Seller’s sole discretion, for Part Orders.

2.9 Seller reserves the right to apply an AOG service charge of $500 per Part and to recover from Customer the cost of any Vendor expedite charges for certain Parts that Customer requests to arrive AOG, as such term is defined in Article 9 below.

2.10 Buyer is solely responsible for any calibration and testing of ground support equipment and tooling purchased new from Seller that may be mandated by the aircraft operator, applicable airworthiness authorities, and the original equipment manufacturer.

Article 3 SUBSTITUTIONS AND MODIFICATIONS

3.1 Seller reserves the right, without Customer’s consent, to make any necessary corrections or changes in the design, Part number, and nomenclature of Parts identified in an Order and to substitute Parts, provided, however, that unit price and interchangeability of the applicable Parts is not affected. Seller will promptly inform the Customer if the unit price is different or if interchangeability is affected. If Customer wishes to proceed with the Order at the changed price and/or with the affected interchangeability, Customer shall send Seller an amended Order reflecting the new unit price and/or acknowledging the affected interchangeability. If Customer wishes not to proceed with the Order at the changed price and/or with the affected interchangeability, or if Customer does not submit an amended Order, Seller will not process such Order.

Article 4 PACKING, DELIVERY AND METHOD OF SHIPMENT

4.1 Seller’s delivery of Parts to Customer shall be Free Carrier (FCA) Incoterms® 2010 Seller’s designated facility.

4.2 Seller will not consider Customer’s notice of a short or incorrect shipment of Parts unless Customer notifies Seller, in writing, as soon as reasonably practical following Customer’s receipt thereof or within 30 days of the date of delivery of such Parts, whichever is earlier. Customer must notify its Customer Service Representative of any short or incorrect shipment of Parts.

4.3 Availability of Parts is subject to their prior sale or commitment to third parties prior to Seller’s acceptance of the applicable Order.

4.4 Seller reserves the right to allocate Parts on an equitable basis amongst Customer and other Seller customers, as Seller, in its sole discretion, may determine.

4.5 Parts lead times may vary during the course of the year due to fluctuations in the market and manufacturing conditions.

4.6 Seller shall include in each shipment a packing list/release note itemized to show:

4.6.1 The contents of the shipment;
4.6.2 The approved signature of Seller’s applicable civil airworthiness authority’s representative attesting to the airworthiness of the Parts; and
4.6.3 The value of the shipment for customs purposes, if required.

4.7 Customer shall specify the required method of shipment and carrier on each Order. If no method has been provided, or if stated method is unsuited to the given Order (e.g. carrier will not accept hazardous materials or oversized packages), Seller will ship via Seller’s selected method of shipment and selected carrier, all at Customer’s risk and expense.

4.8 If Seller gives Customer written notice that Parts ordered by Customer are ready for shipment, and shipment is delayed more than 30 days due to (a) Customer’s request for delay, or (b) without Seller’s fault or responsibility, then Customer shall promptly reimburse Seller, upon demand, for all costs and expenses, including but not limited to reasonable amounts for storage, handling, insurance and taxes, incurred by Seller as a result of such delay.

4.9 Special packaging and other expenses necessary or customary to ship items restricted by airlines are subject to additional fees.

Article 5 TAXES AND DUTIES

5.1 Customer shall be responsible for the payment of any taxes including without limitation sales, use, value-added, withholding, goods and services tax, excise, imposts, duties, any other taxes imposed or withheld by any taxing authority, and any other related charges and fees of any nature together with any fines, penalties or interest as a result of any Purchase, sale, use, delivery, storage, transfer or otherwise of any Parts, or any other matter in connection with these Terms (collectively “Taxes”).

5.2 If Seller has reason to believe that any such Taxes are applicable, Seller may separately state the amount of such Taxes on its invoice to the Customer.

5.3 If a claim is made against Seller for any such Taxes, Seller shall promptly notify Customer of such claim and Customer shall promptly pay after receipt of such notice or reimburse Seller for such Taxes.

5.4 In the event that any deduction or tax withholding is required in respect of any amount payable by Customer to Seller, Customer will pay such an increased amount as will ensure that, after the required withholding is applied, Seller still receives the amount as set out in the Order.

5.5 Customer shall be responsible for the payment of any brokerage fees, customs duties and other import charges with respect to the importation of any Parts.

Article 6 PAYMENT TERMS

6.1 Payment terms shall be net 30 days of the invoice date for established open accounts. However, Seller, at its discretion, reserves the right to request that Customer provide payment for the Order and/or for transportation costs in advance of Parts shipment. Interest will be charged on all overdue amounts from the due date for payment at the annual rate of 8% above the Bank of England base lending rate from time to time, accruing on a daily basis until payment is made, whether before or after any judgment. In addition, Customer agrees that Seller shall be entitled to its reasonable costs of collection of all overdue amounts, including, but not limited to, the amount of reasonable attorneys’ fees and expenses.

6.2 Seller reserves the right to alter a Customer’s terms of payment, without prior notice to such Customer, if such Customer fails to pay, when due, an amount that such Customer owes to Seller, or an affiliate or subsidiary thereof, under any agreement with such entity.

6.3 Customer shall comply with all applicable monetary and exchange control regulations and shall obtain any necessary authority from the governmental agencies administering such regulations to enable Customer to make its payments to Seller at the time and place and in the manner specified herein.

6.4 Seller’s invoice to Customer must be paid, in full, in the manner and within the time period set forth in such invoice. In the event Customer disputes all or any portion of Seller’s invoice, Customer shall nonetheless submit payment in full of the amount not in dispute, and Customer shall provide written notice to Seller of its dispute with the invoice within 30 days of the date of Seller’s invoice, which notice shall provide detailed justification of the reasons for the dispute. In the event such dispute is not resolved (as confirmed in writing by Seller) within 20 days of receipt of such notice by Seller, then the outstanding amount in dispute shall become due and payable within 10 days of the expiry of such 20-day period without any further notice from Seller.

6.5 Seller reserves the right to immediately suspend, without notice, any supply of Parts in the event that the Customer fails to make any payment that the Customer is required to make hereunder, and Seller has the right to exercise all recourses available at law against Customer, including without limitation all rights to set-off against Customer for any payments due and owed to Seller under other contracts that Seller has with Customer and the right to be paid entirely in cash (C.O.D.) upon Seller’s acceptance of an Order and prior to Seller’s shipment of such Parts to Customer. All costs that may be incurred by the Customer as a result of such suspension, including the price of the suspended booking, shall be borne by the Customer.

Article 7 TITLE AND RISK OF LOSS

7.1 Property and title, and risk of loss or damage, to Parts shall pass to Customer upon delivery of such Parts Free Carrier (FCA) Incoterms® 2010 Seller’s designated facility. Seller agrees to notify Customer of the date Parts are shipped and the carrier’s reference information (i.e. waybill number).

7.2 Property and title, and risk of loss or damage, to Parts being returned by Customer to Seller pursuant to Article 12 shall pass to Seller upon delivery of such Parts at Seller’s designated facility.

7.3 Notwithstanding any other provisions in these Terms, risk of loss or damage to Parts being returned by Customer to Seller pursuant to Article 14 shall remain with Customer. Title to such Parts will at all times remain with Customer, except for title to returned Parts that have been replaced, which passes to Seller upon shipment to Customer of the replacement Parts.

Article 8 INSURANCE

8.1 Customer shall be solely responsible for any transportation insurance or claims processing with respect to any accepted Order, unless Seller should otherwise agree in writing prior to its shipment of the applicable Parts.

Article 9 PROCESSING PRIORITIES

9.1 Seller recognizes that, on occasion, a Customer will require a Part to be delivered to such Customer in less than normal delivery lead-time.

9.2 In response to this need to get the aircraft returned to service, the priorities for processing requirements have been established as follows:

9.2.1 AOG
Definition: Aircraft grounded by Part requirements
Response time: Within four (4) hours

9.2.2 CRITICAL (Urgent)
Definition: Imminent AOG or work stoppage. Parts required by date given

Response time: Within one (1) day

9.2.3 ROUTINE
Definition: Standard Part stock / Standard Part stock order

Response time: Within seven (7) days

9.3 The Customer is requested to provide its need date for the Part to be available for delivery from Seller’s facility (“Customer’s Required Date”). The Seller will attempt to ship the Part by the Customer’s Required Date. The intention of this Article 9.3 is to provide realistic back-order reports and in no way constitutes grounds for remedies should the Customer’s Required Date not be achieved.

Article 10 PROCEDURES FOR PLACING ORDERS

10.1 Customer shall provide the following written information to Seller when placing an Order for Part(s):
10.1.1 Customer name and account number
10.1.2 Purchase Order number
10.1.3 Aircraft serial number (mandatory for AOG, Critical and kit Orders)
10.1.4 Part Number
10.1.5 Quantity
10.1.6 Order type:
ü Outright Purchase
ü Parts Warranty
ü Tooling
ü GSE
10.1.7 Billing Address
10.1.8 Shipping Destination
10.1.9 Specified Shipping Method
10.1.10 Priority (Pursuant to the defined terms above in Article 9):
ü AOG (Aircraft Serial Number is required.)
ü Critical
ü Routine
10.1.11 Customer’s Required Date
10.1.12 Complete serial number of faulty unit and defect for AOG orders
10.1.13 Also required for some third party suppliers:
ü Aircraft Landings and Cycles

Article 11 CANCELLATION OF ORDERS

11.1 In the event a Customer cancels an Order, Seller, at its option, shall be entitled to recover from Customer, as liquidated damages and not as a penalty, an amount based upon the following parameters:

11.1.1 If work accomplished on the Order has been limited to Seller’s order processing department, no cancellation charges shall apply; if the Order is in work in the warehouse but has not left Seller’s facility, a $50 fee per Order line shall apply;

11.1.2 If production planning has been completed on the Order, or shop orders have been written on the Order, or if Seller has placed a corresponding order with the Vendor, but no shop time or material charges have been incurred against the Order, the cancellation charge shall be the greater of 10% of the price of the cancelled Order, or the actual cancellation charge incurred by Seller;

11.1.3 If shop time or material charges have been made against the Order, the cancellation charge shall be based on the cost of such time and materials, plus overhead; and

11.1.4 If a shelf stock Part covered by the Order can be absorbed into Seller’s inventory without increasing Seller’s normal maximum stock level, cancellation charges may be reduced.

Article 12 RETURN OF PARTS

12.1 Prior to sending any Parts to Seller, Customer shall first request a Material Return Authorization form and obtain authorization from the Customer Service Representative. Customer shall then, at its own expense, deliver the Parts to the facility designated by the Customer Service Representative. The duly completed Material Return Authorization form must accompany the returned Parts. Seller shall have the right to refuse the return of non-shelf-stock Parts.

12.2 Customer’s failure to include a duly completed MRA form with the returning Parts, or to deliver such Parts at the facility instructed by the Customer Service Representative, or to provide documents pursuant to Article 12.5, may result in one or more of the following:

12.2.1 Seller may return such Parts to Customer at Customer’s sole risk and expense, or Seller may charge re-certification fees;
12.2.2 Seller may charge a $1,500 administrative fee;
12.2.3 Seller may refuse warranty coverage to Customer; and
12.2.4 Customer’s account may not be credited for the return of such unused Parts.

12.3 A restocking fee of $500 may be charged to Customer for each unused Part returned. Each returned Part is subject to Seller’s quality inspection, which may lead to requiring Customer to provide payment to Seller for recertification fees for such Parts. Seller may charge recertification and/or transportation fees if the tamper-proof seal is not intact when an unused electronic Part is returned.

12.4 Unused Parts are not eligible for return after 30 days from such Parts respective delivery to Customer.

12.4.1 Acceptance of the return of an unused Part after 30 days is at the sole and exclusive discretion of the Seller, and $100 per day, in addition to the $500 restocking fee, may be charged to Customer for every day beyond 30 days.

12.5 All original documentation must be returned with the Part, including certification documents and any logbooks, maintenance cards or other time-tracking documentation required for Time Limits/Maintenance Checks (TLMC parts).

12.6 In addition to the completed Material Return Authorization form, Customer must also enclose a commercial invoice when the shipment is to cross international borders in order to prevent the shipment from being delayed by customs authorities.

12.6.1 The commercial invoice required from Customer should contain the following information:
ü Part number of the Parts being returned
ü Description of the Parts being returned
ü Material Return Authorization number
ü Country of origin
ü Value of the Part being returned Currency = U.S. Dollars
ü Airway bill or tracking number

12.6.2 At the time of shipment, Customer shall submit an advance notification with a copy of the commercial invoice and waybill by email to belfast.spares@aero.bombardier.com.

Article 13 IMPORT & EXPORT REGULATIONS

13.1 The parties hereto shall, at all times, comply with any applicable U.K., U.S., and other applicable export, re-export, and import laws, regulations and requirements, including but not limited to the U.S. Department of Commerce’s Export Administration Regulations, the U.S. Department of State’s International Traffic in Arms Regulations (“ITAR”), and the U.S. Department of Treasury’s Office of Foreign Assets Control regulations. The Customer shall be the importer of record of the Parts.

Article 14 PARTS WARRANTY

14.1 The specific coverages, warranty periods, conditions, and limitations are set out in this Article and/or in Appendix 1 hereof.

14.2 Exceptions

14.2.1 Seller has no obligation or responsibility under the warranties set out in Appendix 1 for:

(a) Normal wear and tear and the need for regular maintenance and overhaul;

(b) Unapproved modification or changes;

(d) Foreign Object Damage (FOD) or Customer-induced damage;

(e) Part not operated or maintained in accordance with Seller documentation furnished or available to Customer (including Service Bulletins and airworthiness directives);

(f) Defect not becoming apparent within the warranty period;

(g) Defect not reported by Customer in writing to Seller within the period of time referred to Article 14.4.1 herein; or

(h) Any indirect, special, incidental or consequential damage caused by the failure of the Part.

14.2.2 In the event that a Part returned under a warranty claim is subsequently established to be serviceable, then Seller shall be entitled to charge and recover from Customer any reasonable costs incurred by Seller in connection with such warranty claim. However, in the event that repetitive in-service failure occurs on a particular Part, which is subsequently identified by Seller on a repeated basis to be “no fault found“, then Seller and Customer shall discuss and mutually agree on a course of further action to help identify the source of the recurring failure. In the event the fault is ultimately confirmed to be a legitimate warranty claim, Seller will reimburse Customer for any costs Customer paid to Seller pursuant to this Article 14.2.2.

14.3. Repair, Replacement or Rework

14.3.1 Seller’s sole obligation and liability under this warranty is expressly limited to, at Seller’s election, correction by the repair, replacement or rework of the defective Part. The repaired, replaced or reworked Part which is the subject of the warranty claim shall then be warranted under the same terms and conditions for the then un-expired portion of the warranty period. In the event Seller elects to replace a defective Part under this warranty, Seller may supply a repaired or overhauled Part which has a configuration identical to, or higher than, the defective Part that is being replaced under warranty.

14.4 Claims Information

14.4.1 Customer’s obligation hereunder is subject to submission of a warranty claim in writing to Seller within 15 days of the defect becoming apparent to Customer.

14.5 Timely Correction

14.5.1 Seller shall make the repair, replacement or rework, following receipt of the defective Part, with reasonable care and dispatch.

14.6 Approval, Audit, Transportation

14.6.1 All warranty claims shall be subject to audit and approval by Seller. Seller will use reasonable efforts to advise Customer in writing the disposition of Customer’s warranty claim within 30 days following the receipt of the claim and return of the defective Part to Seller’s designated facility. Seller shall notify Customer of Seller’s disposition of each claim.

14.6.2 Customer shall deliver the defective Part at the facility designated by the Customer Service Representative in accordance with Article 12.1. The repaired or replacement Part shall be delivered to Customer Free Carrier (FCA) Incoterms® 2010 Seller’s designated facility.

14.7 THE WARRANTY OBLIGATIONS AND LIABILITIES OF SELLER AND THE RIGHTS AND REMEDIES OF CUSTOMER SET FORTH IN THESE TERMS ARE EXCLUSIVE AND ARE IN LIEU OF, AND CUSTOMER HEREBY WAIVES AND RELEASES ALL OTHER WARRANTIES, CONDITIONS, OBLIGATIONS, REPRESENTATIONS OR LIABILITIES, EXPRESS OR IMPLIED, ARISING BY LAW, IN CONTRACT, CIVIL LIABILITY OR IN TORT, OR OTHERWISE, INCLUDING BUT NOT LIMITED TO ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR PARTICULAR PURPOSE OR OF ANY IMPLIED CONDITION, AND ANY WARRANTIES ARISING FROM COURSE OF PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE AND ANY OTHER OBLIGATION OR LIABILITY ON THE PART OF SELLER TO ANYONE OF ANY NATURE WHATSOEVER BY REASON OF THE DESIGN, MANUFACTURE, SALE OR USE OF THE PARTS DELIVERED HEREUNDER.

Article 15 EXCUSABLE DELAY

15.1 In the event Seller is delayed in the performance of its obligations or responsibility under an Order due directly or indirectly to a cause which is beyond Seller’s reasonable control or without Seller’s fault or negligence (an “Excusable Delay”), Seller shall not be liable for, nor shall Seller be deemed to be in default under the respective Order or these Terms on account of such delay in delivery of the material or other performance hereunder and the time fixed or required for the performance of any obligations or responsibility in the Order or these Terms shall be extended for a period equal to the period during which any such cause or the effect thereof persists. Excusable Delay shall be deemed to include, without limitation, delays occasioned by the following causes:

(a) force majeure or acts of God;

(b) war, warlike operations, act of the enemy, armed aggression, civil commotion, insurrection, riot, or embargo;

(c) fire, explosion, earthquake, lightning, flood, draught, windstorm, or other action of the elements or other catastrophic or serious accidents;

(d) epidemic, pandemic or quarantine restrictions;

(e) any legislation, act, order, directive or regulation of any governmental or other duly constituted authority;

(f) strikes, lockout, walkout, and/or other labour troubles causing cessation, slow-down or interruption of work;

(g) shortage or delay in delivery of supplies, materials, accessories, equipment, tools or parts;

(h) delay or failure of carriers, subcontractors, or suppliers for any reason whatsoever; or

(i) delay in obtaining any airworthiness approval or certificate, for any equivalent approval or certification, by reason of any law or governmental order, directive or regulation or any change thereto, or interpretation thereof, by a governmental agency, the effective date of which is subsequent to the date Customer’s Order is accepted by Seller, or by reason of any change or addition made by Seller or its affiliates or requested by a governmental agency to the compliance program of Seller or of its affiliate, or any part thereof, as same may have been approved by Regulatory Authorities, or change to the interpretation thereof to obtain any such airworthiness approval or certificate.

Article 16 LIMITATION OF LIABILITY

16.1 SELLER SHALL NOT BE LIABLE FOR ANY INDIRECT, CONSEQUENTIAL, SPECIAL, INCIDENTAL, AND / OR PUNITIVE DAMAGES OF ANY KIND OR NATURE UNDER ANY CIRCUMSTANCES, NOR SHALL SELLER BE LIABLE FOR LOST PROFITS, LOSS OF GOODWILL, LOSS OF BUSINESS OPPORTUNITY AND/OR LOSS OR DAMAGE FOR OR ARISING OUT OF ANY LACK OR LOSS OF USE OF ANY AIRCRAFT, EQUIPMENT OR ANY PARTS FOR ANY REASON.

16.2 Seller’s total liability arising under or in connections with these Terms, whether in tort (including negligence or breach of statutory duty) contract, misrepresentation, restitution or otherwise, shall be limited to the total amount paid to and received by Seller under these Terms.

16.3 To the extent applicable laws do not allow the limitations set forth in these Terms, these Terms shall be modified only to the extent required by applicable laws.

Article 17 INSPECTION

17.1 All Parts are subject to inspection by Customer at destination. Use of Parts or failure to give notice of rejection within 30 days after Customer’s receipt shall constitute acceptance. Acceptance shall be final and Customer waives the right to revoke acceptance for any reason, whether or not cause for rejection is known to Customer at the time of acceptance or deemed acceptance. Customer’s remedies for defects discovered before acceptance are exclusively provided for in Article 17.2 below.

17.2 Any notice of rejection shall specify the reasons for rejection. If Seller concurs with a rejection, Seller shall, at its option, correct, repair or replace the rejected Part. Customer shall, upon receipt of Seller’s written instructions, deliver the rejected Part to Seller in accordance with Article 12.1. The repaired or replacement Part for the rejected Part will be delivered to Customer Free Carrier (FCA) Incoterms® 2010 Seller’s designated facility.

Article 18 INDEMNITY AGAINST PATENT INFRINGEMENT

18.1 Subject to the provisions set out in this Article 18, Seller agrees to indemnify, protect, and save harmless Customer against any liability, losses, damages or expenses including reasonable and substantiated out-of-pocket expenses incurred by Customer (excluding any liability, losses, damages and expenses in respect of or resulting from any lack or loss of use of the aircraft or any Parts) resulting solely from any infringement or alleged infringement of a UK patent by any Parts provided to Customer under these Terms. The foregoing undertaking by Seller to indemnify, protect and save harmless Customer shall not apply with respect to the engines or any accessories, equipment or Parts which are not manufactured by Seller or are not manufactured exclusively pursuant to Seller’s detailed design, or which are incorporated in the aircraft at Customer’s request instead of or in addition to such accessories, equipment or Parts proposed by Seller.

18.2 Seller shall not be liable with respect to any actual or alleged patent infringement to which this Article 18 would apply unless:

18.2.1 suit is commenced against Customer for infringement or Customer receives a written claim alleging infringement, and notice is given in writing to Seller by Customer within ten days after Customer’s receipt of the suit or written claim; and

18.2.2 Customer uses diligent efforts, in full cooperation with Seller, to mitigate and reduce expenses, damages, costs and royalties involved; and

18.2.3 Customer furnishes promptly to Seller all data, papers and records within its possession, and any other information or material within Customer’s knowledge, necessary or useful to resist and defend against such claim or suit; and

18.2.4 Customer refrains from making any payment and from assuming any obligations, liabilities, expenses, damages, costs and royalties for which Seller may be held liable, without approval of Seller and is diligent to reduce or mitigate any such expenses, damages, costs and royalties.

18.3 Seller shall have the option, at any time or from time to time, to conduct negotiations, in its own name, or in the name of Customer, and to enter into a settlement or settlements with the party or parties involved in the infringement or alleged infringement and to intervene in any suit or claim. Should Seller intervene in any such suit or claim, it shall be entitled at any stage of negotiations or proceedings to assume conduct or control the defense thereof. If Seller assumes such defense and Customer, in its interest, elects to participate therein, Customer shall do so at its sole cost and expense.

18.4 THE OBLIGATIONS ON THE PART OF SELLER, FOR ITSELF, IN THIS ARTICLE ARE UNDERTAKEN BY SELLER, OR ITS SUBSIDIARIES OR AFFILIATES, AND ACCEPTED BY CUSTOMER IN LIEU OF ANY AND ALL OTHER OBLIGATIONS, EXPRESS OR IMPLIED, ARISING IN LAW OR OTHERWISE, TO WHICH SELLER, ITS SUBSIDIARIES OR AFFILIATES MIGHT OTHERWISE BE LIABLE WITH RESPECT TO ANY PATENT INFRINGEMENT OR ALLEGED PATENT INFRINGEMENT BY ANY PARTS PROVIDED TO CUSTOMER UNDER THESE TERMS OR UNDER ANY PATENT, PATENT RIGHT OR RIGHT TO PATENT, AND SUCH OBLIGATIONS SHALL NOT BE EXTENDED, ALTERED OR VARIED EXCEPT IN WRITING SIGNED BY SELLER, ITS SUBSIDIARIES OR AFFILIATES, AND CUSTOMER UNDER THE HANDS OF THEIR RESPECTIVE DULY AUTHORIZED REPRESENTATIVES.

Article 19 GENERAL PROVISIONS

19.1 These Terms are governed by and are to be construed in accordance with the laws of Northern Ireland. The parties have agreed to exclude the application of the United Nations Convention on contracts for the International Sale of Goods.

19.2 By placement of Orders or acceptance of the Parts covered thereby, Customer has expressly agreed to these Terms.

19.3 Customer shall not assign any of its rights or delegate any of its obligations under these Terms without Seller’s prior consent. Seller may, without Customer’s consent, transfer, sell or assign any receivable or other right or interest that Seller may have or acquire under these Terms.

19.4 The courts of Northern Ireland shall have jurisdiction to hear and determine all claims, disputes, action or suits, which arise under these Terms or any Order requested or accepted hereunder. The failure at any time to enforce any provision of these Terms will not be a waiver of any such right to enforce or of the right thereafter to enforce each provision. These Terms contain the entire and only agreement between the parties respecting the subject matter hereof. If any provision, word, phrase, Article, or other element of these Terms is found illegal or unenforceable by a court of competent jurisdiction, the remainder of these Terms shall not be affected and shall continue to be the rights and obligations of the parties hereto.

APPENDIX 1

WARRANTY FOR PARTS FOR BOEING AND AIRBUS AIRCRAFT

1.0 Warranty

1.1 Seller warrants that, at the date of delivery of a Boeing or Airbus aircraft Part to Customer, such Part shall be free from defects in material and workmanship.

1.2 For new Boeing or Airbus aircraft Parts, the warranty period shall remain in effect for any defect covered by the Parts warranty that becomes apparent during the 36 month period following delivery of the initial Parts.