MRO Terms and Conditions
Last Modified: May 8, 2023
PHI Aviation, LLC
MRO General Terms and Conditions
These Maintenance, Repair and Overhaul (“MRO”) general terms and conditions (these “General Terms”) apply to all quotes, purchase orders, order acknowledgements, estimates, statements of work, invoices, change orders, other similar forms (each, an “Order Form” and collectively, the “Order Forms”) and all work, inspection, maintenance, repair, teardown, evaluation, overhaul, and other similar services provided by PHI Aviation LLC (“PHI”) to Customer.
Customer and PHI may be referenced herein as a “Party” or, collectively, as the “Parties.” The Order Form(s) together with these General Terms are the agreement between the Parties (the “Agreement”). If these General Terms conflict with the terms of any Order Form(s), these General Terms will control unless the Parties have agreed in writing otherwise. If any Order Form or these General Terms conflict with applicable law or regulations, including the FAR, then the applicable law, regulation, or FAR will control.
1. Certain Definitions
1.1. “Customer” is the legal entity or person(s) requesting or receiving Services from PHI.
1.2. “CSP” means any Customer Supplied Parts, which is any part, component, subcomponent, or article to be provided by Customer in order for PHI to perform the Services.
1.3. “End Product” is the Product tendered for delivery to Customer after PHI has performed the Services.
1.4. “FAA” is the United States Federal Aviation Administration.
1.5. “FAR” is the Federal Aviation Regulations in Title 14 of the Code of Federal Regulations of the United States (14 C.F.R.), as same may be amended or replaced from time to time.
1.6. “OEM” is the original equipment manufacturer of the applicable Product.
1.7. “Product” is any aircraft, part, or component, including engines or auxiliary power units, furnished by Customer to PHI for the Services.
1.8. “Services” is any services in an Order Form or otherwise provided by PHI to Customer which may include the following:
1.8.1. Avionics Services such as inspection, testing, repairing, overhauling, modifying, and installing of flight control systems, monitoring systems, collision avoidance systems, flight management systems, flight data recorders, radars, radios and other communication systems, electronics, and electronical accessories.
1.8.2. Balancing Services such as inspections, repairs, and balancing of rotor blades, engine compressors, turbine wheels, cooling fans, transmission internal rotating parts, and drive shafts.
1.8.3. Rotor Blade Services such as inspections, repairs, and overhauls of rotor blades, including trim tab and honeycomb replacement, nickel cap and trailing edge, fairing, leading edge, and erosion strip repairs.
1.8.4. Rotor Hub and Drive Shaft Services such as inspecting, repairing, and overhauling rotor heads, drive shafts, and vertical shaft assemblies, forward and aft rotor heads, swashplates, tail rotor drive shafts, vertical shafts, flight control systems and assemblies, synchronization shafts and adapter assemblies.
1.8.5. Finishing Services such as media blast stripping of airframes and components, chemical stripping, chemical conversion coating, finish coating, paint, and non-skid coatings.
1.8.6. Other Services such as inspections, machining, welding, engineering, non-destructive testing, logistics, and flight testing.
2. Initial Tear Down and Evaluation
2.1. Upon delivery of the Product(s) to PHI, PHI may perform an initial teardown and evaluation of the Product(s) (the “Initial T&E”). If PHI has performed an Initial T&E, PHI may provide Customer with a separate Order Form to reflect any recommended changes or adjustments to the requested Services from the Services contemplated by the initial Order Form (the “T&E Order Form”).
2.2. The T&E Order Form may include: (a) the estimated total price for the Services from the Initial T&E; (b) an “Evaluation Charge” for the Initial T&E; and (c) an estimate of additional time required for all Services stemming from the Initial T&E. Customer agrees that no further Services identified in the initial Order Form will be performed by PHI unless: (1) Customer accepts the T&E Order Form in writing or (2) PHI waives the T&E Order Form and elects to perform the Services set out in the initial Order Form.
2.3. If Customer does not accept the T&E Order Form or PHI does not waive the T&E Order Form: (1) Customer shall, within five (5) days of receiving the T&E Order Form, pay the Evaluation Charge to PHI, and (2) Customer shall, at Customer’s sole cost, be responsible for return and shipment of the Product(s).
2.4. For all Products or components that PHI determines are beyond economic repair or are will not be reinstalled on the End Product (“Excess Components”), PHI will notify Customer and Customer will advise PHI whether it elects to have the Excess Component returned or disposed of, in each case at Customer’s cost. If Customer fails to provide such instructions within three (3) Business Days of PHI’s notice, PHI may proceed with either option at Customer’s cost and without liability to Customer.
2.5. If PHI does not waive the T&E Order Form or Customer (1) rejects the T&E Order Form, (2) fails to pay the Evaluation Charge; (3) does not respond to the T&E Order Form within five (5) days; (4) requests that PHI store the Product(s); or (5) fails to take delivery of an End Product within five (5) days of notification by PHI that the End Product is ready for delivery, PHI may charge storage fees. Storage fees may also be charged by PHI in the event of any delays to the Services caused by Customer failure to timely provide CSP or Parts or failure to timely respond to PHI communications or requests. Storage fees shall be at PHI’s then-current rates and may be billed on a monthly basis and payments are due as stated on the invoice and in any event before the End Product is shipped or provided to Customer.
2.6. If Products, End Products, or CSP are left at PHI’s facility for more than thirty (30) days after notice from PHI of completion of the Services, termination of the Agreement, or as provided in Section 2.5, PHI may deem the Product, End Product, or CSP abandoned and pursue all available remedies including, but not limited to, foreclosure and sale of such property or disposal of such property (at Customer’s cost).
3. Price and Payment Terms
3.1. Unless otherwise stated in the Order Form, invoices are payable within thirty (30) days of the invoice date and in any event before the End Product is shipped or is removed by Customer. PHI may decline to ship, make delivery, or perform Services except upon receipt of cash payment in full, letter of credit, or security, or upon other terms satisfactory to PHI. For clarity, PHI may require some or all of the estimated Services costs in advance, and PHI may refuse delivery of any part, component, or aircraft unless advance payment is timely made. Progress payments, if any, shall be made as set forth in the Order Form, and PHI may stop all Services, and impose storage charges, if timely payment of progress payments are not made by Customer.
3.2. All prices for Services are net to PHI and do not include shipping, transportation, insurance, Taxes (as defined below), import or export charges or duties, levies, imposts, penalties, interest, or other similar charges, all of which are the responsibility of Customer. PHI may increase any prices in an Order Form to reflect any increase in cost to PHI due to factors beyond PHI’s control (including, without limitation, any foreign exchange fluctuation, inflation, changes in currency regulations, or significant increase in labor, material, or other costs), any change requested by Customer (and agreed by PHI in its discretion), or any delay caused by Customer.
3.3. Any past due invoice shall bear interest at the lesser of one and one-half percent (1 1⁄2%) per month or the maximum amount permitted by law commencing from the due date until the date the invoice amount plus any service charges is paid. CUSTOMER AGREES TO PAY ALL COSTS OF COLLECTION, INCLUDING REASONABLE ATTORNEY’S FEES AND EXPENSES, IN THE EVENT IT BECOMES NECESSARY TO ENFORCE THE PAYMENT THEREOF.
3.4. All invoiced amounts will be paid in United States Dollars as directed PHI in writing (including on the invoice). No set-off, deduction, short payment, or counterclaim is permitted by Customer.
3.5. Customer hereby grants PHI a security interest in any Product(s) as security for all amounts owed to PHI, which security interest is in addition to any statutory liens that apply.
3.6. PHI is entitled, with the prior consent of Customer, but at Customer’s expense, to perform additional Services that PHI considers necessary for the proper performance of Services set forth in the Order Form. Consent may be sent to, and given by Customer, via email, and failure of Customer to respond to any email from PHI seeking consent for additional Services, within 48 hours of the date and time of PHI’s request, shall be deemed as consent by Customer to the additional Services.
4.1. All price(s) are exclusive of any federal, state, local and foreign taxes including, but not limited to, value added tax, goods and services tax, sales, use or consumption tax, import or export charges or duties, levies, imposts, penalties, or interest (“Taxes”).
4.2. Customer shall be required to pay, and shall indemnify and hold harmless PHI against, any Taxes which may apply to the Services performed at any time. PHI may invoice Customer for Taxes at any time after the End Products are delivered to Customer.
5. Delivery, Title, and Risk of Loss
5.1. Delivery from Customer to PHI
5.1.1. Prior to delivery of any CSP to PHI, Customer shall send a pre-alert to PHI with the applicable shipping documents for review. Delivery terms for all Products and CSP are DDP PHI’s facility INCOTERMS® 2020) (to the extent applicable and not inconsistent with the terms herein). Product(s) and CSP will be delivered to the designated PHI facility and shall also provide all logbooks, records, and other information necessary for PHI to perform the Services. PHI shall require at a minimum (and unless otherwise designated in the work order) a lead time of two (2) weeks for delivery of CSP to ensure timely performance of the Services. Any delays caused by failure to provide any requested information, documentation, or CSP shall be at Customer’s sole risk, and PHI reserves the right to charge Customer up to $500.00 per day storage and admin fees for each day that work or services are delayed because of later delivery of CSP. Customer will bear all risk of loss/damage and costs to fly, transport, or ship the Product(s), any aircraft, CSP, and documentation to PHI’s facilities and from PHI’s facilities to the Customer’s shipping or final destination (including freight and transit insurance costs). If Customer ships Products or CSP to PHI’s designated facility from outside the United States, Customer will name itself as importer and secure a customs broker. Customer is responsible for payment of all customs duties, taxes, and other charges.
5.1.2. Customer shall pack the Product(s) and CSP in accordance with good commercial practices for protection against damage and deterioration during shipment and storage and, if applicable, any PHI instructions.
5.1.3. Customer will be responsible for all costs related to flights of Customer Aircraft to and from PHI’s facility.
5.1.4. PHI will not be required to make an inventory of items received in connection with a Product (or Aircraft, if applicable) but may elect to do so in each instance. If done, Customer will promptly acknowledge such list and confirm the included items in writing.
5.1.5. Customer shall bear all risk of loss or damage to aircraft, Products, and CSP at all times, including during shipment or return from any Subcontractors of PHI, except and to the extent that any loss or damage occurs after delivery to PHI, is solely caused by the negligence of PHI, and is also covered by PHI’s hangarkeepers insurance policy, see Section 19.7 of these terms and conditions, further to subject to Section 8.3 which provides that PHI shall have no liability under any circumstances for flight tests performed by PHI crew. “Delivery” to PHI shall be deemed to occur when the Product or CSP is received by PHI at its shipping dock in Lafayette, Louisiana, and for aircraft flown to PHI’s facilities, when the aircraft is parked on PHI’s ramp and the rotor blades have stopped turning. For clarity, PHI shall not be deemed to be the sole cause of a loss when PHI is acting in concert with or at the direction of the Customer, an OEM, the FAA, an independent contractor or any other person not employed by PHI in the maintenance, movement, storage, handling, piloting or repair of the Customer’s Product or Aircraft.
5.2. Delivery from PHI to Customer
5.2.1. PHI is authorized to advance the delivery date or complete performance of any Services prior to the time set forth in the applicable Order Form. PHI may make partial shipments of End Products to Customer. If done, each shipment will constitute a separate sale, and Customer shall pay for the End Products shipped whether such shipment is in whole or partial fulfillment of Customer’s Order Form.
5.2.2. All delivery or completion dates for Product(s) are provisional, non-binding and shall serve as general information only.
5.2.3. Unless otherwise agreed in writing, all Products will be packed for shipment in accordance with PHI’s standard packing procedures. PHI will endeavor to notify Customer in the event that any Product(s) may be delivered late but shall have no liability for same or any failure to provide notice.
5.2.4. Delivery terms for all End Products are Ex-Works (INCOTERMS® 2020) (where PHI means “seller” and Customer means “buyer”), to the extent applicable and not inconsistent with the terms herein. Customer will pay all shipping and handling and other costs from PHI’s facilities including costs of freight, insurance, export clearances and licenses, duties, and taxes. Risk of loss shall pass to Customer upon tender of delivery of the Products to the shipper at PHI’s facility. Risk of loss for Products and aircraft flown from PHI facilities shall be with Customer at and from the time that the aircraft is placed on the ramp for departure purposes.
5.2.5. Customer may specify the method of transportation and the shipper and, in such event, Customer shall arrange for prepayment of shipping costs and expenses. Absent such specification, PHI shall ship the End Products by a shipper of its own selection, and Customer will prepay all applicable charges.
5.3. Except as otherwise provided, title to the Product(s) shall at all times remain with Customer, provided, however, title to all parts and supplies in the Order Form to be provided by PHI shall remain PHI’s until full payment for the Services has been made, even if Products have been shipped prior to payment.
6. Services Standards
6.1.1. PHI may, as applicable and unless otherwise specifically stated in the Order Form, use:
184.108.40.206.1. non-OEM parts or new/used OEM parts;
220.127.116.11.2. OEM instructions and data to install parts;
18.104.22.168.3. use any other FAR and FAA approved/accepted data and documentation to install parts (including field approvals where necessary); and/or
22.214.171.124.4. use documentation and instructions provided by Customer (assuming instructions do not conflict with PHI standards and 126.96.36.199 - 188.8.131.52).
6.1.2. PHI will perform the Services in accordance with its FAR Part 145 Repair Station Certificate and the manuals required thereby.
6.2.1. PHI may use OEM specified tooling or equipment but shall not be required to do so unless applicable law or OEM instructions require specific tooling or equipment.
6.2.2. Notwithstanding 6.2.1, PHI may utilize functionally equivalent alternate tools and equipment as permitted under applicable law that meet PHI’s quality standards if the tooling or equipment in the OEM instructions no longer exists or are impractical to obtain.
6.3.1. Any End Product that is to be installed upon an aircraft or is in itself an aircraft that is FAA-regulated shall be accompanied by an FAA Form 8130-3.
6.3.2. End Products that are to be installed upon an aircraft or is in itself an aircraft that is not FAA-regulated shall be accompanied by a PHI Certificate of Conformance.
7. Customer Supplied Parts
7.1. Customer is responsible to provide any Letter of Authorizations or Approved Aviation Authority serviceability tags required to perform the tasks requested for any CSP.
7.2. Customer warrants and represents that any CSP are, as applicable, airworthy, serviceable, and ready for immediate use.
7.3. Customer is liable for any additional costs incurred for special tools or equipment needed to support aircraft modifications related to CSP.
7.4. Customer is liable for providing all CSP listed in the Order Form(s) prior to PHI’s commencement of the Services, and PHI will not be obligated to commence the Services until it has received all such CSP.
7.5. Customer bears risk of loss during transportation of CSP and all transportation costs (including packaging and shipping costs, taxes, duties, fees, import/export costs and transit insurance) for the shipping of CSP.
8. Inspection, Flight Tests, and Acceptance
8.1. Customer may inspect Products during the performance of Services only with advance written permission of PHI in each instance and only upon compliance with PHI’s premises security protocols. All Customer agents and representatives shall conduct inspections or visits to PHI facilities at their own risk, and PHI shall have no liability for, and Customer shall indemnify and hold harmless PHI from, any personal injuries, death, or property losses or damages sustained while on PHI premises, from any reason. Unless otherwise agreed in an Order Form, Customer shall inspect End Products prior to removal or shipment from PHI’s facility and shall execute PHI’s Product acceptance form prior to leaving with the End Product(s). If inspected at PHI’s facility, Customer shall identify any defects in writing, after which PHI shall, if it agrees with Customer’s identification of defect(s), remedy the defect(s), and shall have reasonable time to do so. If End Products are shipped by PHI without being inspected by Customer at PHI’s facility, Customer shall inspect the End Product(s) within five (5) days of Customer’s receipt of End Products and provide notice to email@example.com of any defects to the End Product(s). All defects shall be handled in accordance with PHI’s limited warranty on the End Product(s), if any.
8.2. PHI shall have no liability or duty to inform Customer of issues or defects in any Product which PHI may discover in the performance of Services, that are not directly related to the Services that PHI is performing under the applicable Order Form.
8.3. All flight tests shall be performed by pilots and crew selected by Customer and at Customer’s sole risk of loss, liability, or loss from any cause. If required and requested by Customer in an Order Form, flight testing of Aircraft may be performed by pilots selected by PHI and which meet the requirements of Customer’s aviation liability and hull risk insurance policies. All flight testing provided by PHI shall be “as is, where is, and with all faults” and will be at the Customer’s sole risk of loss, liability, or damage, and Customer shall provide aviation liability insurance coverage for all ground runs and flight testing, in such form and with such carriers as PHI shall reasonably require, which insurance shall be primary for any losses covered thereby. PHI will not perform any ground runs or flight testing until Customer has confirmed to PHI’s satisfaction that PHI and its crew have been properly added to Customer’s aviation liability insurance policies as primary additional insureds per the requirements of Section 19 hereof.
9. Non-compliance by Customer
9.1. If Customer: (a) fails to comply with any term of this Agreement or any other agreement between Customer or an affiliate of Customer and PHI or an affiliate of PHI, (b) files for bankruptcy or becomes subject to a bankruptcy proceeding, or (c) in the opinion of PHI becomes insolvent or unable to pay its debts as they come due, then PHI may, at its election and without limiting any other remedies: (y) cease performing the Services and/or not return a Product or End Product to Customer until the non-compliance is remedied, or (z) terminate this Agreement and pursue any right or remedy available to it hereunder or under applicable law.
9.2. Customer hereby appoints PHI to be its true and lawful attorney with full power and authority on Customer’s behalf to sell and dispose of any Products or End Products in connection with the foreclosure of any PHI lien as permitted hereunder.
10. Subcontracting and Assignment
10.1. PHI reserves the right to subcontract, in part or in full, any Services to third-party vendors that are authorized to perform the Services and hold any required licenses.
10.2. Customer shall not assign any of its rights or delegate any of its obligations under the Agreement without prior written consent of PHI, which consent may be withheld or conditioned by PHI for any reason. Any purported assignment or delegation in violation of this Section is null and void. No permitted assignment or delegation relieves Customer of any of its obligations under the Agreement.
10.3. PHI may assign the Agreement without Customer’s consent in the event of (i) a merger of PHI with another entity; (ii) the sale or transfer of a majority of PHI’s assets; (iii) an acquisition of fifty (50%) or more of the PHI’s voting interests by a third party, and (iv) a change in beneficial ownership of fifty percent (50%) or more of PHI’s ownership equity.
11. Limited Warranty
11.1. Unless otherwise provided in an Order Form, PHI provides a limited warranty of workmanship only for the End Products set for the below and only for the following periods (the “Limited Warranty Period”): Avionics work, balancing, rotor blades, rotor heads, and drive shafts - 180 calendar days from delivery, or 500 flight hours, whichever first occurs. No warranty is given on any other Service, including finishing and other general services.
11.2. This limited warranty is limited to those instances which, in the sole opinion of PHI, reveal defective workmanship by PHI in failing to follow the FARs or the instructions of the OEM (“Defective Workmanship”) and this limited warranty does not extend to any claim, failure or damage attributable in whole or in part to:
11.2.1. inherent vice, rust, corrosion, FOD, bird strikes, or lightning strikes;
11.2.2. failure to operate and/or maintain the End Product (or aircraft or component upon which it is installed) in accordance with the FARs, OEM requirements, and industry standards;
11.2.3. any repair or alteration by parties other than PHI; or
11.2.4. any part, component, upon which no work or Services were performed by PHI, or any consumables. For clarity, NO WARRANTY SHALL BE PROVIDED BY PHI WITH RESPECT TO CONSUMABLES, SOFTWARE, PARTS OR COMPONENTS ON WHICH NO SERVICES WERE PERFORMED BY PHI (INCLUDING ANY SUBCONTRACTOR IR THIRD PARTY WORK), OR ANY CSP, ALL OF WHICH ARE PROVIDED TO CUSTOMER “AS IS, WHERE IS, AND WITH ALL FAULTS AND DEFECTS.” Any OEM or other parts or components sold by PHI to Customer shall be provided with the OEM warranty applicable thereto, if any, and to the extent assignable to Customer. Any software provided shall be subject to the terms and conditions of the supplying vendor’s software license. The warranties for software shall be limited to the warranties provided by such vendor.
11.3. The obligation and responsibility of PHI under this limited warranty is expressly limited to, at PHI’s election: (a) assuming the cost of the labor and material required to replace or repair, at PHI’s facility, the primary damage sustained by the End Product and caused solely and directly by Defective Workmanship; or (b) refunding the amount paid by Customer allocable to the Defective Workmanship. Customer shall bear all cost and expense for, if applicable, removal and replacement of any defective parts, components, or CSP.
11.4. Any obligation of PHI with respect to the limited warranty shall be conditional upon: (a) the damage arising from the Defective Workmanship occurring during the applicable Limited Warranty Period; (b) Customer advising PHI in writing of the claim of Defective Workmanship within ten (10) days from the date of discovery of same; and (c) Customer returning the End Product to PHI, at its sole cost, within thirty (30) days after the discovery of same or such other date as PHI shall direct; and (d) PHI confirming that, in the opinion of PHI, the damage was caused by the Defective Workmanship of PHI.
11.5. Upon receipt of an End Product subject to a limited warranty claim, PHI may elect to perform a teardown or disassembly of the End Product to confirm the warranty claim. In the event that the teardown report shows no Defective Workmanship by PHI, Customer will be required to pay all costs of the teardown and the preparation of the teardown report based on PHI’s then prevailing labor and material rates.
11.6. All transportation costs (including packaging and shipping costs, taxes, duties, fees, import/export costs and transit insurance) in connection with any limited warranty claim shall be paid by Customer.
11.7. The Limited Warranty Period for any re-performed Services will be the unexpired portion of the original Limited Warranty Period.
12.1. EXCEPT AS SPECIFICALLY PROVIDED IN SECTION 11, ALL SERVICES, PARTS, CONSUMABLES, COMPONENTS, AND END PRODUCTS ARE PROVIDED IN “AS- IS, WHERE IS AND WITH ALL FAULTS” CONDITION WITH ALL ASSIGNABLE WARRANTIES FROM THE LAST OPERATOR OR REPAIR FACILITY (IF SUCH WARRANTIES EXIST).
12.2. ALL SERVICES ARE PERFORMED IN ACCORDANCE WITH OEM INSTRUCTIONS, IF AVAILABLE, OR, IF APPLICABLE, SUPPLEMENTAL TYPE CERTIFICATE HOLDER INSTRUCTIONS. ANY DAMAGE TO PRODUCTS OR OTHER PROPERTY OR DEATH OR INJURY TO ANY PERSONS THAT RESULT FROM SAID INSTRUCTIONS ARE DEEMED DISCLAIMED AND PHI SHALL HAVE NO LIABILITY THEREFOR.
12.3. THE OBLIGATIONS AND LIABILITY OF PHI HEREUNDER ARE EXPRESSLY IN LIEU OF ALL OTHER REPRESENTATIONS OR WARRANTIES OF ANY KIND OR CHARACTER, AND CUSTOMER HEREBY DISCLAIMS, WAIVES AND RELEASES PHI FROM ANY AND ALL OTHER WARRANTIES, AGREEMENTS, GUARANTEES, CONDITIONS, OBLIGATIONS, DUTIES, REPRESENTATIONS, REMEDIES OR LIABILITIES OF ANY KIND, EXPRESS OR IMPLIED, WHETHER ARISING AT LAW, IN CONTRACT OR IN TORT, WHETHER UNDER THEORIES OF NEGLIGENCE, STRICT NEGLIGENCE OR OTHERWISE, INCLUDING WITHOUT LIMITATION: (1) ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR INTENDED USE OR FOR A PARTICULAR PURPOSE, (2) ANY IMPLIED WARRANTY ARISING FROM COURSE OF PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE, AND (3) ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY FOR LOSS OF USE OR DAMAGE TO ANY END PRODUCT OR ENGINE OR AIRCRAFT OR ANY OTHER PROPERTY FOR LOSS OF REVENUE OR PROFIT WITH RESPECT TO ANY SUCH PROPERTY OR LIABILITY OF CUSTOMER TO ANY THIRD PARTY OR FOR ANY DIRECT, INDIRECT, INCIDENTAL, PUNITIVE OR CONSEQUENTIAL DAMAGES WHATSOEVER.
12.4. CUSTOMER EXPRESSLY WAIVES THE WARRANTY OF FITNESS AND THE WARRANTY AGAINST REDHIBITORY VICES AND DEFECTS, WHETHER APPARENT OR LATENT, IMPOSED BY LOUISIANA CIVIL CODE ARTICLES 2520 THROUGH 2548, INCLUSIVE, AND ANY OTHER APPLICABLE STATE OR FEDERAL LAW AND THE JURISPRUDENCE THEREUNDER. CUSTOMER ALSO WAIVES ANY RIGHTS IT MAY HAVE IN REDHIBITION TO A RETURN OF ANY PURCHASE PRICE OR TO A REDUCTION OF ANY PURCHASE PRICE PAID UNDER THIS AGREEMENT PURSUANT TO LOUISIANA CIVIL CODE ARTICLES 2520 TO 2548, INCLUSIVE, IN CONNECTION WITH ANY PARTS, COMPONENTS, AND END PRODUCTS. BY ITS SIGNATURE, CUSTOMER EXPRESSLY ACKNOWLEDGES ALL SUCH WAIVERS AND ITS EXERCISE OF ITS RIGHT TO WAIVE WARRANTY PURSUANT TO LOUISIANA CIVIL CODE ARTICLE 2520 AND 2548, INCLUSIVE.
13. Limitation of Liability
13.1. IF CUSTOMER CLAIMS ANY LOSS OR DAMAGES AGAINST ANY PHI INDEMNITEES (AS DEFINED BELOW), REGARDLESS OF THE CAUSE, INCLUDING BUT NOT LIMITED TO PHI'S OWN NEGLIGENCE, FAILURE TO PERFORM ANY OF THE OBLIGATIONS SET FORTH IN THE AGREEMENT, OR FROM THE MANUFACTURE, SALE, DELIVERY OR USE OF ANY GOOD, SERVICE, OR END PRODUCT COVERED BY OR FURNISHED UNDER THE AGREEMENT, THE LIABILITY OF THE PHI INDEMNITEES SHALL IN NO CASE EXCEED THE AMOUNT ACTUALLY PAID TO PHI BY CUSTOMER FOR THE SPECIFIC SERVICES WHICH GIVE RISE TO THE CLAIM, INCLUSIVE OF ALL TYPES OF DAMAGES, ATTORNEY'S FEES, INTEREST, EXPENSES, AND COSTS. IN NO EVENT SHALL ANY PHI INDEMNITEES BE LIABLE TO CUSTOMER FOR SPECIAL, INCIDENTAL, INDIRECT, CONSEQUENTIAL, EXEMPLARY, PUNITIVE, OR ENHANCED DAMAGES, NOR SHALL PHI INDEMNITEES BE LIABLE FOR DAMAGES RELATING TO THIRD PARTY CLAIMS, LOSS OF USE, DEATH, PERSONAL INJURIES, INTEREST, PROPERTY DAMAGE, DIMINUTION IN VALUE, ATTORNEYS’ FEES, LOST REVENUE, LOST PROFITS, OR COST OF REPLACEMENT GOODS, REGARDLESS WHETHER SUCH DAMAGES ARE DIRECT OR CONSEQUENTIAL, AND REGARDLESS WHETHER SUCH DAMAGES WERE FORESEEABLE, PHI WAS ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, OR THE LEGAL OR EQUITABLE THEORY UPON WHICH THE CLAIM IS BASED. THE LIMITATION OF LIABILITY PROVISIONS SET FORTH IN THIS SECTION SHALL APPLY EVEN IF CUSTOMER’S REMEDIES UNDER THE AGREEMENT FAIL OF THEIR ESSENTIAL PURPOSE. PHI AND CUSTOMER AGREE THAT THE PARTIES ENTERED INTO THIS AGREEMENT IN RELIANCE UPON THE LIMITATION OF LIABILITY SET FORTH IN THIS SECTION, AND THAT IT REFLECTS AN ALLOCATION OF RISK BETWEEN THE PARTIES, INCLUDING THE RISK THAT A REMEDY MAY FAIL OF ITS ESSENTIAL PURPOSE AND CAUSE CONSEQUENTIAL LOSS, AND THAT IT FORMS AN ESSENTIAL BASIS OF THE BARGAIN BETWEEN THE PARTIES.
13.2. ANY LAWSUIT, PROCEEDING OR ACTION BY CUSTOMER AGAINST ANY PHI INDEMNITEE MUST BE COMMENCED WITHIN ONE (1) YEAR AFTER THE CAUSE OF ACTION HAS ACCRUED.
14.1. To the extent not prohibited by law, Customer will defend, indemnify, and hold harmless PHI, its owners, affiliates, and subsidiaries, and each of their respective financiers, officers, directors, insurers and reinsurers, shareholders, subcontractors, agents, and employees (collectively, the “PHI Indemnitees”) from and against any and all liabilities, losses, judgments, damages, demands, actions, suits, fines, penalties, and claims of any kind whatsoever, whether based upon alleged active or passive negligence, implied or express contract or warranty, contribution, indemnity, strict liability, or product liability on the part of PHI Indemnitees, including all costs, expenses and reasonable attorneys’ fees incidental thereto, for property damage, diminution in value, lost profits, loss of use, injury to or death of any person, infringement of patents or trademarks arising from PHI’s compliance with Customer’s designs or specifications or instructions, and any other direct, indirect, incidental, consequential, economic or statutory civil damages, which arise out of or are in any way related to the breach of this contract by Customer, or the use, operation, repair, or maintenance of any Products, End Products, or CSP, by Customer at any time. Customer’s obligations under this Section 14.1 shall survive the delivery of the End Products or the termination or expiration of this Agreement for any reason and in perpetuity.
15. Export Control
15.1. Customer acknowledges that PHI may require Customer to provide trade compliance information regarding the CSP, aircraft, engines, components, and parts (e.g. Unit Value, HS Classification Code, Country of Origin and Export Control Classification Number) for the purposes of importing and exporting said items, if applicable. In the event that the Customer supplies incorrect trade compliance information, Customer agrees to indemnify and hold harmless PHI for any expenses, penalties, fines or other costs arising therefrom and provide PHI with a written statement identifying the error and the corrected information for the purposes of PHI providing to the applicable customs or other regulatory authority. Customer agrees to comply with all applicable export control laws, anti-boycott laws, and economic sanctions of any jurisdiction or governmental entity. Customer understands that Services, Products, and/or End Products (including related technical data) (collectively, “Exported Items”) may be subject to the United States Arms Export Control Act, the International Traffic in Arms Regulations (ITAR) (22 CFR 120-130 et seq.), the Export Administration Regulations (EAR) (15 CFR 730-774 et seq.), or any similar law or regulation of another country (collectively “Export Control Laws”). Customer warrants and represents that it will not export, re-export or divert the Products or End Products in violation of Export Control Laws. Customer will be “importer of record” or “exporter of record,” as applicable and defined by Export Control Laws, and shall obtain any required governmental authorizations such as an
import license, export license, exchange permit or any other required governmental authorization, and will perform all compliance and logistics functions in connection therewith and will also comply with all applicable laws, rules, and regulations. PHI SPECIFICALLY DISCLAIMS ANY AND ALL LIABILITY RELATED TO COMPLIANCE WITH ANY IMPORT OR EXPORT CONTROL LAWS.
16. Government Contracts
16.1. Unless otherwise preapproved in writing by PHI, no government contract regulations or clauses (whether the United States or otherwise) will apply to the Services or any Products or will otherwise act to bind PHI. Unless Customer provides PHI with prior written notice, Customer warrants that it will not submit any request for Services for which Customer knows or has reason to know such Services will be used in the performance of a U.S. government contract or subcontract which incorporates or is subject to federal regulations expressly or by reference, including without limitation the Federal Acquisition Regulations, Defense Acquisition Regulations (DFAR), Armed Services Procurement Regulations (ASPR), and Cost Accounting Standards (CAS).
17. Confidential Information; Non-solicitation
17.1. Prices for Services and all other information related to PHI’s business, products, and practices (“Confidential Information”) shall be held by Customer in confidence and Customer shall use and disclose any such Confidential Information only as specifically authorized by PHI in writing or as required by any applicable law. Customer will notify PHI immediately of any unauthorized distribution, disclosure, or use of Confidential Information.
17.2. PHI and Customer shall retain all of their own proprietary rights of any kind in and to their respective patents, trademarks, procedures, know-how, methods, processes, trade secrets and proprietary information that may be used or disclosed with respect to the Services.
17.3. PHI will retain ownership of all intellectual property and proprietary rights that it develops in connection with the Services. The provision of Services by PHI does not convey any license, whether by implication, estoppel, or otherwise, to Customer or any other person or entity, to any intellectual property rights of any kind.
17.4. Customer shall not, either directly or indirectly, solicit any PHI employee which Customer has communicated with relative to this Agreement or any Services, to terminate his/her employment with PHI in favor of Customer or any other person or entity provided that this shall not prohibit Customer from discussing employment opportunities with a PHI employee who responds to a general employment advertisement or solicitation that is not specifically directed at that employee.
18. Force Majeure
18.1. PHI will not be liable for delays in delivery or failure to deliver due to causes beyond its reasonable control including but not limited to acts of God, acts or omissions of Customer, acts of government, expropriations, eminent domain, condemnation, national, regional, or local emergency, revolution, changes in laws, regulations, or orders, terrorism, acts of third parties, acts of civil or military authority, fires, blockages, seizures or freeze of assets, government delays or refusals (including but not limited to delays or refusals to grant export or import licenses or the suspension or revocation thereof), floods, earthquakes, explosions, severe weather, epidemics, pandemic, quarantine restrictions, war, riot, insurrection, embargo, delays in transportation, labor strikes, work slowdowns, lockouts, telecommunication breakdown, power outages or other utility interruptions, inability or delay in obtaining necessary labor, materials, or components, or any other commercial impracticability (“Force Majeure”).
19.1. Customer shall maintain the following insurance in the amounts and with the endorsements specified, in form and content satisfactory to PHI:
19.1.1. For all aircraft flown to PHI’s facility, and for all ground runs and flight test activity, comprehensive aviation liability (including but not limited to third party legal liability, public liability, passenger legal liability, and contractual liability insurance with combined single limit of liability (bodily injury/property damage) of not less than US$25 Million per occurrence (unless otherwise agreed in an Order Form);
19.1.2. All risks (ground, taxing, ingestion, and flight) aviation hull insurance and all risks (including transit) aircraft spare parts insurance with limits of not less than the full market value of the Aircraft (or the Product or CSP, as applicable, if not installed);
19.1.3. Worker's compensation insurance as required by law; and
19.1.4. Commercial General Liability insurance covering all accidents, injuries, and property damage or loss while on Customer’s premises, with limits of no less than US$10 Million per occurrence.
19.2. Each policy required under Section 19.1 will:
19.2.1. be primary and without any right of contribution from any insurance which is carried by any PHI Indemnitee;
19.2.2. apply to liability and risks of loss assumed by Customer under any contract or agreement and includes this Agreement;
19.2.3. provide PHI with thirty (30) days’ notice of material change and/or cancellation of insurance;
19.2.4. contain a breach of warranty clause in favor of the PHI Indemnitees and not be invalidated by any act or omission or breach or violation by Customer or any other party of any of its obligations contained in any policy;
19.2.5. contain a full waiver of Customer and underwriters’ rights of subrogation in favor of the PHI Indemnitees;
19.2.6. be placed with an insurance carrier with an AM Best rating of no less than A- or equivalent; and
19.2.7. provide that the PHI Indemnitees will be included as additional primary insureds.
19.3. Customer will provide an insurance certificate and endorsements evidencing the coverage required hereunder prior to PHI performing any Services, no later than thirty (30) days prior to the expiration of any policy, and upon PHI’s request from time to time. PHI shall have the right to refuse to provide the Services or accept delivery of a Product from Customer at any time until it has received from Customer a then-current insurance certificate and endorsements that satisfies the requirements hereunder.
19.4. Customer will be solely responsible for any deductibles.
19.5. The amount of insurance carried in compliance with the above requirements is not to be construed as either a limitation on or satisfaction of Customer’s indemnification obligations.
19.6. In addition to the above, Customer shall carry and maintain such insurance in types and amounts as would be carried by prudent companies engaged in Customer’s industry.
19.7. For the time period when any Product or End Product (including aircraft) is at PHI’s facility, it will be covered under PHI’s standard hangarkeepers insurance policy (subject to the provisions of Section 5.1.5 hereof), but CUSTOMER UNDERSTANDS THAT HANGARKEEPERS INSURANCE IS NOT AN ALL-RISK POLICY AND THAT CERTAIN RISKS, DAMAGES, AND LOSSES ARE EXCLUDED THEREFROM. AS SUCH, CUSTOMER WILL KEEP ALL AIRCRAFT, PRODUCTS, AND END PRODUCTS COVERED UNDER ITS ALL-RISK HULL AND SPARES POLICIES, IF ANY, AND ANY CLAIMS, LOSSES OR DAMAGES NOT COVERED BY PHI’S HANGARKEEPERS POLICY SHALL BE DEEMED WAIVED BY CUSTOMER. IF CUSTOMER IS NOT THE TITLE OWNER OF THE PRODUCT OR AIRCRAFT, CUSTOMER WILL INDEMNIFY AND HOLD PHI HARMLESS FROM ALL CLAIMS OF THE APPLICABLE OWNER FOR DAMAGES OR LOSSES NOT COVERED BY PHI’S HANGARKEEPERS POLICY.
20. Customer Representations and Warranties:
20.1. Customer represents and warrants to the PHI that: (a) it is a legal entity duly established and validly existing under the laws of its jurisdiction of organization, and has full power, authority and legal right to own its assets and to carry on its business; (b) it has full power, authority and legal right, and all necessary corporate actions have been taken in order to authorize it to enter into this Agreement and perform its obligations hereunder; (c) the Agreement constitutes the legal, valid and binding obligations of Customer enforceable in accordance with its terms subject to applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally; (d) all authorizations required from any governmental or other authority or required to be obtained from any of its owners, shareholders, members or creditors or any other person for or in connection with the execution, validity, performance and enforceability of this Agreement have been obtained and are in full force and effect; (e) it is generally subject to legal proceedings, and it is not entitled to any immunity or privilege from any set off, judgment, execution, attachment or other legal process; and (f) with respect to all Products and Aircraft on which they may be installed, it either owns the Product or has authorization from the owner of the Product to enter into and perform its obligations under the Agreement and to have the Services performed on the Product.
21. Governing Law; Venue; Waiver of Jury Trial and Service of Process
21.1. The Agreement is governed by the laws of the state of Louisiana (without regard to conflict of laws principles). The United Nations Convention on Contracts for the International Sale of Goods, 1980, and any successor thereto, shall not apply. In the event of any dispute or claim, the Parties hereby agree that any lawsuit or other legal action shall be filed only in the United States federal courts with jurisdiction over Lafayette Parish, Louisiana, and in no other venue ("Courts") provided however that if the Courts lack jurisdiction in any manner, then the state courts of record for Lafayette, Louisiana shall be the sole and exclusive venue. The Parties agree to submit to the exclusive jurisdiction of the Courts, agree to venue in the Courts, and waive any defense of lack of personal jurisdiction or forum non conveniens in the Courts. The prevailing Party in any lawsuit or other legal action shall be entitled to collect its reasonable legal fees and costs from the non-prevailing Party. The provisions of this section shall not restrict the ability of either Party to enforce in any court, without geographic limitation, any judgment obtained in the Courts. ALL TRIALS BY JURY ARE IRREVOCABLY WAIVED. Service of process by certified mail to its address as set forth in the Order Form(s) shall be effective service of process on such Party for any lawsuit or other legal action brought in the Courts.
22.1. All notices and other communications hereunder shall be in writing and addressed to the Parties at the addresses set forth on Order Forms or to such other address that may be designated by the receiving Party in writing. All notices shall be delivered by personal delivery, nationally recognized overnight courier (with all fees prepaid), email (with confirmed read receipt or acknowledgement by the recipient and followed by an original in accordance with this section) or certified or registered mail (in each case, return receipt requested, postage prepaid). Notices will be deemed received the next day if sent via overnight mail or courier with confirmation of receipt, or five (5) days after deposited in the mail sent certified or registered. Otherwise, notices are effective only (a) upon receipt of the receiving Party; and (b) if the Party giving the Notice has complied with the terms of this section.
23. Cumulative Remedies
23.1. All rights and remedies provided in the Agreement are cumulative and not exclusive, and the exercise by a Party of any right or remedy does not preclude the exercise of any other rights or remedies that may now or subsequently be available at law, in equity, by statute, in any other agreement between the Parties, or otherwise.
24. Further Assurances
24.1. The Parties shall execute and deliver such additional documents, instruments, conveyances, and assurances and take such further actions as may be required to carry out the provisions hereof and give effect to the transactions contemplated hereby.
25. Waiver; Severability
25.1. The failure of a Party to object to or to take affirmative action with respect to any conduct of the other Party which is in violation of any of the terms hereof, shall not be construed as a waiver thereof, nor of any future breach or subsequent wrongful conduct of the same or any other provisions of the Agreement. No waiver shall be of any force or effect unless set forth in a writing signed by both Parties. If any term hereof is held invalid or unenforceable in any jurisdiction by a court of competent jurisdiction, such invalidity or unenforceability shall not affect the validity, enforceability, or operation of any other term of the Agreement (which shall remain in full force and effect), and such invalid or unenforceable term shall be deemed to be severed from the Agreement for purposes of such jurisdiction.
26. Binding Effect; No Third-Party Beneficiaries
26.1. This Agreement shall be binding on and shall enure to the benefit of the Parties and their successors, permitted assigns, heirs, and administrators. Subject to the immediately preceding subsection, no third party will have any rights or remedies under the Agreement.
27. Entire Agreement; No Oral Modification; Counterparts; Term; Survival
27.1. These General Terms (together with any applicable Order Forms) constitute the entire and final agreement of the Parties with respect to the subject matter of the Agreement, and revokes and supersedes any and all prior or contemporaneous negotiations, commitments, discussions, understandings, and/or agreements, representations, and warranties, in each case whether oral or otherwise, and any course of dealing, between the Parties with respect to each subject matter of the Agreement.
27.2. These General Terms cannot be modified or amended except in writing signed by the Parties hereto. Customer’s representative who executed the Order Form on Customer’s behalf shall be deemed an authorized representative of Customer for all other purposes, including any change orders or amendments to the Agreement.
27.3. Each Party may execute and deliver this Agreement or any Order Form, change order, or amendment hereto or thereto by electronic transmission (including in portable document format or by electronic signature such as DocuSign) of one or more signed counterparts that together will constitute one and the same instrument.
27.4. The term of this Agreement will commence upon signature or acceptance hereof by both Parties and will expire when all Services with respect to the Product(s) under any Order Form have been completed and the End Product(s) have been delivered to Customer. For clarity, Customer’s signature or acceptance of these terms and conditions and the Order Form to which they pertain shall be final and irrevocable, and no termination for convenience shall apply.
27.5. The termination or expiration of this Agreement for any reason will not relieve any Party of any liability or obligation to the extent accrued prior to such termination. Not in derogation of the generality of the foregoing sentence, Sections 3.3, 3.5, 4.2, 5.3, 9, 11-15, 17, 18 and 20-28 will survive the termination or expiration of this Agreement or completion of the Services under any circumstance.
28.1. The section, subsection, paragraph, and item headings included in these General Terms are for convenience of reference only and shall not affect or be utilized in construing or interpreting any word, phrase, provision, or section in, or all or any portion of, the Agreement. Neither the General Terms nor any portion or provision of the Agreement will be construed in favor or against any Party based on which Party drafted the Agreement or such provision. Use in these General Terms of the term “herein,” “hereof,” “hereunder,” “herewith,” and other similar words refer to the General Terms as a whole and to no particular provision, unless expressly indicated otherwise herein. Each provision in the Agreement that states or implies that consent or approval (or the like) of PHI is required will be construed in such a manner that such consent or approval (or the like) may be granted, withheld, conditioned, or denied, in whole or in part, in PHI’s sole and absolute discretion, for any reason or no reason. The use of the word “including” and similar terms in this Agreement will be construed without limitation. References in this Agreement to “Business Days” will refer to each day other than a Saturday or Sunday or a day that commercial banking institutions in Lafayette, Louisiana are authorized or required by law to remain closed, and “days” means consecutive calendar days.