EFTA00759269.pdf

S-76D NEW HELICOPTER SALES AGREEMENT THIS S-76D NEW HELICOPTER SALES AGREEMENT (the "Agreement"), dated as of the Effective Date stated below, is made by and between Sikorsky Aircraft Corporation ("Sikorsky") and the Customer named below. I. DEFINITIONS/INFORMATION FOR THIS AGREEMENT 1. Customer: Shmitka Air Inc. 2. Sikorsky Contract No: 3. Helicopter Quantity: One (1) 4. ScheduledPresentation Date June 2012 (or sooner at Sikorsky's option) Helicopter: Subject to Confirmation Immediately Prior to Execution 5. ScheduledPresentation Date December 2012 (or sooner at Sikorsky's Completion Services: option) Subject to Confirmation Immediately Prior to Execution 6. Helicopter Unit Price: US$ 8,900,000 7. Completion Services Unit Price: US$ 3 268 000 8. Custom Helicopter Unit Price: US$12,168,000 9. Total Contract Price: US$12,168,000 10. Payment Schedule: a. Helicopter Advance Payment: 20% of the Total Contract Price (less any previously remitted deposit amount) due on the date Customer signs this Agreement. US$2,333,600 (US$2,433,600 less $100,000 deposit paid by Customer prior to the Effective Date) S-76D Contract No. 76DD7702 Shmitka Air Inc.. Pagc I of IS EFTA00759269  S-76D NEW HELICOPTER SALES AGREEMENT b. Helicopter Final Payment: 65% of the Total Contract Price due upon acceptance of the Helicopter pursuant to Article III.2, subject to Article III.1. US$7,909,200 d. Completion Services Final 15% of the Completion Services Unit Price Payment: due upon acceptance of the Completion Services pursuant to Article III.6, subject to Article III.5. US$1,825,200 11. Customer's Contact for Technical Larry Visoski Issues: Chief Pilot Shmitka Air Inc. 1131 Pine Point Road Sin er Island, FL 33404 12. Customer's Contact Detailsfor Darren K. Indyke Legal Notices and Invoices Vice-President (including, (a) name and title, (b) Shmitka Air Inc. mailing addressfor notices and do Darren K. Indyke PLLC invoices, (c) department/ 301 East 66th Street 10B organization for notices, (d) phone New York, NY 10065 number, and (e) e-mail address): S-76D Contract No. 76DD7702 Shmitka Air Inc.. Pagc 2 of 18 EFTA00759270  S-76D NEW HELICOPTER SALES AGREEMENT II. SIKORSKY'S COMMITMENTS TO THE CUSTOMER 1. Sale and Delivery — Sikorsky shall sell and deliver to the Customer, and the Customer shall purchase from Sikorsky, the Quantity of Sikorsky Model S-76D Helicopters equipped with the items of additional equipment specified in Exhibit A, Part 1 (the "Helicopter"). The Helicopter shall be delivered and, subject to the conditions, requirements and other provisions contained in this Agreement, acceptance of the Helicopter shall take place at Sikorsky's designated facility, in Pennslyvania (the "Designated Facility") and title to the Helicopter shall be transferred to the Customer or Customer's designee in accordance with the provisions of this Agreement. 2. Performance of Completion Services — Sikorsky shall sell and perform the Completion Services for Customer and Customer shall purchase the Completion Services on the Helicopter, which, as a result of such Completion Services, will then be equipped with the items of additional equipment specified in Exhibit A, Part 2 (the "Custom Helicopter"). The Completion Services shall be performed subsequent to title transfer with Sikorsky retaining custody of the Helicopter subsequent to title transfer to perform the Completion Services at a Sikorsky designated completion center (the "Designated Completion Center"). Following the arrival of the Helicopter at the Designated Completion Center, the configuration items specified in Exhibit A, Annex 1, shall be removed from the Helicopter and retained by Sikorsky. These configuration items shall be either deleted or replaced by the Customer's items of additional equipment specified in Exhibit A, Part 2 as part of the Completion Services. 3. Publications and Training — Sikorsky shall make available to Customer: (i) the technical publications described in Exhibit B, and (ii) the training described in Exhibit C. 4. Helicopter Warranty — the terms of Sikorsky's limited warranty are set forth in Exhibit D. 5. Spare Parts Provisioning and Technical Support - Sikorsky recommends that a provisioning conference should be held between the Customer and representatives of Sikorsky Aerospace Services ("SAS"), Sikorsky's aftermarket business, no later than 180 days before the Scheduled Presentation Date Helicopter, for the purpose of defining the Customer's detailed logistics planning considerations and support objectives. Sikorsky will invite the Customer to participate in the provisioning conference at Sikorsky's designated facility. At the provisioning conference, a list of parts and equipment recommended to support the Custom Helicopter would be identified and discussed. Any spare parts procured by the Customer would be sold pursuant to a separate agreement between the Customer and SAS. The Customer shall be responsible for all travel and related expenses associated with Customer's personnel attending the provisioning conference. S-76D Contract No. 76DD7702 Shmitka Air Inc.. Pagc 3 of 18 EFTA00759271  S-76D NEW HELICOPTER SALES AGREEMENT III. INSPECTION ACCEPTANCE DELIVERY AND TITLE TRANSFER 1. Presentation for Acceptance — The Helicopter shall be presented for acceptance at the Designated Facility on the Scheduled Presentation Date Helicopter. During such presentation, the Customer shall be entitled to a standard acceptance test flight by Sikorsky for the Helicopter, which test flight shall be no longer than one (1) hour in duration, or longer as may be reasonably necessary. Customer's obligation to purchase the Helicopter is conditioned upon and subject to Customer being satisfied that (i) the Helicopter is in airworthy condition with all flight critical systems functional and in proper working order, (ii) the Helicopter has been manufactured in accordance with the specifications of this Agreement and that (iii) the Helicopter has no damage, corrosion or other defects. If Customer does not make itself available for presentation and acceptance of the Helicopter, the Helicopter Final Payment shall be due within ten (10) days following receipt by Customer of written notice that the Helicopter is ready for presentation and acceptance; provided, that if Customer's failure to make itself available is attributable to causes that would be an Excusable Delay as defined in Article VIII.1, then, without impairing any of Sikorsky's rights under Article VIII.2, Customer shall be afforded such time as may be reasonably required to remove such causes; and, provided, further, that if Customer's failure to make itself available is attributable to a material breach on the part of Sikorsky, Sikorsky shall be afforded such time as may be reasonably required to cure such breach. 2. Acceptance, Delivery and Title Transfer — Subject to the provisions of Section 11I.1 of this Agreement, after presentation, Customer shall accept the Helicopter by executing a Certificate of Helicopter Acceptance in the form of Exhibit E Part 1. Thereafter, upon receipt of the Helicopter Final Payment in accordance with Article I.10.b., above, Sikorsky shall deliver, at the Designated Facility, to Customer, or Customer's designee, a Bill of Sale and a Certificate of Airworthiness to evidence delivery and title transfer. The Helicopter shall be delivered Ex Works (Incoterms 2000) from the Designated Facility. Subsequent to title transfer to Customer, Sikorsky shall retain custody of the Helicopter in order to perform the Completion Services. 3. No Prospective Registration of Interest — Prior to the transfer of title as provided in this Agreement, Customer, without the prior written consent of Sikorsky, shall neither register nor consent to the ability of any person to register any interest in the Helicopter or its engines on the International Registry, including without limitation, any prospective international interest, pursuant to that body of law known as the Cape Town Treaty Convention on International Interests in Mobile Equipment and the Protocol to the Convention on International Interests in Mobile Equipment on Matters Specific to Aircraft Equipment (hereinafter the "Cape Town Treaty"). Any consent by Sikorsky to registration of any interest in the Helicopter or its engines shall be subject to, among other things at Sikorsky's sole discretion, receipt by Sikorsky of all payments due under this Agreement at the time of title transfer of the Helicopter to Customer. Registration of any interest under the Cape Town Treaty in violation of this paragraph shall be deemed S-76D Contract No. 76DD7702 Shmitka Air Inc.. Pogo 4 of IS EFTA00759272  S-76D NEW HELICOPTER SALES AGREEMENT ineffective as against Sikorsky and, upon request of Sikorsky, Customer, at its own expense, immediately shall take all required action to remove any such interest or other encumbrance on the Helicopter or its engines. 4. Risk of Loss — Sikorsky shall have risk of loss of the Helicopter, subsequent to the transfer of title until the Customer's acceptance of the Completion Services as evidenced by the Customer's execution of a Certificate of Completion Services Acceptance in the form of Exhibit E, Part 2. In the event that the Helicopter is damaged or the functionality is in any way compromised during the conduct of the Completion Services, Sikorsky shall be required, as a part of the Completion Services, to repair such damage or restore such functionality to as good condition as new. Customer agrees that any insurance proceeds for such repair shall be paid directly to Sikorsky. In the event the Helicopter is lost or destroyed or damaged beyond economic repair at any time prior to Customer's acceptance, Customer shall have the right to either (i) purchase the next available S-76D helicopter in Sikorsky's production sequence (the "Replacement Helicopter"), if available, on the same terms and conditions as set forth in this Agreement; provided, that Sikorsky reserves the right to make changes in the Exhibit A configuration and Helicopter Unit Price of the Replacement Helicopter required due to obsolescence, FAA requirements, or as a result of changes in the manufacture of the Helicopter; or (ii) terminate this Agreement. Customer shall notify Sikorsky of its decision within fifteen (15) days of receipt by Customer of written notice from Sikorsky of the loss or destruction of or damage beyond economic repair to the Helicopter, which notice shall include the projected delivery date of the Replacement Helicopter, or a statement indicating that such Replacement Helicopter is not available. 5. Presentation of Completion Services for Acceptance — The Custom Helicopter shall be presented for technical acceptance of the Completion Services performed at the Sikorsky Designated Completion Center on the Scheduled Presentation Date Completion Services. During such presentation, the Customer shall be entitled to a standard acceptance test flight by Sikorsky for the Custom Helicopter, which test flight shall be no longer than one (1) hour in duration or longer as may be reasonably necessary. Customer's obligation to accept the Completion Services is subject to Customer being satisfied that the Completion Services have been satisfactorily completed and that the Custom Helicopter, as previously accepted by Customer, is in airworthy condition with all flight critical systems functional and in proper working order, the Custom Helicopter has been manufactured in accordance with the specifications of this Agreement, and that the Custom Helicopter has no damage, corrosion or other defects. If Customer does not make itself available for presentation and acceptance of the Completion Services, the Completion Services Final Payment shall be due within ten (10) days following receipt by Customer of written notice that the Completion Services are ready for presentation and acceptance; provided, that if Customer's failure to make itself available is attributable to causes that would be an Excusable Delay as defined in Article VIII.1, then, without impairing any of Sikorsky's rights under Article VIII.2, Customer shall be afforded such time as may be reasonably required to remove such causes; and, provided, further, that if Customer's failure to make itself available is attributable to a material S-76D Contract No. 76DD7702 Shmitka Air Inc.. Pogo 5 of 18 EFTA00759273  S-76D NEW HELICOPTER SALES AGREEMENT breach on the part of Sikorsky, Sikorsky shall be afforded such time as may be reasonably required to cure such breach. 6. Acceptance of Completion Services - Subject to the provisions of Section III.5 of this Agreement, after inspection, Customer shall accept the Completion Services by executing a Certificate of Acceptance of the Completion Services in the form of Exhibit E, Part 2. Thereafter, upon receipt of the Completion Services Final Payment pursuant to Article I. 10.d. above, Sikorsky shall provide to Customer a FAA return to service certification and, if applicable, an Export Certificate of Airworthiness, and the Custom Helicopter shall then be at Customer's risk. If applicable under the terms of this Agreement, Sikorsky retains the right to utilize its own freight forwarder for the preparation and booking of any export shipment. IV. PRICE/PAYMENT SCHEDULE 1. Price/Payment Schedule — The Customer shall pay to Sikorsky the payments set forth in the Payment Schedule contained in Article I hereof by wire transfer to: (or such other account that Sikorsky may designate in writing). Sikorsky shall provide an invoice to Customer for all payments due hereunder in accordance with the Payment Schedule contained in Article I hereof. V. CONFIGURATION 1. Sikorsky Specification Changes - Before the Scheduled Presentation Date Completion Services, Sikorsky reserves the right to make any substitution or amendment to Exhibit A (Helicopter Configuration) hereto that it deems necessary in order to ensure that the Helicopter and/or Custom Helicopter complies with any airworthiness requirement or any mandatory airworthiness directive or service bulletins affecting the Helicopter and/or Custom Helicopter issued by Sikorsky, any vendor or the FAA. 2. Configuration Finalization — To facilitate finalization of the configuration for the Helicopter, Sikorsky and Customer agree as follows: 2.1 Customer Guidance — Not later than two hundred ten (210) days prior to the Scheduled Presentation Date Helicopter, Customer must provide guidance to Sikorsky with respect to exterior paint colors and interior colors and materials (as applicable). Sikorsky will create exterior renderings and interior material boards based on this guidance, and will present this material at the configuration review S-76D Contract No. 76DD7702 Shmitka Air Inc.. Pogo 6 of IS EFTA00759274  S-76D NEW HELICOPTER SALES AGREEMENT meeting described in clause 2.2 below. 2.2 Configuration Finalization Meeting — Not later than one hundred eighty (180) days prior to the Scheduled Presentation Date Helicopter, Sikorsky and Customer shall conduct a configuration review meeting at the Designated Facility to review and discuss the aircraft systems and interior specifications. The intent of this meeting is to provide Customer with a thorough understanding of the aircraft systems and interior specifications. Sikorsky will also present to the Customer exterior paint schemes and interior configuration and materials that are based on colors and guidance provided to Sikorsky prior to the meeting by Customer (reference paragraph 2.1 above). All travel, living and communication expenses incurred by Customer's representatives shall be borne by Customer. Customer approval of the specifications is sought at the time of the Configuration Finalization Meeting, but not later than thirty (30) days following the meeting. The document conveying Customer approval of the specifications is the executed specification approval log, detailed in 2.3.1 below. 2.3 Customer Furnished Information — Not later than one hundred fifty (150) days prior to the Scheduled Presentation Date Helicopter, Customer will furnish Sikorsky with the following information: 2.3.1 Executed specification approval log. Items requiring approval in this log include, but are not limited to: • System Specification • Audio Specification (if applicable) • Interior Configuration Document • Interior Material Board • Seat Upholstery Style (if applicable) • External Paint Rendering • Exterior Paint Colors • Exterior Paint Production Drawing • Any required Customer furnished camera-ready artwork for logos (if applicable) • Registration numbers and ICAO addresses for the Helicopter 2.4 Failure to Provide Configuration Information/Customer Initiated Changes - Failure to provide Sikorsky with any of the information by the respective dates described in subsections 2.1, 2.2 and 2.3 above, or any change to such information, including changes to the configuration, not caused by or proposed by Sikorsky after such respective dates (i) may result in a delivery delay and such delay shall constitute an Excusable Delay with respect to Sikorsky's performance under this Agreement, and (ii) may result in the imposition of one of the two configuration change fee scenarios identified in subsections I) and 2) below. S-76D Contract No. 76DD7702 Shmitka Air Inc.. Pagc 7 of IS EFTA00759275  S-76D NEW HELICOPTER SALES AGREEMENT The scenarios identified below exclude the recurring price (materials and labor) that may be applicable to the equipment items changed by Customer. The recurring price for the equipment items will be included in the Custom Helicopter Unit Price. Configuration change fee and schedule impact for change(s) contracted in a single contract amendment/transaction: I) If a signed amendment to this Agreement and Customer approvals in accordance with paragraph 2.3.1 above are finalized more than ninety (90) days prior to the Scheduled Presentation Date Helicopter, then the following shall apply: -- Acceptable changes: Any Change. -- Configuration change fee: None. -- Schedule Delay: Depending on time for new part(s) design, time for certification, and lead time for new part(s). 2) If a signed amendment to this Agreement and Customer approvals in accordance with paragraph 2.3.1 above are finalized ninety (90) days or less than ninety (90) days prior to the Scheduled Presentation Date Helicopter, then the following shall apply: For existing certified options or development options: a. $50,000 or 20% of value of contract change (whichever is greater); plus b. Any costs or termination liability incurred by Sikorsky as a result of the change; plus c. Any cost of rework (including, without limitation, Sikorsky's labor and material costs incurred to rework items to accommodate the Customer requested changes); and d. Any schedule delay caused by lead time for obtaining parts, added design time, design certification and/or installation time for new part(s). 3) At any time during performance of Completion Services no configuration changes will be accepted. The Helicopter will be completed in accordance with the configuration identified in this Agreement and any changes will be contracted separately in a stand alone Modification Agreement. Services provided under any such Modification Agreement will be accomplished at a Sikorsky Designated Facility. 3. Customer's Changes to Configuration and Additional Equipment — In the event that the S-76D Contract No. 76DD7702 Shmitka Air Inc.. Pagc S of IS EFTA00759276  S-76D NEW HELICOPTER SALES AGREEMENT Customer desires to change the Helicopter configuration and/or obtain additional equipment for the Helicopter, the parties must mutually agree on a written amendment to this Agreement reflecting such changes and setting forth any changes in the price and/or delivery schedule. For this purpose, the Customer hereby appoints the Customer's Contact for Technical Issues as set forth in Article I, which person has authority to negotiate any such changes with Sikorsky and execute a legally binding amendment reflecting such technical, price and/or delivery changes. 4. Suitability of Configuration — The Customer is responsible for having ensured that the helicopter configuration, defined herein, meets all the operational requirements of the country of destination/registration as they relate to the specific intended usage of the Custom Helicopter. If requested, Sikorsky shall make a good faith attempt to assist in the determination of this configuration. If required for import/registration requirements in the foreign country, Sikorsky shall endeavor to obtain that country's design approval of the configuration items not already approved. VI. HELICOPTER RELATED PROVISIONS, INCLUDING S-76D DEVELOPMENT STATUS 1. S-76D Development - The S-76D helicopter is currently in development at Sikorsky. If at any time prior to Federal Aviation Administration (FAA) certification of the S-76D, Sikorsky is not satisfied with the development of the S-76D, or in the event that the S- 76D helicopter is not certified by the FAA, Sikorsky may terminate this Agreement with the Customer upon written notice. In case of such a termination by Sikorsky, the Customer shall have the option of (a) receiving reimbursement from Sikorsky of all amounts paid to Sikorsky in respect of the Helicopter, or (b) applying the amounts paid to Sikorsky in respect of the Helicopter to the purchase of a new S-76C-HE helicopter from Sikorsky, if available. During the development of the S-76D helicopter, Sikorsky may deem it necessary or desirable to change the configuration of the Helicopter/Custom Helicopter referenced in this Agreement. In such case, Sikorsky agrees to consult with the Customer with regard to any such configuration change and Sikorsky will attempt to present a configuration change that does not (i) adversely affect the capabilities or function of the Helicopter/Custom Helicopter; and/or (ii) materially and adversely affect the aesthetics of the Helicopter/Custom Helicopter. In the event that the parties mutually and reasonably conclude that the configuration cannot be changed without adversely affecting the capabilities or function of the Helicopter/Custom Helicopter and/or materially and adversely affecting the aesthetics of the Helicopter/Custom Helicopter, then either party may terminate this Agreement upon written notice to the other. In case of such termination, the Customer shall have the option of (a) receiving reimbursement from Sikorsky of all amounts paid to Sikorsky in respect of the Helicopter, or (b) applying the amounts paid to Sikorsky in respect of the Helicopter to the purchase of a new S-76C++ helicopter from Sikorsky, if available. 2. S-76D FAA Certification — In addition, the obligations of Sikorsky under this Agreement are subject to the certification of the S-76D helicopter by the FAA prior to the Scheduled S-76D Contract No. 76DD7702 Shmitka Air Inc.. Pagc 9 of 18 EFTA00759277  S-76D NEW HELICOPTER SALES AGREEMENT Presentation Date Helicopter. Sikorsky anticipates obtaining certification by September 30, 2011. In the event that such FAA certification is not obtained by such date, such delay shall be considered an excusable delay pursuant to Section IX paragraph 1 of this Agreement; provided, that if the aggregate duration of such excusable delay extends more than more than one hundred twenty (120) days, then either party may terminate this Agreement upon written notice to the other. In case of such termination, the Customer shall have the option of (a) receiving reimbursement from Sikorsky of all amounts paid to Sikorsky in respect of the Helicopter, or (b) applying the amounts paid to Sikorsky in respect of the Helicopter to the purchase of a new S-76C-HF helicopter from Sikorsky, if available. 3. Special Flight Tests — Flight test work required for prototyping, functional checkout, or qualification of any additional equipment contracted may be performed by Sikorsky on the Helicopter and the Custom Helicopter prior to title transfer thereto or final delivery thereof, respectively, to the Customer. The delivery of the Helicopter or the Custom Helicopter may be delayed to the extent necessary to accomplish the flight test work objectives without any liability on the part of Sikorsky for any such delay. In the event the Helicopter is lost or destroyed or damaged beyond economic repair at any time prior to Customer's acceptance, Customer shall have the right to either (i) purchase the next available S-76D helicopter in Sikorsky's production sequence (the "Replacement Helicopter"), if available, on the same terms and conditions as set forth in this Agreement; provided, that Sikorsky reserves the right to make changes in the Exhibit A configuration and Helicopter Unit Price of the Replacement Helicopter required due to obsolescence, FAA requirements, or as a result of changes in the manufacture of the Helicopter; or (ii) terminate this Agreement. Customer shall notify Sikorsky of its decision within fifteen (15) days of receipt by Customer of written notice from Sikorsky of the loss or destruction of or damage beyond economic repair to the Helicopter, which notice shall include the projected delivery date of the Replacement Helicopter, or a statement indicating that such Replacement Helicopter is not available. In case of any purchase by Customer of the Replacement Helicopter, Sikorsky shall apply to such purchase the amounts paid to Sikorsky in respect of the Helicopter. In the event of any termination of this Agreement pursuant to this Section VI.3, Sikorsky or the insurer, as the case may be, shall promptly refund to the Customer all amounts previously paid by Customer to Sikorsky in respect of the Helicopter or Custom Helicopter so destroyed. 4. Compliance Statement Regarding Airworthiness Directives (ADs), and Alert Service Bulletins (ASBs) - Sikorsky will deliver the Custom Helicopter with all applicable ADs and ASBs existing prior to the Scheduled Presentation Date Completion Services complied with. The delivery of the Custom Helicopter may be delayed to the extent necessary to comply with any ADs or ASBs without any liability on the part of Sikorsky for such delay. 5. HelotracTm - With each Helicopter sold and delivered hereunder, Sikorsky shall make available to Customer, at no cost to Customer, a one-year subscription to this service. S-76D Contract No. 76DD7702 Shmitka Air Inc.. Page 10 of 18 EFTA00759278  S-76D NEW HELICOPTER SALES AGREEMENT VII INTERNATIONAL SALES PROVISIONS litapplicable! 1. Export License — Customer and Sikorsky agree that this Agreement is intended to provide for the purchase and sale only of items that are not classified as US Munitions List (USML) items and can be exported under United States Department of Commerce License Exception NLR (no license required). Sikorsky represents that the Helicopter configuration provided under this Agreement at the time of delivery consists only of items that can be exported under the United States Department of Commerce License Exception NLR. Notwithstanding the foregoing, in the event that this Agreement or the performance of the parties hereunder is or becomes subject to United States export or import laws, the full performance by Sikorsky under this Agreement will be subject to the receipt of all applicable United States government export licenses and approvals. In such event, any cause that may delay the receipt of a required United States export license or approval may result in a delay of the delivery of the Helicopter to Customer. Any delivery delay caused thereby shall be deemed an excusable delay in accordance with Article VIII.1. to this Agreement. Should any individual item on the Helicopter or Custom Helicopter later become subject to US export restrictions Sikorsky will attempt to replace the item with an exportable item and notify the Customer of such change at Sikorsky's earliest convenience. Should no exportable item be mutually agreed to between Sikorsky and Customer, both parties shall be released from any further obligations for inclusion of the subject item and any required price adjustment related to such un-exportable item shall also be made. 2. Import License — Customer shall be responsible for obtaining and complying with any and all import licenses or other authorizations and import taxes or fees which may be required by the country of destination for importing the Custom Helicopter. 3. FAA Registration - Customer shall be responsible for obtaining FAA aircraft registration in the United States upon transfer of title of the Helicopter in accordance with this Agreement; provided however that upon Customer's request, Sikorsky shall provide Customer with all reasonable assistance required. In the event Customer cannot comply with FAA regulations for aircraft registration in the United States upon transfer of title of the Helicopter in accordance with this Agreement, Sikorsky shall refer Customer to a third party trustee (the "Trustee") who shall take title to the Helicopter upon acceptance of the Helicopter through the acceptance of the Completion Services. All fees assessed by the Trustee in connection with its services shall be borne by Sikorsky. Sikorsky shall consent to the assignment of the Agreement to the Trustee for this purpose and Customer shall execute any necessary documentation in connection therewith. 4. Operations Within United States — If, after transfer of title, acceptance of Completion Services, and removal from the United States N-number registry, the Helicopter/Custom Helicopter is to be flown within the jurisdiction of the United States for any reason, Customer, shall, prior to such operation, obtain and carry currently effective certificates of registration and airworthiness issued or rendered valid by the country of registry and shall display the nationality and registration markings of that country, as required by Title S-76D Contract No. 76DD7702 Shmitka Air Inc.. Page II of 18 EFTA00759279  S-76D NEW HELICOPTER SALES AGREEMENT 14 Part 375 of the U.S. Code of Federal Regulations. The Customer shall comply with all other United States federal, state, and local laws and regulations that may be applicable to the operation of the Helicopter/Custom Helicopter in the United States. 5. Special Airworthiness Requirements — The Customer is responsible for ensuring that the Helicopter/Custom Helicopter configuration meets all the operational requirements of the country of destination/registration/operation for the Customer's intended usage. In the event Customer wishes to have changes made to the Helicopter/Custom Helicopter to meet specific airworthiness requirements of the country of destination, Customer shall supply to Sikorsky, in the English language, copies of the applicable standards and a complete description of the changes desired. Sikorsky will review all requested changes and promptly submit a quotation to Customer of the effect on prices and delivery of incorporating such changes. In accordance with paragraph 2.3.1 of Article V (Configuration) hereof, failure to provide Sikorsky with any of the referenced information by the respective dates described therein, or any change to such information, including changes to the configuration, not caused by or proposed by Sikorsky after such dates (i) may result in a delivery delay and such delay shall constitute an Excusable Delay with respect to Sikorsky's performance under this Agreement, and (ii) may result in the imposition of a configuration change fee as described in paragraph 2.4 of Article V (Configuration) hereof. Although Sikorsky may provide Customer with assistance in evaluating the specific airworthiness requirements of the country of destination and suggest changes to meet such requirements, Sikorsky assumes no responsibility for the acceptability of such changes to government authorities and assumes no obligation to meet the airworthiness requirements of any country. 6. Compliance with Laws — The terms, conditions and performance by the parties under this Agreement will comply with all applicable laws, rules, regulations and controls, including, but not limited to the following: a. If the Scheduled Presentation Date Helicopter shall occur prior to receipt of all U.S. Government export approvals required for delivery of the Helicopter or Custom Helicopter, Sikorsky shall transfer title to the Helicopter or Custom Helicopter only to a U.S. entity, and if to a U.S. financing institution, only to such U.S. financing institution that is a "broker within the meaning of the ITAR (22 CFR Part 129); and b. Prior to receipt of all U.S. government export approvals required for delivery of the Helicopter or Custom Helicopter, no "foreign person", as that term is defined within the ITAR (22 CFR Part 120), shall have any access to the Helicopter, Custom Helicopter or any related technical data or assistance. VIII. TERMS AND CONDITIONS 1. Excusable Delays - Customer acknowledges that the goods called for hereunder are to be manufactured for Customer to fulfill this Agreement and that the delivery dates are based S-76D Contract No. 76DD7702 Shmitka Air Inc.. Page 12 of 18 EFTA00759280  S-76D NEW HELICOPTER SALES AGREEMENT on the assumption that there will be no delay due to causes beyond Sikorsky's reasonable control. Sikorsky shall not be charged with any liability for delay or non-delivery when due to delays of suppliers (to the extent such delays are not caused by the acts or omissions of Sikorsky), acts of God, terrorism or the public enemy, compliance in good faith with any applicable foreign or domestic governmental regulation or order whether or not it proves to be invalid, fires, riots, labor disputes, unusually severe weather, or any other cause beyond the reasonable control of Sikorsky. To the extent that such causes actually delay deliveries on the part of Sikorsky, the time for Sikorsky's performance shall be extended for as many days beyond the delivery date as are required to remove such causes. This provision shall not, however, relieve Sikorsky from using reasonable efforts to avoid or remove such causes and continue performance with reasonable dispatch whenever such causes are removed. 1.1 Unqualified Equipment — [IF APPLICABLE] Sikorsky shall not be charged with any liability for delay or non-delivery when due to delays in approval of equipment defined within this Article VIII.1.1, by the appropriate regulatory authority. The following Customer-specific equipment has not yet been approved for installation on the Helicopter/Custom Helicopter by the appropriate regulatory authority: Nomenclature System Supplier Option code 11112 Thales TopDeck Upgrade Thales for WAAS/LPV* Option code 90001 XM Weather with XM Satellite Radio Inc. Integrated Functionality on Thales TopDeck Displays* (*These items need to be finally confirmed as to Sikorsky's capability to include in the Helicopter configuration within the delivery schedule quoted herein.) In order to support the Scheduled Presentation Date Completion Services, the equipment supplier must provide substantiating data and/or analysis to Sikorsky in a timely manner to accomplish the qualification approval. If the supplier is not capable or willing to provide this substantiation in a timely manner to support delivery of the Helicopter/Custom Helicopter, the Helicopter/Custom Helicopter will be delivered with space and power provisions, as applicable, with the equipment furnished on delivery as loose equipment. The Customer will be offered the alternative of having Sikorsky perform necessary tests, without guaranty of results, for an additional price. 2. Inability Or Refusal To Pay — If the Customer is unable or refuses to make payment to Sikorsky in accordance with any of its obligations to Sikorsky, or if the Customer's acts S-761) Contract No. 76DD7702 Shmitka Air Inc.. Page 13 of IS EFTA00759281  S-76D NEW HELICOPTER SALES AGREEMENT or omissions preclude Sikorsky's performance under this Agreement, in each case, through no fault of Sikorsky, then Sikorsky shall provide written notice thereof to Customer (the "Late Payment Notice"). Customer shall be deemed to be in default hereunder if Customer fails to make any payments referenced in the Late Payment Notice to Sikorsky within ten (10) days of Customer's receipt of the Late Payment Notice. Upon the occurrence of any such default, Sikorsky may, at its option, terminate this Agreement by giving to the Customer thirty (30) days prior written notice of its intention to terminate. If such default has not been cured on or before the expiration of such thirty (30) day period, this Agreement shall terminate effective upon written notice from Sikorsky to Customer. To the extent Customer cures such default within the time periods set forth herein, the obligations of the parties under this Agreement shall continue in full force and effect. Upon any such termination, Sikorsky shall be relieved of any further obligations to the Customer and (i) the Customer shall reimburse Sikorsky for its termination costs and expenses and a reasonable allowance for profit and (ii) to the extent that the Customer holds title to the Helicopter/Custom Helicopter for which Customer is unable or refuses to make payment to Sikorsky, or in respect of which Customer's acts or omissions preclude Sikorsky's performance, immediately upon Sikorsky's request, and at Customer's expense, the Customer shall execute such documents as are necessary to transfer title to such Helicopter/Custom Helicopter to Sikorsky free and clear of any and all encumbrances. All sums paid to Sikorsky under this Agreement, from whatever sources, will be considered the liquidated value of sub-paragraph (i) above and may be retained by Sikorsky in fulfillment of the defined costs, expenses, and allowances. 3. Liquidated Damages for Delayed Delivery - In the event the actual presentation date of the Custom Helicopter is delayed beyond the Scheduled Presentation Date Completion Services listed in Article I hereof for any reason other than an excusable delay described in Article VIII.1, then commencing on the 60th day after the Scheduled Presentation Date Completion Services, unless otherwise agreed, the Completion Services Final Payment shall be adjusted downward in the amount of $1,000 per day until the 120th day after the Scheduled Presentation Date Completion Services, until the Custom Helicopter is delivered, or the maximum adjustment of $60,000 is reached (whichever occurs first). This shall be the Customer's sole remedy for delayed delivery of the Custom Helicopter. 4. Taxes — In addition to the Total Contract Price, the Customer shall be responsible for payment of any and all taxes (including any sales and use tax, but not including Sikorsky's income taxes), which may be imposed by any taxing authority arising from the sale, delivery or use of the Helicopter/Custom Helicopter. 5. Limitation Of Liability — With respect to any Helicopter/Custom Helicopter, part or service purchased under this Agreement and alleged to be the direct or indirect cause of any loss or damage to the Customer, the sum equal to the invoiced price of such Helicopter/Custom Helicopter, part or service shall be the ceiling limit on Sikorsky's or any of its affiliate's liability whether founded in contract or tort (including negligence, strict tort liability or breach of warranty), arising out of or resulting from (i) this Agreement or the performance or breach thereof, or (ii) the design, manufacture, S-761) Contract No. 76DD7702 Shmitka Air Inc.. Page 14 of IS EFTA00759282  S-76D NEW HELICOPTER SALES AGREEMENT delivery, sale, repair, replacement, or any use of such Custom Helicopter, or (iii) the furnishing of any such service. In no event shall Sikorsky or any of its aff