CONTRACT AGREEMENT(CONTRACT NO. 70-34)

Created: 7/7/1970

OCR scan of the original document, errors are possible

THIS AGREEMENT, tude this 7ta day ofr jyTQ y and between China Airompany organized under tho laws of the Republic of China (hereinafter referred to aand Air Aaerica,elaware corporation with officeshereinafter referred to as "Airam")

WITiiESSETH:

-HEREAS, Airaaontract with the United 5tateso provideervices and desires in the fulfillment of that contract tc sec ire flying services frea an additional scurcc; and

WHEREAS, CAL ia willing to provide such flying services under subcontract to Airam;

KCW, THEREFORE, in consideration of the stated premises, the mutual covenants, and the conditions herein contained the parties hereto agree as followe:

ARTICLE I. ERFCHiED

a. CAL shall, during the period set fcrth in Article iii. hereof, furnish the following:

Iten 1. Flying services:

Itec 1AA Flying services with two basicallyircraft.

Iter: 1AB Flying services withb type aircraft, when requested by Airam in accordance with the call order previsions as provided in paragraph c. of this Article 1.

Flying services as set forth in thisr.clude ail necessary aircraft fuel, engine lubricatingd aircraft lubricantsupplies, services, personnel, and ground support equipment for the operation thereof, unless otherwise provided hereinafter, subject only, to necessary absence of such aircraft for proper naintenar.ee. CAL shall base such aircraftlace or places agreed tc between CAL end AL-an, hereinafter referred tc as. Such Sesee changed froa tine to tine by agreement between CAL and Airan expressed in writing. Daily maintenance inspections are to be perfened at the Base Point of such aircraft. Aircraft repairs, maintenance, end servicesAL's capability to perform at the Base Point nay be perforced at other locations. The aircraft

shall ba operated between points agreed to between CAL and ALran.

For the foregoing services, CAL ahali be paid pursuant to the rates

set forth in Appendixttached heretc and beret?artand the provisions of Article IV. hereof.

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2. Modifications to its aircraft, requested by Airaa and approved by

CAL, to auit thes fcr use by Airaa; provided, that if requestedCAL snail be reimbursed for such modification, and for restoring

aircraft to prior configuration upon release of the aircraft.

such modified aircraft shall not be withdrawn during the

period of assignment or call by CAL without prior approval of Airan.

For the foregoing services, CAL shall be reiabursed pursuant to

paragraph "h* of Article IV. hereof. U

3- Parts and materials to the extent required in the performance of

f this Article I. CAL shall be reimbursed for such parts

and materials as provided In paragraph "h" of Article IV. hereof.

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U. Upon request of Airaa, CAL may, ifrovide additional

flight crew personnel for which CAL ehall be paid pursuant to the

normal rates set forth in Appendix "D" and the provisions of

Article IV. hereof. Requests by Aires for additional flight crew

personnel shall be in writing, requesting personnel by cLaaslfi-2acation and category, desired location of services and period for 25 which services are being requested.

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CAL shall have cosplete authority and discretion to decide all matters of

maintenance, tha adequacy of clearances, permissions obtained, and operations

Insofar as the safety of the aircraft and ita personnel are concerned, in

accordance with established CAL and industry standards.

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In calling for aircraft which may be furnished "on call" pursuant to Iteo 1AB.

Article I. hereof, Airaa, which tera shall include its authorisedshallall order in accordance with Appendixattached hereto

andart hereof, which shall notify CAL of the place at which tha aircraft

ia required and the period of tlae for which euch aircraft is deaired. CAL shall respond by agreeing to furnish the aircraft in accordance with the teraa

or will advise of non-availability of the aircraft, or advise the

portions of the requested period during which the aircraft can be aade available.

in tha event of non-availability, CAL's response shall atate the place

which the aircraft shall be Bade available, and such response shall be deemed

offer which offer may be accepted by Airam at any tine before it is withdrawr..

In writing of such offer by Airaa shall beall order

CAL tc furnish tho aircraft at tne place of availability as stated by CAL,

and for the agreed period whereupon the aircraft shall be deeaed to beuch place of availability shall be tho "Point of Origin" for such

aircraft.

Airam and/cr its duly author; sod representative, may issue Flight Service Order

accordance with Appendix "C" attached hereto and herebyart hereof,

all flights, except maintenance flightsret Taiwan for other than in and say issue changes thereto et any tisa and froa tine to line during the lif' of this contract. Such orders end changes thereto, shall be in writing and

by the authorized representative; provided that such orders or changes

issued orally cr by ether -aana when the exigency cf any situation preclusoperational orders or changes in which event such oral orders cr

be confirmed in writingeasonable tiaie after performance cf the

ordered. Such orders shall authorize CAL to perform flights specific

and may designate the routes to be flown and the points froa which and

which the night shall be made.

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e. Upon request ofember of the aircraft crew shall sign, when recuestc.

all specified cargo listed on the aanifest andeceipt therefcr *

provided, that CAL's personnel shall net bo responsible fer cirgi

or identification.

Airam shall bo responsible for tho management, supervision and the prcvisicr.

peculiar parts, components, equipment and supplies for only

shall be dene at no additional cost tc CAL. Airan shall furnish elL

upon request from CAL, to the extent that such arc available. It is.

the source of such items is United States Government

CAL shall have no obligation to replace any aircraft furnished hereunder which

lost or destroyed or undergoing repairs while engaged in performance of

contract.

II. PERSONNEL TC EE

CAL shall provide, within the rates per flying hour provided for herein,

necessary maintenance and operations personnelormal complement of

flight crew aerabers for the aircraft furnished

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hall arrange fer all personnel required tc load, handle and unload

CAL shell be responsible, within the retes per flying hour provided

fer providing qualified personnel to supervise the placement and

cf cargo as well as the seating of cassengers. Except as

provided for herein, CAL shall detomine its own requlreoenta for personnel to

be assigned to the performance of this contract commensurate with operational

and xaintar.ar.ee requirements hereunder. U

CAL shall engage such of Its facilities and equipment as shall be necessary for

performance of this contract except aa otherwise specifically provided fcr in this contract; provided, however, that Airaa ear loan or furnish CAL such

supplies or equipmait as, in the opinion of Airaa, are required by CAL for tba

performance of the contract and which are not reasonably available to CAL from

other scurces. 11

III. F PSftFOitMANCE

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The services called for under this contract shall coaaence0 and

until midnight,

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Airaa shall have the right to renew this contract for two additional one year

periods ana such renewal shall be automatic unlaas CAL is notified in writing

) days prior to the effective date of such renewal. However, Airaa

shall have the right to terminate this contract at any time it shall determine

the services provided for therein are no longer required by giving notice in

writing) days prior to the effective date of such termination. 23

IV. CCSSIDSRATICM AND PAT MSN

Airaa shall pay CAL in accordance with the provisions of this Article IV. at

the appropriate rates set forth in Appendix "A" and/or Appendix "D" hereof for

the services performed by CAL hereunder.

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1. As pertains to Itemf Article I. hereof, CAL shall be paid, upon

of proper invoices or vouchers, the applicable ratesAppendix "A- for services rendered and accepted, less deductions, if any,

provided.

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As pertains to Itcn A. of Article I. hereof, CAL shall be paid, upon

submission of proper invoices or vouchers, the normal rates stipulated

in Appendix "D" for services rendered and accepted, less deductions,

If any, herein provided. CAL shall be paid the appropriate hourly rates

for each of such personnel and pro rata aacunts thereof for fractionalof an hcur flown provided that CAL shall be paid at the rate forsuch personnelinimumours per cay. Tho ainimua offlying hours per day shall apply to all days that each such personnel

called for hereunder including days required in positioning the personnel

the point of use and return of such personnel to their regular assigned CAL

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station upon release from services hereunderiram.. In addition, cal shall be reimbursed for all expenses of positioningiering such personnel including, but not limited to, transportation costs, incidental expenses, and deadhead pa/.

Flight tiice, actual flying tine, and flying hour is the logged tine cf each flight and shall be calculated 'i fellows:

"Block to Block" Tine: Fron thehe aircraft first moves under its ovn power for the purpOM of flight until the mcnent it cotes tc rest atxt point of landing.

Airborne Time: Airborne tiae is the logged tlaa of each flight to the nearest ainute calculated fron the mcnent cf take-off to the accent of landing.

The fLyir.fi hour prices set forth in Appendices "A" and "tf contain an elenent of cost for peyaent toflight crew aencera for hazardous flying which is definedhe performance of flight duties over areas in which active coabat operations are in progress and/or over areas controlled or occupied by unfriendly forces. In the event that the hazardous conditions as defined herein cease to exist, the flying hour prices shall be reduced by the specified amounts set forth in Appendices "A" and Tho effective cate of such redaction shall be as agreed between CAL and Aires,.

In addition to the flying hour rates provided in Appendix "A" hereof, CAL shall be reimbursed at its cost therefor, as approved by Airan, for payments of per diem and other incidental expenses made tc each crewr saber required to regain overnight away from hisPoint as provided inbove, while performing services pursuant to. above.

1. Subject to aubparagraphAL ahall becr all hoars flora

hereunder by all aircraft furnished pttrautRteas LAAA3 :f

xcept fcr maintenanceurs for otherutreturn of the aircraft to point cf originhe pericc'.s)

of their assignaent cr call hereunder,hall be naic fcr thahours per ralenddr quarter fcr ths fleet of basi:ally assigned

aircraft, whether cr not actually flowr.. Sich amicus flight hoursall hours flcwn huriunder, except maintenance flight hours for other

IRAN and shall be deteralned in accordance with the provisions cf

Mir.laua hcurs shall apply frea thahe aircraft is

ready to fly and is coaaitted to use under this contract. Kinimuaceasa tc apply upon releasefroa the contract cr

destruction cr loss of the aircraft. curs shall net apply

the aircraft subject to call.

2. Subject to payment cf ainiauas specified In paragraphbove, CAL shall

paid for all hours flown as determined in accordance with ths "Biock-to-

definition sat forth in Article IV.cl. hereof; provided, ho-ever,

the tetal hcurs of "Block-to-Block'* tlae fcr which CAL shall be paid

notaxiaun of fifteenf airborne tima as

in Article.

CAL shall be paid in accordance with the provisions of this contract upen CAL

to Airaa an original plus four copies cf CAL's invoices certified

an appropriate officer cf CAL as fellows:

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certify that the above bill is just and correctayasr.t

has net been received."

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.ieiaburse?ent pursuant to the provisions cf Iteas- cf Article I.

be subject to the following:

1- As pertains to Haasndf Article I. hereof, ardf thia ArticleAL shall, upon sutaissior. cf

proper invoices and vouchers, be reimbursed at cost exceptingskilled labor utilized to accomplish mocification andCAL aircraft fcr which CAL shall becr each hourskilled labor required ind expended by CAL personnel, this

rate includes reimbursement fcr unskilled labor, overhead and profit.

As pertains to Itao J. of Article I. hereof, CAL shall Oa reiabirsei for

materials used in accordance with the following:

The amounts to be relaburaad by Airaa under this paragraph

ax Levy by the Government cf the Kesubllc cf China

to

cn aalea (known In TaiwanBusinesshich is ecapcsed of

a businessefense taxtamp tax!. In the absence of

agreements providing uxemption to the Government therefrom, such

shall be considered an allowable cost and may be included ir.

the fixed prices for laborwanhe cost of direct

materials furnished by the Contractor hereunder, tha pricaa fcr

direct materials furnished by tha Contractor ray alsc include customspaid to the Government cf the Republic cf China and auch shallconsidered as allowable cost.

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For those partsaterialsby CAL for which. In accordance

with CAL's established practices, the ccaia ca.-ir.ot be determined either

by reference tc paid vendor's invoices cr other means, the method ofahall be by utilization of the current market price or the

price set forth ir. the most recent available USA? Parts Catalos,

whichever price is most advantageous to Airam. CAL shall segregateitems falling in the above category and so identify in the invoicea separate line Item.

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AU of CAL's claims for reimbursement of the coats of items purchased

directly for this contract must be supported by invoices which shall

be subject to approval by Airam. This acplies to all authorized cost

reimbursable items including direct parts and materials furnished in

of Item 2. Claims for reimbursement cf costs of Items withdraw-

from CAL's stock auat be supported by CAL'a invoices which shall te

subject to approval by Airaa. 27

Procurement, delivery, and material handling expense (current landed

costs) incurred by CAL to point of use shall be considered as allowable

elements of cost for purpose ofnder this contract. Aa

pertains to landed costs, materials, and suppliaa which are used

hereunder, which are transported to or er.route to the point of use

commercial flights, CAL shall be rclncursed at the commercial rates

such transportation in effect at th* tint the transportation ia

3? 1. -Direct Skilled Labor* as used herein includes tsst labor which can be performed

only by individuals possessing the professional, specialized and/or technical

skills, knowledge, and capability to accomplish, inspection, adjustments, repairs,and similar operations; machine shop work, welding, electroplating, andoperations on or incident to reconditioning, overhaul, and repair of

or related components, accesscries, or parts. "Direct Skilled Labor"

only those skilled Laborers, artisans, craftaaen, and operators

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together with their leadaer. and foremen, actually and directly employed in the

performance of work and services ae required under thie contract- It does net

include that labor which is performed in cleaning and polishing ofcccponenta and equipcer.t,emoval, assisting in heavy work,

as movingr heavy components; generally, performing menial

and/ororkature whicn requires nene of the technical

skills, knowledge or profession* .'oferred to ia the firet portion of this

It also doOO not include work and labor performed by administra-

tive personnel, corporate officers, supply personnel, all supervisory personnel

above the foreman level, office personnel, tine-keepers, watchmen, guards and

janitors.

"Direct Materials" as used herein are defined as all items purchased, supplied.

or fabricated with the intention cf entering then into, or making

art of the aircraft. For the purposes of this contract, cleaning,

brightening, polishing components, packing and packaging.

(petroleum, oil and lubricants) and other materials, used or consumed directlythe aircraft or components, ports thereof, shall ho considered direct

materials. All other materials such as office and stationery supplies,

sweeping compounds and equipment, personnel washrccn supplies, lighting

supplies,hich are net (and would not be) actually used directly on

the aircraft or its ccmpcr.er.ts, shall be considered indirect materials. 23

Airam shall cake payment hereof lr. United States dollars by check, draft

other instrument and payable as directed by CAL in

V. SPECIAL PROVISIONS

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Airam, and/or its duly authorized representative, shall provide technical

supervision, and operational conire! necessary to assureperforms the services in accordance with the provisions of thethat auch services shall beith the rated capabilities

of the aircraft, reasonable professional standards, and the qualifications of

CAL's personnel. CAL shall have final authority to decide all matters in

connection with the services involving safety cf operation. 36

CaL shall not be responsible for non-completion or diversion qf any flight

froo original point or destination due to causes beyond the control of CAL.

The flying time for flights whieh are neted or are diverted due to

beyond the control cf CAL shall be considered as authorized flying time

payment under the terms of the contract. The Captain of the aircraft shall

the deciding authority on flight completion cr diversion, or any other

deemed necessary Ln the interest of flight

CAL's employees and officers of CAL, or other persona or organisations

employed by CAL in the performance of work or rendition of services under

this contract, shall at all times be identified as the employees, officers,agents of CAL and shall not be considered as the employees, officers crof Airam.

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ALram may. If it finds it to be in the best interest of the United States Government, direct CAL to remove, and CAL shall remove, any employee from

to perform services under this contract. 10

It ia the understanding cf Airam that CAL shall be relieved of the necessity

to pay landing fees, airways communications and parking charges for operations

performed under this contract. In the event Airam is unable to obtain suchit is agreed that Airaa shall pay such charges incurred under this 15

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Except as expressly provided in this contract, Airam ahall have no responsibility

or for CAL personnel engaged in the performance of services hereunder.

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CAL shall furnish in writing to Airaa the name, personal history data, and any

other pertinent information available to CAL, if requested by Airaa, of all

CAL personnel assigned to this contract.

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To the extent that Airam Is relieved by the United States Coverneent of

for the loss or, daaage to or destruction. Government property

made available to CAL and "J. S. Government cargo, which term shall be deemed

to include passengers' baggage and personal belongings, transported in the

of this contract, Airaa does hereby relieve CAL of liability for

loss of, damage to or destruction of U. S. Government property and cargo

transported by CAL in the oerforaance of this contract. 31

CAL is authorized to transport CAL personnel, parts, equipment and supplies

performance of services hereunder,pace available basis cnfurnished hereunder.

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Airaa shall have the option to provide aircraft fuel. Airaa shall exercise

option by notification to CAL in writingays prior to the effective

date thereof. Upon the effective date, the -dry wing" prices set forth in

"A" shall apply to the aircraft which are or aay be assigned to

under this contract and CAL shall no longer be required to furnish

fuel underf. In the eventlects to arovide

fuel but shall fail to do ao, said aircraft fuel way be ordered by CAL

the account of Airan, in which event, the oil company supolying such aircraft

may submit its invoices directly to Airaa, and Airan shall maxe direct

to the oil company upon certification oy CAL that such aircraft fuel

consumed in performance of services under this contract; provided that in

event CAL does not furnish aircraft fuel under these circumstances, such

not constitute non-availability of aircraft or of CAL's services under

VI. ilT( AND

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a. Except as otherwise provided in Article V. paragraph h. and except for loss,

or destruction of Airam property and injury to or death of Airaa

personnel not caused by or directly attributable to CAL or its agents,

servants, employees, and except for loss, damage or destruction to property and injury tc or death of persons caused by or directly attributable to the

misconduct of Airam or its associated or affiliated companies or their

employees, servants and agents, Airaa shall not be responsible or acceptisk for any loss, damage, cr destruction of any property cr for any injury to or death of any person resulting from or arising out of this contract regardless

how caused or when occurring and CAL hereby agrees to indemnify and save and

hold Airam, including its associated companies and affiliates, and Its agents,

servants and employees, harmless with regard to any and all claims of any nature,

Including costs and expenses incident thereto, for damages, restitution, or

other compensation or accountability arising fron or related to any or all such

loss, dasage, destruction, injury and death. U

15 b. CAL agrees to maintain in full force and effect during this contractCAL's liability and undertaking set forth in paragraphereinabove

in connection with its operations through and its activities in and about the

locations covered by this contract, such insurance to be in such amounts and

with such insurers as are acceptable to Airam and shall cause Airam to oe named

asin connection with such insurance. 21

CAL agrees to furnish to Airim the insurers' certificate(s) of insurance which

ehow (l) the names of the insuredhe aircrafthe effective period of such insurance,he amount and

coverage afforded by suchhe geographical limitations applicable

to the aircraft covered by such insuranceertifying that such insurance

is in full force andcknowledging acceptance of the indemnification

agreement assumed by CAL under thisaiving any and all rirj^ts of

subrogation against the United States Government and Airam, its officers, agents, and employeesroviding that the insurers will give Airam at least

) days prior written notice before such insurance or waiver of

subrogation is cancelled or materially changed. In addition, CAL shall furnish

ertified copy or duplicate original of such policy or policies andthereto and thereon as soon as convenitntly possible.

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d. In the event CAL shall fail to procure and maintain such insurance, Airaa shall have the right to do so and charge CAL with tho cost thereof, such

cost being subject to deduction from any amounts owed by Airam to CAL under

this contract. 40

Ll . RAK FUhNISriUJ FACILITIES LZ

t3 shall furnish to CALum to be deductible fron aaounts to be paid to Lit CAL as provided in Article IV.b. such equipment and facilities cr their approximate L% equivalent at such prices as shall be agreed to Ln writing between the parties fron time to time. Airy facilities and equipment furnished to CAL by Airim shall be Ll utilized only in support of this contract.

viii. ype aircraft 2

any other provisions cf this contract, it is understood that cal's

herein with regard to caking* aircraft available upon

an initial or continuing basis and the operation thereof shall be subject to tha

terms and conditions or other arrangement upon which such aircraft are so furnished

al.

a

ia. contractual contents

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contract consists ofhrough ix cnn appendix "A"

ages; an appendix "b" cf one page; ar. appendix "c"ages and an

appendix "d" of one page;eneral provisions list and generall throughonsisting ofages.

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in witness whereof, the parties hereto have, by their respective officials or

representatives thereunto duly authorized, executed this agreement. 22

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alklines, ltd.

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jataa*

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name: bob Yah

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vice president

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3l

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akenlca, INC.

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.

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name: var m. greer.

L3

president

us

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"A"

I cf

iCUr.

ircrmft

Vuerter

KlniauBS

v;ing

Price Per Flying Hour

Ung

Flyinc Hcur

330

0 rid over

7 .X*

*

Aircraft

KlnisoM

Vina Price Per

Flying Hour

'iing Price Per Firing Hour

".inimins

The flying nour prices forost eler-.ent cf0 fortimernal crew complement consistingilot, Co-Pilot,and Parachute Dropping Cfficer. The flying hour prices for thea cost element of ill.TO for hazardous flight timeormalconsist in-ilot,licht Engineer, lr. thohourn rvcucedlmcf

lying hour prices shall be reduced

A flying hour prices shall be reduced ov

0

Vcle I. The ten "fleet" as usee htreir. is defined as one cr eereype of aircraft which are assigned to the contract as basic aircraft pursuant to tho terms of. Itetr. 1.

2. e total nucber of aircraft makingleetalendar quarter shall be determined by considering each basic aircraftervices under the contract during th* entire calendar quarternit of one and each basic aircraft performing services -under theortion of the calendar quarterercentagenit one obtained by dividing the number of days the aircraft was assigned by tha number of days in the calendar quarter. The total sun of 'units will be the fleet for that calendar quarter.

Note J. The minimums applicable to each fleet of aircraft shall be determined by multiplying applicable mir-iouas aat forth onf this Appendix "A" by the fleet as determined in accordance with the procedures set forth in Notebove.

Note a. If the total hours flown by the entire fleet equals or oxceeds the calendar quarters determined in accordance withbove, there will be nc unflown minimums.

Kote 5- If the total hours flown by the entire fleet is less than the calendar quarter minimums as determined in accordance with Notebove, the billableinimums shall be the difference between the total hours flown by the fleet and said ainLiuxs.

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JEH FCS ADDITICSAL ALwC-CrT

To: China Airlines,Order No..

Pursuant to Article I. paragraph c. cf subject contract, you are hereby requested to provide, if available, additional aircrart as specified below:

Type cfAircraft

Please return the original and four copies to tha undersigned indicating in space provided below your agreement to this request and aircraft identification number assigned.

Air America, Inc. Authorized Representative

cal'S

To: Air America, Inc.

China Airlines, Ltd. hereby agrees to furnish aircraft as indicated:

Aircraft Identification 'ill be available

of

China Airlines, Ltd. Representative

This constitutes acceptance of the Contractor's Offer as stated above and shall,rticle I. Paragraph c. of the contract, bee Operatic rial Order for CAL to furnish .he aircraft describee at the place of origin as Indicated. The aircraft shall proceed from

on

*date above)

Air Ame-ica. Lnc. Authorized Representative

ACCEPTANCE AND CALLChina Airlines, Date

PrtlCES ?CH ALL PKaSCiiASi-

liar-AlPrice

Pilot

Operator

Crew Member

Engineer

Dropping Officer (PDC)

* In the eventour orices are reduced pursuant to tne provist cf Article W. paragraph d. the flying hour prices set forth under theazardous Price" shall nc longer apply.

Original document.

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