VAS Aero Services, LLC

VAS Standard Exchange Terms and Conditions

These terms and conditions are incorporated by reference in the exchange agreement between vas and customer. Except as otherwise indicated, all references to defined terms and sections below are to defined terms and sections in the exchange agreement between vas and customer.

---

I. Standard Fees & Charges

1. CUSTOMER agrees to the following charges, as more fully defined below and in the Exchange Agreement: (i) the Exchange Fee indicated in Section 3(d) of the Exchange Agreement, (ii) Recertification Cost(s), (iii) Administrative Fees pursuant to Section 3(f) of the Exchange Agreement, (iv) Late Charge(s), (v) any Differential Charges, and (vi) Other Charges (collectively the “Standard Charges”). Core Units are to be delivered to VAS, with all charges paid by CUSTOMER including, but not limited to, freight, customs fees and clearance, packaging, insurance, storage, licenses for export and import, inspections, and any applicable taxes including VAT, all as applicable (“Other Charges”).

2. CUSTOMER’s maximum liability for the Recertification of the Core Unit will not exceed the Outright Value in Section 3(e) of the Exchange Agreement. At no time shall the Outright Value act as a purchase price, after the fact, once a Core Unit is returned. Based on the applicable repair facility evaluation (the “Repair Estimate/Invoice”), the following shall apply:

   1. In cases where the Repair Estimate/Invoice, and any applicable Differential Costs, exceeds the Outright Value, CUSTOMER will be invoiced (a) the Outright Value, (b) any shop evaluation fees, (c) Administrative Fee, and (d) Other Charges (collectively the “Outright Charge”), with the Core Unit remaining the property of VAS, and further subject to the VAS T&C. In lieu of the Outright Charge, the CUSTOMER may elect, within three (3) business days of the receipt of the Repair Estimate/Invoice, to notify VAS in writing of its intent to provide a replacement Core, and if so, then CUSTOMER has five (5) business days to deliver to VAS’s designated location a replacement Core, subject to the replacement terms herein. If CUSTOMER does not timely exercise its right of election, then the CUSTOMER shall be responsible for timely payment of the Outright Charge.
   2. In cases where the Repair Estimate/Invoice, and any applicable Differential Charges, is less than the Outright Value, no option for replacement or outright conversion/core return is available to CUSTOMER, unless otherwise noted in Article III herein or agreed to in writing by VAS. In such event, VAS, in its sole discretion, will proceed with the disposition of the Core Unit per Article IV herein, with the Standard Charges invoiced to CUSTOMER pursuant to the terms and conditions of the Exchange Agreement and VAS T&C.
3. In cases where the Outright Charge is invoiced per Article I(b)(i) above and no other replacement is provided, the option to have the Core Unit returned/scrapped may be available for an additional scrap surcharge (“Surcharge”), above and beyond the Outright Value. The Surcharge is calculated as two percent (2%) of the Outright Value, in addition to any shop related charges incurred by VAS. CUSTOMER must request in writing from VAS the return/scrap of the Core Unit and acceptance of the Surcharge, within three (3) business days of receiving the Repair Estimate/Invoice, otherwise the Core Unit is retained by VAS as VAS’s property at no cost to VAS.
4. If prior to the Core Unit being returned, the CUSTOMER elects to convert the Exchange to an outright purchase, CUSTOMER must notify VAS, in writing, within 24 hours from the Date of Exchange per Section 3(a) of the Exchange Agreement, to have the Exchange Fee waived. For requests made after 24 hours, the Exchange Fee will be due in addition to the Outright Value, including but not limited to any other charges pursuant to this Agreement.
5. Cancellations and/or original units returned unused are subject to the Standard Charges, subject to return requirements as defined in Article II herein.
6. VAS will not be held responsible, in any way, for late or delayed billing by any applicable repair facility.

II. Return Units and Late Charges

1. Core Units are to be returned to VAS (or to VAS’s designated location) by the Return Due Date as indicated in Section 3(c) of the Exchange Agreement. It is the CUSTOMER’s responsibility to return a Core Unit on time. VAS is not responsible for outgoing or incoming transit delays for any reason, customs clearance delays, or failure of CUSTOMER to timely provide all required documentation pursuant to Article III.
2. Core Units not received by the Return Due Date will be charged an additional Exchange Fee (“Late Charge”), giving the CUSTOMER an additional Exchange Period indicated in Section 3(b) of the Exchange Agreement to return the Core Unit (“Additional Due Date”). Prior to the Return Due Date, or Additional Due Date in the event of an additional Exchange Period, the CUSTOMER has the option to (i) accept a Late Charge or (ii) be invoiced the full Outright Value. If the CUSTOMER does not in writing timely choose either option II.b.(i) or (ii) above by the Return Due Date, the Late Charge will be invoiced to CUSTOMER. For subsequent Exchange Periods following the first Late Charge billing, unless otherwise noted in Section 4 of the Exchange Agreement, VAS shall notify CUSTOMER in writing VAS’s choice, in its sole discretion, to either invoice the CUSTOMER (i) an additional Late Charge, or (ii) the full Outright Value. CUSTOMER may advise VAS in writing, prior to any due date period, to be invoiced the full Outright Value in lieu of receiving an additional Late Charge. CUSTOMER is responsible for managing all due dates and returns, regardless of any notification or lack of notification provided by VAS. If the Outright Value is invoiced, for any reason, the original Exchange Fee, Administrative Fee, Late Charge(s) accrued and or invoiced to date, Other Charges, and any and all other charges pursuant to this Agreement remain due.
3. Core Units are not considered received and accepted by VAS until all requirements in Article III herein are fully completed and accepted by VAS. Until then, the Exchange remains open, subject to all charges pursuant to the Exchange Agreement and the VAS T&C. If a Core Unit is received and does not meet all the requirements in Article III herein, the CUSTOMER shall have the equivalent time of the initial Exchange Period to remedy the nonconforming issue. If the nonconformance is not able to be remedied by the end of the applicable Exchange Period, the CUSTOMER will be invoiced the full Outright Value, and the Core Unit shall be returned to CUSTOMER at the CUSTOMER’s sole expense.
4. The Parties acknowledge and agree that Late Charge(s) set forth herein constitute reasonable charges from VAS to CUSTOMER, which are standard and customary within the industry.

III. Return Core Requirements including Documentation

1. Prior to or concurrent with execution of this Agreement, CUSTOMER shall provide VAS with a Non-Incident Statement in a form or substance previously approved by VAS from an approved regulated source (“NIS”), including that the Core Unit has not been damaged or subject to any unusual stress or extreme temperature, and that it has not been obtained from a government or military source.
2. Core Units are to be returned to VAS in the condition removed from the aircraft with no repairs or alterations, properly packaged and shipped to VAS’s designated location at CUSTOMER’s sole expense (“As Removed”). VAS is under no obligation to accept a Core Unit to close the Exchange. Any request to return a Core Unit should be made prior to the exchange and is only valid if given prior written approval by VAS. If permitted, the CUSTOMER must meet all required VAS conditions set forth in writing and is still subject to all other terms and conditions set forth in the Exchange Agreement and VAS T&C.
3. All time-controlled, life limited parts and inflatables must be returned with the same Date of Manufacture (“DOM”), Time Since New (“TSN”), Cycles Since New (“CSN”), year of last Overhaul (as defined in FAA Advisory Circular 20-62E), as the Exchange Unit supplied or fresher (this includes the lead part number as well as any sub-assemblies attached to the lead part number). If the Core Unit is returned with a DOM older than that of the Exchange Unit, a differential charge equal to 1/15th (one fifteenth) of the Outright Value per year will be charged to CUSTOMER (“Differential Charge”). All time-controlled and life limited parts must be returned with full back to birth information including but not limited to TSN, CSN and date of last Overhaul. VAS reserves the right to reject Core Units for time-controlled and life limited items that are too old or for any item deemed by the shop to be non-repairable to the equivalent state of the outgoing Exchange Unit. In such event, the CUSTOMER Core Unit will be rejected and be responsible for the rejection/replacement obligations pursuant to Article III(e) and (f) of the VAS T&C.
4. Core Units must be accompanied by full trace documentation meeting VAS’s Certification & Traceability Requirements, which are incorporated by reference herein as part of the Exchange Agreement and VAS T&C and can be viewed at Supplier Requirements, which CUSTOMER, by executing the Exchange Agreement and the incorporated VAS T&C, acknowledges having received and agreed to, including but not limited to: signed removal tag, packing slip (P/S), data plate affixed to the unit, and certification (“Cert”) with a NIS, if not previously furnished to VAS, along with P/S & Cert from each part handling the material from a regulated source to VAS. If the CUSTOMER traces the unit to a Part 145 certified facility (Repair/MRO), the 145 Cert must contain the last operator/ aircraft removal information, along with a NIS from that operator. Any deviations from these requirements must be approved in writing by the VAS General Counsel or Director of Compliance. Core Units received without acceptable documentation will be rejected, and CUSTOMER will not have satisfied their duty and obligations under the Exchange Agreement. In such event, CUSTOMER shall be responsible to VAS for (i) any and all Late Charges(s) and or Outright Value billings pursuant to Article II herein, (ii) rejection and/or replacement charges and conditions pursuant to Article III (f) herein, and (iii) any and all other charges pursuant to the Exchange Agreement and the incorporated VAS T&C.
5. Core Units returned unused must be accompanied by all original, unaltered documentation or be subject to Recertification Costs and/or rejection. In addition, unused Core Units must be returned with certification documentation signed by the quality department of any party who handled the unit, stating the Core Unit was not damaged, installed or used in any manner while in the possession of said party. Core Units returned unused after 45 days from the Date of Exchange as indicated in Section 3(a) (“Exchange Date”) of the Exchange Agreement are subject to Recertification Costs in accordance with the aging to the outgoing certification. Unused Core Units that appear to incur (i) damage, (ii) unexpected wear or (iii) transit damage will be sent to the shop for Recertification. Recertification Costs for unused NEW/OH outgoing units are subject to condition Differential Charges.

6. If the CUSTOMER is notified by VAS that a Core Unit is rejected, the CUSTOMER shall, within three (3) business days of the receipt of the notice of rejection, notify VAS in writing of its intent to elect to be invoiced the full Outright Value and either return to VAS the Core Unit or supply to VAS a replacement Core Unit (“Replacement Core Unit”). The Core Unit or a Replacement Core Unit is subject to the following terms and conditions in addition to all other terms and conditions pursuant to the Exchange Agreement and the VAS T&C:

   1. The Exchange reverts to open from the original Exchange Date as if the original Core Unit was not received, subject to all applicable charges including Late Charges, Administrative Costs and Other Charges. CUSTOMER is responsible at its sole expense for all evaluation/freight/packing charges related to the original Core Unit.
   2. The original Core Unit shall not be returned to the CUSTOMER until the Replacement Core Unit is returned and evaluated.
   3. CUSTOMER may only elect to supply a Replacement Core Unit one time.

IV. Repair Terms and Conditions

1. Unless otherwise stated in Section 4, if VAS supplies a unit with OEM certification (NEW, OH or SV condition), the Core Unit will be sent to the OEM repair shop as designated by VAS at CUSTOMER’s sole expense. If VAS supplies a unit with non-OEM certification, VAS will in its own discretion determine which repair station will be utilized.
2. CUSTOMER is responsible for all charges related to bring Core Units to the same, “like-for-like”, configuration as the outgoing Exchange Unit supplied including (i) any modifications and/or Service Bulletins (“SB”) present in the original outgoing Core Unit, and (ii) the incorporation of any modification(s), SB, or Airworthiness Directives (“AD”) that become mandatory, either through regulatory agencies (FAA/EASA) or the OEM, during the time the Core Unit is out on exchange or at the repair shop, regardless of the original outgoing configuration (the “Recertification Cost”).
3. VAS, in its sole discretion, will approve/reject Repair Estimate/Invoice. VAS reserves the right to not proceed with or to change the work-scope at any time. Payment may not be delayed to VAS in the event the final shop invoice is not provided to CUSTOMER or VAS. Once work is completed, if the final shop invoice contains additional charges not found during evaluation, CUSTOMER will be invoiced separately at that time. If VAS approves a Repair Estimate/Invoice more than ninety (90) days from the date the original Repair Estimate/Invoice is invoiced to the CUSTOMER, the CUSTOMER will not be responsible for any additional charges, except as otherwise noted in this Agreement.
4. CUSTOMER will be invoiced the Recertification Cost, plus an additional administrative fee of 10% of the Recertification Cost (the “Administrative Fee”). Upon receipt of the Repair Estimate/Invoice, CUSTOMER will have three (3) business days to dispute in writing to VAS the shop findings, after which time the invoice is final. In cases where an itemized, priced teardown is not attainable, either due to flat rate/contract pricing or repair shop policy, VAS is under no obligation to provide this information to CUSTOMER, nor can the CUSTOMER delay payment. VAS will not be held responsible for differences between the Repair Estimate/Invoice, and that which CUSTOMER may be able to obtain via their own status, relationships, and/or contracts. Repairs will remain in VAS’s name and at no time will work orders be transferred to the CUSTOMER or a third party.
5. Any special shop request required by the CUSTOMER, such as pictures or test results, shall be made in writing prior to the Core Unit being returned to VAS, so they may be communicated to the shop accordingly. VAS will make commercially reasonable efforts to obtain additional information, however, VAS cannot be held responsible, nor can the CUSTOMER delay payment in any way for failure of VAS or the applicable repair facility to provide this information.
6. CUSTOMER is not permitted to supply parts for use in repair under any circumstances.
7. Any parts requiring replacement on the shop evaluation/estimate will be quoted in NEW condition by the shop.
8. If a replacement component required for repair/Overhaul is not in stock with a lead time greater than 90 days, VAS reserves the right to reject and return the Core Unit. If rejected, CUSTOMER will have the option of supplying a new Core Unit, with the time the original Core Unit was at the shop abated, or to have the Core Unit returned and be invoiced the full Outright Value.
9. Time is of the essence in all duties and obligations under the Exchange Agreement and the VAS T&C.
10. CUSTOMER agrees to submit to personal and subject matter jurisdiction and venue in Palm Beach County, Florida with all conflict of laws waived and the Agreement governed in accordance with the laws of the state of Florida, U.S.

VAS Aero Services, LLC. Exchange Agreement (Rev 10 01/31/2020)