Letter of Intent
(DRAFT)
Shenzhen Airlines Co., Ltd. (the “Seller”)is pleasedto providethe followingproposalfor thesaleofone (1) Boeing B737-700 aircraft,equipped with two (2) CFM56-7B engines.
Buyer:
SellerShenzhen Airlines Co., Ltd. (the “Seller”)
Aircraft:One (1) Boeing B737-700aircraft having manufacturer’s serial numbers 29190,equipped with two (2) CFM56-7Benginesbearing respective engine serial numberslisted below together with the Aircraft Documents and Records listed in Exhibit A(the “Aircraft”).
Aircraft model / Chineseregistration mark / MSN / Engine type / Left ESN / Right ESN
B737-700 / B-2633 / 29190 / CFM56-7B / 876614 / 876615
※B-2633 will be on ground on 31st of March, 2015.
Delivery Date: On or before May 30, 2015 orsuch other date as both parties may agree in writing.Seller will have responsibility to maintain and insure the Aircraft until they are delivered to Buyer. Seller, at Buyer’s cost, shall provide basic routine maintenance cover as prescribed in the AMM for the Aircraft until date of departure to include routine inspection, parking, short term storage and departure support. Buyer will be responsible for a ferry flight of the Aircraft on or after delivery date.
Purchase Price：
Aircraft / MSN / USDB-2633 / 29190 / $
Deposit:Within three(3) businessdaysafterexecution of this letter of intent (“LOI”)by both parties,Buyerwill pay a deposit in the amount of USD100,000(the"Deposit")to Seller'sdesignatedaccount below.The Deposit shall be non-refundable except in the following circumstances:
(i)total loss of the Aircraft;
(ii)the Aircraft is damaged and that damage materially and adversely affects the value of the Aircraft or the Aircraft is not in serviceable conditionaccording to AMM at delivery to Buyer;
（iii） following a full inspection of the Aircraft and records by the Buyer, if the Aircraft does not meet the conditions set out in Exhibit A attached.
TheDepositwill be applied to the PurchasePrice. The Deposit will not accrue interest.
Balance ofUpon delivery of theAircraft, Buyer shall pay to Seller via wire
Purchase Price:transfer in same day funds the balance of the Purchase Price in the amount of USD (the “Balance”).
Payments andThe Deposit and the Balance shall be paid to the following
Seller'sAccount:account of Seller:
Beneficiary Information:
Name:
A/C No:
Beneficiary Bank Information:
BIC Code:
Name:
Address:
City:
Country:
All payments shall be made by Buyer to Seller without any set-off, counterclaim, deduction or withholding of whatever nature.
Aircraft Condition:The Aircraft will be in the delivery condition set out in Exhibit A and will be sold"AS IS - WHERE IS".The Aircraft will be deliveredin anairworthyconditionin accordance with Seller'smaintenanceprogrammeapprovedby the Civil Aviation Administration of China (CAAC) as demonstrated by (1) an aircraft ground check, the profile of which is to be agreed upon by Buyer and Seller, and Borescope inspection of each engine and on wing MPA tests, the work scope shall not exceed that recommended in the AMM. The Aircraft shallhavea currentandvalid certificateof airworthiness issuedbyCAAC.
TechnicalOn or before April 30, 2015.
AcceptanceDate: The transaction contemplated in the LOI and the aircraft purchase agreement will be deemed null and void if the Technical Acceptance of the Aircraft is not signed by Buyer on or before April 30, 2015.
DeliveryLocation:Shenzhen BaoanInternational Airport, Shenzhen City, Guangdong, People’s Republic of China
Inspection：Buyer shallhavethe opportunityto performtechnicalinspectionon the Aircraft including the Aircraft Documents afterthe executionof this LOIand Seller’s receipt of the Deposit from Buyer in orderthat Buyer may verify componentspart numbers and the condition of theAircraft including the Aircraft Documents.Buyer shall perform the technical inspection of the Aircraft before the Technical Acceptance Date. The Deposit shall not be refunded to Buyer if Buyer fails to perform the technical inspection of the Aircraft before the Technical Acceptance Date. Sellerwill provideon-siteresources reasonablyrequestedbyBuyer to enable Buyerto accomplishthe technical Inspection.Buyer shall also be entitled to reviewall Aircraft Documents to ensure that they meet the requirements outlined in Exhibit A. In the event any items listed in Exhibit A as “(if available)” are unavailable, Buyer agrees this will not be a valid reason to reject the aircraft or request a refund of the deposit.
Buyershall signanddeliver to Sellera TechnicalAcceptanceafter the AcceptanceInspectionand in any event on or beforethe Technical Acceptance Date.
Taxes:Each of SellerandBuyer shallbe responsiblefor its owntaxeswhich arise as a result of the transactioncontemplatedhereinor in the aircraft purchase agreement.Notwithstandingthe foregoing,Buyerand Sellershallcooperatein good faith with a view to minimizingany tax impactto eitherpartyassociated with the transaction.
Title:On the Delivery Date, after receipt of the Purchase Price, Seller shall transfer title to the Aircraft to Buyer free of liens (other than liens created by or through Buyer). Seller shall deliver to Buyer bills of sale and other delivery documents to be agreed between Seller and Buyer.
GENERA L TERMS
Costs and Expenses:Eachpartywill be responsiblefor its legalfeesand otherout-of-pocket costsrelatedto thistransaction.All the registrationcostsrelatedto the Aircraft after delivery will be borne by Buyer.
Conditions Precedent:Conditionsprecedentto the abovetransactionwillincludethe following:
1.Executionofsale documentationacceptable toSellerandBuyer.
2.Obtaining of Buyer’s and Seller'scorporate approval(ifrequired) beforeexecution of the aircraft purchase agreement.
3.Execution of the Technical Acceptance by Buyer before the Technical Acceptance Date.
Validity:This LOI will be deemednull andvoid if both parties do not enter into an aircraft purchase agreementin respect of the Aircraft beforeMay 30, 2015or such other date as the parties may agree in writing.Thereafter, none of the SellerandBuyershall have any obligations hereunder.
Confidentiality:The termsandconditionsof this LOI shallbe held inthe strictest of confidenceand shallnot be disclosed toany party other than the respectivelegalcounsel ,shareholders, financiers of the Buyer and Seller,unlesssuchdisclosureis requiredby applicablelaw,courtorderor legal proceedings applicable to any of the parties hereto.
GoverningLaw:This LOI shall be governed by the laws of England.
Pleasesignthis LOI andreturnit to Seller.This LOI shallbe deemednull andvoid
if it is not receivedby Sellerby______2015.
For and on behalf of
Shenzhen Airlines Co., Ltd.
By:______
Its:______
Date:______
Accepted and Agreed By
By:______
Its:
Date:______
Exhibit A – Aircraft Documents and Records listA / Certificates
1 / Air Carrier Certificate
2 / Certificate of Airworthiness
3 / Aircraft Registration
4 / Radio Station License
5 / Cof A for Export (CAAC)
6 / Insurance Certificate
7 / ARL
8 / Boeing Delivery Documents (if available)
B / Aircraft Status Reports
1 / Mini Specification
2 / Airframe Airworthiness Directives Status
3 / Appliance Airworthiness Directives Status
4 / Service Bulletin Status
5 / Check history - C Check
6 / List of Deferred Maintenance Items
7 / Component HT Status (CAAC)
8 / Life vest Status
9 / OC-CM Status
10 / CMR/AWL Task Summary
11 / MPD Status- Last Done Next Due
12 / Major Modification /STC Status
13 / E-E Bay Avionic Equipment Inventory
14 / Flight Log Book Summary
15 / Defer/On watch item
C / Cabin
1 / LOPA
2 / Loose Equipment Inventory
3 / Emergency Equipment Drawing/Listing
D / Aircraft Maintenance Status Reports
1 / Technical logs (two (2) years before such aircraft delivery date)
2 / A Checks - last complete cycle of A Checks
3 / C Checks - last Complete cycle of C Checks to include last C6/C8 check accomplished
4 / Dent /Repair Mapping Chart
5 / Digital Flight Data Recorder Readout (if available)
6 / Weight ang Balance Report
7 / Mantenance Check Status
8 / Aircraft Non-incident-Accident (if available)
9 / Hydraulic Fuel Analysis (if available)
10 / Fuel Tank Microbiological Test (if available)
11 / Last Demonstration Flight Report (if available)
E / Engine XXXX Status Report（LH）
1 / LLP Status,Hours-Cycles Summary (B-T-B Documents)
2 / Airworthiness Directive Status
3 / Service Bulletin Status
4 / Max power Assurance Repot (SV Report)
5 / Engine Condition Motitoring
6 / Engine Non-Incident Accident Stament
7 / Engine Removal and Installation History
8 / Last Installation / Removal History Record (if available)
9 / Engine LRU List
10 / Borescope Report
11 / Defer/On watch item
12 / Shop Visit Report
F / Engine XXXX Status Report（RH）
1 / LLP Status,Hours-Cycles Summary (B-T-B Documents)
2 / Airworthiness Directive Status (SV Report)
3 / Service Bulletin Status (SV Report)
4 / Max power Assurance Repot (SV Report)
5 / Engine Condition Motitoring
6 / Engine Non-Incident Accident Stament
7 / Engine Removal and Installation History
8 / Last Installation / Removal History Record (if available)
9 / Engine LRU List
10 / Borescope Report
11 / Defer/On watch item
12 / Shop Visit Report
G / APU Status Report
1 / APU Log Book
2 / APU Removal and Installation History (if available)
3 / Airworthiness Directive Status (SV Report)
4 / Last Overhaul Report
5 / APU LRU List (SV Report)
6 / LLP Status (B-T-B Documents, if available)
7 / Last Installation / Removal History Record (if available)
8 / Non-Incident Accident Statement
H / Landing Gears
1 / NLG LLP Status (B-T-B Documents, if available)
2 / LH MLG LLP Status (B-T-B Documents, if available)
3 / RH MLG LLP Status (B-T-B Documents, if available)
4 / Shop Visit Report
5 / Incident and Accident Statement
I / Statements
1 / Oil and Lubricant Statement
J / Manuals
1 / Wiring Diagram Manual
2 / Illustrated Parts Catalog
3 / Maintenance Manual
4 / Airplane Flight Manual
5 / Aircraft Operating Manual
6 / Quick Reference Handbook
7 / Weight and Balance Manual
8 / Power Plant Buildup Manual
9 / Structural Repair Manual
10 / Master Minimum Equipment List
11 / Maintenance Planning Data Document
12 / Detailed Specification (if available)
K / Miscellaneous
1 / Box Inventory (N/A)
1