- Engine Stand Lease Agreement
Engine Stand Lease Agreement
This Agreement specifies terms and conditions of Engine Transportation Base and / or
Engine Cradle (hereinafter – the “Engine Stand”) lease, whereby Magnetic MRO AS
(hereinafter – “Magnetic MRO”) leases to the Lessee its Engine Stand defined herein.
Lease shall commence on agreed Lease Term start date or on the date when Engine Stand is
ready for delivery, whichever comes later. Leased Engine Stand shall not be rented or
leased or otherwise made available to any third party without prior written approval of
Magnetic MRO. In case Lessee breaches this obligation, Lessee shall pay liquidated damages
in the amount of 30 days’ Lease Fee (for each event of breach).
At delivery Lessee shall sign and present to Magnetic MRO a Delivery Receipt in the form
of Exhibit A. Lessee shall photograph Engine Stand upon receipt and present such photos to
Magnetic MRO together with Delivery Receipt (in case Lessee fails to perform such
obligation, it shall not rely on deficiencies of Engine Stand at Delivery).
Whenever Engine Stand leaves Magnetic MRO facility, Lessee assumes risk of loss until it
is redelivered to Magnetic MRO. Lessee agrees and warrants that title to, and ownership
of, the Engine Stand shall remain with Magnetic MRO.
Should Lessee wish to change customs status of the Engine Stand during the Lease it shall
notify Magnetic MRO of its intention in advance. Notwithstanding Magnetic MRO’s consent,
the Lessee shall be obliged to return the Engine Stand to Magnetic MRO in the same customs
status as at delivery.
Lessee agrees to return the Engine Stand to Magnetic MRO in the same condition as that
supplied, all data specified in documents (weight, value, measurement, p/n, s/n) must be
the same, customs status must be the same, otherwise Lessee shall reimburse Magnetic MRO
any associated costs and losses. Should Lessee fail to return the Engine Stand to Magnetic
MRO in the same customs status, it shall remain responsible for changing the customs
status to the same as at delivery and provisions of clause 7(iv) shall apply. In case
Lessee refuses to perform this obligation, it shall reimburse Magnetic MRO any associated
costs and losses, including customs duties, taxes, etc.
The Lease shall end on the later of: (i) the day the Engine Stand is returned to Magnetic
MRO or on Lease Term expiry date (as may be extended upon mutual written agreement of the
Parties), whichever comes later; (ii) if the Engine Stand is returned in an unserviceable
condition – (a) the day on which the Engine Stand is returned to a serviceable condition
or (b) if Engine Stand is determined to be BER by the Workshop – the day Lessee reimburses
Magnetic MRO with the outright value of the Engine Stand; (iii) if the Engine Stand is
returned incomplete – the day Lessee delivers all missing items and Lessor installs them
on the Engine Stand or the day Lessee reimburses Lessor’s acquisition costs of such
missing items; (iv) if the Engine Stand is returned in another customs status than
delivered – the day on which the customs status of the Engine Stand is changed to the same
as at delivery.
In case Lessee wishes to extend Lease Term, it shall notify Magnetic MRO accordingly at
least 5 days in advance, and such extension shall be subject to Magnetic MRO approval
(including commercial terms of the extension).
In case the Engine Stand is not redelivered to Magnetic MRO in 2 months from the Agreement
termination / agreed Lease Term expiry day in accordance with requirements of this
Agreement, (i) the Engine Stand may be deemed lost and Lessee shall in addition to the
Lease Fees reimburse Magnetic MRO with the outright value of the Engine Stand; or, if
agreed by Magnetic MRO (ii) the Lessee shall replace leased Engine Stand with another
Engine Stand of the same or better type, condition and value.
Lessee shall pay the Deposit (if applicable) 2 days prior to commencement of the Lease.
Lessee shall pay Lease Fee for the agreed Lease Term in accordance with Payment terms
specified herein. If the Lease does not end on agreed Lease Term expiry date (if not
extended upon mutual written agreement of the Parties), escalated Lease Fee (150% of Lease
Fee) might be applied at Magnetic MRO’s sole discretion. However, application of escalated
Lease Fee shall not be deemed as Magnetic MRO consent to prolong Lease Term and in any
case Lessee’s obligation to redeliver the Engine Stand in shortest possible time shall
The Engine Stand is (might be) equipped with tracking device to enable monitoring of its
movement. In case Tracking device is damaged or missing, Lessee shall reimburse Magnetic
MRO with its outright value, as well as pay the tracking fee, which, however, shall be
applicable at Magnetic MRO’s sole discretion.
In case Lessee wishes to change Engine Stand Redelivery incoterms and / or location, it
shall notify Magnetic MRO accordingly at least 5 days in advance, and such change shall be
subject to Magnetic MRO approval (including commercial terms of the change).
In addition to the Lease Fee and escalated Lease Fee, Magnetic MRO reserves the right to
charge the Lessee the following additional charges: (i) Should the Engine Stand be
returned to Magnetic MRO in an unserviceable condition – inspection charges and either:
(a) repair charges, in the event that the Engine Stand is repaired by the Workshop; or (b)
the Outright Price of the Engine Stand, should the Engine Stand be deemed BER by the
Workshop; (ii) Should the Engine Stand be returned to Magnetic MRO incomplete – remedies
defined in Clause 7(iii) shall apply; (iii) any transportation costs Magnetic MRO may
incur for the inspection or repair of the Engine Stand or acquisition of missing items;
(iv) transportation costs – should Parties agree that Magnetic MRO shall arrange
transportation of Engine Stand from Delivery Location to Destination address; (v) charges
for customs duties and taxes for transporting, importing and exporting the Engine Stand;
(vi) Administration fee; (vii) AOG fee. Any Disbursements made by Magnetic MRO due to
inspection or repair of the Engine Stand or acquisition of missing items will be charged
at cost price plus a 10% mark-up.
If so specified in this Agreement, Magnetic MRO shall issue a proforma invoice for the
Lease Fee for the agreed Lease Term and Lessee shall settle such invoice in 3 days and in
any case prior to Delivery of the Engine Stand. After the end of the Lease (or on monthly
basis, if Lease lasts longer than 1 month) Magnetic MRO shall issue invoice for the Lease
Fee and escalated Lease Fee (if applicable) and any related disbursements (less any
advance payments, if applicable) and such invoice is to be paid by the Lessee in 3 days.
Magnetic MRO shall have the right to set off any invoice not paid by its due date against
the Deposit. At the time of Lease end, Magnetic MRO shall arrange for the release of the
Deposit within three (3) days, less any amounts due from the Lessee.
Lessee will pay to Magnetic MRO a daily late payment charge of three percent (3%) per
month on all late payment.
All payments shall be effected at Lessee’s costs in a contractual currency by bank
transfer to Magnetic MRO account indicated in the invoice.
All rates prescribed in this Agreement or addendums hereto do not include VAT (if such
applies). Lessee shall pay any taxes, any levies and any other fees related to this
Magnetic MRO expressly disclaims and makes no representations or warranties, express or
implied, as to any matter, whatsoever, including, without limitation, the selection,
capacity, age, airworthiness, description, its merchantability, the operation or
performance of the Engine Stand, or the maintenance thereof. Magnetic MRO shall not be
liable for any damage to, or loss of, property including the aircraft and Engines, or
injury or death or any other damage directly or indirectly caused to the Lessee or third
parties during or after, due to, or in connection with, or in consequence of the
performance or non–performance of this Agreement between Magnetic MRO and the Lessee,
unless caused by wilful misconduct or gross negligence of Magnetic MRO, and the Lessee
shall indemnify and hold harmless Magnetic MRO and its subcontractors against any and all
such claims including costs and expenses. Magnetic MRO’s total liability for any and all
demands, pretensions or claims, whether in contract between Magnetic MRO and the Lessee,
warranty, tort, product liability, patent infringement or otherwise, for any damages
arising out or connected with, or resulting from the performance, or non–performance of
any service will not exceed the price allocable to the services which give rise to the
demand, pretension or claim. In no event, whether as a result of breach of Agreement,
warranty, tort, product liability, patent infringement, or otherwise, Magnetic MRO will be
liable for any special, consequential, incidental, resultant or indirect damage
(including, without limitation, loss of use, revenue, good will) or punitive or exemplary
The Lessee warrants and confirms that the Lessee has thoroughly inspected the Engine Stand
at delivery and warrants and confirms that:
- The Engine Stand is in satisfactory condition for its intended use;
The Lessee accepts responsibility for any damage to or loss of the Engine Stand
Magnetic MRO shall not bear any responsibility for damage to any engine once it has
been installed on the Engine Stand, or any process of installing or uninstalling any
At all times during this Agreement the Lessee shall maintain in full force and effect
policies of insurance protecting Magnetic MRO and the property of Magnetic MRO providing
Comprehensive General Liability Insurance and/or Comprehensive Airline Liability Insurance
and/or Comprehensive Aviation Insurance to cover the liability exposures of the Lessee
from any and all occurrences with limits of not less than US$20,000,000 any one occurrence
and in the aggregate with respect of Products and Personal Injury.
The party who is the importer or exporter of the Engine Stand will be responsible for
obtaining any licence, exchange permit or other required governmental authorisation
relating to the shipment of the Engine Stand and shall be responsible for complying with
all licensing and reporting requirements in connection with this Agreement. The Lessee
shall be responsible for all customs issues if not otherwise agreed by the Parties. Export
of Engine Stand pursuant to this Agreement may be subject to U.S. or EU Export Regulations
and Lessee agrees to comply with such regulations. At execution of this Agreement and in
any case prior to delivery of Engine Stand the Lessee shall complete an End Use / End User
In case of breach of this Agreement, the aggrieved Party shall be entitled to terminate
the Lease by delivering 10 days prior written notice, in case such breach is not remedied
within notification period. Engine Stand shall be redelivered immediately (in no case
longer than in 10 days) after such termination.
It is further agreed that legal action required regarding this transaction will be subject
to the laws of the Republic of Estonia and the disputes shall be settled by competent
courts of the Republic of Estonia.
It is likewise agreed that a fax / scanned signature is acceptable and binding. However
non return of a signed Agreement but acting in accordance with this Agreement will be
taken as full acceptance of conditions above.