FIFTH URGENT NOTICE
FOR IMMEDIATE RELEASE March 27, 2002
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|To:||All airlines operating (and all operating lessors leasing) aircraft supported|
by the Export-Import Bank of the United States (each an Airline)
|From:||Alice McNutt Miller|
Managing Director - Asset Monitoring & Restructuring
Export-Import Bank of the United States (Ex-Im Bank)
By notices dated September 24, 2001 (the 1st Notice), October 1, 2001 (the 2nd Notice), October 11, 2001 (the 3rd Notice), and November 30, 2001 (the 4th Notice) Ex-Im Bank informed each Airline that, subject to the terms and conditions set forth therein, Ex-Im Bank would not require compliance with specified terms of the documentation governing Ex-Im Bank supported aircraft transactions (the Governing Documents). These terms were with respect to certain minimum amounts of liability insurance for third party claims of people and property on the ground for personal injury and property damage arising from war and allied perils (Third Party War Liability Insurance). Ex-Im Bank further advised it would not exercise its rights under the Governing Documents with respect thereto. These notices were effective through October 1, 2001, October 11, 2001, November 30, 2001, and March 31, 2002 respectively.
In the 2nd Notice, Ex-Im Bank requested each Airline to respond to a detailed questionnaire. Ex-Im Bank analyzed the information provided and continues to monitor developments in the international aviation insurance market and foreign government actions in response thereto. During the period covered by the 3rd Notice, Ex-Im Bank conferred with other interested parties (including representatives of other export credit agencies, commercial banks, aircraft operating lessors, insurance brokers, airlines and aircraft manufacturers). During the period covered by the 4th Notice, Ex-Im Bank continued to confer with other interested parties and has been closely following the progress of the ICAO Special War Risk Group toward formulating a proposed international solution to the war risk insurance problems confronting the international airline industry.
Ex-Im Bank continues to believe that, although some calm has returned to the insurance markets with respect to Third Party War Liability Insurance, it will be some period of time before it is clear whether a long term, international solution can be found or before the insurance markets have returned to normalcy. Further, Ex-Im Bank is aware that there have been changes with respect to cost or availability of other insurance coverages traditionally required by third party financiers. These involve, for example, hull war risk and allied perils coverage per clause LSW555B (Hull War Risk and Allied Perils Insurance), coverage for confiscation of aircraft by country of registration and the fleet aggregate amounts of hull war risk and allied perils insurance.
Ex-Im Bank continues to work with other US Government agencies, international aviation associations such as the International Civil Aviation Organization, the International Air Transport Association and the European export credit agencies on a longer term, uniform approach to solving the problems presented by these issues. Accordingly, subject to the terms and conditions described below, Ex-Im Bank will not exercise its rights under the Governing Documents with respect to Third Party War Liability Insurance through 23:59 EDT on June 30, 2002.
Ex-Im Bank notes that Third Party War Liability Insurance in the required amounts continues to be available from the commercial aviation insurance industry and that a number of governments have continued to provide supplemental coverage either through purchase or through indemnity. Ex-Im Bank expects each Airline to avail itself of one or both of these options during the period this notice is in effect.
Each recipient of this notice (the 5th Notice) is requested to review it carefully and comply with the provisions set forth below.
- This 5th Notice and all of its provisions expire automatically and without notice at 23:59 EDT on June 30, 2002.
- To the extent the Airline does not maintain, or cause to be maintained, Third Party War Liability Insurance, as defined herein, in the amounts required by the Governing Documents as a result of the changes in the international insurance markets due to the incidents of September 11, 2001, Ex-Im Bank will not require compliance with such requirements and will not exercise its rights under the Governing Documents with respect thereto for a period commencing 24:00 EST April 1, 2002, and ending 23:59 EDT June 30, 2002. This decision by Ex-Im Bank to forbear from the exercise of its rights under the Governing Documents is further subject to the terms and conditions stated herein and may be revoked for any reason or no reason upon 24 hours' prior written notice to the Airline from Ex-Im Bank. The provisions of this paragraph 2 do not apply to Hull War Risk and Allied Perils Insurance coverage.
- Each Airline is required to advise Ex-Im Bank in writing per the instructions set forth below of any changes occurring subsequent to the submission of such Airline's responses to the questionnaire included with the 2nd Notice with respect to: (a) the availability or amounts of commercial Third Party War Liability Insurance carried, (b) the availability or amounts of Hull War Risk and Allied Perils Insurance carried and (c) in each case, (i) any contingent or standby coverage offered to the Airline by any governmental authority and (ii) what specific actions the Airline is taking in response to any changes.
- In the event that an Airline gives notice of any change pursuant to paragraph 3 above, and in particular with respect to changes in coverage referenced in paragraph 3(c)(i) and any proposed actions referenced in paragraph 3(c)(ii), Ex-Im Bank reserves the right to require such Airline to obtain additional commercial insurance coverage as the specific circumstances may require.
- Except as expressly set forth herein, this 5th Notice does not modify or waive any provision of any Governing Document, all of which remain in full force and effect, and does not modify or waive any right or remedy Ex-Im Bank may have under the Governing Documents, all of which are hereby expressly reserved.
- This 5th Notice affects only Ex-Im Bank's rights under the Governing Documents. Ex-Im Bank notes that other parties to the Governing Documents may have independent rights with respect to the Airline under the Governing Documents or other agreements and this 5th Notice is not intended, and does not, affect any such rights. Ex-Im Bank also notes that the Airline must continue to comply with all applicable laws and regulations, including any minimum insurance coverage required by relevant jurisdictions.
- This 5th Notice is not intended, nor shall it be construed, as advice or comment on any aspect of the Airline's business or operations, including any decision to operate or not operate any aircraft at any time or on any route.
Questions regarding this 5th Notice and the information required under paragraph 3 above should be addressed: (a) by e-mail, to Douglas O. Adler, Esq. (email@example.com) and (b) by fax to the attention of Mr. Adler (202-565-3462).