SIXTH URGENT NOTICE
FOR IMMEDIATE RELEASE June 26, 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), November 30, 2001 (the 4th Notice) and March 28, 2002 (the 5th 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 that 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, March 31, 2002 and June 30, 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 closely followed 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. During the period covered by the 5th Notice, Ex-Im Bank has continued to monitor the developments in the ICAO Special War Risk Group, as well as the developments in the private sector insurance markets. Ex-Im Bank has also paid close attention to developments regarding the supplemental coverage provided by some governments for amounts in excess of the insurance available under AVN 52D.
In addition, Ex-Im Bank continues to monitor market developments with respect to cost or availability of other insurance coverage traditionally required by third party financiers, including, coverage against the risk of confiscation of title to, or use of, an aircraft by country of registry and the fleet aggregate limits for hull war risk and allied perils insurance under clause LSW555B (Hull War Risk and Allied Perils Insurance). Ex-Im Bank is aware that some underwriters are no longer providing coverage against the risk of confiscation by the government of registry and that fleet aggregate limits have been reduced under Hull War Risk and Allied Perils Insurance polices.
Ex-Im Bank continues to work with other U.S. 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. Ex-Im Bank is hopeful that a truly international solution will be available within a reasonable period of time. 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 September 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 6th Notice) is requested to review it carefully and comply with the provisions set forth below.
- This 6th Notice and all of its provisions expire automatically and without notice at 23:59 EDT on September 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 EDT July 1, 2002, and ending 23:59 EDT September 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 (including, without limitation, the fleet aggregate limit for Hull War Risk and Allied Perils Insurance and the basis for such limit) 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 addition, each Airline is required to advise Ex-Im Bank of the status of its insurance with respect to coverage against confiscation, nationalization, seizure, restraint, detention, appropriation, requisition for title or use by or under the authority of the government of the country of registry. In particular, each Airline should respond to the following questions:
- Who is the Airline's insurance or reinsurance broker?
- Is confiscation by the government of registry currently covered under the Airline's Hull War Risk and Allied Perils Insurance Policy?
- Was the Airline assessed an additional premium in order to obtain (or maintain) insurance coverage against the risk of confiscation by government of registry? If so, what additional premium was charged?
- When does the Airline's current Hull War Risk and Allied Perils Insurance Policy expire?
- Has the Airline been informed that coverage against the risk of confiscation by government of registry is not available at all or will not be available upon renewal of its Hull War Risk and Allied Perils Insurance policy?
- 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 6th 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 6th 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 6th 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 6th 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 6th Notice and the information required under paragraphs 3 and 4 above should be addressed: (a) by e-mail, to Louis E. Emery, Esq. (firstname.lastname@example.org), Douglas O. Adler, Esq. (email@example.com) and to Mr. Robert Lewandowski (firstname.lastname@example.org), and (b) by fax to the attention of Mssrs. Emery and Adler (202-565-3462) and to Mr. Robert Lewandowski at (202-565-3625).