* CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED
SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A
CONFIDENTIAL
TREATMENT REQUEST.
BOMBARDIER REGIONAL AIRCRAFT DIVISION
PURCHASE AGREEMENT
RJ-0350
BETWEEN
BOMBARDIER INC.
AND
ATLANTIC COAST AIRLINES
Relating to the Purchase of
Twelve (12) Canadair Regional Jet aircraft
Including related Customer Support Services
TABLE OF CONTENTS
ARTICLE
1 INTERPRETATION
2 SUBJECT MATTER OF SALE
3 CUSTOMER SUPPORT SERVICES AND WARRANTY
4 PRICE
5 PAYMENT
6 DELIVERY PROGRAM
7 BUYER INFORMATION
8 CERTIFICATION/FOR EXPORT/
9 ACCEPTANCE PROCEDURE
10 TITLE AND RISK
11 CHANGES
12 BUYER'S REPRESENTATIVES AT MANUFACTURE SITE
13 EXCUSABLE DELAY
14 NON-EXCUSABLE DELAY
15 LOSS OR DAMAGE
16 TERMINATION
17 NOTICES
18 INDEMNITY AGAINST PATENT INFRINGEMENT
19 LIMITATION OF LIABILITY
20 ASSIGNMENT
21 SUCCESSORS
22 APPLICABLE LAWS
23 CONFIDENTIAL NATURE OF AGREEMENT
24 AGREEMENT
25 DISPUTES
APPENDIX
I ECONOMIC ADJUSTMENT FORMULA
II DELIVERY SCHEDULE
III SPECIFICATION
IV BUYER SELECTED OPTIONAL FEATURES
EXHIBIT
I CERTIFICATE OF ACCEPTANCE
II BILL OF SALE
III CERTIFICATE OF RECEIPT OF AIRCRAFT
IV CHANGE ORDER
ANNEX A CUSTOMER SUPPORT SERVICES
ANNEX B WARRANTY AND SERVICE LIFE POLICY
LETTER AGREEMENTS
B96-7701-RJTL-RJ0350-001 Credit Memorandum
B96-7701-RJTL-RJ0350-002 Conditions Precedent
B96-7701-RJTL-RJ0350-003 Option Aircraft
B96-7701-RJTL-RJ0350-004 Options
B96-7701-RJTL-RJ0350-005 FIPP
B96-7701-RJTL-RJ0350-006 Operational Restrictions
B96-7701-RJTL-RJ0350-007 Financing
B96-7701-RJTL-RJ0350-008 Schedule Completion Rate
B96-7701-RJTL-RJ0350-009 Airframe Direct Maintenance
Cost
B96-7701-RJTL-RJ0350-010 Additional Customer Support
B96-7701-RJTL-RJ0350-011 Spares
B96-7701-RJTL-RJ0350-012 Marketing Support
B96-7701-RJTL-RJ0350-013 Spares Credit
B96-7701-RJTL-RJ0350-014 Taxes, Duties and Licenses
B96-7701-RJTL-RJ0350-015 Airworthiness Directives
B96-7701-RJTL-RJ0350-016 Reconciliation
This Agreement is made on the 8th day of January 1997.
BY AND BETWEEN: BOMBARDIER INC., a Canadian Corporation
represented by
its BOMBARDIER REGIONAL AIRCRAFT DIVISION ("BRAD")
having an office at 123 Garratt Boulevard, Downsview,
Ontario, Canada.
AND: ATLANTIC COAST AIRLINES, a California Company, having
offices at 1 Export Drive, Sterling , Virginia 20164,
U.S.A.
("Buyer")
WHEREAS Bombardier Inc. through its Canadair Manufacturing
Division, is engaged in the manufacture of the
Canadair Regional Jet aircraft products; and
BRAD has been created for the purpose of providing
marketing, sales and customer support services for the
Canadair Regional Jet aircraft and related products;
WHEREAS Buyer desires to purchase twelve (12) Aircraft (as
later defined) and related data, documents, and
services under this Agreement (as later defined), and
BRAD desires to arrange the sale of such Aircraft,
data, documents and services to Buyer,
WHEREAS Atlantic Coast Airlines Inc., a Delaware
Corporation,
the parent of Buyer, is prepared to provide a
guarantee of Buyer's obligations hereunder, in a form
acceptable to the parties and the financiers.
NOW THEREFORE, in consideration of the mutual covenants
herein contained,
Buyer and BRAD agree as follows:
ARTICLE 1. INTERPRETATION
1.1 The recitals above have been inserted for convenience
only and do not
form part of the agreement.
1.2 The headings in this agreement are included for
convenience only and
shall not be used in the construction and interpretation of
this
agreement.
1.3 In this agreement, unless otherwise expressly provided,
the singular
includes the plural and vice-versa.
1.4 In this agreement the following expressions shall,
unless otherwise
expressly provided, mean:
(a) "Acceptance Period" shall have the meaning
attributed to it in
Article 9.3;
(b) "Acceptance Date" shall have the meaning
attributed to it in
Article 9.7.(a);
(c) "Agreement" means this Agreement, including its
Exhibits,
Annexes, Appendices and Letter Agreements, if any, attached
hereto (each of which is incorporated in the Agreement by
this
reference), as they may be amended pursuant to the
provisions
of the Agreement;
(d) "Aircraft" shall have the meaning attributed to it
in Article
2.1;
(e) "Aircraft Purchase Price" shall have the meaning
attributed to
it in Article 4.2;
(f) "Base Price" shall have the meaning attributed to
it in Article
4.1;
(g) "Bill of Sale" shall have the meaning attributed
to it in
Article 9.7 (c);
(h) "BFE" shall have the meaning attributed to it in
Article 11.1;
(h.1) "Bombardier Group" shall have the meaning
attributed to it in
Article 24.3;
(h.2) *
(i) "Buyer Selected Optional Features" shall have the
meaning
attributed to it in Article 2.1;
(j) "Delivery Date" shall have the meaning attributed
to it in
Article 9.7.(c);
(k) "Economic Adjustment Formula" shall have the
meaning attributed
to it in Article 4.2;
(l) "Excusable Delay" shall have the meaning
attributed to it in
Article 13.1;
(m) "FAA" shall have the meaning attributed to it in
Article 8.1;
(m.1) "Grace Period" shall have the meaning
attributed to it in
Article 14.1;
(n) "Non-Excusable Delay" shall have the meaning
attributed to it
in Article 14.1;
(o) "Notice" shall have the meaning attributed to it
in Article
17.1;
( p) "Other Patents" shall have the meaning attributed
to it in
Article 18.1;
( q) "Permitted Change" shall have the meaning
attributed to it in
Article 11.2;
( r) "Readiness Date" shall have the meaning attributed
to it in
Article 9.1;
( s) "Regulatory Change" shall have the meaning
attributed to it in
Article 8.4;
( t) "Scheduled Delivery Dates" shall have the meaning
attributed to
it in Article 6;
( u) "Specification" shall have the meaning attributed
to it in
Article 2.1;
( v) "Taxes" shall have the meaning attributed to it in
Article
4.3.;
( w) "TC" shall have the meaning attributed to it in
Article 8.1;
( x) "Net Aircraft Purchase Price" shall have the
meaning attributed
to it in
Article 5.3.;
( y) *
( z) "Deposit" shall have the meaning attributed to it
in Article
5.2.1.;
(z.1) "Technical Data" shall have the meaning
attributed to it in
Annex A Article 4.1;
(z.2) "Total Deposit)" shall have the meaning
attributed to it in
Article 5.2.1.b); and
1.5 All dollar amounts in this Agreement are in United
States Dollars.
ARTICLE 2 - SUBJECT MATTER OF SALE
2.1 Subject to the provisions of this Agreement, BRAD will
sell and Buyer
will purchase twelve (12) Canadair Regional Jet aircraft
model CL600-
2B19 Version 200ER, manufactured pursuant to specification
Number
RAD-601R-146 Issue NC dated November 18, 1996, attached
hereto as
Appendix III, as that specification may be modified from
time to time
in accordance with this Agreement (the "Specification"), as
supplemented to reflect the incorporation of the Buyer
selected
optional features ("Buyer Selected Optional Features") set
forth in
Appendix IV hereto (collectively the "Aircraft").
ARTICLE 3 - CUSTOMER SUPPORT SERVICES AND WARRANTY
3.1 BRAD shall provide to Buyer the customer support
services pursuant to
the provisions of Annex A attached hereto.
3.2 BRAD shall provide to Buyer the warranty and the
service life policy
described in Annex B attached hereto.
3.3 Unless expressly stated otherwise, the services
referred to in 3.1
and 3.2 above are incidental to the sale of the Aircraft and
are
included in the Aircraft Purchase Price.
ARTICLE 4 - PRICE
4.1 (a) The base price for each of the Aircraft (excluding
the Buyer
Selected Optional Features) Ex Works (Incoterms 1990) BRAD's
offices or premises in Montreal, Province of Quebec, Canada,
is * expressed in July 1, 1995 dollars.
(b) The base price of the Buyer Selected Optional
Features is *
expressed in July 1, 1995 dollars.
The Aircraft base price shall be the base price for the
Aircraft as
stated in paragraph (a), plus the base price of the Buyer
Selected
Optional Features as stated in paragraph (b) ("Base Price").
4.2 The price of the Aircraft (the "Aircraft Purchase
Price") shall be
the Base Price adjusted to the date of delivery to reflect
economic
fluctuations during the period from July 1, 1995 to the
respective
delivery date of the Aircraft. Such adjustments shall be
based on
the formula as found in Appendix I ("Economic Adjustment
Formula").
*
* [TWO PAGES OF CONFIDENTIAL MATERIALS OMITTED]
4.3 Upon the occurrence of events as described in this
paragraph 4.3,
there will be adjustments as follows:
4.3.1 In the event that BRAD and Buyer agree to any
changes in the
Specification or selected optional features, or should
changes
in the Specification or selected optional features be made
pursuant to Article 11.1 or as a result of any Regulatory
Changes pursuant to Article 8.4 which are chargeable to
Buyer
pursuant to Article 8.5, or in the event that BRAD and Buyer
agree to any *
4.3.2 The * adjustment shall be
based on the projected index rate for
the agreed delivery month as identified
in Attachment 1 to Appendix I.
4.3.3 The Credit Memorandum adjustment shall be in
accordance with
the terms of Letter Agreement No. 1.
4.3.4 *
4.3.5 In the event of a Non-Excusable Delay, the
provisions of
Article 14.2 shall apply.
4.4 The Aircraft Purchase Price does not include any taxes,
fees or
duties including, but not limited to, sales, use, value
added
(including the Canadian Goods and Services Tax), personal
property,
gross receipts, franchise, excise taxes, assessments or
duties
("Taxes") which are or may be imposed by law upon BRAD, any
affiliate
of BRAD, Buyer or the Aircraft whether or not there is an
obligation
for BRAD to collect same from Buyer, by any taxing authority
or
jurisdiction occasioned by, relating to or as a result of
the
execution of this Agreement or the sale, lease, delivery,
storage,
use or other consumption of any Aircraft, BFE or any other
matter,
good or service provided under or in connection with this
Agreement.
4.5 If any Taxes (other than income taxes charged on the
income of
Bombardier Group) are imposed upon Buyer or become due or
are to be
collected from Bombardier Group by any taxing authority
resulting
from, relating to or in connection with the execution of
this
Agreement, the sale, lease, delivery, storage, use or other
consumption of any Aircraft, BFE or any other matter, goods
or
services provided for under this Agreement, BRAD shall
notify Buyer
and Buyer shall promptly, but no later than ten (10) working
days
after receiving such notice, pay such Taxes directly to the
taxing
authority, or reimburse BRAD for such Taxes, as the case may
be,
including interest and penalties. Buyer shall only
reimburse BRAD
for interest and penalties if BRAD notifies Buyer in writing
of the
imposition of these Taxes within ten (10) working days of
the member
of Bombardier Group receiving written notification of such
Taxes.
4.6 Upon BRAD's request, Buyer shall execute and deliver to
BRAD any
documents that BRAD deems necessary or desirable in
connection with
any exemption from or reduction of or the contestation of or
the
defense against any imposition of Taxes.
4.7 Upon Buyer's request, BRAD shall execute and deliver to
Buyer any
documents that Buyer deems necessary or desirable in
connection with
any exemption from or reduction of or the contestation of or
the
defense against any imposition of Taxes.
ARTICLE 5 - PAYMENT
5.1 Intentionally left blank.
5.2 Deposit
5.2.1 The deposit for the Aircraft (the "Deposit")
will be paid as follows:
a) Four Million ($4,000,000 U.S.)
United States Dollars on the business
day following execution of the
Agreement, and
b) Eleven Million ($11,000,000
U.S.) United States Dollars (the
"Total Deposit") on or before March 31,
1997. will be retained by BRAD *
The total sum of Fifteen
Million ($15,000,000 US) United
States Dollars (the "Total Deposit").
5.2.2 Notwithstanding the provisions
of Article 5.2.1 (b) above, should Buyer
not be in a position to provide the
total Eleven Million ($11,000,000 U.S.)
United States Dollars referred to in
Article 5.2.1 (b) by March 31, 1997, *
Buyer for any remaining portion of the
Deposit then due, up to a sum of Eleven
Million ($11,000,000 U.S.) United States
Dollars.
* Buyer agrees to pay BRAD the
Deposit or the remaining portion
thereof, by issuing an assignable
promissory note payable on the Delivery
Date (as defined in Article 9.7 (c)) of
the first Aircraft. The promissory note
shall bear interest at an annual
interest rate of * per annum
calculated and compounded monthly for
any such outstanding balance of the
Deposit, from March 31, 1997, and up to
and including the day prior to receipt
of such payment.
5.3 Payment Terms
Buyer shall pay BRAD on or before the
delivery date either (i) the Aircraft
Purchase Price of such Aircraft lees the
amount of the applicable Credit
Memorandum as set out in Letter
Agreement No. 1, which will be credited
by BRAD toward the Aircraft Purchase
Price, * such amount being the "Net
Aircraft Purchase Price"
5.4 Subject to the provisions of Article 9.9 hereof, should
Buyer fail to
make any of the aforementioned Deposit payments on or before
the
stipulated date and Buyer does not correct the default
within a
period of thirty (30) days thereafter, this Agreement shall
automatically terminate and BRAD shall have no further
obligation to
Buyer under this Agreement, including the obligation to
proceed
further with the manufacture of the Aircraft on behalf of
Buyer or
the sale and/or delivery of the Aircraft to Buyer. BRAD
shall have
the option (but not the obligation) of waiving such
termination
should Buyer make arrangements satisfactory to BRAD for such
payment
and all future payments within ten (10) calendar days of
Buyer's
default.
5.5 Buyer shall pay BRAD daily interest on late payments,
from the date
that any payment becomes due up to and including the day
prior to
receipt of payment, at a rate of two per cent (2 %) per
annum over
the U.S. prime rate charged by the Chase Manhattan Bank, New
York
Branch, or its successor,, from time to time, calculated and
compounded monthly. BRAD's right to receive such interest is
in
addition to any other right or remedy BRAD has at law as a
result of
Buyer's failure to make payments when due.
5.6 If under any terms of the Agreement BRAD is obligated
to return the
Deposit or make other payments if applicable to Buyer, with
or
without interest as provided for herein, BRAD shall do so
within five
(5) working days , and if BRAD fails to do so, BRAD shall
pay Buyer
daily interest on late payments from the date any payment
becomes due
up to and including the day prior to receipt of payment, at
a rate of
two per cent
(2 %) per annum over the U.S. prime rate charged from time
to time by
the Chase Manhattan Bank, New York Branch, or its successor,
calculated and compounded monthly. The five (5) days grace
period
mentioned above shall not apply to return of Deposits
coincident with
the return of the last six (6) Aircraft.
5.7 Buyer shall make all payments due under this Agreement
in immediately
available funds by deposit on or before the due date to
BRAD's
account in the following manner:
*
BRAD shall make all payments due under this Agreement
in immediately
available funds by deposit on or before the due date to
Buyer's
account as specified below:
*
5.8 All other amounts due with respect to each Aircraft
shall be paid on
or prior to the Delivery Date of the respective Aircraft.
5.9 All payments provided for under this Agreement to
either party shall
be made so as to be received in immediately available funds
on or
before the dates stipulated herein. Neither party shall
incur
interest charges for any delay which occurs after provision
of a
proof of transfer from that party's bank.
5.10 BRAD, or its affiliate to whom the Aircraft may have
been sold, shall
remain the exclusive owner of the Aircraft, free and clear
of all
rights, liens, charges or encumbrances created by or through
Buyer,
until such time as all payments referred to in this Article
5 have
been made.
ARTICLE 6 - DELIVERY PROGRAM
6.1 The Aircraft shall be offered for inspection and
acceptance to Buyer
at BRAD's facility in Montreal, Quebec during the months set
forth in
Appendix II attached hereto (the "Scheduled Delivery
Dates").
ARTICLE 7 - BUYER INFORMATION
7.1 During the manufacture of the Aircraft, Buyer shall
provide to BRAD
on or before the date required by BRAD, all information as
BRAD may
reasonably request to manufacture the Aircraft including,
without
limitation, the selection of furnishings, internal and
external
colour schemes.
On or before January 31, 1997, Buyer will:
(a) provide BRAD with an external paint scheme agreed
on by the
parties; and
(b) select interior colours (from BRAD's standard
colours).
Failure of Buyer to substantially comply with these
requirements may
result in a reasonable increase in price, as applicable, a
delay in
delivery of the Aircraft, or both.
ARTICLE 8 - CERTIFICATION FOR EXPORT
8.1 BRAD has obtained and will continue to have on each
Delivery Date
from Transport Canada ("TC"), a valid TC Type Approval
(Transport
Category) and from the Federal Aviation Administration of
the United
States ("FAA") an FAA Type Certificate for the type of
aircraft
purchased under this Agreement.
8.2 BRAD shall provide to Buyer a TC Certificate of
Airworthiness
(Transport Category) for export, on or before the Delivery
Date with
respect to each Aircraft.
8.3 The obtaining of any import license or authority
required to import
or operate the Aircraft into any country outside of Canada
shall be
the responsibility of Buyer. BRAD will, assist Buyer in
obtaining
import permits and licenses. BRAD shall, with Buyer's
assistance,
obtain the issuance of a Canadian export license to enable
Buyer to
export the Aircraft from Canada, subject to prevailing
export control
regulations in effect on the Delivery Date. Except as
provided in
Articles 8.1, 8.2 and 8.3 BRAD shall not be obligated to
obtain any
other certificates or approvals as part of this Agreement.
8.4 If any addition or change to, or modification or
testing of the
Aircraft is required or will be required by the passage of
time by
any law or governmental regulation or requirement or
interpretation
thereof by any governmental agency having jurisdiction
subsequent to
the date of this Agreement but prior to the Delivery Date in
order to
meet the requirements of Article 8.2 (a "Regulatory
Change"), such
Regulatory Change shall be made to the Aircraft prior to
Delivery
Date, or at such other time after the Delivery Date as the
parties
may agree upon taking into account the terminating action
deadline.
8.5 The Regulatory Change shall be made without additional
charge to
Buyer unless such Regulatory Change is:
(a) necessary to comply with any requirement of the
United States,
the country of import, which varies from or is in addition
to its
regulation, requirement or interpretation in effect on the
date
hereof for the issuance of a Certificate of Airworthiness in
said
country of import (unless such requirement has been imposed
to
correct a defect specific to the Aircraft or to the Canadair
Regional Jet fleet of aircraft), in which case Buyer shall
pay
BRAD's reasonable charges for such Regulatory Change, or
(b) required by any governmental law or regulations or
interpretation
thereof promulgated by TC or the FAA which is effective
subsequent to the date of this Agreement but before the
Delivery
Date and which is applicable to all aircraft in general or
to all
aircraft of the same category as the Aircraft, in which case
Buyer shall pay BRAD's reasonable charges for such
Regulatory
Change incorporated in any such Aircraft.
8.6 If delivery of the Aircraft is
delayed by the incorporation of any
Regulatory Change, such delay shall be
an Excusable Delay within the meaning of
Article 13 subject to the limitations
therein. Notwithstanding the provision
of * should the Regulatory Change be
required to correct a defect specific to
the Aircraft or to the Canadair Regional
Jet fleet of aircraft, *
8.7 BRAD shall issue a Change Order, reflecting any
Regulatory Change
required to be made under this Article 8, which shall set
forth in
detail the particular changes to be made and the effect, if
any, of
such changes on design, performance, weight, balance, time
of
delivery, Base Price, the Aircraft Purchase Price, * all
in accordance
with this Agreement. Any Change Orders issued pursuant to
this
Article shall be effective and binding upon the date of
BRAD's transmittal
of such Change Order, all in accordance
with this Agreement. Although Buyer's
consent to said Change Order is not
required, BRAD agrees to consult with
Buyer regarding the change proposed by
BRAD to implement such Regulatory
Change.
8.8 If the use of any of the certificates identified in
this Article 8
are discontinued during the performance of this Agreement,
reference
to such discontinued certificate shall be deemed a reference
to any
other certificate or instrument which corresponds to such
certificate
or, if there should not be any such other certificate or
instrument,
then BRAD shall be deemed to have obtained such discontinued
certificate(s) upon demonstrating that the Aircraft complies
substantially with the Specification.
ARTICLE 9 - ACCEPTANCE PROCEDURE
9.1 No later than * BRAD shall inform
Buyer by facsimile or telegraphic
communication or other expeditious
means, of the projected week of delivery
within the delivery month.
BRAD shall give Buyer at least * advance notice,
by facsimile or telegraphic communication or other
expeditious means,
of the projected date of readiness of each Aircraft for
inspection
and delivery. BRAD and Buyer shall then agree on a mutually
acceptable
targeted delivery schedule within the delivery month.
BRAD shall give Buyer at least *
advance notice, by facsimile or
telegraphic communication or other
expeditious means, of the date on which
an Aircraft will be ready for Buyer's
inspection, flight test and acceptance
(the "Readiness Date"), which Readiness
Date shall take into account the
targeted delivery schedule mentioned
above or such other date as the parties
my have agreed upon.
9.2 Within two (2) days following receipt by Buyer of the
notice of
Readiness Date Buyer shall:
(a) provide notice to BRAD as to the source and method
of payment of
the balance of the Aircraft Purchase Price;
(b) identify to BRAD the names of Buyer's
representatives who will
participate in the inspection, flight test and
acceptance; and
(c) provide evidence of the authority of the
designated persons to
execute the Certificate of Acceptance and other delivery
documents on behalf of Buyer.
9.3 Buyer shall have three (3) consecutive working days
commencing on the
Readiness Date in which to complete the inspection and
flight test
(such three (3) working day period being the "Acceptance
Period").
This three (3) day period may be extended in the event of
any delay
by BRAD in making the Aircraft available for inspection and
flight
test.
9.4 Up to four (4) representatives of Buyer may participate
in Buyer's
ground inspection of the Aircraft and two (2)
representatives of
Buyer may participate in the flight test. BRAD shall, if
requested
by Buyer, perform an acceptance flight of not less than one
(1) and
not more than three (3) hours duration. Ground inspection,
in
accordance with procedures to be mutually agreed to, and
flight test
shall be conducted in accordance with BRAD's acceptance
procedures (a
copy of which shall be provided to Buyer at least 30 days
prior to
the Scheduled Delivery Date of the First Aircraft
hereunder), as may
be amended by mutual agreement of Buyer and BRAD, and at
BRAD's
expense. At all times during ground inspection and flight
test, BRAD
shall retain control over the Aircraft.
9.5 If no Aircraft defect or discrepancy is revealed during
the ground
inspection or flight test, Buyer shall accept the Aircraft
on or
before the last day of the Acceptance Period in accordance
with the
provisions of Article 9.7.
9.6 If any material defect or discrepancy in the Aircraft
is revealed by
Buyer's ground inspection or flight test, the defect or
discrepancy
will promptly be corrected by BRAD, at no cost to Buyer,
which
correction may occur during or after the Acceptance Period
depending
on the nature of the defect or discrepancy and of the time
required
for correction. To the extent necessary to verify such
correction,
BRAD shall perform one (1) or more further acceptance
flights or
ground inspections as applicable.
Notwithstanding the provisions of
Article 4.2, should the Delivery Date of
an Aircraft occur in the month
subsequent to the Scheduled Delivery
Date due to the correction of defects or
discrepancies, *
9.7 Upon completion of the ground inspection and acceptance
flight of the
Aircraft and correction of any defects or discrepancies:
(a) Buyer will sign a Certificate of Acceptance (in
the form of
Exhibit I hereto) for the Aircraft. Execution of the
Certificate of Acceptance by or on behalf of Buyer shall be
evidence of Buyer having examined the Aircraft and found it
in
accordance with the provisions of this Agreement. The date
of
signature of the Certificate of Acceptance shall be the
"Acceptance Date";
(b) BRAD will supply a TC Certificate of Airworthiness
for Export;
and
(c) Buyer shall pay BRAD the balance of the * any
other amounts due, at which time BRAD shall issue an FAA
bill
of sale and a warranty bill of sale in a form acceptable to
BRAD and financiers (substantially in accordance with the
forms
attached as Exhibit II(a) and Exhibit II(b) hereto), passing
to
Buyer, or approved assignee pursuant to Article 20, good
title
to the Aircraft free and clear of all liens, claims, charges
and encumbrances except for those liens, charges or
encumbrances created by or claimed through Buyer (the "Bill
of
Sale"). The date on which BRAD delivers the Bill of Sale
and
Buyer takes delivery of the Aircraft shall be the "Delivery
Date".
Delivery of the Aircraft shall be evidenced by the
execution and
delivery of the Bill of Sale and of the Certificate of
Receipt of
Aircraft (in the form of Exhibit III hereto).
9.8 Provided that BRAD has met all of its obligations under
this Article
9, should Buyer not accept, pay for (subject to Letter
Agreement No. 7) and take
delivery of any of the Aircraft within ten (10) calendar
days after the end of the
Acceptance Period of such Aircraft, Buyer shall be deemed to
be in
default of the terms of this Agreement *
9.9 Should the Buyer be in default pursuant to Article 9.8
hereof, Buyer
shall promptly, upon demand, reimburse BRAD for all costs
and
expenses reasonably incurred by BRAD as a result of such
Buyer's
failure to accept or take delivery of the Aircraft,
including but not
limited to reasonable amounts for storage, insurance, taxes,
preservation or protection of the Aircraft, and provided
that BRAD
has met all of its obligations under this Article 9, should
Buyer not
accept, pay for and/or take delivery of any one of the
Aircraft within *
following the end of the Acceptance Period, BRAD may, at its
option, terminate
the present Agreement with respect to any of the undelivered
Aircraft. BRAD
shall however, have the option (but not the obligation) of
waiving
such termination should Buyer, within ten (10) calendar days
following such termination, make arrangements satisfactory
to BRAD to
accept delivery and provide payment for all amounts owing or
to
become due pursuant to this Agreement.
ARTICLE 10 - TITLE AND RISK
10.1 Title to the Aircraft and risk of loss of or damage to
the Aircraft
passes to Buyer when BRAD presents the Bill of Sale to Buyer
on the
Delivery Date.
10.2 If, after transfer of title on the Delivery Date, the
Aircraft
remains in or is returned to the care, custody or control of
BRAD,
Buyer shall retain risk of loss of, or damage to the
Aircraft and for
itself and on behalf of its insurer(s) hereby waives and
renounces
to, and releases BRAD and any of BRAD's affiliates from any
claim,
whether direct, indirect or by way of subrogation, for
damages to or
loss of the Aircraft arising out of, or related to, or by
reason of
such care, custody or control *
ARTICLE 11 - CHANGES
11.1 Other than a Permitted Change as described in Article
11.2, or a
Regulatory Change as described in Article 8.4, any change to
this
Agreement (including without limitation the Specification)
or any
features or Buyer Furnished Equipment ("BFE"), if any,
changing the
Aircraft from that described in the Specification attached
hereto,
and as may be mutually agreed upon by the parties hereto,
shall be
made using a change order ("Change Order") substantially in
the
format of Exhibit IV hereto. Should Buyer request a change,
BRAD
shall advise Buyer, to the extent reasonably practical, of
the
effect, if any, of such change request on:
(a) the Scheduled Delivery Date;
(b) the price and payment terms applicable to the
Change Order; and
(c) any other material provisions of this Agreement
which will be
affected by the Change Order.
Such Change Order shall become effective and binding on
the parties
hereto when signed by a duly authorized representative of
each party.
11.2 BRAD, prior to the Delivery Date and without a Change
Order or
Buyer's consent, may:
(a) substitute the kind, type or source of any
material, part,
accessory or equipment with any other material, part,
accessory
or equipment of like, equivalent or better kind or type; or
(b) make such change or modification to the
Specification as it deems
appropriate to:
1) improve the Aircraft, its maintainability or
appearance, or
2) to prevent delays in manufacture or delivery, or
3) to meet the requirements of Articles 2 and 8,
other than for a
Regulatory Change to which the provisions of Articles 8.4
and
8.5 shall apply,
provided that such substitution, change or modification
shall not
affect the Aircraft Purchase Price or materially affect the
Scheduled
Delivery Date, * Any change made in
accordance with the provisions of this Article 11.2 shall be
deemed
to be a "Permitted Change" and the cost thereof shall be
borne by
BRAD.
ARTICLE 12 - BUYER'S REPRESENTATIVES AT MANUFACTURE SITE
12.1 From time to time, commencing with the date of this
Agreement and
ending with the Delivery Date of the last Aircraft purchased
hereunder, BRAD shall furnish, without charge, office space
at BRAD's
facility for one (1) representative of Buyer. Buyer shall
be
responsible for all expenses of its representative and shall
notify
BRAD at least thirty (30) calendar days prior to the first
scheduled
visit of such representative and three (3) days for each
subsequent
visit.
12.2 BRAD's and BRAD's affiliates facilities shall be
accessible to
Buyer's representative during normal working hours. Buyer's
representative shall have the right to periodically observe
the work
at BRAD's or BRAD's affiliates' facilities where the work is
being
carried out provided there shall be no disruption in the
performance
of the work.
12.3 BRAD shall advise Buyer's representative of BRAD's or
BRAD's
affiliates' rules and regulations applicable at the
facilities being
visited and Buyer's representative shall conform to such
rules and
regulations.
12.4 At any time prior to delivery of the Aircraft, Buyer's
representative
may request, in writing, correction of parts or materials
which they
reasonably believe are not in accordance with the
Specification.
BRAD shall provide a written response to any such request.
Communication between Buyer's representative and BRAD shall
be solely
through BRAD's Contract Department or its designate.
12.5 BUYER HEREBY RELEASES AND AGREES TO DEFEND, INDEMNIFY
AND HOLD
HARMLESS BRAD, ITS ASSIGNEES AND AFFILIATES AND THEIR
OFFICERS,
DIRECTORS, AGENTS, EMPLOYEES AND CONTRACTORS FROM AND
AGAINST ALL
LIABILITIES, DAMAGES, LOSSES, COSTS AND EXPENSES RESULTING
FROM
INJURIES TO OR DEATH OF BUYER'S REPRESENTATIVES WHILE AT
BRAD'S OR
BRAD'S AFFILIATES OR SUBCONTRACTOR'S FACILITIES AND/OR
DURING
INSPECTION, FLIGHT TEST OR ACCEPTANCE OF THE AIRCRAFT,
WHETHER OR NOT
CAUSED BY THE ACTIVE, PASSIVE OR IMPUTED NEGLIGENCE OR
STRICT
PRODUCTS LIABILITY OF BRAD, ITS ASSIGNEES, AFFILIATES OR
THEIR
OFFICERS, DIRECTORS, AGENTS, EMPLOYEES OR CONTRACTORS *
12.6 *
*
ARTICLE 13 - EXCUSABLE DELAY
13.1.1 In the event of a delay on the part of BRAD in the
performance
of its obligations or responsibilities under the provisions
of this
Agreement due directly or indirectly to a cause which is
beyond the
reasonable control or without the fault or negligence of
BRAD (an
"Excusable Delay"), BRAD shall not be liable for, nor be
deemed to be
in default under this Agreement on account of such delay in
delivery
of the Aircraft or other performance hereunder and the time
fixed or
required for the performance of any obligation or
responsibility in
this Agreement shall be extended for a period equal to the
period
during which any such cause or the effect thereof persist.
Excusable
Delay shall be deemed to include, without limitation, delays
occasioned by the following causes:
(a) force majeure or acts of God;
(b) war, warlike operations, act of the enemy, armed
aggression,
civil commotion, insurrection, riot or embargo;
(c) fire, explosion, earthquake, lightning, flood,
draught, windstorm
or other action of the elements or other catastrophic or
serious
accidents;
(d) epidemic or quarantine restrictions;
(e) any legislation, act, order, directive or
regulation of any
governmental or other duly constituted authority;
(f) strikes, lock-out, walk-out, and/or other labour
troubles causing
cessation, slow-down or interruption of work;
(g) lack or shortage or delay in delivery of supplies,
materials,
accessories, equipment, tools or parts, *
(h) * , delay or failure of carriers, subcontractors
or suppliers for any
reason whatsoever; or
(i) delay in obtaining any airworthiness approval or
certificate, or
any equivalent approval or certification, by reason of any
law or
governmental order, directive or regulation or any change
thereto, or interpretation thereof, by a governmental
agency, the
effective date of which is subsequent to the date of this
Agreement, or by reason of any change or addition made by
BRAD or
its affiliates or requested by a governmental agency to the
compliance program of BRAD or of its affiliate, or any part
thereof, as same may have been approved by TC, or change to
the
interpretation thereof to obtain any such airworthiness
approval
or certificate; or
(j) the incorporation of a Regulatory Change as set
out in Article 8
13.1.2 *
*
13.2 (a) If BRAD concludes, based on its appraisal of the
facts and normal
scheduling procedures, that due to Excusable Delay it can be
reasonably anticipated that delivery of the Aircraft will be
delayed, BRAD shall give prompt written notice to Buyer of
such
delay. BRAD and Buyer agree to collaborate and to use their
reasonable efforts
to mitigate the impact of such delays upon the parties.
(b) If, as the result of an
Excusable Delay, delivery of the
Aircraft will be delayed to a date
beyond the originally scheduled Delivery
Date or any revised date previously
agreed to in writing by the parties,
Buyer and BRAD agree, *
(c) In the event of an Excusable Delay * or an
anticipated
Excusable Delay * shall conduct an appraisal of the facts
and normal
scheduling procedures, and if it concludes that delivery of
one or more of
the Aircraft will be delayed for * after the originally
Scheduled Delivery Date or any
revised date agreed to in writing by the parties, * may
then terminate this
Agreement with respect to such delayed Aircraft by giving
written notice *
(d) If, due to Excusable Delay * delivery of any
Aircraft is
delayed for * after the Scheduled Delivery Date, either
party may terminate this Agreement with respect to such
Aircraft
by giving written notice to the other within fifteen (15)
business days after the expiration of such * period.
13.3 Termination under Article 13.2 shall discharge all
obligations and
liabilities of Buyer and BRAD hereunder with respect to such
delayed
Aircraft and all related undelivered items and services, *
BRAD shall, within
* of such termination, repay to Buyer, and BRAD's sole
liability and
responsibility shall be limited to the repayment to Buyer,
of all
deposits for such Aircraft received by BRAD less any amount
due by
Buyer to BRAD.
13.4 The termination rights set forth in Article 13.2 are in
substitution
for any and all other rights of termination or contract
lapse arising
by operation of law in connection with Excusable Delays.
ARTICLE 14 - NON-EXCUSABLE DELAY
14.1 If delivery of the Aircraft is delayed beyond the end
of the
Scheduled Delivery Date, by causes not excused under Article
13.1,
this shall constitute a non-excusable delay (a "Non-
Excusable
Delay").
14.2 If as a result of an Non-Excusable Delay, delivery of
the Aircraft
will be delayed to a date beyond the originally Scheduled
Delivery
Date or any revised date previously agreed to in writing by
the
parties, the Aircraft Purchase Price of the Aircraft at
delivery,
*
ARTICLE 15 - LOSS OR DAMAGE
15.1 In the event that prior to the Delivery Date of any
Aircraft, the
Aircraft is lost, destroyed or damaged beyond repair due to
any
cause, BRAD shall promptly notify Buyer in writing. Such
notice
shall specify the earliest date reasonably possible,
consistent with
BRAD's other contractual commitments and production
schedule, by
which BRAD estimates it would be able to deliver a
replacement for
the lost, destroyed or damaged Aircraft. This Agreement
shall
automatically terminate as to such Aircraft unless Buyer
gives BRAD
written notice, within thirty (30) days of BRAD's notice,
that Buyer
desires a replacement for such Aircraft. If Buyer gives
such notice
to BRAD, the parties shall execute an amendment to this
Agreement
which shall set forth the Delivery Date for such replacement
aircraft
and corresponding new replacement Aircraft Purchase Price;
provided,
however, that nothing herein shall obligate BRAD to
manufacture and
deliver such replacement aircraft if it would require the
reactivation or acceleration of its production line for the
model of
aircraft purchased hereunder. The terms and conditions of
this
Agreement applicable to the replaced Aircraft shall apply to
the
replacement aircraft.
15.2 If an Aircraft is lost, destroyed,
or damaged beyond repair as contemplated
under this Article, due to a cause to
which reference is made in Article 13.1,
and Buyer elects to purchase a
replacement Aircraft, then *
ARTICLE 16 - TERMINATION
16.1 This Agreement may be terminated, in whole or in part,
with respect
to any or all of the Aircraft before the Delivery Date by
BRAD or
Buyer by notice of termination to the other party upon the
occurrence
of any of the following events:
(a) a party makes an assignment for the benefit of
creditors or
admits in writing its inability to pay its debts or
generally
does not pay its debts as they become due; or
(b) a receiver or trustee is appointed for a party or
for
substantially all of such party's assets and, if appointed
without such party's consent, such appointment is not
discharged
or stayed within * thereafter; or
(c) proceedings or action under any law relating to
bankruptcy,
insolvency or the reorganization or relief of debtors are
instituted by or against a party, and, if contested by such
party, are not dismissed or stayed within * thereafter, or
(d) any writ of attachment or execution or any similar
process is
issued or levied against a party or any significant part of
its
property and is not released, stayed, bonded or vacated
within
* after its issue or levy.
16.2 In addition, this Agreement may be terminated, with
respect to any or
all undelivered Aircraft, in whole or in part, before the
Delivery Date
(a) as otherwise provided in this Agreement; and
(b) by BRAD * default or breach of any material term
or condition of this Agreement and such party does not cure
such
default or breach within forty-five (45) calendar days after
receipt of Notice from BRAD * specifying such default or
breach.
16.3 In case of termination of this Agreement under Articles
5.4, 9.9, 16.1 or 16.2:
(a) all rights (including property rights), if any,
which Buyer or
its assignee may have or may have had in or to (i) this
Agreement
or portion thereof with respect to the undelivered Aircraft,
or
(ii) any or all of the undelivered Aircraft, shall become
null
and void with immediate effect;
(b) BRAD may sell, lease or otherwise dispose of such
Aircraft to
another party free of any claim by Buyer;
(c) In the event of termination by BRAD, all amounts
paid by Buyer
with respect to the applicable undelivered Aircraft shall be
retained by BRAD and
shall be applied against the costs, expenses, losses and
damages
incurred by BRAD as a result of Buyer's default and/or the
termination of this Agreement, to which BRAD shall be
entitled, * and
(d) *
16.4 Notwithstanding the foregoing, nothing herein contained
shall, in the
event of termination of this Agreement, limit * ongoing
rights and obligations
with respect to Aircraft delivered prior to the termination
date,
such as the after sale support obligations described in
Annex A, the
warranty provisions and Service Life Policy of Annex B and
the
obligation contained in Letters of Agrement where it is
expressly
provided that said obligations (or part thereof) shall
survive
termination, subject to any adjustments of said rights or
obligations
required to reflect the number of Aircraft in service, if
applicable.
16.5 *
ARTICLE 17 - NOTICES
17.1 Any notice, request, approval, permission, consent or
other
communication ("Notice"), to be given or required under this
Agreement shall be provided in writing, by registered mail,
facsimile, courier, telegraphic or other electronic
communication
providing reasonable proof of transmission, except that no
notice
shall be sent by mail if disruption of postal service exists
or is
threatened either in the country of origin or of
destination, by the
party giving the Notice and shall be addressed as follows
until
changed by notice in writing:
(a) Notice to BRAD shall be addressed to:
Bombardier Inc.
Bombardier Regional Aircraft Division
123 Garratt Boulevard
Downsview, Ontario
Canada
M3K 1Y5
Attention: Director Contracts
Telephone: (416)375-4052
Telex: 06-22128
Facsimile: (416) 375-4533
(b) Notice to Buyer shall be addressed to:
ATLANTIC COAST AIRLINES
1 Export Drive,
Sterling , Virginia
20164
U.S.A.
Attention: General Counsel
Telephone: 703-406-6500
Facsimile: 703-406-7471
17.2 Notice given in accordance with Article 17.1 shall be
deemed
sufficiently given to and received by the addressees:
(a) if delivered by hand, on the day when the same
shall have been so
delivered; or
(b) if mailed or sent by courier on the day indicated
on the
corresponding acknowledgment of receipt; or
(c) if sent by telex or facsimile on the day indicated
by the
acknowledgment or the answer back of the receiver in
provable form.
ARTICLE 18 - INDEMNITY AGAINST PATENT INFRINGEMENT
18.1 In the case of any actual or alleged infringement of
any Canadian or
United States patent or, subject to the conditions and
exceptions set
forth below, any patent issued under the laws of any other
country in
which Buyer from time to time may lawfully operate the
Aircraft
("Other Patents"), by the Aircraft, or by any system,
accessory,
equipment or part installed in such Aircraft at the time
title to
such Aircraft passes to Buyer, BRAD shall indemnify,
protect, hold
harmless and defend (subject to applicable court procedures)
Buyer
from and against all claims, suits, actions, liabilities,
damages * resulting from the
infringement, excluding any incidental or consequential
damages
(which include without limitation loss of revenue or loss of
profit)
and BRAD shall and as promptly as possible under the
circumstances,
at its option and expense:
(a) procure for Buyer the right under such patent to
use such
system, accessory, equipment or part; or
(b) replace such system, accessory, equipment or part
with one of the
similar nature and quality that is non-infringing; or
(c) modify such system, accessory, equipment or part
to make same
non-infringing in a manner such as to keep it otherwise in
compliance with the requirements of this Agreement.
BRAD's obligation hereunder shall extend to Other
Patents only if
from the time of design of the Aircraft, system, accessory,
equipment
or part until the alleged infringement claims are resolved:
(d) such other country and the country in which the
Aircraft is
permanently registered have ratified and adhered to and are
at
the time of the actual or alleged infringement contracting
parties to the Chicago Convention on International Civil
Aviation
of December 7, 1944 and are fully entitled to all benefits
of
Article 27 thereof; and
(e) such other country and the country of registration
shall each
have been a party to the International Convention for the
Protection of Industrial Property (Paris Convention) or have
enacted patent laws which recognize and give adequate
protection
to inventions made by the nationals of other countries which
have
ratified, adhered to and are contracting parties to either
of the
foregoing conventions.
18.2 The foregoing indemnity does not apply to BFE, or to
avionics,
engines or any system, accessory, equipment or part that was
not
manufactured to BRAD's detailed design or to any system,
accessory,
equipment or part manufactured by a third party to BRAD's
detailed
design without BRAD's authorization. *
18.3 Buyer's remedy and BRAD's obligation and liability
under this Article
are conditional upon (i) Buyer giving BRAD written notice
within ten
(10) days after Buyer receives notice of a suit or action
against
Buyer alleging infringement or within twenty (20) days after
Buyer
receives any other written claim of infringement (ii) Buyer
uses
reasonable efforts in full cooperation with BRAD to reduce
or
mitigate any such expenses, damages, costs or royalties
involved, and
(iii) Buyer furnishes promptly to BRAD all data, papers and
records
in its possession or control necessary or useful to resist
and defend
against such claim or suit. BRAD may at its option conduct
negotiations with any party claiming infringement and may
intervene
in any suit or action. Whether or not BRAD intervenes, BRAD
shall be
entitled at any stage of the proceedings to assume or
control the
defense. Buyer's remedy and BRAD's obligation and liability
are
further conditional upon BRAD's prior approval of Buyer's
payment or
assumption of any liabilities, expenses, damages, royalties
or costs
for which BRAD may be held liable or responsible.
18.4 THE INDEMNITY, OBLIGATIONS AND LIABILITIES OF BRAD AND
REMEDIES OF
BUYER SET OUT IN THIS ARTICLE ARE EXCLUSIVE AND ACCEPTED BY
BUYER TO
BE IN LIEU OF AND IN SUBSTITUTION FOR, AND BUYER HEREBY
WAIVES,
RELEASES AND RENOUNCES, ALL OTHER INDEMNITIES, OBLIGATIONS
AND
LIABILITIES OF BRAD AND OF ITS AFFILIATES AND ALL OTHER
RIGHTS,
REMEDIES AND CLAIMS, INCLUDING CLAIMS FOR DAMAGES, DIRECT,
INCIDENTAL
OR CONSEQUENTIAL, OF BUYER AGAINST BRAD AND ITS AFFILIATES
EXPRESS OR
IMPLIED, ARISING BY LAW OR OTHERWISE, WITH RESPECT TO ANY
ACTUAL OR
ALLEGED PATENT INFRINGEMENT BY THE AIRCRAFT OR ANY INSTALLED
SYSTEM,
ACCESSORY, EQUIPMENT OR PART.
ARTICLE 19 - LIMITATION OF LIABILITY AND INDEMNIFICATION
19.1 ANNEX B, EXCEPT AS OTHERWISE PROVIDED IN LETTERS OF
AGREEMENT NO. 6,
8, 9 AND 15 HERETO, EXCLUSIVELY SETS FORTH BRAD'S
OBLIGATIONS WITH
RESPECT TO ANY NON-CONFORMANCE OF THE AIRCRAFT WITH THE
SPECIFICATION
OR ANY DEFECT IN THE AIRCRAFT AND THE OBLIGATIONS AND
LIABILITIES OF
BRAD UNDER THE AFORESAID ARE ACCEPTED BY BUYER TO BE
EXCLUSIVE AND IN
LIEU OF, AND BUYER HEREBY WAIVES, RELEASES AND RENOUNCES ALL
OTHER
REMEDIES, WARRANTIES, GUARANTEES, OBLIGATIONS,
REPRESENTATIONS OR
LIABILITIES, EXPRESS OR IMPLIED, OF BRAD AND ITS AFFILIATES
WITH
RESPECT TO DEFECTS IN EACH AIRCRAFT OR PART THEREOF,
PRODUCT,
DOCUMENT OR SERVICE DELIVERED OR PROVIDED UNDER THIS
AGREEMENT,
ARISING IN FACT, IN LAW, IN CONTRACT, IN TORT, OR OTHERWISE,
INCLUDING, WITHOUT LIMITATION,
A. ANY IMPLIED WARRANTY OF CONDITION OR
MERCHANTABILITY OR FITNESS;
B. ANY IMPLIED WARRANTY OR CONDITION ARISING
FROM COURSE OF PERFORMANCE, COURSE OF DEALING OR USAGE OF
TRADE;
C. ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR
REMEDY IN TORT,
WHETHER OR NOT ARISING FROM THE ACTIVE, PASSIVE OR IMPUTED
NEGLIGENCE OR STRICT PRODUCTS LIABILITY OF BRAD OR ITS
AFFILIATES, BY REASON OF THE DESIGN, MANUFACTURE, SALE,
REPAIR, LEASE OR USE OF THE AIRCRAFT OR PRODUCT AND SERVICES
DELIVERED HEREUNDER; AND
D. ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR
REMEDY FOR LOSS
OF OR DAMAGE TO ANY AIRCRAFT OR PART THEREOF, ANY BRAD
PARTS, ANY POWER PLANT PARTS, ANY VENDOR PARTS, ANY SPARE
PARTS OR ANY TECHNICAL DATA.
19.2 BUYER HEREBY RELEASES AND AGREES TO DEFEND, INDEMNIFY
AND HOLD
HARMLESS BRAD, ITS SUBSIDIARIES, AFFILIATES, SUBCONTRACTORS
AND
LESSORS, AND THEIR RESPECTIVE EMPLOYEES, DIRECTORS, OFFICERS
AND
AGENTS, AND EACH OF THEM (THE "INDEMNIFIED PARTIES"), FROM
AND
AGAINST ALL LIABILITIES, CLAIMS, DAMAGES, LOSSES, COSTS AND
EXPENSES
FOR LOSS OF OR DAMAGE TO PROPERTY INCLUDING ANY AIRCRAFT,
AND LOSS OF
USE THEREOF, OR INJURIES TO OR DEATH OF ANY AND ALL PERSONS
(INCLUDING BUYER'S DIRECTORS, OFFICERS, AGENTS AND EMPLOYEES
BUT
EXCLUDING BRAD'S DIRECTORS, OFFICERS, AGENTS AND EMPLOYEES),
ARISING
DIRECTLY OR INDIRECTLY OUT OF OR IN CONNECTION WITH ANY
SERVICE
PROVIDED UNDER ANNEX A WHETHER OR NOT CAUSED BY THE ACTIVE,
PASSIVE
OR IMPUTED NEGLIGENCE OR STRICT PRODUCTS LIABILITY OF THE
INDEMNIFIED
PARTIES. THE FOREGOING SHALL NOT APPLY WHERE SUCH LOSSES OR
DAMAGES
ARE CAUSED BY THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF
THE
INDEMNIFIED PARTIES.
19.3 NOTHING CONTAINED IN ARTICLE 19.1 OR 19.2 ABOVE SHALL
CONSTITUTE A
WAIVER OR RELEASE OR RENUNCIATION OF, OR INDEMNITY FOR, ANY
LOSSES,
DAMAGES OR CLAIMS, BY BUYER AGAINST BRAD FOR CONTRIBUTION
TOWARD
THIRD-PARTY BODILY INJURY OR PROPERTY DAMAGE CLAIMS BASED ON
PRODUCT
LIABILITY THEORIES TO THE EXTENT OF BRAD'S RELATIVE
PERCENTAGE OF THE
TOTAL FAULT OR OTHER LEGAL RESPONSIBILITY OF PERSONS CAUSING
SUCH
BODILY INJURY OR PROPERTY DAMAGE.
19.4 IN THE EVENT OF ANY LOSSES OR DAMAGES SUFFERED BY
ANYONE FOR OR
ARISING OUT OF (i) ANY LACK OR LOSS OF USE OF ANY AIRCRAFT,
EQUIPMENT, BRAD PARTS, VENDOR PARTS, SPARE PARTS, GROUND
SUPPORT
EQUIPMENT, TECHNICAL PUBLICATIONS OR DATA OR (ii) ANY
SERVICES TO BE
PROVIDED HEREUNDER, OR (iii) FOR ANY FAILURE TO PERFORM ANY
OBLIGATIONS HEREUNDER, NEITHER PARTY SHALL HAVE ANY
OBLIGATION FOR
LIABILITY TO THE OTHER (AT LAW OR IN EQUITY), WHETHER
ARISING IN
CONTRACT (INCLUDING WITHOUT LIMITATION, WARRANTY), IN TORT
(INCLUDING
THE ACTIVE, PASSIVE OR IMPUTED NEGLIGENCE OR STRICT PRODUCTS
LIABILITY OF BRAD OR ITS AFFILIATES), OR OTHERWISE, FOR LOSS
OF USE,
REVENUE OR PROFIT OR FOR ANY OTHER INDIRECT, INCIDENTAL,
CONSEQUENTIAL OR PUNITIVE DAMAGES OF ANY KIND OR NATURE.
ARTICLE 20 - ASSIGNMENT
This Agreement may be assigned only as follows:
20.1 Either party may assign, sell, transfer or dispose of
(in whole or in
part) any of its rights and obligations hereunder to a
wholly owned
subsidiary or affiliate provided that there is no increase
to the
liability and/or responsibility of the non-assigning party
and that
the assigning party remains jointly and severally liable
with any
assignee for the performance of its obligation under this
Agreement.
20.2 With the other party's prior
written consent not to be unreasonably
withheld, either party may assign, sell,
transfer, or dispose of (in whole or in
part) any of its rights and obligations
hereunder to another entity only
provided that (i) * (ii) there is no
increase to the liability and/or
responsibility of the non assigning
party, (iii) assigning party remains
jointly and severally liable with any
assignee for the performance of its
obligation under this Agreement, (iv)
the assignment is made only for
operational and financial
considerations, (v) the assignee shall
execute a confidentiality agreement
prohibiting the disclosure of
confidential information, and (vi) *
20.3 With BRAD's prior written consent,
not to be unreasonably withheld, Buyer
may assign, sell, transfer, or dispose
of (in whole or in part) any of its
rights and obligations hereunder to
another entity to which Buyer does not
hold majority interest provided that (i)
there is no increase to the liability
and/or responsibility of BRAD, (ii) the
Buyer remains jointly and severally
liable with any assignee for the
performance of its obligation under this
Agreement, (iii) the assignment is made
only for operational and financial
considerations, (iv) the shareholders
(other than shareholders purchasing
stock through arms length, publicly
traded transactions) or owners of
assignee, other than Buyer, are not
engaged in air transportation, (v) the
assignee operates or is to operate its
business in a fashion that is generally
held out and structured to be perceived
by people knowledgeable in the industry
to be closely affiliated with Buyer or
Buyer's parent, (vi) the assignee shall
execute a confidentiality agreement
prohibiting the disclosure of
confidential information, and (vii) the
assignee does not compete with the
Bombardier Group with respect to the
manufacture of aircraft.
20.4 Except as provided in Articles 20.1, 20.2 and 20.3,
Buyer shall not
assign, sell, transfer or dispose of (in whole or in part)
any of its
rights or obligations hereunder without BRAD's prior written
consent,
such consent not to be unreasonably withheld. In the event
of such
assignment, sale, transfer or disposition Buyer shall remain
jointly
and severally liable with any assignee for the performance
of all and
any of Buyer's obligations under this Agreement and BRAD
reserves the
right as a condition of its consent to amend one or more of
the terms
and conditions of this Agreement.
20.5 Notwithstanding Article 20.4 above,
Buyer may assign, after transfer of
title of the Aircraft, its rights under
the Agreement to a third party purchaser
of any one of the Aircraft, provided
said third party acknowledges in writing
to be bound by the applicable terms and
conditions of this Agreement, including
but not limited to the provisions and
limitations as described in Annex A,
Customer Support Services, Annex B,
Warranty and Service Life Policy and of
the provisions and limitations in
Limitation of Liability as defined in
Article 19 hereof and Indemnity Against
Parent Infringement as defined in
Article 18 hereof and any other on-going
obligations of Buyer, which shall apply
to it to the same extent as if said
third party was Buyer hereunder and
provided that there is no increase to
the liability and/or responsibility of
BRAD.
20.6 BRAD may assign any of its rights to receive money
hereunder without
the prior consent of Buyer.
20.7 Notwithstanding the other provisions of this Article
20, BRAD shall,
at Buyer's cost and expense, if so requested in writing by
Buyer,
take any action reasonably required for the purpose of
causing any of
the Aircraft to be subjected (i) to, at or after the
Delivery Date,
an equipment trust, conditional sale or lien, leases and
mortgages,
or (ii) to another arrangement for the financing of the
Aircraft by
Buyer, providing, however, there shall be no increase to the
liability and/or responsibility of BRAD arising through such
financing.
ARTICLE 21 - SUCCESSORS
21.1 This Agreement shall inure to the benefit of and be
binding upon each
of BRAD and Buyer and their respective successors and
permitted
assignees.
21.2 As used herein, reference to an airworthiness authority
such as
Transport Canada and the FAA, to a regulation or directive
issued by
such airworthiness authority or other governmental
authority, shall
include any successor to such authority then responsible for
the
duties of such authority and regulation or directive
covering the
same subject matters.
ARTICLE 22 - APPLICABLE LAWS
22.1 THIS AGREEMENT SHALL BE SUBJECT TO AND CONSTRUED IN
ACCORDANCE WITH AND THE RIGHTS OF THE PARTIES SHALL BE
GOVERNED BY THE DOMESTIC LAWS
OF THE STATE OF NEW YORK, U.S.A., EXCLUDING THE CHOICE OF
LAW RULES,
AND THE PARTIES HAVE AGREED THAT THE APPLICATION OF THE
UNITED
NATIONS CONVENTION ON CONTRACTS FOR THE INTERNATIONAL SALE
OF GOODS
IS HEREBY EXCLUDED.
22.2 Each of Buyer and BRAD agrees that any legal action or
proceeding
with respect to this Agreement may be brought in the Federal
Courts
of the United States of America in the Southern District
Courts of
New York or in the Supreme Courts of the State of New York
in the
County of New York and by the execution and delivery of this
Agreement irrevocably consents and submits to the
nonexclusive
jurisdiction of each of the aforesaid court in personam with
respect
to any such action or proceeding and irrevocably waive any
objection
either party may have as to venue or any such suit, action
or
procedure brought in such court or that such court is an
inconvenient
forum. Nothing in this paragraph shall affect the right of
any party
hereto or their successors or assigns to bring any action or
proceeding against the other party hereto or their property
in the
courts of other jurisdictions.
ARTICLE 23 - CONFIDENTIAL NATURE OF AGREEMENT
23.1 This Agreement is confidential between the parties and
shall not,
without the prior written consent of the other party, be
disclosed by
either party in whole or in part to any other person or body
except:
i) as may be necessary for either party to carry out its
obligations under this Agreement or other agreements related
to this Agreement to which it is a party, and
ii) as may be required by law, and
iii) *
23.2 Except as may be reasonably required for the operation,
maintenance,
overhaul, modification, storage and repair of the Aircraft
by Buyer
or any third party, Buyer shall hold confidential all
Technical Data
and other proprietary information (and so marked by BRAD)
supplied by
or on behalf of BRAD, and shall not reproduce any such
Technical Data
or proprietary information or divulge the same to any third
party
unless such disclosure requires the third party to hold same
in
confidence and use it only for the purposes stated above.
23.3 Either party may announce the signing of this Agreement
by means of a
notice to the press provided that the content and date of
the notice
has been agreed to by the other party.
23.4 BRAD hereby acknowledges that Buyer
is sensitive with respect to the public
disclosure of its operating data
provided to BRAD pursuant to this
Agreement. Although BRAD shall have no
confidentiality undertaking with respect
to such data, BRAD agrees to consider
Buyer's sensitivity in its public use of
said data.
ARTICLE 24 - AGREEMENT
24.1 This Agreement and the matters referred to herein
constitute the
entire Agreement between BRAD and Buyer and supersede and
cancel all
prior representations, brochures, alleged warranties,
statements,
negotiations, undertakings, letters, memoranda of agreement,
acceptances, agreements, understandings, contracts and
communications, whether oral or written, between BRAD and
Buyer or
their respective agents, with respect to or in connection
with the
subject matter of this Agreement and no agreement or
understanding
varying the terms and conditions hereof shall be binding on
either
BRAD or Buyer hereto unless an amendment to this Agreement
is issued
and duly signed by their respective authorized
representatives
pursuant to the provisions of this Article hereof. In the
event of
any inconsistencies between any provisions of this Agreement
and
those of any Letter Agreements, the provisions of the Letter
Agreements shall prevail.
24.2 If any of the provisions of this Agreement are for any
reason
declared by judgment of a court of competent jurisdiction to
be
unenforceable or ineffective, those provisions shall be
deemed
severable from the other provisions of this Agreement and
the
remainder of this Agreement shall remain in full force and
effect.
24.3 THE BENEFIT OF THE WAIVER, LIMITATION, RELEASE,
RENUNCIATION AND/OR
EXCLUSION OF LIABILITY CONTAINED IN THIS AGREEMENT EXTENDS
TO THE
OTHER DIVISIONS, OTHER SUBSIDIARIES, AND OTHER AFFILIATES OF
BOMBARDIER INC., INCLUDING DE HAVILLAND INC. (COLLECTIVELY
THE
"BOMBARDIER GROUP") AND TO THE OFFICERS, DIRECTORS,
EMPLOYEES AND
REPRESENTATIVES OF THE BOMBARDIER GROUP, ON WHOSE BEHALF AND
FOR
WHOSE BENEFIT BRAD IS, FOR PURPOSES OF THIS ARTICLE 24.3,
ACTING AS
AGENT AND TRUSTEE.
*
24.4 Buyer and BRAD agree that this Agreement has been the
subject of
discussion and negotiation and is fully understood by the
parties
hereto and that the price of the Aircraft and the other
mutual
agreements of the parties set forth herein were arrived at
in
consideration of the limitation provisions contained in
Article 19
and the other similar provisions contained in this
Agreement.
ARTICLE 25 - DISPUTES
25.1 Any dispute, difference, controversy or claim arising
out of or relating to
this Agreement, the breach, or non-performance thereof shall
first be
attempted to be resolved by BRAD and Buyer through mutual
negotiations,
consultation and discussions.
25.2 Should the parties hereto be unable to settle their
differences or disputes
which may arise between them with respect to the
interpretation or
application of this Agreement (a "Dispute"), by mutual
agreement as
provided in Article 25.1 above, the parties agree to each
appoint two (2)
representatives to constitute a joint commission (the "Joint
Commission")
to jointly hear the representations of each party regarding
the Dispute.
One representative will be appointed as chair of the Joint
Commission on an
alternate basis. At least one (1) representative of each
party shall have
knowledge in technical or contractual matters depending on
the nature of
the Dispute. The Joint Commission shall, following
representations by each
party, issue non-binding written recommendations to the
parties as to how
best settle the Dispute. If the representatives do not
agree on joint
recommendations, the representatives of each party shall
issue their own
recommendations.
25.3 Either party may request the formation of the Joint
Commission if a dispute
is not settled within forty-five (45) days following a
written notice from
either party to the other detailing the nature of the
Dispute and the
resolution sought. The request for a Joint Commission shall
be made in
writing and shall contain the names of the representatives
appointed by the
party requesting its formation. The other party shall then
provide the
names of its representatives within thirty (30) days
following the receipt
of the request for a Joint Commission.
25.4 The Joint Commission shall have forty-five (45) days
from its formation to
agree on the procedure to be followed, including the place
of hearing, if
any. The Joint Commission shall have sixty (60) days from
the completion
of the representations by each party to issue its
recommendations.
25.5 If, despite the recommendations of the Joint
Commission, the parties are
unable to resolve the Dispute, either party may, except
where the remedies
sought include termination of the Agreement in whole or in
part or
injunctive relief, or other controversy involving an amount
claimed in good
faith in excess of Five Million United States Dollars (
$5,000,000 U.S.)
unless otherwise agreed, request by sixty (60) days prior
notice that the
Dispute be settled by arbitration in accordance with
arbitration rules to
be agreed upon before delivery of the first Aircraft.
25.6 Within thirty (30) days of the demand to refer the
Dispute to arbitration,
each party shall appoint one (1) arbitrator, who in turn
will appoint the
third arbitrator, within thirty (30) days of their
appointments. This
third arbitrator shall act as the chairman of the Arbitral
Tribunal so
constituted.
25.7 The venue of arbitration shall be Toronto, Ontario, New
York City, or
Washington, DC, U.S.A., as agreed between the parties.
25.8 The arbitrators shall not act as "Amiable Compositeur"
and shall decide
according to the terms of the agreement and to the laws of
New York.
25.9 The award of the arbitration shall be final and shall
not be called in
question in any court or tribunal.
25.10 It is expressly agreed that any statement,
representation or document made
or produced to or in connection with, or as a result of the
formation of a
Joint Commission shall be without prejudice and without
admission of
liability by either party and shall not be used as such by
the other party.
25.11 Each party shall be responsible for its own costs
and expenses incurred as
a result of, or in connection with the Joint Commission and
arbitration
including the cost, fees and expenses of its own
representatives.
In witness whereof this Agreement was signed on the date
written hereof:
For and on behalf of For an on behalf of
Atlantic Coast Airlines: Bombardier Inc.:
_______________________ ______________________
James B. Glennon Michel Bourgeois
Sr. Vice President and C.F.O. Vice
President,
Contracts
APPENDIX I
REGIONAL JET AIRCRAFT
ECONOMIC ADJUSTMENT FORMULA
Pursuant to the provision of Article 4 of the Agreement,
economic
adjustment will be calculated using the lesser amount of
those generated by
the following two calculations:
(i) The Economic Adjustment Formula:
PP = PO (0.28 LD + 0.35 ED + 0.20 CD + 0.15 MD +
0.02 FD)
LO EO CO MO FO
*
Where:
PP = Aircraft Purchase Price;
PO = Base Price;
LD = the Canadian labour index based upon the indices
for the last full
month preceding the month of delivery of the relevant
Aircraft;
LO = the Canadian labour index which, as at 1 July
1995, is 19.69;
ED = the U.S. labour index based upon the indices for
the last full month
preceding the month of delivery of the relevant Aircraft;
EO = the U.S. labor index which, as at 1 July 1995, is
18.07;
CD = the Industrial Commodities index based upon the
indices for the last
full month preceding the month of delivery of the relevant
Aircraft;
CO = the Industrial Commodities index which, as at 1
July 1995, is 126.6;
MD = the material index based upon the indices for the
last full month
preceding the month of delivery of the relevant Aircraft;
MO = the material index which, as at 1 July 1995, is
134.8;
FD = the fuel index based on the indices for the last
full month preceding
the month of delivery of the relevant Aircraft; and
FO = the fuel index which, as at 1 July 1995, is 81.0.
For the purpose of the Economic Adjustment Formula and the
calculation of the
economic adjustment:
(a) the Canadian labour index shall be the index provided
in the Standard
Industrial Classification (S.I.C.) Code 321 for Average
Hourly
Earnings for the Aircraft and Parts Industry (Canada)
published by
Statistics Canada in "Employment Earnings and Hours" Table
3.1.
(b) the U.S. labour index shall be the index provided in
the Bureau of
Labor Statistics (B.L.S.) Code 372 Gross Hourly Earnings of
production and non-supervisory workers in the Aircraft and
Aircraft
Parts Industry as published by the U.S. Department of Labor,
Bureau
of Labor Statistics in "Employment and Earnings" Table C-2.
(c) the Industrial Commodities index shall be the index
provided in the
Producer Price Index as Industrial Commodities as published
by the
U.S. Department of Labor, Bureau of Labor Statistics in
"Producer
Prices and Price Indexes" Table 6.
(d) the material index shall be the index provided in the
Producer Price
Index for Code 10 Metals and Metals Products as published by
the U.S.
Department of Labor, Bureau of Labor Statistics in "Producer
Prices
and Price Indexes" Table 6.
(e) the fuel index shall be the index provided in the
Bureau of Labor
Statistics (B.L.S.) Code 5 "Fuel and Related Products and
Power"
Table 6 as published by the U.S. Department of Labor.
(f) in the event that BRAD shall be prevented from
calculating the
Aircraft Purchase Price of each Aircraft due to any delay in
the
publication of the required indices, BRAD shall use the last
provisionally published indices, and in the event that
provisional
indices are not available, BRAD shall extrapolate from the
last three
(3) months of published indices and where the balance of the
Aircraft
Purchase Price payable is calculated on the provisionally
published
indices, and/or extrapolation, BRAD will amend such
installment on
publication of the final indices and will submit
supplementary claims
or provide credit notes in respect of any adjustment so
caused.
Notwithstanding the foregoing, it is the intention of
the parties to
finalize the Aircraft Purchase Price within twelve (12)
months
following the Aircraft delivery date. Accordingly, at the
end of
each calendar quarter the parties shall review and finalize
by mutual
agreement the Aircraft Purchase Price of the Aircraft
delivered more
than twelve months prior to such review, using the best data
and
information available at that time.
(g) the indices used in the Economic Adjustment Formula and
the weighting
assigned to them, as well as the various indices as of July
1st, 1995
quoted here, are based on the information known to date and
represent
the projection by BRAD of the manner in which BRAD will
incur cost in
the production of the Aircraft. In the event there is a
change in
the indices published or in circumstances which materially
affects
the indices chosen or the weighting assigned to them, the
indices
and/or the weighting shall be amended accordingly by mutual
agreement
of the parties. The change in circumstances referred to
above shall
include but not be limited to:
1) Any material change in the basis upon which the chosen
indices have
been calculated or if any of said indices are discontinued
or
withdrawn from publication,
2) Any change in manufacturing plan involving the letting
of a new sub-
contract or the termination of an existing sub-contract, and
3) Any change in the escalation or Economic Adjustment
Formula used in a
Vendor or sub-contractor contract with BRAD; and
In the calculation of the Aircraft Purchase Price the
following guidelines in
respect of decimal places shall apply:
(a) All indices in the Economic Adjustment Formula shall be
rounded to
the second decimal place,
(b) The Economic Adjustment Formula shall be calculated and
rounded to
four decimal places, and
(c) The Aircraft Purchase Price resulting from the Economic
Adjustment
Formula shall be rounded to the nearest dollar.
APPENDIX II
DELIVERY SCHEDULE
First Aircraft *
Second Aircraft *
Third Aircraft *
Fourth Aircraft *
Fifth Aircraft *
Sixth Aircraft *
Seventh Aircraft *
Eighth Aircraft *
Ninth Aircraft *
Tenth Aircraft *
Eleventh Aircraft *
Twelfth Aircraft *
APPENDIX III
SPECIFICATION
TYPE SPECIFICATION
*
APPENDIX IV
BUYER SELECTED OPTIONAL FEATURES
Description Price
(in Jul 1,
1995
US$)
Higher Design Weights (51,000 lbs MTOW) - ER *
Centre Wing Fuel Tank *
FAA Collins Strapping *
Provision for Collins ACARS *
F/A Call Annunciation Lights *
Interior - Universal North American *
Class C Baggage Compartment minus temperature control *
Leather Seat Covers *
Reduced V2 Vref Speed *
Red Anti-Ice Warning Light (FAA) *
Logo Lights (includes Cargo Door Light) *
Red Beacon Lights *
Altimeter Reset Auto Flash *
Single Collins FMS 4100 *
EROS Magic Mask - Provisions Only *
GE CF34-3B1 Engine - Series 200 *
Additional Flap Setting *
Exterior Paint Scheme * *
Total Technical Features *
All prices listed above are expressed in July 1, 1995 US
dollars, and are subject
to economic adjustment as provided in the Agreement.
*
CUSTOMER SUPPORT SERVICES
ANNEX A - TECHNICAL SUPPORT, SPARE PARTS, TRAINING AND
TECHNICAL DATA
The following Customer Support Services are those services
to which
reference is made in Article 3 of the Agreement.
ARTICLE 1 - TECHNICAL SUPPORT
1.1 Factory Service
BRAD agrees to maintain or cause to be maintained the
capability to
respond to Buyer's technical inquiries, to conduct
investigations
concerning maintenance problems and to issue findings and
recommend
action thereon. This service shall be provided for as long
as ten
(10) CL-600-2B19 aircraft remain in commercial air transport
service.
1.2 Field Service Representative
1.2.1 Services
BRAD shall assign one (1) Field Service Representative
("FSR")
to Buyer's main base of operation or other location as may
be
mutually agreed.
1.2.2 Term
Such assignment shall be for * and shall commence
approximately one (1) month prior to the Delivery Date of
the
first Aircraft. The FSR assignment may be extended on terms
and conditions to be mutually agreed.
1.2.3 Responsibility
The FSR's responsibility shall be to provide technical
advice
to Buyer for the line maintenance and operation of the
Aircraft
systems and troubleshooting during scheduled and unscheduled
maintenance by Buyer's designated personnel ("FSR
Services").
1.2.4 Travel
If requested by Buyer, the FSR may, at Buyer's expense,
travel
to another location to provide technical advice to Buyer.
The
FSR must fly on Buyer's airline, if such service is
available.
1.2.5 Office Facilities
Buyer shall furnish the FSR, at no charge to BRAD,
suitable and
private office facilities * and related
equipment including desk, file cabinet, access to two
telephone lines, facsimile and photocopy equipment
conveniently
located at Buyer's main base of operation or other location
as
may be mutually agreed.
1.2.6 Additional Expenses
Buyer shall reimburse BRAD (net of any additional taxes
on such
reimbursement) the amount of any and all taxes (except
Canadian
taxes on the income of the FSR) and fees of whatever nature,
including any customs duties, withholding taxes or fees
together with any penalties or interest thereon, paid or
incurred by BRAD or the FSR or other BRAD employee as a
result
of or in connection with the rendering of the services.
1.2.7 Right to Stop Work
BRAD shall not be required to commence or continue the
FSR
Services when:
a.) there is a labour dispute or work stoppage in
progress at
Buyer's facilities;
b.) there exist war, risk of war or warlike
operations, riots
or insurrections;
c.) there exist conditions that are dangerous to the
safety
or health of the FSR or other BRAD employee; or
d.) the Government of the country where Buyer's
facilities
are located or where Buyer desires the FSR to
travel refuses the BRAD employee permission to
enter said country or Buyer's base of operations.
1.2.8 Work Permits and Clearances
Buyer shall assist in arranging for all necessary
airport
security clearances required for the FSR or other BRAD
employee
to permit timely accomplishment of the FSR services.
1.3 Maintenance Planning Support
1.3.1 Scheduled Maintenance Task Cards
As described in Annex A Attachment A, BRAD shall
provide Buyer
BRAD's standard format scheduled maintenance task cards that
shall conform to the Aircraft at the Delivery Date. At
Buyer's
request BRAD shall provide a proposal for task cards
produced
to Buyer's format.
1.3.2 In-Service Maintenance Data
Buyer agrees to provide to BRAD in-service maintenance
data in
order to provide updates to BRAD's recommended maintenance
program. Buyer and BRAD shall agree on standards and
frequency
for communication of such data.
1.4 Additional Services
At Buyer's request BRAD shall provide a proposal to
provide such
additional support services as the parties may agree upon,
which may
include special investigations, maintenance and repair of
the
Aircraft.
ARTICLE 2 - SPARE PARTS, GSE, TOOLS AND TEST EQUIPMENT
2.1.1 Definitions
a. "BRAD Parts":
any spare parts, ground support equipment, tools and
test
equipment which bear an inhouse Cage Code number in the BRAD
Provisioning Files (as that expression is defined in ATA
Specification 2000).
b. "Power Plant Parts":
any power plant or power plant part or assembly
carrying the power
plant manufacturer's part number or any part furnished by
the
power plant manufacturer for incorporation on the Aircraft.
c. "Vendor Parts":
any spare parts, ground support equipment, tools and
test
equipment for the Aircraft which are not BRAD Parts or Power
Plant
Parts.
d. "Spare Parts":
all materials, spare parts, assemblies, special tools
and items of
equipment, including ground support equipment, ordered for
the
Aircraft by Buyer from BRAD. The term Spare Parts includes
BRAD
Parts, Power Plant Part and Vendor Parts.
e. "Order":
any order for Spare Parts issued by Buyer to BRAD; and
f. "Technical Data":
shall have the meaning attributed to it in Annex A
Article 4.1.
2.1 Term and Applicability
The term of this Annex A Article 2 shall become
effective on the date
hereof and shall remain in full force and effect with
respect to the
purchase and sale of Spare Parts for each Aircraft so long
as at
least ten (10) of the CL-600-2B19 aircraft remain in
commercial air
transport service. The provisions of Annex A Articles 2.2,
2.6.5,
2.24 and Annex B Article 5.0 shall survive expiration or
termination
of this Agreement.
2.2 Order Terms
Terms and conditions hereof shall apply to all Orders
placed by Buyer
with BRAD in lieu of any terms and conditions in Buyer's
purchase
orders.
2.3 Purchase and Sale of Spare Parts
2.3.1 Agreement to Manufacture and Sell
BRAD shall manufacture, or procure, and make available
for sale
to Buyer suitable Spare Parts in quantities sufficient to
meet
the reasonably anticipated needs of Buyer for normal
maintenance and normal spares inventory replacement for each
Aircraft. During the term specified in Annex A Article 2.1
above, BRAD shall also maintain, or cause to be maintained,
a
shelf stock of certain BRAD Parts selected by BRAD to ensure
reasonable re-order lead times and emergency support. BRAD
shall maintain, or cause to be maintained, a reasonable
quantity of BRAD insurance parts at a U.S. distribution
centre.
Insurance parts as used herein shall include, but not be
limited to, dispatch-essential parts such as major flight
control surfaces.
2.4 Agreement to Purchase BRAD Parts
2.4.1 *
2.4.2 Buyer's Right to Purchase, Redesign or Manufacture
* shall not be construed as a granting of a license by
BRAD and shall not
obligate BRAD to disclose to anyone Technical Data or other
information nor to the payment of any license fee or royalty
or
create any obligation whatsoever to BRAD and BRAD shall be
relieved of any obligation or liability with respect to
patent
infringement in connection with any such redesigned part.
Buyer shall be responsible for obtaining all regulatory
authority approvals required by Buyer to repair the Aircraft
using redesigned or manufactured BRAD Parts as described in
the
preceding Article. Any such redesigned part shall be
identified with Buyer's part number only.
2.4.3 Notice to BRAD of Redesigned Parts
BRAD reserves the right to negotiate with Buyer the
access to
redesigned parts, drawings and the non-exclusive
manufacturing
rights of the redesigned part, if Buyer redesigns or has had
any BRAD parts redesigned.
2.5 Purchase of Vendor Parts & Power Plant Parts
BRAD shall not be obligated to maintain a stock of
Power Plant Parts.
BRAD maintains a spares stock of selected Vendor Parts at
its own
discretion to support provisioning and replenishment sales.
BRAD
agrees to use all reasonable efforts to require its vendors
to comply
with the terms and conditions of this Annex A Article 2 as
they apply
to Vendor Parts. Vendor Parts shall be delivered in
accordance with
the vendor's quoted lead time plus BRAD's internal
processing time.
2.6 Spare Parts Pricing
2.6.1 Spare Parts Price Catalogue
Prices for commonly used BRAD Parts stocked by BRAD
shall be
published in the spare parts price catalogue ("Spare Parts
Price Catalogue"). BRAD shall hold the published prices
firm
for catalogue stock class items for a period of twelve (12)
months and shall provide at least ninety (90) calendar days
notice prior to changing the published price.
2.6.2 BRAD prices for Vendor Parts
If Buyer orders Vendor Parts from BRAD, the price shall
be as
published in the Spare Parts Price Catalogue.
2.6.3 Quotations
Price and delivery quotations for items not included in
the
Spare Parts Price Catalogue shall be provided at Buyer's
request by BRAD. Price quotations will be held firm for a
period of ninety (90) calendar days or as otherwise
specified
by BRAD. Responses to quotation requests will be provided
within ten (10) calendar days.
2.6.4 Currency and Taxes
All Spare Parts Price Catalogue and quotation prices
shall be
in U.S. dollars and exclusive of transportation, taxes,
duties
and licenses.
Buyer shall pay to BRAD upon demand the amount of any sales,
use, value-added, excise or similar taxes imposed by any
federal, provincial or local taxing authority within Canada,
and the amount of all taxes imposed by any taxing authority
outside Canada, required to be paid by BRAD as a result of
any
sale, use, delivery, storage or transfer of any Spare Parts.
If BRAD has reason to believe that any such tax is
applicable,
BRAD shall separately state the amount of such tax in its
invoice. If a claim is made against BRAD for any such tax,
BRAD shall promptly notify Buyer.
In addition, Buyer shall pay to BRAD on demand the
amount of
any customs duties required to be paid by BRAD with respect
to
the importation by Buyer of any Spare Parts.
2.6.5 Vendor Pricing
BRAD shall use reasonable efforts to require its major
vendors
to maintain any published price for their parts for a period
of
at least twelve (12) months with a ninety (90) calendar day
notice period prior to changing a published price.
2.7 Provisioning
2.7.1 Pre-provisioning/Provisioning Conference
Pre-provisioning and provisioning conferences shall be
convened
on dates to be mutually agreed between Buyer and BRAD in
order
to:
(i) discuss the operational parameters to be provided by
Buyer to BRAD which BRAD considers necessary for preparing
its quantity recommendations for initial provisioning of
Spare Parts to be purchased from BRAD or vendors
("Provisioning Items");
(ii) review Buyer's ground support equipment and special
tool
requirements for the Aircraft;
(iii) discuss the format of the provisioning documentation
to
be provided to Buyer from BRAD for the selection of
Provisioning Items; and
(iv) arrive at a schedule of events for the initial
provisioning process, including the establishment of a date
for the initial provisioning conference ("Initial
Provisioning Conference") which shall be scheduled where
possible at least six (6) months prior to delivery of the
first Aircraft.
The time and location of the pre-provisioning
conference shall
be mutually agreed upon between the parties; however, BRAD
and
Buyer shall use their best efforts to convene such meeting
within thirty (30) days after execution of the Agreement.
2.8 Initial Provisioning Documentation
Initial provisioning documentation for BRAD Parts and
Vendor Parts
shall be provided by BRAD as follows:
a) BRAD shall provide, as applicable to Buyer, no later
than six (6)
months prior to the Scheduled Delivery Date of the first
Aircraft,
or as may be mutually agreed, the initial issue of
provisioning
files.
Revisions to this provisioning data shall be issued by
BRAD every
ninety (90) calendar days until ninety (90) calendar days
following the Delivery Date of the last Aircraft or as may
be
mutually agreed; and
b) the Illustrated Parts Catalogue designed to support
provisioning
shall be issued concurrently with provisioning data files
and
revised at ninety (90) calendar day intervals.
2.8.1 Obligation to Substitute Obsolete Spare Parts
In the event that, prior to delivery of the first
Aircraft, any
Spare Part purchased by Buyer from BRAD is rendered obsolete
or
unusable due to the redesign of the Aircraft or of any
accessory, equipment or part thereto (other than a redesign
at
Buyer's request), BRAD shall deliver to Buyer new and usable
Spare Parts in substitution for such obsolete or unusable
Spare
Parts upon return of such Spare Parts to BRAD by Buyer.
BRAD
shall credit Buyer's account with the price paid by Buyer
for
any such obsolete or unusable Spare Part and shall invoice
Buyer for the purchase price of any such substitute Spare
Part
delivered to Buyer.
2.8.2 Delivery of Obsolete Spare Parts and Substitutes
Obsolete or unusable Spare Parts returned by Buyer
pursuant to
Annex A Article 2.8.1. shall be delivered to BRAD at its
plant
in Ontario or Quebec, or such other destination as BRAD may
reasonably designate. Spare Parts substituted for such
returned obsolete or unusable Spare Parts shall be delivered
to
Buyer from BRAD's plant in Ontario or Quebec, or such other
BRAD shipping point as BRAD may reasonably designate. BRAD
shall pay the freight charges for the shipment from Buyer to
BRAD of any such obsolete or unusable Spare Part and for the
shipment from BRAD to Buyer of any such substitute Spare
Part.
2.8.3 Obligation to Repurchase Surplus Provisioning
Items
During a period * BRAD
shall, upon receipt of Buyer's written request and subject
to
the exceptions in Annex A Article 2.8.4, repurchase unused
and
undamaged Provisioning Items which: (i) were recommended by
BRAD as initial provisioning for the Aircraft, (ii) were
purchased by Buyer from BRAD or Vendor at BRAD's
recommendation, and (iii) are surplus to Buyer's needs.
2.8.4 Exceptions
BRAD shall not be obligated under Annex A Article 2.8.3
to
repurchase any of the following: (i) quantities of
Provisioning Items in excess of those quantities recommended
by
BRAD in its Recommended Spare Parts List ("RSPL") for the
Aircraft, (ii) Power Plant Parts, QEC Kits, standard
hardware,
bulk and raw materials, ground support equipment and special
tools, (iii) Provisioning Items which have become obsolete
or
have been replaced by other Provisioning Items as a result
of
Buyer's modification of the Aircraft and (iv) Provisioning
Items which become surplus as a result of a change in
Buyer's
operating parameters provided to BRAD pursuant to Annex A
Article 2.7, which were the basis of BRAD's initial
provisioning recommendations for the Aircraft.
2.8.5 Notification and Format
Buyer shall notify BRAD, in writing, when Buyer desires
to
return Provisioning Items which Buyer's review indicates are
eligible for repurchase by BRAD under the provisions of
Annex
A Article 2.8.3. Buyer's notification shall include a
detailed
summary, in part number sequence, of the Provisioning Items
Buyer desires to return. Such summary shall be in the form
of
listings as may be mutually agreed between BRAD and Buyer,
and
shall include part number, nomenclature, purchase order
number,
purchase order date and quantity to be returned.
Within sixty (60) calendar days after receipt of
Buyer's
notification and detailed summary BRAD shall complete the
review of such summary.
2.8.6 Review and Acceptance by BRAD
Upon completion of BRAD's review of any detailed
summary
submitted by Buyer pursuant to Annex A Article 2.8.5., BRAD
shall within sixty calendar days issue to Buyer a Material
Return Authorization notice ("MRA") for those Provisioning
Items BRAD agrees are eligible for repurchase in accordance
with Annex A Article 2.8.3. BRAD will advise Buyer of the
reason that any Provisioning Items included in Buyer's
detailed
summary are not eligible for return. The MRA notice shall
state the date by which Provisioning Items listed in the MRA
notice must be redelivered to BRAD as agreed between the
parties, and Buyer shall arrange for shipment of such
Provisioning Items accordingly, to the U.S. distribution
centre.
2.8.7 Price and Payment
The price of each Provisioning Item repurchased by BRAD
pursuant to Annex A Article 2.8.6 will be the original
invoice
price thereof. BRAD shall pay the repurchase price by
issuing
a credit memorandum in favour of Buyer which may be applied
against amounts due BRAD for the purchase of Spare Parts and
services.
2.8.8 Return of Surplus Provisioning Items
Provisioning Items repurchased by BRAD pursuant to
Annex A
Article 2.8.6 shall be delivered to BRAD *
2.8.9 Obsolete Spare Parts and Surplus Provisioning
Items - Title and
Risk of Loss
Title to and risk of loss of any obsolete or unusable
Spare
Parts returned to BRAD pursuant to Annex A Article 2.8.8
shall
pass to BRAD upon delivery thereof to BRAD. Title to and
risk
of loss of any Spare Parts substituted for an obsolete or
unusable Spare Part pursuant to Annex A Article 2.8.1 shall
pass to Buyer upon delivery thereof to Buyer. Title to and
risk of loss of any Provisioning Items repurchased by BRAD
pursuant to Annex A Article 2.8.3 shall pass to BRAD upon
delivery thereof to BRAD.
With respect to the obsolete or unusable Spare Parts
which may
be returned to BRAD and the Spare Parts substituted
therefor,
pursuant to Annex A Article 2.8.1, and the Provisioning
Items
which may be repurchased by BRAD, pursuant to Annex A
Article
2.8.3, the party which has the risk of loss of any such
Spare
Part or Provisioning Item shall have the responsibility of
providing any insurance coverage thereon desired by such
party.
2.9 Procedure for Ordering Spare Parts
Orders for Spare Parts may be placed by Buyer to BRAD
by any method
of order placement (including but not limited to SITA,
ARINC,
telecopier, letter, telex, facsimile, telephone or hard copy
purchase
order).
2.9.1 Requirements
Orders shall include at a minimum order number, part
number,
nomenclature, quantity, delivery schedule requested,
shipping
instructions and BRAD's price, if available.
2.9.2 Processing of Orders
Upon acceptance of any Order, unless otherwise directed
by
Buyer, BRAD shall, if the Spare Parts are in stock, proceed
immediately to prepare the Spare Parts for shipment to
Buyer.
If BRAD does not have the Spare Parts in stock, BRAD shall
proceed immediately to acquire or manufacture the Spare
Parts.
Purchase order status and actions related to the shipment of
Spare Parts shall be generally consistent with the
provisions
of the World Airline Suppliers Guide, as applicable to
Buyer.
2.9.3 Changes
BRAD reserves the right, without Buyer's consent, to
make any
necessary corrections or changes in the design, part number
and
nomenclature of Spare Parts covered by an Order, to
substitute
Spare Parts and to adjust prices accordingly, provided that
interchangeability is not affected * unless
Buyer's order specifically and reasonably prohibits such
substitution. BRAD shall promptly give Buyer written notice
of
corrections, changes, substitutions and consequent price
adjustments. Corrections, changes, substitutions and price
adjustments which affect interchangeability or exceed the
price
limitations set forth above may be made only with Buyer's
written consent, which consent shall conclusively be deemed
to
have been given unless Buyer gives BRAD written notice of
objection within thirty (30) calendar days after receipt of
BRAD's notice. In case of any objection, the affected Spare
Part will be deemed to be deleted from Buyer's Order.
2.10 Packing
All Spare Parts ordered shall receive standard
commercial packing
suitable for export shipment via air freight. Such standard
packing
will generally be to ATA 300 standards as amended from time
to time.
All AOG orders will be handled, processed, packed and
shipped
separately.
2.11 Packing List
BRAD shall insert in each shipment a packing
list/release note
itemized to show:
(i) the contents of the shipment,
(ii) the approved signature of BRAD's TC authority attesting
to the
airworthiness of the Spare Parts.
(iii) value of the shipment for customs clearance if
required.
2.12 Container Marks
Upon Buyer's request each container shall be marked
with shipping
marks as specified on the Order. In addition BRAD shall,
upon
request, include in the markings: gross weight and cubic
measurements.
2.13 Delivery, Title and Risk of Loss
2.13.1 Delivery Point
Spare Parts, other than AOG and Critical Orders, shall
be
delivered to Buyer FOB BRAD's U.S. distribution centre. AOG
and Critical Orders shall be delivered FOB point of origin.
2.13.2 Delivery Time
BRAD shall use reasonable efforts so that shipment of
BRAD
Parts to Buyer be as follows:
a) AOG Orders
Ship AOG Orders within four (4) hours of receipt of
Order.
Buyer's affected Aircraft factory production number shall be
required on AOG Orders;
b) Critical Orders (A1)
Ship critical Orders within twenty-four (24) hours of
order
receipt;
c) Expedite Orders (A2)
Ship expedite Orders within seven (7) calendar days of
order
receipt;
d) Initial Provisioning Orders
Prior to the Delivery Date of the first Aircraft or as
may
be mutually agreed; and
e.) Other Orders
Shipment of stock items shall be approximately thirty
(30)
calendar days after BRAD's receipt of Buyer's Order.
Shipment of non-stock items shall be in accordance with
quoted lead times or lead times published in the current
Spare Parts Price Catalogue, procurement data, or
provisioning data.
2.14 Collect Shipments
Where collect shipments are not deemed practicable by
BRAD, charges
for shipment, insurance, prepaid freight charges and all
other costs
paid by BRAD shall be paid by Buyer promptly upon
presentation to
Buyer of invoices covering the same.
2.15 Freight Forwarder
If Buyer elects to use the services of a freight
forwarder for the
onward movement of Spare Parts, Buyer agrees to release BRAD
from and
indemnify it for any liability for any fines or seizures of
Spare
Parts imposed under any governmental Goods in Transit
regulations.
Any such fines levied against BRAD will be invoiced to Buyer
and any
Spare Parts seized under such regulations will be deemed to
be
received, inspected, and accepted by Buyer at the time of
seizure.
2.16 Intentionally Left Blank
2.17 Title and Risk of Loss
Property and title to the Spare Parts will pass to
Buyer upon payment
for the Spare Parts in full. Until payment in full for
Spare Parts,
(a) title to them will not pass to Buyer, and (b) BRAD
maintains a
purchase money security interest in them. Risk of loss of
the Spare
Parts will pass to the Buyer upon delivery by BRAD. With
respect to
Spare Parts rejected by Buyer pursuant to Annex A Article
2.19, risk
of loss shall remain with Buyer until such Spare Parts are
re-
delivered to BRAD .
BRAD agrees to notify Buyer when material is shipped
and shall
provide carrier's reference information (i.e., waybill
number).
2.18 Inspection and Acceptance
All Spare Parts shall be subject to inspection by
Buyer at
destination. Use of Spare Parts or failure of Buyer to give
notice of
rejection within forty-five (45) days after receipt shall
constitute
acceptance. Acceptance shall be final and Buyer waives the
right to
revoke acceptance for any reason, whether or not known to
Buyer at
the time of acceptance. Buyer's remedies for defects
discovered
before acceptance are exclusively provided for in Annex A
Article
2.19 herein.
2.19 Rejection
Any notice of rejection referred to in Annex A Article
2.18 shall
specify the reasons for rejection. If BRAD concurs with a
rejection,
BRAD shall, at its option, either correct, repair or replace
the
rejected Spare Parts. Buyer shall, upon receipt of BRAD's
written
instructions and Material Return Authorization ("MRA")
number, which
BRAD shall issue in a timely manner, return the rejected
Spare Parts
to BRAD at its specified plant, or other destination as may
be
mutually agreeable. The return of the rejected Spare Parts
to BRAD
and the return or delivery of a corrected or repaired
rejected Spare
Part or any replacement for any such Spare Part to Buyer
shall be at
BRAD's expense. Any corrected, repaired or replacement
Spare Parts
shall be subject to the provisions of this Agreement.
2.20 Payment
Except as provided in Annex A Article 2.22 below,
payment terms shall
be net thirty (30) calendar days of invoice date for
established open
accounts. Any overdue amount shall bear interest from the
due date
until actual payment is received by BRAD at an annual rate
of
interest equal to the U.S. prime interest rate as
established from
time to time by the Chase Manhattan Bank, New York Branch,
or its
successor,,, plus two percent (2%) calculated and compounded
monthly.
2.21 Payment for Provisioning Items
Payment for Provisioning Items purchased by Buyer as
contemplated by
Paragraph 2.7.1(i) shall be made by Buyer as follows:
a) a deposit of 35% of the total price of the Provisioning
Items as
selected by Buyer, upon signature of the spares provisioning
document; and
b) the balance of the total price of Provisioning Items
upon their
delivery.
2.22 Modified Terms of Payment
BRAD reserves the right to alter the terms of payment
without
prior notice if Buyer fails to pay when due an amount Buyer
owes
under any agreement with BRAD, unless such failure relates
to a
good faith dispute of an invoice.
2.23 Regulations
Buyer shall comply with all applicable monetary and
exchange control
regulations and shall obtain any necessary authority from
the
governmental agencies administering such regulations to
enable Buyer
to make payments at the time and place and in the manner
specified
herein.
2.24 Warranty
The warranty applicable to Spare Parts is set forth in Annex
B
hereto.
2.25 Cancellation of Orders
Except as otherwise may apply to initial provisioning,
if Buyer
cancels an Order, BRAD, at its option, shall be entitled to
recover
actual damages, but not less than the following cancellation
charges
or more than the purchase price of the Spare Parts covered
by the
Order:
a) if work accomplished on the Order has been limited to
BRAD Spares
Department, or the part has been identified as "shelf stock"
in
the Spare Parts Price Catalogue, no cancellation charges
shall be
made;
b) if production planning has been completed on the Order
and shop
orders have been written, but no shop time or material
charges
have been made against the Order, the cancellation charge
shall be
10% of the price but not to exceed $100 per unit;
c) if shop time or material charges have been made against
the Order,
the cancellation charge shall be based on the cost of such
time
and materials, plus overhead; and
d) if the Spare Parts covered by the Order can be absorbed
into
BRAD's inventory without increasing BRAD's normal maximum
stock
level, no cancellation charges shall be made.
2.26 Lease
BRAD shall select and make available certain parts for
lease, subject
to availability Buyer has the option to negotiate a lease
agreement
with BRAD separate from this Agreement.
2.27 Additional Terms and Conditions
BRAD's conditions of sale are deemed to incorporate the
terms and
conditions stated herein. Additional terms and conditions
applicable
at time of receipt of each order from Buyer may be added
providing
such terms and conditions do not conflict with the terms and
conditions provided herein. Such additional terms and
conditions
shall be provided to Buyer at least ninety (90) calendar
days prior
to their effective date.
ARTICLE 3 - TRAINING
3.1 General Terms
3.1.1 The objective of the training programs (the
"Programs"),
as described herein, shall be to familiarize and assist
Buyer's
personnel in the introduction, operation, and maintenance of
the Aircraft.
BRAD shall offer to the Buyer the Programs in the
English
language at a BRAD designated facility.
*
3.1.2 Buyer shall be responsible for all travel and
living
expenses, including local transportation, of Buyer's
personnel
incurred in connection with the Programs.
3.1.3 The Programs shall be designed to reflect the
model
and/or configuration of the Aircraft and may include
differences training to identify such configuration or
model.
Manuals which are provided during the Programs exclude
revision
service.
3.1.4 A training conference shall be held where possible
no
later than six (6) months prior to the Scheduled Delivery
Date
of the first Aircraft to the Buyer, or as may be otherwise
agreed, to establish the Programs' content and schedule.
3.2 Flight Crew Training
3.2.1 Flight Crew Ground Training
At no additional charge, BRAD will provide with each
delivered
Aircraft, a TC or FAA approved transition training for one
(1)
of Buyer's crews (two (2) pilots) who meet the minimum entry
requirement provided in the applicable training manual.
Each
course shall consist of up to eighty (80) hours of classroom
instruction which may include part task trainer, Computer
Based
Training (CBT), and/or Flight Training Device (FTD). BRAD
shall furnish each of Buyer's licensed pilots attending the
course one copy of the Flight Crew Operating Manual.
3.2.2 Pilot Simulator Training
BRAD shall provide access at Buyer's expense to a TC or
FAA
approved flight simulator for the crew trained under Annex A
Article 3.2.1. BRAD shall provide a simulator instructor
for
eight (8) missions for the crew trained on BRAD's designated
simulator in Montreal; each mission shall consist of four
(4)
hours in the simulator and required briefing/debriefing
sessions.
3.2.3 In-flight Training
Should Buyer require aircraft flight training, such
training
shall be conducted in Buyer's Aircraft after the Delivery
Date
for up to a maximum of four (4) of Buyer's pilots. BRAD
shall
provide an instructor pilot at no additional charge; Buyer
shall be responsible for the cost of fuel, oil, landing
fees,
taxes, insurance, maintenance, and other associated
operating
expenses required for the Aircraft during such training.
3.2.4 Flight Attendant Course
A familiarization course for up to two (2) of Buyer's
flight
attendant personnel shall be conducted. Each course shall
be
for a maximum of five (5) working days duration. This
course
shall present general information on the Aircraft and
detailed
information on the operation of the passenger safety
equipment
and emergency equipment. BRAD shall furnish for each
participant in this course one (1) copy of the Flight
Attendant
Training Guide which shall not be revised. Buyer shall
assist
BRAD in the development of the Flight Attendant Training
Guide
to incorporate Buyer's specific equipment and procedures.
3.2.5 Flight Dispatcher Course
A course for up to two (2) of Buyer's flight dispatch
personnel
shall be conducted. Each course shall be for a maximum of
five
(5) working days duration. The course shall consist of
classroom instruction covering general Aircraft
familiarization, coverage of performance, flight planning,
weight and balance and the Minimum Equipment List. BRAD
shall
furnish for each participant in this course one (1) copy of
the
Flight Crew Operating Manual which shall not be revised.
3.2.6 Recurrent Pilot Training
BRAD shall, upon Buyer's request, provide a proposal
for a TC
or FAA approved course for type rated pilots, customized in
content to meet the recurrent training of Buyer's pilots.
3.2.7 Course Training Material
BRAD shall, upon Buyer's request, present a proposal to
provide
one (1) set of the materials (without revision service)
used
to conduct the Flight Crew Ground Training course, as
follows:
i) 35 mm slides;
ii) Instructional Narrative and/or Instruction Guides;
iii) Overhead Projection Transparencies;
iv) Motion picture and/or Video tapes; and
v) Audio cassettes tapes.
3.3 Maintenance Training
3.3.1 Airframe and Powerplant Systems Maintenance Course
BRAD shall, at no additional charge, train up to two
(2) of
Buyer's qualified personnel. This course shall emphasize
detailed systems description, operation, and routine line
maintenance practices. The course material shall be
principally mechanical with electrical and avionics
information
for overall systems comprehension. The course duration
shall
be for a maximum of twenty-five (25) working days.
3.3.2 Electrical and Avionics Systems Maintenance Course
BRAD shall, at no additional charge, train up to two
(2) of
Buyer's qualified personnel. The course shall emphasis
detailed
systems description, operation and routine line maintenance
practices. The course material shall be principally
electrical
and avionic but shall include mechanical information for
overall systems comprehension. The course duration shall be
for a maximum of twenty-five (25) working days.
3.3.3 Ground Handling Course
BRAD shall, at no additional charge, train up to two
(2) of
Buyer's qualified personnel. This course shall provide ramp
service personnel with training to be able to tow and park
Aircraft and perform routine ramp servicing tasks. Such
training shall be conducted in class with a practical
demonstration on Buyer's Aircraft after acceptance. The
course
duration shall be a maximum of five (5) working days and the
practical demonstration shall not exceed two (2) working
days.
3.3.4 General Familiarization Course
BRAD shall, at no additional charge, train up to * of
Buyer's personnel. The course shall generally describe the
Aircraft, the systems
and the maintenance and support requirements. This course
is
primarily designed for Buyer's facilities planning, parts
provisioning and aircraft management personnel. The course
duration is for a maximum of five (5) working days.
3.3.5 Engine Run-up Course
BRAD shall provide an Engine Run-up course, at no
additional
charge, for up to * of Buyer's qualified personnel.
This course enables Buyer's personnel to gain proficiency in
engine and APU runs, cockpit management procedures ,
malfunctions and exceedences. A prerequisite for this
course
is satisfactory completion of the Airframe and Powerplant
Systems Maintenance course. The course duration shall be
for a
maximum of two (2) working days.
3.3.6 Specialist Courses
At Buyer's request, BRAD shall make a proposal for
specialist
courses which will be derived from BRAD's standard courses
detailed herein.
3.3.7 Recurrent Training
At Buyer's request, BRAD shall make a proposal for a
Regulatory
Authority approved training plan for maintenance recurrent
training.
3.3.8 Vendor Training
At Buyer's request, BRAD shall assist Buyer to obtain
vendor
maintenance training.
3.3.9 Course Training Material
BRAD, upon Buyer's request, shall present a proposal to
provide
one (1) set of the training materials (without revision
service) used to conduct BRAD's standard training as
detailed
herein:
i) 35 mm slides;
ii) Lesson Guides;
iii) Overhead Projection Transparencies;
iv) Motion picture and/or Video tapes; and
v) Audio cassettes tapes.
3.4 Insurance
3.4.1 Buyer shall at all times during flight
training in
Buyer's Aircraft secure and maintain in effect, at its
own
expense, insurance policies covering the Aircraft including
without limitation:
a) liability insurance covering public
liability,
passenger, crew, property and cargo damage in amounts *
b) all risk aircraft hull and engine insurance
for an
amount which is not less than its then fair market value.
3.4.2 The liability policy shall name BRAD (and its
affiliates)
as additional insured. The hull policy shall contain a
waiver of subrogation in favour of BRAD (and its
affiliates); * All insurance policies shall provide for
payments despite
any misrepresentations or breach of warranty by any person
(other than the assured receiving payments) and
shall not be subject to any offset by any other insurance
carried by BRAD except that Buyer shall not be required
to provide insurance with respect to the manufacturing,
repair and maintenance activities of BRAD (and of its
affiliates) and the related potential liability (product
or otherwise) arising therefrom.
ARTICLE 4 - TECHNICAL DATA
4.1 Technical Data Provided
BRAD shall furnish to Buyer the Technical Data
described in
Attachment A hereto (the "Technical Data"). The Technical
Data shall
be in the English language and shall provide information on
items
manufactured according to BRAD's detailed design and in
those units
of measures used in the Specification or as may otherwise be
required
to reflect Aircraft instrumentation as may be mutually
agreed.
4.2 Shipment
All Technical Data provided hereunder shall be
delivered to Buyer
Free Carrier (Incoterms) BRAD's designated facilities and at
the time
indicated in Attachment A.
4.3 Proprietary Technical Data
It is understood and Buyer acknowledges that the
Technical Data
provided herein is proprietary to BRAD and all rights to
copyright
belong to BRAD and the Technical Data shall be kept
confidential by
Buyer. Buyer agrees to use the Technical Data solely to
maintain,
operate, overhaul or repair the Aircraft or to make
installation or
alteration thereto allowed by BRAD.
Technical Data shall not be disclosed to third parties
or used by
Buyer or furnished by Buyer for the design or manufacture of
any
aircraft or Spare Parts including BRAD Parts or items of
equipment,
except when manufacture or redesign is permitted under the
provisions
Article 23.2 of the Agreement or of Annex A Article 2.4
hereof and
then only to the extent and for the purposes expressly
permitted
therein.
[ATTACHMENT OMITTED]
ANNEX B - WARRANTY AND SERVICE LIFE POLICY
ARTICLE 1 - WARRANTY
The following warranty is that to which reference is made in
Article 3
of the Agreement.
1.1 Warranty
1.1.1 Subject to Annex B Articles 1.9, 1.10, and 2, BRAD
warrants
that, at the date of delivery of the Aircraft or BRAD Part,
as applicable :
a) the Aircraft shall conform to the Specification, except
that any matter stated in the Specification as type
characteristics, estimates or approximations is excluded
from this Warranty;
b) the Aircraft shall be free from defects caused by the
failure of BRAD to install a Vendor Part or Powerplant
Part in accordance with reasonable instructions of the
vendor;
c) the Aircraft, excluding however Vendor Parts and
Powerplant Parts which shall be governed by Article 2
hereof, shall be free from defects in material or
workmanship * and
d.) the Aircraft, excluding however Vendor Parts and
Powerplant Parts which shall be governed by Article 2
hereof, shall be free from defects in design, having
regard to the state of the art as of the date of such
design.
1.1.2 The Warranty set forth in Annex B Article 1.1.1
(c) and (d)
above shall also be applicable to BRAD Parts purchased as
Spare Parts.
1.1.3 BRAD further warrants that, at the time of
delivery, the
Technical Data shall be free from error.
1.2 Warranty Period
1.2.1 The Warranty set forth in Annex B Article 1.1
shall remain
in effect for any defect covered by the Warranty (a
"Defect") becoming apparent during the following periods
(individually, the "Warranty Period"):
a) for failure to conform to the Specification and in the
installation referred to in Annex B Article 1.1.1 (a) and
1.1.1 (b), thirty-six (36) months from the Delivery Date;
b) for those Defects in material or workmanship referred
to
in Annex B Article 1.1.1 (c) and 1.1.2, thirty-six (36)
months from the date of delivery of the Aircraft or BRAD
Parts, as applicable;
c) for those Defects in design referred to in Annex B
Article 1.1.1 (d), thirty-six (36) months from the date
of delivery of the Aircraft or BRAD Parts, as applicable;
and
d) for errors in the Technical Data referred to in Annex B
Article 1.1.3, twelve (12) months from the date of
delivery of the applicable Technical Data.
1.3 Repair, Replacement or Rework
As to each matter covered by this Warranty BRAD's sole
obligation
and liability under this Warranty is expressly limited to,
at
BRAD's election, correction by the repair, replacement or
rework
of the defective part or item of Technical Data. The
repaired,
replaced or reworked part or item of Technical Data which is
the
subject of the Warranty claim shall then be warranted under
the
same terms and conditions for the then unexpired portion of
the
Warranty Period.
In the case of a Defect relating to non-conformance
with the
Specification, BRAD shall correct that Defect in the
equipment
item or part in which the Defect appears, except that BRAD
will
not be obligated to correct any Defect which has no material
adverse effect on the maintenance, use or operation of the
Aircraft or the image of Buyer as a reputable airline
operator.
1.4 Claims Information
BRAD's obligations hereunder are subject to a Warranty
claim to be
submitted in writing to BRAD's warranty administrator, which
claim
shall include but not be limited to the following
information:
a) the identity of the part or item involved, including
the Part
number, serial number if applicable nomenclature and the
quantity claimed to be defective;
b) the manufacturer's serial number of the Aircraft from
which the
part was removed;
c) the date the claimed Defect became apparent to Buyer;
d) the total flight hours (and cycles if applicable)
accrued on
the part at the time the claimed Defect became apparent to
Buyer; and
e) a description of the claimed Defect and the
circumstances
pertaining thereto.
1.5 Intentionally Left Blank .
1.6 Timely Corrections
BRAD shall make the repair, replacement or rework,
following
receipt of the defective part or item, with reasonable care
and
dispatch.
In the event that BRAD does not
respond or confirm receipt of a warranty
claim from Buyer within * subject to
Buyer and BRAD agreeing on a non-receipt
of a confirmation from BRAD within *
from the date of submittal of claim.
1.7 Labour Reimbursement
For correction of Defects BRAD shall establish a
reasonable
estimate for the labour hours required for the repair,
replacement
or rework of the defective BRAD Part and, if the repair,
replacement or rework is performed by Buyer or by third
party on
behalf of Buyer, BRAD shall reimburse Buyer for BRAD
estimated
hours or for Buyer's or third party's actual labour hours,
whichever is less, for the repair, replacement or rework of
the
defective BRAD Part excluding any work necessary to gain
access to
said BRAD Part. Such reimbursement shall be based upon
Buyer's
direct labour rate per manhour plus burden rate of fifty
percent
(50%), subject to annual review and adjustment of such
labour rate
as mutually agreed; provided, however, that this amount
shall not
exceed fifty percent (50%) of the BRAD published selling
labour
rate.
1.8 Approval, Audit, Transportation and Waiver
All Warranty claims shall be subject to audit and
approval by
BRAD. BRAD will use reasonable efforts to advise in writing
the
disposition of Buyer's Warranty claim within thirty (30)
days
following the receipt of the claim and (if requested) return
of
the defective BRAD Part to BRAD's designated facility. BRAD
shall
notify Buyer of BRAD's disposition of each claim.
Buyer shall pay all costs of transportation of the
defective part
from Buyer to BRAD's U.S. distribution centre and BRAD shall
pay
all costs of transportation of the repaired, corrected or
replacement parts back to Buyer.
1.9 Limitations
1.9.1 BRAD shall be relieved of and shall have no
obligation or
liability under this Warranty if:
a) the Aircraft was operated with any products or parts
not
specifically approved by BRAD, unless Buyer furnishes
reasonable evidence acceptable to BRAD that such products
or parts were not a cause of the Defect; or
b) the Aircraft was not operated or maintained in
accordance
with the Technical Data listed in Attachment A of Annex A
and the manufacturer's documentation furnished to Buyer
(including Service Bulletins and airworthiness
directives) unless Buyer furnishes reasonable evidence
acceptable to BRAD that such operation or maintenance was
not a cause of the Defect; or
c) the Aircraft was not operated under normal airline use,
unless Buyer furnishes reasonable evidence acceptable to
BRAD that such operation was not a cause of the Defect;
or
d) Buyer does not
1) report the Defect in writing to BRAD's Warranty
administrator within forty-five (45) calendar days
following such Defect becoming apparent, and
2) retain the BRAD Part claimed to be defective until
advised by BRAD to return such BRAD Part to BRAD's
designated facility in order for BRAD to finalize its
evaluation of the Warranty claim or to otherwise
dispose of such BRAD Part; or
e) Buyer does not submit reasonable demonstration to BRAD
within forty-five (45) calendar days after the Defect
becomes apparent that the Defect is due to a matter
covered within this Warranty; or
f) Buyer does not allow BRAD reasonable opportunity
(taking
into account Buyer's wish to replace Aircraft back in
service) to be present during the disassembly and
inspection of the BRAD Part claimed to be defective.
1.9.2 The above warranties do not apply to Buyer
Furnished
Equipment.
1.10 Normal Usage
Normal wear and tear and the need for regular
maintenance and
overhaul shall not constitute a Defect or failure under this
Warranty.
1.11 Overhaul of Warranty Parts
BRAD's liability for a BRAD Part which has a Defect and
is
overhauled by Buyer within the Warranty Period shall be
limited
only to that portion of the labour and material replacement
related to the Defect.
1.12 No Fault Found
In the event that a BRAD Part returned under a Warranty
claim is
subsequently established to be serviceable then BRAD shall
be
entitled to charge and recover from Buyer any reasonable
inspection, transportation, repair and other costs of a
similar
nature incurred by BRAD in connection with such Warranty
claim.
Providing, however, in the event that repetitive in-service
failure occurs on the particular BRAD Part which is
subsequently
identified by BRAD on a repeated basis to be "no fault
found,"
then BRAD and Buyer shall discuss and mutually agree a
course of
further action to help identify the problem. In the event
the
fault is ultimately confirmed to be a legitimate Warranty
claim
then the above mentioned costs, if incurred by BRAD will be
borne
by BRAD, and any such costs already paid by Buyer will be
reimbursed by BRAD.
ARTICLE 2 - VENDOR WARRANTIES
2.1 Warranties from Vendors
The Warranty provisions of this Annex B apply to BRAD
Parts only.
However, BRAD has made or shall make reasonable efforts to
obtain
favourable warranties from vendors, with respect to Vendor
Parts
and Power Plant Parts. Except as specifically provided
under this
Annex B Article 2, BRAD shall have no liability or
responsibility
for any such Vendor Parts and Power Plant Parts and the
warranties
for those Vendor Parts and Power Plant Parts shall be the
responsibility of the vendor and a matter as between Buyer
and
vendor.
2.2 Vendor Warranty Backstop
For those Vendor Parts installed on the Aircraft at the
Delivery
Date or subsequently purchased through BRAD, excluding the
Powerplant or the Power Plant Parts, in the event the
parties
agree that a vendor is in default in the performance of any
material obligation under any applicable warranty obtained
by BRAD
from such vendor pursuant to Annex B Article 2.1 above, the
warranties and all other terms and conditions of Annex B
Article 1
shall become applicable as if the Vendor Parts had been a
BRAD
Part, except that the warranty period shall be the Warranty
Period
as set forth herein or by the vendor's warranty, whichever
is
shorter.
2.3 BRAD's Interface Commitment
In the event of a dispute in the application of a
Vendor Part
warranty, at Buyer's request addressed to BRAD's warranty
administrator, BRAD shall, without charge, conduct an
investigation and analysis of any such dispute resulting
from a
technical interface problem to determine, if possible, the
cause
of the interface problem and then recommend feasible
corrective
action. Buyer shall furnish to BRAD all data and
information in
Buyer's possession relevant to the interface problem and
shall
cooperate with BRAD in the conduct of its investigation and
such
tests as may be required. BRAD, at the conclusion of its
investigation, shall advise Buyer in writing of BRAD's
opinion as
to the cause of the problem and BRAD's recommended
corrective
action.
ARTICLE 3 - SERVICE LIFE POLICY
3.1 Applicability
The Service Life Policy ("SLP") described in this Annex
B Article
3 shall apply if * in any Covered
Component which is defined in Annex B Article 3.7 below.
3.2 Term
3.2.1 Should such failures occur in any Covered
Component within
one hundred and forty-four (144) months following delivery
of the Aircraft containing such Covered Component, BRAD
shall, as promptly as practicable and at its option;
a) design and/or furnish a correction for such failed
Covered Component; or
b) furnish a replacement Covered Component (exclusive of
standard parts such as bearings, bushings, nuts, bolts,
consumables and similar low value items).
3.3 Price
Any Covered Component which BRAD is required to furnish
under this
SLP shall be provided for at a price calculated in
accordance with
the following formula:
P = C x T
144
Where:
P = Price of Covered Component to Buyer;
C = BRAD's then current price for the Covered
Component;
T = The total time to the nearest month since the
Aircraft
containing the Covered Component, * was delivered by BRAD
3.4 Conditions and Limitations
3.4.1 The following general conditions and limitations
shall apply
to the SLP:
a) the transportation cost for the return to BRAD's
designated facility, if practicable, of any failed
Covered Component necessary for failure investigation or
redesigning studies shall be borne by BRAD but Buyer
agrees to use reasonable efforts to ship the Covered
Component on Buyer's aircraft to a scheduled destination
closest to Canadair's designated facility at no cost to
BRAD;
b) BRAD's obligations under this SLP are conditional upon
the submission of reasonable proof acceptable to BRAD
that the failure is covered hereby;
c) Buyer shall report any failure of a Covered Component
in
writing to BRAD`s Warranty administrator within two (2)
months after such failure becomes evident * Failure to
give this
required notice shall excuse BRAD from all obligations
with respect to such failure;
d) the provisions of Annex B Article 1.9 of the Warranty
(except for subparagraphs (d) and (e) thereof) are
incorporated by this reference and shall condition BRAD's
obligations under this SLP with respect to any Covered
Component;
e) BRAD's obligations under this SLP shall not apply to
any
Aircraft which has not been correctly modified in
accordance with the specifications or instructions
contained in the relevant Service Bulletins which are
furnished to Buyer prior to receipt by BRAD from Buyer of
any notice of an occurrence which constitutes a failure
in a Covered Component, subject to Buyer having had
reasonable time to i) obtain parts required for the
installation of the Service Bulletin and ii) incorporate
the Service Bulletin into the Aircraft. The provisions
of this subparagraph shall not apply in the event that
Buyer furnishes reasonable evidence acceptable to BRAD
that such failure was not caused by Buyer's failure to so
modify the Aircraft;
f) this SLP shall not apply to a failure of a Covered
Component if BRAD determines that such failure may not
reasonably be expected to occur on a repetitive basis
unless subsequently demonstrated to be; and
g) this SLP shall not apply to a Covered Component where
the
failure results from an accident, abuse, misuse,
degradation, except for normal wear and tear, negligence
or wrongful act or omission, unauthorized repair or
modification adversely affecting a Covered Component,
impact or foreign object damage, to any Covered
Component.
3.5 Coverage
This SLP is neither a warranty, performance guarantee
nor an
agreement to modify the Aircraft to conform to new
developments in
design and manufacturing art. BRAD's obligation is only to
provide correction instructions to correct a Covered
Component or
furnish replacement at a reduced price as provided in this
SLP.
3.6 Covered Component
Only those items or part thereof listed in Attachment A
to this
Annex B shall be deemed to be a Covered Component, and
subject to
the provisions of this SLP.
ARTICLE 4 - GENERAL
4.1 It is agreed that BRAD shall not be obligated to
provide to Buyer
any remedy which is a duplicate of any other remedy which
has been
provided to Buyer under any other part of this Annex B.
* CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST.
January 8, 1997
Our Ref: B96-7701-RJTL-RJ0350-001
Atlantic Coast Airlines
1 Export Drive,
Sterling, Virginia,
U.S.A. 20164
Gentlemen,
Letter Agreement No. 001 to Purchase Agreement No. RJ-0350
dated January
8, 1997 (the "Agreement" between Bombardier Inc. ("BRAD")
and Atlantic
Coast Airlines ("Buyer") relating to the purchase of twelve
(12)
Canadair Regional Jet Aircraft (the "Aircraft")
Subject: Credit Memorandum
1.0 This letter constitutes an integral part of the
Agreement and
evidences our further agreement with the matters set forth
below.
All terms used herein and in the Agreement and not defined
herein,
shall have the same meaning as in the Agreement.
2.0 In consideration of Buyer having entered into the above
referenced Agreement for the purchase of twelve (12)
Aircraft, BRAD
will issue to Buyer, upon delivery and payment of the price
of the
Aircraft in accordance with the Agreement, for each
Aircraft, a credit
memorandum * which will be used to reduce the amount
payable on
delivery of the respective Aircraft against which it has
been issued.
* The credit memorandum will * be adjusted on the same
pro-rata
percentage calculation as other aircraft price changes due
to changes in
the Specification or Buyer selected optional features as
otherwise provided
for in this Agreement. The credit memorandum, as adjusted,
will be known
as the "Credit Memorandum".
3.0 Notwithstanding the provisions of
this Letter Agreement, in the case of
any Aircraft where *
4.0 In the event of the Termination of
the Agreement, this Letter Agreement
shall become automatically null and void
with respect to any undelivered
Aircraft.
5.0 The provisions of this Letter
Agreement are personal to Buyer and
shall not be assigned or otherwise
disposed of by Buyer, except as required
for financing purposes in accordance
with Letter Agreement No. 7 (Financing
Assistance) and except as part of an
assignment of the Agreement as expressly
permitted in Article 20 of the
Agreement, without the prior written
consent of BRAD.
Should there be any inconsistency between this Letter
Agreement and the
Agreement with respect to the subject matter covered by the
terms
hereof, then this Letter Agreement shall prevail.
Yours truly,
BOMBARDIER INC.
________________________ Date:_____________
Michel Bourgeois
Vice President, Contracts
Acknowledged and Accepted
Atlantic Coast Airlines
________________________ Date:_____________
James B. Glennon
Sr. Vice President and C.F.O.
* CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST.
January 8, 1997
Our Ref: B96-7701-RJTL-RJ0350-002
Atlantic Coast Airlines
1 Export Drive,
Sterling, Virginia,
U.S.A. 20164
Gentlemen,
Letter Agreement No. 002 to Purchase Agreement No. RJ-0350
dated January 8,
1997 (the "Agreement" between Bombardier Inc. ("BRAD") and
Atlantic Coast
Airlines ("Buyer") relating to the purchase of twelve (12)
Canadair Regional
Jet Aircraft (the "Aircraft")
Subject: Conditions Precedent
1.0 This letter constitutes an integral part of the
Agreement and evidences
our further agreement with the matters set forth below. All
terms used
herein and in the Agreement and not defined herein, shall
have the same
meaning as in the Agreement.
2.0 In consideration of Buyer having entered into the above
referenced
Agreement for the purchase of twelve (12) Aircraft, BRAD and
Buyer
agree that the Agreement is subject to the following
conditions:
2.1 United Approval
It is understood that Buyer requires
approval to operate fifty (50) seat jet
aircraft as a United Express operator,
on terms stisfactory to Buyer ("United
Approval"). If on or before * Buyer
determines that United Approval will not
be achieved by such date, or in any
event Buyer has not received United
Approval by * then either party may,
unless the parties agree to extend said
date with such amendment to the terms
hereof that may be appropriate in the
circumstances, terminate this Agreement
by providing ten (10) days prior notice,
which notice shall be given on or before
*
2.2 Board Approval
BRAD and Buyer confirm to each other they have each obtained
the
required authorizations and fulfilled any conditions
applicable to
enable each of them to enter into this Agreement, except
that
Buyer's final acceptance of the Agreement will be
conditioned on
the approval of Buyer's Board of Directors to be obtained
ten (10)
business days following execution of the Agreement, failing
receipt of which, either party may terminate this Agreement
by
providing ten (10) days prior notice.
2.3 Termination
Upon notification of termination as provided by Articles 2.1
and 2.2 above,
BRAD shall, *
3.0 The provisions of this Letter Agreement are personal to
Buyer and
shall not be assigned or otherwise disposed of by Buyer
without
the prior written consent of BRAD.
Should there be any inconsistency between this Letter
Agreement and the
Agreement with respect to the subject matter covered by the
terms hereof, then
this Letter Agreement shall prevail.
Yours truly,
BOMBARDIER INC.
________________________ Date:_____________
Michel Bourgeois
Vice President, Contracts
Acknowledged and Accepted
Atlantic Coast Airlines
________________________ Date:_____________
James B. Glennon
Sr. Vice President and C.F.O.
* CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST.
January 8, 1997
Our Ref: B96-7701-RJTL-RJ0350-003
Atlantic Coast Airlines
1 Export Drive,
Sterling, Virginia,
U.S.A. 20164
Gentlemen,
Letter Agreement No. 003 to Purchase Agreement No. RJ-0350
dated January 8,
1997 (the "Agreement") between Bombardier Inc. ("BRAD") and
Atlantic Coast
Airlines ("Buyer") relating to the purchase of twelve (12)
Canadair Regional
Jet Aircraft (the "Aircraft")
Subject: Option Aircraft
1.0 This letter constitutes an integral part of the
Agreement and evidences
our further agreement with the matters set forth below. All
terms used
herein and in the Agreement and not defined herein, shall
have the same
meaning as in the Agreement.
2.0 In consideration of the purchase of
the Firm Aircraft, BRAD will grant to
Buyer the right to purchase twelve (12)
Option Aircraft in accordance with the
following conditions:
(a) Number of Options The Option Aircraft are *
(b) Terms
(i) The Option Aircraft will be as described in Article 2
of the Agreement.
(ii) The base price for each of the Option Aircraft
excluding the Buyer selected optional features, Ex Works
(Incoterms 1990) BRAD's facilities in Montreal, Quebec shall
be * The base price of the Buyer Selected Optional
Features shall be * The price of the Aircraft shall be the
sum of the Aircraft Base Price and the price of the Buyer
Selected Optional Features, and is subject to escalation in
accordance with the Economic Adjustment Formula Attached as
Appendix I to the Agreement, * of each Option Aircraft
("Option Aircraft Purchase Price").
(iii) Unless expressly provided for in this Agreement,
the terms and conditions of the Agreemnet shall apply
mutatis mutandis to the Option Aircraft, with the exception
of the provision for * and with respect to Annex A
training courses as specified in Article 3.2.5 (flight
dispatch), Article 3.3.3 (ground handling), Article 3.3.4
(general familiarization) and Article 3.3.5 (engine run-up),
and the provision for a start-up team as found in Article 3
of Letter Agreement No. 10 (Additional Customer Support).
Furthermore, the following Letter Agreements are also not
applicable to the Option Aircraft and are hereby excluded:
Letter Agreement No. 2 (Conditions Precedent)
Letter Agreement No. 4 (Options)
Letter Agreement No. 11 (Spares)
Furthermore, Letter Agreement No. 6
(Operational Restrictions), Letter
Agreement No. 8 (Schedule Completion
Rate), and Letter Agreement No. 9
(Maintenance Cost) * contained in
Letter Agreement No. 12 (Marketing
Support) are applicable as set out
therein.
(c) *
(d) Exercise Procedures Timing and
procedures for the exercise of options
for aircraft in each Block shall be as
follows:
(i) * prior to the desired delivery
month of the first aircraft in that
Block:
Buyer shall give notice ("Notice of
Intention") to BRAD of its
conditional intention to purchase
Option Aircraft and indicating its
desired delivery months * and
Buyer shall pay to BRAD a
reservation fee ("Reservation Fee")
of * per Option Aircraft.
(ii) During the month following Notice
of Intention, BRAD and Buyer will
discuss and agree on available delivery
positions, *
(iii) Within * following Notice of
Intention:
Buyer shall give notice ("Notice of
Exercise") to BRAD of its exercise
of its option to purchase the
Aircraft in that Block, at which
time the Option Aircraft shall
become Aircraft; and
Coincident with a Notice of
Exercise, Buyer shall make payments
to BRAD as is necessary to bring
the total amount of Total Deposits
held to the amount identified in
section 3 below; and
Reservation fees shall be applied
as follows:
For each aircraft for which
Notice of Exercise has been
made, all Reservation Fees
paid shall be applied toward
any Total Deposits if any are
due, or if no Total Deposits
are due, shall be refunded by
direct bank transfer within *
of Notice of Exercise;
*
3.0 *
5.0 In the event of the Termination of
the Agreement, this Letter Agreement
shall become automatically null and
void.
6.0 Upon the exercise of Buyer's rights
to purchase in accordance with this
Letter Agreement, the parties shall
amend the Agreement or enter into an
additional purchase agreement in order
to give effect to the purchase of Option
Aircraft in accordance with the terms
and conditions thereof.
7.0 The provisions of this Letter
Agreement are personal to Buyer and
shall not be assigned or otherwise
disposed of by Buyer without the prior
written consent of BRAD.
Should there be any inconsistency
between this Letter Agreement and the
Agreement with respect to the subject
matter covered by the terms hereof, then
this Letter Agreement shall prevail.
Yours truly,
BOMBARDIER INC.
________________________ Date:_____________
Michel Bourgeois
Vice President, Contracts
Acknowledged and Accepted
Atlantic Coast Airlines
________________________ Date:_____________
James B. Glennon
Sr. Vice President and C.F.O.
* CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED
SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A
CONFIDENTIAL TREATMENT REQUEST.
January 8, 1997
Our Ref: B96-7701-RJTL-RJ0350-004
Atlantic Coast Airlines
1 Export Drive,
Sterling, Virginia,
U.S.A. 20164
Gentlemen,
Letter Agreement No. 004 to Purchase Agreement No. RJ-0350
dated January 8,
1997 (the "Agreement" between Bombardier Inc. ("BRAD") and
Atlantic Coast
Airlines ("Buyer") relating to the purchase of twelve (12)
Canadair Regional
Jet Aircraft (the "Aircraft")
Subject: Options
1.0 This letter constitutes an integral part of the
Agreement and evidences
our further agreement with the matters set forth below. All
terms used
herein and in the Agreement and not defined herein, shall
have the same
meaning as in the Agreement.
2.0 In consideration of Buyer having entered into the above
referenced
Agreement, and in addition to the provisions of Letter
Agreement No. 003, *
(a) *
*
[ONE AND ONE HALF PAGES OF CONFIDENTIAL MATERIALS OMITTED]
3.0 In the event of the Termination of the Agreement, this
Letter Agreement
shall become automatically null and void.
4.0 Upon exercise of Buyer's rights to purchase in
accordance with this Letter
Agreement, the parties shall amend the Agreement or enter
into an additional
purchase agreement in order to give effect to the purchase
of Option Aircraft in
accordance with the terms and conditions thereof.
5.0 The provisions of this Agreement are personal to Buyer
and, except as part
of an assignment of the Agreement as expressly permitted by
the provisions of Article 20
of the Agreement, shall not be assigned or otherwise
disposed of by Buyer without the
prior written consent of BRAD.
Should there be any inconsistency between this Letter
Agreement and the
Agreement with respect to the subject matter covered by the
terms hereof, then
this Letter Agreement shall prevail.
Yours truly,
BOMBARDIER INC.
________________________ Date:_____________
Michel Bourgeois
Vice President, Contracts
Acknowledged and Accepted
Atlantic Coast Airlines
________________________ Date:_____________
James B. Glennon
Sr. Vice President and C.F.O.
* CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED
SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A
CONFIDENTIAL TREATMENT REQUEST.
January 8, 1997
Our Ref: B96-7701-RJTL-RJ0350-005
Atlantic Coast Airlines
1 Export Drive,
Sterling, Virginia,
U.S.A. 20164
Gentlemen,
Letter Agreement No. 005 to Purchase Agreement No. RJ-0350
dated January 8,
1997 (the "Agreement" between Bombardier Inc. ("BRAD") and
Atlantic Coast
Airlines ("Buyer") relating to the purchase of twelve (12)
Canadair Regional
Jet Aircraft (the "Aircraft")
Subject: FIPP
1.0 This letter constitutes an integral part of the
Agreement and evidences
our further agreement with the matters set forth below. All
terms used
herein and in the Agreement and not defined herein, shall
have the same
meaning as in the Agreement.
2.0 BRAD will participate with Buyer in a * ("FIPP")
pursuant to which *
*
3.0 *
4.0 In the event of termination pursuant to Article 16.1 or
16.2 for the default
of Buyer or in the event of default of Buyer (or its
asignee) under a financing
arrangement referred to in Letter Agreement No. 7 which
results in a termination of
such an arrangement, this Letter Agreement shall become
automatically null and void.
*
5.0 The provisions of this Letter
Agreement are personal to Buyer and
shall not be assigned or otherwise
disposed of by Buyer without the prior
written consent of BRAD * except to a
member of the Buyer's group of companies
to which reference is made in paragraph
20.1, 20.2 or 20.3 of the Agreement. *
provided: (i) that the confidentiality
of the terms of this Letter Agreement be
maintained in a manner satisfactory to
both parties; (ii) that there is no
increase in the liability or exposure of
BRAD, (iii) that Buyer remains jointly
and severally liable with assignee,
except in the event of the sale of the
Aircraft where BRAD is released of its
obligation under the financing, and (iv)
that BRAD shall be given a first right
of refusal to purchase the Aircraft at
the same terms and conditions as that
agreed to with assignee.
6.0 *
*
Should there be any inconsistency between this Letter
Agreement and the
Agreement with respect to the subject matter covered by the
terms hereof, then
this Letter Agreement shall prevail.
Yours truly,
BOMBARDIER INC.
________________________ Date:_____________
Michel Bourgeois
Vice President, Contracts
Acknowledged and Accepted
Atlantic Coast Airlines
________________________ Date:_____________
James B. Glennon
Sr. Vice President and C.F.O.
* CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED
SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A
CONFIDENTIAL TREATMENT REQUEST.
January 8, 1997
Our Ref: B96-7701-RJTL-RJ0350-006
Atlantic Coast Airlines,
1 Export Drive,
Sterling, Virginia,
U.S.A. 20164
Gentlemen,
Letter Agreement No. 006 to Purchase Agreement No. RJ-0350
dated January 8, 1997
(the "Agreement") between Bombardier Inc. ("BRAD") and
Atlantic Coast Airlines, Inc
("Buyer") relating to the purchase of twelve (12) Canadair
Regional Jet Aircraft
(the "Aircraft")
Subject: Operational Restrictions
1.0 This letter constitutes an integral part of the
Agreement and evidences
our further agreement with the matters set forth below. All
terms used
herein and in the Agreement and not defined herein, shall
have the same
meaning as in the Agreement.
2.0 Grounding
2.1 In the event that
(a) the FAA issues an Airworthiness
Directive that is ultimately
attributable to a defect in the
design and/or manufacturing of the
Canadair Regional Jet Aircraft
(taking into account the state of
the art at the time of design or
manufacture) that results in a
grounding or operational
restrictions on all or part of
Buyer's fleet of Aircraft (except
where directed at Buyer or
resulting from Buyer's operating or
maintenance practices), which
effectively prevents Buyer from
operating the Aircraft in revenue
service for more than * or
(b) Buyer is prevented from operating
the Aircraft in revenue service for
more than * by a court order in
the case of a patent infringement
claim or action filed before a
court in Canada or the United
States, *
3.0 During the time that Buyer is prevented from operating
the Aircraft due to
such operational restrictions, Buyer shall use best efforts
to reschedule the
Aircraft within its total route system such that the
restriction does not
prevent the Aircraft from operating in revenue service.
4.0 The undertaking by BRAD in this Letter Agreement
excludes any such grounding
or operational restriction caused by:
(i) BFE or Buyer-selected equipment or other products or
parts not
specifically approved by BRAD;
(ii) failure by Buyer (subject to parts availability) to
comply with or
incorporate a service bulletin which would have prevented
the
grounding;
(iii) failure by Buyer to comply with the conditions of
the Airworthiness
Directive, within a reasonable length of time given the
availability
of BRAD Parts, Vendor Parts or Powerplant Parts;
(iv) modifications made to the Aircraft or its Vendor Parts
subsequent to
the Delivery Date by Buyer or a third party, unless approved
by BRAD;
(v) failure to operate or maintain the Aircraft in
accordance with the
Technical Data; or
(vi) not operating the Aircraft in normal commercial airline
service.
5.0 The term of this Letter Agreement shall commence
on the date of start of
revenue service of Buyer's first Aircraft and shall expire
*
6.0 Without limitation to the foregoing, during any period
of grounding or
operational restrictions, BRAD will diligently work to
correct the cause(s)
relating thereto and Buyer will provide all reasonable
assistance, if
required.
7.0 Limitation
7.1 *
8.0 The provisions of this Letter Agreement are personal to
Buyer and
shall not be assigned or otherwise disposed of by Buyer
except as
part of an assignment of the Agreement without the prior
written
consent of BRAD.
9.0 This Letter Agreement constitutes an integral part of
the
Agreement and subject to the terms and conditions contained
therein.
10.0 In the event of Termination of the
Agreement, this Letter Agreement shall
become automatically null and void
unless this Agreement is terminated by
Buyer pursuant to Article 16.1 or 16.2
as a result of a default or breach of
this Agreement by BRAD, or as a result
of an Excusable Delay * in which event
the terms and conditions of this
Aircraft will continue to apply to the
Aircraft delivered prior to the date of
termination.
Should there be any inconsistency between this Letter
Agreement and the
Agreement with respect to the subject matter covered by the
terms
hereof, then this Letter Agreement shall prevail.
Yours very truly,
BOMBARDIER INC.
________________________ Date:_____________
Michel Bourgeois
Vice President, Contracts
Acknowledged and Accepted
Atlantic Coast Airlines
________________________ Date:_____________
James B. Glennon
Sr. Vice President and C.F.O.
* CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED
SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A
CONFIDENTIAL TREATMENT REQUEST.
January 8 1997
Our Ref: B96-7701-RJTL-RJ0350-007
Atlantic Coast Airlines
1 Export Drive,
Sterling, Virginia,
U.S.A. 20164
Gentlemen,
Letter Agreement No. 007 to Purchase Agreement No. RJ-0350
dated January 8,
1997 (the "Agreement") between Bombardier Inc. ("BRAD") and
Atlantic Coast
Airlines ("Buyer") relating to the purchase of twelve (12)
Canadair Regional
Jet Aircraft (the "Aircraft")
Subject: Financing
1.0 This letter constitutes an integral part of the
Agreement and evidences
our further agreement with the matters set forth below. All
terms used
herein and in the Agreement and not defined herein, shall
have the same
meaning as in the Agreement.
1.1 This Letter Agreement describes the
general terms and conditions of the
financing assistance to be provided by
BRAD to Buyer. * collectively referred
to as the "Financed Aircraft").
2.0 Financing Assistance
2.1 Lease financing of the Financed
Aircraft will be arranged by Buyer
working in close coordination with and
supported by BRAD with backstop
financing to be underwritten by BRAD as
generally outlined below. Any
information related to the form and
amount of any support which may be
provided by BRAD is to be treated as
confidential and is not to be provided
by Buyer to any third party without the
express written consent of BRAD and then
only subject to the third party agreeing
to BRAD's confidentiality agreement. It
is Buyer's responsibility to have such
for executed with any third party prior
to Buyer's disclosure of any such
information and to provide such form to
BRAD for approval. The above does not
apply where Buyer or the applicable
third party is required to disclose such
information by law or compelled by court
order to do so. It is acknowledged that
Buyer's advisor Babcock & Brown has
received a copy of this proposal and
that BRAD and Babcock & Brown will
execute a confidentiality agreement.
2.2 *
2.3 Buyer and BRAD will work together
to structure, arrange and source
acceptable third party lease financing
based on Buyer's and Guarantor's credit.
If Buyer, in conjunction with BRAD, is
unable to arrange such lease financing
as described above in the first sentence
of paragraph 2.1 on the basis of Buyer's
and Guarantor's credit, *
2.4 *
2.5 *
2.6 *
2.7 *
*
2.8 *
2.9 *
3.0 *
4.0 In the event of the termination of
the Agreement pursuant to Article 16.2
or 16.2 as a result of a default or
breach of this Agreement by Buyer, or in
the event of a default of Buyer (or its
assignee) under a financing arrangement
referred to Letter Agreement No. 7 which
results in termination of such
agreement, this Letter Agreement shall
become automatically null and void.
5.0 The provisions of this Letter
Agreement are personal to Buyer and
shall not be assigned or otherwise
disposed of by Buyer except as part of
an assignment of the Agreement expressly
permitted by Article 20 of the
Agreement.
Should there be any inconsistency between this Letter
Agreement and the
Agreement with respect to the subject matter covered by the
terms hereof, then
this Letter Agreement shall prevail.
Yours truly,
BOMBARDIER INC.
________________________ Date:_____________
Michel Bourgeois
Vice President, Contracts
Acknowledged and Accepted
Atlantic Coast Airlines
________________________ Date:_____________
James B. Glennon
Sr. Vice President and C.F.O.
*
[TWO PAGE CONFIDENTIAL ANNEX OMITTED]
* CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED
SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A
CONFIDENTIAL TREATMENT REQUEST.
January 8, 1997
Our Ref: B96-7701-RJTL-RJ0350-008
Atlantic Coast Airlines
1 Export Drive,
Sterling, Virginia,
U.S.A. 20164
Gentlemen,
Letter Agreement No. 008 to Purchase Agreement No. RJ-0350
dated January 8,
1997 (the "Agreement" between Bombardier Inc. ("BRAD") and
Atlantic Coast
Airlines ("Buyer") relating to the purchase of twelve (12)
Canadair Regional
Jet Aircraft (the "Aircraft")
Subject: Schedule Completion Rate
1.0 This letter constitutes an integral part of the
Agreement and
evidences our further agreement with the matters set forth
below.
All terms used herein and in the Agreement and not defined
herein,
shall have the same meaning as in the Agreement.
2.0 Intent
The intent of the Schedule Completion
Rate * is to achieve the full
potential fo the inherent technical
reliability of the Aircraft *
3.0 Definition
*
4.0 *
*
5.0 *
*
6.0 Formula
*
7.0 Assumptions
*
8.0 Conditions and Limitations
8.1 *
*
8.2 Reporting
Buyer shall provide to BRAD not later
than * all reports as required by
Buyer's regulatory authority relating to
dispatch reliability and schedule
completion. * Buyer shall also provide
BRAD such other information and data as
BRAD may reasonably request for the
purpose of analyzing * BRAD shall
respond to the data in a timely manner
and shall provide Buyer with a summary
of fleetwide dispatch reliability
reports *
8.3 Master Record
The master record of Schedule Completion
Rate will be maintained by BRAD in its
format based upon information provided
by Buyer's maintenance control program
as requested herein.
BRAD will provide a copy to Buyer of the
data. Buyer shall review the data and
if it is not in agreement with Buyer's
records, Buyer and BRAD will consult to
resolve and differences.
9.0 Corrective Action
9.1 In the event the achieved schedule
completion rate, as reported to Buyer by
BRAD, * BRAD and Buyer will jointly
review the performance for that period
to identify improvement changes
required. *
*
9.2 * shall be dependent upon the
quality, extent and regularity of
information and data reported to BRAD by
Buyer.
10.0 Implementation of Changes
Buyer may, at its option, decline to
implement any change proposed by BRAD
under Article 9.0 above. If Buyer so
declines, *
11.0 *
*
12.0 *
*
13.0 Limitation of Liability
*
14.0 The provisions of this Letter Agreement are personal to
Buyer and shall not be assigned or otherwise disposed of by
Buyer without the prior written consent of BRAD, which
consent shall not be unreasonably withheld.
15.0 This Letter Agreement constitutes an integral part of
the
Agreement and subject to the terms and conditions contained
therein.
16.0 In the event of the Termination of the Agreement, this
Letter
Agreement shall become automatically null and void.
Should there be any inconsistency between this Letter
Agreement and the
Agreement with respect to the subject matter covered by the
terms
hereof, then this Letter Agreement shall prevail.
Yours truly,
BOMBARDIER INC.
________________________ Date:_____________
Michel Bourgeois
Vice President, Contracts
Acknowledged and Accepted
Atlantic Coast Airlines
________________________ Date:_____________
James B. Glennon
Sr. Vice President and C.F.O.
* CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED
SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A
CONFIDENTIAL TREATMENT REQUEST.
January 8, 1997
Our Ref: B96-7701-RJTL-RJ0350-009
Atlantic Coast Airlines
1 Export Drive,
Sterling, Virginia,
U.S.A. 20164
Dear Sirs,
Letter Agreement No. 009 to Purchase Agreement No. RJ-0350
dated January
8, 1997 (the "Agreement" between Bombardier Inc. ("BRAD")
and Atlantic
Coast Airlines, Inc. ("Buyer") relating to the purchase of
twelve (12)
Canadair Regional Jet Aircraft (the "Aircraft")
Subject: Airframe Direct Maintenance Cost
1.0 This letter constitutes an integral part of the
Agreement and
evidences our further agreement with the matters set forth
below.
All terms used herein and in the Agreement and not defined
herein,
shall have the same meaning as in the Agreement.
2.0 Intent
2.1 The intent of the Airframe direct
maintenance cost * is to achieve the
full potential of the maintainability of
the Aircraft *
2.2 The "Airframe" shall mean the
Aircraft excluding Power Plant Parts,
APU parts, seatcovers and carpets,
Collins Avionics Components, Buyer
Furnished Equipment (BFE) and Ground
Support Equipment (GSE).
3.0 Airframe Direct Maintenance Cost *
3.1 *
3.1.1 The term of this Letter
Agreement shall commence on the first
day of the month following delivery of
the first Aircraft and shall end five
(5) years thereafter;
3.1.2 *
3.1.3 *
3.2 *
*
4.0 Calculation of Cost
4.1 Airframe Direct Maintenance
Material Cost ("ADMMC")
The ADMMC is defined as the cost of
material consumed, which excludes
initial provisioning purchases, for the
direct airframe maintenance of the
aircraft, less any transportation,
duties, taxes or license fees.
Notwithstanding Buyer's internal cost
allocation system all elements of
indirect material such as cleaning
supplies, consumable tools, hydraulic
fluids, oils and greases, welding
supplies and adhesives are excluded from
the calculation of ADMMC.
4.2 Airframe Direct Outside Service
Cost ("ADOSC")
The ADOSC is defined as the cost
expended in outside services for direct
airframe and component maintenance of
the aircraft. The ADOSC shall include
the total outside service charges of
both labour and material costs, but
excluding transportation and taxes.
4.3 Hourly Airframe Direct Maintenance
Cost ("ADMC")
The following formula shall be used to
calculate the hourly ADMC:
ADMC = ADMMC + ADOSC
T
Where:
ADMMC = Airframe Direct
Maintenance Material Cost,
ADOSC = Airframe Direct
Outside Service Cost,
T = Total flight hours for
the Aircraft recorded
for the applicable period
4.4 Exclusion of In-House Labour Costs
For more certainty, the parties agree
that all labour costs incurred in-house
by Buyer in maintaining the Aircraft,
including but not limited to scheduled
and routine maintenance,
troubleshooting, removal and
installation of parts, is excluded *
5.0 *
5.1 *
5.2 *
*
5.3 *
5.4 *
6.0 Final Adjustment
6.1 *
6.2 *
*
6.3 *
6.4 *
6.5 *
6.6 *
6.7 *
*
6.7 *
7.0 *
*
8.0 Reporting
8.1 Buyer will furnish data to BRAD to
allow BRAD to carry out its analysis and
tracking of Buyer's maintenance costs
with respect to * If Buyer is not in
agreement with BRAD's request for
specific data and format, Buyer and BRAD
will consult to resolve any differences.
8.2 BRAD shall provide a quarterly
report to Buyer on the status of the
Airframe direct maintenance cost based
on the data submitted by Buyer and
approved by BRAD. BRAD shall review the
report and, if the supporting data is
not in agreement with Buyer's records,
Buyer and BRAD will consult to resolve
any differences. *
8.3 BRAD shall not contest any data, as
supplied by Buyer, once the * has been
agreed to.
8.4 *
9.0 Limitation of Liability
*
10.0 The provisions of this Letter
Agreement are personal to Buyer and
shall not be assigned or otherwise
disposed of by Buyer without the prior
written consent of BRAD, which shall not
be unreasonably withheld.
11.0 This Letter Agreement constitutes an integral part of
the Agreement and subject to the terms and conditions
contained therein.
12.0 In the event of the termination of the Agreement, this
Letter Agreement shall become automatically null and void
unless this Agreement is terminated by Buyer pursuant to
Article 16.1 or 16.2 as a result of a default of breach of
this Agreement by BRAD, or as a result of an Excusable Delay
or *
Should there be any inconsistency between this Letter
Agreement
and the Agreement with respect to the subject matter covered
by
the terms hereof, then this Letter Agreement shall prevail.
Yours very truly,
BOMBARDIER INC.
________________________ Date:_____________
Michel Bourgeois
Vice President, Contracts
Acknowledged and Accepted
Atlantic Coast Airlines
________________________ Date:_____________
James B. Glennon
Sr. Vice President and C.F.O.
APPENDIX A
AIRFRAME DIRECT MAINTENANCE COST *
*
The following is a listing of all assumptions used to
determine * per flight hour. It is understood by the
parties that these assumptions may change in which case the
parties, with mutual agreement, will adjust *
1. All costs are based upon Specification.
2. All costs are based on the maintenance inspection
intervals in the Buyer's regulatory agency
approved maintenance program.
3. All costs are expressed in July 1, 1996 United States
Dollars subject to escalation in accordance with the
terms of Appendix I of the Agreement, and are rounded
to the nearest whole dollar.
5. Buyer's subcontract airframe labour rate per man-hour
is *
6. *
7. Annual average Aircraft utilization is not more than *
flight hours per year.
8. Buyer's average annual flight duration for the Aircraft
will be * minutes per departure.
Should Buyer's average annual flight duration change
throughout the * a new Airframe Direct Maintenance Cost *
value will be generated as per the following formula:
*
9. Buyer's subcontracted maintenance cost levels are:
*
* CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED
SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A
CONFIDENTIAL TREATMENT REQUEST.
January 8, 1997
Our Ref: B96-7701-RJTL-RJ0350-010
Atlantic Coast Airlines
1 Export Drive,
Sterling, Virginia,
U.S.A. 20164
Gentlemen,
Letter Agreement No. 010 to Purchase Agreement No. RJ-0350
dated January 8,
1997 (the "Agreement" between Bombardier Inc. ("BRAD") and
Atlantic Coast
Airlines ("Buyer") relating to the purchase of twelve (12)
Canadair Regional
Jet Aircraft (the "Aircraft")
Subject: Additional Customer Support
1.0 This letter constitutes an integral part of the
Agreement and evidences
our further agreement with the matters set forth below. All
terms used
herein and in the Agreement and not defined herein, shall
have the same
meaning as in the Agreement.
2.0 Training
2.1 General Terms
2.1.1 The objective of the training programs (the
"Programs"), as
described herein, shall be to familiarize and assist Buyer's
personnel in the introduction, operation, and maintenance of
the
aircraft.
BRAD shall offer to the Buyer the Programs in the
English language
at a BRAD designated facility.
*
2.1.2 *
2.1.3 The Programs shall be designed to reflect the
model and/or the
configuration of the Aircraft and may include differences
training
to identify such configuration or model. Manuals and
training
materials which are provided during the Programs exclude
revision
service.
2.1.4 A Training Conference shall be held where possible
no later than
six (6) months prior to the Scheduled Delivery of the first
aircraft to the Buyer, or as may be otherwise agreed, to
establish
the Programs' content and schedule.
2.2 *
*
2.3 *
*
3.0 *
4.0 *
4.1 *
4.2 *
5.0 Manuals on CD-ROM
5.1 BRAD and Buyer are aware that BRAD is currently in the
process of investigating and bringing on-line CD-ROM
versions of various manuals. BRAD hereby commits that in
the event that it is able to successfully and cost-
effectively complete this program, it will provide Buyer
with CD-ROM versions of Buyer's technical publications *
6.0 *
7.0 The provisions of this Letter Agreement are personal to
Buyer and shall not be assigned or otherwise disposed of by
Buyer except as part of an assignment of the Agreement
expressly permitted by Article 20 of the Agreement (with the
exception of Article 4.0 hereof, which can only be assigned
to a wholly owned subsidiary).
8.0 This Letter Agreement constitutes an integral part of
the
Agreement and subject to the terms and conditions contained
therein.
9.0 In the event of the Termination of the Agreement, this
Letter Agreement shall become automatically null and void.
Should there be any inconsistency between this Letter
Agreement
and the Agreement with respect to the subject matter covered
by the terms hereof, then this Letter Agreement shall
prevail.
Yours very truly,
BOMBARDIER INC.
________________________ Date:_____________
Michel Bourgeois
Vice President, Contracts
Acknowledged and Accepted
Atlantic Coast Airlines
________________________ Date:_____________
James B. Glennon
Sr. Vice President and C.F.O.
* CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED
SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A
CONFIDENTIAL TREATMENT REQUEST.
January 8, 1997
Our Ref: B96-7701-RJTL-RJ0350-011
Atlantic Coast Airlines
1 Export Drive,
Sterling, Virginia,
U.S.A. 20164
Gentlemen,
Letter Agreement No. 011 to Purchase Agreement No. RJ-0350
dated
January 8, 1997 (the "Agreement" between Bombardier Inc.
("BRAD")
and Atlantic Coast Airlines ("Buyer") relating to the
purchase of
twelve (12) Canadair Regional Jet Aircraft (the "Aircraft")
Subject: Spares
1.0 This letter constitutes an integral part of the
Agreement
and evidences our further agreement with the matters set
forth below. All terms used herein and in the Agreement and
not defined herein, shall have the same meaning as in the
Agreement.
2.0 *
3.0 *
4.0 The provisions of this Letter Agreement are personal to
Buyer and shall not be assigned or otherwise disposed of by
Buyer except as part of an assignment of the Agreement (in
whole but not in part) expressly permitted by Article 20 of
the Agreement.
5.0 This Letter Agreement constitutes an integral part of
the
Agreement and subject to the terms and conditions contained
therein.
6.0 In the event of the Termination of the Agreement, this
Letter Agreement shall become automatically null and void.
Should there be any inconsistency between this Letter
Agreement
and the Agreement with respect to the subject matter covered
by
the terms hereof, then this Letter Agreement shall prevail.
Yours very truly,
BOMBARDIER INC.
________________________ Date:_____________
Michel Bourgeois
Vice President, Contracts
Acknowledged and Accepted
Atlantic Coast Airlines
________________________ Date:_____________
James B. Glennon
Sr. Vice President and C.F.O.
* CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED
SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A
CONFIDENTIAL TREATMENT REQUEST.
January 8, 1997
Our Ref: B96-7701-RJTL-RJ0350-012
Atlantic Coast Airlines
1 Export Drive,
Sterling, Virginia,
U.S.A. 20164
Gentlemen,
Letter Agreement No. 012 to Purchase Agreement No. RJ-0350
dated January
8, 1997 (the "Agreement" between Bombardier Inc. ("BRAD")
and Atlantic
Coast Airlines ("Buyer") relating to the purchase of twelve
(12)
Canadair Regional Jet Aircraft (the "Aircraft")
Subject: Marketing Support
1.0 This letter constitutes an integral part of the
Agreement and
evidences our further agreement with the matters set forth
below.
All terms used herein and in the Agreement and not defined
herein,
shall have the same meaning as in the Agreement.
2.0 *
3.0 The provisions of this Letter Agreement are personal to
Buyer and
shall not be assigned or otherwise disposed of by Buyer
except as
part of an assignment of the Agreement expressly permitted
under
Article 20 of the Agreement.
4.0 This Letter Agreement constitutes an integral part of
the
Agreement and subject to the terms and conditions contained
therein.
5.0 In the event of the Termination of the Agreement, this
Letter
Agreement shall become automatically null and void.
Should there be any inconsistency between this Letter
Agreement and the
Agreement with respect to the subject matter covered by the
terms
hereof, then this Letter Agreement shall prevail.
Yours very truly,
BOMBARDIER INC.
________________________ Date:_____________
Michel Bourgeois
Vice President, Contracts
Acknowledged and Accepted
Atlantic Coast Airlines
________________________ Date:_____________
James B. Glennon
Sr. Vice President and C.F.O.
* CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED
SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A
CONFIDENTIAL TREATMENT REQUEST.
January 8, 1997
Our Ref: B96-7701-RJTL-RJ0350-013
Atlantic Coast Airlines
1 Export Drive,
Sterling, Virginia,
U.S.A. 20164
Gentlemen,
Letter Agreement No. 013 to Purchase Agreement No. RJ-0350
dated January 8,
1997 (the "Agreement" between Bombardier Inc. ("BRAD") and
Atlantic Coast
Airlines ("Buyer") relating to the purchase of twelve (12)
Canadair Regional
Jet Aircraft (the "Aircraft")
Subject: Spares Credit
1.0 This letter constitutes an integral part of the
Agreement and evidences
our further agreement with the matters set forth below. All
terms used
herein and in the Agreement and not defined herein, shall
have the same
meaning as in the Agreement.
2.0 *
3.0 *
*
4.0 *
5.0 The provisions of this Letter Agreement are personal to
Buyer and
shall not be assigned or otherwise disposed of by Buyer
except as
part of an assignment of the Agreement expressly permitted
in
Article 20 of the Agreement.
6.0 This Letter Agreement constitutes an integral part of
the
Agreement and subject to the terms and conditions contained
therein.
7.0 In the event of the Termination of the Agreement, this
Letter
Agreement shall become automatically null and void with
respect to
any undelivered Aircraft.
Should there be any inconsistency between this Letter
Agreement and the
Agreement with respect to the subject matter covered by the
terms
hereof, then this Letter Agreement shall prevail.
Yours very truly,
BOMBARDIER INC.
________________________ Date:_____________
Michel Bourgeois
Vice President, Contracts
Acknowledged and Accepted
Atlantic Coast Airlines
________________________ Date:_____________
James B. Glennon
Sr. Vice President and C.F.O.
* CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED
SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A
CONFIDENTIAL TREATMENT REQUEST.
January 8, 1997
Our Ref: B96-7701-RJTL-RJ0350-014
Atlantic Coast Airlines
1 Export Drive,
Sterling, Virginia,
U.S.A. 20164
Gentlemen,
Letter Agreement No. 014 to Purchase Agreement No. RJ-0350
dated January
8, 1997 (the "Agreement" between Bombardier Inc. ("BRAD")
and Atlantic
Coast Airlines ("Buyer") relating to the purchase of twelve
(12)
Canadair Regional Jet Aircraft (the "Aircraft")
Subject: Taxes, Duties and Licenses
1.0 This letter constitutes an integral part of the
Agreement and
evidences our further agreement with the matters set forth
below.
All terms used herein and in the Agreement and not defined
herein,
shall have the same meaning as in the Agreement.
2.0 The parties contemplate that at time of delivery, the
Aircraft
will be sold to a United States company or other USA entity
(the
"Lessor"), and directly exported from Canada and
subsequently
leased to Buyer. *
3.0 *
*
4.0 *
5.0 The provisions of this Letter Agreement are personal to
Buyer and
shall not be assigned or otherwise disposed of by Buyer
except as
part of an assignment of the Agreement expressly permitted
by
Article 20 of the Agreement without the prior written
consent of
BRAD.
6.0 This Letter Agreement constitutes an integral part of
the
Agreement and subject to the terms and conditions contained
therein.
7.0 In the event of the Termination of the Agreement, this
Letter
Agreement shall become automatically null and void.
Should there be any inconsistency between this Letter
Agreement and the
Agreement with respect to the subject matter covered by the
terms
hereof, then this Letter Agreement shall prevail.
Yours very truly,
BOMBARDIER INC.
________________________ Date:_____________
Michel Bourgeois
Vice President, Contracts
Acknowledged and Accepted
Atlantic Coast Airlines
________________________ Date:_____________
James B. Glennon
Sr. Vice President and C.F.O.
* CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED
SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A
CONFIDENTIAL TREATMENT REQUEST.
January 8, 1997
Our Ref: B96-7701-RJTL-RJ0350-015
Atlantic Coast Airlines
1 Export Drive,
Sterling, Virginia,
U.S.A. 20164
Gentlemen,
Letter Agreement No. 015 to Purchase Agreement No. RJ-0350
dated January
8, 1997 (the "Agreement" between Bombardier Inc. ("BRAD")
and Atlantic
Coast Airlines ("Buyer") relating to the purchase of twelve
(12)
Canadair Regional Jet Aircraft (the "Aircraft")
Subject: Airworthiness Directives
1.0 Intent
In consideration of Buyer entering into
the above-referenced Agreement, BRAD
states that it is its intention to
incorporate before delivery of the
Aircraft any Mandatory Modification
Service Bulletins outstanding on the
Aircraft. *
2.0 Applicability
The provisions of this Letter Agreement
will apply to mandatory Airworthiness
Directives ("AD"), and resulting service
bulletins, issued by the DOT and/or the
FAA pursuant to applicable regulations
prior to the time of delivery of any
Aircraft ("Mandatory Modification
Service Bulletins").
3.0 Conditions
For any Mandatory Modification Service
Bulletin not incorporated on the
Delivery Date, as defined in Article 2.0
above, BRAD shall, subject to the
provisions of Article 8.5 of the
Agreement, * as defined in the service
bulletin, as provided in Article 4
hereof.
4.0 *
*
*
5.0 This letter constitutes an integral part of the
Agreement and
evidences our further agreement with the matters set forth
below.
All terms used herein and in the Agreement and not defined
herein,
shall have the same meaning as in the Agreement.
6.0 The provisions of this Letter Agreement are personal to
Buyer and shall not be assigned or otherwise disposed of by
Buyer except as part of an assignment of the Agreement
expressly permitted in Article 20 of the Agreement.
7.0 In the event of the termination of
the Agreement, this Letter Agreement
shall become automatically null and void
unless this Agreement is terminated by
Buyer pursuant to Article 16.1 or 16.2
as a result of a default or breach of
this Agreement by BRAD, in which event
the terms and Conditions of this Letter
Agreement will continue to apply to the
Aircraft delivered prior to the date of
termination.
Should there be any inconsistency between this Letter
Agreement
and the Agreement with respect to the subject matter covered
by
the terms hereof, then this Letter Agreement shall prevail.
Yours very truly,
BOMBARDIER INC.
________________________ Date:_____________
Michel Bourgeois
Vice President, Contracts
Acknowledged and Accepted
Atlantic Coast Airlines
________________________ Date:_____________
James B. Glennon
Sr. Vice President and C.F.O.
* CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED
SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A
CONFIDENTIAL TREATMENT REQUEST.
January 8, 1997, 1996
Our Ref: B96-7701-RJTL-RJ0350-016
Atlantic Coast Airlines
1 Export Drive,
Sterling, Virginia,
U.S.A. 20164
Gentlemen,
Letter Agreement No. 016 to Purchase Agreement No. RJ-0350
dated January
8, 1997 (the "Agreement" between Bombardier Inc. ("BRAD")
and Atlantic
Coast Airlines ("Buyer") relating to the purchase of twelve
(12)
Canadair Regional Jet Aircraft (the "Aircraft")
Subject: Reconciliation
1.0 The parties recognize that in the
course of administration of this
Agreement, * in accordance with the
terms of the Agreement.
2.0 *
*
3.0 *
4.0 This letter constitutes an integral part of the
Agreement and
evidences our further agreement with the matters set forth
below.
All terms used herein and in the Agreement and not defined
herein,
shall have the same meaning as in the Agreement.
5.0 The provisions of this Letter Agreement are personal to
Buyer and
shall not be assigned or otherwise disposed of by Buyer
except as
part of an assignment of the Agreement (in whole not in
part)
expressly permitted under Article 20 of the Agreement and
otherwise
such consent shall not be unreasonably withheld.
6.0 In the event of the Termination of the Agreement, this
Letter
Agreement shall become automatically null and void.
7.0 Should there be any inconsistency between this Letter
Agreement and
the Agreement with respect to the subject matter covered by
the
terms hereof, then this Letter Agreement shall prevail.
Yours very truly,
BOMBARDIER INC.
________________________ Date:_____________
Michel Bourgeois
Vice President, Contracts
Acknowledged and Accepted
Atlantic Coast Airlines
________________________ Date:_____________
James B. Glennon
Sr. Vice President and C.F.O.