Initials
Buyer________ BRAD
______
Exhibit 10.40A
CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL
TREATMENT REQUEST.
PURCHASE AGREEMENT BETWEEN BOMBARDIER, INC. AND
ATLANTIC COAST AIRLINES, AS AMENDED
BOMBARDIER REGIONAL AIRCRAFT DIVISION
PURCHASE AGREEMENT
RJ-0350
BETWEEN
BOMBARDIER INC.
AND
ATLANTIC COAST AIRLINES
Relating to the Purchase of
Thirty-three (33) 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-RJ0350-001A 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-RJ0350-005A FIPP
B96-7701-RJTL-RJ0350-006 Operational Restrictions
B96-7701-RJTL-RJ0350-007A 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
B97-7701-AP-RJ0350-017 Spare Parts Price Catalogue
B97-7701-AP-RJ0350-018 Exercise of Twelve Option Aircraft
B97-7701-AP-RJ0350-019 Transferability of Aircraft
Delivery Positions
B97-7701-AP-RJ0350-020 United Approval
B97-7701-AP-RJ0350-021 Flight Data Recorder
B97-7701-AP-RJ0350-022 Cargo Floorboards
Letter Agreement No. 023 n/a
B98-7701-AP-RJ0350-024 Additional Option Aircraft
Letter Agreement No. 025 n/a
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 515A Shaw Road, Sterling,
Virginia, U.S.A. 20166 ("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 thirty-three (33)
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 thirty-three (33) 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, for the first through eighth Aircraft, is
[ *
] expressed in
July 1, 1995 dollars.
(c) The base price of the Buyer Selcted Optional
Features, for the ninth and subsequent Aircraft, 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) or (c), as applicable (the "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"). [ *
]
[ *
]
[ *
]
[ *
]
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. 1B.
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 on or before April 1, 1997.
The total sum of Fifteen Million ($15,000,000
U.S.) United States Dollars (the "Total Deposit") will
be retained by BRAD [ *
]
[ *
]
[ *
]
5.2.2 Notwithstanding the provisions of Article 5.2.1 (b)
above, should Buyer not be in a position to provide the
total Eleven Million ($ 11,000,000 U.S.) United States
Dollars referred to in Article 5.2.1 (b) by April 1, 1997,
[ *
]
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
July 15, 1997. 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 April 1, 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 less 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:
(a) Transfer to: [ *
]
(b) For credit to: [ *
]
(c) For further credit to: [ *
]
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:
Account Name: [ * ]
Bank Name: [ *
]
Account No.: [ * ]
Bank ABA: [ * ]
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
Article 13.2(b), 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 may 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
[ * ] and
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 a 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 [ *
] 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 Agreement 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
515A Shaw Road,
Dulles, Virginia
U.S.A. 20166
Attention: General Counsel
Telephone: 703-925-6000
Facsimile: 703-925-6294
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 and costs (including
reasonable attorney fees
[ *
]
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 detailed 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 Patent
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.
Should BRAD be required to submit supplementary claims to
Buyer, Buyer and BRAD hereby agree that BRAD will deduct
these supplementary claims from the next FIPP Contributions
payable, such FIPP Contributions being identified in Letter
Agreement No. 5005B. Should the supplementary claims not be
fully covered by future FIPP Contributions, Buyer and BRAD
agree to meet and arrive at a mutually agreeable method of
payment for those services not fully covered by FIPP
Contributions.
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 [ * ]
Thirteenth Aircraft [ * ]
Fourteenth Aircraft [ * ]
Fifteenth Aircraft [ * ]
Sixteenth Aircraft [ * ]
Seventeenth Aircraft [ * ]
Eighteenth Aircraft [ * ]
Nineteenth Aircraft [ * ]
Twentieth Aircraft [ * ]
Twenty-first Aircraft [ * ]
Twenty-second Aircraft [ * ]
Twenty-third Aircraft [ * ]
Twenty-fourth Aircraft [ * ]
Twenty-fifth Aircraft [ * ]
Twenty-sixth Aircraft [ * ]
Twenty-seventh Aircraft [ * ]
Twenty-eighth Aircraft [ * ]
** Twenty-ninth Aircraft [ * ]
** Thirtieth Aircraft [ * ]
Thirty-first Aircraft [ * ]
Thirty-second Aircraft [ * ]
APPENDIX II
DELIVERY SCHEDULE (CONTINUED)
Thirty-third Aircraft [ * ]
Thirty-fourth Aircraft [ * ]
** Thirty-fifth Aircraft [ * ]
Thirty-sixth Aircraft [ * ]
** Thirty-seventh Aircraft [ * ]
** Thirty-eighth Aircraft [ * ]
** Thirty-ninth Aircraft [ * ]
** Fortieth Aircraft [ * ]
** Forty-first - Aircraft [ * ]
** Forty-second Aircraft [ * ]
** Forty-third Aircraft [ * ]
APPENDIX III
SPECIFICATION
TYPE SPECIFICATION
[ * ]
[ * ]
APPENDIX IV (A)
AIRCRAFT ONE THROUGH EIGHT
BUYER SELECTED OPTIONAL FEATURES
CR No. Description
Price
(in July, 1995 US$)
00-008 Higher Design Weights (51,000 lbs MTOW) - ER [ *
]
00-009 Centre Wing Fuel Tank [ *
]
00-013 FAA Collins Strapping [ *
]
F/A Call Annunciation Lights [ *
]
Interior - Universal North American [ *
]
Class C Baggage Compartment minus temperature [ *
control ]
Reduced V2 Vref Speed [ *
]
30-001 Red Anti-Ice Warning Light (FAA) [ *
]
Logo Lights (includes Cargo Door Light) [ *
]
30-003 Red Beacon Lights [ *
]
33-027 Altimeter Reset Auto Flash [ *
]
34-031 Single Collins FMS 4100* [ *
]
EROS Magic Mask [ *
]
72-002 GE CF34-3B1 Engine - Series 200 [ *
]
00-012 Additional Flap Setting [ *
]
25-077 Exterior Paint Scheme - ACA (1st thru 4th A/C [ *
only) ]
25-305 Ext. Paint Scheme [ *
[ * ]
]
Avicom Announcement and Boarding Music System [ *
]
34-037 Single GPS 4000 (CR 34-037) [ *
]
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.
[ *
]
[ *
]
APPENDIX IV (B)
AIRCRAFT NINE AND SUBSEQUENT
BUYER SELECTED OPTIONAL FEATURES
CR No. Description
Price
(in July, 1995 US$)
00-008 Higher Design Weights (51,000 lbs MTOW) - ER [ *
]
00-009 Centre Wing Fuel Tank [ *
]
00-013 FAA Collins Strapping [ *
]
F/A Call Annunciation Lights [ *
]
Interior - Universal North American [ *
]
Class C Baggage Compartment minus temperature [ *
control ]
Reduced V2 Vref Speed [ *
]
30-001 Red Anti-Ice Warning Light (FAA) [ *
]
Logo Lights (includes Cargo Door Light) [ *
]
30-003 Red Beacon Lights [ *
]
33-027 Altimeter Reset Auto Flash [ *
]
34-031 Single Collins FMS 4100* [ *
]
EROS Magic Mask [ *
]
72-002 GE CF34-3B1 Engine - Series 200 [ *
]
00-012 Additional Flap Setting [ *
]
25-077 Exterior Paint Scheme - ACA (1st thru 4th A/C [ *
only) ]
25-305 Ext. Paint Scheme [ *
[ * ]
]
Avicom Announcement and Boarding Music System [ *
** ]
23-363 *** Passenger Briefing and Music System [ *
Provisions(1) ]
34-037 Single GPS 4000 (CR 34-037) [ *
]
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.
[ *
]
[ *
]
(1) Incorporation of Passenger Briefing and Music System Provisions
effective on Eighth Aircraft and subsequent.
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
[ * ] based on the
purchase and delivery of thirty-three (33) Aircraft to Buyer
(should Buyer eventually exercise and take delivery of less
than thirty-three (33) Aircraft, the term shall be accordingly
amended as per Letter Agreement No. 003A Article 3.0), 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 [ *
]
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's [ *
]
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 7.5% 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
At no additional charge, BRAD shall provide access to a TC or
FAA approved flight simulator for the crews trained under
Annex A Article 3.2.1. BRAD shall provide a simulator and a
simulator instructor for up to eight (8) missions for the
crews 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
At no additional charge, with each delivered Aircraft, BRAD
shall 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
At no additional charge, with each delivered Aircraft, BRAD
shall 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.
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.
Bombardier Inc.
Bombardier Regional Aircraft
Division
Garratt Boulevard
Downsview, Ontario
Canada M3K 1Y5
Telephone (416) 633-7310
January 29, 1998
Our Ref: B96-7701-RJTL-RJ0350-001B
Atlantic Coast Airlines
515A Shaw Road,
Dulles, Virginia,
U.S.A. 20166
Gentlemen,
This Letter Agreement 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").
This Letter Agreement No. 001B dated April 24, 1997 cancels and
supersedes Letter Agreement No. 001A, dated April 16, 1997
Subject: Credit Memorandum
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.
Recital
As provided in Letter Agreement RJ0350-13 to the Agreement as amended by
this Contract Change Order herein, Buyer has elected to receive
[ * ] out of the total credit memorandum available to Buyer
in accordance with Letter Agreement RJ0350-001, in the form of a
[ * ] credit memorandum for the [ * ]
Aircraft. As stipulated in Letter Agreement RJ0350-13, such credit
memorandum shall be utilized by Buyer [ *
]
Notwithstanding the above, and in order to assist Buyer in the
acquisition of [ * ] BRAD agrees, subject always to Buyer
being in compliance with all terms and conditions of the Agreement, to
provide Buyer each of the [ * ] credit memorandum allocated to
the [ * ] Aircraft at time of delivery of the First
Aircraft as set forth below;
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 twenty-three (23) Aircraft, BRAD will
issue to Buyer upon delivery and payment for the price of the
Aircraft in accordance with the Agreement, a credit memorandum in
the amount of (i) [ *
], or (ii) [ *
]
***3.0 In addition, BRAD will, a) issue to Buyer upon delivery
and payment in full for the
First Aircraft, [ * ] credit memorandum in the
amount of [ *
] and b), issue
to Buyer upon delivery and payment in
full for the Fifth Aircraft, a [ * ] credit
memorandum in the amount of [ *
] Each of the
credit memorandum in a) and b) above, shall be made available to
Buyer by reducing the escalated value of the credit memoranda
listed in 2.0 above by [ * ] for each of the
[ * ] Aircraft, resulting a corresponding increase
in the [ *
] as stated in
Letter Agreement RJ0350-13 Such credit memoranda as provided by
BRAD above, will be used [ *
]
4.0 [ *
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".
5.0 Notwithstanding the provisions of this Letter Agreement, in the
case of any Aircraft where the [ *
]
6.0 In the event of the Termination of the Agreement, this Letter
Agreement shall become automatically null and void with respect to
any undelivered Aircraft.
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
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:_____________
Scott Crawford
Senior Contracts Account Executive
Acknowledged and Accepted
Atlantic Coast Airlines
________________________ Date:_____________
Rick Kennedy
General Counsel and Corporate Secretary
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
satisfactory 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.
Bombardier Inc.
Bombardier Regional Aircraft
Division
Garratt Boulevard
Downsview, Ontario
Canada M3K 1Y5
Telephone (416) 633-7310
December 17, 1998
Our Ref: B98-7701-RJTL-RJ0350-003B
Atlantic Coast Airlines
515A Shaw Road,
Sterling, Virginia,
U.S.A. 20166
Gentlemen,
Letter Agreement No. 003B 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 forty-
three (43) Canadair Regional Jet Aircraft (the "Aircraft")
This Letter Agreement No. 003B dated December 17, 1998 cancels and
supersedes Letter Agreement No. 003A dated March 31, 1998 .
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 seventeen (17) 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 Special 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 the Agreement, the
terms and conditions of the Agreement (including Letter
Agreements, except as noted below) shall apply mutatis
mutandis to the Option Aircraft, with the exception that
the provisions for (i) [ *
] and (ii) 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 (iii) a start-up team
as found in Article 3 of Letter Agreement No. 10
(Additional Customer Support) shall not apply to the
Option Aircraft.
(iv) The following Letter Agreements shall not apply to the
Option Aircraft and are hereby excluded:
Letter Agreement No. 2 (Conditions Precedent)
Letter Agreement No. 4 (Options)
Letter Agreement No. 11 (Spares)
Letter Agreement No. 19 (Transferability)
Letter Agreement No. 20 (United Approval)
Letter Agreement No. 23 (Compensation)
Letter Agreement No. 24 (Additional Options)
(v) Letter Agreement No. 6 (Operational Restrictions), Letter
Agreement No. 8 (Schedule Completion Rate), Letter
Agreement No. 9 (Maintenance Cost) and Letter Agreement
No. 12 (Marketing Support) shall apply mutatis mutandis
to the Option Aircraft, with specific terms for Option
Aircraft as set out therein.
(c) Exercise Procedures for Blocks No. 1, 2, 3, 4 and 5
Timing and procedures for the exercise of options for aircraft
in each Block shall be as follows:
(i) [ * ] prior to the first day
of the desired delivery month of the
first aircraft in that Block:
Buyer shall give notice ("Notice of Intention") to BRAD
of it s
conditional intention to purchase Option Aircraft and
indicating its
desired delivery months for the Option Aircraft in that
Block; and
Buyer shall pay to BRAD a reservation fee
("Reservation Fee") of
[ * ] per Option
Aircraft.
Buyer shall not request delivery positions [ * ]
(ii) During the month following Notice of Intention, BRAD and
Buyer will discuss and agree on available delivery
positions, [ *
]
(iv) Within [ * ] following Notice of Intention:
Buyer shall give notice ("Notice of Exercise") to BRAD of its
exercise of its option to purchase the Option Aircraft in
the respective
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 Article 5.2 of the Agreement; and
Reservation fees shall be applied as follows:
For each Option Aircraft for which Notice of Exercise
has been
made, all Reservation Fees paid shall be applied
toward the Total
Deposits, if any, that are then due, or if no Total
Deposits are due,
shall be refunded by direct bank transfer within
[ * ]of Notice of Exercise;
[ *
]
(v) [ *
]
3.0 BRAD will, upon payment for and delivery of each Option Aircraft,
at no additional charge to Buyer, extend the term of Article 1.2.2
of Annex A of the Agreement (the Field Service Representative
("FSR")) by two (2) additional months.
4.0 In the event of the Termination of the Agreement, this Letter
Agreement shall become automatically null and void.
5.0 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.
6.0 The provisions of this Letter Agreement are personal to Buyer and,
except as part of an assignment of the Agreement as expressly
permitted by the provisions in 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:_____________
Anthony Prezioso
Manager, Contracts
Acknowledged and Accepted
ATLANTIC COAST AIRLINES
________________________ Date:_____________
Kerry B. Skeen
President and C.E.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) [ *
]
(b) [ *
]
[ *
]
(c) [ *
]
[ *
]
(d) [ *
]
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 Letter 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.
Bombardier Inc.
Bombardier Regional Aircraft
Division
Garratt Boulevard
Downsview, Ontario
Canada M3K 1Y5
Telephone (416) 633-7310
November 21, 1997
Our Ref: B96-7701-RJTL-RJ0350-005B
Atlantic Coast Airlines
515A Shaw Road,
Sterling, Virginia,
U.S.A. 20166
Gentlemen,
Letter Agreement No. 005B 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 twenty-
three (23) Canadair Regional Jet Aircraft (the "Aircraft")
This Letter Agreement No. 005B dated November 21, 1997 cancels and
supersedes Letter Agreement No. 005A dated May 19, 1997.
Subject: FIPP
1.0 This letter constitutes an integral part of the Agreement and
evidences our further agreement with the matters set forth below.
Unless otherwise specified, the term "Aircraft" in this Letter
Agreement only shall refer additionally to the thirty-seven (37)
Option Aircraft as well as the thirty-three (33) Firm Canadair
Regional Jet Aircraft. All other 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 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
assignee) under a financing arrangement referred to in Letter
Agreement No. 007B which results in a termination of such an
arrangement, this Letter Agreement shall become automatically null
and void. [ *
]
4.0 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.
5.0 [ *
]
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:_____________
Paul Tate
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 of 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
five (5) years thereafter.
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 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, or as
a result of an Excusable Delay
[ * ] 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.
Bombardier Inc.
Bombardier Regional Aircraft
Division
Garratt Boulevard
Downsview, Ontario
Canada M3K 1Y5
Telephone (416) 633-7310
November 21, 1997
Our Ref: B96-7701-RJTL-RJ0350-007B
Atlantic Coast Airlines
515A Shaw Road,
Sterling, Virginia,
U.S.A. 20166
Gentlemen,
Letter Agreement No. 007B 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 twenty-
four (24) Canadair Regional Jet Aircraft (the "Aircraft")
This Letter Agreement No. 007B dated November 21, 1997 cancels and
supersedes Letter Agreement No. 007A dated May 19, 1997.
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 form 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 16.1 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. 007B which results in termination of such
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 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:_____________
Paul Tate
Sr. Vice President and C.F.O.
ANNEX A
[ *
]
[ *
]
[ *
]
**** 7.0 [ *
]
*** 8.0The 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 and 7.0
hereof, which can only be assigned to a wholly owned
subsidiary).
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 the Termination of the Agreement, this
Letter Agreement shall become automatically null and
void.
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 of 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 any 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.
Bombardier Inc.
Bombardier Regional Aircraft
Division
Garratt Boulevard
Downsview, Ontario
Canada M3K 1Y5
Telephone (416) 633-7310
December 17, 1998
Our Ref: B96-7701-RJTL-RJ0350-009B
Atlantic Coast Airlines
515A Shaw Road,
Sterling, Virginia,
U.S.A. 20166
Dear Sirs,
Letter Agreement No. 009B 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 forty-three (43) Canadair
Regional Jet Aircraft (the "Aircraft")
This Letter Agreement No. 009B dated December 17, 1998
cancels and supersedes Letter Agreement No. 009A dated
August 21,1998.
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 seven (7) 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 [ * ]
5.1.1 [ *
]
5.1.2 [ *
]
[ *
]
5.1.3 [ *
]
5.1.4 [ *
]
5.2 [ * ]
5.2.1 [ *
]
5.2.2 [ *
]
[ *
]
[ *
]
6.0 Final Adjustment
6.1 [ *
]
6.2 [ *
]
[ *
]
6.3 [ *
]
6.4 [ *
]
6.5 [ *
]
[ *
]
6.6 [ *
]
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 or 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:_____________
Anthony Prezioso
Manager, Contracts
Acknowledged and Accepted
ATLANTIC COAST AIRLINES
________________________ Date:_____________
Kerry B. Skeen
President and C.E.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, 1997 United States
Dollars subject to escalation in accordance with the
terms of Appendix B of this Letter 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.
9. Total number of Aircraft Buyer has on firm order from
BRAD (including delivered Aircraft under the Agreement)
equals [ * ]
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:
ATA CHAPTER PERCENT
[ *
]
[ *
]
[ *
]
[ *
]
[ *
]
[ *
]
[ *
]
[ *
]
[ *
]
[ *
]
[ *
]
[ *
]
[ *
]
[ *
]
[ *
]
[ *
]
[ *
]
[ *
]
[ *
]
[ *
]
[ *
]
[ *
]
[ *
]
APPENDIX B
ADMCG Economic Adjustment Formula
The [ * ] will be calculated using
the following [ * ] Formula. The
[ * ] term is specified in Section 3.1.1 of the
Letter Agreement.
[ *
]
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 [ *
]
4.3 In regard to Article 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 [ * ]
]
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 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).
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 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 Bulletin").
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 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 the
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.
CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
A CONFIDENTIAL TREATMENT REQUEST.
Bombardier Inc.
Bombardier Regional Aircraft
Division
Garratt Boulevard
Downsview, Ontario
Canada M3K 1Y5
Telephone (416) 633-7310
November 21, 1997
Our Ref: B97-7701-AP-RJ0350-017
Atlantic Coast Airlines
1 Export Drive,
Sterling, Virginia,
U.S.A. 20164
Gentlemen,
Letter Agreement No. 017 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 twenty-four (24) Canadair Regional Jet
Aircraft (the "Aircraft")
Subject: Spare Parts Price Catalogue
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.
1.0 In consideration of Buyer having entered into the above
referenced Agreement, Bombardier hereby confirms,
[ *
]
2.0 In the event that during [ *
]
3.0 In reference to Article 2 above, Bombardier and Buyer
shall mutually agree on the [ *
]
4.0 Except as provided for in Article 20.1 of the
Agreement, 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 Bombardier.
5.0 This Letter Agreement constitutes an integral part of
the Agreement and is subject to the terms and
conditions contained therein. To the extent of any
inconsistency or conflict between this Letter Agreement
and the Agreement, this Letter Agreement shall prevail.
Yours truly,
BOMBARDIER INC.
________________________ Date:_____________
Michel Bourgeois
Vice President, Contracts
Acknowledged and Accepted
Atlantic Coast Airlines
________________________ Date:_____________
Paul Tate
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.
Bombardier Inc.
Bombardier Regional Aircraft
Division
Garratt Boulevard
Downsview, Ontario
Canada M3K 1Y5
Telephone (416) 633-7310
November 21, 1997
Our Ref: B97-7701-AP-RJ0350-018
Atlantic Coast Airlines
1 Export Drive,
Sterling, Virginia,
U.S.A. 20164
Letter Agreement No. 018 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 twenty-four (24) Canadair Regional Jet
Aircraft (the "Aircraft")
Subject: Exercise of Twelve Option Aircraft
Gentlemen:
Reference is made to Notice of Intention to Exercise letter
dated August 27, 1997, whereby Buyer states of its intention
to purchase twelve (12) Option Aircraft pursuant to Letter
Agreement No. 003 of the Agreement and to Letter of Intent
dated October 30, 1997, whereby Buyer states the terms and
conditions by which Buyer will exercise its right to acquire
the Option Aircraft.
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.
1.0 [ *
]
1.1 [ *
]
1.2 [ *
]
2.0 [ * ]
2.1 [ *
]
2.2 [ *
]
3.0 [ * ]
3.1 [ *
]
4.0 In the event of the termination of the 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 without the prior written consent of
Bombardier.
6.0 This Letter Agreement constitutes an integral part of
the Agreement and is subject to the terms and
conditions contained therein. To the extent of any
inconsistency or conflict between this Letter Agreement
and the Agreement, this Letter Agreement shall prevail.
Yours truly,
BOMBARDIER INC.
________________________ Date:_____________
Michel Bourgeois
Vice President, Contracts
Acknowledged and Accepted
Atlantic Coast Airlines
________________________ Date:_____________
Paul Tate
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.
Bombardier Inc.
Bombardier Regional Aircraft
Division
Garratt Boulevard
Downsview, Ontario
Canada M3K 1Y5
Telephone (416) 633-7310
November 21, 1997
Our Ref: B97-7701-AP-RJ0350-019
Atlantic Coast Airlines
1 Export Drive,
Sterling, Virginia,
U.S.A. 20164
Letter Agreement No. 019 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 twenty-four (24) Canadair Regional Jet
Aircraft (the "Aircraft")
Subject: Transferability of Aircraft Delivery Positions
Gentlemen:
Reference is made to Notice of Intention to Exercise letter
dated August 27, 1997, whereby Buyer states of its intention
to purchase twelve (12) Option Aircraft pursuant to Letter
Agreement No. 003 of the Agreement and to Letter of Intent
dated October 30, 1997, whereby Buyer states the terms and
conditions by which Buyer will exercise its right to acquire
the Option Aircraft.
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. [ *
]
2. Subject to Article 20.5 of the Agreement, Buyer may
[ *
]
3. [ *
]
4. In the event of the termination of the Agreement, this
Letter Agreement shall become automatically null and
void.
5. 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
Bombardier.
6. This Letter Agreement constitutes an integral part of
the Agreement and is subject to the terms and
conditions contained therein. To the extent of any
inconsistency or conflict between this Letter Agreement
and the Agreement, this Letter Agreement shall prevail.
Yours truly,
BOMBARDIER INC.
________________________ Date:_____________
Michel Bourgeois
Vice President, Contracts
Acknowledged and Accepted
Atlantic Coast Airlines
________________________ Date:_____________
Paul Tate
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.
Bombardier Inc.
Bombardier Regional Aircraft
Division
Garratt Boulevard
Downsview, Ontario
Canada M3K 1Y5
Telephone (416) 633-7310
November 21, 1997
Our Ref: B97-7701-AP-RJ0350-020
Atlantic Coast Airlines
1 Export Drive,
Sterling, Virginia,
U.S.A. 20164
Letter Agreement No. 020 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 twenty-four (24) Canadair Regional Jet
Aircraft (the "Aircraft")
Subject: United Approval
Gentlemen:
Reference is made to Notice of Intention to Exercise letter
dated August 27, 1997, whereby Buyer states of its intention
to purchase twelve (12) Option Aircraft pursuant to Letter
Agreement No. 003 of the Agreement and to Letter of Intent
dated October 30, 1997, whereby Buyer states the terms and
conditions by which Buyer will exercise its right to acquire
the Option Aircraft.
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. United Approval
1.1 The Aircraft from Block No. 2 of the Option
Aircraft [ *] are conditional on United
Airlines granting Buyer the authority to operate
said Aircraft as a United Express operator, on
terms satisfactory to Buyer ("United Approval").
If on or before [ *] Buyer determines that
United Approval will not be granted or received by
such date, or in any event if Buyer has not
received United Approval by such date for Block
No. 2 of the Option Aircraft, then either party
may, unless the parties agree to extent said date
with such amendment to the terms hereof that may
be appropriate in the circumstances, terminate the
exercise of Block No. 2 of the Option Aircraft
pursuant to Change Order No. 7, by providing ten
(10) days notice.
1.2 Similarly, the Aircraft derived from Block No. 3
of the Option Aircraft [ *] are conditional
on United Airlines granting Buyer the authority to
operate said Aircraft as a United Express
operator, on terms satisfactory to Buyer ("United
Approval").
If on or before [ *] determines that United
Approval will not be granted or received by such
date, or in any event if Buyer has not received
United Approval by such date for Block No. 3 of
the Option Aircraft, 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 those
Aircraft positions held for Buyer pursuant to
Letter Agreement No. 018 (Article 1.2), by
providing ten (10) days notice.
2. [ *]
2.1 In the event that United Approval is not granted
and either party terminates the exercise of Option
Aircraft Block No. 2 as specified in 1.1 above,
then Buyer shall [ *
]
2.2 Similarly, in the event that United Approval is
not granted and either party terminates those
Option Aircraft delivery positions as specified in
1.2 above, then Buyer shall [ *
]
3. In the event of the termination of the Agreement, this
Letter Agreement shall become automatically null and
void.
4. 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
Bombardier.
6. This Letter Agreement constitutes an integral part of
the Agreement and is subject to the terms and
conditions contained therein. To the extent of any
inconsistency or conflict between this Letter Agreement
and the Agreement, this Letter Agreement shall prevail.
Yours truly,
BOMBARDIER INC.
________________________ Date:_____________
Michel Bourgeois
Vice President, Contracts
Acknowledged and Accepted
Atlantic Coast Airlines
________________________ Date:_____________
Paul Tate
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.
Bombardier Inc.
Bombardier Regional Aircraft
Division
Garratt Boulevard
Downsview, Ontario
Canada M3K 1Y5
Telephone (416) 633-7310
March 31, 1998
Our Ref: B98-7701-AP-RJ0350-021
Atlantic Coast Airlines
515A Shaw Road,
Sterling, Virginia,
U.S.A. 20166
Letter Agreement No. 021 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 twenty-three (23) Canadair Regional Jet
Aircraft (the "Aircraft")
Subject: Flight Data Recorder
Gentlemen:
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. [ *
]
2. 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
Bombardier.
3. This Letter Agreement constitutes an integral part of
the Agreement and is subject to the terms and
conditions contained therein. To the extent of any
inconsistency or conflict between this Letter Agreement
and the Agreement, this Letter Agreement shall prevail.
Yours truly,
BOMBARDIER INC.
________________________ Date:_____________
Michel Bourgeois
Vice President, Contracts
Acknowledged and Accepted
Atlantic Coast Airlines
________________________ Date:_____________
Paul Tate
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.
Bombardier Inc.
Bombardier Regional Aircraft
Division
Garratt Boulevard
Downsview, Ontario
Canada M3K 1Y5
Telephone (416) 633-7310
August 31, 1998
Our Ref: B98-7701-AP-RJ0350-022
Atlantic Coast Airlines
515A Shaw Road,
Sterling, Virginia,
U.S.A. 20166
Letter Agreement No. 022 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 thirty-three (33) Canadair Regional Jet
Aircraft (the "Aircraft")
Subject: Cargo Floorboards
Gentlemen:
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. [ *
]
2. [ *
]
3. [ *
]
4. 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
Bombardier.
5. This Letter Agreement constitutes an integral part of
the Agreement and is subject to the terms and
conditions contained therein. To the extent of any
inconsistency or conflict between this Letter Agreement
and the Agreement, this Letter Agreement shall prevail.
Yours truly,
BOMBARDIER INC.
________________________ Date:_____________
Michel Bourgeois
Vice President, Contracts
Acknowledged and Accepted
Atlantic Coast Airlines
________________________ Date:_____________
Paul Tate
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.
August 27, 1998
Tony Prezioso
Bombardier Inc.
123 Garratt Blvd.
Downsview, Ontario, Canada
M3K 1Y5
Re: Letter Agreement No. 23 to Purchase Agreement (the
"Purchase Agreement") Between Bombardier Inc. and
Atlantic Coast Airlines dated January 8, 1997
Dear Tony:
This Letter Agreement No. 23, when countersigned by
you, shall set forth our further understanding with regard
to the matters contained herein.
[ *
]
[ *
]
All other terms and conditions of the Purchase
Agreement shall remain unchanged. The foregoing terms are
subject to the terms and conditions of the Purchase
Agreement. Defined terms used but not defined herein shall
be as defined in the Purchase Agreement. All amounts
expressed herein shall be in U.S. dollars.
In Witness Whereof, the parties hereto have executed
this Letter Agreement No. 23 as of the day and year first
above written.
AGREED and ACCEPTED:
Atlantic Coast Airlines Bombardier, Inc.
By: _____________________________ By:
____________________________
Paul H. Tate
Title: Senior Vice President Title:
CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
A CONFIDENTIAL TREATMENT REQUEST.
Bombardier Inc.
Bombardier Regional Aircraft
Division
Garratt Boulevard
Downsview, Ontario
Canada M3K 1Y5
Telephone (416) 633-7310
December 17, 1998
Our Ref: B98-7701-AP-RJ0350-024
Atlantic Coast Airlines
515A Shaw Road,
Sterling, Virginia,
U.S.A. 20166
Letter Agreement No. 024 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 forty-three (43) Canadair Regional Jet
Aircraft (the "Aircraft")
Subject: Additional Option Aircraft
Gentlemen:
This letter constitutes an integral part of the Agreement
and evidences our further agreement with respect to 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.
1.0 [ *
]
1.1 The Additional Option Aircraft will be as
described in Article 2 of the Agreement.
1.2 The price for each of the Additional Option
Aircraft will [ *
]
1.3 The Option Aircraft shall be offered in [ *
]
1.4 [ *
]
[ *
]
2.0 In the event of the termination of the Agreement, this
Letter Agreement shall become automatically null and
void.
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
Bombardier.
Yours truly,
BOMBARDIER INC.
________________________ Date:_____________
Anthony Prezioso
Manager, Contracts
Acknowledged and Accepted
ATLANTIC COAST AIRLINES
________________________ Date:_____________
Kerry B. Skeen
President and C.E.O.
CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
A CONFIDENTIAL TREATMENT REQUEST.
January 20, 1999
Tony Prezioso
Bombardier Inc.
123 Garratt Blvd.
Downsview, Ontario, Canada
M3K 1Y5
Re: Letter Agreement No. 25 to Purchase Agreement (the
"Purchase Agreement") Between Bombardier Inc. and
Atlantic Coast Airlines dated January 8, 1997
Dear Tony:
This Letter Agreement No. 25, when countersigned by
you, shall set forth our further understanding with regard
to the matters contained herein.
[ *
]
[ *
]
All other terms and conditions of the Purchase
Agreement shall remain unchanged. The foregoing terms are
subject to the terms and conditions of the Purchase
Agreement. Defined terms used but not defined herein shall
be as defined in the Purchase Agreement. All amounts
expressed herein shall be in U.S. dollars.
In Witness Whereof, the parties hereto have executed
this Letter Agreement No. 25 as of the day and year first
above written.
AGREED and ACCEPTED:
Atlantic Coast Airlines Bombardier, Inc.
By: _____________________________ By:
____________________________
Richard J. Kennedy
Title: Vice President & Secretary Title: