Exhibit 10.45
CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL
TREATMENT REQUEST.
AGREEMENT
FOR
SALE AND PURCHASE
OF
DORNIER 328-300 AND 428JET AIRCRAFT
BY AND BETWEEN
DORNIER LUFTFAHRT GMBH
AND
ATLANTIC COAST AIRLINES
DATED
MARCH 31, 1999
(reference: PA227)
TABLE OF CONTENTS
Article
A. Preamble
B. Summary of Definitions
Article 1 Subject Matter
Article 2 428JET Aircraft
Article 3 Price, Taxes
Article 4 Terms of Payment
Article 5 Inspection, Acceptance, Delivery
Article 6 Certification
Article 7 Technical Changes
Article 8 Aircraft Configuration
Article 9 Product Warranties
Article 10 Customer Support
Article 11 Excusable Delay
Article 12 Non-Excusable Delay
Article 13 Event of Default, Remedies
Article 14 Limited Liability, Indemnification
Article 15 Patent Infringement
Article 16 Assignment, Resale, Lease
Article 17 Seller's Representations and Warranties
Article 18 Purchaser's Representations and Warranties
Article 19 *****
Article 20 *****
Article 21 Option Aircraft
Article 22 *****
Article 23 *****
Article 24 *****
Article 25 Condition Precedent
Article 26 Completion and Reliability
Article 27 *****
Article 28 Maintenance Cost
Article 29 *****
Article 30 RESERVED
Article 31 AlliedSignal AFIS
Article 32 Powerplant and APU Support
Article 33 Notices, Requests
Article 34 Applicable Law, Jurisdiction
Article 35 Miscellaneous
Exhibit
Exhibit I Specifications
Exhibit II Optional Equipment
Exhibit III Delivery
Schedule
Exhibit IV Power of Attorney Form
Exhibit V Certificate of Acceptance Form
Exhibit VI Aircraft Receipt Form
Exhibit VII Warranty Bill of
Sale Form
Exhibit VIII Product
Warranties
- Annex A: Service Life Policy Items
Exhibit IX Customer Support
- Annex A: Technical Publications and
Documentation
Exhibit X *****
Exhibit XI Price Adjustment Formula
Exhibit XII Schedule
Completion
Exhibit XIII Maintenance Cost
Exhibit XIV *****
Exhibit XV *****
Exhibit XVI *****
Exhibit XVII *****
Exhibit XVIII Reserved
Exhibit XIX *****
Exhibit XX Certificate of Technical Acceptance
This Aircraft Purchase Agreement with reference No. PA227 is made
as of this 31st day of March 1999 by and between Dornier
Luftfahrt GmbH, a corporation registered under the laws of the
Federal Republic of Germany, having its principal office at
Oberpfaffenhofen, P.O. Box 1103, D-82230 Wessling, Federal
Republic of Germany ("Seller") and Atlantic Coast Airlines, a
California corporation, having its principal office at 515A Shaw
Road, Dulles, Virginia 20166, USA ("Purchaser").
A. PREAMBLE
WHEREAS, Seller is the manufacturer of the Dornier 328-300 and
428 aircraft; and
WHEREAS, Purchaser desires to purchase, and Seller is willing to
sell, in accordance with the terms and conditions hereinafter set
forth, certain Dornier 328-300 and 428 aircraft; and
WHEREAS, Purchaser desires and Seller is willing to provide
certain product warranties, customer support and other
inducements necessary for the acquisition, maintenance and
operation of such Dornier aircraft;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter set forth, Seller and Purchaser
(hereinafter individually a "Party" and collectively the
"Parties") agree as follows:
B. SUMMARY OF DEFINITIONS
Unless the context otherwise requires, the following terms shall
have the following meanings. The definitions shall be equally
applicable to both singular and plural forms of the terms
defined.
Acceptance Purchaser's acceptance of the Aircraft
in accordance with Article 5.5a
Agreement This agreement, including exhibits,
annexes, appendices and letter
agreements, if any, (each of which is
incorporated in the Agreement) as may
be amended pursuant to the provisions
of this Agreement.
Aircraft The aircraft to be delivered to the
Purchaser, depending on the context,
could be either the 328-300 or the 428
aircraft completed with the Optional
Equipment. See Article 1.1
Aircraft Delivery Price The price to be paid by the Purchaser
for the Aircraft. See Article 3.3
AOG Spares Spare Parts required to return an
Aircraft grounded due to the lack of an
essential part, to revenue service.
See Exhibit IX.3.7
ATA Air Transport Association of America
ATT Aircraft Technician Training. See
Exhibit IX.2.3
Business Days Any day, other than a Saturday or
Sunday, on which commercial banking
institutions in New York City are not
authorized or required to be closed.
Date of Availability The date on which the Aircraft shall be
available for inspection and acceptance
by the Purchaser. See Article 5.2.
***** *****
Effectiveness The date on which the Party's
obligations shall start. See Article
35.12
FAA United States Federal Aviation
Administration or successor agency of
the U.S. Government.
FAR Federal Aviation Regulations, issued by
the FAA or its successor agencies.
FAT Flight Attendant Training. See Exhibit
IX.2.4
Insurance Items High value Proprietary Parts held by
Seller purely as a precaution in order
to preclude undue scheduling problems
and/or economic hardship which might
otherwise occur should the part be out
of stock when required. See Exhibit
IX.3.2
JAA European Joint Aviation Authorities.
JAR European Joint Airworthiness
Requirements, issued by the JAA.
LBA Luftfahrtbundesamt of the Federal Republic
of Germany. The German federal aviation
authority.
MSCN Manufacturer Specification Change
Notice. See Article 7.2
***** *****
Optional Equipment Aircraft Equipment selected by
Purchaser as set forth in Exhibit II.
See Article 1.1
Proprietary Parts Components, systems, accessories,
equipment and parts manufactured to
Seller's detailed drawings and design
specifications and having Seller's part
number as listed in the then current
Illustrated Parts Catalog. Any
warranty provisions, price discounts
and other economic benefits granted to
Purchaser under this Agreement
associated with Proprietary Parts shall
be preserved for Purchaser should any
or all of such Proprietary Parts become
Vendor Parts after execution of this
Agreement. See Exhibit IX.3.2
PTT Pilot Transition Training. See Exhibit
IX.2.2
Purchaser One or more individuals duly authorized
Representative(s) by the Purchaser to inspect, perform
the acceptance flight, note any non-
compliance, execute the Aircraft
Receipt Form and Certificate of
Technical Acceptance and take delivery
of the Aircraft. See Article 5.3
SCN Specification Change Notice. See
Article 7.1
Spare Parts Collectively, Proprietary Parts, Vendor
Parts and Standard Parts.
Specification The specifications for the Aircraft as
set forth in Exhibit I. See Article
1.1
Standard Parts Expendable parts and hardware items
normally manufactured to national
standards and available worldwide from
various supply sources. See Exhibit
IX.3.2
US$ or US Dollars The lawful currency of the United
States of America
Vendor A supplier of parts listed in the
Vendor Information Manual. See Exhibit
VIII.3.1
Vendor Parts Components, systems, accessories,
equipment and parts which were not
manufactured by Seller or pursuant to
Seller's detailed drawings and design
specifications and not having a
Seller's part number. See Exhibit
VIII.1.2 and IX.3.2
ARTICLE 1 SUBJECT MATTER
1.1 In accordance with the terms and conditions hereinafter set
forth, Seller hereby agrees to sell and Purchaser hereby
agrees to purchase fifty-five (55) new Dornier 328-300 and
428 aircraft (hereinafter referred to as the "328-300
Aircraft" and "428JET Aircraft", respectively, and
collectively referred to as the "Aircraft") designed and
manufactured in compliance with the specifications set forth
in Exhibit I hereto (the "Specification"), together with the
optional equipment selected by Purchaser and installed in
the Aircraft, as set forth in Exhibit II hereto (the
"Optional Equipment").
1.2 The first twenty-five (25) Aircraft will be delivered to
Purchaser in accordance with the terms of this Agreement and
the Delivery Schedule, as that term is defined in Article
5.1. *****
ARTICLE 2 428JET AIRCRAFT
2.1 a. 428JET Aircraft technical specification issues
shall be published in March (initial), based on
Seller's 428JET Aircraft study completed earlier, May
(preliminary), and August (complete) 1999. Seller's
key schedule milestones for the 428JET Aircraft program
are set forth in Exhibit XV ("428 Program Master
Schedule"), attached hereto. Purchaser will be invited
to participate in or witness the (i) Preliminary Design
and Critical Design reviews; (ii) first flight test
article ("SN 001") fuselage-wing mating; and, (iii) the
first flight of SN 001, and of the other 428JET
Aircraft flight test aircraft. Purchaser may request,
and if requested, Seller will provide, at its
facilities in Oberpfaffenhofen, Germany at an agreed
time, an annual 428JET Aircraft program progress update
briefing to Purchaser in late 1999, and at mutually
convenient dates in 2000, 2001, and 2002.
b. On or before July 1, 1999, or such later date as may be
mutually agreed by the parties, Purchaser shall have agreed and
accepted in writing the preliminary Specification for the 428JET
Aircraft, including key performance parameters. If no such
agreement and acceptance has been reached, this Agreement may be
terminated by Purchaser with respect to Aircraft 26-55 and, if so
terminated, Seller shall promptly return to Purchaser any Initial
Deposits and Additional Deposits (as defined in Article 4), with
interest computed in accordance with Article 2.3e, paid by
Purchaser with respect to such Aircraft and thereafter neither
party shall have any further rights, obligations or liabilities
with respect to this Agreement for the sale and purchase of any
428JET Aircraft. Nothing contained herein shall be deemed to
terminate Purchaser's obligations to purchase and accept delivery
of the 328-300 Aircraft in accordance with the terms of this
Agreement. In that event, Purchaser may terminate the 328-300
Aircraft program in accordance with Article 2.3.
2.2 Unless Purchaser's obligation to purchase 428JET Aircraft
was terminated in accordance with Article 2.1.b, then Seller
shall deliver 428JET Aircraft to Purchaser beginning in
February 2003, as Aircraft delivery position numbers 26-55,
unless:
a. *****
(i) *****
(ii) *****
(iii) *****
(iv) *****
(v) *****
*****
b. Purchaser does not obtain timely United Approval, as
defined in Article 25, to include the 428JET Aircraft.
Deliveries of the 428JET Aircraft will commence after
United Approval is received, in accordance with the
428JET Aircraft Delivery Schedule.
c. Purchaser's capacity requirements do not require 40-
seat class lift in 2003. Such requirements will be
defined by Purchaser not later than December 31, 2001
and Purchaser will so advise Seller in writing. Seller
will commence 428JET Aircraft deliveries to Purchaser
beginning in June 2004, provided (i) the 428JET
Aircraft meets the performance parameters to be agreed
pursuant to Article 2.2a. above, and (ii) United
Approval is received, as in 2.2b. above.
d. *****
2.3 *****
a. *****
b. *****
c. *****
d. *****
e. *****
2.4 *****
2.5 In the event that 428JET Aircraft delivery positions become
available before February 2003 ("Early Positions") because
of a program acceleration, Seller and Purchaser shall meet
to define the basis under which Purchaser shall be assigned
any Early Positions, under the pricing terms and product
support concessions agreed for Aircraft numbers 26-55.
*****
ARTICLE 3 PRICE, TAXES
3.1 328-300 Aircraft Price
a. The base price of each 328-300 Aircraft is *****
(the "328-300 Aircraft Base Price") which is the sum
of:
(i) the price of each 328-300 Aircraft, together with
the Standard SCNs, as set forth in Exhibit II.1,
Clause 1.2.1, in the amount of ***** ;
and
(ii) the price of the Optional Equipment, as set forth
in Exhibit II.1, Clause 1.2.2, installed in the
328-300 Aircraft in the amount of *****
.
b. *****
3.2 428JET Aircraft Price
a. The base price of each 428JET Aircraft is *****
(the "428JET Aircraft Base Price") which is the sum of:
(i) the price of each 428JET Aircraft, together with
the Standard SCNs, as set forth in Exhibit II.2,
Clause 2.2.1, in the amount of *****
; and
(ii) the price of the Optional Equipment, as set forth
in Exhibit II.2, Clause 2.2.2, installed in the
428JET Aircraft in the amount of *****
.
b. *****
3.3 The Adjusted 328-300 Aircraft Base Price and Adjusted 428JET
Aircraft Base Price are based on January 1999 economic
conditions and are subject to adjustment from January 1999
to the month of Aircraft delivery in accordance with the
price adjustment provisions set forth in Exhibit XI,
attached hereto ("Price Adjustment Formula") and the terms
of this Agreement with respect to the application of the
Price Adjustment Formula. The Adjusted 328-300 Aircraft
Base Price and the Adjusted 428JET Aircraft Base Price so
adjusted shall be referred to as the "Aircraft Delivery
Price."
3.4 Except as otherwise provided in this Article 3.4, the
Aircraft Delivery Price is exclusive of any taxes, duties,
imposts, value added or similar taxes or charges,
(collectively "Taxes") which shall be for the account of
Purchaser. If under the provision of any applicable law or
regulation such Taxes are to be paid by Seller, Purchaser
shall reimburse Seller accordingly. Seller hereby
represents to Purchaser that pursuant to current U.S. and
German law, German and U.S. Taxes are not applicable to
aircraft sold and exported from Germany into the United
States. Should there be a change in such law, Purchaser and
Seller agree to modify this Agreement on mutually acceptable
terms (which may include mutual termination). Purchaser
shall, in any case, not be responsible for any Taxes
normally borne by sellers of aircraft, including but not
limited to Taxes on Seller's gross or net income.
ARTICLE 4 TERMS OF PAYMENT
4.1 Payment Terms
a. Purchaser has paid to Seller a cash deposit in the
amount of ***** per Aircraft for a total
deposit of ***** ("Initial Deposit"). The
Initial Deposit will become non-refundable upon
execution of this Agreement, except as otherwise
provided in this Agreement.
b. An additional deposit of ***** shall be paid
to Seller upon execution of this Agreement ("Additional
Deposit"). The Initial Deposit of ***** and the
Additional Deposit of ***** will be held
by Seller for a total deposit of *****
("Deposit") representing a ***** deposit with
respect to each Aircraft.
c. The Aircraft Delivery Price shall be payable by
Purchaser to Seller as follows:
(i) application of the Deposit in equal installments
of ***** per Aircraft;
(ii) on *****
("Progress Payment"); and
(iii) upon delivery of each Aircraft, the balance
of the Aircraft Delivery Price.
d. *****
(i) *****
(ii) *****
4.2 *****
4.3 Seller shall submit an invoice to Purchaser for each payment
due pursuant to Article 4.1c above. The invoice for the
balance of the Aircraft Delivery Price (or the full purchase
price in the case of a financed Aircraft, as requested by
Purchaser) shall detail the price adjustment calculations
pursuant to Article 3.3 above.
4.4 Any other amount due to Seller pursuant to this Agreement
shall be invoiced separately and shall be paid no later than
thirty (30) days after the date of invoice except as may be
otherwise provided for herein.
ARTICLE 5 INSPECTION, ACCEPTANCE, DELIVERY
5.1 The Aircraft shall be available for inspection,
reinspection, acceptance and delivery at Seller's facilities
in Oberpfaffenhofen, Federal Republic of Germany (the
"Delivery Location") in accordance with the delivery
schedule specified in Exhibit III hereto ("Delivery
Schedule") as it may be adjusted by mutual agreement of the
Parties or in accordance with the provisions of this
Agreement. The Parties shall co-ordinate and agree, no
later than sixty (60) days prior to the delivery of the
first Aircraft, on the flight inspection procedures to be
used to confirm each Aircraft complies with this Agreement.
5.2 Seller shall provide preliminary written notification to
Purchaser, no later than sixty (60) days prior to the
projected date each Aircraft shall be available for
inspection and acceptance tests. Thereafter, Seller shall
provide written notification to Purchaser, no later than
thirty (30) days prior to the date each Aircraft shall be
available for inspection and acceptance tests ("Date of
Availability") and Purchaser shall inspect, and if the
Aircraft conforms with this Agreement, accept and take
delivery (as hereinafter defined) of the Aircraft not later
than five (5) days after such Date of Availability (the
"Inspection Period"). During the Inspection Period, Seller
shall have appropriate personnel available to assist
Purchaser in the conduct of its inspection. In the event
the Aircraft is not in compliance with this Agreement, the
Inspection Period will be deemed to be extended, pursuant to
Article 5.4c below, by the number of days required to
complete Purchaser's ground inspection and flight
inspection, including any needed re-inspections, until
Purchaser either determines the Aircraft does or does not
comply with the provisions of this Agreement. If (i) the
Date of Availability is scheduled by Seller less than five
(5) days before the end of a month or (ii) the Acceptance is
extended beyond the month of the original Date of
Availability due to the Aircraft not being in compliance
with this Agreement, then the Price Adjustment Formula shall
not apply to such Aircraft after the month of the original
Date of Availability.
5.3 During the Inspection Period and at the Delivery Location,
Purchaser shall, in coordination with Seller, inspect,
perform the acceptance flight and accept the Aircraft in
accordance with this Agreement. Purchaser shall authorize
its representative(s) (the "Purchaser's Representative"), as
evidenced by a written Power of Attorney in the form set
forth in Exhibit IV hereto, to inspect the Aircraft and
perform the acceptance flight in order to confirm the
Aircraft are in compliance with this Agreement and, if so,
execute the Aircraft Receipt Form and the Certificate of
Technical Acceptance on behalf of Purchaser. Seller shall
make facilities available to Purchaser's Representatives to
perform inspections of the Aircraft.
5.4 Inspection and Acceptance
a. During the Inspection Period, Purchaser's
Representative shall, in coordination with Seller,
promptly inspect the Aircraft and perform the
acceptance flight of the Aircraft. Purchaser's
Representative shall be permitted to participate in the
acceptance flight of the Aircraft for a period not to
exceed three (3) hours, provided, however, such
acceptance flight shall at all times remain under the
complete control of Seller with Seller's pilot in
command. The acceptance flight shall be performed in
accordance with Purchaser's flight inspection
procedures as agreed to by Seller. Seller shall not be
required to provide any special instrumentation for the
acceptance flight.
b. Provided the Aircraft complies with the terms of this
Agreement, then promptly upon completion of the
inspection and acceptance flight of the Aircraft, which
confirms compliance with this Agreement, Purchaser's
Representative shall deliver to Seller a signed
certificate of technical acceptance in the form set
forth in Exhibit XX hereto (the "Certificate of
Technical Acceptance"). Such signed Certificate of
Technical Acceptance shall irrevocably constitute
conclusive evidence that such Aircraft technically
complies with the terms and conditions of this
Agreement and has been technically accepted without any
condition or reservation by Purchaser except as (i)
such condition or reservation is noted on the
Certificate of Technical Acceptance and (ii) to non-
conformance with the Specification that is not
reasonably susceptible to identification during
Purchaser's inspection as set forth in Exhibit VIII,
Clause 1.3.a. Upon execution of the Certificate of
Technical Acceptance, Seller shall lock and otherwise
secure the Aircraft until Acceptance.
c. In the event Purchaser's Representative determines,
after an inspection (as described herein) that the
Aircraft is not in compliance with this Agreement,
Purchaser's Representative shall provide Seller, in
writing, specific details of any alleged non-
compliance. Upon Seller's confirmation of any non-
compliance with the terms of this Agreement and prior
to the execution of the Certificate of Technical
Acceptance, Seller shall, at Seller's sole expense,
remedy any non-compliance, or agree in writing to
remedy or cause to remedy the non-compliance as soon as
reasonably practicable after Aircraft delivery.
Purchaser shall have the right to reinspect the
Aircraft to confirm Seller has remedied the non-
compliance and that the Aircraft conforms to the terms
of this Agreement. Such confirmation may include
another acceptance flight of the Aircraft. Upon
Seller's remedy of any non-compliance or the Parties
agreement on performing such remedy after Aircraft
delivery, Purchaser's Representative shall execute and
deliver to Seller the Certificate of Technical
Acceptance.
d. In the event, without just and reasonable cause
(reasons of Force Majeure constitute just and
reasonable cause), Purchaser's Representative is not
present at the Delivery Location within five (5) days
of the Date of Availability for the inspection and
acceptance flight, or fails, without lawful cause, to
execute a Certificate of Technical Acceptance and
Aircraft Receipt Form, or Purchaser fails to take
delivery as required by Article 5.5a ("Default of
Acceptance"), Seller shall, in addition to any other
rights of Seller under this Agreement and/or at law or
equity, be entitled to compensation from Purchaser for
all costs and expenses incurred or to be borne by
Seller as a result of such delay including, but not
limited to, the reasonable cost of storage,
maintenance, insurance, and tax. Additionally, such
Default of Acceptance shall be deemed to be a failure
of Purchaser to effect any payment when due, pursuant
to Article 13 herein.
5.5 Delivery
a. The Aircraft shall be delivered upon full payment to
Seller of the amounts due for such Aircraft pursuant to
Article 4.1 herein or as otherwise provided in Article
20. Upon delivery of the Aircraft, Purchaser shall (i)
execute and deliver a certificate of final acceptance
in the form set forth in Exhibit V hereto (the
"Certificate of Final Acceptance") to Seller
("Acceptance"), and (ii) confirm receipt of the
Aircraft in the form set forth in Exhibit VI hereto,
and Seller shall deliver to Purchaser an executed Bill
of Sale, conveying good and marketable title free and
clear of any encumbrances, in the form set forth in
Exhibit VII hereto and an FAA Bill of Sale. No
delivery shall be scheduled on a day before a non-
Business Day. Risk of loss or damage to each Aircraft
shall pass from Seller to Purchaser upon Acceptance.
b. Purchaser shall not, by virtue of anything contained in
this Agreement, including, without limitation, any
payments made by Purchaser hereunder or any designation
or identification by Seller of any particular aircraft
as Aircraft, acquire title to, special property or any
other right in any Aircraft, prior to receipt by
Purchaser of the Bill of Sale for such Aircraft.
5.6 Ferry Flight
a. Purchaser shall be responsible for obtaining any
licenses, permits or authorizations required for the
importation of each of the Aircraft into the country of
destination. Seller will, on behalf of and for the
expense of Purchaser (such expenses shall not include
any expenses of Seller), apply for any licenses,
permits or authorizations required for the exportation
of each Aircraft after delivery from the Federal
Republic of Germany to the United States and for all
licenses or permits required to ferry the Aircraft to
the United States. Each Party agrees, upon the request
of the other, to assist the requesting Party in
obtaining any of the licenses, permits or
authorizations the requesting Party is obligated to
obtain hereunder.
b. All of Purchaser`s Representative's personal and
incidental expenses related to Aircraft inspection,
acceptance and delivery and the cost of catering for
its fly-away shall be borne by Purchaser.
c. After delivery, the Aircraft shall be ferried to Dulles
International Airport, Dulles, Virginia ("Dulles") with
a crew consisting of Seller's co-pilot and Purchaser's
pilot. Seller's co-pilot shall be available for duty
after Acceptance so as to permit Purchaser to
immediately export the Aircraft from Germany. *****
Seller will also furnish the Aircraft ferry kit for
each ferry flight. Purchaser, at its cost, will ship
the ferry kits from Dulles back to the Purchaser at the
Delivery Location. Aircraft discrepancies occurring
during the ferry flight will be corrected by Seller on
site in accordance with its warranty policy. Any Taxes
imposed on Purchaser due to the failure of Seller's co-
pilot to be available for ferry service so that the
Aircraft is subject to taxation in Germany because it
could not be exported from Germany shall be borne by
Seller notwithstanding the provision of Article 3.4
hereof.
ARTICLE 6 CERTIFICATION
6.1 At time of delivery, each Aircraft will comply with Part 25
of the Federal Aviation Regulations ("FAR") of the United
States Federal Aviation Administration ("FAA"), as set forth
in the Specification. If the Aircraft is delivered with a
temporary exemption from FAR Parts 25 and 121, which
exemption expires while the Aircraft are being operated by
Purchaser, Seller shall at its expense implement permanent
corrective action. If, after delivery of the Aircraft, the
FAA decides that certification of the Aircraft under Part 25
was in error, Seller shall, at its cost, bring the Aircraft
into compliance with Part 25.
6.2 The Aircraft will be delivered in an airworthy condition
with a valid and effective Certificate of Airworthiness for
Export issued by the LBA and a valid and effective FAA
Standard Certificate of Airworthiness.
6.3 If prior to delivery of the Aircraft the issuance of any of
the certificates under this Article 6 is discontinued,
Seller shall be deemed to have provided such discontinued
certificate by submitting to Purchaser the corresponding
substitute certificate or, if not existing, by demonstrating
that the Aircraft complies with the Specification and that
such certificate(s) is no longer required to export or
operate the Aircraft.
6.4 When delivered, the Aircraft, as configured in accordance
with Exhibit II, shall comply with the airworthiness
requirements set forth in this Article 6 and with FAR Part
121. Any additional equipment ("Additional Equipment")
required to be installed in or on the Aircraft to comply
with airworthiness or operational requirements for
Purchaser's specific operations and/or to comply with
changes to FAR Part 121, additional airworthiness,
operational, registration or certification requirements
becoming effective after execution of this Agreement which
is applicable to all aircraft in general or to all aircraft
of the same category as the Aircraft (a "Regulatory Change")
will be for the account of Purchaser and subject to an
amendment to this Agreement, including an appropriate
adjustment in the Aircraft Delivery Price and Delivery
Schedule. Any Additional Equipment installed to correct a
defect specific to the Aircraft, to the components thereof
or the fleet of Aircraft, will be for the account of Seller
and such Aircraft will not be subject to the Price
Adjustment Formula for the period of time necessary to
correct the defect. Purchaser shall be obligated to accept
the Aircraft if the Aircraft Delivery Price increase
(related to installation of such Additional Equipment as a
result of a Regulatory Change) does not exceed *****
per Aircraft. Any delay in the delivery of the Aircraft as
a result of a Regulatory Change shall be deemed an Excusable
Delay, as defined in Article 11.1a.
ARTICLE 7 TECHNICAL CHANGES
7.1 Except as provided in Articles 7.2 herein and 6.4 above, the
Specification and Optional Equipment may be changed or
amended from time to time by written agreement between the
Parties in the form of a specification change notice issued
by Seller and approved by Purchaser (the "Specification
Change Notice" or "SCN"). The SCN shall set forth in detail
the particular changes to be made, and the effect, if any,
of such changes on design, performance, weight and balance,
date of delivery, price of the Aircraft, on the affected
paragraphs of the Specification and on the Optional
Equipment. Any such changes as evidenced by an SCN shall
constitute an amendment to this Agreement, including an
appropriate adjustment in the Aircraft Delivery Price and
Delivery Schedule.
7.2 Notwithstanding anything to the contrary contained in
Article 7.1 herein, Seller shall have the right, at its
expense, without the prior consent of Purchaser, to make
modifications, alterations or changes to the Specification,
or the Optional Equipment or to substitute substantially
equivalent equipment, accessories or materials in the
Aircraft where such changes or substitutions are deemed
necessary by Seller in order to prevent delays in
manufacture or delivery, or to improve the performance,
manufacture, reliability, stability, control, utility,
maintenance or appearance of the Aircraft ("Manufacturer
Specification Change Notice" or "MSCN"), provided such
substitutions, modifications, alterations, or changes shall
not affect the Aircraft Delivery Price, the Delivery
Schedule, the Aircraft warranties, maintenance cost and
operational guarantees, Purchaser's spare parts inventory
requirements or the interchangeabilty, maintainability
(including, but not limited to, maintenance cost or
replaceability of spare parts) or the performance
characteristics of the Aircraft or of the changed
components.
Seller shall inform Purchaser of any significant changes to
the Specification or the Optional Equipment and shall supply
to Purchaser appropriate revisions to the Specification or
this Agreement, as this case may be.
ARTICLE 8 AIRCRAFT CONFIGURATION
8.1 The Aircraft will be delivered to Purchaser in accordance
with the Specification and with the Optional Equipment
installed as set forth in Exhibit I and II.
8.2 In the event Purchaser elects to change the Aircraft
configuration or its selected Optional Equipment, the
changes shall be subject to an amendment to this Agreement,
including adjustment in the Aircraft Delivery Price and
Delivery Schedule, if appropriate.
8.3 The Aircraft will be delivered in the current production
specification incorporating Purchaser's Optional Equipment
as set forth in Exhibit II, and those highly recommended
Service Bulletins as may be incorporated during the Aircraft
assembly process without delaying series production or
Aircraft delivery. Should the incorporation of such Service
Bulletins threaten to delay production or delivery, then the
relevant Service Bulletin modification kits shall be
provided to Purchaser under the terms of Exhibit VIII,
Clauses1.4.e. and f.
ARTICLE 9 PRODUCT WARRANTIES
Concurrently with the delivery of each Aircraft, Seller shall
provide or cause to be provided to Purchaser the product
warranties and service life policy as set forth in Exhibit VIII
hereto (the "Product Warranties").
ARTICLE 10 CUSTOMER SUPPORT/TRAINING PACKAGE
10.1 Seller shall provide Purchaser the customer support as
described in Exhibit IX hereto ("Customer Support"). This
Customer Support is included in the Aircraft Delivery Price
at no additional cost to Purchaser, unless otherwise
specified in Exhibit IX.
10.2 Customer Support shall be subject to the reasonable
provisions, conditions and procedures contained in both the
then current Customer Support Manual ("Manual") and Seller's
then applicable general terms and conditions for sale of
spare parts or repair of parts and rental agreements ("Terms
and Conditions") as issued by Seller from time to time.
Notwithstanding the previous sentence, no term or provision
of the Manual or Terms and Conditions, as they may be issued
or modified from time to time, shall vary the terms of this
Agreement and the Exhibits hereto. No term or provision of
any such Manual or Terms and Conditions shall limit or be
deemed to limit Purchaser's rights or Seller's obligations
for the provision of Customer Support.
10.3 Seller, its affiliate, or a third party selected by Seller,
at Seller's discretion, shall provide Purchaser certain FAA
approved initial and recurrent pilot, flight attendant,
maintenance, ground handling, general familiarization and
engine run-up training, as appropriate, as set forth in
Exhibit IX, attached hereto.
ARTICLE 11 EXCUSABLE DELAY
11.1 Force Majeure
a. (i) Seller shall have no responsibility or
liability with respect to any failure or delay in
the performance of any term or condition of this
Agreement, if such failure or delay in performance is due in
whole or in part to any cause which is
unforeseeable, unavoidable or beyond Seller's
reasonable control including, but not limited to:
acts of God; flood; fire; explosions; epidemics;
quarantine restrictions; labor disputes;
industrial unrest; acts of war; public enemy;
insurrection; riot or civil disorder; any order,
decree, law or regulation of any court, government
or governmental agency; failure or delay in
obtaining any governmental approvals (due to
another Excusable Delay); allocation regulations
affecting materials, labor, equipment, facilities
or aircraft; or delay or failure on the part of
suppliers or subcontractors due to any of the
above events.
(ii) *****
(iii) A failure or delay in the performance by
***** of any term or condition of this
Agreement attributable to any of the foregoing
events in (i) and (ii) above ("Force Majeure")
shall constitute an excusable delay ("Excusable
Delay").
b. Any date or period of time stipulated herein for the
performance of any obligation which is affected by an
event of Force Majeure shall be prolonged to the extent
of the duration of such Force Majeure, provided a right
of termination as specified hereinafter is not
exercised. Seller and Purchaser agree to collaborate
and to use their reasonable efforts to mitigate the
impact of such event of Force Majeure.
c. If an event of Force Majeure occurs, which may result
in a delay of the delivery of the Aircraft, written
notice thereof shall be provided. Such notice shall
reasonably identify the event and specify either:
(i) the period of delay which may reasonably be
expected to result therefrom, or
(ii) that such period of probable delay is so uncertain
that it cannot be reasonably estimated.
As soon as possible after the occurrence of an event of
Force Majeure, Seller shall provide Purchaser with a
revised Aircraft delivery schedule (the "Revised
Delivery Schedule") which shall replace the Delivery
Schedule set forth in Exhibit III hereto. Seller shall
not discriminate against Purchaser in the event that
such event of Force Majeure requires Seller to
reschedule deliveries to more than one customer.
d. If, as a result of one or more events of Force Majeure
due to reasons set forth in Article 11.1.a.(i):
(i) the Revised Delivery Schedule provides that the
delivery of an Aircraft shall take place more than
ten (10) months after the last day of the calendar
month in which delivery of such Aircraft is
otherwise required hereunder, Purchaser may
terminate this Agreement in respect to such
delayed Aircraft, by giving written notification
of such termination within thirty (30) days after
receipt by Purchaser of such Revised Delivery
Schedule; or
(ii) the actual delivery of the Aircraft has not taken
place after ten (10) months after the last day of
the calendar month in which delivery of such
Aircraft is otherwise required hereunder,
Purchaser may terminate this Agreement in respect
to such delayed Aircraft, by giving written
notification of such termination within thirty
(30) days after expiration of such ten (10)
months.
(iii) Seller is unable to deliver each of six (6)
or more consecutive Aircraft within ten (10)
months after the last day of the calendar month in
which such Aircraft was originally scheduled to be
delivered, Purchaser may terminate this Agreement,
by giving thirty (30) days prior written notice.
However, if, as the result of such Force Majeure,
Seller discontinues manufacture of the specific
aircraft model sold under this Agreement, and
continued deliveries to Purchaser would require
reactivation of the production line for such
specific aircraft model or otherwise cause undue
hardship to Seller, Seller will have no obligation
to deliver future Aircraft.
e. If, as a result of one or more events of Force Majeure
due to reasons set forth in Article 11.1.a.(ii), each
of six (6) or more consecutive Aircraft is not
delivered within ten (10) months after the last day of
the calendar month in which such Aircraft was scheduled
to be delivered, this Agreement may be terminated by
Seller giving thirty (30) days prior written notice.
In the event of such termination, the rights of the Parties
shall be determined in accordance with Article 11.4 herein.
In the event a Party fails to exercise its right of
termination pursuant to this Article 11.1.d., such Party
shall have no further right pursuant to this Article 11 to
terminate this Agreement with respect to such delayed
Aircraft.
11.2 Lost or Destroyed Aircraft
a. In the event that prior to delivery of an Aircraft, the
aircraft allocated by Seller to Purchaser is lost,
destroyed or in Seller's opinion damaged beyond repair
(the "Lost Aircraft"), Seller shall promptly notify
Purchaser in writing of such event. As soon as possible
after such event, Seller shall notify Purchaser of the
date on which delivery of a replacement aircraft (the
"Replacement Aircraft") manufactured in the same
configuration as the Lost Aircraft, can be expected,
consistent with Seller's other contractual commitments
and production schedule. Seller shall not discriminate
against Purchaser in the event that Aircraft of more
than one customer are lost or destroyed in the same
incident.
b. Purchaser shall notify Seller, not later than thirty
(30) days after receipt of Seller's notice, of
Purchaser's acceptance or rejection of Seller's
proposed Replacement Aircraft delivery date. Non-
receipt by Seller of Purchaser's notification within
such period is deemed to be considered as Purchaser's
acceptance of Seller's proposed Replacement Aircraft
delivery date.
c. In the event Purchaser rejects Seller's proposed
Replacement Aircraft delivery date and an alternative
Replacement Aircraft delivery date is not mutually
agreed by the Parties, either Party is entitled to
terminate this Agreement as to the Lost Aircraft by
providing written notification to the other Party
within thirty (30) days of the date of Seller's receipt
of Purchaser's rejection of the proposed Replacement
Aircraft delivery date. In the event of such
termination, the rights of the Parties shall be
determined in accordance with Article 11.4 herein.
d. If a Replacement Aircraft delivery date is agreed
between the Parties, an amendment to this Agreement
shall be executed establishing the delivery date for
such Replacement Aircraft. The time required to
replace the Lost Aircraft shall be deemed an Excusable
Delay. The remaining terms and conditions of this
Agreement applicable to the Lost Aircraft shall apply
to the Replacement Aircraft.
e. Notwithstanding the foregoing, nothing herein shall
oblige Seller to deliver a Replacement Aircraft if the
manufacture of the specific aircraft model sold under
this Agreement has been discontinued and delivery of a
Replacement Aircraft would require reactivation of the
production line for such aircraft model or otherwise
cause an undue hardship to Seller.
11.3 Price Adjustment
In the event of a delay in the delivery of an Aircraft
attributable to the provisions of this Article 11, the
Adjusted 328-300 Aircraft Base Price/Adjusted 428JET
Aircraft Base Price shall be adjusted pursuant to Article
3.3 to the actual date of Acceptance, however, *****
11.4 Termination
Nothing herein will limit either Party's ongoing rights and
obligations under this Agreement with respect to any
Aircraft delivered prior to termination. Termination
pursuant to Article 11.1.d. or 11.2.c. herein shall
terminate and discharge all obligations and liabilities of
the Parties whatsoever only with respect to the terminated
Aircraft and all undelivered items and services to be
supplied hereunder, which are specifically related thereto.
Notwithstanding the foregoing, Seller shall return to
Purchaser any Deposits and Progress Payments paid to Seller
by Purchaser in respect of such terminated Aircraft, without
interest.
ARTICLE 12 NON-EXCUSABLE DELAY
12.1 In the event that Seller, through no fault of Purchaser,
does not deliver an Aircraft within ***** after the
last day of the calendar month in which delivery of that
Aircraft is scheduled, such delay not being an Excusable
Delay, then :
a. If Seller advises Purchaser more than *****
before the first day of a month in which an Aircraft is
scheduled to be delivered that such delivery will be
delayed more than ***** after the last day
of such month, Seller shall pay ***** as
liquidated damages for each day of delay in the
delivery of such delayed Aircraft, *****
.
b. If Seller advises Purchaser less than *****
before the first day of a month in which an Aircraft is
scheduled to be delivered that such delivery will be
delayed more than ***** after the last day
of such month, Seller shall pay as liquidated damages,
for each Aircraft delayed more than *****
in the delivery of such delayed Aircraft, *****
12.2 In the event that delivery of an Aircraft is delayed by more
than ***** after the last day
of the calendar month in which delivery of that Aircraft is
scheduled, and such delay is not an Excusable Delay,
Purchaser may, by written notice to Seller given no later
than ***** after expiration of such *****
, terminate this Agreement only in respect to that Aircraft
which is the subject of such delay. Seller, at Purchaser's
option, shall return or credit to Purchaser, within *****
after such notice, all sums previously paid by Purchaser to
Seller in respect of that Aircraft *****
12.3 It is expressly acknowledged that any amount to be paid by
Seller and Purchaser's rights and remedies as a result of a
delay in delivery of any Aircraft (but not as a result of
Seller's failure to deliver any Aircraft) as set forth in
this Article 12 is agreed and accepted as liquidated damages
and not as a penalty (no other method of quantifying such
damages being possible) and are agreed as final and
exclusive and in lieu of any other rights and remedies.
12.4 *****
ARTICLE 13 EVENT OF DEFAULT, REMEDIES
13.1 Each of the following events shall be deemed to be an "Event
of Default":
a. Either Party fails to make any payment of *****
or more under this Agreement within four (4) Business
Days after the due date;
b. Either Party fails to make any other payment under this
Agreement when due, and such failure continues for
***** Business Days after the defaulting Party
receives written notice thereof.
c. Either Party fails to perform or observe any other
material obligation for at least ***** days
after receipt of written notice, unless such failure
cannot be remedied with diligent effort during such
***** period and the non-defaulting Party (i)
determines in good faith that such failure may be
remedied with additional efforts within an additional
period of ***** days, and (ii)
is diligently proceeding by appropriate proceedings to
correct such failure, in which case such failure
continues for a period in excess of such longer period
(not exceeding ***** days
from the date of notice) as may be necessary to remedy
such failure with diligent effort of the defaulting
Party.
d. Any material representation or warranty of either Party
is incorrect in a material respect when made, remains
material when discovered ("Misrepresentation"), and, if
the effect of such Misrepresentation is curable, is not
cured within ***** days after the
defaulting Party's receipt of written notice thereof
from the other Party. If the effect of such
Misrepresentation is not curable, an Event of Default
shall exist immediately upon receipt of such written
notice.
e. At any time prior to delivery of an Aircraft, either
Party
(i) becomes bankrupt or insolvent, or admits in
writing that it is unable, or is in fact unable,
to pay its debts as they mature; or
(ii) applies for or consents to or suffers the
appointment of a receiver for any of its business
or assets; or
(iii) has a trustee, liquidator or similar officer
appointed for it after a petition has been filed
for its winding up or reorganization under a
bankruptcy law and is not withdrawn or dismissed
within ninety (90) days thereafter; or
(iv) makes an assignment for the benefit of its
creditors; or
(v) commences any bankruptcy, reorganization,
arrangements, insolvency or liquidation or winding
up proceedings, or other proceedings for relief
under any bankruptcy law or similar law for relief
of debtors or any such proceeding is instituted
against it.
f. The guaranty of the guarantor ***** ceases to
be in full force and effect, or said guarantor
repudiates the validity of the guaranty, in each case,
at any time prior to the termination of such guaranty
in accordance with its terms.
13.2 Upon the occurrence of any one or more of the Events of
Default as defined in Article 13.1a, e, and f and at any
time thereafter as long as the same may be continuing, the
non-defaulting Party may exercise the following remedies:
a. suspend performance of its obligations until such Event
of Default has been cured with respect to any
undelivered Aircraft or services with respect to such
undelivered Aircraft; and/or
b. in the event of an Event of Default under Article
13.1.a, the defaulting Party shall pay, for each day of
payment delay, interest, computed daily on the sum due,
at a rate equal to *****
, but not to exceed the maximum rate allowed by
applicable law ("Past Due Rate"); and/or
c. terminate this Agreement with respect to any
undelivered Aircraft or services with respect to such
undelivered Aircraft that are subject to this
Agreement; and/or
d. exercise any rights and remedies to which the non-
defaulting Party may be entitled including the return
of any Deposits, Progress Payments or other payments
made pursuant to the provisions of this Agreement and
as may be available at law or in equity.
13.3 Upon the occurrence of any one or more of the Events of
Default as defined in Article 13.1b, c, and d and at any
time thereafter as long as the same may be continuing, the
non-defaulting Party may exercise the following remedies:
a. subject to the outcome of Arbitration and Consultation
as provided for in Article 34.2, suspend performance of
its obligations until such Event of Default has been
cured; and/or
b. in the event of an Event of Default under Article
13.1.b, the defaulting Party shall pay, for each day of
payment delay, interest, computed daily on the sum due,
at a rate equal to the Past Due Rate; and/or
c. subject to the outcome of Arbitration and Consultation
as provided for in Article 34.2, terminate this
Agreement with respect to any undelivered Aircraft or
services with respect to such undelivered Aircraft as
are subject to this Agreement; and/or
d. subject to the outcome of Arbitration and Consultation
as provided for in Article 34.2, exercise any rights
and remedies to which the non-defaulting Party may be
entitled with respect to such undelivered Aircraft
pursuant to
the provisions of this Agreement and as may be available at
law or in equity.
13.4 The exercise or failure to exercise any remedy hereunder
shall not constitute a waiver of nor prevent the exercise of
any other remedy in this Agreement and no waiver of any
breach or failure to declare any default shall prevent the
non-defaulting Party from declaring this Agreement to be in
default and to exercise any remedy provided hereunder.
ARTICLE 14 LIMITED LIABILITY, INDEMNIFICATION
14.1 THE PARTIES TO THIS AGREEMENT EXPRESSLY RECOGNIZE THE
COMMERCIAL NEED TO DEFINE, APPORTION AND LIMIT CONTRACTUALLY
THE RISKS ASSOCIATED WITH THE PURCHASE, SALE AND USE OF THE
AIRCRAFT AND THE PRODUCTS, INFORMATION, INSTRUCTIONS,
TRAINING SERVICES AND OTHER THINGS PROVIDED UNDER THIS
AGREEMENT. TO ACHIEVE THIS END, SELLER AND PURCHASER
UNDERSTAND AND AGREE THAT ALL OF THEIR RESPECTIVE REMEDIES
FOR ANY ALLEGED LIABILITY ARISING UNDER OR IN ANY WAY
RELATED TO THIS AGREEMENT SHALL BE LIMITED TO THE REMEDIES
EXPRESSLY AGREED UPON AND STATED IN THIS AGREEMENT. SELLER
AND PURCHASER EXPRESSLY AGREE THAT THEY SHALL HAVE NO OTHER
REMEDIES OTHER THAN THOSE EXPRESSLY STATED IN THIS AGREEMENT
AND THAT THE TERMS OF THIS ARTICLE 14 ARE AN ESSENTIAL BASIS
OF THIS BARGAIN.
14.2 THE WARRANTIES, OBLIGATIONS AND LIABILITIES OF SELLER, AND
THE REMEDIES AGAINST SELLER WHICH ARE EXPRESSLY SET FORTH IN
THIS AGREEMENT ARE EXCLUSIVE AND IN LIEU OF ANY OTHER
WARRANTIES, OBLIGATIONS, LIABILITIES AND REMEDIES OF ANY
NATURE WHATSOEVER, EXCEPT WITH RESPECT TO WARRANTY OF TITLE.
PURCHASER HEREBY EXPRESSLY ACKNOWLEDGES SELLER'S DISCLAIMER
OF ALL OTHER WARRANTIES, GUARANTEES, OBLIGATIONS, AND
LIABILITIES OF SELLER AND EXPRESSLY WAIVES ALL OTHER RIGHTS
OR REMEDIES AGAINST SELLER, EXPRESS OR IMPLIED, ARISING BY
LAW, IN CONTRACT, IN TORT OR OTHERWISE, WITH RESPECT TO ANY
BREACH OF THIS AGREEMENT, INCLUDING DELAY OR DEFAULT, AND
WITH RESPECT TO ANY DEFECT, NONCONFORMANCE OR DEFICIENCY IN
ANY PRODUCTS DELIVERED UNDER THIS AGREEMENT OR IN ANY OF THE
MANUALS, TECHNICAL PUBLICATIONS, INFORMATION, INSTRUCTIONS
OR OTHER GOODS OR SERVICES PROVIDED PURSUANT TO THIS
AGREEMENT.
WITHOUT LIMITATION, SELLER HEREBY DISCLAIMS:
(I) ALL IMPLIED WARRANTIES OF MERCHANTABILITY;
(II) ALL IMPLIED WARRANTIES OF FITNESS FOR A PARTICULAR
PURPOSE; AND
(III) ALL IMPLIED WARRANTIES ARISING FROM COURSE OF
PERFORMANCE, COURSE OF DEALING OR USAGE OR TRADE
PRACTICES.
AS USED HEREIN, THE TERM "SELLER" INCLUDES SELLER, ITS
PARENT, SUBSIDIARIES, AFFILIATES OR RELATED COMPANIES,
ASSIGNEES AND SUCCESSORS, VENDORS AND SUBCONTRACTORS AS
WELL AS ALL OF THEIR OFFICERS, DIRECTORS, EMPLOYEES,
REPRESENTATIVES AND AGENTS AS USED HEREIN, THE TERM
"PURCHASER" INCLUDES PURCHASER, ITS PARENT, SUBSIDIARIES,
AFFLILIATES AND RELATED COMPANIES, ASSIGNEES AND SUCCESSORS
AS WELL AS PURCHASER'S OFFICERS, DIRECTORS, EMPLOYEES,
REPRESENTATIVES AND AGENTS.
14.3 NEITHER SELLER NOR PURCHASER SHALL, UNDER ANY CIRCUMSTANCES
OR UNDER ANY THEORY OF LIABILITY (INCLUDING NEGLIGENCE),
HAVE ANY LIABILITY TO THE OTHER PARTY FOR CONSEQUENTIAL,
SPECIAL, INCIDENTAL AND/OR PUNITIVE DAMAGES INCLUDING, BUT
NOT LIMITED TO, LOSS OF REVENUES RESULTING FROM ANY BREACH
OF THIS AGREEMENT OR FAILURE OF EITHER PARTY TO PERFORM ANY
OBLIGATION HEREUNDER. SELLER AND PURCHASER EXPRESSLY WAIVE
ANY AND ALL RIGHTS WHICH IT MAY HAVE OTHERWISE HAD TO SEEK
AND/OR TO RECOVER SUCH DAMAGES, EXCEPT IF OCCASIONED BY
WILLFUL MISCONDUCT OF THE OTHER PARTY.
14.4 NOTHING CONTAINED IN THIS ARTICLE 14 SHALL CONSTITUE A
WAIVER OR RELEASE OR RENUNCIATION OF, OR INDEMNITY FOR, ANY
LOSSES, DAMAGES OR CLAIMS BY PURCHASER AGAINST SELLER FOR
CONTRIBUTION TOWARD THIRD PARTY BODILY INJURY OR PROPERTY
DAMAGE CLAIMS BASED ON PRODUCT LIABILITY THEORIES (TO THE
EXTENT OF SELLER'S RELATIVE PERCENTAGE OF THE TOTAL FAULT
OR OTHER LEGAL RESPONSIBLITY OF PERSONS CAUSING SUCH BODILY
INJURY OR PROPERTY DAMAGE).
14.5 EXCEPT AS OTHERWISE PROVIDED FOR IN THIS AGREEMENT,
PURCHASER SHALL BE RESPONSIBLE FOR AND SHALL INDEMNIFY AND
HOLD HARMLESS SELLER, AS DEFINED IN ARTICLE 14.3 ABOVE, FROM
AND AGAINST ALL CLAIMS, DEMANDS OR CAUSES OF ACTION,
LIABILITIES, LOSSES, JUDGEMENTS, SUITS (INCLUDING, BUT NOT
LIMITED TO, COSTS, EXPENSES AND LEGAL FEES INCIDENT
THERETO), AND DAMAGES OF ANY NATURE - TANGIBLE OR
INTANGIBLE, WHETHER IN CONTRACT, TORT, STATUTE OR OTHERWISE,
WHICH IN ANY WAY ARE CONNECTED TO OR ARISING FROM THIS
AGREEMENT OR THE USE, OPERATION, OWNERSHIP OR CONTROL OF THE
AIRCRAFT, AND WHICH RESULT IN ANY DEGREE FROM ACTS OR
OMISSIONS OR THE LEGAL RESPONSIBILITY OF PURCHASER.
FURTHERMORE, PURCHASER SHALL INDEMNIFY AND HOLD HARMLESS
SELLER FROM AND AGAINST SUCH OCCURRENCES, MENTIONED IN THE
PRECEDING SENTENCE, CAUSED BY PURCHASER OR SELLER, (WHETHER
OR NOT ARISING FROM THEIR NEGLIGENCE), ARISING OUT OF,
RELATING TO OR RESULTING FROM THE OPERATION OF THE AIRCRAFT
SUBSEQUENT TO THE ACCEPTANCE OF SUCH AIRCRAFT OR THE ACTS OR
OMISSIONS OF SELLER WHEN
PERFORMING SERVICES AT PURCHASER'S FACILITY OR UNDER PURCHASER'S
AUSPICES. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED
IN THIS ARTICLE 14.5, SELLER SHALL NOT BE ENTITLED TO
INDEMNIFICATION FOR BODILY INJURY, DEATH OR LOSS OR DAMAGE
TO PROPERTY CAUSED BY THE GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT OF SELLER.
14.6 IN THE EVENT THAT ANY PART OF THIS ARTICLE 14 IS HELD TO BE
INEFFECTIVE FOR ANY REASON, THE REMAINDER OF SUCH PROVISION
SHALL REMAIN IN FULL FORCE AND EFFECT. IN THE EVENT ANY
TERM OF THIS ARTICLE 14 CONFLICTS WITH THE TERMS OF ANY
OTHER ARTICLE OF THIS AGREEMENT, THE TERMS OF THIS ARTICLE
14 SHALL PREVAIL.
ARTICLE 15 PATENT INFRINGEMENT
15.1 Seller shall indemnify and hold harmless Purchaser from and
against all claims, suits, demands, proceedings, damages and
costs or expenses (excluding any incidental or consequential
damages and excluding any liabilities, costs, loss of
revenues or profit resulting from loss of use, but including
costs of replacing the infringing item or of otherwise
curing any infringement preventing Purchaser from using the
Aircraft), resulting from any actual or alleged infringement
of any Canadian, U.S., and German patents which have been
issued as of the date of delivery of the Aircraft, by the
Aircraft, or by any accessory, equipment or part installed
therein. Such indemnity shall also extend to patents issued
by other countries only if from the time of design of the
Aircraft, system, accessory, equipment or part until the
alleged infringement claims are resolved:
a. such other country in which the Aircraft is permanently
registered has ratified and adhered to and is at the
time of the actual or alleged infringement, a
contracting party to the Chicago Convention on a
International Civil Aviation of December 7, 1994 and is
fully entitled to all benefits of Article 27 thereof,
and
b. 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.
15.2 Seller's obligation under Article 15.1 herein
a. shall not apply to Purchaser furnished equipment nor to
any accessory, equipment or part that was not
manufactured by Seller or pursuant to Seller's detailed
design nor to any accessory, equipment or part
manufactured to Seller's detailed design without
Seller's written authorization.
b. is conditional upon Purchaser giving Seller written
notice within ten (10) days after Purchaser receives
notice of a suit or action against Purchaser alleging
infringement or within twenty-five (25) days after
Purchaser's receipt of written claim of infringement,
whichever occurs first.
c. is conditional upon Purchaser promptly furnishing to
Seller all data, records and assistance, within
Purchaser's control, material to such claim, suit,
demand or proceedings, and, except as to amounts
payable under a judgement, upon Purchaser not making
payment and assuming any liabilities or paying any,
damages, royalties or costs without the prior approval
of Seller.
15.3 Seller shall be entitled, in its own name or on behalf of
Purchaser, to conduct negotiations and/or settlements with
the party or parties alleging infringement and may assume
and conduct the defense of any suit or claim. In each case,
Seller will consult with Purchaser and be cognizant of its
operational needs in any settlement or conduct of its
defense.
15.4 In the event Purchaser is legally prevented from using any
accessory, equipment or part of an Aircraft because of any
such infringement pursuant to Article 15.1 herein, Seller
shall, at its option and expense, procure for Purchaser the
right to unrestrictively use such accessory, equipment or
part, or replace and install such accessory, equipment or
part as soon as possible with a non-infringing substitute
which shall be deemed to be in compliance with this
Agreement or to modify it so it becomes not infringing but
equivalent.
15.5 The foregoing states the entire liability of Seller
concerning patent infringement in the course of, or
resulting from, sales of Aircraft under this Agreement.
ARTICLE 16 ASSIGNMENT, RESALE, LEASE
16.1 Neither the rights nor the obligations of either Party under
this Agreement may be assigned, transferred or otherwise
disposed of, in whole or part, by either Party without the
prior written consent of the other Party, such consent not
to be unreasonably withheld or delayed.
16.2 a. Notwithstanding Article 16.1 hereinabove, Seller
may assign any of its rights to receive payments
hereunder to any third party and/or any part of its
rights and obligations herein including, but not limited
to, its title to or any interest in any Aircraft or
service to be delivered hereunder, its right to receive
payments and to be indemnified, to any subsidiary or
affiliate of Seller.
b. Notwithstanding Article 16.1 hereinabove, Purchaser
may assign any of its rights and obligations herein to
its parent company, or any wholly owned subsidiary, or a
wholly owned subsidiary of its parent company.
16.3 Prior to delivery of the Aircraft and receipt of total
payment by Seller pursuant to Article 4.1 or as otherwise
provided in Article 20, Purchaser shall not resell, lease,
transfer, pledge or otherwise dispose of the Aircraft, or
contract to do so, without Seller's prior written consent.
The consent of Seller shall not be unreasonably withheld or
delayed to a transaction involving any Aircraft, provided
that the main purpose of such transaction is to arrange
financing for the acquisition of such Aircraft by Purchaser
and provided further that Purchaser shall be the operator of
such Aircraft after delivery. Such transaction shall not
modify in any way Seller's rights hereunder, or release
Purchaser from any of its obligations hereunder, or require
Seller to divest itself of title to or possession of such
Aircraft, until delivery and payment thereof as provided
herein. Purchaser acknowledges that any purported assignment
of any rights pursuant to this Agreement without the written
consent of Seller shall be without legal force or effect.
16.4 In the event of the resale, lease, transfer or other
disposal of any Aircraft by Purchaser with Seller's prior
written consent, Purchaser's rights pursuant to this
Agreement shall inure to the benefit of such purchaser,
lessee or other transferee, as the case may be, from the
date of Seller's approval of such resale, lease, transfer or
other disposal provided the subsequent purchaser, lessee or
other transferee undertakes in writing to be bound by and
comply with all terms, conditions and limitations applicable
to Purchaser pursuant to this Agreement. Nothing contained
herein shall preclude Purchaser from reselling, leasing,
transferring, or otherwise disposing of its interest in an
Aircraft subsequent to its delivery without Seller's
consent, provided that, in that instance, no rights
contained in this Agreement shall be assigned.
ARTICLE 17 SELLER'S REPRESENTATIONS AND WARRANTIES
Seller represents that it:
(i) is a company duly organized and lawfully existing and
in good standing under the laws of the Federal Republic
of Germany and has the necessary power to own its
property and to carry on its business as is now being
conducted,
(ii) has the full power and authority to execute, deliver
and perform its obligations under this Agreement, the
same having been duly authorized by all proper and
necessary corporate action, and no consent or approval
of stockholders or any other person or consent or
approval of, notice to, or filing with, any public
authorities is required as a condition to the validity
of this Agreement,
(iii) this Agreement constitutes a valid and legally
binding obligation of Seller enforceable in accordance
with its terms,
(iv) no proceedings are pending or threatened against Seller
before any court or administrative agency, that, in the
reasonable opinion of Seller will materially adversely
affect the ability of Seller to perform its obligations
under this Agreement,
(v) there is no provision in the charter of by-laws of
Seller and no provision of any existing mortgage,
debenture, contract or agreement binding on Seller or
affecting its properties that conflicts with or, in any
ways prevents the execution, delivery or performance by
Seller of this Agreement, and
(vi) there is no governmental regulation, treaty or order
that shall be contravened by the execution, delivery
and performance of this Agreement by Seller.
ARTICLE 18 PURCHASER'S REPRESENTATIONS AND WARRANTIES
Purchaser represents that it:
(i) is a company duly organized and lawfully existing and
in good standing under the laws of the State of
California, United States of America, and has the
necessary power to own its property and to carry on its
business as is now being conducted,
(ii) has the full power and authority to execute, deliver
and perform its obligations under this Agreement, the
same having been duly authorized by all proper and
necessary corporate action, and no consent or approval
of stockholders or any other person or consent or
approval of, notice to, or filing with, any public
authorities is required as a condition to the validity
of this Agreement,
(iii) this Agreement constitutes a valid and legally
binding obligation of Purchaser enforceable in
accordance with its terms,
(iv) no proceedings are pending or threatened against
Purchaser before any court or administrative agency,
that, in the reasonable opinion of Purchaser will
materially adversely affect the ability of Purchaser to
perform its obligations under this Agreement,
(v) there is no provision in the charter of by-laws of
Purchaser and no provision of any existing mortgage,
debenture, contract or agreement binding of Purchaser
or affecting its properties that conflicts with or, in
any ways prevents the execution, delivery or
performance by Purchaser of this Agreement, and
(vi) there is no governmental regulation, treaty or order
that shall be contravened by the execution, delivery
and performance of this Agreement by Purchaser.
ARTICLE 19 *****
19.1 *****
19.2 *****
19.3 *****
ARTICLE 20 *****
20.1 *****
a. *****
b. *****
20.2 *****
a. *****
b. *****
c. *****
d. *****
e. *****
f. *****
g. *****
(i) *****
(ii) *****
(iii) *****
h. *****
(i) *****
(ii) *****
(iii) *****
i. *****
j. *****
20.3 *****
20.4 *****
a. *****
b. *****
c. *****
(i) *****
(ii) *****
20.5 *****
a. *****
b. *****
20.6 *****
20.7 *****
20.8 *****
20.9 *****
20.10 *****
20.11*****
a. *****
b. *****
c. *****
d. *****
e. *****
ARTICLE 21 OPTION AIRCRAFT
21.1 Seller hereby grants Purchaser the option to purchase as
many as fifty-five (55) additional Aircraft (the "Option")
incorporating the Optional Equipment ("Option Aircraft").
Options not exercised prior to ***** , will
expire on that date.
21.2 Option Aircraft may be exercised by Purchaser in blocks of
five (5) or more Aircraft. Timing and procedures for the
exercise of options for Option Aircraft in blocks of
delivery positions shall be as follows:
a. Not later than ***** prior to Purchaser's
desired delivery month of the first Option Aircraft in that
block, Purchaser shall give notice ("Preliminary Notice") to
Seller of its conditional intention to purchase Option Aircraft
and indicating its desired delivery month for the Option Aircraft
in that block. The Preliminary Notice shall designate each
Aircraft included in such notice as either a 328-300 or 428JET
Aircraft.
b. During the ***** following the date of
Preliminary Notice, Seller and Purchaser will discuss and agree
on available delivery positions, *****
.
c. Not later than *****
prior to the first day of the month in which an Option Aircraft
is agreed to be delivered pursuant to Article 21.2.b hereof,
Purchaser shall give notice ("Notice of Exercise") to Seller of
its exercise of its option to purchase the Option Aircraft in
that block together with a non-refundable cash deposit in the
amount of ***** per Option Aircraft, at which time the
Option Aircraft shall become firm 328-300 Aircraft or 428JET
Aircraft. Unless
Seller and Purchaser have otherwise mutually agreed, if
Purchaser has not given Notice of Exercise no later
than the date specified herein, the Preliminary Notice
shall expire, but Purchaser shall retain the same
number of Options as if Preliminary Notice had not been
given.
21.3 a. The base price of each Option 328-300 Aircraft is
***** , which is the 328-300
Aircraft Base Price as determined in accordance with
Article 3.1 ("Option 328-300 Aircraft Base Price").
b. *****
21.4 a. The base price of each Option 428JET Aircraft is
***** , which is the 428JET Aircraft Base
Price as determined in accordance with Article 3.2
("Option 428JET Aircraft Base Price").
b. *****
21.5 a. The Adjusted Option 328-300 Aircraft Base Price
and Adjusted Option 428JET Aircraft Base Price, are
based on January 1999 economic conditions and are
subject to adjustment from January 1999 to the month of
Option Aircraft delivery in accordance with the Price
Adjustment Formula and the terms of this Agreement with
respect to the application of the Price Adjustment
Formula. The Adjusted Option 328-300 Aircraft Base
Price and Adjusted Option 428JET Aircraft Base Price so
adjusted shall be referred to as the "Option Aircraft
Delivery Price."
b. Except as otherwise provided in this Article 21.5b, the
Option Aircraft Delivery Price is exclusive of any
Taxes, which shall be for the account of Purchaser. If
under the provision of any applicable law or regulation
such Taxes are to be paid by Seller, Purchaser shall
reimburse Seller accordingly. Seller hereby represents
to Purchaser that pursuant to current U.S. and German
law, German and U.S. Taxes are not applicable to
aircraft sold and exported from Germany into the United
States. Should there be a change in such law,
Purchaser and Seller agree to modify this Agreement on
mutually acceptable terms (which may include mutual
termination). Purchaser shall, in any case, not be
responsible for any Taxes normally borne by sellers of
aircraft, including but not limited to Taxes on
Seller's gross or net income.
21.6 The Option Aircraft Delivery Price shall be payable by
Purchaser to Seller as follows:
a. Application of the deposit paid in accordance with
Article 21.2.c. above, in the amount of *****
(which when paid shall be deemed a Deposit);
b. On *****
(which when paid shall be deemed a Progress Payment;
and
c. Upon delivery of each Option Aircraft, the balance of
the Option Aircraft Delivery Price.
21.7 *****
21.8 Seller shall submit an invoice to Purchaser for each payment
due pursuant to Article 21.6 above. The invoice for the
balance of the Option Aircraft Delivery Price shall detail
the price adjustment calculations pursuant to Article 21.5
above and the provisions of Article 4.4 above shall apply to
payments under this Article 21.
21.9 *****
21.10 With respect to each Option Aircraft ordered by
Purchaser, Purchaser shall perform a technical inspection,
reinspection if necessary, and accept delivery of each
Option Aircraft at the Delivery Location. The inspection,
acceptance, delivery and ferry of the Option Aircraft shall
be completed in accordance with Article 5 above.
21.11Except as specifically provided in this Agreement, the
terms and conditions for the purchase of the Option
Aircraft shall be the same as those of the firm Aircraft.
*****
21.12*****
21.13*****
ARTICLE 22 *****
22.1 *****
22.2 *****
a. *****
b. *****
c. *****
d. *****
e. *****
ARTICLE 23 *****
*****
ARTICLE 24 *****
24.1 *****
24.2 *****
a. *****
b. *****
c. *****
d. *****
e. *****
24.3 *****
ARTICLE 25 CONDITION PRECEDENT
25.1 Purchaser and Seller agree that this Agreement will be
subject to Purchaser receiving United Airlines approval to
operate less than fifty (50) seat jet aircraft as "United
Express", on terms satisfactory to Purchaser in its sole
discretion (the "United Approval"). Such United Approval is
expected on or prior to ***** .
Purchaser may at any time advise Seller in writing that it
waives this Condition Precedent in which case the Aircraft
will be delivered to Purchaser in accordance with the terms
of Article 25.2 based on the month in which Purchaser
advises Seller of its waiver of this Condition Precedent.
25.2 Purchaser agrees to advise Seller immediately, in writing,
upon receipt of the United Approval.
a. If Purchaser receives the United Approval after April
30, 1999, but before June 30, 1999, twenty-five (25)
328-300 Aircraft will be delivered according to the
Delivery Schedule.
b. If Purchaser receives the United Approval after June
30, 1999, but before *****
. The remaining ***** 328-300
Aircraft will be delivered as scheduled. Seller will
advise Purchaser of any rescheduling decision within
***** of the United Approval receipt.
c. If Purchaser does not receive the United Approval by
***** , then the entire twenty-five (25) 328-
300 delivery schedule in Exhibit III may, at Seller's
sole option, be delayed by up to *****
from the date the United Approval is received, unless
Seller and Purchaser agree on earlier deliveries.
Seller will advise Purchaser of any re-scheduling
decision within ***** of the United Approval
receipt. Purchaser shall not be required to accept an
Aircraft delivery with less than *****
advance notice.
d. Any 328-300 Aircraft Delivery Schedule adjustments
addressed above will not cause the re-scheduling of
428JET Aircraft deliveries under the Delivery Schedule
in Exhibit III.
25.3 Any 328-300 Aircraft Delivery Schedule adjustments arising
from this Article 25 shall not relieve Purchaser from taking
delivery of twenty-five (25) 328-300 after the United
Approval is received by Purchaser.
25.4 If Purchaser has not received the United Approval by April
30, 1999, it will advise Seller in writing as to the status
of its request for the United Approval. Said status report
will be updated monthly, which reports will be in writing to
the extent requested by Seller.
25.5 In the event Purchaser determines on or before April 30,
1999, or on any later date, that United will not provide the
United Approval, *****
ARTICLE 26 COMPLETION AND RELIABILITY
Seller shall provide to Purchaser the terms of Exhibit XII,
attached hereto.
ARTICLE 27 *****
27.1 *****
a. *****
b. *****
27.2 *****
27.3 *****
a. *****
b. *****
c. *****
d. *****
e. *****
f. *****
ARTICLE 28 MAINTENANCE COST
28.1 As more fully defined in Exhibit XIII, Seller will guarantee
that the cost to repair, replace, overhaul and restore the
328-300 Aircraft and components thereof, except Excluded
Items, as that term is defined in Exhibit XIII, to a
serviceable condition shall not exceed a fleet average of
***** per flight hour during the first *****
after delivery of the first 328-300 Aircraft. Maintenance
performed on the 328-300 Aircraft must be done in the most
economical manner possible, including the use of overhauled,
restored or repaired parts, when appropriate, consistent
with sound U.S. commercial airline practice. This
guaranteed amount:
a. excludes Purchaser's labor;
b. is based on January 1999 economic conditions and is
subject to adjustment annually from January 1999 in
accordance with the price adjustment provisions set
forth in Exhibit XI, and
c. assumes (i) a fleet size of fifty-five (55) Aircraft
delivered in accordance with the Delivery Schedule,
(ii) a ***** flight hour to cycle ratio, and (iii) an
annual utilization of ***** flight hours, in the
continental United States and Canada.
28.2 Seller will also guarantee that the flight hour maintenance
cost of the 428JET Aircraft and installed components thereof
as defined in Article 28.1 above and Exhibit XIII, except
Excluded Items, shall not exceed a fleet average of
***** per flight hour, under the same assumptions and
conditions as for the 328-300 Aircraft.
ARTICLE 29 *****
29.1 *****
a. *****
b. *****
29.2 a. *****
b. *****
c. *****
29.3 *****
a. *****
b. *****
29.4 *****
ARTICLE 30 RESERVED
ARTICLE 31 ALLIEDSIGNAL AFIS
31.1 The AlliedSignal AFIS (PN 400-0405500-XXX) ("AFIS") will be
delivered with the Aircraft as part of Purchaser's Optional
Equipment subject to:
a. Timely agreement among Seller, Purchaser, Honeywell and
AlliedSignal as to the technical issues and commercial
terms of the AFIS installation in the Aircraft. Such
agreement is to be reached not later than *****
, and may result in AFIS retrofit if such agreement is
reached after *****
b. Purchaser using its best efforts, including placing an
order for AFIS LRUs with AlliedSignal, to induce
AlliedSignal to pay all certification and non-recurring
costs. *****
c. Purchaser providing the AFIS LRUs to Seller as PFE in
sufficient time to allow for installation in and
delivery of the Aircraft in accordance with the
Delivery Schedule. Aircraft deliveries will not be
delayed because AFIS is not certified, available, or
installed in the Aircraft.
31.2 Should (i) Purchaser's share of the non-recurring costs
associated with the AFIS installation in the Aircraft exceed
***** , or (ii) the price to Purchaser of AFIS LRUs
and AFIS-related Aircraft provisioning exceed *****
per Aircraft, Purchaser may elect to decline the
installation of the AFIS and terminate this re-configuration
program by providing written notice to all parties not later
than ***** . In such event, the Aircraft will be
delivered without the AFIS installed and Seller shall have
no liability to Purchaser for the absence of AFIS on the
Aircraft. Seller's price for the complete provisioning of
the AFIS LRU for installation in the Aircraft shall be
referred to as the "AFIS Installation Cost".
ARTICLE 32 POWERPLANT AND APU SUPPORT
a. *****
b. *****
c. *****
ARTICLE 33 NOTICES, REQUESTS
33.1 All notices and requests required or authorized hereunder
shall be made in written form and served by certified mail
(return receipt requested) or by facsimile (with a
confirming telephone call), or delivered by an established
overnight courier service (with proof of delivery) addressed
to the following addresses:
In the case of Seller to: In the case of
Purchaser to:
Dornier Luftfahrt GmbH Atlantic Coast
Airlines
c/o Fairchild Aerospace Corporation 515A Shaw Road
10823 N.E. Entrance Dulles, VA 20166
San Antonio, Texas 78216 U.S.A.
U.S.A.
Attn: General Counsel
Certified Mail Address: Fax Number: 703/925-
6294
P.O. Box 790490
San Antonio, TX 78279-0490
Attention: Vice President, Contracts
Fax Number: 210/820-8656
33.2 All notices and requests required or authorized hereunder
shall be deemed to be effective upon receipt by the Parties
at the above addresses, unless the Parties otherwise notify
each other in writing of changes of address.
ARTICLE 34 APPLICABLE LAW, JURISDICTION
34.1 This Agreement shall be governed by and interpreted in
accordance with the laws of the State of New York. The
application of the UN Convention on Contracts for the
International Sale of Goods is expressly excluded.
34.2 The Parties agree to attempt in good faith to resolve any
controversy or claim arising out of or relating to this
Agreement by meetings between the senior management of both
Parties ("Consultation"). If the matter has not been
resolved pursuant to the aforesaid Consultation within forty-
five (45) days of the commencement of such Consultations
(unless extended by mutual agreement), or if a resolution
satisfactory to both Parties is not concluded, the Parties
agree that the controversy shall be settled by binding
arbitration as the exclusive method of dispute resolution in
accordance with the Commercial Rules of the American
Arbitration Association by a sole arbitrator
("Arbitration"). The arbitration shall be governed by the
Federal Arbitration Act, 9 U.S.C. et seq., and judgement
upon the award rendered by the arbitrator may be entered by
any court having jurisdiction thereof. The place of
arbitration shall be a mutually agreed location in the
continental U.S. not served by Purchaser and not home to
Seller's or Purchaser's headquarters offices. The
arbitrator shall decide any dispute according to the terms
of this Agreement and governing law as specified in Article
34.1. The arbitrator is not empowered to award damages in
excess of the amounts specified in this Agreement or
otherwise in excess of actual damages and no damages may be
awarded for loss of revenue or profit or any indirect,
incidental, consequential or punitive damages of any kind or
nature. The Parties hereby consent to the personal
jurisdiction of the Federal courts of Texas with respect to
Seller and Virginia with respect to Purchaser solely with
respect to the enforcement of a judgement of an award
rendered by an arbitrator pursuant to this Article 34.2.
34.3 Seller and Purchaser shall each be responsible for their own
legal fees related to the negotiation and preparation of
this Agreement.
ARTICLE 35 MISCELLANEOUS
35.1 Confidentiality
a. This Agreement and the terms hereof, as well as all
information and data disclosed in connection with the
execution of this Agreement or disclosed as required by
this Agreement, are confidential and may not be
disclosed by either Party to any third party, except
(i) to associated companies, subsidiaries or
affiliates of the Parties;
(ii) to its advisors, counsel , financial advisors, and
accountants under confidentiality agreement;
(iii) as required by law or regulation;
(iv) as required to perform and enforce the terms
hereof;
(v) upon receipt by the disclosing Party of prior
written consent of the other Party, which shall
not be unreasonably withheld; or
(vi) to assignees or transferees of either party.
b. The Parties acknowledge that should either Party breach
this Article 35.1 that such a default cannot be cured
and the cure period as provided in Article 13.1c. does
not apply in the case of such a default.
35.2 Year 2000 Readiness Disclosure
Seller and Purchaser acknowledge for the benefit of the
other that in order to comply with the terms of this
Agreement, each Party must become, in a timely manner, "Year
2000 Compliant" (as defined below), both as to its products
and services, including the Aircraft, and as to its
continuing ability to meet in a timely manner its
obligations under this Agreement. Therefore, each Party
covenants and agrees that it shall be, in all material
respects, Year 2000 Compliant and shall be able to conduct
its business and perform its obligations under this
Agreement notwithstanding the technological and other issues
revolving around the ability of computers and other data
processing systems to perform functions correctly which
refer to dates or time periods on and after January 01,
2000. "Year 2000 Compliant" shall mean (i) the Party is now
planning and taking action to implement and will continue to
implement, in a commercially reasonable manner, any and all
measures to perform this Agreement according to its terms,
(ii) all the Party's computers and data processing systems
shall be upgraded, replaced or adjusted as necessary to
permit it to conduct its business as usual and to comply
with this Agreement regardless of dates used in such
programs or systems, on or after January 01, 2000, and (iii)
all computer programs and data processing systems of the
Party shall be upgraded, replaced or adjusted, as necessary,
in a manner that resolves any ambiguities as to the century
in a defined, predetermined and appropriate manner. Failure
by either Party, or the Aircraft to be Year 2000 Compliant
is not an Excusable Delay.
35.3 Waiver
The failure of either Party to enforce at any time any of
the provisions of this Agreement, or to require at any time
the performance by the other Party of any
of the provisions hereof, shall in no way be construed to be a
waiver of such provisions, nor in any way affect the
validity of this Agreement or any part thereof, or the right
of said Party thereafter to enforce each and every such
provision. The express waiver by either Party of any
provision, condition or requirement of this Agreement shall
not constitute a waiver of any future obligation to comply
with such provision, condition or requirement.
35.4 Severability
If any provision of this Agreement contravenes any law, such
provision shall be deemed not to be part of this Agreement
and the remainder of this Agreement shall be valid and
binding as though such provision was not included therein.
To the extent a provision of this Agreement would be
enforceable under the applicable law with modification to
conform to the requirements of such law, the Parties agree
to negotiate in good faith for a written amendment of this
Agreement promptly upon discovery of the nonconformity and
to perform and accept performance of the Agreement as
modified to conform to the applicable law.
35.5 Data, Reproduction
a. Purchaser shall provide to Seller, as Seller may
reasonably request, all the necessary existing data
pertaining to the operation of the Aircraft for an
efficient and coordinated survey of all reliability,
maintainability, operational and cost data for the sole
purpose of improving the safety, availability and
operational costs of the Aircraft, provided such data
are of the type and in the form normally kept by
Purchaser in its operation, and provided further that
any such Purchaser data as it may be assembled or
compiled by Seller shall not be provided to any other
party and such data shall be treated as confidential by
the Seller. Seller shall provide Purchaser at least
one copy of any such assembled or compiled information.
b. Nothing in this Agreement shall convey to Purchaser the
right to, and Purchaser shall not, reproduce or cause
the reproduction of an Aircraft, or part thereof, in a
design identical with or similar to that of the
Aircraft, or parts thereof, nor shall this Agreement
grant to Purchaser a license under any patents or other
rights owned or controlled by Seller or by any
subsidiary, associated or affiliated company of Seller
or by any of their vendors or subcontractors.
35.6 Payments
a. All payments due under this Agreement to either Party,
unless otherwise agreed, shall be effected in US
Dollars in immediately available US funds on the dates
due to the following bank accounts:
(i) For Seller:
*****
(ii) For Purchaser:
*****
The payments are deemed to have been made as soon as
such amounts have been credited to the above accounts.
The place of performance for Purchaser's payments shall
be New York, or such other place as may be designated
by Seller. The place of performance for Seller's
payments shall be Virginia, or such other place as may
be designated by Purchaser.
c. Any amounts payable to Seller under Articles 4.1.c and 21.6,
and any amounts payable to Purchaser under Articles 2.3.c, 4.1.d,
11.4, 12.4, and 21.7 are absolute net and without any deductions.
Under no circumstances shall the amounts payable to either Party
be subject to withholding, set-off, discount, counterclaim or any
other right unless undisputed or finally determined in accordance
with the terms of this Agreement.
35.7 Language
The Parties agree that this Agreement, all correspondence,
documents and any other written matters in connection with
this Agreement shall be in English.
35.8 Consideration
THE OBLIGATIONS AND LIABILITIES OF SELLER AND PURCHASER,
INCLUDING BUT NOT LIMITED TO THE WARRANTIES AND LIMITATION
OF WARRANTY AND LIABILITY SET FORTH IN ARTICLE 14 AND
EXHIBIT VIII AND IX HEREIN HAVE BEEN DISCUSSED, UNDERSTOOD
AND AGREED TO
BETWEEN THE PARTIES AS FUNDAMENTAL CONSIDERATION OF THE AIRCRAFT
DELIVERY PRICE.
35.9 Entire Agreement
This Agreement, the Exhibits attached hereto and the matters
referred to herein constitute the entire agreement between
the Parties and supersede and cancel all prior
representations, negotiations, undertakings, letters,
acceptances, agreements, understandings, contracts and other
communications, whether verbal or written, between the
Parties or their agents or representatives, with respect to
or in connection with the subject matter of this Agreement
and no agreement or understanding arising after the
execution of this Agreement varying the terms and conditions
hereof shall be binding on either Party unless in written
form and duly signed by authorized representatives of both
Parties. This requirement of written form shall also apply
with respect to verbal waivers of such written form. In the
event of any inconsistencies between Articles 1 through 35
of this Agreement and any of the Exhibits, the Specification
or other documents referred to herein, the provisions of
Articles 1 through 35 of this Agreement shall prevail.
35.10 Press Releases
The timing and content of any public announcement with
respect to this transaction will be subject to the mutual
agreement of the Parties.
35.11 Corporate Guarantee
*****
. Purchaser's obligations hereunder to Seller shall be
guaranteed by Atlantic Coast Airlines Holdings, Inc.
*****
35.12 Execution, Effectiveness
This Agreement shall be effective upon its execution by both
Parties. However, the performance by either Party hereunder
shall only begin after the occurrence of the following
events: Seller's receipt of the Additional Deposit pursuant
to Article 4.1.b and removal of the Condition Precedent set
forth in Article 25.
This Agreement and any supplements and amendments to this
Agreement may be executed in one or more counterparts. Each
such executed counterpart shall be deemed an original, but
all such executed counterparts together shall constitute one
and the same instrument.
[NEXT PAGE IS SIGNATURE PAGE]
IN WITNESS WHEREOF, Seller and Purchaser have caused this
Agreement to be executed by their duly authorized representatives
as of the day and year first above written.
Atlantic Coast Airlines Dornier Luftfahrt GmbH
(Purchaser) (Seller)
(signature) (signature)
(name) (name)
(title) (title)
EXHIBIT I
SPECIFICATIONS
I.1328-300 Specification
The 328-300 Aircraft specified in this Agreement is defined as
the Dornier model 328-300, twin-turbojet regional transport
aircraft, manufactured in accordance with the Specification AVS
001D 000 A0100 000D of October 1998 ("328-300 Specification"),
which has been supplied to Purchaser under separate cover and the
receipt of which is deemed to have been confirmed by Purchaser's
execution of this Agreement.
I.2328-300 Performance
The performance of the Aircraft built to the 328-300
Specification is defined in the 328-300 Specification Appendix 1
AVS 001D 000 A1100 000D of October 1998 as supplemented by the
Aircraft Flight and Operations Manuals.
I.3 428JET Specification
The 428JET Aircraft specified in this Agreement is defined as the
Dornier model 428-XXX, twin-turbojet regional transport aircraft,
manufactured in accordance with the 428JET Specification [TBD]
("428JET Specification"), which will be published and delivered
to Purchaser in accordance with the schedule in Article 2.1.
I.4428JET Performance
The performance of the 428JET Aircraft built to the 428JET
Specification will be defined in the 428JET Specification [TBD]
as supplemented by the Aircraft Flight and Operations Manuals.
EXHIBIT II
OPTIONAL EQUIPMENT
II.1 328-300 AIRCRAFT
II.1.1 SPECIFICATION CHANGE NOTICES ("SCNs")
The 328-300 Aircraft shall be configured with an APU, ground
spoilers and a suitable airline interior satisfactory to
Purchaser.
Optional Equipment shall conform with the corresponding SCNs more
fully described in the 328-300 Specification, Specification
Change Notices AVS 001D 000 A3100 000D dated October 1998 or as
otherwise agreed pursuant to the provisions of this Agreement.
SCN prices are based on January 1999 economic conditions.
II.1.2 SCN SELECTION
The Optional Equipment set forth in Clause II.1.2.2 below shall
also be installed in and delivered with each 328-300 Aircraft.
II.1.2.1 Standard SCNs
SCN CODE TITLE PRICE
033F007 Maximum Gross Weight/Zero Fuel Weight *****
Increase
111-XXX United Express Livery *****
235-001 3rd Audio Panel *****
252-003 Pax Seats with moving aisle armrests *****
252-022 Pax Seat without ashtray (32 seats) *****
344-0XX GPWS Computer *****
344F018 Ground Proximity Warning System Mode 1 to 7 *****
with Windshear Detection
346-002 Traffic Alert and Collision Avoidance *****
System II
II.1.2.2 Purchaser's Optional Equipment
SCN CODE TITLE PRICE
233-009 Comp. Cabin Briefing System + Music Ent. *****
Sys.
243-004 43AH Saft Batteries *****
251-001 Airspeed Card Holder *****
251-002 Checklist Holder *****
252-008 Passenger Door Curtain *****
252-009 Service Compartment Curtain *****
252-016 Carpet infils in cabin side panel *****
252-029 Leather Seat Covers* *****
253-025 Standard Galley with one set of drawers *****
262K004 Class C Aft Baggage Compartment *****
334-002 Recognition Lights/Anti-Bird Lighting *****
344-008 P-880 Honeywell Weather Radar *****
345-007 DME/ADF II System *****
345-009 Global Positioning System, Honeywell *****
345F023 ATC II System, Mode S, Diversity (two ant.) *****
353-001 Two add. Prot. Breathing Equipment (one PBE *****
std. in A/C)
381-002 Lav Water sys. Ground connector for *****
recharge
XXX-XXX Coffee Maker *****
TOTAL *****
XXX-XXX AlliedSignal AFIS Part No. 400-0405500-XXX
(Complete provisions for the installation TBD
of this Buyer-Furnished Equipment)
* Purchaser shall confirm its requirements for the Leather Seat
Covers on or before July 1, 1999. In the event Purchaser does
not require the Leather Seat Cover option, the Adjusted 328-300
Aircraft Base Price/Adjusted Option 328-300 Aircraft Base Price
will be reduced by ***** .
II.2428JET AIRCRAFT
II.2.1 SPECIFICATION CHANGE NOTICES ("SCNs")
The 428JET Aircraft shall be configured with an APU, ground
spoilers, thrust reversers, bleed air anti-icing for the wing and
empennage and Honeywell Primus 2000 avionics system common with
the 328-300 Aircraft, and a suitable airline interior, with seats
at 31 inches pitch, satisfactory to Purchaser.
Optional Equipment shall conform with the corresponding SCNs more
fully described in the 428JET Specification (to be provided), or
as otherwise agreed pursuant to the provisions of this Agreement.
SCN prices will be based on January 1999 economic conditions.
II.2.2 SCN SELECTION
The Optional Equipment set forth in Clause II.2.2.2 below shall
also be installed in and delivered with each 428JET Aircraft.
II.2.2.1 Standard SCNs
SCN CODE TITLE PRICE
111-XXX United Express Livery *****
235-001 3rd Audio Panel *****
252-003 Pax Seats with moving aisle armrests *****
252-022 Pax Seat without ashtray (42-44 seats) *****
344-0XX GPWS Computer *****
344F018 Enhanced Ground Proximity Warning System *****
Mode 1 to 7 with Windshear Detection
346-002 Traffic Alert and Collision Avoidance *****
System II
II.2.2.2 Purchaser's Optional Equipment
SCN CODE TITLE PRICE
233-009 Comp. Cabin Briefing System + Music Ent. Sys. *****
243-004 43AH Saft Batteries *****
251-001 Airspeed Card Holder *****
251-002 Checklist Holder *****
252-008 Passenger Door Curtain *****
252-009 Service Compartment Curtain *****
252-016 Carpet infils in cabin side panel *****
252-029 Leather Seat Covers* *****
253-025 Standard Galley with one set of drawers *****
262K004 Class C Aft Baggage Compartment *****
334-002 Recognition Lights/Anti-Bird Lighting *****
344-008 P-880 Honeywell Weather Radar *****
345-007 DME/ADF II System *****
345-009 Global Positioning System, Honeywell *****
345F023 ATC II System, Mode S, Diversity (two ant.) *****
353-001 Two add. Prot. Breathing Equipment (one PBE std. *****
in A/C)
381-002 Lav Water sys. Ground connector for recharge *****
XXX-XXX Coffee Maker *****
TOTAL *****
AlliedSignal AFIS Part No. 400-0405500-XXX
(Complete provisions for the installation of
this Buyer-Furnished Equipment)
* Purchaser shall confirm its requirements for the Leather Seat
Covers ten months prior to delivery of the first 428JET
Aircraft. In the event Purchaser does not require the Leather
Seat Cover option, the Adjusted 428JET Aircraft Price/Adjusted
Option 428JET Aircraft Price will be reduced by ***** .
EXHIBIT III
DELIVERY SCHEDULE
Number of Aircraft/
428JET Aircraft Year
***** ***** *****
***** ***** *****
***** ***** *****
***** ***** *****
***** ***** *****
EXHIBIT IV
POWER OF ATTORNEY FORM
Atlantic Coast Airlines (the "Purchaser") authorizes herewith the
individuals listed below to inspect the Dornier Model 328-
300/428JET aircraft (the "Aircraft") and to participate in the
acceptance tests in order to evaluate the compliance of the
Aircraft with the terms and conditions of Aircraft Purchase
Agreement Ref. PA227, dated March 31, 1999, between Purchaser and
Dornier Luftfahrt GmbH.
For the purpose of signing the Certificate of Technical
Acceptance and the Aircraft Receipt in connection with the
technical acceptance and delivery of the Aircraft, Purchaser
authorizes herewith the following individual(s) to act singly and
individually on its behalf:
Name Position
________________________ __________________
________________________ __________________
________________________ __________________
________________________ __________________
Atlantic Coast Airlines
By:
Name:
Title:
Date:
EXHIBIT V
CERTIFICATE OF FINAL ACCEPTANCE FORM
Atlantic Coast Airlines (the "Purchaser") hereby acknowledges
final acceptance this ...........day of ...................... at
Oberpfaffenhofen, Federal Republic of Germany, of one (1) Dornier
_______ aircraft, bearing Serial Number ............
("Aircraft").
Purchaser acknowledges that the Aircraft has been satisfactorily
inspected in accordance with the terms of Aircraft Purchase
Agreement Ref. PA227 dated March 31, 1999 (the "Agreement")
between Purchaser and Dornier Luftfahrt GmbH (the "Seller") and
that on the date set forth above Seller has transferred to
Purchaser and Purchaser has accepted from Seller, in compliance
with the Agreement, the risk of loss of and damage to the
Aircraft described above.
Atlantic Coast Airlines
By:
Name:
Title:
EXHIBIT VI
AIRCRAFT RECEIPT FORM
The undersigned authorized representative of Atlantic Coast
Airlines (the "Purchaser") hereby acknowledges
RECEIPT OF
Dornier _______
[Serial Number]
[Registration Number]
and the two (2) Engines
Model Number ________
Serial Numbers: _______ and _______
RECEIPT FROM
Dornier Luftfahrt GmbH (hereinafter "Seller")
RECEIPT AT
Seller's facilities in Oberpfaffenhofen, Federal Republic of
Germany
RECEIPT ON
Date:__________________________
Time:___________________
The foregoing described aircraft was this date delivered by
Seller to the undersigned in accordance with the provisions of
Aircraft Purchase Agreement Ref. PA227, dated March 31, 1999,
except as may have been noted on the Certificate of Technical
Acceptance as amended and supplemented, between Purchaser and
Seller.
Atlantic Coast Airlines
By:
Name:
Place and Date:
EXHIBIT VII
WARRANTY BILL OF SALE FORM
KNOW ALL MEN BY THESE PRESENTS:
THAT Dornier Luftfahrt GmbH ("Seller"), a corporation registered
under the laws of the Federal Republic of Germany, is the owner
of the full legal and beneficial title of the aircraft
Model: Dornier _______
Serial Number:
Registration:
and the two engines
Model:
Serial Number: Serial Number:
and all appliances, parts, instruments, appurtenances,
accessories, furnishings, or other equipment or property
("Parts") incorporated, installed in or on or attached to said
aircraft and engines ("Aircraft");
THAT for and in consideration of the sum of US$1.00 and other
valuable consideration, receipt of which is hereby acknowledged,
Seller does, on the date hereof, grant, convey, transfer, bargain
and sell, deliver and set over to Purchaser, its successors and
assignees all of its rights, title and interest in and to the
above-described Aircraft, engines and Parts, pursuant to and
subject to the terms and conditions of the Aircraft Purchase
Agreement Ref. PA227 dated as of March 31, 1999 to:
Atlantic Coast Airlines
515A Shaw Road
Dulles, VA 20166 USA
("Purchaser")
THAT Seller hereby warrants to Purchaser, its successors and
assigns, that there is hereby conveyed to Purchaser on the date
hereof, good and marketable title to the aforesaid Aircraft,
engines and Parts, free and clear of all liens, encumbrances and
rights of others of any nature whatsoever, and that Seller will
warrant and defend such title forever against all claims and
demands whatsoever.
This Warranty Bill of Sale is governed by the laws of the State
of New York.
IN WITNESS WHEREOF, Seller has caused this instrument to be
executed by its duly authorized officer this ___ day of _________
____.
Dornier Luftfahrt GmbH
By:
Name:
Title:
EXHIBIT VIII
PRODUCT WARRANTIES
VIII.1 WARRANTY
VIII.1.1 Nature of Warranty
Subject to the limitations and conditions hereinafter set forth
and except as provided in Clause VIII.1.2 herein, Seller warrants
to Purchaser ("Warranty") that at the time of delivery, each
Aircraft and the Warranted Parts shall:
a. Conform to the Specification except as to those portions
stated to be estimates, approximations, design aims or
design criteria;
b. Be free from defects in material or workmanship (including
process of manufacture); and
c. Be free from defects in design including (i) selection of
materials and (ii) process of manufacture with respect to
the state of the art at the time of design.
VIII.1.2 Exceptions
The Warranty shall not apply to Purchaser furnished equipment or
engines, avionics, consumables (as defined in the World Aviation
Technical Operating Guide), or any other equipment, items or
parts supplied by other manufacturers that were not manufactured
to the Seller's detailed drawings and design specifications and
do not have a Seller's part number ("Vendor Parts") provided,
however, any defect in the Seller's workmanship in installing
Vendor Parts and Purchaser furnished equipment in the Aircraft,
including a failure to conform to installation provisions that
invalidates any applicable Vendor warranty, constitutes a defect
in workmanship which is covered by the Warranty provisions, and
to defects resulting from normal wear and tear. All Aircraft
parts which are not Purchaser furnished equipment or Vendor Parts
are hereinafter referred to as "Warranted Parts".
VIII.1.3 Warranty Period
a. The conformity Warranty set forth in Clause VIII.1.1.a above
expires on Acceptance for any non-conformity reasonably
susceptible of identification during Purchaser's inspection
prior to Acceptance; *****
.
b. The design, materials, process and workmanship Warranties
set forth in Clauses VIII.1.1 b. and c. above, are effective
for a period of ***** following Acceptance of
each Aircraft.
VIII.1.4 Seller's Obligations
a. Seller's obligations under the Warranty are expressly
limited, at its option, and sole expense, to the timely
correction, repair, replacement or rework, by Seller or Seller's
authorized FAR 145 approved repair facility, in either case
employing Seller's maintenance procedures, of the defective
Aircraft or Warranted Part. Purchaser shall deliver such
defective Aircraft and/or Warranted Part to Seller's facility or
to Seller's authorized facility subject to the following:
(i) Seller shall bear the cost of delivery and return to
Purchaser, by reasonable transportation means, of a
defective Warranted Part;
(ii) Purchaser shall bear the cost of delivery and return to
Purchaser, by reasonable transportation means, of a
defective Warranted Part that is not accepted by Seller
under the Warranty, provided, however, should a Warranted
Part, after initial non-acceptance for "no fault found",
continue to display the same failure mode which Seller
cannot determine to be defective, Seller and Purchaser will
discuss and mutually agree on a course of action to identify
the problem. If it is subsequently determined that the
defective Warranted Part is covered by the Warranty, Seller
shall reimburse Purchaser for its cost for delivery, return,
repair or replacement of such defective Warranted Part; and
(iii) *****
b. During the initial six (6) month period after Purchaser's
acceptance of each Aircraft, Seller shall, in addition to
its obligations stated herein, credit Purchaser for labor
costs incurred only for:
(i) The removal from the Aircraft of the Warranted Part that is
to be corrected, repaired or replaced pursuant to this
Warranty; and
(ii) The reinstallation in the Aircraft of the reworked, repaired
or replacement Warranted Part.
c. Seller will compensate Purchaser for such direct labor costs
incurred pursuant to Clause VIII.1.4.b. in an amount which
is the product of:
(i) ***** per hour (Seller agrees to perform any work under
this Clause at its Texas facility for ***** per
hour), subject to adjustment in accordance with Exhibit XI;
multiplied by,
(ii) The number of direct man-hours determined by Seller's
maintenance documentation or based on Seller's reasonable
estimate of man-hours required to remove and replace such
Warranted Part, if the number of man-hours is not stipulated
in Seller's maintenance documentation.
d. The Warranty, the Service Life Policy (Clause VIII.2 below)
and Vendor Claims Assistance (Clause VIII 3.3 below) shall
be administered and implemented in accordance with the
reasonable provisions of the Warranty Administration
Procedures set forth in the then current Customer Support
Manual ("Manual"), as may be revised from time to time. If
the terms of the Manual vary from or are inconsistent with
any relevant provision of this Exhibit VIII, the terms of
this Exhibit VIII shall apply. No Manual provision shall
operate so as to limit Purchaser's rights and Seller's
obligations as set forth in this Exhibit VIII.
In the event Seller does not provide a substantive response
to a correctly submitted warranty claim received from
Purchaser within ninety (90) days after receipt of such claim
by Seller, said claim will be resolved in Purchaser's favor.
e. During the Warranty Period of each Aircraft and the
Warranted Parts, Seller shall provide to Purchaser (i) free
of charge, modification kits resulting from any
Airworthiness Directive issued by the FAA ("AD") to correct
a defect in the Aircraft, (ii) free of charge, modification
kits for all highly recommended Service Bulletins ("SB's"),
and (iii) at Seller's cost, modification kits for all
recommended SB's. Notwithstanding the above, if the AD is,
or the SB in (ii) or (iii) above is the result of an AD
which is, (A) applicable to all aircraft in general or to
aircraft in the same category as the Aircraft, or (B) is
imposed by the FAA as a result of Purchaser's use or place
of operation of the Aircraft, the modification kits will be
purchased by Purchaser at Seller's then valid catalog
prices.
f. Furthermore, during the Warranty Period, Seller shall
reimburse Purchaser forthe labor cost associated with the
incorporation of the modification kits described in
VIII.1.4e(i) and (ii) above except if the AD is issued as,
or the highly recommended SB is issued pursuant to an AD
which is, a result of Clause VIII.1.4.e.(A) or (B) above.
The amount to be reimbursed to Purchaser will be based on
Seller's reasonable determination of man-hours required to
perform such modification multiplied by ***** (Seller
agrees to perform any work under this Clause at its Texas
facility for ***** per hour), subject to
adjustment in accordance with Exhibit XI.
g. *****
VIII.1.5 Purchaser's Compliance
Seller shall be relieved of its obligations and liability with
respect to any claim under the Warranty, if (a) the defect
resulted from normal wear and tear, or (b) Purchaser does not
materially comply with Seller's Warranty Administration
Procedure, or (c) the Aircraft or Warranted Part was:
i) Not operated, handled, maintained in compliance with Seller's
applicable technical publications and documentation;
ii)Not repaired, altered, modified or replaced in compliance
with Seller's applicable technical publications and
documentation;
iii) Subject to negligence or suffered abuse;
iv)Involved in an accident and its repair was not made in
accordance with Seller's Structural Repair Manual or
otherwise approved by Seller; or
v) Not properly stored and protected against the elements when
not in use on a regular basis, unless Purchaser furnishes
Seller reasonable evidence that the events set forth in
Clauses VIII.1.5.c.i) through VIII.1.5.c.v) herein were not
the cause of a defect of the Aircraft or Warranted Part.
VIII.1.6 Repaired Part Warranty Period
Any replacement, correction, rework or repair of the Aircraft or
the Warranted Parts under the Warranty shall not extend the
Warranty Period set forth in Clause VIII.1.3.
VIII.1.7 Replaced Part Ownership
Any Warranted Part which is replaced by Seller under the Warranty
shall become the property of Seller.
VIII.1.8 Records
Purchaser's failure to maintain complete records of operations
and maintenance of Aircraft and its engines in accordance with
the applicable requirements of Purchaser's airworthiness
authority to support a warranty claim, and to make relevant
records available for Seller's or the respective Vendor's
warranty claim evaluation relieves Seller of its obligations
under the Warranty with respect to that claim.
VIII.1.9 Limitation
Where more than one remedy or corrective action applies under any
Warranty, Seller shall not be obligated to provide to Purchaser a
remedy or corrective action which duplicates coverage of any
other remedy or corrective action provided under such Warranty.
VIII.1.10 Product Improvement Protection
Whenever product improvements affecting the reliability or
maintainability of the Aircraft are incorporated into new
Aircraft after delivery to Purchaser of some of its Aircraft
fleet, Seller and Purchaser shall mutually agree, on a case-by-
case basis, on commercial terms and delivery schedule of such
retrofit kits that would be required by Purchaser to retrofit its
Aircraft fleet to a common specification.
VIII.2 SERVICE LIFE POLICY
VIII.2.1 Definitions and Scope
a. In addition to the warranties set forth in Clause VIII.1
herein, Seller agrees that should a Failure occur in any
Item, the provisions of this Clause VIII.2 "Service Life
Policy" shall apply. Where more than one remedy or
corrective action applies under the Service Life Policy,
Seller shall not be obligated to provide to Purchaser a
remedy or corrective action which duplicates coverage of any
other remedy or corrective action provided under such
Service Life Policy.
b. For the purpose of this Clause VIII.2 the following
definitions shall apply:
(i) "Item" means any of the Seller's equipment, components or
parts, installed in the 328-300 Aircraft as set forth in
Annex A to this Exhibit VIII, and the corresponding
equipment, components or parts of the 428JET Aircraft, which
shall be identified to Purchaser by an amendment hereto and
set forth in Annex B to this Exhibit VIII;
(ii) "Failure" means any breakage of or defect in an Item in the
Aircraft which materially impairs the usage or safety of the
Item.
VIII.2.2 Seller's Obligations
a. Seller agrees that if a Failure occurs in an Item within
***** , after the delivery of each Aircraft to
Purchaser, the Seller shall at its own discretion and as promptly
as practicable either:
(i) Design and furnish to Purchaser a correction for such Item
and provide any parts required for such correction; or
(ii) Replace such Item.
b. Such correction or replacement shall be at Purchaser's cost
and expense, reduced by Seller's financial participation
("Seller's Participation") as set forth in Clause VIII.2.3
herein, except as provided in Clause VIII.2.4 a, b, and c.
VIII.2.3 Seller's Financial Participation
a. Seller's Participation shall be determined in accordance
with the following formula:
*****
where:
*****
*****
*****
VIII.2.4 Transportation and Other Costs
a. Transportation from Purchaser to Seller or Seller's
authorized facilities and return to Purchaser of any Item or
part of the Item to be corrected, repaired or replaced under
the Service Life Policy, shall be the responsibility of
Seller, who shall bear any related costs, except for any and
all taxes, duties and similar charges of any nature
whatsoever levied in Purchaser's country, which will be for
Purchaser's account.
b. Should any repair, correction or replacement of an Item
under the Service Life Policy require the use of specific
tooling by Purchaser which is not available at Purchaser's
facilities, Seller shall assist Purchaser by making
available such specific tooling on a rent free basis for the
purpose of performing such repair, correction or
replacement, provided that such tooling is transportable,
readily available or duplicable in due time.
c. Any cost resulting from removal and/or reinstallation of
Aircraft parts or of an Item which is the subject of a
Failure and reassembly and installation of the corrected or
replacement Item, shall be at Purchaser's expense.
VIII.2.5 Purchaser's Compliance
a. Purchaser's remedy and Seller's obligation and liability
under this Service Life Policy are subject to Purchaser
having:
(i) Maintained complete records of operations and maintenance of
the Aircraft and its engines in accordance with the then
applicable requirements of Purchaser's airworthiness
authority;
(ii) Informed Seller of any significant incidents relating to an
Aircraft that have occurred, which shall have been recorded
in the maintenance log books of Purchaser;
(iii) Complied with its obligations in respect of Seller's
Warranty;
(iv) Carried out the reasonable specific structural inspection
programs for monitoring purposes as may have been
established from time to time by Seller and communicated to
Purchaser. Such programs shall, as much as possible, be
compatible with Purchaser's operational requirements.
Reports relating thereto shall be made available to Seller;
and
(v) Reported the Failure in writing to Seller within ninety (90)
days after such Failure has become apparent.
b. If Seller fails to notify Purchaser, within ninety (90) days
after receipt of Purchaser's report, that the reported
breakage is not accepted as a Failure, it shall be deemed to
be a Failure.
VIII.2.6 Limited Liability
a. NOTHING IN THIS SERVICE LIFE POLICY SHALL BE CONSTRUED AS A
WARRANTY OR REPRESENTATION THAT AN AIRCRAFT OR ANY ITEM WILL
OPERATE WITHOUT A FAILURE, OR AS AN AGREEMENT TO MODIFY THE
AIRCRAFT OR ANY COVERED ITEM TO CONFORM TO NEW DEVELOPMENTS
IN THE STATE OF DESIGN OR MANUFACTURING. SELLER'S SOLE
OBLIGATION HEREUNDER IS TO FURNISH CORRECTIONS OR
REPLACEMENTS AND THE COST SHARING FOR FAILED ITEMS AS
PROVIDED IN THIS SERVICE LIFE POLICY.
b. EXCEPT IN THE CASE OF SELLER'S GROSS NEGLIGENCE AND WILLFUL
MISCONDUCT, PURCHASER'S SOLE REMEDY AND RELIEF FOR THE NON-
PERFORMANCE OF ANY OBLIGATION OR LIABILITY OF SELLER ARISING
UNDER OR BY VIRTUE OF THIS SERVICE LIFE POLICY SHALL BE IN
MONETARY COMPENSATION, LIMITED TO THE AMOUNT PURCHASER
REASONABLY EXPENDS IN PROCURING A CORRECTION OR REPLACEMENT
FOR ANY ITEM WHICH IS THE SUBJECT OF A FAILURE COVERED BY
THIS
SERVICE LIFE POLICY AND TO WHICH SUCH NON-PERFORMANCE IS RELATED.
VIII.3 VENDOR WARRANTIES
VIII.3.1 Definitions and Scope
Seller has obtained from all its suppliers other than P&WC,
which will provide its warranty directly to Purchaser
("Vendors"), enforceable, assignable and transferable warranties
for Vendor parts for a period of at least *****
from the date of each Aircraft delivery. Seller shall use its
best efforts to obtain a ***** warranty period,
beginning on the date of each Aircraft delivery, for all Vendor
parts. On delivery of each Aircraft, Seller shall transfer to
Purchaser such transferable Vendor warranties.
VIII.3.2 Seller's Assistance
In the event that any Vendor does not fulfill its warranty
obligations to Purchaser and the Purchaser submits reasonable
evidence thereof to Seller, Seller shall use its best efforts to
assist Purchaser in obtaining the warranties provided by such
Vendor. *****
.
VIII.3.3 Claims Assistance
Upon Purchaser's request, Seller shall handle Vendor warranty
claims with the respective Vendor when Purchaser's own efforts to
obtain warranty claim response from the Vendor directly have been
unavailing. This support shall be performed in accordance with
the Warranty Administration Procedures contained in the then
current Customer Support Manual and in accordance with the
relevant Vendor Warranty Administration Procedures.
VIII.4 INTERFACE COMMITMENT
VIII.4.1 Definitions and Scope
a. If, during the Warranty Period, Purchaser experiences any
technical problem during the operation of the Aircraft or its
systems/subsystems due to the malfunction or failure of any
equipment, or part thereof, the cause of which, after due and
reasonable investigation, is not clearly identifiable by
Purchaser, but which Purchaser reasonably believes to be
attributable to the design characteristics of other
components of the Aircraft or the Aircraft ("Interface
Problem"), Seller shall, if
requested by Purchaser, and without additional charge to
Purchaser, promptly conduct an investigation and analysis of
any such problem to determine the cause, and to furnish the
recommended solution to such problem.
b. Purchaser shall provide Seller with all relevant data and
information in Purchaser's possession relating to the
Interface Problem, and shall cooperate with Seller during
Seller's investigations and tests as may be required.
c. Seller shall (i) promptly advise Purchaser, in writing, of
the results of its investigation, and of Seller's opinion
concerning the cause or causes of the Interface Problem, and
(ii) identify the corrective actions to be taken by the
responsible party.
VIII.4.2 Seller's Design Responsibility
If Seller determines that the Interface Problem is primarily
attributable to the design of any equipment, Aircraft component
or part for which Seller has the design responsibility, Seller
shall, if requested by Purchaser correct the design of such
equipment or part and implement such design correction, subject
to prior mutual agreement on commercial terms and conditions and
on the implementation schedule.
VIII.4.3 Vendor's Design Responsibility
a. If Seller determines that the Interface Problem is primarily
attributable to the design of any Vendor Part, Seller shall,
if requested by Purchaser, reasonably assist Purchaser in
processing any warranty claim Purchaser may have against the
Vendor of such Vendor Part. *****
.
b. Seller shall also make its best efforts to obtain an
acceptable solution to Purchaser's Interface Problem provided
for under its agreements with such Vendor.
VIII.4.4 Seller's and Vendor's Design Responsibility
If Seller determines that the Interface Problem is partially
attributable to the design of any equipment, Aircraft component
or part for which Seller has the design responsibility and
partially to the design of any Vendor Part, Seller shall, if
requested by Purchaser, promptly seek and implement a solution to
the Interface Problem through cooperative efforts of Seller and
any Vendor involved. Seller shall promptly advise Purchaser of
such corrective action as may be proposed by Seller and any such
Vendor. Such proposal shall be consistent with any then existing
obligations of Seller or any such Vendor hereunder.
EXHIBIT VIII
ANNEX A
SERVICE LIFE POLICY ITEMS - 328-300 AIRCRAFT
ITEM NO. ITEM
53 Fuselage
Structure of the pressurized fuselage region
530.1 Front and rear pressure bulkheads
530.2 Skins with doublers, stringers and frames
from the front pressure bulkhead to the rear
pressure bulkhead
530.3 Windows and windshields attachment structure,
but excluding windows and windshields
530.4 Sills, excluding scuff plates, and upper
beams surrounding the door apertures
530.5 Pressurized floor and bulkheads surrounding
the main landing gear wheel well
530.6 Nose landing gear bay walls and panels
530.7 Cockpit floor structure and passenger cabin
floor substructure excluding floor panels and
seat rails
Structure of the unpressurized fuselage
region
530.8 Attachment fittings for nose landing gear
(part of nose landing gear wheel well side
wall)
530.9 Keel beam structure in the main landing gear
wheel well area
530.10 Skin with stringers and frames from frame 1
to frame 3 and from frame 45 to frame 50
(Including the Vertical Stabilizer (VS)
attachment frames with integral VS spars)
530.11 Attachment fittings for APU Installation
530.12
EXHIBIT VIII
ANNEX A
ITEM NO. ITEM
54 Engine Nacelle
540.1 ENG/Pylon complete
540.2 ENG/Pylon forward yoke
540.3 ENG/Pylon aft yoke isolator
540.4 Nacelle access cowls
540.5 Afterbody cowls
540.6 Attachment fittings at the wing rear spar
55 Stabilizers
551 Horizontal stabilizer main structural box
551.1 Front, center and rear spars
551.2 Upper and lower skin panels with integral
stringers
551.3 Ribs
551.4 Attachment fittings to the vertical
stabilizer box
551.5 Elevator support structure
553* Vertical stabilizer main structural box
553.1 Front spar including fuselage attachment
fitting (center and rear spars are integrated
with the VS attachment frames)
553.2 Left and right skin panels with integral
stringers
*Because of the high integration of the VS structure with the
rear fuselage all VS components have the rear fuselage code 536
(Dornier 328-300 Aircraft and 428JET Aircraft deviation from
ATA).
EXHIBIT VIII
ANNEX A
ITEM NO. ITEM
553.3 Ribs
553.4 Attachment fittings to the horizontal
stabilizer box
553.5 Rudder support structure
57 Wing
571 Center wing main structural box
571.1 Front and rear spar
571.2 Upper and lower machined panel with integral
stringers and integral rib flanges
571.3 Ribs 0 to 11 left and right
571.4 Attachment fittings to the fuselage
connecting rods
571.5 Wing to fuselage connecting rods
571.6 Main structural box joint elements
571.7 Landing flap support structure
572 Outer wing main structural boxes
572.1 Front and rear spars (left and right)
572.2 Upper and lower machined panels with integral
stringers and integral rib flanges (left and
right)
572.3 Ribs 12 to 26 (left and right)
572.4 Landing flap support structure
572.5 Aileron support structure
EXHIBIT VIII
ANNEX B
SERVICE LIFE POLICY ITEMS - 428JET AIRCRAFT
EXHIBIT IX
CUSTOMER SUPPORT
IX.1 TECHNICAL PUBLICATIONS AND DOCUMENTATION
IX.1.1 General
Seller will provide, at no cost to Purchaser, the manuals
(operational, maintenance, repair, illustrated parts catalog,
vendor manuals and all other manuals required to operate the
Aircraft), in the quantities and media form set forth in Annex A
to this Exhibit IX, attached hereto ("Technical Publications and
Documentation"). Seller will also provide at no cost to
Purchaser, as part of the maintenance documentation, (i) a
complete set of Job Instruction Cards, and (ii) appropriate
engineering drawings as necessary for maintenance or repair. The
Technical Publications and Documentation and Job Instruction
Cards will be provided to Purchaser not less than sixty (60) days
in advance of delivery of the first Aircraft. Seller's Technical
Publications and Documentation, as noted in Annex A, will be made
available on CD-ROM within twenty-four (24) months after delivery
of the first Aircraft. Any additional Technical Publications and
Documentation and revisions thereto are to be purchased by
Purchaser at Seller's then valid catalog price for such item.
IX.1.2 Compliance with ATA
Technical Publications and Documentation related to the Aircraft,
shall be prepared in general accordance with the applicable
provisions of ATA Specification 100. Technical Publications and
Documentation related to Vendor Parts shall be delivered
according to the general standard of the specific Vendor. Where
applicable, such publications shall include details concerning
software if the Vendor intends to supply such software.
IX.1.3 Language
The Technical Publications and Documentation will be supplied in
the English language.
IX.1.4 Revision Service
a. Seller: Revisions to Technical Publications and Documentation
shall be issued by Seller as required from time to time
("Seller's Revisions").
b. Vendor: Seller shall ensure that revisions to the Vendor
Technical Publications and Documentation listed in Annex A
hereto ("Vendor's Revisions") shall be provided by the
respective Vendor.
c. Unless otherwise agreed between Purchaser and Seller, or the
respective Vendor, as the case may be, revisions shall be
prepared and supplied in the same format and quantity as the
original documentation.
d. Revisions to Seller's Technical Publications and
Documentation will be provided for ***** from
delivery of the first Aircraft. Upon Purchaser providing its
first Notice of Exercise, as that term is defined in Article
21.2c, revisions to Seller's Technical Publications and
Documentation will be extended to ***** from
delivery of the first Aircraft. Thereafter, all revisions to
Seller's Technical Publications and Documentation will be
purchased by Purchaser at Seller's then valid catalog price
for such revision service. Notwithstanding the above, Seller
shall provide revisions to Seller's Technical Publications
and Documentation for all documentation modified by a service
bulletin issued by Seller for matters requiring urgent
attention and generally limited to items affecting safety
("Alert Service Bulletin"), and those which Purchaser's
certification authority requires to maintain following
certification.
e. Purchaser may reproduce all Technical Publications and
Documentation for Purchaser's exclusive use, or for such
other use subject to Seller's approval, which will not be
unreasonably withheld. Technical Publications and
Documentation reproduced by Purchaser will not be subject to
Seller's revision service.
f. Seller warrants the accuracy and completeness of Seller's
Technical Publications and Documentation. Seller's sole
responsibility or liability to Purchaser for breach of this
warranty shall be to correct any publication found to contain
an error within thirty (30) days after Seller has been
notified of such error. Such correction shall be accomplished
in a temporary revision.
IX.1.5 Delivery
On delivery of the initial issue of and revisions to the
Technical Publications and Documentation, Purchaser shall provide
Seller a receipt evidencing delivery of such publications and/or
revisions.
IX.1.6 Proprietary Rights
All of the publications, data, drawings or other documentation or
information described in this Exhibit IX or in the Specification
are proprietary to Seller and/or Vendors and all copyrights and
other proprietary rights, if any, are the Seller's and/or
Vendors' property.
IX.1.7 Non Disclosure of Data and Documents
a. Purchaser covenants that the data or documents furnished by
Seller under the terms of this Clause IX.1 or copies thereof,
or otherwise acquired by Purchaser, shall not be disclosed to
any person, firm or corporation, or to any government or
governmental department or agency without Seller's written
consent, except as
may be necessary for the full use and enjoyment of the Aircraft
by Purchaser. For the avoidance of doubt, Purchaser may make
such data and documents available to (i) the FAA if requested
to do so or otherwise as necessary to insure its compliance
with FAA rules and regulations, and (ii) Purchaser's outside
maintenance provider and consultants if necessary for the
full use and enjoyment of the Aircraft, on the basis that
such provider or consultants may not further disclose the
data or documents to another third party.
b. Purchaser shall inform Seller of any subsequent purchaser,
operator, owner, assignee or transferee of the Aircraft and
Purchaser may provide the new operator with any Aircraft
specific Manuals.
c. A violation by Purchaser of Seller's rights pursuant to
Clause IX.1.6 and/or a violation of Purchaser's obligations
under Clauses IX.1.7 shall be deemed to be a material breach
of Purchaser's obligations under this Agreement and entitles
Seller, in addition to any other rights and remedies it may
have by law or otherwise, to suspend its performance under
this Clause IX.1 without notice.
IX.2 TRAINING
IX.2.1 General
a. Seller, its affiliate or an FAA-approved third party selected
by Seller, at Seller's discretion, will provide type specific
training for the Aircraft, consisting of:
(i) Pilot Transition Training (PTT);
(ii)Aircraft Technician Training (ATT); and
(iii) Flight Attendant Training (FAT).
b. All training will meet the standards required by Purchaser's
civil aviation authority having jurisdiction over it and will
be conducted and directed by experienced instructors at third
party training facilities in Hoofddorp, Netherlands, in
Dallas, Texas, at Seller's training facilities, at another
Seller designated location or at other locations specified
herein. Seller will provide Purchaser first priority on
available training in the U.S., subject to adequate advance
notice of at least six (6) months. Personnel assigned for
such training shall be required to have command of the
English language as all training shall be conducted in the
English language. Purchaser's personnel expenses including,
but not limited to, transportation, accommodation, insurance,
living and incidental expenses shall be borne by Purchaser.
Purchaser is entitled to the training program set forth in
this Exhibit IX for up to twelve (12) months after delivery
of each Aircraft. In the event that a trainee is unable
during the courses or at the end of such courses to perform
to the minimum levels required by the course requirements,
Seller shall discuss with
Purchaser the remedies to assist trainee in satisfying such
course requirements. In the event the performance of the
trainee continues to be insufficient, the corresponding
course shall be terminated for such trainee without
replacement.
c. Any additional training and related expenses for such
training services beyond the content and duration of the
corresponding standard programs as required by the FAA are
for the account of Purchaser.
IX.2.2 Pilot Transition Training (PTT) and Other Pilot
Training
a. Seller shall provide to Purchaser pilot type transition
training for ***** pilots per Aircraft in an FAA-certified
full flight simulator ("FFS") to support entry of the
Aircraft into revenue service. Such pilots must have a valid
air transport pilot license (Captain) or commercial pilot
license with instrument rating (First Officer), or any other
equivalent qualification with the necessary flying experience
in multi-engine turboprop or jet aircraft, required by the
aviation authority having jurisdiction. *****
additional pilots shall be trained to check airman status
***** of which may be FAA personnel. *****
The qualification requirements for pilot training will be
established during a training planning conference to be held
in advance of training.
b. The PTT per pilot consists of:
- Ground school training, consisting of Computer Based
Training and use of the full flight simulator in the fixed
based mode; and
- FFS training of up to twenty (20) hours per pilot which
shall include dual qualification for the 328-300 Aircraft
and 428JET Aircraft, when the 428JET training syllabus is
approved.
c. The ground school training, simulator training and flight
training on the Aircraft, if required by the aviation
authorities, for at least one (1) crew for Aircraft ferry
purposes should be completed prior to delivery of the first
Aircraft.
d. In the event of non-availability of the simulator, Seller
reserves the right to conduct or cause to be conducted the
training in Purchaser's Aircraft or in another Dornier Model
328-300/428JET aircraft of Seller's choice. If such training
is conducted in Purchaser's Aircraft, Seller shall reimburse
Purchaser for the cost of operation and maintenance of such
Aircraft. If Purchaser chooses not to train in the Aircraft,
it may, without regard to any provision of this Agreement
concerning Purchaser's delay in accepting an Aircraft, delay
delivery of the Aircraft at no penalty.
e. Each PTT student will receive, and may retain, the training
documentation necessary for the PTT. Such documentation is
for training purposes only and shall not be subject to
revision.
f. Purchaser will, at its discretion, have the right to submit
whatever training course it deems appropriate to the FAA for
approval.
g. Pilot Training
(i)*****
(ii) *****
(iii) *****
(iv) *****
IX.2.3 Aircraft Technician Training (ATT)
All ATT trainees must have qualifications that meet the FAA's
standard aircraft maintenance requirements. The qualifications
for technician training will be established during a training
planning conference to be held in advance of the start of
training. The ATT course for at least one (1) mechanic for
Aircraft ferry purposes should be completed prior to delivery of
the first Aircraft. Purchaser will receive the training
documentation necessary for the ATT. Such documentation is for
training purposes only and shall not be subject to revision.
a. Seller's ATT
To assist Purchaser in establishing its own in-house technician
training capabilities, Seller shall train an initial cadre of
***** technicians, ***** of which will be trained
to technician training instructor level, at Seller's maintenance
training site in San Antonio, Texas. Seller, at no cost to
Purchaser, shall provide a reasonable quantity of maintenance
training and instruction materials, including but not limited to
non-mechanical training aids, slides and training and instruction
manuals, which Purchaser may reproduce for its exclusive employee
use or for a third party for use in exclusively training
Purchaser's employees. Seller will cooperate with Purchaser to
make available mechanical training aids to support FAA-approved
training courses on terms and conditions to be agreed. The
courses described below are designed in general accordance with
the ATA 104 Specification "Guidelines for Aircraft Maintenance
Training." Purchaser may submit whatever training course it
deems appropriate to the FAA for approval. Each ATT candidate
may attend only one of the following line/base maintenance
courses:
(i)Airframe/Power Plant System
A fifteen (15) day course to include a detailed
description of the operation, component location,
component removal and installation and test procedures of
the airframe and power plant systems in accordance with
Seller's Maintenance Manual. Engine operation and engine
run-up training may be provided in the simulator. In
addition, a general familiarization on electrical and
avionic systems shall be provided.
(ii) Electrical and Avionic System
A fifteen (15) day course to include a general
familiarization of airframe and power plant system and a
detailed description of the operation, component location,
component removal and installation and test procedures on
the electrical and avionic systems in accordance with
Seller's Maintenance Manual. Trainees for this course
shall have a basic knowledge of avionic bus systems and
display techniques.
b. Engine Manufacturer ATT
In addition to the Seller's ATT course for Airframe/Power
Plant System, Purchaser's personnel attending such course
shall be instructed in a line maintenance course on the
Aircraft engine. Such course, free of charge to Purchaser,
shall take place at the engine manufacturer's site in St.
Hubert, Quebec, Canada, covering general engine
familiarization, line maintenance, and hot section inspection
and heavy maintenance. Purchaser's personnel expenses will
be for Purchaser's account.
c. Avionics Manufacturer ATT
Honeywell shall provide, free of charge, at its facilities,
avionics training for Purchaser's avionics technicians.
Purchaser's personnel expenses will be for Purchaser's
account.
d. Other Vendor ATT
Upon Purchaser's request, Seller will assist Purchaser in
arranging additional training with other Vendors.
Purchaser's personnel expenses will be for Purchaser's
account.
e. Ground Handling Training
Seller shall provide a ground handling training course for
***** of Purchaser's personnel at Purchaser's facility. The
course duration shall be at least three (3) working days and
consistent with Purchaser's training needs.
f. General Familiarization Training
Seller will provide a general familiarization training course
for ***** of Purchaser's qualified personnel at
Purchaser's facility. The course duration shall be three (3)
working days and consistent with Purchaser's training needs.
g. Engine Run-Up Training
Seller will provide an engine run-up training course for
***** of Purchaser's qualified personnel at
Purchaser's facility and/or at the FFS facility. The course
duration shall be two (2) working days.
IX.2.4 Flight Attendant Training (FAT)
Seller shall provide Purchaser training for ***** flight
attendants in accordance with Seller's standard training program.
Such training shall be provided at Purchaser's facility on
Purchaser's Aircraft.
IX.2.5Trainee Allocation
Each course will have a reasonably determined minimum capacity.
Seller reserves the right to combine Purchaser's trainees in
courses with those of other customers.
IX.2.6Training Planning Conference
Not later than thirty (30) days after Purchaser's receipt of the
United Approval, a training planning conference will take place
at Seller's Texas facility or a third party's premises
in the United States at which Seller or a third party, as the
case may be, shall provide and discuss with Purchaser a detailed
description and schedule of the training courses herein.
Purchaser shall bear all costs, such as travel, transportation,
accommodation and other individual expenses, for its personnel
attending such conference. Not later than September 30, 1999,
Purchaser shall provide Seller in writing with the number of
attendees participating in the training courses set forth in
Clause IX.2 herein. Purchaser will provide the names of attendees
one (1) month prior to the commencement of the training course,
subject to overseas travel documentation requirements, Purchaser
may substitute trainees from the attendee list at any time. In
the event Purchaser reschedules the training courses after the
training conference, Purchaser shall bear the corresponding
cancellation and rescheduling fees.
IX.2.7Training Approval by Aviation Authority
Purchaser is fully responsible, with Seller's or third party
training provider's reasonable assistance, for obtaining local
approvals of all training requirements, instructor personnel and
related training aids by the respective aviation authority having
jurisdiction prior to the start of training.
IX.2.8Training Aids
*****
IX.2.9 UNUSED TRAINING CREDITS
*****
a. *****
b. *****
*****
IX.2.10 Insurance
a. While training is being provided pursuant to this
Clause IX.2, Purchaser shall maintain (i) aviation
liability insurance with coverage for bodily injury,
property damage, passenger liability and public
liability insurance with a minimum amount of not less
than ***** or equivalent for any one (1)
accident/occurrence and (ii) commercial liability
insurance covering the liability of Purchaser for
bodily and property damages with a minimum amount of
not less than ***** for any one (1)
accident/occurrence.
b. Purchaser shall cause Seller, its subsidiary or
affiliated companies, their officers, agents, employees
and representatives to be named as additional insured
under such liability insurances as set forth in this
Clause IX.2.10 herein.
c. If Purchaser maintains hull insurance in respect
to the Aircraft, such insurance shall contain a waiver
of subrogation in favor of Seller, its subsidiary or
affiliated companies, their officers, agents, employees
and representatives. In the event a deductible is
included in such hull insurance, Purchaser shall bear
the cost of such deductible.
d. Purchaser shall, not later than ten (10) days
prior to the scheduled start of the corresponding
training, furnish to Seller for its approval, a
certificate from the Purchaser's insurer evidencing
compliance with the provisions of this Clause IX.2.10
showing that Seller has been so named as an additional
insured, stating that the coverage is in accordance
with this Agreement and providing that such Aircraft
insurance policy shall not be cancelled or materially
altered by the insurer unless thirty (30) days' prior
written notice thereof has been provided to Seller.
IX.3. SPARE PARTS SERVICES
IX.3.1 Definitions
The terms used in this Exhibit IX.3 shall have the meanings
ascribed to them in Article B. "Summary of Definitions".
IX.3.2 Scope of Material Support
The material support provided hereunder covers Seller's supply,
repair and modification of and documentation for all Proprietary
Parts and the lease of Insurance Items. Supply, repair and
modification of and documentation for Vendor Parts shall be
provided by the respective Vendor in accordance with the Vendor
Information Manual. Back-up support for Vendor Parts and Standard
Parts shall be provided by Seller as may be deemed necessary in
Seller's opinion to enhance the availability of such parts. If
the terms of the Vendor Information Manual vary from or are
inconsistent with any relevant provision of this Exhibit IX, the
terms of this Exhibit IX shall apply. No Vendor Information
Manual provision shall operate so as to limit Purchaser's rights
and Seller's obligations as set forth in this Exhibit IX.
IX.3.3 Support Period
So long as a minimum of five (5) aircraft of the type purchased
hereunder are regularly operated in scheduled commercial revenue
service worldwide, accumulating a total of not less than five
thousand (5000) flying hours each calendar year, Seller shall
manufacture or procure and sell to Purchaser Proprietary Parts to
meet Purchaser's reasonable requirements for such parts in
connection with its normal operation of the Aircraft. The
support periods for Vendor Parts are defined in the Vendor
Information Manual.
IX.3.4 ******
a. *****
b. *****
c. *****
d. *****
IX.3.5 *****
a. *****
b. *****
c. *****
d. *****
e. *****
f. ******
IX.3.6 *****
*****
a. *****
b. *****
IX.3.7 Expedite Service
Seller shall maintain a twenty-four (24) hours-a-day, seven (7)
days-a-week AOG Service for the supply of AOG Spares. Such
service is operated in general accordance with the "World
Airlines & Suppliers Guide."
a. So long as Purchaser continues to operate its
Aircraft and 428JET Aircraft fleet(s), Seller is
committed to meeting the following response and
dispatch times to spare parts requests from Purchaser:
Service Level Response time Dispatch time
AOG 2 hours 4 hours
Critical (imminent AOG 2 hours 24 hours
or work stoppage)
Expedite 24 hours Per customer
request
Routine 48 hours 7 days
b. Seller will use production parts to support
Purchaser in AOG cases when necessary. In the event
Seller is unable to meet the above spare parts dispatch
times for a part, Seller agrees to pay freight delivery
charges for such part.
IX.3.8 Sales Conditions
a. Except as otherwise provided in this Agreement,
Spare Parts shall be quoted, ordered, sold and
delivered in accordance with Seller's General Terms and
Conditions for the Sale of Spare Parts, published from
time to time in the Seller's Spare Parts Price List,
and in accordance with the then current Customer
Support Manual.
b. *****
c. All international freight charges and duties, if
any, for spare parts ordered by Purchaser through
Seller will be paid by Seller, provided, however,
international freight charges and duties, if any, for
AOG Non-Stock Spare Parts will be paid by Purchaser.
AOG Non-Stock Spare Parts, as used herein, means those
spare parts that have not been requisitioned by any
operator two or more times during the previous twelve
(12) months.
IX.3.9 Warranty for Spare Parts
a. The warranty period for Spare Parts shall expire
when twenty-four (24) months have elapsed from the date
of delivery of such Spare Part to Purchaser.
b. The warranty, procedures and administration of Spare
Parts shall be in accordance with the then current
Customer Support Manual. If the terms of the Manual
vary from or are inconsistent with any relevant
provision of this Exhibit IX, the terms of this Exhibit
IX shall apply. No Manual provision shall operate so
as to limit Purchaser's rights and Seller's obligations
as set forth in this Exhibit IX.
IX.4 PERSONNEL DELEGATION
a. Seller shall assign one qualified (1) technical
representative ("Tech Rep") for a total period of
***** beginning with delivery of the first
Aircraft to Purchaser's primary maintenance facility,
or such other location as may be mutually agreed, for
advisory services. The period of assignment will be
extended by ***** for each Option Aircraft
delivered to Purchaser. The advisory services and the
procedures under which such services shall be provided
shall be consistent with the services and procedures as
set forth in the then current Customer Support Manual.
b. The Tech Rep delegated to Purchaser hereunder
shall be and shall remain the employee of Seller. The
salary and benefits paid to the Tech Rep shall be the
sole responsibility of the Seller. Such Tech Rep shall
work in an advisory capacity and perform such services
as reasonably requested by Purchaser, which shall have
no authority to govern the conduct or to supervise the
Tech Rep. Purchaser will consult and coordinate with
Seller in all matters relating to Tech Rep activities
during the period of delegation. The Tech Rep shall be
used for civil operations only.
c. The scope of advisory services to be provided by the
Tech Rep shall be as follows:
- provide advice for Purchaser's personnel in the
performance of maintenance and inspection
procedures;
- establish and maintain effective communication
between Seller's Customer Support Department and
Purchaser's appropriate management;
- observe and investigate maintenance and operational
procedures in order to identify potential technical
problems and to recommend solutions to correct the
source of problems;
- provide on-the-job training instructions in the
performance of maintenance, overhaul and
troubleshooting procedures;
- interpret technical publications and specifications
as required to assist Purchaser's maintenance
personnel;
- oversee mechanical and structural repairs in the
field; and
- compile reports and technical data pertaining to, or
requiring, service changes and improvements (S.B.'s
or E.O.'s).
d. Purchaser shall arrange for emergency medical
treatment for the Tech Rep, if necessary, during such
period of delegation. Medical insurance coverage for
the Tech Rep shall be at Seller's cost.
e. Sick leave for the Tech Rep shall be granted only for
valid medical reasons confirmed by a doctor appointed
by Purchaser or Seller. In either case a medical
certificate shall be submitted to both Purchaser and
Seller. In case of disability of the Tech Rep longer
than ten (10) working days, the Parties shall agree as
to the temporary replacement of the personnel
concerned.
f. Purchaser will provide transportation and per diem
expense reimbursement only in the event the Tech Rep is
temporarily based at locations other than Purchaser's
main base, if so required and directed by Purchaser.
g. Seller shall provide the Tech Rep's transportation to
Purchaser's main base and return to Tech Rep's home
base. If Purchaser requires the Tech Rep to accompany
Purchaser's crew on the ferry flight of the Aircraft to
Purchaser's main base, Purchaser shall provide the Tech
Rep with duly paid flight tickets from Purchaser's main
base to Munich.
h. Seller shall be responsible for obtaining in sufficient
time any visas, permits and other authorizations
required for the Tech Rep. Purchaser shall assist
Seller in obtaining such documents.
i. Purchaser shall, at its expense, provide the Tech
Rep with suitable office space, facilities and office
equipment including a desk, file cabinets, two
telephone lines, access to facsimile and photocopy
equipment, while on assignment at Purchaser's facility.
All other expenses of the Tech Rep will be the
responsibility of Seller.
j. *****
IX.5 SERVICE ENGINEERING
a. *****
b.(i) *****
(ii) *****
EXHIBIT IX
ANNEX A
TECHNICAL PUBLICATIONS AND DOCUMENTATION
IX.A.1 IDENTIFICATIONS
1) FORMAT
P = Printed hard copy in general accordance with ATA
100, Chapter 1-1-1.
CD = Electronic Data Carrier - on request
F = Microfiche, in general accordance with ATA 100,
Chapter 1-1-1.
2) VERSION
C = Customized as per ATA 100
A = Non-customized
3) SUPPLY
EA = Per Aircraft, upon Delivery
FL = Delivered for the entire fleet of Aircraft
4) REVISIONS PER YEAR
1 = one revision
2 = two revisions
AR = as required
NA = not applicable
5) REMARKS
OEM = Issued and delivered by Seller
VEN = Issued by the respective Vendor and initially
delivered by Seller
6) VENDOR TECHNICAL DOCUMENTATION
* = Revision Service provided by the respective Vendor
EXHIBIT IX
ANNEX A
IX.A.2 TECHNICAL PUBLICATIONS AND DOCUMENTATION TO BE DELIVERED
Title Abbrev Ver Forma Qty Rev/ Remarks
s t Supply Year
1. Operational Tech Pubs
Aircraft Flight Manual (AFM) C P ***** AR OEM
Flight Crew Operating (FCOM) C P ***** AR OEM
Manual
Master Minimum Equipment (MMEL) A P ***** AR OEM
List
Rescue Manual (RM) A P ***** AR OEM
2. Maintenance Tech
Pubs/Doc
Aircraft Maintenance (AMM) C CD/P ***** 2 OEM
Manual
Maintenance Review Board (MRB) A P ***** AR OEM
Report
Maintenance Planning (MPD) A P ***** AR OEM
Document
Airworthiness Limitations (ALD) A P ***** AR OEM
Doc.
System Schematics Manual (SSM) C CD/P ***** AR OEM
Fault Isolation Manual (FIM) C CD/P ***** 1 OEM
Wiring Manual (WM) C CD/P ***** 2 OEM
Structural Repair Manual (SRM) A CD/P ***** AR OEM
Corrosion Prevention and (CPCPM) A P ***** AR OEM
Control Program Manual
Consumable Material List (CML) A P ***** AR OEM
Weight and Balance Manual (WBM) C P ***** AR OEM
Power Plant Build-up (PPBM) A CD/P ***** AR OEM
Manual
Component Maintenance (CMM-M) A CD/P ***** AR OEM
Manuals-Aircraft
Manufacturer
*Component Maintenance (CMM- A CD/P ***** AR OEM/VEN
Manuals-Vendors (Standard V)
Documentation as per PI)
*Honeywell System (SMM) C P ***** AR VEN
Maintenance Manual
Illustrated Tool and (ITEM) A CD\P ***** AR OEM
Equipment Manual
Non-Destructive Testing (NDTM) A CD/P ***** AR OEM
Manual
3. Material Tech Pubs/Doc
Aircraft Illustrated Parts (AIPC) C CD/P ***** 2 OEM
Catalog
*Engine Illustrated Parts (EIPC) A P ***** AR VEN
Catalog
Title Abbrev Vers Format Qty Rev/ Remarks
Supply Year
4. Service Tech Pubs/Doc
Customer Support Manual (CSM) A P ***** AR OEM
Vendor Information Manual (VIM) A P ***** AR OEM
Publications Index (PI) A P ***** 12 OEM
Service Bulletins (SB) C/A P ***** NA OEM
Service Information (SI) A P ***** NA OEM
Letters
All Operators Telex (AOT) A P ***** NA OEM
Aircraft Life Record (ALR) C P ***** NA OEM
Aircraft Log Book (ALB) C P ***** NA OEM
Engine Log Book (ELB) C P ***** NA OEM
5. Standard Vendor
Documentation
* Set of standard Vendor ----- A P ***** AR OEM/VEN
Documentation available
from Seller as per PI and
related to Vendor
equipment installed in the
Aircraft
EXHIBIT X
*****
*****
*****
EXHIBIT XI
PRICE ADJUSTMENT FORMULA
XI.1 DETERMINATION OF THE AIRCRAFT DELIVERY PRICE
For the determination of the Aircraft Delivery Price or the
Option Aircraft Delivery Price, the Adjusted 328-300 Aircraft
Base Price set forth in Article 3.1 or the Adjusted 428JET
Aircraft Base Price set forth in Article 3.2 and the Adjusted
Option 328-300 Aircraft Base Price set forth in Article 21.3
or the Adjusted Option 428JET Aircraft Base Price as set
forth in Article 21.4 of this Agreement, and for the purpose
of adjusting other amounts pursuant to this Agreement as the
case may be, shall be adjusted in accordance with the Price
Adjustment Formula and the General Provisions as set forth in
this Exhibit XI.
XI.2 REFERENCE INDICES
XI.2.1 LU Index:
Average Hourly Earnings for Industry classification "Aircraft
and Parts," 1987 SIC Code 372, not seasonally adjusted; as it
appears in the periodical "Employment and Earnings," under
the section "Not Seasonally Adjusted," Monthly Establishment
Data, Hours and Earnings - National, in Table B-15. Average
hours and earnings of production and non-supervisory workers
on private non-farm payrolls by detailed industry; as
published by the Bureau of Labor Statistics of the U.S.
Department of Labor.
XI.2.2 MU Index:
Producer Price Index for Commodity group "Metals and Metal
Products," Commodity Code 10, not seasonally adjusted; as it
appears in the periodical "Producer Price Indexes" in Table
6. Producer price indexes and percent changes for commodity
groupings and individual items (1982=100); as published by
the Bureau of Labor Statistics of the U.S. Department of
Labor.
XI.3 PRICE ADJUSTMENT FORMULA
*****
*****
*****
*****
*****
*****
*****
*****
*****
*****
*****
*Applies to the Adjusted 328-300 Aircraft Base Price, the Adjusted
428JET Aircraft Base Price, the Adjusted Option 328-300 Aircraft
Base Price or the Adjusted Option 428JET Aircraft Base Price, as
the case may be.
XI.4 GENERAL PROVISIONS
XI.4.1 In determining the Aircraft Delivery Price, the
coefficients of the two ratios of the escalation formula
shall be calculated to the ten thousandth (4 decimals). If
the next succeeding place is five (5) or more, the preceding
decimal shall be raised to the next higher figure. The final
factor to be multiplied with (Pb), shall be rounded to the
nearest ten thousandth (4 decimals). The amount resulting
therefrom shall be then rounded to the nearest whole number
(0.5 or more rounded to 1) and then be fixed as the Aircraft
Delivery Price.
XI.4.2 In the event that one or both of the indices referred to
herein above are discontinued, Seller shall use comparable
statistics on the cost of labor for aircraft workers or the
cost of materials for metals and metal products, as the case
may be, published by the statistical sources set forth in
Clause XI.2 herein. In the event that such sources shall no
longer maintain statistics on such costs of labor or cost of
materials for metals and metal products, Seller shall use
comparable statistics published by a respectable financial
periodical of a recognized authority. Any selection by
Seller of comparable statistics shall be binding upon
Purchaser.
XI.4.3 If the U.S. Department of Labor alters the compilation
of the basket of available commodities or the selection of
the payroll reports as basis of valuation for any of the
indices used in the Price Adjustment Formula, Seller reserves
the right to compute the further development of the indices
being affected by such altered basis of valuation in such a
manner as would have been achieved by the use of
the original basis of valuation prior to the corresponding
alteration decided by the U.S. Department of Labor.
XI.4.4 Final values of the above referred indices shall be used
for the Aircraft Delivery Price calculation. If no "final"
value is published for any of the applicable months at the
time of invoicing at Aircraft delivery, then the published
preliminary figures shall be used for the computation of the
Aircraft Delivery Price.
EXHIBIT XII
SCHEDULE COMPLETION
XII.1 GENERAL
Seller shall provide Purchaser a Revenue Service Schedule
Completion Rate Guarantee for the Aircraft, covering a period of
***** following the date of entry into service of the
first Aircraft. This Revenue Service Schedule Completion Rate
Guarantee is effective during the Guarantee Term, defined below,
so long as ***** of Purchaser's Scheduled Revenue
Service Flights originate or terminate at its main maintenance
base, or line maintenance base which shall have levels of spares
and maintenance technician support to be agreed during the initial
provisioning conference.
XII.2 DEFINITIONS
In this Revenue Service Schedule Completion Rate Guarantee:
"Cancelled Flight" means a Scheduled Revenue Service Flight that
is cancelled or diverts from its intended destination because of
technical reasons inherent in the Aircraft and the flight is not
an Excluded Flight.
"Excluded Flight" means flight cancellation or diversions caused
by the reasons set forth in Appendix 1, attached hereto;
"Guarantee Term" means a term commencing with the date of entry
into service of the first Aircraft and terminating on a date
***** later.
The "Revenue Service Schedule Completion Rate Guarantee
Percentage" shall be a ***** moving average (expressed
as a percentage) which shall be calculated using the following
formula:
*****
"Scheduled Revenue Service Flight" means an Aircraft operation
available for the transportation of revenue passengers;
XII.3 REVENUE SERVICE SCHEDULE COMPLETION RATE GUARANTEE
PERCENTAGES
At the end of each month, Purchaser shall perform the calculation
required to determine the Revenue Service Schedule Completion Rate
Guarantee Percentage. Input data will be drawn from Purchaser's
official logs and utilization reports as submitted to its
regulatory authorities. Seller guarantees such Revenue Service
Schedule Completion Rate Guarantee Percentage shall not be less
than:
*****
Satisfaction of the guarantee for the first ***** shall
be evaluated immediately following ***** .
In the event the Aircraft fleet's Guarantee Percentage equals or
exceeds ***** on a moving average during *****
following delivery of the first Aircraft, the Revenue Service
Schedule Completion Rate Guarantee shall terminate and Seller
shall have no further obligation to Purchaser under this Revenue
Service Schedule Completion Rate Guarantee.
XII.4 In the event the Aircraft fleet fails to meet the
Revenue Service Schedule Completion Rate Guarantee, Seller
and Purchaser agree as follows:
a. Purchaser shall notify Seller in writing of a failure to
meet the Revenue Service Schedule Completion Rate
Guarantee and provide Seller with detailed
substantiating information concerning such failure.
Purchaser will provide data in a format to be mutually
agreed upon.
b. In those instances where, on the basis of reports
furnished to Seller, engine-related causes are shown to
be a significant contributor to the failure to meet the
Revenue Service Schedule Completion Rate Guarantee, P&WC
will conduct investigations to determine root causes,
and together with Seller, will generate a corrective
action plan on a case-by-case basis.
c. *****
d. *****
e. *****
XII.5 PURCHASER'S OBLIGATIONS
Seller's Revenue Service Schedule Completion Rate Guarantee is
subject to Purchaser complying with the following:
a. Purchaser shall provide to Seller all data pertaining to
the operation of the Aircraft reasonably deemed
necessary and requested by Seller to enable Seller to
conduct an efficient and coordinated audit of all
reliability, maintainability, operational and cost data,
with the objective of improving the safety, availability
and operational costs of the Aircraft, provided that
such data are of the type and in the form normally
accumulated by Purchaser in its operation. Seller shall
enter into an appropriate confidentiality agreement with
respect to Purchaser's data, and in any event will not
be entitled to data not relevant to the Aircraft.
b. Purchaser shall submit a Cancelled Flight report within
thirty (30) days after the end of each calendar month,
beginning with the month Purchaser places the first
Aircraft in service. Purchaser and Seller shall agree,
prior to delivery of the first Aircraft, upon the final
content and lay-out of such reports, which shall
include, among other data, ATA Chapter, Subchapter,
Aircraft, date, discrepancy and action taken.
c. Purchaser shall subscribe fully to a FAA-accepted
maintenance training program and shall have sufficient
trained technicians on site at its aircraft maintenance
facilities. Purchaser agrees to provide, at its
expense, mutually agreed supplementary training for
Purchaser's personnel in areas where additional training
would reasonably be expected to enhance Aircraft
reliability and maintainability.
d. During the first ***** after entry into
service of the first Aircraft delivered, Purchaser shall
participate in Seller's quarterly reliability review
meetings to be held at Purchaser's maintenance base to
identify possible deficiencies. During *****
entry into service of the first Aircraft delivered,
reliability review meetings will be held on an annual
basis unless mutually agreed otherwise.
e. If during the Guarantee Term guarantee levels are not
achieved, Seller shall have the right to perform a
reasonable review during normal business hours of
Purchaser's maintenance and flight operations
departments' procedures related to the failure to meet
the guarantee in Purchaser's operation of the Aircraft.
Purchaser's maintenance and operations personnel shall
cooperate in the conduct of the review. This review
will be performed by employees of Seller provided an
appropriate confidentiality agreement has been executed.
Purchaser shall be given access to any information
gathered during such review.
EXHIBIT XII
APPENDIX 1
REVENUE SERVICE SCHEDULE COMPLETION RATE GUARANTEE EXCLUSIONS
Negligence of Purchaser's personnel or personnel under contract to
the Purchaser;
Force Majeure (including, but not limited to, lightning strikes,
foreign object damage, bird strikes, enroute weather, and ATC
diversions);
Crew refusal of systems or components that are within specified
limits;
Non-availability of spares (as recommended by and included in
Seller's IP list), equipment documentation or trained personnel
due to fault of Purchaser;
Acts of third parties (other than acts of any affiliate, agent or
employee of Seller or its Vendors;
Incorrect routine servicing of engine oil, hydraulic fluid, or
oxygen refilling or recharging;
Navigation routing software data base updating of on-board
navigation computers;
Tire/wheel assembly change due to cuts, wear or dry nitrogen/air
pressure servicing;
Wheel and brake changes due to wear;
Recurrences of technical delays within three (3) days, with or
without corrective action, which are caused by incorrect crew
reporting, maintenance or servicing;
Failure to correct technical faults when Purchaser has a
maintenance opportunity to correct such fault;
Malfunction of equipment provided by Purchaser;
Extended maintenance or late release from maintenance due to work
scheduling of Purchaser, except for discrepancies found during
scheduled maintenance;
Malfunction of any galley equipment except the fixed galley
structure;
Malfunction or absence of any loose or portable emergency
equipment;
Evidence for cancellations for which supporting information and/or
documentation are not available;
Failure to maintain, overhaul, repair and operate the Aircraft,
and failure to maintain, overhaul, repair, and operate any
equipment, any accessory, any component, and any part, in
accordance with Purchaser's maintenance programs;
Malfunctions caused by components not manufactured by Vendors
listed in the Aircraft Illustrated Parts Catalog or authorized by
Seller; and
Cancelled Flights caused by inherent or non-corrected malfunctions
which could have been avoided by operation in accordance with all
of the provisions of the Minimum-Equipment List as approved by the
FAA for the operation of the Aircraft, unless precluded by
Purchaser's Flight Operations Manual for the Aircraft.
EXHIBIT XIII
MAINTENANCE COST
XIII.1 GENERAL
Subject to the provisions of Seller's Maintenance Cost Guarantee
set forth below, Seller guarantees that the cost to repair,
replace, overhaul and restore the 328JET and 428JET Aircraft and
components thereof, except Excluded Items as defined below, to a
serviceable condition shall not exceed a guaranteed amount per
flight hour/cycle during a specified period of 328-300 Aircraft
operations, provided however, that the maintenance is performed in
the most economical manner, which includes the use of overhauled,
restored or repaired parts, when authorized and appropriate.
The Maintenance Cost Guarantee is also applicable to the 428JET
Aircraft at the flight hour rate defined as the Guaranteed Amount,
below.
XIII.2 DEFINITIONS
In this Maintenance Cost Guarantee ("MCG"):
"Eligible Aircraft" means the fleet of fifty-five (55) Aircraft
plus any Option Aircraft acquired during the MCG Term by Purchaser
pursuant to this Agreement;
"Eligible Aircraft Total Cost" means for the Eligible Aircraft,
the Eligible Costs accumulated by the Purchaser during the MCG
Term for such Aircraft;
"Eligible Cost" means the cost of Eligible Parts and associated
shop labor;
"Eligible Part" means any part, component or equipment installed
in or part of the Eligible Aircraft excluding the Excluded Items;
"Excluded Items" means those items excluded from the Maintenance
Cost Guarantee which are:
a. Parts, systems or components which are:
1) Subject to an insurance claim;
2) Damaged by misuse, or damaged either directly or
indirectly as the result of failure to properly
maintain other parts or components in accordance
with Seller's Maintenance Planning Document ("MPD")
standards;
3) Damaged or malfunction due to components not
manufactured by vendors listed in the Aircraft
Illustrated Parts Catalog or authorized by the
Seller;
4) Sent out for repair when no repair is required or
performed, excluding repetitive failure on
individual serialized components;
5) Not maintained in accordance with approved
documentation, including the MPD; and
6) Damaged as a result of foreign object ingestion or
impact (FOD), lightning strikes, or acts of God.
b. Standard parts including, but not limited to AN, MS,
NAS, AGS designated hardware as used for any type of
aircraft line maintenance;
c. Interior carpets, passenger seats (except seat frames),
seat covers, trim panels, galley equipment (except
coffee makers), etc., subject to normal wear and tear,
and loose safety equipment;
d. Exterior Aircraft paint;
e. Purchaser furnished equipment;
f. Petroleum oil and lubricants, and chemicals and
adhesives; or
g. Expendables with a value of less than ***** .
"Guaranteed Amount" shall mean *****
.
*****
*****
*****
*****
*****
"MCG Term" means for the Eligible Aircraft, a term commencing on
the day immediately following delivery of the first Aircraft and
terminating on the ***** anniversary of the date of delivery of
the first Aircraft.
"Guaranteed Reconciliation Period Amount" shall mean the
US$/Flight Hour amount for the associated Reconciliation Period
for the 328-300 Aircraft and 428JET Aircraft as set forth below:
*****
*****
* *****
The Guaranteed Reconciliation Period Amount excludes the hourly
maintenance cost of the engines, APU, and Honeywell avionics
suite.
XIII.3 REPORTING AND PAYMENT CALCULATIONS
a. During the MCG Term, Purchaser shall, not later than
thirty (30) days after the last day of each quarter,
provide Seller with documentation, in a format
acceptable to Seller, supporting the total of the
Eligible Costs accumulated for each Eligible Aircraft
during the preceding quarter, and a total of the flight
hours and cycles accumulated for each Eligible Aircraft
during the preceding quarter, as recorded in the
Eligible Aircraft records.
b. During the MCG Term, Seller shall, every twelve (12)
months, beginning with the twelfth (12th) month after
delivery of the first Aircraft ("Reconciliation Period")
provide Purchaser with a statement which is the positive
or negative result of a calculation which is the sum of
the Eligible Aircraft Total Cost less the sum of the
product of the flight hours multiplied by the hourly
Guaranteed Reconciliation Period Amount, from the date
of delivery of each Eligible Aircraft.
c. *****
d. Seller's liability under this MCG is expressly limited
to the provision of the aforementioned Spare Parts
Credit. Seller's obligations hereunder shall terminate
in the event that Purchaser is unable to provide Seller
with documentation as requested pursuant to Clause
XIII.3a above if Purchaser is in default under this or
any other agreement with Seller or a subsidiary of
Seller, Seller's obligation to make payment hereunder
shall be suspended.
e. In the event that, during the MCG Term, an Eligible
Aircraft does not meet the MCG Guaranteed Amount, Seller
shall provide Purchaser with cost-reduction related
Service Bulletin instructions, parts and materials free
of charge. Such Service Bulletin parts and materials
shall be incorporated as soon as practicable following
receipt by Purchaser of instructions, parts and
materials, if applicable. Should Purchaser not
incorporate and/or install such Service Bulletin, parts
and materials and/or modifications, as soon as
practicable, the Spare Parts Credit to be provided to
Purchaser shall be reduced by an amount attributable to
the delay in incorporation of such Service Bulletin.
EXHIBIT XIV
*****
EXHIBIT XV
*****
EXHIBIT XVI
*****
EXHIBIT XVII
*****
EXHIBIT XVIII
RESERVED
EXHIBIT XIX
*****
EXHIBIT XX
CERTIFICATE OF TECHNICAL ACCEPTANCE FORM
Atlantic Coast Airlines (the "Purchaser") hereby acknowledges
technical acceptance this ...........day of ...................... at
Oberpfaffenhofen, Federal Republic of Germany, of one (1) Dornier
_______ aircraft, bearing Serial Number ............ ("Aircraft").
Purchaser acknowledges that the Aircraft has been satisfactorily
inspected in accordance with the terms of Aircraft Purchase Agreement
Ref.: PA227 dated March 31, 1999 (the "Agreement") between Purchaser
and Dornier Luftfahrt GmbH (the "Seller") and that the Aircraft is in
complete conformity, except as to non-conformance with the
Specification that is not reasonably susceptible to identification in
accordance with Exhibit VIII, Clause 1.3.a., with the specifications
and the requirements
of the Agreement without any condition or reservation, except as
noted below.
Atlantic Coast Airlines
By:
Name:
Title:
Exceptions: