EXHIBIT 10.41
CONFIDENTIAL PORTIONS HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO A
CONFIDENTIAL TREATMENT REQUEST.
BOMBARDIER REGIONAL AIRCRAFT DIVISION
PURCHASE AGREEMENT
PA-0454
BETWEEN
BOMBARDIER INC.
AND
ATLANTIC COAST AIRLINES
Relating to the Purchase of
SIX (6) Canadair Regional Jet aircraft
Including related Customer Support
Services
TABLE OF CONTENTS
ARTICLE
1 INTERPRETATION
2 SUBJECT MATTER OF SALE
3 CUSTOMER SUPPORT SERVICES AND
WARRANTY
4 PRICE
5 PAYMENT
6 DELIVERY PROGRAM
7 BUYER INFORMATION
8 CERTIFICATION FOR EXPORT
9 ACCEPTANCE PROCEDURE
10 TITLE AND RISK
11 CHANGES
12 BUYER'S REPRESENTATIVES AT
MANUFACTURE SITE
13 EXCUSABLE DELAY
14 NON-EXCUSABLE DELAY
15 LOSS OR DAMAGE
16 TERMINATION
17 NOTICES
18 INDEMNITY AGAINST PATENT
INFRINGEMENT
19 LIMITATION OF LIABILITY
20 ASSIGNMENT
21 SUCCESSORS
22 APPLICABLE LAWS
23 CONFIDENTIAL NATURE OF AGREEMENT
24 AGREEMENT
25 DISPUTES
APPENDIX
I ECONOMIC ADJUSTMENT FORMULA
II DELIVERY SCHEDULE
III SPECIFICATION
IV BUYER SELECTED OPTIONAL FEATURES
EXHIBIT
I CERTIFICATE OF ACCEPTANCE
II BILL OF SALE
III CERTIFICATE OF RECEIPT OF AIRCRAFT
IV CHANGE ORDER
ANNEX A
CUSTOMER SUPPORT SERVICES
ANNEX B
WARRANTY AND SERVICE LIFE POLICY
LETTER AGREEMENTS
Letter Agreement No. 001 Credit
Memorandum
Letter Agreement No. 002 Assignment
Letter Agreement No. 003 Option
Aircraft
Letter Agreement No. 004 Financing
Letter Agreement No. 005 Additional
Customer Support
Letter Agreement No. 006 Spares
Credit
Letter Agreement No. 007 Taxes,
Duties and Licenses
Letter Agreement No. 008
Airworthiness Directives
Letter Agreement No. 009
Reconciliation
Letter Agreement No. 010 Spares
Parts Price Catalogue
Letter Agreement No. 011 Cargo
Floor Boards
This Agreement is made on the 29th day of July
1999.
BY AND BETWEEN: BOMBARDIER INC., a Canadian
corporation represented by
Bombardier Aerospace, Regional
Aircraft having an office
located at 123 Garratt
Boulevard, Downsview, Ontario,
Canada. (hereafter called
"Bombardier")Bombardier
AND: ATLANTIC COAST AIRLINES, a
California Company, having
offices at 515A Shaw Road,
Dulles,, Virginia 20166, U.S.A.
("Buyer")
WHEREAS Bombardier Inc. through its
Canadair Manufacturing Division,
is engaged in the manufacture of
the Canadair Regional Jet
aircraft products; and
Bombardier has been created for
the purpose of providing
marketing, sales and customer
support services for the
Canadair Regional Jet aircraft
and related products;
WHEREAS Buyer desires to purchase six
(6) Aircraft (as later defined)
and related data, documents, and
services under this Agreement
(as later defined), and
Bombardier desires to arrange
the sale of such Aircraft, data,
documents and services to Buyer,
WHEREAS Atlantic Coast Airlines Holdings
Inc., a Delaware Corporation,
the parent of Buyer, is prepared
to provide a guarantee of
Buyer's obligations hereunder,
in a form acceptable to the
parties and the financiers.
NOW THEREFORE, in consideration of the
mutual covenants herein contained,
Buyer and Bombardier agree as
follows:
ARTICLE 1. INTERPRETATION
1.1 The recitals above have been inserted for
convenience only and do not form part of the
agreement.
1.2 The headings in this agreement are included
for convenience only and shall not be used
in the construction and interpretation of
this agreement.
1.3 In this agreement, unless otherwise
expressly provided, the singular includes
the plural and vice-versa.
1.4 In this agreement the following expressions
shall, unless otherwise expressly provided,
mean:
(a) "Acceptance Period" shall have the
meaning attributed to it in Article 9.3;
(b) "Acceptance Date" shall have the meaning
attributed to it in Article 9.7.(a);
(c) "Agreement" means this Agreement,
including its Exhibits, Annexes,
Appendices and Letter Agreements, if
any, attached hereto (each of which is
incorporated in the Agreement by this
reference), as they may be amended
pursuant to the provisions of the
Agreement;
(d) "Aircraft" shall have the meaning
attributed to it in Article 2.1;
(e) "Aircraft Purchase Price" shall have the
meaning attributed to it in Article 4.2;
(f) "Base Price" shall have the meaning
attributed to it in Article 4.1;
(g) "Bill of Sale" shall have the meaning
attributed to it in Article 9.7 (c);
(h) "BFE" shall have the meaning attributed
to it in Article 11.1;
(h.1) "Bombardier Group" shall have the
meaning attributed to it in Article
24.3;
(h.2) ----------------------------------
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--------
(i) "Buyer Selected Optional Features"
shall have the meaning attributed to it
in Article 2.1;
(j) "Delivery Date" shall have the meaning
attributed to it in Article 9.7.(c);
(k) "Economic Adjustment Formula" shall have
the meaning attributed to it in Article
4.2;
(l) "Excusable Delay" shall have the meaning
attributed to it in Article 13.1;
(m) "FAA" shall have the meaning attributed
to it in Article 8.1;
(m.1) "Grace Period" shall have the
meaning attributed to it in Article 14.1;
(n) "Non-Excusable Delay" shall have the
meaning attributed to it in Article
14.1;
(o) "Notice" shall have the meaning
attributed to it in Article 17.1;
( p)"Other Patents" shall have the meaning
attributed to it in Article 18.1;
( q)"Permitted Change" shall have the
meaning attributed to it in Article 11.2;
( r)"Readiness Date" shall have the meaning
attributed to it in Article 9.1;
( s)"Regulatory Change" shall have the
meaning attributed to it in Article 8.4;
( t)"Scheduled Delivery Dates" shall have
the meaning attributed to it in Article
6;
( u)"Specification" shall have the meaning
attributed to it in Article 2.1;
( v)"Taxes" shall have the meaning
attributed to it in Article 4.3.;
( w)"TC" shall have the meaning attributed
to it in Article 8.1;
( x)"Net Aircraft Purchase Price" shall have
the meaning attributed to it in
Article 5.3.;
( y)"Technical Data" shall have the meaning
attributed to it in Annex A Article 4.1;
1.5 All dollar amounts in this
Agreement are in United States
Dollars.
ARTICLE 2 - SUBJECT MATTER OF SALE
2.1 Subject to the provisions of this
Agreement, Bombardier will sell and
Buyer will purchase six (6)
Canadair Regional Jet aircraft
model CL600-2B19 Version 200ER,
manufactured pursuant to
specification Number RAD-601R-146
Issue B dated
June 11, 1999, attached hereto as
Appendix III, as that specification
may be modified from time to time
in accordance with this Agreement
(the "Specification"), as
supplemented to reflect the
incorporation of the Buyer selected
optional features ("Buyer Selected
Optional Features") set forth in
Appendix IV hereto (collectively
the "Aircraft").
With the exception of Permitted Changes
as defined in Section 11.2 (a) and
(b) of the Agreement, and
notwithstanding wording and or
description changes, the
Specification for the Aircraft is
the same as the aircraft
specification for the aircraft
subject to Aircraft Purchase
Agreement between Bombardier and
Buyer dated January 8, 1997, as
amended, except with respect to any
systems and related components in
connection with the EICAS 2000 (CR
Ref No. 31-120), DFDR 88 Parameters
(CR Ref No. 31-340), EGPWS (CR Ref
No. 34-328) and AMI Pilot and co-
pilot seats.
ARTICLE 3 - CUSTOMER SUPPORT SERVICES AND WARRANTY
3.1 Bombardier shall provide to Buyer
the customer support services
pursuant to the provisions of Annex
A attached hereto.
3.2 Bombardier shall provide to Buyer
the warranty and the service life
policy described in Annex B
attached hereto.
3.3 Unless expressly stated otherwise,
the services referred to in 3.1 and
3.2 above are incidental to the
sale of the Aircraft and are
included in the Aircraft Purchase
Price.
ARTICLE 4 - PRICE
4.1 (a) The base price for each of the
Aircraft (excluding the Buyer Selected
Optional Features) Ex Works (Incoterms
1990) Bombardier's offices or premises
in Montreal, Province of Quebec, Canada,
is -------------------------------------
----------------------------------------
-------- expressed in January 1, 1999
dollars.
(b) The base price of the Buyer
Selected Optional Features is ----------
----------------------------------------
----------------------------------------
-------- expressed in January 1, 1999
dollars.
The Aircraft base price (the
"Aircraft Base Price") shall be the
base price for the Aircraft as
stated in paragraph (a), plus the
base price of the Buyer Selected
Optional Features as stated in
paragraph (b) ("Base Price").
4.2 The price of the Aircraft (the "Aircraft
Purchase Price") shall be the Base Price
adjusted to the date of delivery to
reflect economic fluctuations during the
period from January 1, 1999 to the
respective delivery date of the
Aircraft. Such adjustments shall be
based on the formula as found in
Appendix I ("Economic Adjustment
Formula"), but when adjusted, the
Aircraft Purchase Price shall in no case
be lower than the Aircraft Base Price,
as stipulated in Article 4.1 herein.
4.3 Upon the occurrence of events as
described in this paragraph 4.3, there
will be adjustments as follows:
4.3.1 In the event that Bombardier
and Buyer agree to any changes in the
Specification or selected optional
features, or should changes in the
Specification or selected optional
features be made pursuant to Article
11.1 or as a result of any Regulatory
Changes pursuant to Article 8.4 which
are chargeable to Buyer pursuant to
Article 8.5, or in the event that
Bombardier and Buyer agree to any ------
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----------
4.3.2 The Credit Memorandum
adjustment shall be in accordance with
the terms of Letter Agreement No. 1.
4.3.3 ------------------------------
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4.3.4 In the event of a Non-
Excusable Delay, the provisions of
Article 14.2 shall apply.
4.4 The Aircraft Purchase Price does not
include any taxes, fees or duties
including, but not limited to, sales,
use, value added (including the Canadian
Goods and Services Tax), personal
property, gross receipts, franchise,
excise taxes, assessments or duties
("Taxes") which are or may be imposed by
law upon Bombardier, any affiliate of
Bombardier, Buyer or the Aircraft
whether or not there is an obligation
for Bombardier to collect same from
Buyer, by any taxing authority or
jurisdiction occasioned by, relating to
or as a result of the execution of this
Agreement or the sale, lease, delivery,
storage, use or other consumption of any
Aircraft, BFE or any other matter, good
or service provided under or in
connection with this Agreement.
4.5 If any Taxes (other than income taxes
charged on the income of Bombardier
Group) are imposed upon Buyer or become
due or are to be collected from
Bombardier Group by any taxing authority
resulting from, relating to or in
connection with the execution of this
Agreement, the sale, lease, delivery,
storage, use or other consumption of any
Aircraft, BFE or any other matter, goods
or services provided for under this
Agreement, Bombardier shall notify Buyer
and Buyer shall promptly, but no later
than ten (10) working days after
receiving such notice, pay such Taxes
directly to the taxing authority, or
reimburse Bombardier for such Taxes, as
the case may be, including interest and
penalties. Buyer shall only reimburse
Bombardier for interest and penalties if
Bombardier notifies Buyer in writing of
the imposition of these Taxes within ten
(10) working days of the member of
Bombardier Group receiving written
notification of such Taxes.
4.6 Upon Bombardier's request, Buyer shall
execute and deliver to Bombardier any
documents that Bombardier deems
necessary or desirable in connection
with any exemption from or reduction of
or the contestation of or the defense
against any imposition of Taxes.
4.7 Upon Buyer's request, Bombardier shall
execute and deliver to Buyer any
documents that Buyer deems necessary or
desirable in connection with any
exemption from or reduction of or the
contestation of or the defense against
any imposition of Taxes.
ARTICLE 5 - PAYMENT
5.1 Bombardier acknowledges having
previously received a deposit of --
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----------------------per Aircraft,
totaling --------------------------
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5.2 Buyer shall make payment or cause
payment to be made for each
Aircraft as follows:
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-----
All payments referred to in
paragraphs a., b. and c. above are
to be made on the first day of the
applicable month.
5.3 Payment Terms
On or before the Delivery Date
Bombardier shall have received in
full the amount of the Aircraft
Purchase Price of such Aircraft
less the amount of the applicable
Credit Memorandum as set out in
Letter Agreement No. 1, which will
be credited by Bombardier toward
the Aircraft Purchase Price (said
amount being the "Net Aircraft
Purchase Price").
5.4 Subject to the provisions of
Article 9.9 hereof, should Buyer
fail to make any of the
aforementioned payments on or
before the stipulated date and
Buyer does not correct the default
within a period of thirty (30) days
thereafter, this Agreement shall
automatically terminate and
Bombardier shall have no further
obligation to Buyer under this
Agreement, including the obligation
to proceed further with the
manufacture of the Aircraft on
behalf of Buyer or the sale and/or
delivery of the Aircraft to Buyer.
Bombardier shall have the option
(but not the obligation) of waiving
such termination should Buyer make
arrangements satisfactory to
Bombardier for such payment and all
future payments within ten (10)
calendar days of Buyer's default.
5.5 Buyer shall pay Bombardier daily
interest on late payments, from the
date that any payment becomes due up
to and including the day prior to
receipt of payment, at a rate of two
per cent (2 %) per annum over the
U.S. prime rate charged by the Chase
Manhattan Bank, New York Branch, or
its successor, from time to time,
calculated and compounded monthly.
Bombardier's right to receive such
interest is in addition to any other
right or remedy Bombardier has at
law as a result of Buyer's failure
to make payments when due.
5.6 If under any terms of the Agreement
Bombardier is obligated to return
any of the payments or make other
payments if applicable to Buyer,
with or without interest as provided
for herein, Bombardier shall do so
within five (5) working days, and if
Bombardier fails to do so,
Bombardier shall pay Buyer daily
interest on late payments from the
date any payment becomes due up to
and including the day prior to
receipt of payment, at a rate of two
per cent (2 %) per annum over the
U.S. prime rate charged from time to
time by the Chase Manhattan Bank,
New York Branch, or its successor,
calculated and compounded monthly. .
The five (5) day grace period
mentioned above shall not apply to
return of any excess payments, if
any, received by Bombardier toward
the payment of the Net Aircraft
Purchase Price, which shall be paid
to Buyer on the Delivery Date.
5.7 Buyer shall make all payments due
under this Agreement in immediately
available funds by deposit on or
before the due date to Bombardier's
account in the following manner:
(a) Transfer to: ----------
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-----------------------------------
-----------------------------------
-----------------------------------
-----------------------------------
-----------------------------------
-----------------------------------
---------------------------
(b) To pay: ------
--------------------------
--------------------------
-------
(c) For credit to: ------
--------------------------
--------------------------
--------------------------
--------------------------
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-----------
(d) For further credit to: -----
-----------------------------------
-----------------------------------
-----------------------------------
------- Bombardier shall make all
payments due under this Agreement
in immediately available funds by
deposit on or before the due date
to Buyer's account as specified
below:
Account Name: -------------------
----
Bank Name: -------------------
-
------------
Account No.: -----------
Bank ABA: -----------
5.8 All other amounts due with respect
to each Aircraft shall be paid on
or prior to the Delivery Date of
the respective Aircraft.
5.9 All payments provided for under
this Agreement to either party
shall be made so as to be received
in immediately available funds on
or before the dates stipulated
herein. Neither party shall incur
interest charges for any delay
which occurs after provision of a
proof of transfer from that party's
bank.
5.10 Bombardier, or its affiliate to
whom the Aircraft may have been
sold, shall remain the exclusive
owner of the Aircraft, free and
clear of all rights, liens, charges
or encumbrances created by or
through Buyer, until such time as
all payments referred to in this
Article 5 have been made.
ARTICLE 6 - DELIVERY PROGRAM
6.1 The Aircraft shall be offered for
inspection and acceptance to Buyer
at Bombardier's facility in
Montreal, Quebec during the months
set forth in Appendix II attached
hereto (the "Scheduled Delivery
Dates").
ARTICLE 7 - BUYER INFORMATION
7.1 During the manufacture of the
Aircraft, Buyer shall provide to
Bombardier on or before the date
required by Bombardier, all
information as Bombardier may
reasonably request to manufacture
the Aircraft including, without
limitation, the selection of
furnishings, internal and external
colour schemes.
Nine (9) months prior to delivery
of the First Aircraft Buyer will:
(a) provide Bombardier with an
external paint scheme agreed on by
the parties; and
(b) select interior colours (from
Bombardier's standard colours).
Failure of Buyer to substantially
comply with these requirements may
result in a reasonable increase in
price, as applicable, a delay in
delivery of the Aircraft, or both.
ARTICLE 8 - CERTIFICATION FOR EXPORT
8.1 Bombardier has obtained and will
continue to have on each Delivery
Date from Transport Canada ("TC"),
a valid TC Type Approval
(Transport Category) and from the
Federal Aviation Administration of
the United States ("FAA") an FAA
Type Certificate for the type of
aircraft purchased under this
Agreement.
8.2 Bombardier shall provide to Buyer a
TC Certificate of Airworthiness
(Transport Category) for export, on
or before the Delivery Date with
respect to each Aircraft.
8.3 The obtaining of any import license
or authority required to import or
operate the Aircraft into any
country outside of Canada shall be
the responsibility of Buyer.
Bombardier will, assist Buyer in
obtaining import permits and
licenses. Bombardier shall, with
Buyer's assistance, obtain the
issuance of a Canadian export
license to enable Buyer to export
the Aircraft from Canada, subject
to prevailing export control
regulations in effect on the
Delivery Date. Except as provided
in Articles 8.1, 8.2 and 8.3
Bombardier shall not be obligated
to obtain any other certificates or
approvals as part of this
Agreement.
8.4 If any addition or change to, or
modification or testing of the
Aircraft is required or will be
required by the passage of time by
any law or governmental regulation
or requirement or interpretation
thereof by any governmental agency
having jurisdiction subsequent to
the date of this Agreement but
prior to the Delivery Date in order
to meet the requirements of Article
8.2 (a "Regulatory Change"), such
Regulatory Change shall be made to
the Aircraft prior to Delivery
Date, or at such other time after
the Delivery Date as the parties
may agree upon taking into account
the terminating action deadline.
8.5 The Regulatory Change shall be made
without additional charge to Buyer
unless such Regulatory Change is:
(a) necessary to comply with any
requirement of the United States,
the country of import, which varies
from or is in addition to its
regulation, requirement or
interpretation in effect on the
date hereof for the issuance of a
Certificate of Airworthiness in
said country of import (unless such
requirement has been imposed to
correct a defect specific to the
Aircraft or to the Canadair
Regional Jet fleet of aircraft), in
which case Buyer shall pay
Bombardier's reasonable charges for
such Regulatory Change, or
(b) required by any governmental
law or regulations or
interpretation thereof promulgated
by TC or the FAA which is effective
subsequent to the date of this
Agreement but before the Delivery
Date and which is applicable to all
aircraft in general or to all
aircraft of the same category as
the Aircraft, in which case Buyer
shall pay Bombardier's reasonable
charges for such Regulatory Change
incorporated in any such Aircraft.
8.6 If delivery of the Aircraft is
delayed by the incorporation of any
Regulatory Change, such delay shall
be an Excusable Delay within the
meaning of Article 13 subject to
the limitations therein.
Notwithstanding the provision of
Article 13.2(b), should the
Regulatory Change be required to
correct a defect specific to the
Aircraft or to the Canadair
Regional Jet fleet of aircraft, ---
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-----------------------------------
----------------
8.7 Bombardier shall issue a Change
Order, reflecting any Regulatory
Change required to be made under
this Article 8, which shall set
forth in detail the particular
changes to be made and the effect,
if any, of such changes on design,
performance, weight, balance, time
of delivery, Base Price, the
Aircraft Purchase Price, ----------
-----------------------------------
-------------- all in accordance
with this Agreement. Any Change
Orders issued pursuant to this
Article shall be effective and
binding upon the date of
Bombardier's transmittal of such
Change Order, all in accordance
with this Agreement. Although
Buyer's consent to said Change
Order is not required, Bombardier
agrees to consult with Buyer
regarding the change proposed by
Bombardier to implement such
Regulatory Change.
8.8 If the use of any of the
certificates identified in this
Article 8 are discontinued during
the performance of this Agreement,
reference to such discontinued
certificate shall be deemed a
reference to any other certificate
or instrument which corresponds to
such certificate or, if there
should not be any such other
certificate or instrument, then
Bombardier shall be deemed to have
obtained such discontinued
certificate(s) upon demonstrating
that the Aircraft complies
substantially with the
Specification.
ARTICLE 9 - ACCEPTANCE PROCEDURE
9.1 No later than ----------------
-----------------------------------
---------- Bombardier shall inform
Buyer by facsimile or telegraphic
communication or other expeditious
means, of the projected week of
delivery within the delivery month
Bombardier shall give Buyer at
least ---------------- advance
notice, by facsimile or telegraphic
communication or other expeditious
means, of the projected date of
readiness of each Aircraft for
inspection and delivery.
Bombardier and Buyer shall then
agree on a mutually acceptable
targeted delivery schedule within
the delivery month.
Bombardier shall give Buyer at
least ----------------------advance
notice, by facsimile or telegraphic
communication or other expeditious
means, of the date on which an
Aircraft will be ready for Buyer's
inspection, flight test and
acceptance (the "Readiness Date"),
which Readiness Date shall take
into account the targeted delivery
schedule mentioned above or such
other date as the parties may have
agreed upon.
9.2 Within two (2) days following
receipt by Buyer of the notice of
Readiness Date Buyer shall:
(a) provide notice to Bombardier
as to the source and method of
payment of the balance of the
Aircraft Purchase Price;
(b) identify to Bombardier the
names of Buyer's representatives
who will participate in the
inspection, flight test and
acceptance; and
(c) provide evidence of the
authority of the designated persons
to execute the Certificate of
Acceptance and other delivery
documents on behalf of Buyer.
9.3 Buyer shall have three (3)
consecutive working days commencing
on the Readiness Date in which to
complete the inspection and flight
test (such three (3) working day
period being the "Acceptance
Period"). This three (3) day
period may be extended in the event
of any delay by Bombardier in
making the Aircraft available for
inspection and flight test.
9.4 Up to four (4) representatives of
Buyer may participate in Buyer's
ground inspection of the Aircraft
and two (2) representatives of
Buyer may participate in the flight
test. Bombardier shall, if
requested by Buyer, perform an
acceptance flight of not less than
one (1) and not more than three (3)
hours duration. Ground inspection,
in accordance with procedures to be
mutually agreed to, and flight test
shall be conducted in accordance
with Bombardier's acceptance
procedures (a copy of which shall
be provided to Buyer at least 30
days prior to the Scheduled
Delivery Date of the First Aircraft
hereunder), as may be amended by
mutual agreement of Buyer and
Bombardier, and at Bombardier's
expense. At all times during ground
inspection and flight test,
Bombardier shall retain control
over the Aircraft.
9.5 If no Aircraft defect or
discrepancy is revealed during the
ground inspection or flight test,
Buyer shall accept the Aircraft on
or before the last day of the
Acceptance Period in accordance
with the provisions of Article 9.7.
9.6 If any material defect or
discrepancy in the Aircraft is
revealed by Buyer's ground
inspection or flight test, the
defect or discrepancy will promptly
be corrected by Bombardier, at no
cost to Buyer, which correction may
occur during or after the
Acceptance Period depending on the
nature of the defect or discrepancy
and of the time required for
correction. To the extent
necessary to verify such
correction, Bombardier shall
perform one (1) or more further
acceptance flights or ground
inspections as applicable.
Notwithstanding the provisions of
Article 4.2, should the Delivery
Date of an Aircraft occur in the
month subsequent to the Scheduled
Delivery Date due to the correction
of defects or discrepancies, ------
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9.7 Upon completion of the ground
inspection and acceptance flight of
the Aircraft and correction of any
defects or discrepancies:
(a) Buyer will sign a Certificate
of Acceptance (in the form of
Exhibit I hereto) for the Aircraft.
Execution of the Certificate of
Acceptance by or on behalf of Buyer
shall be evidence of Buyer having
examined the Aircraft and found it
in accordance with the provisions
of this Agreement. The date of
signature of the Certificate of
Acceptance shall be the "Acceptance
Date";
(b) Bombardier will supply a TC
Certificate of Airworthiness for
Export; and
(c) Buyer shall pay Bombardier the
balance of ------------------------
------- and any other amounts due,
at which time Bombardier shall
issue an FAA bill of sale and a
warranty bill of sale in a form
acceptable to Bombardier and
financiers (substantially in
accordance with the forms attached
as Exhibit II(a) and Exhibit II(b)
hereto), passing to Buyer, or
approved assignee pursuant to
Article 20, good title to the
Aircraft free and clear of all
liens, claims, charges and
encumbrances except for those
liens, charges or encumbrances
created by or claimed through Buyer
(the "Bill of Sale"). The date on
which Bombardier delivers the Bill
of Sale and Buyer takes delivery of
the Aircraft shall be the "Delivery
Date".
Delivery of the Aircraft shall be
evidenced by the execution and
delivery of the Bill of Sale and of
the Certificate of Receipt of
Aircraft (in the form of Exhibit
III hereto).
9.8 Provided that Bombardier has met
all of its obligations under this
Article 9, should Buyer not accept,
pay for () and take delivery of any
of the Aircraft within ten (10)
calendar days after the end of the
Acceptance Period of such Aircraft,
Buyer shall be deemed to be in
default of the terms of this
Agreement -------------------------
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9.9 Should the Buyer be in default
pursuant to Article 9.8 hereof,
Buyer shall promptly, upon demand,
reimburse Bombardier for all costs
and expenses reasonably incurred by
Bombardier as a result of such
Buyer's failure to accept or take
delivery of the Aircraft, including
but not limited to reasonable
amounts for storage, insurance,
taxes, preservation or protection
of the Aircraft, and provided that
Bombardier has met all of its
obligations under this Article 9,
should Buyer not accept, pay for
and/or take delivery of any one of
the Aircraft within ---------------
-------------- following the end of
the Acceptance Period, Bombardier
may, at its option, terminate the
present Agreement with respect to
any of the undelivered Aircraft.
Bombardier shall however, have the
option (but not the obligation) of
waiving such termination should
Buyer, within ten (10) calendar
days following such termination,
make arrangements satisfactory to
Bombardier to accept delivery and
provide payment for all amounts
owing or to become due pursuant to
this Agreement.
ARTICLE 10 - TITLE AND RISK
10.1 Title to the Aircraft and risk of
loss of or damage to the Aircraft
passes to Buyer when Bombardier
presents the Bill of Sale to Buyer
on the Delivery Date.
10.2 If, after transfer of title on the
Delivery Date, the Aircraft remains
in or is returned to the care,
custody or control of Bombardier,
Buyer shall retain risk of loss of,
or damage to the Aircraft and for
itself and on behalf of its
insurer(s) hereby waives and
renounces to, and releases
Bombardier and any of Bombardier's
affiliates from any claim, whether
direct, indirect or by way of
subrogation, for damages to or loss
of the Aircraft arising out of, or
related to, or by reason of such
care, custody or control ----------
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ARTICLE 11 - CHANGES
11.1 Other than a Permitted Change as
described in Article 11.2, or a
Regulatory Change as described in
Article 8.4, any change to this
Agreement (including without
limitation the Specification) or
any features or Buyer Furnished
Equipment ("BFE"), if any, changing
the Aircraft from that described in
the Specification attached hereto,
and as may be mutually agreed upon
by the parties hereto, shall be
made using a change order ("Change
Order") substantially in the format
of Exhibit IV hereto. Should Buyer
request a change, Bombardier shall
advise Buyer, to the extent
reasonably practical, of the
effect, if any, of such change
request on:
(a) the Scheduled Delivery Date;
(b) the price and payment terms
applicable to the Change Order; and
(c) any other material provisions
of this Agreement which will be
affected by the Change Order.
Such Change Order shall become
effective and binding on the
parties hereto when signed by a
duly authorized representative of
each party.
11.2 Bombardier, prior to the Delivery
Date and without a Change Order or
Buyer's consent, may:
(a) substitute the kind, type or
source of any material, part,
accessory or equipment with any
other material, part, accessory or
equipment of like, equivalent or
better kind or type; or
(b) make such change or
modification to the Specification
as it deems appropriate to:
1) improve the Aircraft, its
maintainability or appearance,
or
2) to prevent delays in
manufacture or delivery, or
3) to meet the requirements
of Articles 2 and 8, other
than for a Regulatory Change
to which the provisions of
Articles 8.4 and 8.5 shall
apply,
provided that such
substitution, change or
modification shall not affect
the Aircraft Purchase Price or
materially affect the
Scheduled Delivery Date, -----
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-------------- Any change
made in accordance with the
provisions of this Article
11.2 shall be deemed to be a
"Permitted Change" and the
cost thereof shall be borne by
Bombardier.
ARTICLE 12 - BUYER'S REPRESENTATIVES AT
MANUFACTURE SITE
12.1 From time to time, commencing with
the date of this Agreement and
ending with the Delivery Date of
the last Aircraft purchased
hereunder, Bombardier shall
furnish, without charge, office
space at Bombardier's facility for
one (1) representative of Buyer.
Buyer shall be responsible for all
expenses of its representative and
shall notify Bombardier at least
thirty (30) calendar days prior to
the first scheduled visit of such
representative and three (3) days
for each subsequent visit.
12.2 Bombardier's and Bombardier's
affiliates facilities shall be
accessible to Buyer's
representative during normal
working hours. Buyer's
representative shall have the right
to periodically observe the work at
Bombardier's or Bombardier's
affiliates' facilities where the
work is being carried out provided
there shall be no disruption in the
performance of the work.
12.3 Bombardier shall advise Buyer's
representative of Bombardier's or
Bombardier's affiliates' rules and
regulations applicable at the
facilities being visited and
Buyer's representative shall
conform to such rules and
regulations.
12.4 At any time prior to delivery of
the Aircraft, Buyer's
representative may request, in
writing, correction of parts or
materials which they reasonably
believe are not in accordance with
the Specification. Bombardier
shall provide a written response to
any such request. Communication
between Buyer's representative and
Bombardier shall be solely through
Bombardier's Contract Department or
its designate.
12.5 BUYER HEREBY RELEASES AND AGREES TO
DEFEND, INDEMNIFY AND HOLD HARMLESS
BOMBARDIER, ITS ASSIGNEES AND
AFFILIATES AND THEIR OFFICERS,
DIRECTORS, AGENTS, EMPLOYEES AND
CONTRACTORS FROM AND AGAINST ALL
LIABILITIES, DAMAGES, LOSSES, COSTS
AND EXPENSES RESULTING FROM
INJURIES TO OR DEATH OF BUYER'S
REPRESENTATIVES WHILE AT
BOMBARDIER'S OR BOMBARDIER'S
AFFILIATES OR SUBCONTRACTOR'S
FACILITIES AND/OR DURING
INSPECTION, FLIGHT TEST OR
ACCEPTANCE OF THE AIRCRAFT, WHETHER
OR NOT CAUSED BY THE ACTIVE,
PASSIVE OR IMPUTED NEGLIGENCE OR
STRICT PRODUCTS LIABILITY OF
BOMBARDIER, ITS ASSIGNEES,
AFFILIATES OR THEIR OFFICERS,
DIRECTORS, AGENTS, EMPLOYEES OR
CONTRACTORS -----------------------
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12.6 ----------------------------------------
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-------------------ARTICLE 13 -
EXCUSABLE DELAY
13.1.1 In the event of a delay on the
part of Bombardier in the
performance of its obligations or
responsibilities under the
provisions of this Agreement due
directly or indirectly to a cause
which is beyond the reasonable
control or without the fault or
negligence of Bombardier (an
"Excusable Delay"), Bombardier
shall not be liable for, nor be
deemed to be in default under this
Agreement on account of such delay
in delivery of the Aircraft or
other performance hereunder and the
time fixed or required for the
performance of any obligation or
responsibility in this Agreement
shall be extended for a period
equal to the period during which
any such cause or the effect
thereof persist. Excusable Delay
shall be deemed to include, without
limitation, delays occasioned by
the following causes:
(a) force majeure or acts of God;
(b) war, warlike operations, act
of the enemy, armed aggression,
civil commotion, insurrection, riot
or embargo;
(c) fire, explosion, earthquake,
lightning, flood, draught,
windstorm or other action of the
elements or other catastrophic or
serious accidents;
(d) epidemic or quarantine
restrictions;
(e) any legislation, act, order,
directive or regulation of any
governmental or other duly
constituted authority;
(f) strikes, lock-out, walk-out,
and/or other labour troubles
causing cessation, slow-down or
interruption of work;
(g) lack or shortage or delay in
delivery of supplies, materials,
accessories, equipment, tools or
parts, ----------------------------
-----------------
(h) ------------------------------
-------------------, delay or
failure of carriers, subcontractors
or suppliers for any reason
whatsoever; or
(i) delay in obtaining any
airworthiness approval or
certificate, or any equivalent
approval or certification, by
reason of any law or governmental
order, directive or regulation or
any change thereto, or
interpretation thereof, by a
governmental agency, the effective
date of which is subsequent to the
date of this Agreement, or by
reason of any change or addition
made by Bombardier or its
affiliates or requested by a
governmental agency to the
compliance program of Bombardier or
of its affiliate, or any part
thereof, as same may have been
approved by TC, or change to the
interpretation thereof to obtain
any such airworthiness approval or
certificate; or
(j) the incorporation of a
Regulatory Change as set out in
Article 8.
13.1.2-----------------------------
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13.2 (a) If Bombardier concludes, based on
its appraisal of the facts and normal
scheduling procedures, that due to
Excusable Delay it can be reasonably
anticipated that delivery of the Aircraft
will be delayed, Bombardier shall give
prompt written notice to Buyer of such
delay. Bombardier and Buyer agree to
collaborate and to use their reasonable
efforts to mitigate the impact of such
delays upon the parties.
(b) If, as a result of an Excusable
Delay, delivery of the Aircraft will be
delayed to a date beyond the originally
Scheduled Delivery Date or any revised
date previously agreed to in writing by
the parties, Buyer and Bombardier agree,
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(c) In the event of an Excusable
Delay-------------------------, or
an anticipated Excusable Delay ----
-----------------------------------
---- shall conduct an appraisal of
the facts and normal scheduling
procedures, and if it concludes
that delivery of one or more of the
Aircraft will be delayed ----------
------------------- after the
originally Scheduled Delivery Date
or any revised date agreed to in
writing by the parties-------------
-----------------------------------
-----------------------------------
----------------- may then
terminate this Agreement with
respect to such delayed Aircraft by
giving written notice -------------
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------------------
(d) If, due to Excusable Delay ---------
---------------- delivery of any Aircraft
is delayed -----------------------------
after the Scheduled Delivery Date, either
party may terminate this Agreement with
respect to such Aircraft by giving
written notice to the other within
fifteen (15) business days after the
expiration of such -------------- period.
13.3 Termination under Article 13.2 shall
discharge all obligations and liabilities of
Buyer and Bombardier hereunder with respect
to such delayed Aircraft and all related
undelivered items and services, except that
Bombardier shall, within --------------------
- of such termination, repay to Buyer, and
Bombardier's sole liability and
responsibility shall be limited to the
repayment to Buyer, of all advance payments
for such Aircraft received by Bombardier less
any amount due by Buyer to Bombardier.
13.4 The termination rights set forth in Article
13.2 are in substitution for any and all
other rights of termination or contract lapse
arising by operation of law in connection
with Excusable Delays.
ARTICLE 14 - NON-EXCUSABLE DELAY
14.1 If delivery of the Aircraft is
delayed beyond the end of the
Scheduled Delivery Date, by causes
not excused under Article 13.1,
this shall constitute a non-
excusable delay (a "Non-Excusable
Delay").
14.2 If as a result of an Non-Excusable
Delay, delivery of the Aircraft
will be delayed to a date beyond
the originally Scheduled Delivery
Date or any revised date previously
agreed to in writing by the
parties, the Aircraft Purchase
Price of the Aircraft at delivery,
-----------------------------------
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-----------------------------------
----------------
ARTICLE 15 - LOSS OR DAMAGE
15.1 In the event that prior to the Delivery Date
of any Aircraft, the Aircraft is lost,
destroyed or damaged beyond repair due to any
cause, Bombardier shall promptly notify Buyer
in writing. Such notice shall specify the
earliest date reasonably possible, consistent
with Bombardier's other contractual
commitments and production schedule, by which
Bombardier estimates it would be able to
deliver a replacement for the lost, destroyed
or damaged Aircraft. This Agreement shall
automatically terminate as to such Aircraft
unless Buyer gives Bombardier written notice,
within thirty (30) days of Bombardier's
notice, that Buyer desires a replacement for
such Aircraft. If Buyer gives such notice to
Bombardier, the parties shall execute an
amendment to this Agreement which shall set
forth the Delivery Date for such replacement
aircraft and corresponding new replacement
Aircraft Purchase Price; provided, however,
that nothing herein shall obligate Bombardier
to manufacture and deliver such replacement
aircraft if it would require the reactivation
or acceleration of its production line for
the model of aircraft purchased hereunder.
The terms and conditions of this Agreement
applicable to the replaced Aircraft shall
apply to the replacement aircraft.
15.2 If an Aircraft is lost, destroyed or damaged
beyond repair as contemplated under this
Article, due to a cause to which reference is
made in Article 13.1, and Buyer elects to
purchase a replacement Aircraft, then -------
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ARTICLE 16 - TERMINATION
16.1 This Agreement may be terminated, in whole or
in part, with respect to any or all of the
Aircraft before the Delivery Date by
Bombardier or Buyer by notice of termination
to the other party upon the occurrence of any
of the following events:
(a) a party makes an assignment for the
benefit of creditors or admits in writing
its inability to pay its debts or
generally does not pay its debts as they
become due; or
(b) a receiver or trustee is appointed
for a party or for substantially all of
such party's assets and, if appointed
without such party's consent, such
appointment is not discharged or stayed
within ------------------------
thereafter; or
(c) proceedings or action under any law
relating to bankruptcy, insolvency or the
reorganization or relief of debtors are
instituted by or against a party, and, if
contested by such party, are not
dismissed or stayed within --------------
---------- thereafter; or
(d) any writ of attachment or execution
or any similar process is issued or
levied against a party or any significant
part of its property and is not released,
stayed, bonded or vacated within --------
---------------- after its issue or levy.
16.2 In addition, this Agreement may be
terminated, with respect to any or all
undelivered Aircraft, in whole or in part,
before the Delivery Date
(a) as otherwise provided in this
Agreement; and
(b) by Bombardier ----------------------
------------ default or breach of any
material term or condition of this
Agreement and such party does not cure
such default or breach within forty-five
(45) calendar days after receipt of
Notice from Bombardier ------------------
-----, specifying such default or breach.
16.3 In case of termination of this
Agreement under Articles 5.4, 9.9,
16.1 or 16.2:
(a) all rights (including property
rights), if any, which Buyer or its
assignee may have or may have had in or
to (i) this Agreement or portion thereof
with respect to the undelivered Aircraft,
or (ii) any or all of the undelivered
Aircraft, shall become null and void with
immediate effect;
(b) Bombardier may sell, lease or
otherwise dispose of such Aircraft to
another party free of any claim by Buyer;
(c) in the event of termination by
Bombardier, all amounts paid by Buyer
with respect to the applicable
undelivered Aircraft shall be retained by
Bombardier and shall be applied against
the costs, expenses, losses and damages
incurred by Bombardier as a result of
Buyer's default and/or the termination of
this Agreement, to which Bombardier shall
be entitled, ----------------------------
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------------------ and
(d) ------------------------------------
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----
16.4 Notwithstanding the foregoing, nothing herein
contained shall, in the event of termination
of this Agreement, limit -----------------
ongoing rights and obligations with respect
to Aircraft delivered prior to the
termination date, such as the after sale
support obligations described in Annex A, the
warranty provisions and Service Life Policy
of Annex B and the obligation contained in
Letters of Agreement where it is expressly
provided that said obligations (or part
thereof) shall survive termination, subject
to any adjustments of said rights or
obligations required to reflect the number of
Aircraft in service, if applicable.
16.5 -----------------------------------
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ARTICLE 17 - NOTICES
17.1 Any notice, request, approval, permission,
consent or other communication ("Notice"), to
be given or required under this Agreement
shall be provided in writing, by registered
mail, facsimile, courier, telegraphic or
other electronic communication providing
reasonable proof of transmission, except that
no notice shall be sent by mail if disruption
of postal service exists or is threatened
either in the country of origin or of
destination, by the party giving the Notice
and shall be addressed as follows until
changed by notice in writing:
(a)Notice to Bombardier shall be
addressed to:
Bombardier Inc.
123 Garratt Boulevard
Downsview, Ontario
Canada
M3K 1Y5
Attention: Director Contracts
Telephone: (416)375-
4052
Facsimile: (416) 375-4533
(b)Notice to Buyer shall be addressed
to:
ATLANTIC COAST AIRLINES
515A Shaw Road,
Dulles , Virginia
20166
U.S.A.
Attention: General Counsel
Telephone: 703-925-6000
Facsimile: 703-925-6294
17.2 Notice given in accordance with Article 17.1
shall be deemed sufficiently given to and
received by the addressees:
(a) if delivered by hand, on the day when
the same shall have been so delivered; or
(b) if mailed or sent by courier on the day
indicated on the corresponding
acknowledgment of receipt; or
(c) if sent by telex or facsimile on the
day indicated by the acknowledgment or
the answer back of the receiver in
provable form.
ARTICLE 18 - INDEMNITY AGAINST PATENT
INFRINGEMENT
18.1 In the case of any actual or alleged
infringement of any Canadian or United States
patent or, subject to the conditions and
exceptions set forth below, any patent issued
under the laws of any other country in which
Buyer from time to time may lawfully operate
the Aircraft ("Other Patents"), by the
Aircraft, or by any system, accessory,
equipment or part installed in such Aircraft
at the time title to such Aircraft passes to
Buyer, Bombardier shall indemnify, protect,
hold harmless and defend (subject to
applicable court procedures) Buyer from and
against all claims, suits, actions,
liabilities, damages and costs (including
reasonable attorney fees --------------------
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--------------------------------------
resulting from the infringement, excluding
any incidental or consequential damages
(which include without limitation loss of
revenue or loss of profit) and Bombardier
shall and as promptly as possible under the
circumstances, at its option and expense:
(a) procure for Buyer the right under
such patent to use such system,
accessory, equipment or part; or
(b) replace such system, accessory,
equipment or part with one of the similar
nature and quality that is non-
infringing; or
(c) modify such system, accessory,
equipment or part to make same non-
infringing in a manner such as to keep it
otherwise in compliance with the
requirements of this Agreement.
Bombardier's obligation hereunder shall
extend to Other Patents only if from the
time of design of the Aircraft, system,
accessory, equipment or part until the
alleged infringement claims are resolved:
(d) such other country and the country
in which the Aircraft is permanently
registered have ratified and adhered to
and are at the time of the actual or
alleged infringement contracting parties
to the Chicago Convention on
International Civil Aviation of December
7, 1944 and are fully entitled to all
benefits of Article 27 thereof; and
(e) such other country and the country
of registration shall each have been a
party to the International Convention for
the Protection of Industrial Property
(Paris Convention) or have enacted patent
laws which recognize and give adequate
protection to inventions made by the
nationals of other countries which have
ratified, adhered to and are contracting
parties to either of the foregoing
conventions.
18.2 The foregoing indemnity does not apply to
BFE, or to avionics, engines or any system,
accessory, equipment or part that was not
manufactured to Bombardier's detailed design
or to any system, accessory, equipment or
part manufactured by a third party to
Bombardier's detailed design without
Bombardier's authorization. ----------------
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18.3 Buyer's remedy and Bombardier's obligation
and liability under this Article are
conditional upon (i) Buyer giving Bombardier
written notice within ten (10) days after
Buyer receives notice of a suit or action
against Buyer alleging infringement or within
twenty (20) days after Buyer receives any
other written claim of infringement (ii)
Buyer uses reasonable efforts in full
cooperation with Bombardier to reduce or
mitigate any such expenses, damages, costs or
royalties involved, and (iii) Buyer furnishes
promptly to Bombardier all data, papers and
records in its possession or control
necessary or useful to resist and defend
against such claim or suit. Bombardier may
at its option conduct negotiations with any
party claiming infringement and may intervene
in any suit or action. Whether or not
Bombardier intervenes, Bombardier shall be
entitled at any stage of the proceedings to
assume or control the defense. Buyer's
remedy and Bombardier's obligation and
liability are further conditional upon
Bombardier's prior approval of Buyer's
payment or assumption of any liabilities,
expenses, damages, royalties or costs for
which Bombardier may be held liable or
responsible.
18.4 THE INDEMNITY, OBLIGATIONS AND LIABILITIES OF
BOMBARDIER AND REMEDIES OF BUYER SET OUT IN
THIS ARTICLE ARE EXCLUSIVE AND ACCEPTED BY
BUYER TO BE IN LIEU OF AND IN SUBSTITUTION
FOR, AND BUYER HEREBY WAIVES, RELEASES AND
RENOUNCES, ALL OTHER INDEMNITIES, OBLIGATIONS
AND LIABILITIES OF BOMBARDIER AND OF ITS
AFFILIATES AND ALL OTHER RIGHTS, REMEDIES AND
CLAIMS, INCLUDING CLAIMS FOR DAMAGES, DIRECT,
INCIDENTAL OR CONSEQUENTIAL, OF BUYER AGAINST
BOMBARDIER AND ITS AFFILIATES EXPRESS OR
IMPLIED, ARISING BY LAW OR OTHERWISE, WITH
RESPECT TO ANY ACTUAL OR ALLEGED PATENT
INFRINGEMENT BY THE AIRCRAFT OR ANY INSTALLED
SYSTEM, ACCESSORY, EQUIPMENT OR PART.
ARTICLE 19 - LIMITATION OF LIABILITY AND
INDEMNIFICATION
19.1 ANNEX B, EXCEPT AS OTHERWISE PROVIDED IN
LETTER OF AGREEMENT NO. 008 HERETO,
EXCLUSIVELY SETS FORTH BOMBARDIER'S
OBLIGATIONS WITH RESPECT TO ANY NON-
CONFORMANCE OF THE AIRCRAFT WITH THE
SPECIFICATION OR ANY DEFECT IN THE AIRCRAFT
AND THE OBLIGATIONS AND LIABILITIES OF
BOMBARDIER UNDER THE AFORESAID ARE ACCEPTED
BY BUYER TO BE EXCLUSIVE AND IN LIEU OF, AND
BUYER HEREBY WAIVES, RELEASES AND RENOUNCES
ALL OTHER REMEDIES, WARRANTIES, GUARANTEES,
OBLIGATIONS, REPRESENTATIONS OR LIABILITIES,
EXPRESS OR IMPLIED, OF BOMBARDIER AND ITS
AFFILIATES WITH RESPECT TO DEFECTS IN EACH
AIRCRAFT OR PART THEREOF, PRODUCT, DOCUMENT
OR SERVICE DELIVERED OR PROVIDED UNDER THIS
AGREEMENT, ARISING IN FACT, IN LAW, IN
CONTRACT, IN TORT, OR OTHERWISE, INCLUDING,
WITHOUT LIMITATION,
A. ANY IMPLIED WARRANTY OF CONDITION
OR MERCHANTABILITY OR FITNESS;
B. ANY IMPLIED WARRANTY OR CONDITION
ARISING FROM COURSE OF PERFORMANCE,
COURSE OF DEALING OR USAGE OF TRADE;
C. ANY OBLIGATION, LIABILITY, RIGHT, CLAIM
OR REMEDY IN TORT, WHETHER OR NOT
ARISING FROM THE ACTIVE, PASSIVE OR
IMPUTED NEGLIGENCE OR STRICT PRODUCTS
LIABILITY OF BOMBARDIER OR ITS
AFFILIATES, BY REASON OF THE DESIGN,
MANUFACTURE, SALE, REPAIR, LEASE OR USE
OF THE AIRCRAFT OR PRODUCT AND SERVICES
DELIVERED HEREUNDER; AND
D. ANY OBLIGATION, LIABILITY, RIGHT, CLAIM
OR REMEDY FOR LOSS OF OR DAMAGE TO ANY
AIRCRAFT OR PART THEREOF, ANY BOMBARDIER
PARTS, ANY POWER PLANT PARTS, ANY VENDOR
PARTS, ANY SPARE PARTS OR ANY TECHNICAL
DATA.
19.2 BUYER HEREBY RELEASES AND AGREES TO DEFEND,
INDEMNIFY AND HOLD HARMLESS BOMBARDIER, ITS
SUBSIDIARIES, AFFILIATES, SUBCONTRACTORS AND
LESSORS, AND THEIR RESPECTIVE EMPLOYEES,
DIRECTORS, OFFICERS AND AGENTS, AND EACH OF
THEM (THE "INDEMNIFIED PARTIES"), FROM AND
AGAINST ALL LIABILITIES, CLAIMS, DAMAGES,
LOSSES, COSTS AND EXPENSES FOR LOSS OF OR
DAMAGE TO PROPERTY INCLUDING ANY AIRCRAFT,
AND LOSS OF USE THEREOF, OR INJURIES TO OR
DEATH OF ANY AND ALL PERSONS (INCLUDING
BUYER'S DIRECTORS, OFFICERS, AGENTS AND
EMPLOYEES BUT EXCLUDING BOMBARDIER'S
DIRECTORS, OFFICERS, AGENTS AND EMPLOYEES),
ARISING DIRECTLY OR INDIRECTLY OUT OF OR IN
CONNECTION WITH ANY SERVICE PROVIDED UNDER
ANNEX A WHETHER OR NOT CAUSED BY THE ACTIVE,
PASSIVE OR IMPUTED NEGLIGENCE OR STRICT
PRODUCTS LIABILITY OF THE INDEMNIFIED
PARTIES. THE FOREGOING SHALL NOT APPLY WHERE
SUCH LOSSES OR DAMAGES ARE CAUSED BY THE
GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE
INDEMNIFIED PARTIES.
19.3 NOTHING CONTAINED IN ARTICLE 19.1 OR 19.2
ABOVE SHALL CONSTITUTE A WAIVER OR RELEASE OR
RENUNCIATION OF, OR INDEMNITY FOR, ANY
LOSSES, DAMAGES OR CLAIMS, BY BUYER AGAINST
BOMBARDIER FOR CONTRIBUTION TOWARD THIRD-
PARTY BODILY INJURY OR PROPERTY DAMAGE CLAIMS
BASED ON PRODUCT LIABILITY THEORIES TO THE
EXTENT OF BOMBARDIER'S RELATIVE PERCENTAGE OF
THE TOTAL FAULT OR OTHER LEGAL RESPONSIBILITY
OF PERSONS CAUSING SUCH BODILY INJURY OR
PROPERTY DAMAGE.
19.4 IN THE EVENT OF ANY LOSSES OR DAMAGES
SUFFERED BY ANYONE FOR OR ARISING OUT OF (I)
ANY LACK OR LOSS OF USE OF ANY AIRCRAFT,
EQUIPMENT, BOMBARDIER PARTS, VENDOR PARTS,
SPARE PARTS, GROUND SUPPORT EQUIPMENT,
TECHNICAL PUBLICATIONS OR DATA OR (II) ANY
SERVICES TO BE PROVIDED HEREUNDER, OR (III)
FOR ANY FAILURE TO PERFORM ANY OBLIGATIONS
HEREUNDER, NEITHER PARTY SHALL HAVE ANY
OBLIGATION FOR LIABILITY TO THE OTHER (AT LAW
OR IN EQUITY), WHETHER ARISING IN CONTRACT
(INCLUDING WITHOUT LIMITATION, WARRANTY), IN
TORT (INCLUDING THE ACTIVE, PASSIVE OR
IMPUTED NEGLIGENCE OR STRICT PRODUCTS
LIABILITY OF BOMBARDIER OR ITS AFFILIATES),
OR OTHERWISE, FOR LOSS OF USE, REVENUE OR
PROFIT OR FOR ANY OTHER INDIRECT, INCIDENTAL,
CONSEQUENTIAL OR PUNITIVE DAMAGES OF ANY KIND
OR NATURE.
ARTICLE 20 - ASSIGNMENT
This Agreement may be assigned only as follows:
20.1 Either party may assign, sell, transfer or
dispose of (in whole or in part) any of its
rights and obligations hereunder to a wholly
owned subsidiary or affiliate provided that
there is no increase to the liability and/or
responsibility of the non-assigning party and
that the assigning party remains jointly and
severally liable with any assignee for the
performance of its obligation under this
Agreement.
20.2 With the other party's prior written consent
not to be unreasonably withheld, either party
may assign, sell, transfer or dispose of (in
whole or in part) any of its rights and
obligations hereunder to another entity only
provided that (i) -------------------------
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-------------------- (ii) there is no
increase to the liability and/or
responsibility of the non assigning party,
(iii) assigning party remains jointly and
severally liable with any assignee for the
performance of its obligation under this
Agreement, (iv) the assignment is made only
for operational and financial considerations,
(v) the assignee shall execute a
confidentiality agreement prohibiting the
disclosure of confidential information, and
(vi) ----------------------------------------
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20.3 With Bombardier's prior written consent, not
to be unreasonably withheld, Buyer may
assign, sell, transfer or dispose of (in
whole or in part) any of its rights and
obligations hereunder to another entity to
which Buyer does not hold majority interest
provided that (i) there is no increase to
the liability and/or responsibility of
Bombardier, (ii) the Buyer remains jointly
and severally liable with any assignee for
the performance of its obligation under this
Agreement, (iii) the assignment is made
only for operational and financial
considerations, (iv) the shareholders
(other than shareholders purchasing stock
through arms length, publicly traded
transactions) or owners of assignee, other
than Buyer, are not engaged in air
transportation, (v) the assignee operates or
is to operate its business in a fashion that
is generally held out and structured to be
perceived by people knowledgeable in the
industry to be closely affiliated with Buyer
or Buyer's parent, (vi) the assignee shall
execute a confidentiality agreement
prohibiting the disclosure of confidential
information, and (vii) the assignee does not
compete with the Bombardier Group with
respect to the manufacture of aircraft.
20.4 Except as provided in Articles 20.1, 20.2 and
20.3, Buyer shall not assign, sell, transfer
or dispose of (in whole or in part) any of
its rights or obligations hereunder without
Bombardier's prior written consent, such
consent not to be unreasonably withheld. In
the event of such assignment, sale, transfer
or disposition Buyer shall remain jointly and
severally liable with any assignee for the
performance of all and any of Buyer's
obligations under this Agreement and
Bombardier reserves the right as a condition
of its consent to amend one or more of the
terms and conditions of this Agreement.
20.5 Notwithstanding Article 20.4 above, Buyer may
assign, after transfer of title of the
Aircraft, its rights under the Agreement to a
third party purchaser of any one of the
Aircraft, provided said third party
acknowledges in writing to be bound by the
applicable terms and conditions of this
Agreement, including but not limited to the
provisions and limitations as detailed Annex
A, Customer Support Services, Annex B,
Warranty and Service Life Policy and of the
provisions and limitations in Limitation of
Liability as defined in Article 19 hereof and
Indemnity Against Patent Infringement as
defined in Article 18 hereof and any other on-
going obligations of Buyer, which shall apply
to it to the same extent as if said third
party was Buyer hereunder and provided that
there is no increase to the liability and/or
responsibility of Bombardier.
20.6 Bombardier may assign any of its rights to
receive money hereunder without the prior
consent of Buyer.
20.7 Notwithstanding the other provisions of this
Article 20, Bombardier shall, at Buyer's cost
and expense, if so requested in writing by
Buyer, take any action reasonably required
for the purpose of causing any of the
Aircraft to be subjected (i) to, at or after
the Delivery Date, an equipment trust,
conditional sale or lien, leases and
mortgages, or (ii) to another arrangement for
the financing of the Aircraft by Buyer,
providing, however, there shall be no
increase to the liability and/or
responsibility of Bombardier arising through
such financing.
ARTICLE 21 - SUCCESSORS
21.1 This Agreement shall inure to the benefit of
and be binding upon each of Bombardier and
Buyer and their respective successors and
permitted assignees.
21.2 As used herein, reference to an airworthiness
authority such as Transport Canada and the
FAA, to a regulation or directive issued by
such airworthiness authority or other
governmental authority, shall include any
successor to such authority then responsible
for the duties of such authority and
regulation or directive covering the same
subject matters.
ARTICLE 22 - APPLICABLE LAWS
22.1 THIS AGREEMENT SHALL BE SUBJECT TO AND
CONSTRUED IN ACCORDANCE WITH AND THE RIGHTS
OF THE PARTIES SHALL BE GOVERNED BY THE
DOMESTIC LAWS OF THE STATE OF NEW YORK,
U.S.A., EXCLUDING THE CHOICE OF LAW RULES,
AND THE PARTIES HAVE AGREED THAT THE
APPLICATION OF THE UNITED NATIONS CONVENTION
ON CONTRACTS FOR THE INTERNATIONAL SALE OF
GOODS IS HEREBY EXCLUDED.
22.2 Each of Buyer and Bombardier agrees that any
legal action or proceeding with respect to
this Agreement may be brought in the Federal
Courts of the United States of America in the
Southern District Courts of New York or in
the Supreme Courts of the State of New York
in the County of New York and by the
execution and delivery of this Agreement
irrevocably consents and submits to the
nonexclusive jurisdiction of each of the
aforesaid court in personam with respect to
any such action or proceeding and irrevocably
waive any objection either party may have as
to venue or any such suit, action or
procedure brought in such court or that such
court is an inconvenient forum. Nothing in
this paragraph shall affect the right of any
party hereto or their successors or assigns
to bring any action or proceeding against the
other party hereto or their property in the
courts of other jurisdictions.
ARTICLE 23 - CONFIDENTIAL NATURE OF AGREEMENT
23.1 This Agreement is confidential between the
parties and shall not, without the prior
written consent of the other party, be
disclosed by either party in whole or in part
to any other person or body except:
i) as may be necessary for either party to
carry out its obligations under this
Agreement or other agreements related to
this Agreement to which it is a party,
and
ii)as may be required by law, and
iii)-----------------------------------------
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23.2 Except as may be reasonably required for the
operation, maintenance, overhaul,
modification, storage and repair of the
Aircraft by Buyer or any third party, Buyer
shall hold confidential all Technical Data
and other proprietary information (and so
marked by Bombardier) supplied by or on
behalf of Bombardier, and shall not reproduce
any such Technical Data or proprietary
information or divulge the same to any third
party unless such disclosure requires the
third party to hold same in confidence and
use it only for the purposes stated above.
23.3 Either party may announce the signing of this
Agreement by means of a notice to the press
provided that the content and date of the
notice has been agreed to by the other party.
23.4 In the event Buyer now or hereafter has a
class of securities registered under Section
12(b) or 12(g) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), or
is subject to the reporting requirements of
Section 15(d) thereof, or Buyer proposes to
effect an offering of securities registered
under the Securities Act of 1933, as amended
(the "Securities Act"), and in any such case,
Buyer reasonably determines that this
Agreement is a "material contract" as
described in Item 601 of Regulations S-K, and
is required to be filed as an exhibit to a
registration statement under the Securities
Act or a periodic report under the Exchange
Act, Buyer shall notify Bombardier prior to
the date of such anticipated filing of such
determination and the reasons therefor, and
shall use its reasonable efforts to prepare
and file with the Securities and Exchange
Commission (the "Commission") a request for
confidential treatment pursuant to Rule 24b-2
under the Exchange Act or Rule 406 under the
Securities Act, as the case may be, with
respect to information in this Agreement,
which Buyer reasonably believes to be
eligible for confidential treatment. Buyer
agrees to provide Bombardier with advance
notice of the information selected for
inclusion in its request for confidential
treatment and to reasonably consider
recommendations made by Bombardier for the
inclusion of any additional information. .
Subject to compliance with the foregoing, and
notwithstanding the other provisions of this
Article, portions of this Agreement may be
filed as exhibits to such registration
statement or periodic report to the extent
determined to be appropriate to comply with
applicable law and such filing shall not
constitute a breach hereof by Buyer.
23.5 Bombardier hereby acknowledges that Buyer is
sensitive with respect to the public
disclosure of its operating data provided to
Bombardier pursuant to this Agreement.
Although Bombardier shall have no
confidentiality undertaking with respect to
such data, Bombardier agrees to consider
Buyer's sensitivity in its public use of said
data.
ARTICLE 24 - AGREEMENT
24.1 This Agreement and the matters referred to
herein constitute the entire Agreement
between Bombardier and Buyer and supersede
and cancel all prior representations,
brochures, alleged warranties, statements,
negotiations, undertakings, letters,
memoranda of agreement, acceptances,
agreements, understandings, contracts and
communications, whether oral or written,
between Bombardier and Buyer or their
respective agents, with respect to or in
connection with the subject matter of this
Agreement and no agreement or understanding
varying the terms and conditions hereof
shall be binding on either Bombardier or
Buyer hereto unless an amendment to this
Agreement is issued and duly signed by
their respective authorized representatives
pursuant to the provisions of this Article
hereof. In the event of any
inconsistencies between any provisions of
this Agreement and those of any Letter
Agreements, the provisions of the Letter
Agreements shall prevail.
24.2 If any of the provisions of this Agreement
are for any reason declared by judgment of
a court of competent jurisdiction to be
unenforceable or ineffective, those
provisions shall be deemed severable from
the other provisions of this Agreement and
the remainder of this Agreement shall
remain in full force and effect.
24.3 THE BENEFIT OF THE WAIVER, LIMITATION,
RELEASE, RENUNCIATION AND/OR EXCLUSION OF
LIABILITY CONTAINED IN THIS AGREEMENT
EXTENDS TO THE OTHER DIVISIONS, OTHER
SUBSIDIARIES, AND OTHER AFFILIATES OF
BOMBARDIER INC (COLLECTIVELY THE
"BOMBARDIER GROUP") AND TO THE OFFICERS,
DIRECTORS, EMPLOYEES AND REPRESENTATIVES OF
THE BOMBARDIER GROUP, ON WHOSE BEHALF AND
FOR WHOSE BENEFIT BOMBARDIER IS, FOR
PURPOSES OF THIS ARTICLE 24.3, ACTING AS
AGENT AND TRUSTEE.
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24.4 Buyer and Bombardier agree that this
Agreement has been the subject of
discussion and negotiation and is fully
understood by the parties hereto and that
the price of the Aircraft and the other
mutual agreements of the parties set forth
herein were arrived at in consideration of
the limitation provisions contained in
Article 19 and the other similar provisions
contained in this Agreement.
ARTICLE 25 - DISPUTES
25.1 Any dispute, difference, controversy or claim
arising out of or relating to this Agreement,
the breach, or non-performance thereof shall
first be attempted to be resolved by
Bombardier and Buyer through mutual
negotiations, consultation and discussions.
25.2 Should the parties hereto be unable to settle
their differences or disputes which may arise
between them with respect to the
interpretation or application of this
Agreement (a "Dispute"), by mutual agreement
as provided in Article 25.1 above, the
parties agree to each appoint two (2)
representatives to constitute a joint
commission (the "Joint Commission") to
jointly hear the representations of each
party regarding the Dispute. One
representative will be appointed as chair of
the Joint Commission on an alternate basis.
At least one (1) representative of each party
shall have knowledge in technical or
contractual matters depending on the nature
of the Dispute. The Joint Commission shall,
following representations by each party,
issue non-binding written recommendations to
the parties as to how best settle the
Dispute. If the representatives do not agree
on joint recommendations, the representatives
of each party shall issue their own
recommendations.
25.3 Either party may request the formation of the
Joint Commission if a dispute is not settled
within forty-five (45) days following a
written notice from either party to the other
detailing the nature of the Dispute and the
resolution sought. The request for a Joint
Commission shall be made in writing and shall
contain the names of the representatives
appointed by the party requesting its
formation. The other party shall then
provide the names of its representatives
within thirty (30) days following the receipt
of the request for a Joint Commission.
25.4 The Joint Commission shall have forty-five
(45) days from its formation to agree on the
procedure to be followed, including the place
of hearing, if any. The Joint Commission
shall have sixty (60) days from the
completion of the representations by each
party to issue its recommendations.
25.5 If, despite the recommendations of the Joint
Commission, the parties are unable to resolve
the Dispute, either party may, except where
the remedies sought include termination of
the Agreement in whole or in part or
injunctive relief, or other controversy
involving an amount claimed in good faith in
excess of Five Million United States Dollars
( $5,000,000 U.S.) unless otherwise agreed,
request by sixty (60) days prior notice that
the Dispute be settled by arbitration in
accordance with arbitration rules to be
agreed upon before delivery of the first
Aircraft.
25.6 Within thirty (30) days of the demand to
refer the Dispute to arbitration, each party
shall appoint one (1) arbitrator, who in turn
will appoint the third arbitrator, within
thirty (30) days of their appointments. This
third arbitrator shall act as the chairman of
the Arbitral Tribunal so constituted.
25.7 The venue of arbitration shall be Toronto,
Ontario, New York City, or Washington, DC,
U.S.A., as agreed between the parties.
25.8 The arbitrators shall not act as "Amiable
Compositeur" and shall decide according to
the terms of the agreement and to the laws of
New York.
25.9 The award of the arbitration shall be final
and shall not be called in question in any
court or tribunal.
25.10 It is expressly agreed that any
statement, representation or document made or
produced to or in connection with, or as a
result of the formation of a Joint Commission
shall be without prejudice and without
admission of liability by either party and
shall not be used as such by the other party.
25.11 Each party shall be responsible for its
own costs and expenses incurred as a result
of, or in connection with the Joint
Commission and arbitration including the
cost, fees and expenses of its own
representatives.
In witness whereof this Agreement was signed on
the date written hereof:
For and on behalf of For an on
behalf of
Atlantic Coast Airlines: Bombardier
Inc.:
_______________________
______________________
Kerry Skeen Michel
Bourgeois
President and C.E.O. Vice
President, Contracts
APPENDIX I
REGIONAL JET AIRCRAFT
ECONOMIC ADJUSTMENT FORMULA
Pursuant to the provision of Article 4
of the Agreement, economic
adjustment will be calculated using
the lesser amount of those
generated by the following two
calculations:
(i) The Economic Adjustment Formula:
PP = PO (0.28 LD + 0.35 ED +
0.20 CD + 0.15 MD + 0.02 FD)
LO EO CO MO FO
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Where:
PP =Aircraft Purchase Price;
PO =Base Price;
LD =the Canadian labour index obtained by
calculating the arithmetic average of
the labour indices for the fifth, sixth,
and seventh months prior to the month of
delivery of the Aircraft;
LO =the Canadian labour index obtained by
calculating the arithmetic average of
the labour indices for the fifth, sixth,
and seventh months prior to the month of
the Base Price of the Aircraft, which
is 20.52;
ED =the U.S. labour index obtained by
calculating the arithmetic average of
the U.S. labour indices for the fifth,
sixth, and seventh months prior to the
month of delivery of the Aircraft;
EO =the U.S. labor index obtained by
calculating the arithmetic average of
the U.S. labour indices for the fifth,
sixth, and seventh months prior to the
month of the Base Price of the Aircraft,
which is 19.11;
CD =the Industrial Commodities index
obtained by calculating the arithmetic
average of the Industrial Commodities
indices for the fifth, sixth, and
seventh months prior to the month of
delivery of the Aircraft;
CO =the Industrial Commodities index
obtained by calculating the arithmetic
average of the Industrial Commodities
indices for the fifth, sixth, and
seventh months prior to the month of the
Base Price of the Aircraft, which is
124.97;
MD =the material index obtained by
calculating the arithmetic average of
the material indices for the fifth,
sixth, and seventh months prior to the
month of delivery of the Aircraft;
MO =the material index obtained by
calculating the arithmetic average of
the material indices for the fifth,
sixth, and seventh months prior to the
month of the Base Price of the Aircraft,
which is 127.93;
FD =the fuel index obtained by calculating
the arithmetic average of the fuel
indices for the fifth, sixth, and
seventh months prior to the month of
delivery of the Aircraft; and
FO = the fuel index obtained by
calculating the arithmetic average of
the fuel indices for the fifth, sixth,
and seventh months prior to the month of
the Base Price of the Aircraft, which is
76.13.
For the purpose of the Economic
Adjustment Formula and the
calculation of the economic
adjustment:
(a) the Canadian labour index shall be the
index provided in the Standard
Industrial Classification (S.I.C.) Code
321 for Average Hourly Earnings for the
Aircraft and Parts Industry (Canada)
published by Statistics Canada in
"Employment Earnings and Hours" Table
3.1.
(b) the U.S. labour index shall be the index
provided in the Bureau of Labor
Statistics (B.L.S.) Code 372 Gross
Hourly Earnings of production and non-
supervisory workers in the Aircraft and
Aircraft Parts Industry as published by
the U.S. Department of Labor, Bureau of
Labor Statistics in "Employment and
Earnings" Table C-2.
(c) the Industrial Commodities index shall
be the index provided in the Producer
Price Index as Industrial Commodities as
published by the U.S. Department of
Labor, Bureau of Labor Statistics in
"Producer Prices and Price Indexes"
Table 6.
(d) the material index shall be the index
provided in the Producer Price Index for
Code 10 Metals and Metals Products as
published by the U.S. Department of
Labor, Bureau of Labor Statistics in
"Producer Prices and Price Indexes"
Table 6.
(e) the fuel index shall be the index
provided in the Bureau of Labor
Statistics (B.L.S.) Code 5 "Fuel and
Related Products and Power" Table 6 as
published by the U.S. Department of
Labor.
(f) in the event that Bombardier shall be
prevented from calculating the Aircraft
Purchase Price of each Aircraft due to
any delay in the publication of the
required indices, Bombardier shall use
the last provisionally published
indices, and in the event that
provisional indices are not available,
Bombardier shall extrapolate from the
last three (3) months of published
indices and where the balance of the
Aircraft Purchase Price payable is
calculated on the provisionally
published indices, and/or extrapolation,
Bombardier will amend such installment
on publication of the final indices and
will submit supplementary claims or
provide credit notes in respect of any
adjustment so caused.
(g) the indices used in the Economic
Adjustment Formula and the weighting
assigned to them, as well as the various
indices quoted here, are based on the
information known to date and represent
the projection by Bombardier of the
manner in which Bombardier will incur
cost in the production of the Aircraft.
In the event there is a change in the
indices published or in circumstances
which materially affects the indices
chosen or the weighting assigned to
them, the indices and/or the weighting
shall be amended accordingly by mutual
agreement of the parties. The change in
circumstances referred to above shall
include but not be limited to:
1) Any material change in the basis upon
which the chosen indices have been
calculated or if any of said indices are
discontinued or withdrawn from
publication,
2) Any change in manufacturing plan
involving the letting of a new sub-
contract or the termination of an
existing sub-contract, and
3) Any change in the escalation or Economic
Adjustment Formula used in a Vendor or
sub-contractor contract with Bombardier;
and
In the calculation of the Aircraft
Purchase Price the following guidelines
in respect of decimal places shall
apply:
(a) All indices in the Economic Adjustment
Formula shall be rounded to the second
decimal place,
(b) The Economic Adjustment Formula shall be
calculated and rounded to four decimal
places, and
(c) The Aircraft Purchase Price resulting
from the Economic Adjustment Formula
shall be rounded to the nearest dollar.
APPENDIX II
DELIVERY SCHEDULE
* First Aircraft ---------
* Second Aircraft------------* Third
Aircraft---------------**Fourth Aircraft
-------------**Fifth Aircraft --------
------
**Sixth Aircraft --------------
APPENDIX III
SPECIFICATION
TYPE SPECIFICATION
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APPENDIX IV
BUYER SELECTED OPTIONAL FEATURES
CR Ref. # Option Description Price in
Jan. 1999 US
Dollars
00-008 PERFORMANCE - EXTENDED ---
RANGE
00-312 ADDITIONAL FLAP SETTING, 8 -------
DEG TAKE-OFF
00-313 CERTIFICATION - FAA ---
STRAPPING
11-300 PAINT SCHEME ** ----
25-22-301 IN-ARM MEAL TRAYS IN ROW 1 ------
25-22-302 UNDERSEAT LIFE VEST POUCHES ------
25-22-304 RECLINING PASSENGER SEATS -------
25-24-301 ENTRANCE STORAGE ----
COMPARTMENT
25-26-301 PARTITION - LHD WINDSCREEN ----
25-26-302 PARTITION - RHD WINDSCREEN ----
25-31-320 G1 GALLEY: PROVISIONS FOR ------
SNACK & HOT BEVERAGE
SERVICE
25-34-310 STANDARD BEVERAGE MAKER - -------
COFFEE (QTY 2)
30-001 ICE DETECTION - RED WARNING ---
LIGHT
31-320 EICAS 2000 ---
31-340 DFDR 88 PARAMETERS -------
33-003 RED BEACON LIGHTS -------
33-310 TAIL LOGO LIGHTS -------
33-320 CARGO DOOR FLOODLIGHTS -------
34-328 EGPWS - ENHANCED GROUND -------
PROXIMITY WARNING SYSTEM
34-330 FMS - SINGLE COLLINS FMS- -------
4200 -
34-350 GPS - SINGLE COLLINS GPS- -------
4000
34-353 VHF NAV - FM IMMUNITY (VIR- ------
432+)
34-362 ALTIMETER - BARO SETTING ----
REMINDER
35-004 EROS MAGIC MASK (THREE) -------
38-313 8 US GAL. GALLEY -------
WATER/WASTE TANK SYSTEM
(WITH G1 GALLEY SELECTION)
AMI PILOT & CO-PILOT SEAT ---
Total Technical Features -------
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All prices listed above are expressed in January 1,
1999 US dollars, and are subject to economic
adjustment to the date of aircraft delivery as
provided in the Agreement.
CUSTOMER SUPPORT SERVICES
ANNEX A - TECHNICAL SUPPORT, SPARE PARTS,
TRAINING AND
TECHNICAL DATA
The following Customer Support Services are those
services to which reference is made in Article 3 of
the Agreement.
ARTICLE 1 - TECHNICAL SUPPORT
1.1 Factory Service
Bombardier agrees to maintain or cause to be maintained
the capability to respond to Buyer's technical inquiries,
to conduct investigations concerning maintenance problems
and to issue findings and recommend action thereon. This
service shall be provided for as long as ten (10) CL-600-
2B19 aircraft remain in commercial air transport service.
1.2 Field Service Representative
1.2.1 Services
Bombardier shall assign one (1) Field Service
Representative ("FSR") to Buyer's main base of
operation or other location as may be mutually
agreed.
1.2.2 Term
Such assignment shall be for ------------------- and
shall commence approximately one (1) month prior to
the Delivery Date of the first Aircraft. The FSR
assignment may be extended on terms and conditions to
be mutually agreed.
1.2.3 Responsibility
The FSR's responsibility shall be to provide
technical advice to Buyer for the line maintenance
and operation of the Aircraft systems and
troubleshooting during scheduled and unscheduled
maintenance by Buyer's designated personnel ("FSR
Services").
1.2.4 Travel
If requested by Buyer, the FSR may, at Buyer's
expense, travel to another location to provide
technical advice to Buyer. The FSR must fly on
Buyer's airline, if such service is available.
1.2.5 Office Facilities
Buyer shall furnish the FSR, at no charge to
Bombardier, suitable and private office facilities
and related equipment including desk, file cabinet,
access to two telephone lines, facsimile and
photocopy equipment conveniently located at Buyer's
main base of operation or other location as may be
mutually agreed.
1.2.6 Additional Expenses
Buyer shall reimburse Bombardier (net of any
additional taxes on such reimbursement) the amount of
any and all taxes (except Canadian taxes on the
income of the FSR) and fees of whatever nature,
including any customs duties, withholding taxes or
fees together with any penalties or interest thereon,
paid or incurred by Bombardier or the FSR or other
Bombardier employee as a result of or in connection
with the rendering of the services.
1.2.7 Right to Stop Work
Bombardier shall not be required to commence or
continue the FSR Services when:
a.) there is a labour dispute or work stoppage in
progress at Buyer's facilities;
b.) there exist war, risk of war or warlike
operations, riots or insurrections;
c.) there exist conditions that are dangerous
to the safety or health of the FSR or other
Bombardier employee; or
d.) the Government of the country where Buyer's
facilities are located or where Buyer desires
the FSR to travel refuses the Bombardier
employee permission to enter said country or
Buyer's base of operations.
1.2.8 Work Permits and Clearances
Buyer shall assist in arranging for all necessary
airport security clearances required for the FSR or
other Bombardier employee to permit timely
accomplishment of the FSR services.
1.3 Maintenance Planning Support
1.3.1 Scheduled Maintenance Task Cards
As described in Annex A Attachment A, Bombardier
shall provide Buyer Bombardier's standard format
scheduled maintenance task cards that shall conform
to the Aircraft at the Delivery Date. At Buyer's
request Bombardier shall provide a proposal for task
cards produced to Buyer's format.
1.3.2 In-Service Maintenance Data
Buyer agrees to provide to Bombardier in-service
maintenance data in order to provide updates to
Bombardier's recommended maintenance program. Buyer
and Bombardier shall agree on standards and frequency
for communication of such data.
1.4 Additional Services
At Buyer's request Bombardier shall provide a
proposal to provide such additional support
services as the parties may agree upon, which
may include special investigations, maintenance
and repair of the Aircraft.
ARTICLE 2 - SPARE PARTS, GSE, TOOLS AND TEST
EQUIPMENT
2.1.1 Definitions
a."Bombardier Parts":
any spare parts, ground support equipment, tools and
test equipment which bear an inhouse Cage Code number
in the Bombardier Provisioning Files (as that
expression is defined in ATA Specification 2000).
b."Power Plant Parts":
any power plant or power plant part or assembly
carrying the power plant manufacturer's part number or
any part furnished by the power plant manufacturer for
incorporation on the Aircraft.
c."Vendor Parts":
any spare parts, ground support equipment, tools and
test equipment for the Aircraft which are not
Bombardier Parts or Power Plant Parts.
d."Spare Parts":
all materials, spare parts, assemblies, special tools
and items of equipment, including ground support
equipment, ordered for the Aircraft by Buyer from
Bombardier. The term Spare Parts includes Bombardier
Parts, Power Plant Part and Vendor Parts.
e."Order":
any order for Spare Parts issued by Buyer to
Bombardier; and
f."Technical Data":
shall have the meaning attributed to it in Annex A
Article 4.1.
2.1 Term and Applicability
The term of this Annex A Article 2 shall become effective
on the date hereof and shall remain in full force and
effect with respect to the purchase and sale of Spare
Parts for each Aircraft so long as at least ten (10) of
the CL-600-2B19 aircraft remain in commercial air
transport service. The provisions of Annex A Articles
2.2, 2.6.5, 2.24 and Annex B Article 5.0 shall survive
expiration or termination of this Agreement.
2.2 Order Terms
Terms and conditions hereof shall apply to all Orders
placed by Buyer with Bombardier in lieu of any terms and
conditions in Buyer's purchase orders.
2.3 Purchase and Sale of Spare Parts
2.3.1 Agreement to Manufacture and Sell
Bombardier shall manufacture, or procure, and make
available for sale to Buyer suitable Spare Parts in
quantities sufficient to meet the reasonably
anticipated needs of Buyer for normal maintenance and
normal spares inventory replacement for each
Aircraft. During the term specified in Annex A
Article 2.1 above, Bombardier shall also maintain, or
cause to be maintained, a shelf stock of certain
Bombardier Parts selected by Bombardier to ensure
reasonable re-order lead times and emergency support.
Bombardier shall maintain, or cause to be maintained,
a reasonable quantity of Bombardier insurance parts
at a U.S. distribution centre. Insurance parts as
used herein shall include, but not be limited to,
dispatch-essential parts such as major flight control
surfaces.
2.4 Agreement to Purchase Bombardier Parts
2.4.1 -----------------------------------------------------
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2.4.2 Buyer's Right to Purchase, Redesign or
Manufacture
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----------------------------------- shall not be
construed as a granting of a license by Bombardier
and shall not obligate Bombardier to disclose to
anyone Technical Data or other information nor to the
payment of any license fee or royalty or create any
obligation whatsoever to Bombardier and Bombardier
shall be relieved of any obligation or liability with
respect to patent infringement in connection with any
such redesigned part. Buyer shall be responsible for
obtaining all regulatory authority approvals required
by Buyer to repair the Aircraft using redesigned or
manufactured Bombardier Parts as described in the
preceding Article. Any such redesigned part shall be
identified with Buyer's part number only.
2.4.3 Notice to Bombardier of Redesigned Parts
Bombardier reserves the right to negotiate with Buyer
the access to redesigned parts, drawings and the non-
exclusive manufacturing rights of the redesigned
part, if Buyer redesigns or has had any Bombardier
parts redesigned.
2.5 Purchase of Vendor Parts & Power Plant Parts
Bombardier shall not be obligated to maintain a stock
of Power Plant Parts. Bombardier maintains a spares
stock of selected Vendor Parts at its own discretion
to support provisioning and replenishment sales.
Bombardier agrees to use all reasonable efforts to
require its vendors to comply with the terms and
conditions of this Annex A Article 2 as they apply to
Vendor Parts. Vendor Parts shall be delivered in
accordance with the vendor's quoted lead time plus
Bombardier's internal processing time.
2.6 Spare Parts Pricing
2.6.1 Spare Parts Price Catalogue
Prices for commonly used Bombardier Parts
stocked by Bombardier shall be published in the
spare parts price catalogue ("Spare Parts Price
Catalogue"). Bombardier shall hold the
published prices firm for catalogue stock class
items for a period of twelve (12) months and
shall provide at least ninety (90) calendar days
notice prior to changing the published price.
2.6.2 Bombardier prices for Vendor Parts
If Buyer orders Vendor Parts from Bombardier,
the price shall be as published in the Spare
Parts Price Catalogue.
2.6.3 Quotations
Price and delivery quotations for items not
included in the Spare Parts Price Catalogue
shall be provided at Buyer's request by
Bombardier. Price quotations will be held firm
for a period of ninety (90) calendar days or as
otherwise specified by Bombardier. Responses to
quotation requests will be provided within ten
(10) calendar days.
2.6.4 Currency and Taxes
All Spare Parts Price Catalogue and quotation
prices shall be in U.S. dollars and exclusive of
transportation, taxes, duties and licenses.
Buyer shall pay to Bombardier upon demand the
amount of any sales, use, value-added, excise or
similar taxes imposed by any federal, provincial
or local taxing authority within Canada, and the
amount of all taxes imposed by any taxing
authority outside Canada, required to be paid by
Bombardier as a result of any sale, use,
delivery, storage or transfer of any Spare
Parts. If Bombardier has reason to believe that
any such tax is applicable, Bombardier shall
separately state the amount of such tax in its
invoice. If a claim is made against Bombardier
for any such tax, Bombardier shall promptly
notify Buyer.
In addition, Buyer shall pay to Bombardier on
demand the amount of any customs duties required
to be paid by Bombardier with respect to the
importation by Buyer of any Spare Parts.
2.6.5 Vendor Pricing
Bombardier shall use reasonable efforts to
require its major vendors to maintain any
published price for their parts for a period of
at least twelve (12) months with a ninety (90)
calendar day notice period prior to changing a
published price.
2.7 Provisioning
2.7.1 Pre-provisioning/Provisioning Conference
Pre-provisioning and provisioning conferences shall
be convened on dates to be mutually agreed between
Buyer and Bombardier in order to:
(i) discuss the operational parameters to be
provided by Buyer to Bombardier which Bombardier
considers necessary for preparing its quantity
recommendations for initial provisioning of Spare
Parts to be purchased from Bombardier or vendors
("Provisioning Items");
(ii) review Buyer's ground support equipment and
special tool requirements for the Aircraft;
(iii) discuss the format of the provisioning
documentation to be provided to Buyer from
Bombardier for the selection of Provisioning
Items; and
(iv) arrive at a schedule of events for the
initial provisioning process, including the
establishment of a date for the initial
provisioning conference ("Initial Provisioning
Conference") which shall be scheduled where
possible at least six (6) months prior to delivery
of the first Aircraft.
The time and location of the pre-provisioning
conference shall be mutually agreed upon between the
parties; however, Bombardier and Buyer shall use
their best efforts to convene such meeting within
thirty (30) days after execution of the Agreement.
2.8 Initial Provisioning Documentation
Initial provisioning documentation for Bombardier Parts
and Vendor Parts shall be provided by Bombardier as
follows:
a)Bombardier shall provide, as applicable to Buyer, no
later than six (6) months prior to the Scheduled
Delivery Date of the first Aircraft, or as may be
mutually agreed, the initial issue of provisioning
files.
Revisions to this provisioning data shall be issued by
Bombardier every ninety (90) calendar days until ninety
(90) calendar days following the Delivery Date of the
last Aircraft or as may be mutually agreed; and
b)the Illustrated Parts Catalogue designed to support
provisioning shall be issued concurrently with
provisioning data files and revised at ninety (90)
calendar day intervals.
2.8.1 Obligation to Substitute Obsolete Spare Parts
In the event that, prior to delivery of the first
Aircraft, any Spare Part purchased by Buyer from
Bombardier is rendered obsolete or unusable due to
the redesign of the Aircraft or of any accessory,
equipment or part thereto (other than a redesign at
Buyer's request), Bombardier shall deliver to Buyer
new and usable Spare Parts in substitution for such
obsolete or unusable Spare Parts upon return of such
Spare Parts to Bombardier by Buyer. Bombardier shall
credit Buyer's account with the price paid by Buyer
for any such obsolete or unusable Spare Part and
shall invoice Buyer for the purchase price of any
such substitute Spare Part delivered to Buyer.
2.8.2 Delivery of Obsolete Spare Parts and Substitutes
Obsolete or unusable Spare Parts returned by Buyer
pursuant to Annex A Article 2.8.1. shall be delivered
to Bombardier at its plant in Ontario or Quebec, or
such other destination as Bombardier may reasonably
designate. Spare Parts substituted for such returned
obsolete or unusable Spare Parts shall be delivered
to Buyer from Bombardier's plant in Ontario or
Quebec, or such other Bombardier shipping point as
Bombardier may reasonably designate. Bombardier
shall pay the freight charges for the shipment from
Buyer to Bombardier of any such obsolete or unusable
Spare Part and for the shipment from Bombardier to
Buyer of any such substitute Spare Part.
2.8.3 Obligation to Repurchase Surplus Provisioning
Items
During a period -------------------------------------
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receipt of Buyer's written request and subject to the
exceptions in Annex A Article 2.8.4, repurchase
unused and undamaged Provisioning Items which: (i)
were recommended by Bombardier as initial
provisioning for the Aircraft, (ii) were purchased by
Buyer from Bombardier or Vendor at Bombardier's
recommendation, and (iii) are surplus to Buyer's
needs.
2.8.4 Exceptions
Bombardier shall not be obligated under Annex A
Article 2.8.3 to repurchase any of the following:
(i) quantities of Provisioning Items in excess of
those quantities recommended by Bombardier in its
Recommended Spare Parts List ("RSPL") for the
Aircraft, (ii) Power Plant Parts, QEC Kits, standard
hardware, bulk and raw materials, ground support
equipment and special tools, (iii) Provisioning Items
which have become obsolete or have been replaced by
other Provisioning Items as a result of Buyer's
modification of the Aircraft and (iv) Provisioning
Items which become surplus as a result of a change in
Buyer's operating parameters provided to Bombardier
pursuant to Annex A Article 2.7, which were the basis
of Bombardier's initial provisioning recommendations
for the Aircraft.
2.8.5 Notification and Format
Buyer shall notify Bombardier, in writing, when Buyer
desires to return Provisioning Items which Buyer's
review indicates are eligible for repurchase by
Bombardier under the provisions of Annex A Article
2.8.3. Buyer's notification shall include a detailed
summary, in part number sequence, of the Provisioning
Items Buyer desires to return. Such summary shall be
in the form of listings as may be mutually agreed
between Bombardier and Buyer, and shall include part
number, nomenclature, purchase order number, purchase
order date and quantity to be returned.
Within sixty (60) calendar days after receipt of
Buyer's notification and detailed summary Bombardier
shall complete the review of such summary.
2.8.6 Review and Acceptance by Bombardier
Upon completion of Bombardier's review of any
detailed summary submitted by Buyer pursuant to Annex
A Article 2.8.5., Bombardier shall within sixty
calendar days issue to Buyer a Material Return
Authorization notice ("MRA") for those Provisioning
Items Bombardier agrees are eligible for repurchase
in accordance with Annex A Article 2.8.3. Bombardier
will advise Buyer of the reason that any Provisioning
Items included in Buyer's detailed summary are not
eligible for return. The MRA notice shall state the
date by which Provisioning Items listed in the MRA
notice must be redelivered to Bombardier as agreed
between the parties, and Buyer shall arrange for
shipment of such Provisioning Items accordingly, to
the U.S. distribution centre.
2.8.7 Price and Payment
The price of each Provisioning Item repurchased by
Bombardier pursuant to Annex A Article 2.8.6 will be
the original invoice price thereof. Bombardier shall
pay the repurchase price by issuing a credit
memorandum in favour of Buyer which may be applied
against amounts due Bombardier for the purchase of
Spare Parts and services.
2.8.8 Return of Surplus Provisioning Items
Provisioning Items repurchased by Bombardier pursuant
to Annex A Article 2.8.6 shall be delivered to
Bombardier's ----------------------------------------
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2.8.9 Obsolete Spare Parts and Surplus Provisioning
Items - Title and Risk of Loss
Title to and risk of loss of any obsolete or unusable
Spare Parts returned to Bombardier pursuant to Annex
A Article 2.8.8 shall pass to Bombardier upon
delivery thereof to Bombardier. Title to and risk of
loss of any Spare Parts substituted for an obsolete
or unusable Spare Part pursuant to Annex A Article
2.8.1 shall pass to Buyer upon delivery thereof to
Buyer. Title to and risk of loss of any Provisioning
Items repurchased by Bombardier pursuant to Annex A
Article 2.8.3 shall pass to Bombardier upon delivery
thereof to Bombardier.
With respect to the obsolete or unusable Spare Parts
which may be returned to Bombardier and the Spare
Parts substituted therefor, pursuant to Annex A
Article 2.8.1, and the Provisioning Items which may
be repurchased by Bombardier, pursuant to Annex A
Article 2.8.3, the party which has the risk of loss
of any such Spare Part or Provisioning Item shall
have the responsibility of providing any insurance
coverage thereon desired by such party.
2.9 Procedure for Ordering Spare Parts
Orders for Spare Parts may be placed by Buyer to
Bombardier by any method of order placement (including but
not limited to SITA, ARINC, telecopier, letter, telex,
facsimile, telephone or hard copy purchase order).
2.9.1 Requirements
Orders shall include at a minimum order number, part
number, nomenclature, quantity, delivery schedule
requested, shipping instructions and Bombardier's
price, if available.
2.9.2 Processing of Orders
Upon acceptance of any Order, unless otherwise
directed by Buyer, Bombardier shall, if the Spare
Parts are in stock, proceed immediately to prepare
the Spare Parts for shipment to Buyer. If Bombardier
does not have the Spare Parts in stock, Bombardier
shall proceed immediately to acquire or manufacture
the Spare Parts. Purchase order status and actions
related to the shipment of Spare Parts shall be
generally consistent with the provisions of the World
Airline Suppliers Guide, as applicable to Buyer.
2.9.3 Changes
Bombardier reserves the right, without Buyer's
consent, to make any necessary corrections or changes
in the design, part number and nomenclature of Spare
Parts covered by an Order, to substitute Spare Parts
and to adjust prices accordingly, provided that
interchangeability is not affected ------------------
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------------ unless Buyer's order specifically and
reasonably prohibits such substitution. Bombardier
shall promptly give Buyer written notice of
corrections, changes, substitutions and consequent
price adjustments. Corrections, changes,
substitutions and price adjustments which affect
interchangeability or exceed the price limitations
set forth above may be made only with Buyer's written
consent, which consent shall conclusively be deemed
to have been given unless Buyer gives Bombardier
written notice of objection within thirty (30)
calendar days after receipt of Bombardier's notice.
In case of any objection, the affected Spare Part
will be deemed to be deleted from Buyer's Order.
2.10 Packing
All Spare Parts ordered shall receive standard commercial
packing suitable for export shipment via air freight.
Such standard packing will generally be to ATA 300
standards as amended from time to time. All AOG orders
will be handled, processed, packed and shipped separately.
2.11 Packing List
Bombardier shall insert in each shipment a packing
list/release note itemized to show:
(i) the contents of the shipment,
(ii) the approved signature of Bombardier's TC authority
attesting to the airworthiness of the Spare Parts.
(iii) value of the shipment for customs clearance if
required.
2.12 Container Marks
Upon Buyer's request each container shall be marked with
shipping marks as specified on the Order. In addition
Bombardier shall, upon request, include in the markings:
gross weight and cubic measurements.
2.13 Delivery, Title and Risk of Loss
2.13.1 Delivery Point
Spare Parts, other than AOG and Critical Orders,
shall be delivered to Buyer FOB Bombardier's U.S.
distribution centre. AOG and Critical Orders shall
be delivered FOB point of origin.
2.13.2 Delivery Time
Bombardier shall use reasonable efforts so that
shipment of Bombardier Parts to Buyer be as follows:
a)AOG Orders
Ship AOG Orders within four (4) hours of receipt
of Order. Buyer's affected Aircraft factory
production number shall be required on AOG Orders;
b)Critical Orders (A1)
Ship critical Orders within twenty-four (24) hours
of order receipt;
c)Expedite Orders (A2)
Ship expedite Orders within seven (7) calendar
days of order receipt;
d)Initial Provisioning Orders
Prior to the Delivery Date of the first Aircraft
or as may be mutually agreed; and
e.) Other Orders
Shipment of stock items shall be approximately
thirty (30) calendar days after Bombardier's
receipt of Buyer's Order. Shipment of non-stock
items shall be in accordance with quoted lead
times or lead times published in the current Spare
Parts Price Catalogue, procurement data, or
provisioning data.
2.14 Collect Shipments
Where collect shipments are not deemed
practicable by Bombardier, charges for shipment,
insurance, prepaid freight charges and all other
costs paid by Bombardier shall be paid by Buyer
promptly upon presentation to Buyer of invoices
covering the same.
2.15 Freight Forwarder
If Buyer elects to use the services of a freight
forwarder for the onward movement of Spare
Parts, Buyer agrees to release Bombardier from
and indemnify it for any liability for any fines
or seizures of Spare Parts imposed under any
governmental Goods in Transit regulations. Any
such fines levied against Bombardier will be
invoiced to Buyer and any Spare Parts seized
under such regulations will be deemed to be
received, inspected, and accepted by Buyer at
the time of seizure.
2.16 Intentionally Left Blank
2.17 Title and Risk of Loss
Property and title to the Spare Parts will pass
to Buyer upon payment for the Spare Parts in
full. Until payment in full for Spare Parts,
(a) title to them will not pass to Buyer, and
(b) Bombardier maintains a purchase money
security interest in them. Risk of loss of the
Spare Parts will pass to the Buyer upon delivery
by Bombardier. With respect to Spare Parts
rejected by Buyer pursuant to Annex A Article
2.19, risk of loss shall remain with Buyer until
such Spare Parts are re-delivered to Bombardier
.
Bombardier agrees to notify Buyer when material
is shipped and shall provide carrier's reference
information (i.e., waybill number).
2.18 Inspection and Acceptance
All Spare Parts shall be subject to inspection
by Buyer at destination. Use of Spare Parts or
failure of Buyer to give notice of rejection
within forty-five (45) days after receipt shall
constitute acceptance. Acceptance shall be
final and Buyer waives the right to revoke
acceptance for any reason, whether or not known
to Buyer at the time of acceptance. Buyer's
remedies for defects discovered before
acceptance are exclusively provided for in Annex
A Article 2.19 herein.
2.19 Rejection
Any notice of rejection referred to in Annex A
Article 2.18 shall specify the reasons for
rejection. If Bombardier concurs with a
rejection, Bombardier shall, at its option,
either correct, repair or replace the rejected
Spare Parts. Buyer shall, upon receipt of
Bombardier's written instructions and Material
Return Authorization ("MRA") number, which
Bombardier shall issue in a timely manner,
return the rejected Spare Parts to Bombardier at
its specified plant, or other destination as may
be mutually agreeable. The return of the
rejected Spare Parts to Bombardier and the
return or delivery of a corrected or repaired
rejected Spare Part or any replacement for any
such Spare Part to Buyer shall be at
Bombardier's expense. Any corrected, repaired
or replacement Spare Parts shall be subject to
the provisions of this Agreement.
2.20 Payment
Except as provided in Annex A Article 2.22
below, payment terms shall be net thirty (30)
calendar days of invoice date for established
open accounts. Any overdue amount shall bear
interest from the due date until actual payment
is received by Bombardier at an annual rate of
interest equal to the U.S. prime interest rate
as established from time to time by the Chase
Manhattan Bank, New York Branch, or its
successor,,, plus two percent (2%) calculated
and compounded monthly.
2.21 Payment for Provisioning Items
Payment for Provisioning Items purchased by
Buyer as contemplated by Paragraph 2.7.1(i)
shall be made by Buyer as follows:
a) a deposit of 7.5% of the total price of the
Provisioning Items as selected by Buyer, upon
signature of the spares provisioning document;
and
b) the balance of the total price of
Provisioning Items upon their delivery.
2.22 Modified Terms of Payment
Bombardier reserves the right to alter the terms
of payment without prior notice if Buyer fails
to pay when due an amount Buyer owes under any
agreement with Bombardier, unless such failure
relates to a good faith dispute of an invoice.
2.23 Regulations
Buyer shall comply with all applicable monetary
and exchange control regulations and shall
obtain any necessary authority from the
governmental agencies administering such
regulations to enable Buyer to make payments at
the time and place and in the manner specified
herein.
2.24 Warranty
The warranty applicable to Spare Parts is set forth
in Annex B hereto.
2.25 Cancellation of Orders
Except as otherwise may apply to initial
provisioning, if Buyer cancels an Order,
Bombardier, at its option, shall be entitled to
recover actual damages, but not less than the
following cancellation charges or more than the
purchase price of the Spare Parts covered by the
Order:
a) if work accomplished on the Order has been
limited to Bombardier Spares Department, or the
part has been identified as "shelf stock" in the
Spare Parts Price Catalogue, no cancellation
charges shall be made;
b) if production planning has been completed
on the Order and shop orders have been written,
but no shop time or material charges have been
made against the Order, the cancellation charge
shall be 10% of the price but not to exceed $100
per unit;
c) if shop time or material charges have been
made against the Order, the cancellation charge
shall be based on the cost of such time and
materials, plus overhead; and
d) if the Spare Parts covered by the Order can
be absorbed into Bombardier's inventory without
increasing Bombardier's normal maximum stock
level, no cancellation charges shall be made.
2.26 Lease
Bombardier shall select and make available
certain parts for lease, subject to availability
Buyer has the option to negotiate a lease
agreement with Bombardier separate from this
Agreement.
2.27 Additional Terms and Conditions
Bombardier's conditions of sale are deemed to
incorporate the terms and conditions stated
herein. Additional terms and conditions
applicable at time of receipt of each order from
Buyer may be added providing such terms and
conditions do not conflict with the terms and
conditions provided herein. Such additional
terms and conditions shall be provided to Buyer
at least ninety (90) calendar days prior to
their effective date.
ARTICLE 3 - TRAINING
3.1 General Terms
3.1.1 The objective of the training programs (the
"Programs"), as described herein, shall be to
familiarize and assist Buyer's personnel in the
introduction, operation, and maintenance of the
Aircraft.
Bombardier shall offer to the Buyer the Programs in
the English language at a Bombardier designated
facility.
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3.1.2 Buyer shall be responsible for all travel and
living expenses, including local transportation, of
Buyer's personnel incurred in connection with the
Programs.
3.1.3 The Programs shall be designed to reflect the
model and/or configuration of the Aircraft and may
include differences training to identify such
configuration or model. Manuals which are provided
during the Programs exclude revision service.
3.1.4 A training conference shall be held where
possible no later than six (6) months prior to the
Scheduled Delivery Date of the first Aircraft to the
Buyer, or as may be otherwise agreed, to establish
the Programs' content and schedule.
3.2 Flight Crew Training
3.2.1 Flight Crew Ground Training
At no additional charge, Bombardier will provide with
each delivered Aircraft, a TC or FAA approved
transition training for ------- (--) of Buyer's
pilots who meet the minimum entry requirement
provided in the applicable training manual. Each
course shall consist of up to eighty (80) hours of
classroom instruction which may include part task
trainer, Computer Based Training (CBT), and/or Flight
Training Device (FTD). Bombardier shall furnish each
of Buyer's licensed pilots attending the course one
copy of the Flight Crew Operating Manual.
3.2.2 Pilot Simulator Training
Bombardier shall provide access at Buyer's expense to
a TC or FAA approved flight simulator for the crew
trained under Annex A Article 3.2.1. Bombardier
shall provide a simulator instructor for eight (8)
missions for the crew trained on Bombardier's
designated simulator in Montreal; each mission shall
consist of four (4) hours in the simulator and
required briefing/debriefing sessions.
3.2.3 In-flight Training
Should Buyer require aircraft flight training, such
training shall be conducted in Buyer's Aircraft after
the Delivery Date for up to a maximum of ---- (--) of
Buyer's pilots. Bombardier shall provide an
instructor pilot at no additional charge; Buyer shall
be responsible for the cost of fuel, oil, landing
fees, taxes, insurance, maintenance, and other
associated operating expenses required for the
Aircraft during such training.
3.2.4 Flight Attendant Course
A familiarization course for up to ---- (--) of
Buyer's flight attendant personnel shall be
conducted. Each course shall be for a maximum of
five (5) working days duration. This course shall
present general information on the Aircraft and
detailed information on the operation of the
passenger safety equipment and emergency equipment.
Bombardier shall furnish for each participant in this
course one (1) copy of the Flight Attendant Training
Guide which shall not be revised. Buyer shall assist
Bombardier in the development of the Flight Attendant
Training Guide to incorporate Buyer's specific
equipment and procedures.
3.2.5 Recurrent Pilot Training
Bombardier shall, upon Buyer's request, provide a
proposal for a TC or FAA approved course for type
rated pilots, customized in content to meet the
recurrent training of Buyer's pilots.
3.2.6 Course Training Material
Bombardier shall, upon Buyer's request, present a
proposal to provide one (1) set of the materials
(without revision service) used to conduct the Flight
Crew Ground Training course, as follows:
i)35 mm slides;
ii) Instructional Narrative and/or Instruction
Guides;
iii) Overhead Projection Transparencies;
iv) Motion picture and/or Video tapes; and
v)Audio cassettes tapes.
3.3 Maintenance Training
3.3.1 Airframe and Powerplant Systems Maintenance
Course
Bombardier shall, at no additional charge, train up
to ---- (--) of Buyer's qualified personnel per
Aircraft. This course shall emphasize detailed
systems description, operation, and routine line
maintenance practices. The course material shall be
principally mechanical with electrical and avionics
information for overall systems comprehension. The
course duration shall be for a maximum of twenty-
five (25) working days.
3.3.2 Electrical and Avionics Systems Maintenance
Course
Bombardier shall, at no additional charge, train up
to ---- (--) of Buyer's qualified personnel per
Aircraft. The course shall emphasis detailed systems
description, operation and routine line maintenance
practices. The course material shall be principally
electrical and avionic but shall include mechanical
information for overall systems comprehension. The
course duration shall be for a maximum of twenty-five
(25) working days.
3.3.3 Specialist Courses
At Buyer's request, Bombardier shall make a proposal
for specialist courses which will be derived from
Bombardier's standard courses detailed herein.
3.3.4 Recurrent Training
At Buyer's request, Bombardier shall make a proposal
for a Regulatory Authority approved training plan
for maintenance recurrent training.
3.3.5 Vendor Training
At Buyer's request, Bombardier shall assist Buyer to
obtain vendor maintenance training.
3.3.6 Course Training Material
Bombardier, upon Buyer's request, shall present a
proposal to provide one (1) set of the training
materials (without revision service) used to conduct
Bombardier's standard training as detailed herein:
i)35 mm slides;
ii) Lesson Guides;
iii) Overhead Projection Transparencies;
iv) Motion picture and/or Video tapes; and
v)Audio cassettes tapes.
3.4 Insurance
3.4.1Buyer shall at all times during flight training
in Buyer's Aircraft secure and maintain in
effect, at its own expense, insurance policies
covering the Aircraft including without limitation:
a) liability insurance covering public liability,
passenger, crew, property and cargo damage in
amounts ----------------------------------------
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b) all risk aircraft hull and engine insurance for
an amount which is not less than its then fair
market value.
3.4.2 The liability policy shall name Bombardier (and
its affiliates) as additional insured. The hull
policy shall contain a waiver of subrogation in
favour of Bombardier (and its affiliates); ----------
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insurance policies shall provide for payments despite
any misrepresentations or breach of warranty by any
person (other than the assured receiving payments)
and shall not be subject to any offset by any other
insurance carried by Bombardier except that Buyer
shall not be required to provide insurance with
respect to the manufacturing, repair and maintenance
activities of Bombardier (and of its affiliates) and
the related potential liability (product or
otherwise) arising therefrom.
ARTICLE 4 - TECHNICAL DATA
4.1 Technical Data Provided
Bombardier shall furnish to Buyer the Technical
Data described in Attachment A hereto (the
"Technical Data"). The Technical Data shall be
in the English language and shall provide
information on items manufactured according to
Bombardier's detailed design and in those units
of measures used in the Specification or as may
otherwise be required to reflect Aircraft
instrumentation as may be mutually agreed.
4.2 Shipment
All Technical Data provided hereunder shall be
delivered to Buyer Free Carrier (Incoterms)
Bombardier's designated facilities and at the
time indicated in Attachment A.
4.3 Proprietary Technical Data
It is understood and Buyer acknowledges that the
Technical Data provided herein is proprietary to
Bombardier and all rights to copyright belong to
Bombardier and the Technical Data shall be kept
confidential by Buyer. Buyer agrees to use the
Technical Data solely to maintain, operate,
overhaul or repair the Aircraft or to make
installation or alteration thereto allowed by
Bombardier.
Technical Data shall not be disclosed to third
parties or used by Buyer or furnished by Buyer
for the design or manufacture of any aircraft or
Spare Parts including Bombardier Parts or items
of equipment, except when manufacture or
redesign is permitted under the provisions
Article 23.2 of the Agreement or of Annex A
Article 2.4 hereof and then only to the extent
and for the purposes expressly permitted
therein.
ANNEX B - WARRANTY AND SERVICE LIFE POLICY
ARTICLE 1 - WARRANTY
The following warranty is that to which reference is made in
Article 3 of the Agreement.
1.1 Warranty
1.1.1 Subject to Annex B Articles 1.9, 1.10, and 2,
Bombardier warrants that, at the date of delivery
of the Aircraft or Bombardier Part, as applicable
:
a)the Aircraft shall conform to the
Specification, except that any matter stated in
the Specification as type characteristics,
estimates or approximations is excluded from
this Warranty;
b)the Aircraft shall be free from defects caused
by the failure of Bombardier to install a
Vendor Part or Powerplant Part in accordance
with reasonable instructions of the vendor;
c)the Aircraft, excluding however Vendor Parts
and Powerplant Parts which shall be governed by
Article 2 hereof, shall be free from defects in
material or workmanship------------------------
------------ and
d.) the Aircraft, excluding however Vendor
Parts and Powerplant Parts which shall be
governed by Article 2 hereof, shall be free
from defects in design, having regard to the
state of the art as of the date of such design.
1.1.2 The Warranty set forth in Annex B Article
1.1.1 (c) and (d) above shall also be applicable
to Bombardier Parts purchased as Spare Parts.
1.1.3 Bombardier further warrants that, at the time
of delivery, the Technical Data shall be free from
error.
1.2 Warranty Period
1.2.1 The Warranty set forth in Annex B Article 1.1
shall remain in effect for any defect covered by
the Warranty (a "Defect") becoming apparent during
the following periods (individually, the "Warranty
Period"):
a)for failure to conform to the Specification and
in the installation referred to in Annex B
Article 1.1.1 (a) and 1.1.1 (b), thirty-six
(36) months from the Delivery Date;
b)for those Defects in material or workmanship
referred to in Annex B Article 1.1.1 (c) and
1.1.2, thirty-six (36) months from the date of
delivery of the Aircraft or Bombardier Parts,
as applicable;
c)for those Defects in design referred to in
Annex B Article 1.1.1 (d), thirty-six (36)
months from the date of delivery of the
Aircraft or Bombardier Parts, as applicable;
and
d)for errors in the Technical Data referred to in
Annex B Article 1.1.3, twelve (12) months from
the date of delivery of the applicable
Technical Data.
1.3 Repair, Replacement or Rework
As to each matter covered by this Warranty Bombardier's
sole obligation and liability under this Warranty is
expressly limited to, at Bombardier's election,
correction by the repair, replacement or rework of the
defective part or item of Technical Data. The
repaired, replaced or reworked part or item of
Technical Data which is the subject of the Warranty
claim shall then be warranted under the same terms and
conditions for the then unexpired portion of the
Warranty Period.
In the case of a Defect relating to non-conformance
with the Specification, Bombardier shall correct that
Defect in the equipment item or part in which the
Defect appears, except that Bombardier will not be
obligated to correct any Defect which has no material
adverse effect on the maintenance, use or operation of
the Aircraft or the image of Buyer as a reputable
airline operator.
1.4 Claims Information
Bombardier's obligations hereunder are subject to a
Warranty claim to be submitted in writing to
Bombardier's warranty administrator, which claim shall
include but not be limited to the following
information:
a)the identity of the part or item involved, including
the Part number, serial number if applicable
nomenclature and the quantity claimed to be
defective;
b)the manufacturer's serial number of the Aircraft
from which the part was removed;
c)the date the claimed Defect became apparent to
Buyer;
d)the total flight hours (and cycles if applicable)
accrued on the part at the time the claimed Defect
became apparent to Buyer; and
e)a description of the claimed Defect and the
circumstances pertaining thereto.
1.5 Intentionally Left Blank .
1.6 Timely Corrections
Bombardier shall make the repair, replacement or
rework, following receipt of the defective part or
item, with reasonable care and dispatch.
In the event that Bombardier does not respond or
confirm receipt of a warranty claim from Buyer --------
-------------------------------------------------------
------- subject to Buyer and Bombardier agreeing on a
non-receipt of a confirmation from Bombardier within --
-------- from the date of submittal of claim.
1.7 Labour Reimbursement
For correction of Defects Bombardier shall establish a
reasonable estimate for the labour hours required for
the repair, replacement or rework of the defective
Bombardier Part and, if the repair, replacement or
rework is performed by Buyer or by third party on
behalf of Buyer, Bombardier shall reimburse Buyer for
Bombardier estimated hours or for Buyer's or third
party's actual labour hours, whichever is less, for the
repair, replacement or rework of the defective
Bombardier Part excluding any work necessary to gain
access to said Bombardier Part. Such reimbursement
shall be based upon Buyer's direct labour rate per
manhour plus burden rate of fifty percent (50%),
subject to annual review and adjustment of such labour
rate as mutually agreed; provided, however, that this
amount shall not exceed fifty percent (50%) of the
Bombardier published selling labour rate.
1.8 Approval, Audit, Transportation and Waiver
All Warranty claims shall be subject to audit and
approval by Bombardier. Bombardier will use reasonable
efforts to advise in writing the disposition of Buyer's
Warranty claim within thirty (30) days following the
receipt of the claim and (if requested) return of the
defective Bombardier Part to Bombardier's designated
facility. Bombardier shall notify Buyer of
Bombardier's disposition of each claim.
Buyer shall pay all costs of transportation of the
defective part from Buyer to Bombardier's U.S.
distribution centre and Bombardier shall pay all costs
of transportation of the repaired, corrected or
replacement parts back to Buyer.
1.9 Limitations
1.9.1 Bombardier shall be relieved of and shall
have no obligation or liability under this
Warranty if:
a)the Aircraft was operated with any products or
parts not specifically approved by Bombardier,
unless Buyer furnishes reasonable evidence
acceptable to Bombardier that such products or
parts were not a cause of the Defect; or
b)the Aircraft was not operated or maintained in
accordance with the Technical Data listed in
Attachment A of Annex A and the manufacturer's
documentation furnished to Buyer (including
Service Bulletins and airworthiness directives)
unless Buyer furnishes reasonable evidence
acceptable to Bombardier that such operation or
maintenance was not a cause of the Defect; or
c)the Aircraft was not operated under normal
airline use, unless Buyer furnishes reasonable
evidence acceptable to Bombardier that such
operation was not a cause of the Defect; or
d)Buyer does not
1)report the Defect in writing to Bombardier's
Warranty administrator within forty-five (45)
calendar days following such Defect becoming
apparent, and
2)retain the Bombardier Part claimed to be
defective until advised by Bombardier to
return such Bombardier Part to Bombardier's
designated facility in order for Bombardier
to finalize its evaluation of the Warranty
claim or to otherwise dispose of such
Bombardier Part; or
e)Buyer does not submit reasonable demonstration
to Bombardier within forty-five (45) calendar
days after the Defect becomes apparent that the
Defect is due to a matter covered within this
Warranty; or
f)Buyer does not allow Bombardier reasonable
opportunity (taking into account Buyer's wish
to replace Aircraft back in service) to be
present during the disassembly and inspection
of the Bombardier Part claimed to be defective.
1.9.2 The above warranties do not apply to Buyer
Furnished Equipment.
1.10 Normal Usage
Normal wear and tear and the need for regular
maintenance and overhaul shall not constitute a Defect
or failure under this Warranty.
1.11 Overhaul of Warranty Parts
Bombardier's liability for a Bombardier Part which has
a Defect and is overhauled by Buyer within the Warranty
Period shall be limited only to that portion of the
labour and material replacement related to the Defect.
1.12 No Fault Found
In the event that a Bombardier Part returned under a
Warranty claim is subsequently established to be
serviceable then Bombardier shall be entitled to charge
and recover from Buyer any reasonable inspection,
transportation, repair and other costs of a similar
nature incurred by Bombardier in connection with such
Warranty claim. Providing, however, in the event that
repetitive in-service failure occurs on the particular
Bombardier Part which is subsequently identified by
Bombardier on a repeated basis to be "no fault found,"
then Bombardier and Buyer shall discuss and mutually
agree a course of further action to help identify the
problem. In the event the fault is ultimately
confirmed to be a legitimate Warranty claim then the
above mentioned costs, if incurred by Bombardier will
be borne by Bombardier, and any such costs already paid
by Buyer will be reimbursed by Bombardier.
ARTICLE 2 - VENDOR WARRANTIES
2.1 Warranties from Vendors
The Warranty provisions of this Annex B apply to
Bombardier Parts only. However, Bombardier has made
or shall make reasonable efforts to obtain favourable
warranties from vendors, with respect to Vendor Parts
and Power Plant Parts. Except as specifically
provided under this Annex B Article 2, Bombardier
shall have no liability or responsibility for any such
Vendor Parts and Power Plant Parts and the warranties
for those Vendor Parts and Power Plant Parts shall be
the responsibility of the vendor and a matter as
between Buyer and vendor.
2.2 Vendor Warranty Backstop
For those Vendor Parts installed on the Aircraft at
the Delivery Date or subsequently purchased through
Bombardier, excluding the Powerplant or the Power
Plant Parts, in the event the parties agree that a
vendor is in default in the performance of any
material obligation under any applicable warranty
obtained by Bombardier from such vendor pursuant to
Annex B Article 2.1 above, the warranties and all
other terms and conditions of Annex B Article 1 shall
become applicable as if the Vendor Parts had been a
Bombardier Part, except that the warranty period shall
be the Warranty Period as set forth herein or by the
vendor's warranty, whichever is shorter.
2.3 Bombardier's Interface Commitment
In the event of a dispute in the application of a
Vendor Part warranty, at Buyer's request addressed to
Bombardier's warranty administrator, Bombardier shall,
without charge, conduct an investigation and analysis
of any such dispute resulting from a technical
interface problem to determine, if possible, the cause
of the interface problem and then recommend feasible
corrective action. Buyer shall furnish to Bombardier
all data and information in Buyer's possession
relevant to the interface problem and shall cooperate
with Bombardier in the conduct of its investigation
and such tests as may be required. Bombardier, at the
conclusion of its investigation, shall advise Buyer in
writing of Bombardier's opinion as to the cause of the
problem and Bombardier's recommended corrective
action.
ARTICLE 3 - SERVICE LIFE POLICY
3.1 Applicability
The Service Life Policy ("SLP") described in this Annex
B Article 3 shall apply if ------------------------- in
any Covered Component which is defined in Annex B
Article 3.7 below.
3.2 Term
3.2.1 Should such failures occur in any Covered
Component within one hundred and forty-four (144)
months following delivery of the Aircraft
containing such Covered Component, Bombardier
shall, as promptly as practicable and at its
option;
a)design and/or furnish a correction for such
failed Covered Component; or
b)furnish a replacement Covered Component
(exclusive of standard parts such as bearings,
bushings, nuts, bolts, consumables and similar
low value items).
3.3 Price
Any Covered Component which Bombardier is required to
furnish under this SLP shall be provided for at a price
calculated in accordance with the following formula:
P = C x T
144
Where:
P = Price of Covered Component to Buyer;
C = Bombardier's then current price for the
Covered Component;
T = The total time to the nearest month
since the Aircraft containing the
Covered Component, ------------------------------
---------------------- was delivered by
Bombardier
3.4 Conditions and Limitations
3.4.1 The following general conditions and
limitations shall apply to the SLP:
a)the transportation cost for the return to
Bombardier's designated facility, if
practicable, of any failed Covered Component
necessary for failure investigation or
redesigning studies shall be borne by
Bombardier but Buyer agrees to use reasonable
efforts to ship the Covered Component on
Buyer's aircraft to a scheduled destination
closest to Canadair's designated facility at no
cost to Bombardier;
b)Bombardier's obligations under this SLP are
conditional upon the submission of reasonable
proof acceptable to Bombardier that the failure
is covered hereby;
c)Buyer shall report any failure of a Covered
Component in writing to Bombardier`s Warranty
administrator within two (2) months after such
failure becomes evident -----------------------
-- Failure to give this required notice shall
excuse Bombardier from all obligations with
respect to such failure;
d)the provisions of Annex B Article 1.9 of the
Warranty (except for subparagraphs (d) and (e)
thereof) are incorporated by this reference and
shall condition Bombardier's obligations under
this SLP with respect to any Covered Component;
e)Bombardier's obligations under this SLP shall
not apply to any Aircraft which has not been
correctly modified in accordance with the
specifications or instructions contained in the
relevant Service Bulletins which are furnished
to Buyer prior to receipt by Bombardier from
Buyer of any notice of an occurrence which
constitutes a failure in a Covered Component,
subject to Buyer having had reasonable time to
i) obtain parts required for the installation
of the Service Bulletin and ii) incorporate the
Service Bulletin into the Aircraft. The
provisions of this subparagraph shall not apply
in the event that Buyer furnishes reasonable
evidence acceptable to Bombardier that such
failure was not caused by Buyer's failure to so
modify the Aircraft;
f)this SLP shall not apply to a failure of a
Covered Component if Bombardier determines that
such failure may not reasonably be expected to
occur on a repetitive basis unless subsequently
demonstrated to be; and
g)this SLP shall not apply to a Covered Component
where the failure results from an accident,
abuse, misuse, degradation, except for normal
wear and tear, negligence or wrongful act or
omission, unauthorized repair or modification
adversely affecting a Covered Component, impact
or foreign object damage, to any Covered
Component.
3.5 Coverage
This SLP is neither a warranty, performance guarantee
nor an agreement to modify the Aircraft to conform to
new developments in design and manufacturing art.
Bombardier's obligation is only to provide correction
instructions to correct a Covered Component or furnish
replacement at a reduced price as provided in this SLP.
3.6 Covered Component
Only those items or part thereof listed in Attachment A
to this Annex B shall be deemed to be a Covered
Component, and subject to the provisions of this SLP.
ARTICLE 4 - GENERAL
4.1 It is agreed that Bombardier shall not be obligated to
provide to Buyer any remedy which is a duplicate of any
other remedy which has been provided to Buyer under any
other part of this Annex B.
September 10, 1999
Atlantic Coast Airlines
515A Shaw Road,
Dulles, Virginia,
U.S.A. 20166
Gentlemen,
Letter Agreement No. 001A to Purchase Agreement No. PA-
0454 dated July 29, 1999 (the "Agreement" between
Bombardier Inc. ("Bombardier") and Atlantic Coast
Airlines ("Buyer") relating to the purchase of six (6)
Canadair Regional Jet Aircraft (the "Aircraft")
This Letter Agreement No. 001A dated September 10, 1999
cancels and supersedes Letter Agreement No. 001 dated
July 29, 1999.
Subject: Credit Memoranda
1.0 This letter constitutes an integral part of the
Agreement and evidences our further agreement with the
matters set forth below. All terms used herein and in
the Agreement and not defined herein, shall have the
same meaning as in the Agreement.
2.0 In consideration of Buyer having entered into the
above referenced Agreement for the purchase of six (6)
Aircraft (and for the exercise of any Option Aircraft
(as defined in Letter Agreement No. 003)), Bombardier
will issue to Buyer, upon delivery and payment of the
price of the Aircraft in accordance with the Agreement,
(i) for each of the -------------------
Aircraft (including any delivered Option
Aircraft), a credit memorandum in the amount
of -----------------------------------------
---------------------------------------------
---------------------------------------------
---------------------------------------------
---------------------------------------------
---------------------------------------------
---------------------------------------------
-----------------
- -------------------------------------------------------
- -------------------------------------------------------
- ----------
3.0 In consideration of Buyer having entered into the
above referenced Agreement, Bombardier will issue to
Buyer, upon delivery and payment of the price of the
Aircraft in accordance with the Agreement, for each of
the -----------------------------, a ----------- credit
memorandum in the amount of ---------------------------
- -------------------------------------------------------
- -------------------------------------------------------
- -------------------------------------------------------
- -------------------------------------------------------
- ------------- -----------------------------------------
- -------------------------------------------------------
- -------------------------------------------------------
- -----------------------------------------------
4.0 ---------------------------------------------------
- -------------------------------------------------------
- -------------------------------------------------------
- -------------------------------------------------------
- -------------------------------------------------------
- -------------------------------------------------------
- -------------------------------------------------------
- ------------- The credit memorandum will ---- be
adjusted on the same pro-rata percentage calculation as
other aircraft price changes due to changes in the
Specification or Buyer selected optional features as
otherwise provided for in this Agreement. The credit
memorandum, as adjusted, will collectively be known as
the "Credit Memoranda".
5.0 In the event of the Termination of the Agreement,
this Letter Agreement shall become automatically null
and void with respect to any undelivered Aircraft.
6.0 The provisions of this Letter Agreement are
personal to Buyer and shall not be assigned or
otherwise disposed of by Buyer, except as required for
financing purposes in accordance with Letter Agreement
No. 004 (Financing) and except as part of an assignment
of the Agreement as expressly permitted in Article 20
of the Agreement, without the prior written consent of
Bombardier.
Should there be any inconsistency between this Letter
Agreement and the Agreement with respect to the subject
matter covered by the terms hereof, then this Letter
Agreement shall prevail.
Yours truly,
BOMBARDIER INC.
________________________
Date:_____________
Scott Preece
Manager, Contracts
Acknowledged and Accepted
Atlantic Coast Airlines
________________________
Date:_____________
Kerry B. Skeen
President & C.E.O.
July 29, 1999
Atlantic Coast Airlines
515A Shaw Road
Dulles, Virginia,
U.S.A. 20166
Gentlemen,
Letter Agreement No. 002 to Purchase Agreement No. PA-
0454 dated July 29, 1999 (the "Agreement" between
Bombardier Inc. ("Bombardier") and Atlantic Coast
Airlines ("Buyer") relating to the purchase of six (6)
Canadair Regional Jet Aircraft (the "Aircraft")
Subject: Assignment
Gentlemen:
This letter constitutes an integral part of the
Agreement and evidences our further agreement with
respect to the matters set forth below. All terms used
herein and in the Agreement and not defined herein,
shall have the same meaning as in the Agreement.
1.0 Buyer shall have the right to assign its right to
purchase and to lease up to six (6) of the
Aircraft (Aircraft 1-6) to a new corporation to be
formed in the U.S. ("Newco") subject to:
(i) Newco shall be a U.S. citizen;
(ii) section 1110 of the U.S. Bankruptcy Code
applies;
(iii) the provisions of Articles 20.1, 20.2, 20.3
of the Agreement;
(iv) financing shall be based on Buyer's
credit; and
(v) additional reasonable terms and conditions
required due to the different structure of the
transaction and aircraft operations following
disclosure and due diligence of the transaction
envisaged.
3.0 Subject to the satisfaction of the foregoing, the
assignment shall then be an assignment permitted
pursuant to the terms of Article 20 of the
Agreement, such that Newco will be entitled to all
benefits as contained in the Agreement.
4.0 In the event of the termination of the Agreement,
this Letter Agreement shall become automatically
null and void.
5.0 The provisions of this Letter Agreement are
personal to Buyer and shall not be assigned or
otherwise disposed of by Buyer without the prior
written consent of Bombardier.
Yours very truly,
BOMBARDIER INC.
________________________
Date:_____________
Michel Bourgeois
Vice President, Contracts
Acknowledged and Accepted
Atlantic Coast Airlines
________________________
Date:_____________
Kerry B. Skeen
President & C.E.O.
Atlantic Coast Airlines
515A Shaw Road,
Sterling, Virginia,
U.S.A. 20166
Gentlemen,
Letter Agreement No. 003 to Purchase Agreement No. PA-
0454 dated July 29, 1999 (the "Agreement") between
Bombardier Inc. ("Bombardier") and Atlantic Coast
Airlines ("Buyer") relating to the purchase of Six
(6) Canadair Regional Jet Aircraft (the
"Aircraft")
Subject: Option Aircraft
1.0 This letter constitutes an integral part of the
Agreement and evidences our further agreement with
the matters set forth below. All terms used
herein and in the Agreement and not defined
herein, shall have the same meaning as in the
Agreement.
2.0 In consideration of Buyer having entered into the
above referenced Agreement, Bombardier will grant
to Buyer the right to purchase seventeen (17)
additional Aircraft (the "Option Aircraft") in
accordance with the following general conditions:
(a) Number of Option Aircraft
The Scheduled Delivery Dates of the Option
Aircraft are follows:
---------------------------------------------
---------------------------------------------
---------------------------------------------
---------------------------------------------
---------------------------------------------
--------
(b) Terms
(i) The Option Aircraft will be as described
in Article 2 of the Agreement.
(ii) (a) The base price for each of the
Option Aircraft (excluding the Buyer
Selected Optional Features) Ex Works
(Incoterms 1990) Bombardier's offices or
premises in Montreal, Province of
Quebec, Canada, is ---------------------
----------------------------------------
------------------------ ---------------
---------------------.
(b) The base price of the Buyer
Selected Optional Features is ----------
----------------------------------------
----------------------------------------
----------------------------------------
------
The Option Aircraft base price shall be
the base price for the Option Aircraft
as stated in paragraph (b)(ii)(a), plus
the base price of the Buyer Selected
Optional Features as stated in paragraph
(b)(ii)(b) (the "Option Aircraft Base
Price").
The price of the Option Aircraft (the
"Option Aircraft Purchase Price") shall
be the Option Aircraft Base Price
adjusted to ----------------------------
----------------------------------------
----------------------------------------
---------------- of the Option Aircraft.
Such adjustments shall be based on the
Economic Adjustment Formula as found in
Appendix I of the Agreement.
(ii) As consideration for this option, Buyer
shall make or cause to make payment to
Bombardier -----------------------------
----------------------------------------
----- per Option Aircraft (the "Option
Deposit") upon execution of the
Agreement, for a total amount of -------
----------------------------------------
------------------------
(iii) Unless expressly provided for in
the Agreement, the terms and conditions
of the Agreement (including Letter
Agreements, except as noted below) shall
apply mutatis mutandis to the Option
Aircraft, with the exception that the
provisions with respect to Annex A
training courses as specified in Article
3.2.4 of the Agreement (Flight Attendant
Courses), shall not apply to the Option
Aircraft.
(iv) The following Letter Agreement shall not
apply to the Option Aircraft and is
hereby excluded:
Letter Agreement No. 003 (Option
Aircraft)
(v) Letter Agreement No. 008A (Schedule
Completion Rate), Letter Agreement No.
009C (Airframe Direct Maintenance Cost)
and Letter Agreement No. 006
(Operational Restrictions) of purchase
agreement no. RJ-0350 dated January 8,
1997, as amended through contract change
order no. 14 to such purchase agreement,
shall apply mutatis mutandis to the
Option Aircraft, with specific terms for
Option Aircraft as set out therein.
(c) Option Aircraft Payment Terms
Terms of payment for each of the Option Aircraft
shall be based upon the Option Aircraft Base Price
of such aircraft and will be as follows:
---------------------------------------------
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-------------------------------
All payments referred to in paragraphs a., b. and
c. above are to be made on the first day of the
applicable month.
(d) Exercise Procedures
Timing and procedures for the exercise of
Option Aircraft shall be as follows:
(i) The Option Aircraft will be exercised as
individual aircraft, with Buyer
providing written notice of its
intention to do so ("Notice of
Intention") -------------------- prior
to the first day of the month of the
Scheduled Delivery Date of the
applicable Option Aircraft, at which
point the Option Deposit for the
applicable Option Aircraft will become
non-refundable, and a definitive
irrevocable, written exercise-----------
--------- prior to the first day of the
month of the Scheduled Delivery Date of
the applicable Option Aircraft.
(ii) At any time prior to the Notice of
Intention of an Option Aircraft, Buyer
may elect (on one occasion only as to
any such Option Aircraft) to reschedule
the Scheduled Delivery Date for such
Option Aircraft to a date up to --------
---------- after its original Scheduled
Delivery Date, subject to Bombardier
having position(s) available for the
requested rescheduled delivery date(s),
taking into account Bombardier's then
production rate and commitments.
In the event Bombardier cannot offer an
aircraft delivery position in the month
requested by Buyer, Bombardier shall use
its reasonable efforts (taking into
account Bombardier's production and
commitments), to offer a delivery
position in the calendar quarter next
succeeding the requested rescheduled
delivery date, failing which Bombardier
shall offer to Buyer the available
positions, if any, ---------------------
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-----------------
(iv) The following process shall be utilized
to provide notices (with notice
provisions in accordance with Article 17
of the Agreement):
Buyer may provide notice of its desire
to reschedule ("Notice of Reschedule")
the Scheduled Delivery Date for an
Option Aircraft (on one occasion only as
to any such Option Aircraft) at any time
up to and including --------------------
prior to the first day of the Scheduled
Delivery Date of such option Aircraft.
Following receipt of Buyer's notice to
reschedule, Bombardier shall have ------
---------------- within which to respond
to Buyer's notice, providing alternative
delivery date(s), where available and as
applicable as per paragraph d(ii) above.
Buyer shall use its reasonable efforts
to notify Bombardier of its definitive
intentions regarding the postponement
requested within ---------------- of its
request for postponement.
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-------------------------------
(v) In all cases, prior to notice being
received by Bombardier from Buyer of
Buyer's formal acceptance of the
rescheduled delivery position(s), any
rescheduled delivery position(s)
provided from Bombardier to Buyer will
be subject to prior sale, commitment or
other disposition of the applicable
aircraft.
(vi) Buyer's failure to exercise its rights
with respect an Option Aircraft shall
result in the cancellation of such
Option Aircraft.
(vii) The price of any of the Option
Aircraft which have been rescheduled by
Buyer (including as a result of a Buyer
Excusable Delay, as defined in Article
13 of the Agreement) to a delivery month
beyond October 2003 will increase to
reflect price changes to the aircraft
standard base price (list price), if
any, as a result of value added
modifications incorporated as standard
into the Option Aircraft from the date
of the execution of the Agreement to the
date of exercise of the applicable
Option Aircraft.
(viii) Buyer will endeavor to keep
Bombardier informed as to its intentions
regarding rescheduling of Option
Aircraft.
3.0 Bombardier will, upon payment for and
delivery of each Option Aircraft, at no
additional charge to Buyer, extend the
term of Article 1.2.2 of Annex A of the
Agreement (the Field Service
Representative ("FSR")) by two (2)
additional months.
4.0 In the event of the Termination of the
Agreement, this Letter Agreement shall
become automatically null and void.
5.0 Upon exercise of Buyer's rights to
purchase in accordance with this Letter
Agreement, the parties shall amend the
Agreement or enter into an additional
purchase agreement in order to give
effect to the purchase of Option
Aircraft in accordance with the terms
and conditions thereof.
6.0 The provisions of this Letter Agreement
are personal to Buyer and, except as
part of an assignment of the Agreement
as expressly permitted by the provisions
in Article 20 of the Agreement, shall
not be assigned or otherwise disposed of
by Buyer without the prior written
consent of Bombardier.
Should there be any inconsistency between
this Letter Agreement and the Agreement with
respect to the subject matter covered by the
terms hereof, then this Letter Agreement
shall prevail.
Yours truly,
BOMBARDIER INC.
________________________
Date:_____________
Michel Bourgeois
Vice President, Contracts
Acknowledged and Accepted
ATLANTIC COAST AIRLINES
________________________
Date:_____________
Kerry B. Skeen
President and C.E.O.
July 29, 1999
Atlantic Coast Airlines
515A Shaw Road,
Sterling, Virginia,
U.S.A. 20166
Gentlemen,
Letter Agreement No. 004 to Purchase
Agreement No. PA-0454 dated July 29, 1999
(the "Agreement") between Bombardier Inc.
("Bombardier") and Atlantic Coast Airlines
("Buyer") relating to the purchase of six (6)
Canadair Regional Jet Aircraft (the
"Aircraft")
Subject: Financing
1.0 This letter constitutes an integral part of
the Agreement and evidences our further
agreement with the matters set forth below.
All terms used herein and in the Agreement
and not defined herein, shall have the same
meaning as in the Agreement.
1.1 This Letter Agreement describes the
general terms and conditions of the
financing assistance to be provided by
Bombardier to Buyer. ------------------
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-----------------------
2.0 Financing Assistance
2.1 Financing assistance referred to in this
Letter Agreement No. 004 shall apply
only to the Financed Aircraft.
Financing for the Financed Aircraft will
be arranged by Buyer working in
coordination with Bombardier. The form
of any support which may be provided by
Bombardier is to be treated as
confidential and is not to be provided
by Buyer to any third party without the
third party executing Bombardier's
confidentiality agreement. It is
Buyer's responsibility to have such form
executed with any third party prior to
Buyer's disclosure of any such
information and to provide such form to
Bombardier for approval. The above does
not apply where Buyer or the applicable
third party is required to disclose such
information by law or compelled by court
order to do so.
2.2 ----------------------------------------
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2.3 ----------------------------------------
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3.0 ----------------------------------------
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4.0 ----------------------------------------
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5.0 In the event of the termination of the
Agreement pursuant to Article 16.1 or
16.2 as a result of a default or breach
of this Agreement by Buyer, this Letter
Agreement shall become automatically
null and void.
6.0 The provisions of this Letter Agreement
are personal to Buyer and shall not be
assigned or otherwise disposed of by
Buyer except as part of an assignment of
the Agreement expressly permitted by
Article 20 of the Agreement.
Should there be any inconsistency between
this Letter Agreement and the Agreement with
respect to the subject matter covered by the
terms hereof, then this Letter Agreement
shall prevail.
Yours truly,
BOMBARDIER INC.
________________________
Date:_____________
Michel Bourgeois
Vice President, Contracts
Acknowledged and Accepted
Atlantic Coast Airlines
________________________
Date:_____________
Kerry B. Skeen
President and C.E.O.
July 29, 1999
Atlantic Coast Airlines
515A Shaw Road
Dulles, Virginia,
U.S.A. 20166
Gentlemen,
Letter Agreement No. 005 to Purchase Agreement No. PA-
0454 dated July 29, 1999 (the "Agreement" between
Bombardier Inc. ("Bombardier") and Atlantic Coast
Airlines ("Buyer") relating to the purchase of six
(6) Canadair Regional Jet Aircraft (the
"Aircraft")
Subject: Additional Customer Support
1.0 This letter constitutes an integral part of the
Agreement and evidences our further agreement with
the matters set forth below. All terms used
herein and in the Agreement and not defined
herein, shall have the same meaning as in the
Agreement.
2.0 Manuals on CD-ROM
2.1 Bombardier and Buyer are aware that
Bombardier is currently in the process of
investigating and bringing on-line CD-ROM
versions of various manuals. Bombardier
hereby commits that in the event that it is
able to successfully and cost-effectively
complete this program, it will provide Buyer
with CD-ROM versions of Buyer's technical
publications --------------------------------
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3.0 ---------------------------------------------
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4.0 --------------------------------------------------
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5.0 The provisions of this Letter Agreement are
personal to Buyer and shall not be assigned or
otherwise disposed of by Buyer except as part of
an assignment of the Agreement expressly permitted
by Article 20 of the Agreement.
6.0 This Letter Agreement constitutes an integral part
of the Agreement and subject to the terms and
conditions contained therein.
7.0 In the event of the Termination of the Agreement,
this Letter Agreement shall become automatically
null and void.
Should there be any inconsistency between this Letter
Agreement and the Agreement with respect to the subject
matter covered by the terms hereof, then this Letter
Agreement shall prevail.
Yours very truly,
BOMBARDIER INC.
________________________
Date:_____________
Michel Bourgeois
Vice President, Contracts
Acknowledged and Accepted
Atlantic Coast Airlines
________________________
Date:_____________
Kerry B. Skeen
President & C.E.O.
July 29, 1999
Atlantic Coast Airlines
515A Shaw Road,
Dulles, Virginia,
U.S.A. 20166
Gentlemen,
Letter Agreement No. 006 to Purchase Agreement No. PA-
0454 dated July 29, 1999 (the "Agreement" between
Bombardier Inc. ("Bombardier") and Atlantic Coast
Airlines ("Buyer") relating to the purchase of six (6)
Canadair Regional Jet Aircraft (the "Aircraft")
Subject: Spares Credit
1.0 This letter constitutes an integral part of the
Agreement and evidences our further agreement with
the matters set forth below. All terms used
herein and in the Agreement and not defined
herein, shall have the same meaning as in the
Agreement.
2.0 --------------------------------------------------
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3.0 The provisions of this Letter Agreement are
personal to Buyer and shall not be assigned or
otherwise disposed of by Buyer except as part of
an assignment of the Agreement expressly permitted
in Article 20 of the Agreement.
4.0 This Letter Agreement constitutes an integral part
of the Agreement and subject to the terms and
conditions contained therein.
5.0 In the event of the Termination of the Agreement,
this Letter Agreement shall become automatically
null and void with respect to any undelivered
Aircraft.
Should there be any inconsistency between this Letter
Agreement and the Agreement with respect to the subject
matter covered by the terms hereof, then this Letter
Agreement shall prevail.
Yours very truly,
BOMBARDIER INC.
________________________
Date:_____________
Michel Bourgeois
Vice President, Contracts
Acknowledged and Accepted
Atlantic Coast Airlines
________________________
Date:_____________
Kerry B. Skeen
President & C.E.O.
http://www.aerospace.bombardier.com
July 29, 1999
Atlantic Coast Airlines
515A Shaw Road
Dulles, Virginia,
U.S.A. 20166
Gentlemen,
Letter Agreement No. 007 to Purchase Agreement No. PA-0454
dated July 29, 1999 (the "Agreement" between Bombardier Inc.
("Bombardier") and Atlantic Coast Airlines ("Buyer")
relating to the purchase of three (3) Canadair Regional Jet
Aircraft (the "Aircraft")
Subject: Taxes, Duties And Licenses
1.0 This letter constitutes an integral part of the
Agreement and evidences our further agreement with the
matters set forth below. All terms used herein and in
the Agreement and not defined herein, shall have the
same meaning as in the Agreement.
2.0 The parties contemplate that at time of delivery, the
Aircraft will be sold to a United States company or
other USA entity (the "Lessor"), and directly exported
from Canada and subsequently leased to Buyer. --------
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5.0 The provisions of this Letter Agreement are personal to
Buyer and shall not be assigned or otherwise disposed
of by Buyer except as part of an assignment of the
Agreement expressly permitted by Article 30 of the
Agreement without the prior written consent of
Bombardier.
6.0 This Letter Agreement constitutes an integral part of
the Agreement and subject to the terms and conditions
contained therein.
7.0 In the event of the Termination of the Agreement, this
Letter Agreement shall become automatically null and
void.
Should there be any inconsistency between this Letter
Agreement and the Agreement with respect to the subject
matter covered by the terms hereof, then this Letter
Agreement shall prevail.
Yours very truly,
BOMBARDIER INC.
____________________________ Date:__________________________
Michel Bourgeois ___
Vice President, Contracts
Acknowledged and Accepted
Atlantic Coast Airlines
____________________________ Date:__________________________
Kerry B. Skeen ___
President & C.E.O.
July 29, 1999
Atlantic Coast Airlines
515A Shaw Road
Dulles, Virginia,
U.S.A. 20166
Gentlemen,
Letter Agreement No. 008 to Purchase Agreement No. PA-
0454 dated July 29, 1999 (the "Agreement" between
Bombardier Inc. ("Bombardier") and Atlantic Coast
Airlines ("Buyer") relating to the purchase of six (6)
Canadair Regional Jet Aircraft (the "Aircraft")
Subject: Airworthiness Directives
1.0Intent
In consideration of Buyer entering into the above-
referenced Agreement, Bombardier states that it is its
intention to incorporate before delivery of the Aircraft
any Mandatory Modification Service Bulletins outstanding
on the Aircraft. --------------------------------------
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2.0Applicability
The provisions of this Letter Agreement will apply to
mandatory Airworthiness Directives ("AD"), and resulting
service bulletins, issued by the DOT and/or the FAA
pursuant to applicable regulations prior to the time of
delivery of any Aircraft ("Mandatory Modification
Service Bulletin").
3.0Conditions
For any Mandatory Modification Service Bulletin not
incorporated on the Delivery Date, as defined in Article
2.0 above, Bombardier shall, subject to the provisions
of Article 8.5 of the Agreement, -----------------------
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---------------------- as provided in Article 4 hereof.
4.0----------------------------------------------------
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5.0 This letter constitutes an integral part
of the Agreement and evidences our
further agreement with the matters set
forth below. All terms used herein and
in the Agreement and not defined herein,
shall have the same meaning as in the
Agreement.
6.0 The provisions of this Letter Agreement
are personal to Buyer and shall not be
assigned or otherwise disposed of by
Buyer except as part of an assignment of
the Agreement expressly permitted in
Article 20 of the Agreement.
7.0 In the event of the termination of the
Agreement, this Letter Agreement shall
become automatically null and void
unless this Agreement is terminated by
Buyer pursuant to Article 16.1 or 16.2
as a result of a default or breach of
this Agreement by Bombardier, in which
event the terms and conditions of this
Letter Agreement will continue to apply
to the Aircraft delivered prior to the
date of termination.
Should there be any inconsistency between
this Letter Agreement and the Agreement with
respect to the subject matter covered by the
terms hereof, then this Letter Agreement
shall prevail.
Yours very truly,
BOMBARDIER INC.
________________________
Date:_____________
Michel Bourgeois
Vice President, Contracts
Acknowledged and Accepted
Atlantic Coast Airlines
________________________
Date:_____________
Kerry B. Skeen
President & C.E.O.
July 29, 1999
Atlantic Coast Airlines
515A Shaw Road
Dulles, Virginia,
U.S.A. 20166
Gentlemen,
Letter Agreement No. 009 to Purchase Agreement No. PA-
0454 dated July 29, 1999 (the "Agreement" between
Bombardier Inc. ("Bombardier") and Atlantic Coast
Airlines ("Buyer") relating to the purchase of six (6)
Canadair Regional Jet Aircraft (the "Aircraft")
Subject: Reconciliation
1.0The parties recognize that in the course of the
administration of this Agreement, ----------------------
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4.0This letter constitutes an integral part of the
Agreement and evidences our further agreement with the
matters set forth below. All terms used herein and in
the Agreement and not defined herein, shall have the
same meaning as in the Agreement.
5.0The provisions of this Letter Agreement are personal to
Buyer and shall not be assigned or otherwise disposed of
by Buyer except as part of an assignment of the
Agreement (in whole not in part) expressly permitted
under Article 20 of the Agreement and otherwise such
consent shall not be unreasonably withheld.
6.0In the event of the Termination of the Agreement, this
Letter Agreement shall become automatically null and
void.
7.0Should there be any inconsistency between this Letter
Agreement and the Agreement with respect to the subject
matter covered by the terms hereof, then this Letter
Agreement shall prevail.
Yours very truly,
BOMBARDIER INC.
________________________
Date:_____________
Michel Bourgeois
Vice President, Contracts
Acknowledged and Accepted
Atlantic Coast Airlines
________________________
Date:_____________
Kerry B. Skeen
President & C.E.O.
July 29, 1999
Atlantic Coast Airlines
515A Shaw Road,
Dulles, Virginia,
U.S.A. 20166
Gentlemen,
Letter Agreement No. 10 to Purchase Agreement No. PA-
0454 dated July 29, 1999 (the "Agreement") between
Bombardier Inc. ("Bombardier") and Atlantic Coast
Airlines ("Buyer") relating to the purchase of six
(6) Canadair Regional Jet Aircraft (the
"Aircraft")
Subject: Spare Parts Price Catalogue
This letter constitutes an integral part of the
Agreement and evidences our further agreement with
the matters set forth below. All terms used herein
and in the Agreement and not defined herein, shall
have the same meaning as in the Agreement.
1.0 In consideration of Buyer having entered into the
above referenced Agreement, Bombardier hereby
confirms, ----------------------------------------
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2.0 In the event that during -------------------------
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3.0 In reference to Article 2 above, Bombardier and
Buyer shall mutually agree on the ----------------
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4.0 Except as provided for in Article 20.1 of the
Agreement, the provisions of this Letter Agreement
are personal to Buyer and shall not be assigned or
otherwise disposed of by Buyer without the prior
written consent of Bombardier.
5.0 This Letter Agreement constitutes an integral part
of the Agreement and is subject to the terms and
conditions contained therein. To the extent of
any inconsistency or conflict between this Letter
Agreement and the Agreement, this Letter Agreement
shall prevail.
Yours truly,
BOMBARDIER INC.
________________________
Date:_____________
Michel Bourgeois
Vice President, Contracts
Acknowledged and Accepted
Atlantic Coast Airlines
________________________
Date:_____________
Kerry B. Skeen
President & C.E.O.
SCHEDULE 1
ECONOMIC ADJUSTMENT FORMULA IN RESPECT OF
Bombardier PARTS
The rate of published escalation applicable between
succeeding periods for which the Spare Parts Price
Catalogue is published to which reference is made in
Letter Agreement No. 017 will be calculated using the
following formula:
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July 29, 1999
Atlantic Coast Airlines
515A Shaw Road,
Dulles, Virginia,
U.S.A. 20166
Gentlemen,
Letter Agreement No. 011 to Purchase Agreement No. PA-
0454 dated July 29, 1999 (the "Agreement" between
Bombardier Inc. ("Bombardier") and Atlantic Coast
Airlines ("Buyer") relating to the purchase of six (6)
Canadair Regional Jet Aircraft (the "Aircraft")
Subject: Cargo Floorboards
Gentlemen:
This letter constitutes an integral part of the
Agreement and evidences our further agreement with the
matters set forth below. All terms used herein and in
the Agreement and not defined herein, shall have the
same meaning as in the Agreement.
1. --------------------------------------------------
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5. The provisions of this Letter Agreement are
personal to Buyer and shall not be assigned or
otherwise disposed of by Buyer except as part of an
assignment of the Agreement expressly permitted by
Article 20 of the Agreement.
6. This Letter Agreement constitutes an integral part
of the Agreement and subject to the terms and
conditions contained therein.
7. In the event of the Termination of the Agreement,
this Letter Agreement shall become automatically null
and void.
Should there be any inconsistency between this Letter
Agreement and the Agreement with respect to the subject
matter covered by the terms hereof, then this Letter
Agreement shall prevail.
Yours very truly,
BOMBARDIER INC.
________________________
Date:_____________
Michel Bourgeois
Vice President, Contracts
Acknowledged and Accepted
ATLANTIC COAST AIRLINES
________________________
Date:_____________
Kerry B. Skeen
President & C.E.O.