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EXHIBIT 10.16
PURCHASE AGREEMENT NO. DSP/AJV-042/95
EMBRAER- EMPRESA BRASILEIRA
DE AERONAUTICA S.A.
AND
SKYWEST AIRLINES, INC.
2
I N D E X
ARTICLE PAGE
- ------- ----
1. DEFINITIONS 1
2. SUBJECT 2
3. PRICE 3
4. PAYMENT 3
5. FINANCING 4
6. DELIVERY 7
7. CERTIFICATION 8
8. ACCEPTANCE AND TRANSFER OF OWNERSHIP 8
9. STORAGE CHARGE 9
10. DELAYS IN DELIVERY 10
11. INSPECTION AND QUALITY CONTROL 12
12. CHANGES 13
13. WARRANTY 14
14. TECHNICAL ASSISTANCE SERVICES 15
15. SPARE PARTS POLICY 15
16. PUBLICATIONS 16
17. ASSIGNMENT 16
18. RESTRICTIONS AND PATENT INDEMNITY 16
19. MARKETING PROMOTIONAL RIGHTS 17
20. TAXES 17
21. APPLICABLE LAW 17
22. ARBITRATION 17
23. TERMINATION 18
24. INDEMNITY 20
25. NOTICES 20
26. CONFIDENTIALITY 21
27. INTEGRATED AGREEMENT 21
28. NEGOTIATED AGREEMENT 21
29. COUNTERPARTS 21
30. ENTIRE AGREEMENT 22
ATTACHMENTS:
"A" - AIRCRAFT TECHNICAL DESCRIPTION AND AIRCRAFT SPECIFIC
CONFIGURATION
"B" - AIRCRAFT FINISHING, REGISTRATION MARKS, FERRY
EQUIPMENT, SPARE PARTS POLICY, AND LIST OF PUBLICATIONS
"C" - WARRANTY CERTIFICATE - MATERIAL AND WORKMANSHIP
"D" - EMB-120 BRASILIA PRICE ESCALATION FORMULA
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PURCHASE AGREEMENT NO. DSP/AJV-042/95
THIS AGREEMENT IS ENTERED INTO THIS 9th DAY OF, June, 1995, BY AND BETWEEN
EMBRAER - EMPRESA BRASILEIRA DE AERONAUTICA S.A. AND SKYWEST AIRLINES, INC., FOR
THE PURCHASE AND SALE OF EMBRAER AIRCRAFT.
THE SALE COVERED BY THIS AGREEMENT SHALL BE GOVERNED SOLELY BY THE TERMS AND
CONDITIONS HEREIN SET FORTH, AS WELL AS BY THE PROVISIONS SET FORTH IN THE
ATTACHMENTS HERETO.
THIS AGREEMENT SHALL NOT BE EFFECTIVE UNLESS AND UNTIL IT IS SIGNED BY AN
AUTHORIZED OFFICER OF SKYWEST AIRLINES, INC. AND EXECUTED BY TWO AUTHORIZED
OFFICERS OF EMBRAER - EMPRESA BRASILEIRA DE AERONAUTICA S.A.
1. DEFINITIONS:
For the purpose of this Agreement, the following definitions are hereby
adopted by the parties:
a. EMBRAER - shall mean EMBRAER - EMPRESA BRASILEIRA DE AERONAUTICA
S.A., a Brazilian corporation with its principal place of
business at Sao Jose dos Campos, Sao Paulo, Brazil.
b. BUYER - shall mean Skywest Airlines, Inc., a company with its
principal place of business at 444 South River Road, St. George,
Utah 84770-2086.
c. PARTIES - shall mean EMBRAER and BUYER.
d. AIRCRAFT - shall mean the EMB-120ER "BRASILIA" aircraft or, where
there is more than one such aircraft, each of the EMB-120ER
"BRASILIA" aircraft manufactured by EMBRAER, for sale to BUYER
pursuant to this Agreement, according to the Technical
Description number TD-120/9401, dated September 1994, and the
AIRCRAFT Specific Configuration constituting the Attachment "A"
to this Agreement, and equipped with Pratt & Whitney Canada Inc.
PW-118A engines, according to PW-118A Turboprop Engine
Specification no. 923, dated September 4, 1987, supplemented by
Supplemental No. 923 MMOO, dated September 4, 1989. The
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Technical Description and AIRCRAFT Specific Configuration subject
of the Attachment "A" hereto, shall be substituted by BUYER's
AIRCRAFT Technical Specification on or before three (3) months
prior to the THIRD AIRCRAFT CONTRACTUAL DELIVERY DATE.
e. SERVICES - shall mean technical assistance services as specified
in Article 14 herein.
f. CONTRACTUAL DELIVERY DATE - shall mean the delivery date referred
to in Article 6 of this Agreement.
g. ACTUAL DELIVERY DATE - shall mean, in respect of each AIRCRAFT,
the date on which BUYER obtains title to that AIRCRAFT in
accordance with Article 8 hereof.
h. CTA - shall mean the Aerospace Technical Center of the Brazilian
Ministry of Aeronautics.
i. FAA - shall mean the Federal Aviation Administration.
j. BASIC PRICE - shall mean the AIRCRAFT total price, effective on
the date of execution of this Purchase Agreement, as referred to
in its Article 3.
k. PURCHASE PRICE - shall mean the AIRCRAFT total price, effective
on the relevant AIRCRAFT CONTRACTUAL DELIVERY DATE, resulting
from the application of the Escalation Formula established in
Attachment "D" hereto.
2. SUBJECT:
This Agreement covers:
a. Ten (10) AIRCRAFT.
b. SERVICES as specified in Article 14 herein.
These AIRCRAFT refer to the exercise by BUYER of its option to purchase
EMB-120 Brasilia AIRCRAFT according to the provisions of Purchase
Agreement No. DSP/AJV-30B/93, Article 26 - Groups I and II
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3. PRICE:
a. BUYER agrees to pay EMBRAER, in United States dollars, the
following prices:
1. Relative to the AIRCRAFT the BASIC PRICE of US$ 65,974,820
(sixty-five million nine hundred seventy-four thousand,
eight hundred twenty United States dollars), at a unit
BASIC PRICE of US$ 6,597,482 (six million five hundred
ninety-seven thousand, four hundred eighty-two United
States dollars).
2. Relative to SERVICES: The SERVICES as specified in Article
14 to be provided at no cost to BUYER. All other services
shall be billed to BUYER in accordance with EMBRAER's
prevailing rates therefor.
b. The BASIC PRICE as indicated in item "a.1" hereinabove shall be
escalated according to the formula established in Attachment "D"
hereto. Such price as escalated shall be the AIRCRAFT PURCHASE
PRICE and will be provided to BUYER two (2) months prior to each
AIRCRAFT CONTRACTUAL DELIVERY DATE.
4. PAYMENT:
The prices specified in the previous Article shall be paid by BUYER as
follows:
a. AIRCRAFT:
1. An initial non-refundable deposit of US$ 100,000 (one
hundred thousand United States dollars) per AIRCRAFT is
due and payable to EMBRAER upon execution of this
Agreement.
2. An additional payment of US$ 229,874 (two hundred
twenty-nine thousand, eight hundred seventy-four United
States dollars) per each of the FIRST through THIRD
AIRCRAFT is due and payable to EMBRAER upon execution of
this Agreement.
3. A progress payment of US$ 229,874 (two hundred twenty-nine
thousand, eight hundred seventy-four United States
dollars) per each of the FOURTH through TENTH AIRCRAFT
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is due and payable nine (9) months prior to each relevant
AIRCRAFT CONTRACTUAL DELIVERY DATE
4. A progress payment of US$ 329,874 (three hundred
twenty-nine thousand, eight hundred seventy-four United
States dollars) per AIRCRAFT is due and payable five (5)
months prior to each relevant AIRCRAFT CONTRACTUAL
DELIVERY DATE
5. A progress payment of US$ 329,874 (three hundred
twenty-nine thousand, eight hundred seventy-four United
States dollars) per AIRCRAFT is due and payable two (2)
months prior to each relevant AIRCRAFT CONTRACTUAL
DELIVERY DATE,
6. The difference between fifteen percent (15%) of each
relevant AIRCRAFT PURCHASE PRICE and the amounts
previously paid pursuant to items "a.1" through "a.5"
hereinabove, is due and payable ten (10) calendar days
prior to the CONTRACTUAL DELIVERY DATE of each relevant
AIRCRAFT.
7. The balance of each AIRCRAFT PURCHASE PRICE shall become
due and payable upon acceptance of each relevant AIRCRAFT
by BUYER.
b. Interest will accrue at the rate of one percent (1%) per month or
any part thereof on any amount not paid to EMBRAER as set forth
in paragraph 4.a of this Article from the date due until paid.
5. FINANCING:
a. The amounts specified in Article 4.a.7 of the Purchase Agreement
shall be paid in cash. Such amounts may also be paid by BUYER to
EMBRAER, in cash, by means of an approved financing to be
obtained by BUYER, hereinafter called BUYER'S CREDIT.
b. If requested by BUYER, EMBRAER will exert its best efforts to
assist BUYER in applying for and structuring such BUYER'S CREDIT
financing in compliance with the financing terms of the Brazilian
Export Financing Program (PROEX) as effective at the date of such
request. BUYER understands that EMBRAER does not guaranty the
availability of PROEX or the terms of such financing program and
that the application of BUYER shall be subject to the sole
approval of
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the Brazilian Export Authority on a case-by-case basis (i.e.,
EMBRAER shall incur no liability and BUYER shall have no recourse
against EMBRAER if the application is not approved by the
Brazilian Export Authority, or if it is approved, but only on
different terms and conditions than any previous approval by the
Brazilian Export Authority). For illustrative purposes only, the
last PROEX approval was on the following terms (it being
understood that any approval for BUYER may differ and change
without previous notice once each application is examined
according to the sole discretion and criteria of the Brazilian
Export Authority, on a case-by-case basis):
1. Financing up to eighty-five percent (85%) of the AIRCRAFT
PURCHASE PRICE;
2. Financing Period: ten (10) years;
3. Net Annual Interest Rate: the amount will be calculated
over the unpaid balance at each principal repayment date.
The interest rate will be, at BUYER's option either:
a) Fixed Interest Rate: Libor rate published by
Central Bank of Brazil, for the total term of the
financing, valid on the AIRCRAFT ACTUAL DELIVERY
DATE; or
b) Floating Interest Rate: Libor rate published by
Central Bank of Brazil, for the term of each
installment period, (i.e., Libor for six months
operations) valid on the AIRCRAFT ACTUAL DELIVERY
DATE and on the first day of each interest period.
4. Principal repayments in equal semi-annual installments,
interest payable on the same maturity as the installments
on the outstanding balances, with the first payment
becoming due one hundred eighty (180) days after the
AIRCRAFT ACTUAL DELIVERY DATE and subsequent payments
becoming due at one hundred eighty (180) day intervals
thereafter.
c. If the financing terms and conditions as approved by the
Brazilian Export Authority are accepted by BUYER, the financing
shall be contracted by BUYER at a financing institution which
shall follow all procedures determined by the PROEX in order to
obtain its benefits. If requested by the financial institution,
EMBRAER will exert its best
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efforts to assist such financial institution to comply with the
conditions of the PROEX.
d. Whether or not the BUYER'S CREDIT will be utilized in conjunction
with the PROEX, the payment of the amounts referred to in item
"a" hereinabove shall be paid to EMBRAER in immediately available
funds, by a tested telegraphic transfer order or by other means
as may be determined by EMBRAER.
e. On or before forty-five (45) calendar days of the relevant
AIRCRAFT CONTRACTUAL DELIVERY DATE, BUYER shall provide EMBRAER
with a binding commitment letter, in a form and from a prime bank
or similar financial institution acceptable to EMBRAER,
evidencing that the relevant BUYER'S CREDIT shall have been
approved. If there is no evidence of such approval, EMBRAER shall
have the option, at its sole discretion, to postpone the relevant
AIRCRAFT CONTRACTUAL DELIVERY DATE for the same number of days
that BUYER shall take to provide EMBRAER a written notice
concerning such evidence, plus an additional period of fifteen
(15) days as it shall be necessary for EMBRAER, due to such
BUYER's delay, to adjust its scheduled production for the purpose
of delivering the AIRCRAFT to BUYER.
f. In the event that a BUYER'S CREDIT is not approved on or before
forty-five (45) calendar days of the relevant AIRCRAFT
CONTRACTUAL DELIVERY DATE, without prejudice to EMBRAER's option
as specified in item "e" above, BUYER shall have the option, to
be exercised by a written communication to be received by EMBRAER
on or prior to forty (40) calendar days of the AIRCRAFT
CONTRACTUAL DELIVERY DATE, to either:
1. Pay the due amounts as specified in item "a" hereinabove,
using BUYER's own resources or,
2. Pay the referred to amounts using alternate financing
scheme to be obtained by BUYER and submitted to EMBRAER
for approval.
g. The payment referred to in items "f.1" and "f.2" hereinabove
shall be made by means of an irrevocable letter of credit to be
opened by BUYER no later than five (5) days before the AIRCRAFT
ACTUAL DELIVERY DATE, as per the following terms and conditions:
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1. In favor of EMBRAER - Empresa Brasileira de Aeronautica
S.A.;
2. For account of Skywest Airlines, Inc.;
3. Sum available by presentation of sight draft accompanied
by one copy of the "Certificate of Acceptance and Transfer
of Title and Risks" relative to the AIRCRAFT, signed by
BUYER or its authorized representative;
4. Credit to be negotiated only at financial institutions
with offices located in Sao Jose dos Campos or in Sao
Paulo, State of Sao Paulo, Brazil;
5. To remain valid until sixty (60) calendar days following
the AIRCRAFT ACTUAL DELIVERY DATE;
6. To permit partial shipments, if necessary;
7. To be issued by a prime bank accepted by EMBRAER.
For purposes of EMBRAER's previous examination and approval, a
draft of the terms of such letter of credit shall be presented by
BUYER to EMBRAER on or before forty-five (45) calendar days of an
AIRCRAFT CONTRACTUAL DELIVERY DATE.
h. The options and procedures specified hereinabove shall also be
applied in the event that the financing is approved for an amount
less than the amount applied for.
6. DELIVERY:
Subject to payment in accordance with Article 4 hereof and the
provisions of Articles 5, 8 and 10 hereof, the AIRCRAFT shall be offered
by EMBRAER to BUYER, by means of a written notice, for inspection,
acceptance and subsequent delivery, in Fly Away Factory ("F.A.F.")
conditions, at Sao Jose dos Campos, State of Sao Paulo, Brazil,
according to the following schedule:
1. FIRST AIRCRAFT - on or before October 20, 1995
2. SECOND AIRCRAFT - on or before December 10, 1995
3. THIRD AIRCRAFT - on or before December 20, 1995
4. FOURTH AIRCRAFT - on or February 20, 1996
5. FIFTH AIRCRAFT - on or before May 20, 1996
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6. SIXTH AIRCRAFT - on or before August 20, 1996
7. SEVENTH AIRCRAFT - on or before September 20, 1996
8. EIGHTH AIRCRAFT - on or before November 20, 1996
9. NINTH AIRCRAFT - on or before November 29, 1996
10. TENTH AIRCRAFT - on or before January 20, 1997
7. CERTIFICATION:
The AIRCRAFT shall be delivered to BUYER with an export certificate of
airworthiness issued by CTA complying with the requirements of FAR-25
and the requirements of the FAA. The condition of the AIRCRAFT on
delivery and the documentation delivered with the AIRCRAFT, including
the above-mentioned export certificate of airworthiness, shall be
sufficient to enable BUYER to obtain a standard certificate of
airworthiness for the AIRCRAFT. Subject to the above, it shall be
BUYER's responsibility to obtain such standard certificate of
airworthiness for the AIRCRAFT.
8. ACCEPTANCE AND TRANSFER OF OWNERSHIP:
a. Unless BUYER is notified otherwise, the AIRCRAFT shall be
delivered in accordance with the provisions and schedules
specified in Article 6 herein. EMBRAER shall give BUYER fifteen
(15) calendar days advance notice of the date on which EMBRAER
considers that each AIRCRAFT will be ready for delivery. Upon
successful completion of ground and flight tests performed by
EMBRAER, BUYER will receive a written confirmation that the
AIRCRAFT concerned is ready for delivery, on which date BUYER
shall promptly inspect such AIRCRAFT.
b. BUYER shall be allowed a reasonable period of time to inspect and
conduct an acceptance flight of each AIRCRAFT prior to its
delivery. The fuel for the AIRCRAFT's acceptance flight will be
provided by EMBRAER. After such acceptance flight, each AIRCRAFT
will be delivered by EMBRAER to BUYER in accordance with Article
6 hereof with its wing tanks full.
c. If BUYER finds and AIRCRAFT acceptable, BUYER shall promptly make
the due payments, if any, according to Article 4 hereof and
accept delivery of such AIRCRAFT, whereupon the necessary title
and risk transfer documents shall be executed in order to effect
title transfer.
d. If BUYER declines to accept an AIRCRAFT, BUYER shall immediately
give EMBRAER written notice of all specific reasons for
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such refusal and EMBRAER shall have five (5) business days,
commencing on the first business day after receipt of such
notice, to take all necessary actions in order to resubmit the
AIRCRAFT to BUYER for reinspection.
e. BUYER shall reinspect the AIRCRAFT within five (5) calendar days
after receipt of notice from EMBRAER that all necessary actions
were taken. This period, as well as the one mentioned in item "d"
above, shall not be considered as part of the thirty (30)
calendar days grace period provided for in Article 10.b.1 hereof.
f. Should BUYER fail to comply with the procedures specified in any
of the preceding items, EMBRAER shall not be held liable for any
delays in delivery.
g. Should BUYER fail to perform the acceptance and receipt of title
of the AIRCRAFT within ninety (90) calendar days to be computed
from the notification specified in item "a" above, EMBRAER shall
be entitled to either terminate this Agreement pursuant to
Article 23.f hereinbelow or, at its sole discretion, renegotiate
the terms of this Agreement with BUYER.
9. STORAGE CHARGE:
a. A storage charge equal to zero point zero three percent (0.03%)
of the relevant AIRCRAFT BASIC PRICE per calendar day shall be
charged by EMBRAER to BUYER commencing on the fifteenth (15th)
calendar day after:
1. BUYER's failure to perform inspection or reinspection of
an AIRCRAFT, per the date or time period specified in
writing by EMBRAER, according to Articles 6 and/or 8
hereof, as applicable.
2. BUYER's acceptance of an AIRCRAFT when BUYER defaults in
the fulfillment of any payment due in taking title to such
AIRCRAFT immediately thereafter.
b. A storage charge equal to zero point zero three percent (0.03%)
of the relevant AIRCRAFT BASIC PRICE per calendar day shall be
charged by EMBRAER to BUYER commencing on the thirtieth (30th)
calendar day after BUYER's failure after title transfer to remove
an AIRCRAFT from EMBRAER's facilities.
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c. In the event an AIRCRAFT CONTRACTUAL DELIVERY DATE must be
extended by EMBRAER from that which is designated in Article 6
hereof due to BUYER's failure to perform any action or provide
any information contemplated by this Agreement, other than the
ones specified in the preceding item", the storage charge shall
commence on the fifteenth (15th) calendar day after the
CONTRACTUAL DELIVERY DATE relative to such AIRCRAFT.
d. BUYER undertakes to pay the storage charge, as set forth in items
"a", "b" or "c" hereinabove, as applicable, in U.S. dollars per
each month of delay or part thereof, upon presentation of an
invoice by EMBRAER.
10. DELAYS IN DELIVERY:
a. EXCUSABLE DELAYS:
1. EMBRAER shall not be held liable or be found in default
for any delays in the delivery of an AIRCRAFT or in the
performance of any act to be performed by EMBRAER under
this Agreement, resulting from, but not restricted to, the
following events or occurrences hereinafter referred to as
"excusable delays": (a) force majeure (including, but not
limited to, war or state of war, civil war, insurrection,
fire, accident, explosion, flood, act of government,
governmental priorities, requisition, strike, labor
troubles); (b) inability despite due and timely diligence
to procure any materials, equipment, accessories, parts or
means of transport; or (c) any delay resulting from any
failure by BUYER to perform any action or provide any
information contemplated by this Agreement or delays
resulting from any other cause to the extent it is beyond
EMBRAER's control or does not result from EMBRAER's fault
or negligence.
2. Within sixty (60) calendar days after the occurrence of
any of the above-mentioned events which constitute causes
of excusable delays in delivery of an AIRCRAFT or in the
performance of any act to be performed by EMBRAER under
this Agreement, EMBRAER undertakes to send a written
notice to BUYER, with requested acknowledgment of receipt,
including a description of details involved and an
estimate of the effects expected upon the timing of the
performance of its contractual obligations.
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3. Any such delays shall extend the time for delivery of an
AIRCRAFT by the same number of calendar days required for
the cause of delay to be remedied. EMBRAER undertakes to
use its best efforts whenever applicable to avoid or
remove any such causes of delay and to minimize their
effect on the CONTRACTUAL DELIVERY DATE of an AIRCRAFT.
4. If the cause of such excusable delays is such as to last
longer than three hundred (300) calendar days or to render
the performance of this Agreement impossible, then this
Agreement shall be considered terminated without
liability, to either party, except as provided for in
Article 23.b hereof.
b. NON-EXCUSABLE DELAYS:
1. If the delivery of an AIRCRAFT is delayed, without any
excusable reason, by more than thirty (30) calendar days
after the CONTRACTUAL DELIVERY DATE for such AIRCRAFT,
BUYER will be entitled to claim from EMBRAER liquidated
damages equal to zero point zero three percent (0.03%) of
the BASIC PRICE for each delayed AIRCRAFT, for each
calendar day of delay in excess of the above-mentioned
thirty (30) calendar days, up to the date EMBRAER notices
BUYER such AIRCRAFT will be ready for delivery via written
notice per Article 8.a hereof, it being understood that
such liquidated damages will not, in any event, exceed
three percent (3%) of the BASIC PRICE of the delayed item.
2. The grace period of thirty (30) calendar days granted by
BUYER to EMBRAER as mentioned herein shall only prevail
should BUYER receive a written notification from EMBRAER
advising the expected delay and provided such written
notification is presented to BUYER sixty (60) calendar
days prior to the relevant AIRCRAFT CONTRACTUAL DELIVERY
DATE.
3. It is agreed between the PARTIES that if, with respect to
a delayed AIRCRAFT, EMBRAER does not receive a claim for
liquidated damages as mentioned in item "b.1" above from
BUYER within ninety (90) calendar days after the
CONTRACTUAL DELIVERY DATE of such AIRCRAFT, BUYER shall be
deemed to have fully waived its rights to such liquidated
damages.
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c. DELAY DUE TO LOSS OR STRUCTURAL DAMAGE OF THE AIRCRAFT:
Should any AIRCRAFT be destroyed or damaged before its acceptance
to the extent that it becomes commercially useless, BUYER may, at
its sole discretion, either take a replacement AIRCRAFT at a
later delivery date to be agreed by the PARTIES or terminate this
Agreement with respect to such AIRCRAFT by notice to EMBRAER
given in accordance with Article 25 hereof, without any liability
to either party.
11. INSPECTION AND QUALITY CONTROL:
a. BUYER is hereby allowed to have one or more authorized
representatives at EMBRAER's facilities in order to assure that
the AIRCRAFT and SERVICES were developed in accordance with this
Agreement and according to all applicable quality control
standards.
b. BUYER shall present and communicate to EMBRAER the names of its
authorized representatives, by means of a written notice, at
least thirty (30) calendar days prior to the earliest delivery
date specified in Article 6 hereof.
c. Such representatives shall also be authorized to sign the
acceptance and transfer of title and risk documents and accept
delivery of the AIRCRAFT pursuant to Article 8 hereof.
d. For the purposes subject hereof, EMBRAER shall provide reasonable
communication facilities for BUYER's authorized representatives,
as well as the necessary tools, measuring devices, test equipment
and technical assistance as may be necessary to perform
acceptance tests.
e. It is agreed by the PARTIES that BUYER's authorized
representatives shall observe EMBRAER's administrative rules and
instructions while at EMBRAER's facilities.
f. The BUYER's authorized representatives shall be allowed
exclusively in those areas related to the subject matter hereof
and BUYER agrees to hold harmless EMBRAER from and against all
and any kind of liabilities in respect to such representatives,
for whom BUYER is solely and fully responsible under all
circumstances and in any instance.
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12. CHANGES:
a. Each AIRCRAFT will comply with the standards defined in the
Attachment "A" hereto and shall incorporate all modifications
which are classified as Airworthiness Directives (AD's) mandatory
by CTA or FAA or those agreed upon by BUYER and EMBRAER in
accordance with this Article 12.
b. All the specified tray-mounted avionic equipment installed in the
AIRCRAFT shall be of the latest modification standard made
available to EMBRAER by the relevant vendor at such time as not
to violate the delivery schedule of the AIRCRAFT. All other parts
will be of the latest modification standard available at the
moment of scheduled installation in the AIRCRAFT.
c. The PARTIES hereby agree that changes can be made by EMBRAER in
the design of the AIRCRAFT; the definition of which and its
respective classification shall be in compliance to the AIRCRAFT
Type Specification as follows:
1. Minor changes - defined as those modifications which shall
not adversely affect the AIRCRAFT in any of the following:
- Performance, weight or balance;
- Structural strength, flight qualities;
operation and/or characteristics;
- Interchangeability of parts;
- AIRCRAFT delivery and prices;
- Operational safety;
- Ease of maintenance;
- Noise and environmental control.
2. Major changes - defined as those modifications which
affect at least one of the topics mentioned in item "c.1"
hereinabove.
d. EMBRAER shall have the right, without the prior consent of BUYER,
to make minor changes, as referred to in item "c.1" hereinabove,
in the design of AIRCRAFT. The costs of any such changes shall be
borne by EMBRAER.
e. Major changes as referred to in item "c.2" hereinabove which are
classified as Airworthiness Directives (AD's) mandatory by CTA
and/or FAA shall be conveyed to BUYER by means of Service
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Bulletins, approved by said authorities and incorporated by
EMBRAER in all AIRCRAFT delivered or to be delivered to BUYER at
EMBRAER's own costs during the term of the AIRCRAFT's Warranty
Certificate validity, in a reasonable period of time. When flight
safety is affected, such changes will be immediately
incorporated.
EMBRAER shall not be liable for any delays in the AIRCRAFT
CONTRACTUAL DELIVERY DATE resulting from the execution of any
change classified as mandatory by CTA or FAA when the AIRCRAFT
shall have already surpassed the specific production stage
affected by the incorporation of said change.
f. Major changes (any other than those which are Airworthiness
Directives mandatory as per item "e" above), any change developed
by EMBRAER as product improvement and any change required by
BUYER, including those changes required by BUYER's country
authorities as a consequence of alterations, amendments and/or
innovations of its present airworthiness regulations, shall be
considered as optional and, as such, the corresponding cost
proposals shall be submitted by EMBRAER to BUYER for
consideration and approval. Should BUYER not approve any such
change, it shall not be incorporated in the AIRCRAFT.
g. Any change made by EMBRAER in accordance with the preceding items
which affect the provisions of Attachment "A" hereto shall be
incorporated in said Attachment by means of an amendment. The
amendments shall be submitted to BUYER for signature thirty (30)
calendar days prior to the relevant AIRCRAFT CONTRACTUAL DELIVERY
DATE, a copy of which shall be received by EMBRAER, duly signed,
prior to the relevant AIRCRAFT ACTUAL DELIVERY DATE.
13. WARRANTY:
The materials and workmanship relative to the AIRCRAFT subject of this
Agreement will be warranted in accordance with the terms and conditions
specified in Attachment "C" hereto. If BUYER intends to place the
AIRCRAFT on lease to another party or to assign the rights and
obligations as specified in Article 17 hereof, it is BUYER's
responsibility to obtain EMBRAER's prior consent as well as to provide
EMBRAER written notice within five (5) business days of any changes as
to BUYER's designated lessee or assignee complying with Article 6 of the
Attachment "C" hereof.
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14. TECHNICAL ASSISTANCE SERVICES:
The inflight operational familiarization and technical support programs
specified below are being offered at no charge to BUYER, except for fuel
and any other operational expenses involved in flight training as well
as travel and lodging expenses of BUYER's trainees. Notwithstanding the
eventual use of the term "training" in this Article 14 or in the
Agreement, the intent of the SERVICES provided hereunder is to
familiarize BUYER's pilots with the operation of the AIRCRAFT. It is not
the intent of EMBRAER to provide basic training to any representatives
of BUYER.
Inflight Operational Familiarization - Provided that BUYER's pilots
previously complete the ground familiarization as regards AIRCRAFT
systems, weight and balance, performance and normal/emergency
procedures, as it shall be agreed with Embraer Aircraft Corporation
(EAC) to take place at its facilities in Ft. Lauderdale, Florida, United
States of America, inflight operational familiarization of not more than
five (5) hours per pilot for two (2) pilots per AIRCRAFT shall be
provided at EMBRAER's facilities in Sao Jose dos Campos, Sao Paulo,
Brazil or at such other location as EMBRAER shall reasonably designate.
Such inflight operational familiarization shall be performed in BUYER's
AIRCRAFT after delivery of such AIRCRAFT to BUYER pursuant to Articles 6
and 8 hereof. BUYER must give written notification to EMBRAER thirty
(30) calendar days in advance of BUYER's expected training schedules.
The PARTIES further understand and agree that in the event BUYER elects
not to take all or any portion of the technical assistance SERVICES
provided for herein, no refund or other financial adjustment of the
contract price will be made since such SERVICES are offered
free-of-charge as referred to in item "a.2" of Article 3 hereinabove.
Any other additional SERVICES shall depend on mutual agreement between
the PARTIES and shall be charged by EMBRAER accordingly.
The presence of BUYER's authorized trainees and representatives at
EMBRAER's facilities shall be allowed exclusively in those areas related
to the subject matter hereof and BUYER agrees to hold harmless EMBRAER
from and against all and any kind of liabilities in respect to such
trainees and representatives for whom BUYER is solely and fully
responsible under all aspects and in any instance.
Page 15 of 22
18
15. SPARE PARTS POLICY:
EMBRAER guarantees the supply of spare parts and Aircraft Ground
Equipment for the AIRCRAFT, in accordance with Article 4 of Attachment
"B" hereto, for a period of ten (10) years after production of the last
aircraft of the same type. Such spare parts and Aircraft Ground
Equipment shall be supplied according to the prevailing availability,
sale conditions, delivery schedule and effective price on the date of
acceptance by EMBRAER of the purchase order. The spare parts and
Aircraft Ground Equipment may be supplied either by EMBRAER or through
its subsidiaries or branch offices located abroad.
16. PUBLICATION:
a. Aircraft Publications - EMBRAER shall supply for each AIRCRAFT,
at no cost to BUYER, copies of operational and maintenance
publications applicable thereof in the English language and in
the quantities as specified in Article 5 of Attachment "B"
hereof. Such publications are issued under A.T.A. 100
Specification (as applicable) and are available in hard copies.
The revision service for these publications is provided
free-of-charge, including mailing services (except for air cargo
shipping), for the first two (2) years and subsequently at a
nominal fee. Such publications, except for one set of operational
publications supplied with each AIRCRAFT to accomplish
airworthiness requirements, will be delivered to BUYER no later
than one (1) months prior to the FIRST AIRCRAFT CONTRACTUAL
DELIVERY DATE.
b. Vendor Items Publications - With respect to vendor items
installed in the AIRCRAFT which have their own publications, the
BUYER will receive them in the quantity specified in Article 5 of
Attachment "B" hereto, in their original content and printed
form, directly from the suppliers, who are also in charge of
keeping them continuously updated through a direct communication
system with the BUYER.
17. ASSIGNMENT:
BUYER's rights and obligations hereunder may not be assigned without
EMBRAER's previous written consent.
18. RESTRICTIONS AND PATENT INDEMNITY:
This sale does not include the transfer of designs, copyrights, patents
and other similar rights to BUYER. Subject to BUYER's duty to
immediately
Page 16 of 22
19
advise EMBRAER of any alleged copyright or patent infringement, EMBRAER
shall indemnify and save BUYER harmless with respect to any claims made
against BUYER if the AIRCRAFT infringes copyright patents or the
proprietary rights of others.
19. MARKETING PROMOTIONAL RIGHTS:
EMBRAER shall have the right to show free of any charge, for marketing
purposes, the image of BUYER's AIRCRAFT, painted with BUYER's colors and
emblems, affixed in photographs, drawings, films, slides, audiovisual
works, models or any other medium of expression (pictorial, graphic, and
sculptural works), through all mass communications media such as
billboards, magazines, newspapers, television, movies, theaters, as well
as in posters, catalogs, models and all other kinds of promotional
material. In the event such AIRCRAFT is sold to or operated by or for
another company or person, EMBRAER shall be entitled to disclose such
fact, as well as to continue to show the image of the AIRCRAFT, free of
any charge, for marketing purposes, either with the original or the new
colors and emblems, unless otherwise notified, provided that such
notification shall be subject to the reasonable satisfaction and
agreement of EMBRAER. If accepted, said prohibition, however, shall in
no way apply to the promotional materials or pictorial, graphic or
sculptural works already existing or to any contract for the display of
such materials or works already binding EMBRAER at the time of receipt
of the notification.
The provisions of this Article shall be included in all future sales or
lease agreements concerning the AIRCRAFT.
20. TAXES:
EMBRAER shall pay all taxes arising from the sale subject of this
Agreement as may be imposed on it under the Brazilian laws. All other
taxes, imposts, fees, withholding taxes, stamp taxes and any other
similar or dissimilar taxes, as well as any duties as may be imposed on
the sale subject of this Agreement, shall be borne by BUYER.
21. APPLICABLE LAW:
This Agreement shall be construed in accordance with and its performance
shall be governed by the laws of the Federative Republic of Brazil.
22. ARBITRATION:
All disputes arising in connection with this Agreement shall be finally
settled by arbitration, to be conducted in Paris, France, under the
Rules of
Page 17 of 22
20
Conciliation and Arbitration of the International Chamber of Commerce by
one or more arbitrators appointed in accordance with said Rules.
23. TERMINATION:
a. Should either party fail to comply partially or completely with
its obligations hereunder, the other party shall be entitled to
give notice of such failure and to require that such failure be
remedied within the period specified in that notice, which period
shall not be less than five (5) calendar days. Should such
failure not be remedied within the period so specified, then the
party who gave notice of such failure shall be entitled to
terminate this Agreement provided always that the foregoing shall
not apply in any circumstances where a specific right of
termination is available or will be available upon the expiry of
a specific period of time. Should termination occur in accordance
with the foregoing, the defaulting party shall pay to the
non-defaulting party, as liquidated damages, an amount determined
by mutual agreement or by arbitration.
b. BUYER shall have the right to terminate this Agreement, in
respect to the relevant AIRCRAFT, upon the occurrence of any
excusable delay of three hundred (300) calendar days or longer
and any non-excusable delay of ninety (90) calendar days or
longer after such AIRCRAFT CONTRACTUAL DELIVERY DATE. Such right
to be exercisable by giving EMBRAER a written notice to such
effect no earlier than the three hundredth (300th) or ninetieth
(9Oth) calendar day as applicable. Upon receipt of such notice of
termination, EMBRAER shall return to BUYER an amount equal to the
amounts previously paid by BUYER relative to the relevant
AIRCRAFT less the value of equipment or services previously
delivered or performed by EMBRAER, it being hereby agreed by the
PARTIES that, in this case, no kind of other indemnity shall be
due by EMBRAER to BUYER.
c. In the event of a force majeure occurring prior to the ACTUAL
DELIVERY DATE of any AIRCRAFT which causes BUYER to determine not
to purchase such AIRCRAFT, BUYER may by written notice to
EMBRAER, terminate the Purchase Agreement with respect to such
AIRCRAFT, and BUYER shall only be liable to EMBRAER for the
following amounts on account of such AIRCRAFT:
Page 18 of 22
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----------------------------------------------------------------
IF CANCELLATION OCCURS LIABILITY OF BUYER TO
PRIOR TO THE FOLLOWING EMBRAER
NUMBER OF DAYS BEFORE PERCENTAGE OF THE
THE CONTRACTUAL PURCHASE PRICE OF THE
DELIVERY DATE AIRCRAFT
----------------------------------------------------------------
181 days or more 0%
----------------------------------------------------------------
121-180 days 1%
----------------------------------------------------------------
91-120 days 2%
----------------------------------------------------------------
61-90 days 3%
----------------------------------------------------------------
31 to 60 days 4%
----------------------------------------------------------------
30 days or less 5%
----------------------------------------------------------------
d. In the event BUYER cancels the purchase of any AIRCRAFT under
this Agreement due to the absolute unavailability of the
Brazilian Export Financing Program at the time of such AIRCRAFT
ACTUAL DELIVERY DATE, then BUYER shall not be liable to EMBRAER
for any amount on account of such AIRCRAFT, except for any value
of equipment or services previously delivered or performed by
EMBRAER in connection with such specific canceled AIRCRAFT.
e. EMBRAER agrees that BUYER has the option to terminate the
Purchase Agreement with no penalty assessed against BUYER by
EMBRAER, in the event EMBRAER fails to deliver any three (3)
consecutive AIRCRAFT due to force majeure reasons (and in case of
this item "e", excluding acts of government, governmental
priorities, requisition, strike and labor troubles from the
concept of force majeure) and/or if such delay is due to reasons
detailed in Article 10.a.1(b) (except to the extent that the
delay is as a consequence of a general work force strike of
EMBRAER or of a supplier of EMBRAER, if the supplier provides to
EMBRAER a major component of the AIRCRAFT) and for which Article
23.c has not been invoked, within sixty (60) days of each
relevant AIRCRAFT CONTRACTUAL DELIVERY DATE as specified in
Article 6 herein. If EMBRAER fails to deliver any three (3)
consecutive AIRCRAFT within such sixty (60) day period as above
mentioned, BUYER's right to terminate the Purchase Agreement may
be exercised by written notice to EMBRAER as provided in Article
25 herein, within five (5) days after the expiration of the sixty
(60) day period following the CONTRACTUAL DELIVERY DATE of the
third consecutive AIRCRAFT delayed more than sixty (60) days. In
this case, all amounts paid by BUYER to EMBRAER under the
Purchase Agreement, and specifically with regard to the
non-delivered
Page 19 of 22
22
AIRCRAFT, shall be returned to BUYER, less the value of equipment
or services previously delivered or performed by EMBRAER, it
being hereby agreed by the PARTIES that, in this case, no other
kind of indemnity shall be due by EMBRAER to BUYER.
f. If EMBRAER terminates this Agreement pursuant to Article 8.g
hereof, EMBRAER may, at its sole option, retain all amounts
previously paid by BUYER as liquidated damages resulting from
such default on the part of BUYER.
24. INDEMNITY:
BUYER agrees to indemnify and hold harmless EMBRAER and EMBRAER's
officers, agents and employees from and against all liabilities,
damages, losses, judgments, claims and suits, including costs and
expenses incident thereto, which may be suffered by, accrued against, be
charged to or recoverable from EMBRAER and/or EMBRAER's officers, agents
and employees by reason of loss or damage to property or by reason of
injury or death of any person resulting from or in any way connected
with the performance of services by employees, representatives or agents
of EMBRAER for or on behalf of BUYER related to AIRCRAFT delivered by
EMBRAER to BUYER, including, but not limited to, technical operations,
maintenance and training services and assistance performed while on the
premises of EMBRAER or BUYER, while in flight on BUYER owned AIRCRAFT or
while performing any other services, at any place, in conjunction with
the AIRCRAFT operations of BUYER.
25. NOTICES:
All notices permitted or required hereunder shall be in writing in the
English language and sent, by registered mail, telex or facsimile, to
the attention of the Vice President, Contracts Division as to EMBRAER
and of the Assistant to the President as to the BUYER, to the addresses
indicated below or to such other address as either party may, by written
notice, designate to the other.
EMBRAER:
EMBRAER - Empresa Brasileira de Aeronautica S.A.
Av. Brigadeiro Faria Lima, 2170
12225 Sao Jose dos Campos - SP
BRAZIL
Telephone: (011) (55) (123) 25-1410
(011) (55) (123) 22-4460
Facsimile: (011) (55) (123) 25-1090
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b. BUYER:
Skywest Airlines, Inc.
444 South River Road
St. George, Utah 84770-2086
Telephone: (801) 634-3000
Facsimile: (801) 634-3305
26. CONFIDENTIALITY:
BUYER does not have the right to disclose the terms of this Agreement
except as required by law or in order to obtain AIRCRAFT financing.
BUYER agrees not to disclose any portion of this Agreement or its
Attachments, amendments or any other supplement to any third party
without EMBRAER's written consent, except as necessary to obtain
AIRCRAFT financing. Without limiting the foregoing, in the event BUYER
is legally required to disclose the terms of this Agreement, BUYER
agrees to exert its best efforts to request confidential treatment of
the clauses and conditions of this Agreement relevantly designated by
EMBRAER as confidential.
27. INTEGRATED AGREEMENT:
All attachments referred to in this Agreement and attached hereto are,
by such reference and attachment, incorporated in this Agreement. This
Purchase Agreement, including all Attachments and all amendments,
modifications and supplements, is herein and hereinafter called the
"Agreement" or the "Purchase Agreement".
28. NEGOTIATED AGREEMENT:
BUYER and EMBRAER agree that this Agreement, including all of its
Attachments, has been the subject of discussion and negotiation and is
fully understood by the PARTIES, and that the rights, obligations and
other mutual agreements of the PARTIES contained in this Agreement were
arrived at in consideration of such complete discussion and negotiation
between the PARTIES.
29. COUNTERPARTS:
This Agreement may be signed by the PARTIES hereto in any number of
separate counterparts with the same effect as if the signatures thereto
and hereto whereupon the same instrument and all of which when taken
together shall constitute but one and the same instrument.
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24
30. ENTIRE AGREEMENT:
This Agreement constitutes the entire agreement of the PARTIES hereto
with respect to the sale described as its subject and supersedes all
previous and connected negotiations, representations and agreements
between the PARTIES. This Agreement may not be altered, amended or
supplemented except by a written instrument executed by the PARTIES.
IN WITNESS WHEREOF, the PARTIES have caused this Agreement to be duly executed
and delivered by their proper and duly authorized officers and to be effective
as of the day and year first above written.
EMBRAER BUYER
By: /s/ Juarez S.B. Wanderlen By: /s/ Eric Christensen
------------------------------ --------------------------------------
Name: Juarez S.B. Wanderlen Name: Eric Christensen
Title: President Title: VP Planning
By: /s/ Fred Curado By: /s/ Bradford R. Rich
------------------------------ --------------------------------------
Name: Fred Curado Name: Bradford R. Rich
Title: Sr. VP Commercial Title: Exec. VP-Finance, CFO & Treasurer
Date: 11 June 1995 Date: 6-9-95
Place: Paris, France Place: St. George, Utah
Witness: /s/ Gary J. Soular Witness: /s/ Jerry C. Atkin
------------------------- ---------------------------------
Name: Gary J. Soular Name: Jerry C. Atkin
Page 22 of 22
25
PURCHASE AGREEMENT NO. DSP/AJV-042/95
ATTACHMENT "A"
In addition to the standard equipment detailed in Technical Description number
TD-120/9401, dated September 1994, as referred to in the Purchase Agreement, the
equipped AIRCRAFT configuration as selected by BUYER will include some
non-standard items. The complete list of equipment is detailed hereinbelow. In
case of any conflict between this Attachment and TD-120/9401, this Attachment
shall control.
DESCRIPTION
A) STANDARD EMB-120ER BRASILIA AIRCRAFT:
Basic commuter configuration, incorporating the following equipment and
features:
- Four-blade, constant speed, full feathering and unfeathering,
beta mode, overspeed protection and synchrophasing, Hamilton
Standard propellers, model 14 RF-9
- Structure designed for 40,000 flight hours or 60,000 flight
cycles
- Pressurization system, with nominal differential pressure of
7.0 psi
- Air conditioning supplied by two air cycle machines and intake
for external supply
- Oxygen system: demand masks for crew and drop-out masks for pax
- Fuel system with two gravity refueling points and one pressure
refueling point
- Four electric fuel booster pumps
- Complete anti-ice/de-ice system
- Complete Bruce Lighting system interior lighting with cabin light
control at attendant post station
- Logotype lights
Page 1 of 5
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- Two Rotating Beacons
- Dual flight controls and instruments
- Adjustable SICMA seats for pilot and copilot
- Rear plug-in baggage cargo/baggage door (1.30m x 1.36m)
- Front pax airstairs door (0.77m x 1.70m)
- Complete carpeting, sidewall and headliner with finishing
- Slush Guard: Prevents water, snow, slush and waste from dropping
on flight attendant when main door closes
B) BASIC AVIONICS PANEL:
1 (one) IDC Counter Pointer Encoding Altimeter
2 (two) IDC Vertical Speed Indicators
2 (two) IDC Airspeed Indicators
1 (one) JET Stand-by Gyro Horizon
1 (one) AMETEK Outside Air Temperature Indicator
2 (two) Digital Clocks
1 (one) AMETEK Stand-by Compass
1 (one) DORNE & MARGOLIN DMELT-8 Emergency Locator Transmitter
1 (one) AVTECH Remote Audio Unit for ground crew
2 (two) AVTECH Audio Control Units
1 (one) AVTECH Public Address/Cabin Interphone Unit
2 (two) COLLINS VHF-22A VHF/COMM
Page 2 of 5
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2 (two) COLLINS VIR-32 VHF/NAY Receivers
1 (one) COLLINS ADF-60A ADF System
2 (two) COLLINS RMI-36 Radio Magnetic Indicators
2 (two) COLLINS AHRS-85 Attitude and Heading Ref Systems
2 (two) COLLINS ADI-84 Attitude Director Indicators (4"x4")
2 (two) COLLINS HSI-74 Electronic Horizontal Situation Indicators
(4"x4"), including HPU-74, P/N 622-6198-103
1 (one) COLLINS Automatic Pilot System (APS-65), composed of:
o 2 Autopilot/Flight Director Computers
o 2 Air Data Sensors
o 2 Flight Control Panels
o Autopilot Panel
1 (one) COLLINS DME-42 DME System
2 (two) COLLINS TDR-94 Mode-S Transponder Systems per FAR Part 135
Paragraph 135.143
1 (one) COLLINS WXR-270 Color Weather Radar
1 (one) COLLINS ALT-55 Radio Altimeter
C) OPTIONAL AVIONICS:
1. Third Collins VHF-22A VHF/COMM with CTL-22
2. Second Collins DME-42 System
3. CVR - Fairchild A 100A Cockpit Voice Recorder System
4. FDR - Solid State Fairchild/Teledyne 28-Channel Flight Data
Recorder System
5. IDC Altitude Preselect System with Servo Encoding Altimeter
Page 3 of 5
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6. GPWS - Sundstrand Mark VI Ground Proximity Warning System
7. Provisioning for Bendix/King CAS66A TCAS-I.
D) OPTIONAL SYSTEMS/OTHER EQUIPMENT:
1. P&W 118A Engines
2. Complete APU System with Garrett unit FTCP36-150 (AA)
3. High Altitude Oxygen System (Gaseous type)
4. Partial polyurethane painting
5. Cargo Door Anti-blockage Barrier
6. Reinforced 700 kg cargo compartment bulkhead
7. Enhanced Range Version (EMB-120ER)
8. PTT switch in the lighting panel
9. Engine Oil: Aero Exxon Turbo Oil 2380
E) INTERIOR:
1. External flushing dry toilet (ADT1), including toilet seat, paper
towel dispenser, miscellaneous items, toilet paper and waste
container;
2. Afterward left-hand side galley (AGL1), including miscellaneous
items, two (2) hot jugs (1 gal.) - 28VDC (Manufacturer: Midland
Ross - model 306-140 or equivalent), two (2) standard units
provisions and waste container.
3. Afterward right-hand side galley (AGR3), including miscellaneous
items, icebox, three (3) standard units provisions, galley
service door and folding table.
Note: Neither galley includes standard unit equipment and
optional interphone.
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4. 30 Pax Carbon fiber Seats 9G certified, according to FAR 25.561
and 25.785 - Amendment 5. Observer Station includes: folding
seat; oxygen mask connected to the crew system; seat belts; audio
unit 25-63.
6. Flight Attendant Station - includes: folding seat; oxygen mask;
cabin interphone handset; seat belts; flashlight; fire
extinguisher; control panel for: air conditioning, cabin light,
main door; life vest behind headset
7. Overhead baggage bins - 6 units
Page 5 of 5
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ATTACHMENT "B"
AIRCRAFT FINISHING, REGISTRATION MARKS, FERRY EQUIPMENT,
SPARE PARTS POLICY AND LIST OF PUBLICATIONS
1. FINISHING
a. Exterior Finishing: The AIRCRAFT shall be painted according to
BUYER's color and paint scheme which shall be supplied to EMBRAER
by BUYER on or before six (6) months prior to the relevant
AIRCRAFT CONTRACTUAL DELIVERY DATE, except in the case of the
FIRST AIRCRAFT, for which the paint scheme to be used is that
which has been provided to EMBRAER Pursuant to Purchase Agreement
DSP/AJV30B/93.
b. Interior Finishing: BUYER shall inform EMBRAER on or before
seven (7) months prior to the relevant AIRCRAFT CONTRACTUAL
DELIVERY DATE of its choice of materials and colors of all and
any item of interior finishing, such as seat covers, carpet,
floor lining on galley areas, side walls and overhead lining,
galley lining and curtain, except in the case of the FIRST
through THIRD AIRCRAFT, for which the choice of materials and
colors to be used is that which has been provided to EMBRAER
pursuant to Purchase Agreement DSP/AJV-30B/93.
The above-mentioned schedule for definition of interior finishing
shall only be applicable if BUYER selects its materials from the
choices offered and available by EMBRAER. In case BUYER opts to
use different materials and/or patterns, such schedule shall be
mutually agreed between the PARTIES at the time of signature of
this Purchase Agreement.
2. REGISTRATION MARKS
Each AIRCRAFT shall be delivered to BUYER with the registration marks
painted on it, which shall be supplied to EMBRAER by BUYER no later than
ninety (90) days before the relevant AIRCRAFT CONTRACTUAL DELIVERY DATE.
3. FERRY EQUIPMENT
If it is necessary for any ferry equipment to be installed by EMBRAER
for the ferry flight between Brazil and Fort Lauderdale, Florida, United
States of America, EMBRAER may provide such equipment to BUYER for a
price to be previously agreed between the PARTIES, In this case, BUYER
shall remove such
Page 1 of 4
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ferry equipment from the AIRCRAFT at EMBRAER AIRCRAFT CORPORATION's
facilities at Fort Lauderdale, Florida, United States of America. Such
equipment shall be turned over to a representative of EMBRAER AIRCRAFT
CORPORATION for the purpose of it being returned to EMBRAER in Brazil at
BUYER's own expense.
If such equipment is utilized for any reason, or if such equipment is
not returned by BUYER, in EMBRAER's sole judgment in complete and
perfect condition, BUYER shall fully indemnify EMBRAER for the value of
such equipment, provided that in case of partial utilization of or
damage to any such equipment, the value to be charged shall be the price
of a new complete set of equipment.
In such case the original equipment shall become property of BUYER. The
above-mentioned payment shall be made to EMBRAER by BUYER upon
presentation of a sight draft by EMBRAER.
The presence of an EMBRAER qualified crew member during the ferry flight
on the way to BUYER's facilities, to act as second in command and to
assist in handling communication with Air Traffic Control (ATC) while
overflying Brazilian airspace, shall depend on a previous agreement
between the PARTIES provided that a written advance notice shall be
given from BUYER to EMBRAER at least thirty (30) days prior to the date
of such ferry flight.
4. SPARE PARTS
4.1. Policy:
EMBRAER's spare parts policy is to provide the following
categories of spares as specified in the respective EMBRAER
publications and available to be purchased through EMBRAER:
- Line Replaceable Units (LRU's);
- Parts to repair and overhaul components manufactured under
EMBRAER specification to be used only on the EMB- 120
BRASILIA;
- Parts to line maintenance;
- Parts to fulfill all maintenance tasks per maintenance
manual and/or maintenance plan issued by EMBRAER;
- EMBRAER-made parts;
- Aircraft Ground Equipment (AGE);
- Aircraft Ground Equipment spare parts manufactured under
EMBRAER specifications;
- Special tools;
- Bulk material.
Page 2 of 4
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4.2. Emergency Spare Parts Service:
EMBRAER will maintain emergency spare parts service twenty-four
(24) hours a day, seven (7) days a week. EMBRAER will deliver in
F.C.A. condition at Sao Jose dos Campos, State of Sao Paulo,
Brazil, or at any other port of clearance that may be chosen by
EMBRAER and informed to BUYER, spare parts in inventory needed
for aircraft-on-ground (AOG) orders within twenty-four (24) hours
after receipt EMBRAER will notify BUYER of the action taken to
satisfy each emergency in accordance with the following schedule:
- AOG (Aircraft-On-Ground)........................within 4 hours
- Critical (Imminent AOG or Work Stoppage)........within 24 hours
- Expedite (Less than published or quoted
lead time)......................................within 7 days
4.3. Parts Exchange Program:
According to its prevailing availability, EMBRAER may offer an
"exchange program" for repairable parts whenever the vendor does
not have its own exchange program.
4.4. Parts Repair Program:
For any repair required by BUYER on any EMBRAER or vendor
repairable item, EMBRAER may assist BUYER to perform such repair
in order to ensure the shortest turn around time (TAT).
4.5. Pricing:
EMBRAER will maintain a spare parts price list updated
periodically. Items not shown on the list will be quoted on
request.
5. LIST OF PUBLICATIONS
As provided for in Article 16 of this Agreement, the technical
publications covering operation and maintenance shall be delivered to
BUYER in accordance with the following list:
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QTY
TITLE (Copies)
----- --------
01. AIRPLANE FLIGHT MANUAL (*) 10 (A)
02. WEIGHT & BALANCE 10 (A)
03. WIRING MANUAL 10 (A)
04. OPERATION MANUAL 20 (B)
05. QUICK REFERENCE HANDBOOK 20 (B)
06. MAINTENANCE MANUAL 10 (A)
07. MAINTENANCE REVIEW BOARD (FAA) 1 (C)
08. AIRPORT PLANNING GUIDE 10 (A)
09. EFFECT OF WIND IN TURN PERFORMANCE 10 (A)
10. OPERATION FROM PRECIPITATION COVERED 10 (A)
RUNWAYS AT LOW AMBIENT TEMPERATURE
11. FLIGHT PLANNING 10 (A)
12. ILLUSTRATED PARTS CATALOG 105 (A)
13. MAINTENANCE PLANNING GUIDE 1 (C)
14. POWERPLANT BUILD-UP 1 (C)
15. ILLUSTRATED TOOL EQUIPMENT 1 (C)
16. STRUCTURAL REPAIR 10 (A)
17. INSTRUCTIONS FOR GROUND FIRE 1 (C)
EXTINGUISHING AND RESCUE
18. DEVIATION DISPATCH PROCEDURES MANUAL 10 (A)
19. SERVICE & INFORMATION BULLETIN SET 10 (A)
20. VENDOR SERVICE PUBLICATIONS (*) 10 (A)
(*) To be delivered by the supplier.
(A) - 1 with each AIRCRAFT
(B) - 2 with each AIRCRAFT
(C) - 1 with AIRCRAFT 1
In the event BUYER elects not to take all or any portion of the publications
referred to hereinabove, no refund or other financial adjustment of the contract
price or additional concession/credit will be made since the publications are
offered to BUYER by EMBRAER free of charge.
Page 4 of 4
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ATTACHMENT "C"
WARRANTY CERTIFICATE - MATERIAL AND WORKMANSHIP
EMB-120 BRASILIA
1. EMBRAER subject to the conditions and limitations hereby expressed,
warrants all EMB-120 BRASILIA AIRCRAFT as follows:
a. For a period of twenty-four (24) months from the date of delivery
to the first BUYER, the AIRCRAFT will be free from:
- Defects in materials, workmanship and manufacturing
processes in relation to parts manufactured by EMBRAER or
by its subcontractors holding an EMBRAER part number;
- Defects inherent to the design of the AIRCRAFT and its
parts designed and manufactured by EMBRAER or by its
subcontractors holding an EMBRAER part number.
b. For a period of twelve (12) months from the date of delivery to
the first BUYER the AIRCRAFT will be free from:
- Defects in operation of vendor (EMBRAER's supplier)
manufactured parts, not including the engines and their
accessories and the landing gear system parts, as well as
failures of mentioned parts due to incorrect installation
or installation not complying with the instructions issued
or approved by their respective manufacturers;
- Defects due to non-conformity to the technical
specification referred to in the purchase agreement of
the AIRCRAFT.
c. For a period of twelve (12) months or six thousand (6,000)
landings, whichever occurs first, from the date of delivery to
the first BUYER the AIRCRAFT will be free from:
- Defects in operation of the landing gear system parts
supplied by ERAM, as well as failures of mentioned parts
due to incorrect installation or installation not
complying with the instructions issued or approved by the
manufacturer.
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Once the above-mentioned periods have expired, EMBRAER will
transfer to BUYER the original Warranty issued by the vendors, if
it still exists.
2. EMBRAER, subject to the conditions and limitations hereby expressed,
warrants that:
a. All spare parts or Aerospace Ground Equipment, which have been
manufactured by EMBRAER or by its subcontractors holding an
EMBRAER part number which will permit their particular
identification and which have been sold by EMBRAER or its
representatives, will, for a period of twelve (12) months from
the date of the invoice, be free from defects of material,
workmanship, manufacturing processes and defects inherent to the
design of the above-mentioned parts or Aerospace Ground
Equipment.
b. All spare parts or Aerospace Ground Equipment which have been
designed and manufactured by vendors, not including engines and
their accessories, and stamped with a serial number which will
permit their particular identification and which have been sold
by EMBRAER or its representatives, will, for a period of six (6)
months from the date of the invoice, be free from malfunction,
defect of material and manufacture.
3. The obligations of EMBRAER as expressed in this Warranty are limited to
replace or repair, depending solely upon its own judgment, the parts
that are returned to EMBRAER or its representatives, at BUYER's own
expenses, adequately packed, within a period of sixty (60) days after
the occurrence of the defect, provided that EMBRAER agrees that such
components are indeed defective and that the defect has occurred within
the periods stipulated in this certificate.
NOTE: Notification of any defect claimed under Article 3 above must be
given to EMBRAER within thirty (30) days after such defect is
found.
Parts supplied to BUYER as replacement for defective parts are warranted
for the balance of the warranty period still available from the original
Warranty of the exchanged parts. However, freight, insurance, taxes and
other costs eventually incurred during the shipment to EMBRAER or its
representatives, reinstallation and adjustments are BUYER's
responsibility.
4. EMBRAER will accept no warranty claims under any of the circumstances
listed below:
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a. When the AIRCRAFT has been used in an attempt to break records,
or subjected to experimental flights, or any other way not in
conformity with the flight manual or the airworthiness
certificate, or subjected to any manner of use in contravention
of the applicable aerial navigation or other regulations and
rules issued or recommended by government authorities of whatever
country in which the AIRCRAFT is operated, when accepted and
recommended by I.C.A.O.;
b. When the AIRCRAFT or any of its parts have been altered or
modified by BUYER, without prior approval from EMBRAER or from
the manufacturer of the parts through a Service Bulletin;
c. Whenever the AIRCRAFT or any of its parts have been involved in
an accident, or when parts either defective or not complying to
manufacturer's design or specification have been used;
d. Whenever parts have had their identification marks, designation,
seal or serial number altered or removed;
e. In the event of negligence, misuse or maintenance services done
on the AIRCRAFT or any of its parts not in accordance with the
respective maintenance manual;
f. In cases of deterioration, wear, breakage, damage or any other
defect resulting from the use of inadequate packing methods when
returning items to EMBRAER or its representatives.
5. This Warranty does not apply to defects presented by expendable items,
whose service life or maintenance cycle is lower than the warranty
period, and to materials or parts subjected to deterioration.
6. The Warranty hereby expressed is established between EMBRAER and the
first BUYER, and it cannot be transferred or assigned to others, unless
by written consent of EMBRAER, according to Article 17 of the Purchase
Agreement of which this is an Attachment.
7. THE WARRANTIES, OBLIGATIONS AND LIABILITIES OF EMBRAER AND REMEDIES OF
BUYER SET FORTH IN THIS WARRANTY CERTIFICATE ARE EXCLUSIVE AND IN
SUBSTITUTION FOR, AND BUYER HEREBY WAIVES, RELEASES AND RENOUNCES, ALL
OTHER WARRANTIES, OBLIGATIONS AND LIABILITIES OF EMBRAER AND ANY
ASSIGNEE OF EMBRAER AND ALL OTHER RIGHTS, CLAIMS AND REMEDIES OF BUYER
AGAINST EMBRAER OR ANY ASSIGNEE OF
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EMBRAER, EXPRESSED OR IMPLIED, ARISING BY LAW OR OTHERWISE, WITH RESPECT
TO ANY NON-CONFORMANCE OR DEFECT OR FAILURE FOR ANY OTHER REASON, IN ANY
AIRCRAFT OR OTHER THING DELIVERED UNDER THE PURCHASE AGREEMENT OF WHICH
THIS IS AN ATTACHMENT INCLUDING DATA, DOCUMENT, INFORMATION OR SERVICE,
INCLUDING BUT NOT LIMITED TO:
a. ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS;
b. ANY IMPLIED WARRANTY 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 NEGLIGENCE OR OTHER RELATED
CAUSES OF EMBRAER OR ANY ASSIGNEE OF EMBRAER, WHETHER ACTIVE,
PASSIVE OR IMPUTED; AND
d. ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY FOR LOSS OF OR
DAMAGE TO ANY AIRCRAFT, FOR LOSS OF USE, REVENUE OR PROFIT WITH
RESPECT TO ANY AIRCRAFT OR FOR ANY OTHER DIRECT, INCIDENTAL OR
CONSEQUENTIAL DAMAGES.
8. No representative or employee of EMBRAER is authorized to establish any
other warranty than the one hereby expressed, nor to assume any
additional obligation relative to the matter, in the name of EMBRAER and
therefore any such statements eventually made by or in the name of
EMBRAER shall be void and without effect.
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ATTACHMENT "D"
EMB-120
ESCALATION FORMULA
P = P(0) [0.20(E(1)/E(0)) + 0.10(A(1)/A(0)) + 0.10(AL(1)/AL(0)) +
0.05(T(1)/T(0)) + 0.05(C(1)/C(0)) + 0.50(L(1)/L(0)) ]
PROVIDED: P shall not be less than P(0)
Where:
P= AIRCRAFT PURCHASE PRICE, as defined in item k. of Article 1. of the
Purchase Agreement;
P(0)= AIRCRAFT BASIC PRICE, as defined in item j. of Article 1 of the
Purchase Agreement;
E(1)/E(0)= PW118/118A PRATT & WHITNEY Engine Price variation, calculated
according to the following formula:
E(1)/E(0) = 0.60 (LA(1)/LA(0)) + 0.40 (MA(1)/MA(0))
Where:
LA(0)= Labor Index (SIC Code 3724) - Transportation Equipment,
Aircraft Engines and Engine Parts, based on the first
published information for average hourly earnings,
according to "Employment and Earnings", issued by the U.S.
Department of Labor, referring to the three (3) month
average index of the period ending six (6) months prior to
December 1992;
LA(1)= Labor Index (SIC Code 3724), based on the same publication
above mentioned, referring to the three (3) month average
index of the period ending six (6) months prior to the
AIRCRAFT CONTRACTUAL DELIVERY DATE;
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39
MA(0)= Material Index (Commodity Code 10) - Metals and Metal Products,
based on the first published information, according to "Producer
Price Indexes", issued by U.S. Department of Labor, referring to
the sixth (6th) month prior to December 1992;
MA(1)= Material Index (Commodity Code 10), based on the same information
above mentioned, referring to the sixth (6th) month prior to the
AIRCRAFT CONTRACTUAL DELIVERY DATE.
A(1)/A(0)= Collins avionics price variation, calculated according to the
following formula:
A(1)/A(0) = 0.60 (LC(1)/LC(0)) + 0.40 (MC(1)/MC(0))
Where:
LC(0) = Labor Index (SIC Code 381) - Search and Navigation
Equipment, based on the first published information for
average hourly earnings, according to "Employment and
Earnings", issued by the U.S. Department of Labor,
referring to the twelve (12) month average index of the
period ending six (6) months prior to December 1992;
LC(1) = Labor Index (SIC Code 381), based on the same publication
above mentioned, referring to the twelve (12) month
average index of the period ending six (6) months prior
to the AIRCRAFT CONTRACTUAL DELIVERY DATE;
MC(0) = Material Index (Commodity Code 1178) - Electronic
Components and Accessories, based on the first published
information, according to "Producer Price Indexes",
issued by the U.S. Department of Labor, referring to the
twelve (12) month average index of the period ending six
(6) months prior to December 1992;
MC(1) = Material Index (Commodity Code 1178), based on the same
publication above mentioned, referring to the twelve (12)
month average index of the period ending six (6) months
prior to the AIRCRAFT CONTRACTUAL DELIVERY DATE.
AL(0)= Aluminum Price Index (Commodity Code 1025.0107) - Aluminum Mill Shapes -
sheet, coiled, bare, all others, based on the first published
information, according to "Producer Price Indexes", issued by the U.S.
Department of Labor, referring to the sixth (6th) month prior to
December 1992;
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40
AL(1) = Aluminum Price Index (Commodity Code 1025.0107) of the sixth (6th) month
prior to the AIRCRAFT CONTRACTUAL DELIVERY DATE, based on the same
publication above mentioned;
T(0) = Titanium Price Index (Commodity Code 1025.05) - Titanium Mill Shapes -
based on the first published information, according to "Producer Price
Indexes", issued by the U.S. Department of Labor, referring to the sixth
(6th) month prior to December 1992;
T(1) = Titanium Price Index (Commodity Code 1025.05) of the sixth (6th) month
prior to the AIRCRAFT CONTRACTUAL DELIVERY DATE, based on the same
publication mentioned above;
C(0) = Thermosetting Resins Price Index (Commodity Code 0663) - Thermosetting
Resins, based on the first published information, according to the
"Producer Price Indexes", issued by the U.S. Department of Labor,
referring to the sixth (6th) month prior to December 1992;
C(1) = Thermosetting Resins Price Index (Commodity Code 0663) of the sixth
(6th) month prior to the AIRCRAFT CONTRACTUAL DELIVERY DATE, based on
the same publication above mentioned;
L(0) = Labor Index (SIC Code 3721) - Transportation Equipment, Aircraft and
Parts -based on the first published information for average hourly
earnings, excluding lump-sum payments, according to "Employment and
Earnings", issued by the U.S. Department of Labor, referring to the
sixth (6th) month prior to December 1992.
L(1) = Labor Index (SIC Code 3721) of the sixth (6th) month prior to the
AIRCRAFT CONTRACTUAL DELIVERY DATE, based on the same publication above
mentioned.
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