1
EXHIBIT 10.8
Disclosure Regarding Confidential Information:
Portions of pages 2-4, 11, 15 and 16 and of Attachment D to this
Exhibit 10.8 to the Annual Report on Form 10-K (consisting of portions of
9 multiple pages) have been omitted from this exhibit filed with the Securities
and Exchange Commission (the "Commission") by SkyWest, Inc. The omitted
portions, which are the subject of an application for confidential treatment
and have been filed separately with the Commission, are identified in this
exhibit by the placement of the following symbols: *****.
PURCHASE AGREEMENT NO. GCT-008/98
EMBRAER - EMPRESA BRASILEIRA
DE AERONAUTICA S.A.
AND
SKYWEST AIRLINES, INC.
2
INDEX
ARTICLE PAGE
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1. DEFINITIONS 1
2. SUBJECT 2
3. PRICE 2
4. PAYMENT 3
5. DELIVERY 4
6. CERTIFICATION 5
7. ACCEPTANCE AND TRANSFER OF OWNERSHIP 5
8. STORAGE CHARGE 6
9. DELAYS IN DELIVERY 7
10. INSPECTION AND QUALITY CONTROL 8
11. CHANGES 9
12. WARRANTY 11
13. TECHNICAL ASSISTANCE SERVICES 11
14. SPARE PARTS POLICY 12
15. PUBLICATIONS 12
16. ASSIGNMENT 12
17. RESTRICTIONS AND PATENT INDEMNITY 13
18. MARKETING PROMOTIONAL RIGHTS 13
19. TAXES 13
20. APPLICABLE LAW 13
21. JURISDICTION 14
22. TERMINATION 14
23. OPTIONS 16
24. INDEMNITY 18
25. NOTICES 18
26. CONFIDENTIALITY 19
27. INTEGRATED AGREEMENT 19
28. NEGOTIATED AGREEMENT 19
29. COUNTERPARTS 19
30. ENTIRE AGREEMENT 19
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. GCT-008/98
THIS AGREEMENT IS ENTERED INTO THIS 26th DAY OF MARCH 1998, 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 84790.
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-120/9801 dated February 1998, and the
AIRCRAFT Specific Configuration constituting the Attachment "B"
to this Agreement, and equipped with Pratt & Whitney Canada Inc.
PW-118B engines, according to PW-118A Turboprop Engine
Specification no.1083, dated February 6, 1996.
e. SERVICES - shall mean technical assistance services as specified
in Article 13 herein.
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f. CONTRACTUAL DELIVERY DATE - shall mean the delivery date
referred to in Article 5 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 7 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, *****.
2. SUBJECT:
This Agreement covers:
a. Twenty (20) firm order AIRCRAFT (the "FIRM AIRCRAFT"), and
options for BUYER to purchase up to forty (40) additional
AIRCRAFT (the "OPTION AIRCRAFT") on the terms and conditions of
this Agreement.
b. SERVICES as specified in Article 14 herein.
These AIRCRAFT include 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
III and IV
3. PRICE:
a.****
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*****
b. The BASIC PRICE as indicated in item "a.1" herinabove 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. Except for the first three
aircraft, for which the AIRCRAFT PURCHASE PRICE shall be
provided one week after execution of this Purchase Agreement.
4. PAYMENT:*****
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*****
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 on which
such payments should have been made as therein set forth, until
the actual receipt by EMBRAER of such amounts.
C. Without prejudice to the above, should BUYER fall to make any
payment on the due date, EMBRAER shall have the right, at its
sole discretion, to (i) terminate this Agreement and in this
case BUYER shall release on behalf of EMBRAER all amounts
previously paid by BUYER towards this Agreement without
prejudice to EMBRAER's rights to indemnity as set forth in this
Agreement or by law or (ii) postpone, at its sole discretion,
the relevant AIRCRAFT CONTRACTUAL DELIVERY DATE.
5. DELIVERY:
Subject to payment in accordance with Article 4 hereof and the
provisions of Articles 7 and 9 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:
FIRST AND SECOND AIRCRAFT on or before March 27, 31, 1998
THIRD AIRCRAFT on or before April 30, 1998
FOURTH AND FIFTH AIRCRAFT on or before May 22, 29, 1998
SIXTH AND SEVENTH AIRCRAFT on or before June 23, 30, 1998
EIGHT AIRCRAFT on or before July 31, 1998
NINTH AIRCRAFT on or before August 31, 1998
TENTH AIRCRAFT on or before September 30, 1998
ELEVENTH AIRCRAFT on or before November 23, 1998
TWELFTH AIRCRAFT on or before March 23, 1999
THIRTEENTH AIRCRAFT on or before April 20, 1999
FOURTEENTH AIRCRAFT on or before May 21, 1999
FIFTEENTH AIRCRAFT on or before August 20, 1999
SIXTEENTH AIRCRAFT on or before September 22, 1999
SEVENTEENTH AIRCRAFT on or before October 20, 1999
EIGHTEENTH AIRCRAFT on or before November 22, 1999
NINETEENTH AIRCRAFT on or before December 20, 1999
TWENTIETH AIRCRAFT on or before December 28, 1999
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6. 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, at BUYER'S sole expense.
7. 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 5 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
5 hereof with its wing tanks full.
c. If BUYER finds an 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 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 9.b.1 hereof.
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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 22.f hereinbelow or, at its sole discretion, renegotiate
the terms of this Agreement with BUYER.
8. 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 5 and/or 7
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.
c. The fifteen (15) and thirty (30) calendar days "GRACE PERIOD" is
conditioned to receipt by EMBRAER of a written notification, ten
(10) days in advance of the expected delay in the performance of
BUYER'S obligations set forth in items "a.1", "a.2" and "b"
above.
d. In the event an AIRCRAFT CONTRACTUAL DELIVERY DATE must be
extended by EMBRAER from that which is designated in Article 5
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.
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e. 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.
9. 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.
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 22-b hereof.
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b. NON-EXCUSABLE DELAYS:
1. if the delivery of an AIRCRAFT is delayed, without any
excusable reason, by more than ten (10) calendar days
after the CONTRACTUAL DELIVERY DATE for such AIRCRAFT,
BUYER will be entitled to claim from EMBRAER liquidated
damages equal to US$ 5,000.00 (five thousand US Dollars)
per day, for each calendar day of delay in excess of the
above-mentioned ten (10) calendar days, up to the date
EMBRAER notices BUYER such AIRCRAFT will be ready for
delivery via written notice per Article 7.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 ten (10) 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 forty (40) 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.
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 24 hereof, without
any liability to either party.
10. 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.
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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 5 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 7 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.
11. 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 11.
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:
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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; defined by EMBRAER as
interchangeable
- 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
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.
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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.
12. 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 16 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.
13. TECHNICAL ASSISTANCE SERVICES:
*****
Notwithstanding the eventual use of the term "training" in this Article
13 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.
Simulator Training - Provided that BUYER's pilots are duly qualified as
regards AIRCRAFT systems, weight and balance, performance and
normal/emergency procedures, simulator training of no more than twelve
(12) hours per pilot, for six (6) pilots per aircraft, shall be
provided at EMBRAER's facilities in Ft. Lauderdale, Florida, United
States of America or at such other location as EMBRAER shall reasonably
designate, or, at BUYER's option, at any FlightSafety facility that
offers such training, to the extent time is available. BUYER must give
written notification to EMBRAER thirty (30) calendar days in advance of
BUYER's expected training schedules.
*****
Any other additional SERVICES shall depend on mutual agreement between
the PARTIES and shall be charged by EMBRAER accordingly.
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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.
14. 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.
15. 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) month after the execution of this
Purchase Agreement.
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.
16. ASSIGNMENT:
BUYER's rights and obligations hereunder may not be assigned without
EMBRAER's previous written consent.
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17. 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 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.
18. 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.
19. 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.
20. 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.
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21. JURISDICTION:
All disputes arising in connection with this Agreement shall be finally
settled in the courts of the city of Sao JOSE dos Campos, Sao Paulo,
Brazil. The PARTIES hereby waive any other court of Jurisdiction that
may be competent for settlement of disputes arising from this Agreement.
22. 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 law.
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
(90th) 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:
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17
*****
d. 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 six (6)
consecutive AIRCRAFT due to force majeure reasons (and in case
of this item "d", 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 1O.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
22.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 six (6)
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 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.
e. If EMBRAER terminates this Agreement pursuant to Article 7.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.
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18
23. OPTIONS:
a. In addition to the FIRM AIRCRAFT, and subject to the conditions
set forth hereinbelow, BUYER shall have the option to purchase
another forty (40) AIRCRAFT (the "OPTION AIRCRAFT") at the unit
BASIC PRICE per OPTION AIRCRAFT, with adjustments for any
additions and/or deletions of equipment and/or provisioning
agreed to by BUYER and EMBRAER.
This basic price shall be escalated in accordance with the
escalation formula provided in Attachment "D" to this
Agreement.
b. For option exercise purposes, the OPTION AIRCRAFT are divided
into four (4) groups of ten (10) OPTION AIRCRAFT each as
defined in item "c" hereinbelow.
c. *****
GROUP OPTION EXERCISE DATE
----- --------------------
I OPTION Aircraft 21 - 30 March 31, 1998
II OPTION Aircraft 31 - 40 December 31, 1998
III OPTION Aircraft 41 - 50 May 31, 1999
IV OPTION Aircraft 51 - 60 November 30, 1999
d. Delivery for OPTION Aircraft in Groups I -through IV shall occur
in accordance with option delivery dates below specified,
subject to availability of delivery positions at the time Buyer
elects to exercise its option:
GROUP 1 OPTION AIRCRAFT DELIVERY DATE:
----------------------- --------------
21st A/C December 29, 1998
22nd A/C January 20, 1999
23rd & 24th A/C February 19, 1999
25th A/C April 25, 1999
26th & 27th A/C June 22, 1999
28th A/C July 30, 1999
29th A/C August 31, 1999
30th A/C October 29, 1999
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19
GROUP 2 OPTION AIRCRAFT DELIVERY DATE:
- - ----------------------- --------------
31st & 32nd A/C January 2000
33rd & 34th A/C February 2000
35th & 36th A/C March 2000
37th & 38th A/C April 2000
39th & 40th A/C May 2000
GROUP 3 OPTION AIRCRAFT DELIVERY DATE:
- - ----------------------- --------------
41st & 42nd A/C June 2000
43rd & 44th A/C July 2000
45th & 46th A/C August 2000
47th & 48th A/C September 2000
49th A/C October 2000
50th A/C November 2000
GROUP 4 OPTION AIRCRAFT DELIVERY DATE:
- - ----------------------- --------------
51st A/C December 2000
52nd A/C January 2001
53rd A/C February 2001
54th A/C March 2001
55th A/C April 2001
56th A/C May 2001
57th A/C June 2001
58th A/C July 2001
59th A/C August 2001 -
60th A/C September 2001
Upon exercise of each Group of OPTION AIRCRAFT and confirmation that
delivery positions are available, BUYER shall purchase and EMBRAER shall
sell such AIRCRAFT pursuant to the terms of this Purchase Agreement.
e. Buyer many not purchase any OPTION AIRCRAFT unless BUYER has purchased
all twenty (20) FIRM AIRCRAFT, and receipt by EMBRAER of any and all
payments due, pursuant thereto. Should BUYER fail to purchase and
receive any of the FIRM AIRCRAFT, or fail to cause EMBRAER to receive
full payment therefore in accordance with this Purchase Agreement, then
any right for BUYER to purchase the OPTION AIRCRAFT shall be considered
null and void.
f. Should BUYER fail to exercise a Group of OPTIONS on the OPTION exercise
dates determined in item "c" of this Article 23, or on any other dates
in lieu thereof that may be agreed by EMBRAER and BUYER in writing,
EMBRAER shall be entitled to consider the OPTION contemplated in this
Article 23 terminated for that Group.
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20
g. OPTION Aircraft pricing is offered to BUYER provided that
delivery of all forty (40) OPTION AIRCRAFT shall occur on or
before September 30, 2001 . Any OPTION AIRCRAFT contracted for
delivery after such date shall be subject to a price adjustment
according to the EMBRAER pricing criteria then prevailing.
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 or facsimile, to the
attention of the Senior Manager - Contracts as to EMBRAER and of the
Vice President -- Planning 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.
a. EMBRAER:
EMBRAER - Empresa Brasileira de Aeronautica S.A. Av. Brigadeiro
Faria Lima, 2170 12225 Sao Jose dos Campos - SP BRAZIL
Telephone: (011)(55)(12)345-1410
Facsimile: (011)(55)(12)345-1257
b. BUYER:
SkyWest Airlines, Inc.
444 South River Road
St. George, Utah 84790
Telephone: (435) 634-3000
Facsimile: (435) 634-3305
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21
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.
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.
120ER Purchase Agreement
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22
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: [SIG] By: /s/BRADFORD R. RICH
-------------------------------- --------------------------------
Name: [ILLEGIBLE] Name: Bradford R. Rich
------------------------------ ------------------------------
Title: [ILLEGIBLE] Title: Exec. VP, CFO & Treasurer
----------------------------- -----------------------------
By: [SIG] By: /s/ ERIC CHRISTENSEN
-------------------------------- --------------------------------
Name: Name: Eric Christensen
------------------------------ ------------------------------
Title: Title: VP Planning and Corporate
----------------------------- Secretary
Date: March 5, 1998 Date: March 29, 1998
------------------------------ ------------------------------
Place: San Jose dos Campos - SP Brazil Place: St. George, UT
------------------------------ -----------------------------
Witness: [SIG] Witness:/s/AIMEE WORAM
--------------------------- ---------------------------
Name: [ILLEGIBLE] Name: Aimee Woram
------------------------------ ------------------------------
120ER Purchase Agreement
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23
PURCHASE AGREEMENT NO. GCT-008198
ATTACHMENT "A"
In addition to the standard equipment detailed in Technical Description number
TD-120/9801, dated February 1998, 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-120/9801, 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
- 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
- Two Rotating Beacons
120ER Purchase Agreement
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Attachment A Page 1 of 6
24
- 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
B) BASIC AVIONICS PANEL:
1 (one) SMITHS Counter Pointer Encoding Altimeter
2 (two) SMITHS Vertical Speed Indicators
2 (two) SMITHS Airspeed Indicators
1 (one) JET Stand-by Gyro Horizon
I (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
2 (two) COLLINS VIR-32 VHF/NAV 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
120ER Purchase Agree
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Attachment A Page 2 of 6
25
2 (two) COLLINS EADI-86 Electronic Attitude Director Indicators (5"x6")
2 (two) COLLINS EHSI-86 Electronic Horizontal Situation Indicators
(5"x6"), including DPU-86.
1 (one) COLLINS Automatic Pilot System (APS-65), composed of:
- Autopilot/Flight Director Computers
- Air Data Sensors
- 2 Flight Control Panels
- Autopilot Panel
1 (one) COLLINS DME42 DME System
2 (two) COLLINS TDR-94 Transponder System
1 (one) COLLINS WXR-350 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 - Solid State
4. FDR - Solid State
5. IDC Altitude Preselect System with Servo Encoding Altimeter
6. GPWS - Sundstrand Mark VI Ground Proximity Warning System
7. Complete Installation of TCAS-1 - B. F. Goodrich
120ER Purchase Agreement
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Attachment A Page 3 of 6
26
D) OPTIONAL SYSTEMS/OTHER EQUIPMENT:
1. P&W 118B Engines
2. Complete APU System with Garrett unit FTCP36-150 (AA)
3. High Altitude Oxygen System (Gaseous type)
4. Polyurethane painting
5. Cargo Door Anti-blockage Barrier
6. Reinforced 700 kg cargo compartment bulkhead
7. Advanced Version (EMB-120ER)
8. Engine Oil Aero Exxon Turbo Oil 2380
E) INTERIOR:
The first four (4) AIRCRAFT shall have the following interior
configuration:
1. External flushing dry toilet (FDT1), including toilet seat,
paper towel dispenser, miscellaneous items, toilet paper and
waste container,
2. Afterward left-hand side galley (FGL2), including miscellaneous
items, two (2) hot jugs (1 gal.) - 28VDC (Manufacturer: Midland
Ross - model 306-140 or equivalent), two (2) ice box, two (2)
miscellaneous, one (1) provisions of half size trolley, one (1)
paper napkins, one (1) folding work table,
3. 30 Pax Carbon fiber Seats 9G certified, according to FAR 25.561
and 25.785 - Amendment 25-63
4. Observer Station - includes folding seat; oxygen mask connected
to the crew system; seat belts; audio unit
5. 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
6. Overhead baggage bins - 6 units
120ER Purchase Agreement
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Attachment A Page 4 of 6
27
The fifth AIRCRAFT and all subsequent AIRCRAFT shall have the
following interior configuration:
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.
4. 30 Pax Carbon fiber Seats 9G certified, according to FAR 25.561
and 25.785 - Amendment 25-63.
5. Observer Station - includes folding seat; oxygen mask connected
to the crew system; seat belts; audio unit
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
F) WEIGHT
For the first four (4) AIRCRAFT,
EMBRAER hereby represents that (i) the Basic Empty Weight (BEW) of the
first four (4) AIRCRAFT, in the specific configuration described in this
Attachment "A", shall not be greater than 16,387 Lbs, with a tolerance
of plus or minus one percent (+/- 1%), and (ii) the Maximum Baggage
Allowed (with 30 pax) shall be 1,477 Lbs.
For the fifth AIRCRAFT and all subsequent AIRCRAFT, EMBRAER hereby
represents as follows:
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Attachment A Page 5 of 6
28
EMBRAER hereby represents that (i) the Basic Empty Weight (BEW) of the
AIRCRAFT, in the specific configuration described in this Attachment
"A", shall not be greater than 16,405 Lbs, with a tolerance of plus or
minus one percent (+/- 1%), and (ii) the Maximum Baggage Allowed (with
30 pax) shall be 1,543 Lbs.
120ER Purchase Agreement
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Attachment A Page 6 OF 6
29
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 AND SECOND AIRCRAFT which will be delivered in the
current EMBRAER paint scheme. For the third through twentieth
AIRCRAFT the paint scheme shall be agreed by the PARTIES within
one week after signature of the Purchase Agreement.
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 AND
SECOND AIRCRAFT, which will be delivered as is. For the third
through twentieth AIRCRAFT, the choice of materials and colors
shall be agreed by the PARTIES within one week after signature
of the Purchase Agreement.
c. 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,
except in the case of the first three AIRCRAFT, which shall be supplied
to EMBRAER by BUYER no later than the date of signature of the Purchase
Agreement.
120ER Purchase Agreement
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Attachment B Page 1 of 4
30
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 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;
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Attachment B Page 2 of 4
31
- EMBRAER-made parts;
- Aircraft Ground Equipment (AGE);
- Aircraft Ground Equipment spare parts manufactured under
- EMBRAER specifications;
- Special tools;
- Bulk material.
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.
120ER Purchase Agreement
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Attachment B Page 3 of 4
32
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:
QTY
TITLE (Copies)
----- --------
01. AIRPLANE FLIGHT MANUAL (1) 6
02. SUPPLEMENTARY PERFORMANCE MANUAL (1) 6
03. OPERATION MANUAL (1) 6
04. WEIGHT & BALANCE (1) 6
05. QUICK REFERENCE HANDBOOK (1) 6
06. WIRING MANUAL 6
07. MAINTENANCE MANUAL 6
08. MAINTENANCE REVIEW BOARD (FAA) 6
09. AIRPORT PLANNING GUIDE 6
10. ILLUSTRATED PARTS CATALOG 6
11. MAINTENANCE PLANNING GUIDE 6
12. STRUCTURAL REPAIR 6
13. ILLUSTRATED TOOL EQUIPMENT LIST 6
14. POWERPLANT BUILD-UP 6
15. AUXILIARY POWER UNIT BUILD UP 6
16. INSTRUCTIONS FOR GROUND FIRE
EXTINGUISHING AND RESCUE 6
17. DISPATCH DEVIATION PROCEDURES MANUAL (1) 6
18. FAULT ISOLATION MANUAL 6
19. RAMP ISOLATION MANUAL 6
20. SERVICE & INFORMATION BULLETIN SET 6
21. VENDOR SERVICE PUBLICATIONS (2) 6
22. OPERATIONS BULLETIN 6
(1) Extra copy with each AIRCRAFT
(2) To be delivered by the supplier.
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.
120ER Purchase Agreement
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Attachment B Page 4 of 4
33
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.
120ER Purchase Agreement
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Attachment C Page 1 of 4
34
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 EMERAER 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.
120ER Purchase Agreement
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4. EMBRAER will accept no warranty claims under any of the circumstances
listed below:
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 16 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
120ER Purchase Agreement
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Attachment C Page 3 of 4
36
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 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.
120ER Purchase Agreement
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37
ATTACHMENT "D"
EMB - 120
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ESCALATION FORMULA
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120ER Purchase Agreement
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38
*****
120ER Purchase Agreement
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Attachment D Page 2 of 3
39
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120ER Purchase Agreement
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Attachment D Page 3 of 3